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The Director p39 • 2011’s Deloitte/Management Top 200 campaign p28

Leadership’s looming crisis

Leadership's looming crisis Managers drowning in complexity PAGE 16

Including Leaders

A publication of Leadership NZ JUly 2011 $7.10


JUly 2011

9 421902 251030

Funding growth Governance lessons Minus an overdraft p22 From the rubble of the recession p40

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A new business paradigm


here has never been a greater need for leadership. In an economically sputtering postGFC world we face some of the greatest challenges mankind has had to confront. A convergence of environmental, social and economic upheaval will test the resilience of our species like no other period in our history has done. Against this backdrop we must consider the research reported in the cover story (pages 16-21) showing an acute leadership shortage in New Zealand. Our small size and egalitarian roots – considered pluses by many of us – count against us in the leadership stakes, and the growing complexity of business requires a depth and breadth of skills not found in the majority of New Zealand leaders. Adding to those concerns are the findings of governance expert Doug Matheson on the state of board performance in his article on ‘Lessons from the recession’s rubble’ in The Director on page 40. By contrast this month we launch the 2011 Deloitte/Management magazine Top 200 Companies awards campaign which will both identify and celebrate business leaders and organisations that have reached the top of their game and provide role models for the rest of us to aspire to. The awards theme for 2011 is: Top 200 Thinking – harnessing the brain power of our leaders to activate transformation, and over the coming months we will be providing advice and insights from leading New Zealanders addressing the key issues that confront us. Visit to join the conversation. a mediaweb magazine publisher Toni Myers CONSULTING EDITOR & WRITER-AT-LARGE Reg Birchfield

It’s appropriate that in this issue we include Leaders, the publication we produce for not-for-profit Leadership New Zealand. Now in its seventh year, LNZ is going a long way towards addressing the leadership crisis in New Zealand, facilitating conversations about the bigger issues confronting society, and forging cross-sector and crosscommunity relationships amongst our emerging leaders. This is not your traditional leadership ‘training’ model and recognises that true leadership is an attitude and a way of being in the world rather than any skill set. It reinforces the truth that real leadership springs from a genuine passion to make the world, or some part of it, a better place. This conflicts with some traditional business models that measure success by a narrow band of economic indices. Our challenge then, in the business sector, is to create and operate within a new paradigm – one that considers and accommodates all the elements that contribute to a healthy society. You can participate in debate about how this can be achieved on NZ Management’s Top200 blog at

CONTRIBUTORS Reg Birchfield, Bob Edlin, Steve Hart, Colin James, Iain McCormick, Peter Tynan Advertising Manager Rod Myers 09-372 6444, 027-484 8046 DESIGNER Jan-Michael David COPY & WEB EDITOR Gill Prentice production MANAGER Fran Marshall NEW SUBSCRIPTIONS Subscription enquiries

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NZ MANAGEMENT magazine is independently owned by Mediaweb Limited and is published 11 times a year. It is the officially recognised magazine of the New Zealand Institute of Management Incorporated. Editorial material does not necessarily reflect the views of NZIM. Copyright © 2011: Mediaweb Limited. All material appearing in NZ MANAGEMENT is copyright and cannot be reproduced without prior permission of the publisher. Editorial contributions are welcomed. Letters to the editor are also welcomed, but pen names are not acceptable. NZ MANAGEMENT is printed by PMP. Subscriptions: One-year NZ subscription (11 issues) $78.15 (GST incl). Overseas (airmail only): Australia $NZ130; rest of the world $NZ250. Enquiries: Mediaweb Limited, PO Box 5544, Wellesley Street, Auckland 1141, New Zealand. Phone 09-529 3000, Fax 09-529 3001, New Zealand Institute of Management enquiries to: National Office, Box 67, Wellington; Northern, Box 26001, Epsom; Central, Box 11781, Wellington; Southern, Box 13044, Christchurch.

Toni Myers, Publisher Vol 58 No 6 • ISSN 1174-5339 (Print), 1179-3910 (Online)

JULY 2011

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contents 16 Cover Story

Leadership’s looming crisis World enterprise is facing a leadership shortage of crisis proportions. The problem, increasingly obvious over the past decade, is worsening more rapidly than expected. It is acute in New Zealand and looks set to become even more so. Writer-at-large Reg Birchfield reports on the implications of alarming new research released to NZ Management for this special leadership issue.


Including A publication of Leadership NZ


INBOX: News and views




NZIM: Future Focus – NZIM’s Gary Sturgess.


Execs on the move

38 Executive development

OPINION 12 POLITICS: International now mainstream. Colin James 13 ECONOMICS: Borrowing bloats exchange rate. Bob Edlin 14 LEADERSHIP: Who’s leading what. Reg Birchfield 15 BOOKCASE: The power of co-creation; Winning matters.

ADVICE 36 EXEC HEALTH: Rest assured. Peter Tynan

JULY 2011 • Vol 58 No 6

features 22


Finance and the Economy Series

• Funding growth minus an overdraft

With business loans hard to get as banks continue to be risk-averse, invoice financing is starting to gain ground as the funding method of choice for firms in growth mode, writes Steve Hart.

• Mergers and acquisitions – a glimmer of growth.

30 Face to Face: Venkat Ramaswamy – New business model for the future

Economic recovery from the global financial crisis won’t happen without a more innovative approach to enterprise. Global thought leader in innovation, Professor Venkat Ramaswamy, says co-creative enterprises are the way of the future. He talked to Reg Birchfield.

34 Responsible Governance Series: Beca Group’s “care” legacy

Few organisations have treated their people and the environment as consistently well for as long as global engineering consultancy Beca. Reg Birchfield talked with Richard Aitken and Keith Reynolds about Beca’s approach to governing responsibly.


The Director 40 Governance lessons from the rubble of the recession

Governance expert and author Doug Matheson has so far identified five key lessons from the GFC and its ensuing recession as he researches the changing state of governance for a new book.

42 Food for thought on director feedback

Director and board evaluation involves board members undertaking a constructive but critical review of their own performance, identifying strengths, weaknesses and then implementing plans for further professional development. By Iain McCormick.


44 Learning to align Maori and Pakeha governance

Iwi trusts and assets are among the fastest growing and most dynamic sectors of the New Zealand economy. Wiwini Hakaria is helping Maori directors and trustees master the rules of the governance game.



inbox Why American management rules the world


fter a decade of painstaking research, a team from Harvard Business School, London School of Economics, McKinsey & Company, and Stanford has systematically surveyed global management and concluded that American firms are, on

average, the best managed in the world. Here are some of the key findings of the World Management Survey: Well managed firms thrash their poorly managed competitors Organisations with better management massively outperform their disorganised competitors, no matter where they are located. American firms outperform all others This United States dominates in the manufacturing, retail, and healthcare sectors. Japanese, German and Swedish firms follow closely behind. In contrast, developing countries

like Brazil, China, and India lag at the bottom of the management charts. In the middle stand countries like the UK, France, Italy, and Australia, which have reasonable but not brilliant management practices. New Zealand ranks one place below Australia on the survey. Bottom dwellers drive the rankings down Almost 90 percent of the cross-country differences are driven by the size of the “tail” of really badly managed firms within each country. Countries like the US that excel have hardly any badly managed firms, while those like India have a mass of very badly managed firms pulling down their averages. Every country has some world-class firms Even bottomranking India has dozens of firms that use world-class management practices. A key finding is that individual companies are not trapped by the national environments in

Developing global leaders


ncouraging New Zealand managers to “globalise” in order to improve the international growth potential of their businesses is the aim of a pilot programme being developed by The University of Auckland Business School, in conjunction with business growth centre The ICEHOUSE and the United Statesbased Thunderbird School of Global Management. The experiential Global Executive Leadership Programme, designed and delivered by the consortium, is being funded by New Zealand Trade and Enterprise and comes in the wake of plenty of research showing that the management practices of this country’s manufacturers are “middling to average” by global standards. The programme, which is targeted at senior executives, owners and directors, aims to accelerate the learning process for globalising companies and improve their likelihood of success in overseas markets. Last December, a project team from Auckland

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Business School and The ICEHOUSE spent time at the Arizona campus of the Thunderbird School of Global Management, rated the best in the world for globallyfocused executive education by the Wall Street Journal. During a reciprocal visit to Auckland in February, the Thunderbird members of the design team met with Business School faculty and senior business leaders to share their insights into what it takes to be globally successful. “The team continues to work closely on a virtual basis to develop the groundbreaking programme, which is scheduled to launch in Auckland in August and which will involve visits to China and the US,” says Auckland Business School’s director of executive development Darren Levy. “This Global Executive Leadership Programme has been designed from the ground up to ensure that it will have a significant and measurable impact on participants and their businesses.” M

which they operate – there are top performers in all countries surveyed. Conversely, being in a world-class environment like the US does not guarantee success. The secret sauce of management success One of the biggest drivers of these differences is variation in people management. American firms are ruthless at rapidly rewarding and promoting good employees and retraining or firing bad employees. The reasons are threefold. • The US has tougher levels of competition. Large and open US markets generate the type of rapid management evolution that allows only the best-managed firms to survive. • Human capital is important. America traditionally gets far more of its population into tertiary education than other nations. • The US has more flexible labour markets. It is much easier to hire and fire employees. However, writing in a Harvard Business Review blog four of the survey’s researchers say the answer is not for all firms to be more American, but rather to consider some of the practices US firms – and especially multinationals – continually exhibit and implement. “Across all countries, organisations that properly incentivise talented workers, whether through promotion, pay, or other rewards, outperform others. As best practices spread and firms continue to implement these techniques they will narrow the existing gaps, reaping huge growth and profitability gains.” To benchmark your own organisation and determine where you fall within the ranks of your industry or nation visit http:// M

Private businesses planning growth


inety percent of privately owned businesses are expecting positive growth in the next year, according to the 2011 ANZ Privately-Owned Business Barometer report, but the survey also shows the resilience of firms is still being challenged.

growth of five percent or more in the next three years. However, the recovery is not impacting evenly across the sector with around one in 10 businesses anticipating negative growth in the next 12 months. The barometer also flags an emerging skills shortage. This was identified as the second biggest issue facing business owners, after competition, with 37 percent indicating availability of people and skills as being a main concern (up from 34 percent in 2010). The strain of having to battle through a prolonged downturn is also showing: about half of all business owners want to spend

less time in their business and 22 percent say balancing family and business is an issue (up from 10 percent in 2010). There is also growing recognition of the increasingly global environment businesses are operating in: 34 percent are operating internationally and another 12 percent aspire to expand offshore. About 29 percent have sales to China and 60 percent of them expect this to increase in the next three years. “It’s important when considering international expansion to talk to business owners who have been there

before; consider collaborating with some of your competitors, and ensure you are wellcapitalised,” Turley says. The ANZ Privately-Owned Business Barometer is New Zealand’s most in-depth study of privately owned businesses with an annual turnover of between $2 million and $150 million. It was carried out in February and March this year, targeting around 3000 business owners, and had a response rate of 30 percent. The full ANZ-Privately Owned Business Barometer Key Insights report is available on M

Emergency management ANZ managing director, commercial & agri, Graham Turley says stiff competition for households’ disposable dollar remains a concern for businesses all along the supply chain. “As a result, engaging customers, managing costs and actively managing debtors and cash flow will continue to dominate the business environment,” Turley says. However, the ANZ PrivatelyOwned Business Barometer shows that for the most part, business owners are optimistic – 90 percent are expecting positive growth in the next year, while 85 percent expect


he Christchurch earthquakes, the most serious of which have struck in the middle of the working day, have reinforced the need to have good health and safety practices in place in the workplace. This year’s annual seminar by the Auckland branch of the New Zealand Institute of Safety Management (NZISM) is appropriately themed Are you really prepared – emergency management before, during and after? and takes place on August 18 at the Ellerslie Events Centre. Although targeted at the health and safety sector it is open to everyone interested in any aspect of planning for an emergency. The Auckland branch committee, with the support of sponsors 3M, Edenfx HSE Recruitment and Impac, is also launching two new awards, the ‘3M Auckland

Manage your Taxi Spend with Innovation and Technology

Practitioner of the Year Award’ and ‘The Practitioner Development Award’ both of which aim to recognise and develop health and safety management talent. The latter award is designed to assist the development of knowledge and skills of either an existing practitioner or someone looking to move into the health and safety field. The prize includes a subsidy towards a recognised training programme and a full career pack. For more details on the seminar or awards visit the Auckland branch page at NZISM helps its members develop their skills and knowledge as health and safety professionals within a wide range of private, corporate and public sector organisations. It aims to reduce accidents and improve health, which benefits both business and the country’s economy. M

tel: 09 306 1790 email:

JULY 2011

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inbox World food crisis looming


ommodity prices will surge by over 180 percent in the next 20 years because of climate change, population growth and burgeoning middle classes, a report on global food supply by Oxfam contends. That may be good news for farmers and the New Zealand economy but will lead to an international food crisis, the report claims. A steadily expanding middle class in heavily populated nations such as China, Brazil and India will increase demand for food by 70 percent by 2050, the report says, exacerbating existing pressures from water shortage and crop failure due to global warming and soil loss. In response, governments should become proactive in meeting the challenge, rather than expecting ‘the market’ to manage it, Oxfam says. Amongst recommended government actions are the imposition of a meaningful emissions tax and greater

investment in research to reduce the 30 percent of greenhouse gas emissions contributed by agriculture. Also in need of urgent attention is the inequity of the current food distribution system, with rich countries taking the majority of supply and contributing the majority of food waste, the report argues. The first step would be to reduce the influence of corporate and industrial operators in the food sector and increase that of small holders, according to Oxfam. The report also comes out strongly against biofuels as a solution to sustainability problems. “We think biofuels are potentially very, very damaging in the food system,” says Oxfam campaigns manager Adam Askew. “When you’re putting food in machines rather than people’s bellies, you essentially take up land that should be used to grow food for people to eat.” M

Managers with a future

employers will need over the next 20 years include: Financial sector According to the report, most of the growth in demand for financial sector workers will occur in countries where the sector is already large. In New Zealand, demand for skilled staff in this area will remain strong, says Walker. Healthcare Across the globe, the numbers of over 65s is forecast to increase by 446 million by 2030. Countries will need to devote increasing numbers to work in the healthcare industry or increase inward migration, Hays says. “As there is already a shortage of healthcare professionals worldwide, international migration may be controversial and require a coordinated response.” The World Health Organisation has already introduced a code of practice on the international recruitment of health personnel.

Green energy Climate change will lead to job creation in the development of green energy sources and in occupations needed to mitigate the impacts of global warming. But it is also likely to lead to job losses in industries closely connected to the generation and use of fossil fuels. Infrastructure The need for considerable infrastructure investment in the larger emerging economies will mean significant demand for skilled labour in the construction and engineering sectors. This will require inward migration of highly-skilled temporary construction workers. These are likely to include architects, civil engineers and experienced trades people. It should also increase the demand for more permanent skilled labour in the production of engineering and mechanical goods. On the web: M


xecutives with healthcare, infrastructure, financial services and green energy expertise will be in big demand to power the global economy’s growth over the next 20 years, according to recruitment company Hays. In its recently released report ‘Creating Jobs in a Global Economy, 2011-2030’, compiled in partnership with economic forecaster Oxford Economics, Hays notes that the aging population in the developed world and their attendant healthcare needs, the anticipated vast spending on infrastructure in developing countries, the continued growth and increasing sophistication of the financial services industries and the shift towards green energy will create huge demand worldwide for skilled professionals.

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Jason Walker, managing director of Hays in New Zealand, says over the next 20 years New Zealand, like the rest of the aging developed world, is likely to face chronic shortage of health workers. By contrast, the developing world will face a period of rapid industrialisation and infrastructure construction which will create a need for skilled and experienced workers currently unavailable in sufficient numbers domestically. “New Zealand will need to find a way to maintain our competitive edge in key industries by investing in the future skills required against a backdrop of a smaller and older pool of workers,” says Walker. According to Hays, issues expected to define the skills that

Returning to work after mental illness

Executive Pulse


early half of business decision makers think the Government’s Budget forecasts of four percent economic growth next year are unrealistic. Twenty-three percent think the forecasts, which include creating 170,000 new jobs, are realistic, while 48.7 percent think they are not. This compares with 18.9 percent of the adult population who think they’re realistic; 51.1 percent unrealistic. Thirty-four percent of business decision makers think the Budget will increase unemployment, 22.8 percent decrease it. 33.9 percent of business decision makers think the Budget will increase economic growth in the next year, 22.3 percent decrease it and 32.5 percent say it will have no effect. M In its 2011 Budget statement, the Government forecasts economic growth at four percent next year and that 170,000 new jobs will be created over the next four years. How realistic do you think these assumptions are? Business All respondents decision makers A. Very realistic


ental illness affects one in five New Zealanders in any given year, says the Mental Health Foundation, and many of them are employees. The foundation has put together comprehensive advice on what employees and employers can do to support the process of returning to work after a mental illness. Its publication Return to Work includes information on legal rights, stress and support in the workplace, practical tips for employers and employees and managing the return to work. It also includes case studies. To download the publication visit M



B. Realistic



C. Neutral



D. Unrealistic



E. Very unrealistic


F. I really don’t know


A. Increase unemployment

B. Lower unemployment C. Have no effect on unemployment


business All respondents decision makers

Do you believe that the budget will:

D. Don’t know


A. Increase New Zealand’s economic growth

B. Decrease New Zealand’s economic growth













C. Have no effect on New Zealand’s economic growth



D. Don’t know



Source: Horizon Research, May 20- June 10, 2011. 2297 respondents including 519 business decision makers. Weighted. Margins of error +/- 2% on the national sample, +/-4.3% on the decision maker sub sample. On the web:

•   Finance & the Economy:  The Case for KiwiSaver •   Broadband •  Conference & Event Management



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JULY 2011

Advertising booking deadline 5tH OF MOntH PriOr

AUGUST & SepT 2011

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inbox Middle managers hold the key to R&D


ability to identify the company’s most creative bench scientists – and to help them cultivate new scientific insights and connect with the most promising external sources of innovation. These mid-level managers are an underused asset. They can nurture and navigate promising ideas through complex organisational decision making, reinforce an environment of top-quality science, and keep the brightest minds engaged day in and day out.” Better use of the mid-level cohort can be a critical factor leading to breakthroughs in innovation effectiveness in a range of industries, not just in pharmaceuticals, says Booz & Company. M

espite continuous growth in research and development (R&D) spending, many senior leaders remain deeply concerned about their organisation’s ability to innovate. New research by Booz & Company points to an unexpected and unheralded source of potential productivity in the R&D function: mid-level managers Booz says companies can significantly raise their R&D productivity by recognising and activating the unique impact of leaders in the middle of the organisation’s hierarchy. “Our research with pharmaceutical companies reveals that leaders in the middle of the hierarchy have a singular



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If the shoe fits Sarah Robb O’Hagan, in charge of global brand management for PepsiCo’s Gatorade sports drink, says the secret to success is to know who you are, and who you are not.


arah Robb O’Hagan has taken the occasional wrong turn in her career. Not least was arriving to work on her first day at Virgin Atlantic to find her boss had been sacked. This was followed by a disastrous decision to work for a video game maker – despite having no interest in the technology. One doesn’t get to the top without a hiccup or two, but her interest in sport along with a passion for advertising and marketing, has helped Robb O’Hagan scale the corporate ladder in the US. Today, the daughter of former All Black John Buxton, is the Chicago-based president, Gatorade North America global chief marketing officer, PepsiCo Sports Nutrition – which, like sports the drink, is quite a mouthful. Starting out at Air New Zealand – landing a prized place as a graduate trainee – she was keen to work for Richard Branson’s Virgin group. But getting in front of anyone who could hire her was going to be a mission. She was in the right place though; Air New Zealand had posted her to the US, putting her marketing degree from the University of Auckland to good use. While doing well at Air NZ, she kept her eye on the funky Virgin brand, waiting for an opportunity to connect with them. A marketing conference featuring senior Virgin Atlantic staff seemed a perfect place for Robb O’Hagan to pitch herself. Even better was that the conference was to be held on a ship – Robb O’Hagan’s prey had no escape… “The conference was taking place on a ship off Manhattan and the head of marketing at Virgin was going to be there,” says Robb O’Hagan. “I thought, ‘I don‘t care what it costs me, I’m going’.” Over three days Robb O’Hagan, then

aged 25, got to know the person who eventually hired her as Virgin Atlantic’s marketing and promotions manager. However, on her first day at Virgin she was told her new boss had been sacked. Robb O’Hagan pushed to see someone in HR and was given a job. “I got to look at the business and began to understand why the last person was sacked. There was no business or marketing plan,” said O’Hagan speaking at this year’s World Class New Zealand conference. She wrote one, handed it to the head of the US business and three weeks later was promoted to marketing director. One of her first campaigns was the infamous Shag Atlantic promotion that included the line “we’re not the type of airline to knock on the toilet door”. It turned out to be a good move for Robb O’Hagan who went on to work for Virgin’s music division and – at 26 – attended the Cannes Film Festival where she met Virgin’s owner Sir Richard Branson. A job as vice president marketing at video game maker Atari Interactive seemed to be a good move. But she learned a tough career lesson when the company told her ‘Game Over’. At 28 she was sacked after two years with the firm. “I decided to join Atari, but completely overlooked the fact that I hate video games,” she says. “Know who you are, and know who you are not. I should have known at the [Atari] interview that it wasn’t going to be a fit for me. I had no emotional connection with the products we were making, it was a really tough experience.”

But out of disappointment and a severe kick came clarity. Robb O’Hagan decided to play to her strengths – advertising, marketing and sport. Sports shoe manufacturer Nike seemed the perfect fit. “I had tried to get into Nike for about three years,” says Robb O’Hagan. “I had a passion for the brand.” Ultimately, she took a pay cut and a lower grade job to get in the door. She spent six years at Nike in various marketing and general management roles and had a hand in campaigns such as the Nike+ ipod collaboration and the launch of Nike’s move into the action sports business. Although feeling quite settled in her role, a call out of the blue from Gatorade in 2008 placed a fork in the road for Robb O’Hagan. Pregnant with her third child, she decided to move to Chicago to help lift the sales performance of the company as chief marketing officer. In January this year she became responsible for the North American Gatorade business and the global brand management. M

Sarah Robb O’Hagan is a member of Kea, New Zealand’s global talent community.

JULY 2011

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NZIM – Leadership

Future focus The New Zealand Institute of Management’s new national chairman Gary Sturgess knows what he wants to accomplish during his tenure at the top. NZIM is, he says, “more relevant today” than it has ever been.

Reg Birchfield: What are the most important challenges facing managers today? Gary Sturgess: Managers must be adequately prepared to meet all manner of expected and unanticipated commercial challenges. They must be skilled and trained to the highest levels so challenges can be seen instead as opportunities. RB: Is that where NZIM has a role to play? GS: Because the challenges, both local and global, are constantly widening and changing, NZIM is more relevant to business managers and leaders today than it has ever been. There are, however, some problems with the term “management”. Leadership has, over the past decade, become the new buzz word. That said, I don’t believe a manager can be successful through leadership skills alone – unless leadership is defined broadly to include such critical professional skills as decision-making, strategic and operational planning and delegating. We must improve the practice of management and, NZIM is the leading provider in this space. RB: What can and should NZIM deliver to managers and leaders in future? GS: We must focus on maintaining and delivering our traditional high quality and relevant courses, programmes and events. But we must do more to help organisations develop their people and strengthen their enterprises by: • Synthesising leading-edge research and 10 | | JULY 2011

making it accessible to busy managers. • Providing opportunities for managers to share their management problems online and receive support and advice from peers. • Forming international partnerships to bring speakers, knowledge and opportunities to members. • Being globally focused and locally contextual. • Developing advocacy programmes. • Providing networking and conference opportunities. • Continuing to promote the Young Executive of the Year Awards. • Providing personal and organisational solutions rather than training brokerage. In summary, we must more effectively deliver organisations what they need to build their management capability, credibility, capacity and to help them grow and develop their export potential. We need to encourage organisations to become passionate about personal and professional development as an ongoing process. RB: How can NZIM show how relevant it is to management and leadership development? GS: We must more clearly define our value proposition. We will promote the brand more effectively and show through case studies and the like, just what results NZIM can help organisations achieve. RB: What are some of the biggest challenges now facing organisations?

GS: Securing sales targets and professionally managing company cash flows. Businesses must be prepared to meet competition from expected and unexpected sources. And they need to ensure that their people management and overall organisational approach to running a successful business is second to none. Many enterprises are also facing reducing incomes and workforces. There is both local and global competition for market share and pressure to deliver more for less. There is also a tendency to embrace talent management systems that focus on the development of the “few” when organisations still need the “many” to manage the employees who deliver the products and services. When that happens, the “many” get disengaged. And with many decision makers based offshore, local companies see themselves as little more than branches with limited or no decision-making capability. The result is disenfranchised workers and managers asking what is in it for them? There are probably still too many stick rather than carrot led organisations. RB: NZIM is talking about its own restructuring to meet the demands of the future – can you explain what is happening and how it is important for members? GS: NZIM is clarifying its vision of the future and redefining why it exists. It is also focusing on what future products and services it will need to deliver.

A little over a year ago, NZIM members regionally voted to merge their regions into one entity. The benefits are clear. The financial status of the three regions will be consolidated into one financial entity. The operational delivery of a new agreed mission, vision, value and culture will provide the direction and leadership toward achieving an agreed future strategy. Members will then enjoy the benefits of one organisation that has a clear national direction with regional delivery. These changes are critical to ensuring the future strength and effectiveness of NZIM. Effective facilitation of increased levels of employment and management engagement are critical to lifting New Zealand’s productivity and competitiveness. Leadership and management skills are needed to guide, coach and build the strength of individuals and teams in all organisations. RB: Are you optimistic about the state of management in New Zealand and its capacity to deliver what the country needs? GS: I am. We do, however, need more and better forward planning. It is not enough to just maintain the current professional management base. We must get better at anticipating the future needs of business and what it will take to build management capability to meet those needs. NZIM will work with other organisations to achieve what is best for the country. The Government talks about how important it is to lift productivity. Middle management plays a critical role in this strategy and process. NZIM’s opportunity is to reinvent itself through national integration and strengthen its membership communications strategy in each region to be more supportive of all members and users of NZIM services. RB: What is your personal vision for NZIM? GS: To ensure that it retains its leading national business and professional status and profile. The NZIM brand is strong, but it must become even more widely recognised as being synonymous with quality-driven and value-based training and member services.

NZIM must be recognised as the “goto” management organisation to which all aspiring and practising managers and leaders want to belong. There is great scope for NZIM to reach even further into the regions to take new opportunities to businesses. I want to see us broaden and strengthen our membership base. NZIM must offer a selection of programmes and courses that are nationally consistent with regions adding tailored learning solutions to meet the needs of their local members, managers and leaders. The ideal future position would be to have a high level of engagement with New Zealand managers (present and future), corporate and public sector organisations that deliver programmes and services that build capabilities which deliver tangible and measurable market results. M Reg Birchfield Life FNZIM, is a writer on leadership and 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 BRIAN SOUTAR AFNZIM John Sandford FNZIM Ashley Dixon MNZIM Joanne O’Connor MNZIM OFFICES National Office Chairman: Gary Sturgess Life FNZIM Box 67, Wellington 6140 Ph 0-4-473 0470, Fax 0-4-473 0479 Email National website Northern President: John Sandford FNZIM CEO: KEVIN GAUNT FNZIM, FAIM Box 6600, Wellesley St, Auckland 1141 Ph 0-9-303 9100, Fax 0-9-303 9109 Email Website

Gary Sturgess, Life Fellow of NZIM Joined the Southern Division of NZIM in 1977. President of Otago and Taranaki divisions and served on the Central Board. Joined Auckland division in 2001 and Northern Board in 2003. Became vice president in November that year. NZIM Northern Chair from 2005 to 2009 and served on National Board of NZIM. Appointed Justice of the Peace in 1989. More than 30 years in corporate management. Appointed chief executive of Hospice South Auckland in May 2008.

Central President: Lynda Carroll AFNZIM CEO: Karin Call agh an FNZIM, FIPAA Box 11781, Wellington 6142 Ph 0-4-495 8300, Fax 0-4-495 8301 Email Website Southern President: BRIAN SOUTAR AFNZIM CEO: Joseph Thomas AFNZIM Box 13044, Christchurch 8141 Ph 0-3-379 2302, Fax 0-3-366 7069 Email Website

NZIM Foundation Chairperson: David Moloney FNZIM Secretary: Jim Thomson PO Box 67 Wellington, Ph 0-4-473 0470

JULY 2011

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M politics Colin James

International now mainstream

12 | | JULY 2011



oreign policy is trade, Sir Robert Muldoon said 35 years ago. Murray McCully and John Key have in effect been saying the same since they took office. Actually, trade is foreign policy – and foreign is domestic. This was the import of a littlenoticed recent speech by Treasury deputy secretary Gabriel Mahklouf. The time when a government, especially of a small country, could separate international relations from the rest of its operations is long gone. In the 1990s Tim Groser, then a trade official, laid down a four-part trade policy agenda. The first plank was an efficient domestic economy with internationally competitive regulatory, tax and government spending settings. The Treasury has argued that for more than three decades. But it was not much more than a bystander and occasional technical adviser on the three other parts of Groser’s schema: a multilateral trade deal, open regional trade groupings and plurilateral/ bilateral free trade agreements. They were handled by the Ministry of Foreign Affairs and Trade (MFAT). When “New Zealand Inc” entered the political rhetoric, it was essentially intended to bring together MFAT, New Zealand Trade and Enterprise and tourism and immigration officials. John Allen made that a priority when he took over MFAT in 2009, but has made slow progress. Mahklouf essentially argued in his June 1 speech that New Zealand Inc must involve far more government agencies – and especially the Treasury. He focused on three “key areas”, one of which was domestic policy settings and another the need for the Treasury to have active relationships with counterparts in major trading partners. In fact, in addition to regular talks between the heads of Australia’s,

Britain’s and New Zealand’s Treasuries, there is an “annual strategic dialogue with our Indian and Korean counterparts, fledgling discussions with the United States” and moves for a “strategic dialogue” with China. This illustrates that “trade is foreign policy” rather than the other way round. McCully’s initial narrow focus on trade missed the point that for trade to flourish, the whole gamut of each bilateral relationship needs tending. Because of McCully’s influence over Key in foreign policy, that infected foreign relations policy generally. McCully has this year shown signs he might be parting his blinkers slightly. But Bill English is still not part of the international action, except to keep overseas lenders sweet. China is now a big part of that agenda because of its massive reserves, some of which are fetching up here, invested in government bonds and, gradually, directly into productive enterprises. This got attention in late May when David Mahon said New Zealand risked losing China’s goodwill with its unwelcoming policy toward that direct investment – notably in the Crafar farms case. Labour is more unwelcoming still. In fact, Mahklouf said, New Zealand “does not rank among the highest-scoring countries” in international measures of ease of trading across borders. It “does

not score well” in “openness to foreign investment”, even though “highly dependent on foreign capital”. We could slash that dependence with a massive switch from spending to saving. But that would miss Mahklouf’s broader point: we now live in a “global village” in which “moving ourselves or our money, seeking out better opportunities, has never been easier”. So, he argues, if we want to be a prosperous player in that village, policy on matters “such as tax, education, labour, immigration and management of the environment” becomes critical as a definer of our attractiveness to migrants and investors who can boost prosperity. That requires that this country “internationalises” its domestic policy. Internationalism is no longer a desirable (or undesirable) option. It is mainstream. That is the hard lesson the financially pressed United States middle class is learning. For the government here it implies a big rethink. English is actually a key foreign-relations minister. Other ministers, too, are part of the New Zealand Inc international story. Key might usefully look out beyond McCully to the new world. M Colin James is New Zealand’s leading political commentator and NZ Management ’s regular political columnist.

Bob Edlin economics M

Borrowing bloats exchange rate

Benjamin Franklin... “He that goes a borrowing goes a sorrowing.”

that borrowing extra money might have helped push up the value of the dollar. Once the Government started to borrow less from July, the pressure on the dollar should be eased. Labour’s finance spokesman David Cunliffe exploited the disparate remarks from the Government’s leader and deputy to say they were “at odds over whether borrowing $380 million a week instead of $300 million is affecting the exchange rate”. And so: “Who should Kiwis believe?” He saw the good sense in borrowing at favourable market rates, “but when the Leader and Deputy Leader have clearly not bothered to talk to each other about the potential impact, then we should be worried about the Government’s lack of direction…” There’s no evidence the two did not talk to each other. But let’s hope they have a proper grasp of the exchange



he Government made no secret it was borrowing more than it needed in the year to 30 June 2011. Early in May, Prime Minister John Key told Parliament the Government’s bond programme for the year had recently been extended to $20 billion. This was more than required for the year, but the Debt Management Office was front-loading some borrowing to take advantage of favourable market conditions. This meant new debt had averaged $380 million a week, an “absolutely unaffordable” increase, Key said. This inevitably invited follow-up Opposition questions about whether the Government could afford to spend $44 million a week on tax cuts for the wealthiest 10 percent of our country, and so on – but that’s another issue. The focus here is on borrowing and its consequences. On 7 June, when questioned about the Government’s borrowing requirements, Finance Minister Bill English elaborated: the Debt Management Office had borrowed about $5 billion more than was strictly necessary in 2010/11 to take advantage of beneficial market conditions. Over the next 12 months, as a consequence, it would borrow about $5 billion less because it already has the money in the bank. Given the state of world financial markets, he regarded this – in hindsight – as “a very smart move”. English then was asked who was running the economy: Mr Key, who had said the extra borrowing would have no impact on the exchange rate, or his Finance Minister, who said it would, thereby providing a further reason for reducing debt? That’s not exactly what English had said. He had told news media the Government borrowed the money at lower interest rates, but he conceded

rate effects of their borrowing. If they need a refresher course, they might consult a Listener column by economist Brian Easton some two years ago. It explained the well-established economic proposition that capital inflows (which include borrowing) lift the exchange rate at the expense of the economy’s ability to earn and conserve foreign exchange by production and sales. That’s what had happened to the New Zealand economy since 2002, when we embarked on a great splurge of foreign borrowing, Easton contended. “Not surprisingly, the tradeable sector stagnated while the internal sector expanded rapidly, its expenditure fuelled by the borrowing.” Offshore borrowing was not necessarily bad. “If” the funds were invested in strengthening the tradeable sector, foreign-exchangeearning production was enhanced, so when the borrowing splurge was over, the strengthened industry could take over again (as well as service and pay off debt). It’s an important “if”. Easton concluded it was absurd to expect the Reserve Bank to hold down the New Zealand dollar while we continue to borrow heavily offshore. Some short-term measures could influence the exchange rate, but in the medium term the Reserve Bank could not keep the dollar low when we are over-borrowing. Whether we are still over-borrowing is open to argument. But Treasury forecasts show the current account balance deteriorating from a 0.5 percent of GDP surplus (2010/11) to a seven percent deficit in 2014/15 while our overseas net debt worsens from -78.6 percent of GDP to -85.3 percent. M Bob Edlin is a leading economic commentator and NZ Management ’s regular economics columnist.

JULY 2011

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Who’s leading what?


orld enterprise, according to a growing body of research, is facing a leadership crisis. Businesses are becoming too complex, too competitive and yes, too confused about the future to govern and manage effectively. This issue of NZ Management is heavily focused on leadership because, in part, this time each year organisations like Leadership New Zealand and the Sir Peter Blake Trust promote Leadership Week. Coincidentally, a new Global Leadership Forecast by the Pittsburghbased DDI Group was released to this magazine ahead of general media distribution. Its findings suggest a “leadership revolution” is needed to fix an increasingly serious global leadership problem. This tandem of events seemed like just cause to tackle the topic in detail. An IBM global CEO study conducted in late 2009 found that half the chief executives from 60 different countries surveyed, doubted their organisation’s ability to handle the world’s increasingly “volatile and complex” business environment. And around 80 percent of them expected their operating world to become even more complex. Now, 18 months later, DDI’s study (see cover story p16) reaches similar conclusions and worse. Leaders are not only finding life increasingly difficult, their organisations are simultaneously failing to school up sufficient next-level leaders and managers to take over. The global financial crisis (GFC) and potent new smart technologies have combined to accelerate and exacerbate the problem. The speed with which the new information society is imposing itself is so great, and the transition to the next generation of better equipped leaders so slow, that the marketplace and society in general are confused and frustrated. People expect leaders to lead and now they are too often ill equipped.

14 | | JULY 2011

Despite the plethora of early warnings, the world is not well prepared for the knowledge age. But then, neither was it for the industrial age. Preparation for an economic, social and environmental shift of such magnitude is understandably too much to ask, given our innate resistance to change. But the degree of change taking place is what makes leadership so important. The differences between leadership and very competent management are rather more stark in today’s climate.

world. Organisations built, perhaps, on partnerships, alliances and more stakeholder participation and democracy. Change has become, as the DDI research points out, the only constant in organisational life. Leaders are, or should be, change agents. The successful enterprise will become addicted to change. Good leaders channel change. Managers and teams deliver it. The information and knowledge age is transforming enterprise at an unprecedented and accelerating pace.

The successful enterprise will become addicted to change. What then, should leaders be focusing on? People for one thing. The way people are led and managed hasn’t changed much in 50 years, even though their terms and conditions of employment have. More of us work from home or in some way remotely, yet human resource managers everywhere assume, for example, that young people are the most desirable and least costly employees. Enterprise doesn’t seem to know what to do with older employees, despite the fact their numbers swell with every passing month. There are, for example, no policies or strategies for making people who have reached retirement age more productive. No moves are made to tap their knowledge and experience. Economies need leaders to think about people rather than processes in the knowledge age. Then there is the enterprise itself. It was created for a different age altogether. Wise and courageous leaders might think more proactively about new forms of organisations. Forms that would better fit the needs of a different

The ramifications of this transformation are everywhere. Leaders meanwhile are struggling to keep up. That is, on the face of it, frightening. The problem, of course, is not insurmountable. It is a question of understanding what true leadership is, what it can deliver and investing in its nurture and development. Leadership is not genetic – though some individuals are more natural leaders than others. The evidence of need is everywhere apparent. And the greatest changes lie ahead. That tomorrow will be vastly different from today and not look anything like the most ambitious predictions is fairly certain. The future will, of course, be dominated by information and a host of other re-shaping technologies. Leaders will guide us to new destinations. They will also shape the form of the future. Enterprise and society must invest in the right leaders to ensure the ROI is what we want it to be. M Reg Birchfield is NZ Management ’s consulting editor and writer at large.


The Power of Co-creation By Venkat Ramaswamy & Francis Gouillart • Free Press • RRP$38.99

As management buzz words go, “cocreation” is not the catchiest. It’s a bit of a head-scratcher. But, as the saying goes, you can’t always tell a book by its cover. The term, co-creation, was originally coined by Venkat Ramaswamy and the late CK Prahalad when they were researching their co-authored best seller, The Future of Competition, back in early 2000. Subsequently Ramaswamy, a highprofile professor at the Ross School of Business, University of Michigan, teamed up with Francis Gouillart to study and investigate co-creation more deeply and set up the Experience Co-creation Partnership. Their research findings are, they believe, “groundbreaking” and as a consequence they have unearthed a whole new business model which “boosts growth, productivity and profits”.

Winning Matters By Sean Fitzpatrick • Penguin • RRP$42.00

If watching your kid’s footy team thrash their unhappy mate’s by more than the now recommended 35-point margin offends you, don’t read this book. As the title of former All Black captain Sean Fitzpatrick’s latest literary effort states: Winning Matters. The subtitle, “being the best you can be”, provides some elaboration of his life philosophy. He doesn’t subscribe to the view that – whether in sport or in business life – simply taking part is reason enough. Fitzpatrick has played to win ever since his older siblings, sister included, used him as an excuse to exercise their inner demons. And he’s never really stopped trying to better others. The bigger and

Co-creation is about tapping the power of communications technologies to build “engagement platforms” that draw an organisation’s stakeholders, particularly its customers, into the product and service innovation, marketing, distribution, and organisational performance processes. It offers a new “business paradigm” that is in sync with today’s connected and networked world. The authors draw on the experiences of a raft of global enterprises such as Nike, Starbucks, LEGO, Apple and Dell to make their case. Their studies illustrate how co-creation practices which engage all stakeholders in the value creation process of a business, enrich everyone. The book is constructed in two parts. The first focuses on value co-creation – on how to become a co-creative enterprise, explaining the principle and how it works, why it stimulates innovation, how networks work for people and

enterprises, how to build social ecosystems and how to design the critically important engagement platforms. The second part, of particular interest to managers and directors, is all about organisational transformation, leading the co-creative enterprise, going beyond business process to focus on co-creative engagement, opening up strategy and “co-creating institutional change”. Co-creation is the authors’ answer to the next iteration of enterprise. Society is, they claim, witnessing a structural change in the relationship between institutions and individuals. Co-creation is, therefore, about organisational democracy and a chance to re-invent, or at least refurbish, the tarnished image of old style capitalism. This is an important book which directors and managers who think about the future of enterprise should read. – Reg Birchfield

more threatening they are, the more he enjoys the challenge. Leadership was not, however, something he aspired to. Like many things in his life, it happened because he worked hard, was in the right place at the right time, and, once he had his hands on the mantle, he was determined to learn what it took to be the best All Black captain he knew how. Fitzpatrick’s business career has been equally successful, and for much the same reasons. He can be a little “nasty” when needed. He is disciplined, he practises and he plays to win. The book draws interesting parallels between the leadership truths he discovered in sport and how they apply to his business life. The book is peppered with personal

tips on how to “be the best you can be”, which is his motivating mantra. The endeavour to be the best provides Fitzpatrick with “genuine enjoyment”. Watching others “working at being the best they can be is infectious, attractive and compelling”, he writes. It can be “bloody difficult … but very rewarding”. His life and leadership thoughts are interesting. Many of them are, as he says, pretty obvious. And I have to concede, it was the generous sprinkling of insights and incidents that took place under the grandstand that kept me involved. Winning Matters is an open, honest, engaging and nicely written book. And, at just 200 pages of nicely spaced text, it is an easy weekend read. – Reg Birchfield JULY 2011

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It will take a leadership revolution to halt the slide in both the competency and number of leaders equipped to cope... 16 | | JULY 2011


Leadership’s looming crisis World enterprise is facing a leadership shortage of crisis proportions. The problem, increasingly obvious over the past decade, is worsening more rapidly than expected. It is acute in New Zealand and looks set to become even more so. Writer-at-large Reg Birchfield reports on the implications of alarming new research released to NZ Management for this special leadership issue.


usiness and organisation leaders are overwhelmed by the complexity and scale of the problems confronting their organisations. They are facing a perfect management storm which, like the changes playing merry hell with the globe’s climate, is the outcome of a suite of simultaneous actions, inaction, policies, practices and life-changing technologies. The increasing complexity of organisational life and leadership is the wave that threatens to become a tsunami of economic misadventure. Less certain is an exact understanding of the sequence and relative importance of the changes happening at the epicentre of global enterprise.

Pennsylvania-based talent management consultant Development Dimensions International (DDI) has just released its 2011 Global Leadership Forecast. The findings are, it says, so disturbing that it will take a “leadership revolution” to halt the slide in both the individual competency and the number of leaders equipped to cope with the pace and implications of change. Christien Winter, director of Sheffield, an Auckland-based executive recruiter and DDI’s New Zealand licensee, agrees that “leaders are overwhelmed” by complexity. “But whether it is their own lack of skill and capacity or the pace of change and the lack of people with the skills and

experience to support them, is the more interesting question,” she says. The DDI forecast is the largest biennial study of its kind in the world. This year’s is the sixth undertaken since 1999. It is based on interviews with 12,423 leaders and 2000 human resource professionals in 74 countries. Its findings mirror a similarly extensive global study of 1500 chief executives undertaken last year by IBM Global Business Services. The studies show that leaders now make decisions in an increasingly unpredictable business environment. About 60 percent of the CEOs surveyed by IBM said their businesses were “more volatile, uncertain and complex” than they had JULY 2011

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Photo: Jan-Michael David

“New Zealand's acute leadership shortage looks likely to remain for some time.” – Sheffield's Christien Winter

ever been. They expected them to become even more so. The complexities facing leaders include the pace of change, increasingly competitive markets, political and financial instability, increasingly scarce talent resources, the Global Financial Crisis (GFC) which strafed the ranks of middle managers, poor governance, short-sighted or non-existent leadership development strategies, demographic changes, outdated organisation structures and changing management cultures. Does leadership quality matter? Yes, apparently. A growing volume of research suggests the quality of leadership can make or break an organisation’s sustainability. The DDI study found that top performing leaders have 50 percent more positive impact on their organisations than do average leaders. Organisations with the highest quality leaders were 13 times more likely to outperform their competition in key bottom-line metrics such as financial performance, quality of products and 18 | | JULY 2011

services, employee engagement and customer satisfaction. Only six percent of those in organisations with “poor” quality leaders outperformed their competition. Passion versus pay On the other hand, 78 percent of those who rated their organisation’s leadership “excellent” were in organisations that outperformed their competition in bottom-line metrics. According to the study, quality leaders also retain good employees and keep them engaged. And “passionate” leaders, rather than those who simply take promotion for the “greater compensation”, are even more effective. Leaders are not keeping up with the speed of business in today’s increasingly competitive world. According to the DDI Forecast, only 38 percent of the leaders in their study rated their organisation’s leadership either very good or excellent. The HR respondents were even more critical. Only one in four rated their organisation’s leadership highly.

These outcomes echo those found in DDI’s 2009 Forecast which suggests that, “despite the billions of dollars spent on an array of talent management initiatives over the past two years, organisations have made little progress”. This outcome might, at least in part, be explained by the somewhat rosier view higher-level leaders have of the problem. Mid or first-level leaders who are more exposed to the everyday realities of good and bad leadership are much less optimistic. The disconnect between top and next level leaders might also be a reflection of the fact that senior level leaders are accountable for developing leaders. They might, therefore, be hesitant to admit fault for low leadership quality. “Either way, their perspectives could prevent them from fully understanding the pressing need to develop leaders at the lower management levels,” according to the study. Another major US talent consultancy, California-based Bersin & Associates, has released similar findings. More than half


of the organisations in the B&A study said businesses were “being held back by a lack of leadership talent” and their top priority in the next year is to improve leadership skills. “The world is changing very quickly and leaders are struggling to keep pace,” says Winter. “But the acute shortage of leaders generally is equally problematic. It may be that the lack of people resource is also preventing leaders from developing the skills and competencies they need to lead effectively.” The world’s swelling shortage of “management talent”, which both supports incumbent leaders and replenishes the pool from which new leaders emerge, has been measured, researched and widely reported. Despite this, there has been little progress in filling the gap and developing managers for higher leadership roles. The shortage of talent on the leadership and management bench, both locally and globally, is troubling. The GFC and subsequent recession haven’t helped. Many organisations stopped focusing on talent development, slashed their middle management ranks and switched to satisfying short-term, rather than future, strategic objectives. After DDI discovered what it calls “the truly dire state of leadership” more than a decade ago, it believed better leadership

practices would evolve. “Evolution now seems too light-handed (and relaxed) for the kind of progress that needs to be made,” it says in this year’s Forecast. “Organisations are forging ahead at lightening speed and revolutionising other parts of the business. It is time for leaders to move forward too. The time has come to revolutionise leadership practices to develop leadership capabilities that can keep up with the speed of business.” Breaking out the New Zealand and Australian findings from the body of the DDI survey is even more worrying for Australasian enterprises. Only 34 percent of leaders and 22 percent of HR professionals in the two countries rated their leadership quality high. As relatively small players in the global business landscape, Australasian organisations are strongly influenced by shifting global trends, market conditions, currency fluctuations and increasing involvement in the broader Asia Pacific market. The need for strong leadership is, therefore, even more critical. Winter also calls New Zealand’s leadership and talent shortage “acute” and warns that it is likely to remain so for some time. “Our talent is often attracted to growing economies and interesting career tracks offered offshore,” she says. “The world’s fastest growing

economies, particularly in Asia, South America, Russia and so on, are aggressively recruiting talent to meet the demands of their expansion.” New Zealand’s worsening talent and leadership shortage is impacting our successful exporters and companies that are expanding their operations in other countries. “Exporting companies, like Fisher and Paykel or Raycon for example, need leaders who know how to run global businesses,” says Winter. Fonterra chief executive Andrew Ferrier told NZ Management last year that, when it came to recruiting for senior executives, he was more often than not forced to fill the posts with offshore talent. “Our [senior leader recruitment] criteria require that we employ the best possible people,” he said. “They were not, unfortunately, always home-grown.” This predicament does little to satisfy the Government’s constant exhortations to enterprise to compete and grow their global business opportunities. Winter agrees that when Sheffield is briefed to find executives with global experience, the company is forced to look offshore. Patchy boards Board awareness of New Zealand’s leadership and talent shortage is “patchy”, according to Winter. “In many cases

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[recruitment] is still delegated to the CEO and leadership team to deal with. It is an HR and talent issue,” she says. Some organisations, such as Air New Zealand, see it as a strategic priority. “They have done a great job around their talent and culture strategy,” she adds. “They take it very seriously.” Some insurance companies, such as Sovereign Insurance, IAG, Lumley are, she says, also taking the matter seriously. So too is the ASB Bank. “And the performance results of companies that are treating [talent development] strategies seriously are demonstrably better,” according to Winter. “They are becoming the brands of choice for talented people. They are managing their people differently and becoming more nimble and flexible in how they conduct business.” A 2006 study by The Economist Intelligence Unit on how top executives from 10 countries were nurturing their future leaders said management of a company’s talent pool is now too important to be left to the HR department. It has become the responsibility of the CEO. Two thirds of the CEOs interviewed for the study said they spent 30 to 50 percent of their working time on talent management. The others spent about 20 percent of their time on it. New Zealand’s preponderance of small- to medium-size businesses doesn’t make leadership development easy. Smaller companies often lack the resources or the leadership focus to tackle the problem. Nevertheless, 40 percent of the Australia/ New Zealand DDI sample said they had increased their leadership development budgets since the last survey two years ago. The DDI study identifies three key leadership quality drivers. They are: • Leadership development. • Talent systems and processes. • Management culture. Improving leadership involves identifying the critical skills leaders need to succeed and then providing them with the opportunities to develop and apply those skills effectively. Leadership quality is, says DDI, improved by ensuring the effectiveness of the talent management systems that 20 | | JULY 2011

support development – such as leadership selection, performance management and leadership succession. For talented individuals to fulfil their potential and drive business success, management must create organisational cultures that “allow people the freedom and opportunity to be effective”, according to the Forecast. The survey suggests that leadership development programmes are a major determinant of leadership quality in any organisation. Australasian companies seem to be keeping pace with the rest of the world when it comes to leadership development spend. But, only one in every three HR professionals in this part of the world thinks their organisation’s leadership development efforts are “effective”. Driving skills Are organisations focusing on developing the right leadership skills for the future? There is certainly a difference of opinion between what Australasian companies think are the right skills and what the rest of the world rates most highly. Past DDI surveys identified the most critical skills Australian and New Zealand leaders needed to be effective were: • driving and managing change • improving employee engagement • building customer satisfaction and loyalty. The focus has changed in the last survey. Driving and managing change is still the top priority. Coaching and developing others is now number two and executing organisational strategy makes up the top three skills. But globally, identifying and developing future talent and fostering creativity and innovation rank as second and third priorities behind driving and managing change. This difference may be risky for New Zealand and Australia if their reliance on traditional resource-based industries inhibits other, potentially more innovative growth opportunities. With global organisations more focused on innovation, Australasian companies might find themselves behind the curve in future.

We seem less intent on retaining and motivating employees and more focused on workforce capacity and execution. The DDI analysts wonder if the execution focus is happening at the expense of other, more future-focused skills. “To be at the forefront of a knowledge-based economy (as New Zealand and Australia aspire to be) leaders must inspire innovation and achieve competitive advantage,” they write. “And coaching and developing others is seen as critical in the next three years, potentially due to the need to ensure leaders have the right skills and support to deal with upcoming issues.” But coaching and developing others is considered a relatively weak Australasian skill. Globally companies see it as a high priority. New Zealand’s leaders struggle with personal coaching and performance management processes because they are innately egalitarian, says Winter “We prefer to not confront issues. We are not as assertive or formal about how we interact with each other. This is a strong cultural issue for us to address as a nation. “In environments where this [leadership process] is done well, they have developed a culture in which they expect performance, where it is okay to have open conversations, where they handle issues constructively and where they help individuals grow because it is important to both sides. It is all about transparency and focus and holding people accountable. We are not good at doing this.” Fletcher Building CEO Jonathan Ling expressed a similar view of New Zealand cultural and leadership DNA when I talked with him two years ago. “New Zealand is defined by its relationship culture,” he said. This culture was, he thought, linked to the smallness of the community and the Kiwi’s need to “get along” with others. No one really wanted to make an enemy of someone they may need to have dealings with the following day, he said. New Zealand’s smallness presents other organisational and leadership problems. Companies are pressured by the realities of tight budgets and limited resources, both of which compromise


and talent management are, the third driver – management culture – seems increasingly critical to effective leadership. “Talent doesn’t work in a vacuum,” says the study. “Even the most capable talent cannot thrive in a culture that does not allow them to make decisions, influence others and do their jobs effectively.” Flexible and fluid Economic reform might have helped Australasian leaders call their organisational structures more “flexible” and “fluid”, but they haven’t made much progress in opening up decision making, according to DDI. Only 30 percent of leaders say their enterprises invite discussion about key strategic decisions and creating a nimble, more fluid organisational structure. According to Australasian leaders, their management cultures are not as asgthey are around p evolved df Pa e 1 2 1 / 0 6the / 1world. 1 , Only a quarter of them rated their

management culture “effective”. If accurate, this poses another problem for New Zealand enterprise. The global sample shows that organisations with highly effective management cultures are three times more likely to outperform their competition on nearly all key bottom line measures. Business leaders are under pressure at a time when good organisational leadership has never been more important. The majority of New Zealand leaders do not have the skills they need to be effective in the new global landscape. Talent strategies have been neglected. Cost cutting and process efficiencies have honed leaders’ execution skills. Those are not the skills most needed to deliver the future. The way in which leaders are developed, people are managed, innovation is embraced and appropriate management cultures are implanted 5 will : 2 spell 8 Pthe M difference between future organisational success and failure. M


efforts to embrace and implement adequate talent and leadership development programmes. One upshot of this is a corporate tendency to resort to “quick fix”, short learning programmes. Putting more sophisticated, tailored and properly integrated leadership development and talent management systems in place is considered too expensive or too demanding of senior management’s time. Consequently, New Zealand HR professionals surveyed by DDI think the effectiveness of most local talent management systems is “dismal”. They rated leadership succession and senior-level leadership development systems as the least effective systems of all. Unless these issues are “sitting on the board table as a critical strategic issue to sustain the company long term”, then they may not be perceived as important by the senior management team, says Winter. BAs N Zimportant 7 0 6 5 _ as I nthe v ofirst i ctwo e F busii n. ness drivers of leadership development

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JULY 2011

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Finance and The Economy series

Funding growth

minus an overdraft Continuing NZ Management’s series on finance and the economy.


ebtor – or invoice – finance can eliminate companies’ cash flow crunch. The facility, whereby a third party loans against the invoices companies send to clients, is becoming popular as the perception of it being a financing option of last resort subsides. One of the reasons for this change in attitude, says Simon Thompson, CEO of Lock Finance, is that a mainstream bank – the BNZ – is now offering this facility. Unlike an overdraft facility, debtor financing does not require a charge on property, plant or machinery. The security is in the ability of your clients to pay their bills. While some debtor financing firms will pay up to 80 percent of your total ledger, others will choose which invoices they will accept. In this case, an invoice you send to the local council

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With business loans hard to get as banks continue to be risk-averse, invoice financing is starting to gain ground as the funding method of choice for firms in growth mode, writes Steve Hart. would be fine, but an invoice sent to a sole trader without much of a track record may be declined. Debtor financing is different to factoring because your clients need never know a third party is involved. It also means that collection is down to you, not the finance company. However, while it can cost more than an overdraft, it can deliver an instant boost to your cash flow. The BNZ has been offering what it terms invoice financing or invoice discounting since 2003. It is currently the only mainstream bank that does. It’s a product that is well-accepted in Europe, the UK and Australia. BNZ’s national manager cash flow solutions, Andrew McKerrow, says that in Australia for example, start-ups aren’t offered overdrafts. “They’re offered invoice financing and through the process the company

grows with the bank and the bank gains a better understanding of the inner workings of the business. It’s a more hands-on collaborative approach.” McKerrow says the offering is now taking off here; the BNZ achieved 20 percent growth last year and is headed for 20 percent again this year. And, what’s more, over 70 percent of BNZ’s current invoice finance deals are with customers who are new to the bank. “We are targeting any [business] customer that has an overdraft.” He attributes invoice financing’s relatively late start here to the fact that it is a derivation of factoring – which unfortunately still appears to have a negative connotation in New Zealand, unlike overseas – and the need to overcome that attitude and educate the business marketplace about the confidentiality and non-disclosure elements that make

invoice financing a more attractive proposition. Lock Finance’s Thompson says: “We welcome the banks getting into debtor invoicing because it legitimises [the perception of] it. It is still a bit frustrating that there isn’t a better awareness and acceptance of it, but it is happening gradually. People need to be educated about it. “Most New Zealand businesses still opt for a [financing] model that includes signing their property away as collateral to a bank. Banks tend to put more weighting on property than the balance sheet.

and likely to pay their bills.” Mitchell says debtor invoice financing is “operationally intensive” for companies such as his. “Therefore, we have to review the debtors’ ledger and do site visits. There is a risk of fraud by firms who may create bogus invoices, draw on the invoice from us and leave the country.” Heartland uses a software system to keep tabs on its clients’ business accounts. “We are viewing that information every day,” says Mitchell, “so we get to see what is going on within the business. However, it does mean that our clients

Over 70 percent of BNZ’s current invoice finance deals are with customers who are new to the bank. “Debtor financing is perfect for businesses that are in growth mode. BNZ is now in the market and other banks are probably looking at [offering] this type of product as well. It is certainly very active in Australia, and the UK, where there is much more separation between business finance and property.” James Mitchell, head of business at the recently formed Heartland Building Society – an amalgamation of CBS Canterbury, Marac and Southern Cross Building Society – says the firm insists on having access to clients’ electronic accounts systems on a daily basis. “We would review a client’s debtors’ ledger and pick and choose which invoices we are prepared to lend against,” says Mitchell. “If you are a business with a significant number of debtors who are hard to identify then it is less likely that you could use this facility from us. “But if you had a single debtor – perhaps [you are] a contractor to Telecom – then that would be easy because we consider Telecom to be a good risk

need to have compatible accounting software – which isn’t generally a problem.” BNZ’s McKerrow emphasises that the invoice financing process strengthens the relationship between bank and client because of the understanding the bank gains of how the business operates – particularly its invoicing and cashflow management. “Customers want to know that the banker understands their business; they want active involvement. With knowledge of the inner workings and taking an active interest the banker can add value, further de-risking the business by ensuring it has good robust procedures.” The BNZ designed and built its own online invoice finance system and believes it has developed potentially market-leading software. It kept it simple; customers only have to supply three files – invoice summary, aged debtor and client contact details. It has currently matched its system to 35 accounting packages: “We have

BNZ’s Andrew McKerrow… “Customers want to know that the banker understands their business; they want active involvement.”

all the leading vendors on board from MYOB to Xero to Quickbooks and Attache,” and, says McKerrow, they’ll have close to 60 systems matched by Christmas. “The core target is growth. Many businesses fail because they run out of cash. Our product can solve that by bringing cash forward, funding up to 80 percent of the face value of an invoice out to 90 days; but with the businesses retaining control of the cash collection.” Unlike BNZ and Heartland, Lock Finance lends against a client’s whole accounts receivable ledger. “As it goes up and down, so our lending rises and falls,” says Thompson. “And it is not obvious to the person [receiving the invoice] that there is anybody funding them in the background. “We use averaging principles to lend money against the ledger – there’s going to be some good and others [invoices] not so good. “But we do audit client firms; there are spot checks and we look at client payment history. That gives us comfort on JULY 2011

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Finance and The Economy series

Invoice financing • Receive up to 80 percent of the value of your invoice in cash. • Get the balance when the invoice is paid. • Need to open your financial accounts to the lender. • You may need accounting software that’s compatible with the lender. • Costs include daily interest and a monthly management fee. • Typically more expensive than an overdraft, but no collateral is required. • Choose whether or not to let your clients know that your invoice has been sent to a third party. • You make collection calls – not the finance firm. • Your customers pay you.

Factoring • Your customer would know that the invoice you sent them is in the hands of a third party. • The factoring firm would make collection calls – risking the business relationship you have with your customer. • Your customer pays the factoring firm, not you.

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lease office space, and therefore have no real business assets,” says Mitchell. “But within their client base they might be recruiting for big players such as Fletcher Building or the city council, for example.” Heartland’s debtor invoicing facility helped one Christchurch company out of Heartland Building Society’s James Mitchell... “Because debtor financing isn’t linked to a firm’s property or plant, it is a tight spot when its ideal for firms in the service industry.” plant and machinery was damaged in February’s earthquake. what ratio we will lend – but typically It needed to get its factory up to speed it is 80 percent. Sometimes it is higher, straight away – well before the expected but it can be lower if there is a mixed insurance payout. performance.” “Because it was supplying the maThompson says his debtor financing jor supermarket chains, who are good clients tend to have an annual turnover quality debtors, we were able to extend of more than $30 million, although them finance to get themselves back up he has helped companies with annual and running to full production,” says turnover of less than $2 million – an Mitchell. area where factoring is normally used. Invoice financing is generally more “It is as much about the dynamics expensive than an overdraft facility. of the ledger as the size of it,” he says. Daily interest rates can range from 11 Until now the BNZ’s main invoice percent through to 16 percent. There is finance customers had been SMEs in also a monthly fee to pay; this may be a the $2 million to $30 million turnover fixed amount or based on a percentage category. But its online offering intro- of the total loan. duced in March targets the mediumMcKerrow says the advantage the sized and larger enterprises with more BNZ offers over others in the invoice sophisticated accounting practices. financing market is that as a main “That’s opened up the $5 million to bank its rates are lower. “They range $150 million turnover group and re- from 6.5 to 17 percent with the majorally there’s no upper limit,” enthuses ity between nine and 13 percent. The McKerrow, and it’s working. “There’s rates are more competitive depending been a rise in the level of deals through on the deal size and complexity; they’re the online offering.” assessed deal-by-deal with the larger Because debtor financing isn’t ones in the medium-enterprise and linked to a firm’s property or plant, corporate sector potentially between Heartland’s Mitchell says it is ideal for 6.5 and nine percent,” which, as anyone firms in the service industry. with a business overdraft knows, is an “A good example would be a recruit- attractive option. ment company; they employ people and Heartland’s Mitchell says some

Debtor financing is just part of the cost of doing business, providing whatever it is you are funding is going to give you a return at the other end.

Lock Finance’s Simon Thompson… “We welcome the banks getting into debtor invoicing because it legitimises [the perception of] it.”



people can get “fixated” about price in comparing debtor financing with other products. “But at the end of the day, it is just part of the cost of doing business, providing whatever it is you are funding is going to give you a return at the other end,” he says.

“So if you have a decent business with a decent margin, and you need the working capital to manage your way through cash-flow fluctuations or a one-off situation, then if it stacks up it stacks up.” M Steve Hart is a business journalist.

11:36:25 AM









JULY 2011

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Finance and the Economy Series

Mergers and acquisitions – a glimmer of growth

Deloitte’s Chas Cable… “There are some signs that the M&A market is going to open up.”


erger and acquisition activity in New Zealand is sitting at around 20 percent of its pre-global financial crisis level according to Chas Cable of Deloitte. But it is starting to rise, thanks mainly to Asian investors eyeing up our dairy firms and state-owned power companies. Cable heads up Deloitte’s corporate finance team which handles the company’s M&A work. He says that before the GFC there was an elevated level of M&A activity around the world – driven by easy credit and private equity firms flush with cash. “A lot of that activity was being driven by private equity firms who tended to inject high levels of gearing into their deals,” says Cable. “But as soon as the GFC came along, and the banks brought down the shutters, the availability of debt went away and liquidity went out of the market – that turned the M&A market off very quickly.” Cable says business owners haven’t been selling because they have found it impossible to get the price they want. On the other side of the coin, the banks haven’t been lending to finance M&A deals. “That left private equity (PE) firms to

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fund M&As, but they have not all been in a position to step in either,” says Cable. “Not only are private equity firms not buying new assets, they probably have a bunch of assets that are highly geared. Given the economy, that gearing would have looked highly aggressive. “A lot of those larger PE firms around the world aren’t yet truly back in the market because they are busy mending fences inside their own funds.” In February 2010 there was talk of a recovery in the global economy and hopes of an increase in M&A activity. While there was talk of ‘green shoots’ the predicted upturn has been slow to surface. “I think that while there are some PE firms that have told us they have been quite busy, my general observation is that it hasn’t happened as much as we would have predicted a year ago,” says Cable. “However, there are some signs that the M&A market is going to open up. We are starting to get visits again from Australian PE firms, who like to come over and make sure they are being thought of, and that we will show them deals. Those visits dried up for a period but are starting again.” Right now, Cable can see four trends emerging on the M&A front in New Zealand. A rise in the number of Chinese buyers, an increasing number of trade buyers (firms wanting to buy companies operating in the same business), higher activity from Australian firms looking for bargains and Asian investors keen to get a slice of Kiwi. One only has to look at what has been happening to predict future trends. Notable M&A activity out of Asia includes Brights Dairy Foods’ $82 million investment in Canterbury’s Synlait Milk in

2010, Haier’s 20 percent purchase of Fisher & Paykel in 2009 for $58 million (at a time when F&P announced a $95 million loss) and Agria’s 50.01 percent stake in PGG Wrightson in May 2011. Then there is the ongoing interest in the Crafar farms, Dairy Holdings and the farms held by South Canterbury Finance. Let’s not forget the milk powder plant owned by New Zealand Dairy. “These are assets that are on the block, that Chinese and other foreign interests are watching,” says Cable. In June, Cable hosted a delegation from China whose members monitor state owned enterprises (SOEs). The group was on a fact-finding mission and expressed an interest in New Zealand’s state-owned power companies – which will be partially privatised if National wins the next election. “I had to point out to members of the delegation that it is uncertain what level of foreign ownership the SOE sale processes will tolerate,” says Cable. “However, it is further evidence that China is a source of capital and probably, for the foreseeable future, is going to be a large part of the M&A landscape.” Although there is a long way to go before M&A activity returns to pre GFC levels, Cable is starting to see a glimmer of growth. “There is anecdotal evidence that the banks’ balance sheets are starting to strengthen,” he says. “But I still think that there is a level of caution among banks when it comes to smaller deals of between $30 million and $50 million.” M Steve Hart is a business journalist.

Valuing People – Creating Value Diversity is a business reality for New Zealand employers. Find out how they’re making the most of it at the EEO Trust Work & Life Awards 2011 presentation dinner. This is an opportunity to hear inspiring stories from some of New Zealand’s leading employers. Thursday 25th August 2011 Auckland War Memorial Museum Dome 6.30pm Registration Earlybird (until 30th July)


to register:



or email:

Table of 10


Standard tickets (from 1st August)


Prices exclude GST

Face to face

Organisations will need to challenge and mutate their DNA.


he same old business tricks don’t work any more,” says Venkat Ramaswamy. “Enterprise is effectively starting from rock bottom after the GFC. And there is a new receptiveness to the transformational changes that a co-creative approach to doing business and running organisations brings.” Ramaswamy is Hallman Fellow at the Ross School of Business, in America’s University of Michigan. He co-authored the prophetically insightful business book The Future of Competition with equally high profile management guru CK Prahalad, before joining forces with Francis Gouillart to write The Power of Co-creation, his latest book. Prahalad, who died last year, and Ramaswamy wrote a series of articles between 2000 and 2004 on the probable impacts for business and society of a more “connected and empowered” customer. They described the accelerating shift toward networks of customer communities and global talent that reside outside, but

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interact with businesses on the one hand and the emergence of global resources networks of enterprises on the other. Customer experience, they said, was central to “enterprise value creation, innovation, strategy and executive leadership”. These broad changes in business and society called for co-creation – a practice of developing systems, products or services through collaboration with customers, managers, employees and other stakeholders. Seven years on and enterprise is now confronted by the everyday realities of a rapidly expanding world of highly connected and networked people and enterprises. The new actuality is, as Prahalad and Ramaswamy predicted, changing consumer and employee attitudes toward products, services and to the organisations they buy from or work for. Disengaged employees Consumers want to help “design” the value of the products and services they use; want

ongoing conversations with the companies they do business with and want to be heard. “Simultaneously, surveys show that between 70 and 80 percent of employees are either fully or somewhat disengaged from their employing organisations,” says Ramaswamy. “Enterprise must engage more fully with both customers and employees. The co-creative enterprise answers, at least in large measure, these challenges.” Enterprise transformation is not, in his opinion, a matter of choice. It is more “structural” than that and probably represents the next iteration of the organisation and traditional business model. Co-creation is about “engagement platforms” and is, says Ramaswamy, a direct outcome of rapidly evolving and increasingly advanced communication technologies.“It will probably lead to a very different design of the enterprise and management structures.” In his opinion, the future belongs to the co-creative enterprise, the core principle of which is transforming enterprises toward engaging individuals to “create valuable

Venkat Ramaswamy

New business model for the future Economic recovery from the global financial crisis won’t happen without a more innovative approach to enterprise. Global thought leader in innovation and best-selling business book author, Professor Venkat Ramaswamy, says co-creative enterprises are the way of the future. He talked to Reg Birchfield. experiences together while enhancing network economics”. “Co-creation,” he says, “involves both a profound democratisation and decentralisation of value creation.” His book describes the process as moving value creation from inside the firm to interactions with customers, customer communities, suppliers, partners and employees and other stakeholders. The enterprise then operates by communicating with both internal and external groups through a series of communication technology-driven engagement platforms. Co-creative organisations use individual experiences as the starting point in building a relationship with a customer. Developing compelling experiences with individuals means they participate directly in the design of value. This leads to a recasting of the conventional role of strategy, innovation, marketing, supply chain management, human resources management and information technology. According to Ramaswamy, the co-

creative enterprise drives growth. “It enhances strategic capital, increases returns, and expands market opportunities,” he says. “It draws innovative ideas from customers, employees and stakeholders at large. It also enhances a company’s capacity to generate insights and take advantage of opportunities they might not have identified, while reducing risk and capital needs by using global networks and communities.” Changing mindsets However, organisational transformation on the scale he envisages requires major changes to management and director mindsets. Organisations will need to challenge and mutate their “DNA”.“Change management programmes often fail because the change process is not co-created,” says Ramaswamy. Managers assume that if a particular pre-defined change process is used, then a solution will automatically emerge. It is of course difficult to change the dominant mindset of an organisation,

including the way individuals view each other, their collective beliefs, culture and assumptions. Ramaswamy’s book outlines how he and his co-author think organisations can be transformed through co-creation. Engagement platforms germinate and feed the co-creative enterprise. “They allow the enterprise to be more fluid and dynamic,” he says. “People have ideas and are increasingly frustrated by their inability to do anything about, or with, those ideas. Each one of us wants to help the world. The question becomes how to make it easy for people to be part of a process to help the world – so to speak.” Connectivity is the trigger that fires Ramaswamy’s innovation bullets. “It is not availability of information, there is plenty of that, but rather communications technology that facilitates the ability to extract more value from available information that underpins the co-creative enterprise.” Introducing a co-creative approach requires “top down leadership”. UnforJULY 2011 | | 31

Face to face

“The co-creation approach is different from our traditional transaction and silo-based organisation structure with its infrequent interactions with shareholders and other stakeholders,” says Ramaswamy. “This is about creating a networked enterprise that is designed specifically to listen to and work with all stakeholders. Things don’t just happen by accident.” Co-creation is, he suspects, an evolutionary outcome that began with manufacturing process enhancements such as those introduced by Dr W Edwards Deming’s quality management movement of the 1950s. “But unlike quality and many of the other process concepts like Six Sigma that enhanced the old model, this is a whole new paradigm of how we create value and wealth and wellbeing,” he says.

Venkat Ramaswamy… “Co-creation results in a ‘win more – more win’ approach to doing business.”

tunately, individuals lower down the organisational hierarchy are more likely to grasp the significance and application of engagement platforms than say, directors and senior managers.“Employees are often already connected and sharing ideas,” he says. “They get it. What management and governance needs to do is change its collective experiences to connect better with the co-creative concept.” He sees the engagement platform approach as an opportunity to enhance and improve shareholder and board involvement with the organisation. Sportswear manufacturer Nike’s successfully adopted a more transparent and co-creative approach to management and governance that enhanced both its leadership and its business performance, he says. 32 | | JULY 2011

“Us versus them” “Co-creation is also human-centric. There is a lot of disenchantment with the ‘us versus them’ attitude toward corporations. There are tensions between the public, private and social sectors of our communities. This has the potential to provide a positive common denominator by which all of us can be involved in decision-making processes,” he says. The co-creative enterprise is not, as his book points out, just about thinking outside the box. It is about transforming the box. The authors claim this transformation results in a “win more – more win” approach to doing business. Ramaswamy accepts that companies are always transforming. The difference co-creation offers lies with the involvement of all stakeholders in the change process – especially customers and employees. The change itself is co-created and does not emanate from some corporate blueprint of change. The process can, therefore, be threatening to managers and directors more comfortable with traditional structured

change processes, re-engineering or change models. The starting point is different too. In co-creation it begins with the individual’s experience rather than the company’s processes. Most traditional transformation models start with the firm’s process architecture and ask: what does the customer want from each process? This is, says Ramaswamy, a company-centric way of attempting transformation which might improve the company’s performance but won’t much impact innovation potential. Leaders in co-creative enterprises must relinquish the institution-centred “cascade and align” view of management and adopt an individual-centred “engage and co-create” view, he adds. To make this happen, organisations must establish engagement platforms for employees that allow them to debate, discuss and establish priorities and to participate in the transformation process. But co-creation does not mean that senior management is less important to the enterprise. “On the contrary, senior managers play a critical role in guiding the organisation through the processes for co-creation,” says Ramaswamy. “I am hopeful that co-creation will usher in the next generation of organisational democracy and capitalism. I think it has the power to go beyond the individual organisation and significantly help in the development of economies for the good of everyone.” Ramaswamy believes that his cocreation model represents the next iteration of the organisation with the added advantage that it will be created from within. It will, he hopes, evolve in a “positive way” and provide workable answers to some of the pressing and contentious issues facing enterprise, economies and organisations generally. M The Power of Co-creation by Venkat Ramaswamy and Francis Gouillart is reviewed on page 15.

The Deloitte/Management magazine Top 200 Companies Awards 2011

DOES YOUR BOARD HAVE WHAT IT TAKES... to excel in New Zealand’s most prestigious business awards? The Kensington Swan Responsible Governance Award 2011 We will be evaluating enterprises on published

The finalists and winner will be announced at this

available information, but we also want you to tell us

year’s 22nd Deloitte/Management magazine Top 200

about some of your special responsible governance

Awards, held at SkyCity Auckland on Thursday 24th


November 2011.

Nomination forms can be downloaded from http://www. For further information please email Tania Vela at

Visit for more information and ticket registration.

Responsible governance

Beca Group’s “care” legacy

Global engineering consultancy Beca Group can’t tick all the boxes on a contemporary scale of responsible governance criteria, but few organisations have treated their people and the environment as consistently well for as long as it has. Reg Birchfield talked with Richard Aitken and Keith Reynolds about Beca’s approach to governing responsibly. Nominations are now open for the Kensington Swan Responsible Governance Award, a major award at the Deloitte/Management magazine Top 200 Awards. See: responsiblegovernance.html


eca Group executive chair Richard Aitken believes his company has been committed to responsible governance since its inception, which can be traced back to the 1920s.“Responsible governance has always underpinned the company ethos,” he says. “And it relates to every aspect of our work.” That ethos has not, he says, been lost during the company’s long evolution or its consistent and increasingly global growth. Beca now employees more than 2500 people in seven countries, has an annual turnover of more $360 million and generates about 40 percent of this revenue offshore. It was last year’s Deloitte/ Management magazine Top 200 Company of the Year.

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“I think we have a common-sense approach to responsible governance,” says Aitken. “What we do may not cover all the best practice theory, but we certainly try to practise what we preach.” And what the company preaches is care for its customers, employees, the community and the environment. The company’s approach to doing business was instilled by “founders committed to the principle of taking responsibility” for things that happened, both externally with customers and internally, and to fixing things if there was a problem. “I believe that every time you solve a problem, the organisation is made stronger to tackle the next problem,” says Aitken. Beca’s relatively new group chief executive Keith Reynolds – appointed in September 2009 as the first chief executive enlisted from outside the business – agrees Beca’s approach to caring for all its stakeholders, is deep rooted. There is, he says, an alignment between the board and the executive on both keeping and building on that legacy. The company is, understandably, particularly focused on environmental sustainability and workplace safety. “But

we are also focused on being holistically sustainable,” says Reynolds. The Beca Business Philosophy is articulated everywhere, particularly on its intranet. The company’s ongoing success is, it states, “achieved through financial strength and client focus; commitment to its people; community participation and environmental awareness”. The priority the Beca board gives to responsible governance comes, in large measure, from the company’s ownership structure. Beca evolved from a professional partnership to an employee-owned enterprise. About one third of its employees hold shares. This reality keeps responsible governance practices at the top of the board’s list of strategic priorities, says Aitken. And because of services the company provides and the influence those services have on shaping the planet’s environment, it is environmental sustainability which most overtly testifies to its responsible governance practices, says Reynolds. “We treat our sustainable environment activities very seriously,” he adds. The outcomes of thinking and acting responsibly are, in Aitken’s opinion,

Photo: Jan-Michael David

Beca Group’s executive chair Richard Aitken with chief executive Keith Reynolds.

manifest in Beca’s outstanding local and global business reputation. “Our commitment to acting responsibly has created our reputation and built our brand,” he says.“It is not by chance that when things go wrong, Beca is often called in.” He quotes a number of engineering disasters the company has been enlisted to fix, ending with its now extensive involvement with the natural disaster that has devastated Christchurch. “Our reputation for acting responsibly also helps us attract good people to our team,” says Reynolds. “And it differentiates us in the marketplace.” “Our reputation is everything, particularly to our employees. Some of our harshest critics are internal,” says Aitken. “If they don’t believe we are walking the talk then we’ll end up with a transfer of ownership problem.” Beca is not a listed company so there is no onus on it to adopt the Securities Commission’s Corporate Governance Principles in setting its responsible governance standards and approach. “But we are aware of them,” says Aitken “and I think you will find that we shape up pretty well with those principles.” “We have developed our own guiding charter, based on best local and global practices. We are happy that what we have is aligned with some of the best responsible governance principles,” Reynolds adds. The company doesn’t have a written code of ethics “as such”. It uses its business philosophy to elaborate on its four pillars for success. It also elaborates on a distrib-

uted sustainability statement that links back to the business philosophy. It relies on its employment contracts and the ethical standards that apply to professional bodies its employees belong to as a de facto substitute for an internally generated code. To Aitken’s mind, the terms, conditions and professional standards embodied in this array of material covers everything they might expect to include in a company code – an eventuality Reynolds does not dismiss. “We have a complete suite of policies and procedures that you would expect of a business of our size. A variety of different behavioural codes apply across those policies,” says Reynolds. “We have not isolated out a code of ethics but by virtue of the policies that we have, the terms of our contracts of engagement and the codes of the professional bodies that we are attached to, we believe we have this covered.” When the company rubs up against practices, such as bribery, in some offshore markets, Beca applies its home-base ethical standards.“Our people are properly advised before they go to places where they might encounter unethical practices,” says Aitken. “We maintain our standards irrespective of the markets in which we operate. We have internal management processes to ensure that understanding is captured.” The company continuously reviews its policies and practices, particularly where health and safety is concerned. Employees can, in confidence, raise issues with more senior managers if they are concerned that

their direct report is not acting responsibly. It is not called whistle-blowing, but effectively is. “Employees can raise difficult issues in complete safety,” says Reynolds. Beca's commitment to sustainability and community participation is illustrated, in the first instance, by the production of a comprehensive annual Sustainability Report which is lodged with the Business Council for Sustainability and, in second through its long-running support of the Karori Wildlife Sanctuary in Wellington. The report outlines the vision and values that underscore the extensive range of sustainable activities that Beca is involved with. It details performance and measures results against stated goals. The Karori project is a 225-hectare sanctuary of lowland forest and wetlands surrounded by 8.6 kilometres of predatorproof fencing, which sits within five kilometres of the Beehive. Its vision is to restore a piece of New Zealand as close as possible to the way it was before humans arrived, says Aitken. Beca employees provide volunteer support for the Trust and the company provides pro bono support to projects such as the design and build of the predator-proof fence, walking tracks, bridges and the restoration of wetlands in the sanctuary. “We became involved because we had skills to offer but also because it was about restoring the environment,” says Aitken. “It was for the community and the vision was compelling. It was also inspiring for our people.” M JULY 2011

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Rest assured

Lights out everyone: The weighty case for sleep education.

Of particular media interest has been the effect sleep deprivation can have on our waistline. According to the US National Sleep Foundation (NSF), sleep plays a pivotal role in the normal function of the endocrine and immune systems. Not only does sleep deprivation tend to make us reach for a mid-afternoon sugar hit, some studies have found a correlation with low levels of the hormone leptin, causing the body to crave carbohydrates. In the workplace, well-rested staff are essential to maintain safe



short stint in front of prime time television sees us peppered with public health messages. By turn we’re urged to exercise, eat well, drink less, look after our mental health and keep up regular screening checks. But one thing that might enhance our health, wellbeing and productivity immensely is a message that tells us to simply switch off and go to bed. Regular, restful sleep has a very important function in the maintenance of good health. However, it seems getting to bed at a reasonable hour is something that’s slipped well down our ‘to do’ list. A new survey of 1000 adults by Southern Cross Healthcare Group showed that 51 percent of people feel they get less sleep than they want or need. This figure was even higher for women, those under 40 and, quite understandably, those with children. Of those surveyed, 34 percent averaged six or less hours sleep per day – at minimum, half an hour less than the 6.5 to 8.5 hours sleep needed by most adults, as outlined by the Australasian Sleep Association. It’s well known that lack of sleep can affect our mood, responsiveness and productivity. But what is just beginning to be explored in more depth is the emerging link between reduced sleep and health issues such as obesity, diabetes, depression, low immunity and heart problems.

working conditions, as well as good productivity. The ageing workforce is also heightening the importance of sleep education. Changes to sleep are a natural part of the ageing process. As we age, we tend to spend more time in the ‘light’ stages of sleep. However, contrary to popular opinion, the NSF says there is little research to suggest we need less sleep. Older people also tend to both wake and retire to bed earlier – something that may need to be taken into consideration when setting shifts or schedules. The older age of first time parents is another area where sleep – or lack of it – may be affecting your workplace. With a growing number at executive level delaying parenthood into their late 30s, the most sleep-deprived person in your office might also be the one making key business decisions. With such an important role to play, sleep education can pay dividends as part of a workplace health and wellbeing programme. Initiatives could include a ‘sleeping well’ seminar, or bringing in a health professional to offer advice on an individual level. Addressing the causes of workplace stress and establishing a culture of good work-life balance should also be considered in tandem with sleep advice. M Peter Tynan is chief executive of Southern Cross Health Society.

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

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

1. TNS research 2004.

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

36 | | JULY 2011

execs on the move M

Jason Paris

MediaWorks has announced that television CEO Jason Paris has resigned his position and will work through a six-month notice period. Group managing director Sussan Turner will take over – as part of her md role – the head of TV responsibilities, and senior television management will report direct to her.

Elizabeth Coulter Simon Bennett

Recruitment company The Madison Group has appointed Simon Bennett as chief executive officer and aims to surpass its current double digit growth, to break $100 million turnover in 2013. Bennett, who has previously been the company’s commercial director and served on its advisory board since early 2010, says the company’s goal is to grow by organic growth or merger and acquisition to a size that could feasibly be listed on the New Zealand Stock Exchange. Building on a strong relationship with local body government, central government business in Wellington will be a major focus for the future, he says. Bennett has been a director of several New Zealand businesses and chairman of the Alumni Advisory Board of The Icehouse business growth centre. He has consulted to a number of New Zealand’s largest companies including Goodman and Fletcher Distribution.

The University of Auckland has appointed an IT services director. Elizabeth Coulter has more than 24 years’ experience in the ICT industry, 10 years of that in the higher education sector working at The University of Queensland. She takes up her new role in August.

Spencer Willis

Colmar Brunton has promoted Spencer Willis to the role of national qualitative director. UK-born Spencer worked in financial services for eight years in New York, London and Hong Kong before arriving in Auckland 10 years ago, where he set up youth marketing research company 18 Ltd. He’s been at Colmar Brunton since November 2010, specialising in the youth and Gen Y sectors.

Danelle Ayers

Joining the Rydges Wellington executive team as director of sales and marketing is Danelle Ayers. She was most recently director of sales at the James Cook Hotel Grand Chancellor, Wellington.

Karyn Beattie

Karyn Beattie’s new role as national safety manager for DB Breweries sees her based at DB’s Waitemata Brewery site in Auckland. She was most recently national safety advisor with James Hardie New Zealand and has also held safety, quality and environmental roles within Downer New Zealand.

Allan Beverwijk

Insurance broker and risk advisor Marsh has appointed Allan Beverwijk, IBANZ Insurer Professional of the Year in 2010, as executive director with responsibility for the organisation’s risk management business. Beverwijk was most recently with QBE.

Guy Pascoe

Le Cordon Bleu New Zealand Institute is a step closer to its goal of being home to 500 students when it opens next year with the appointment of Guy Pascoe as director international business. Pascoe has taught in schools around the world and was most recently education sector manager for Grow Wellington.

Phil Hinton

Phil Hinton, executive director of KCL Property, has been appointed as the new president of The Property Institute of New Zealand. He replaces outgoing president Ian Campbell.

Jillian Emery

Waterfront cargo logistics company ISO has appointed Jillian Emery to the new role of training development officer. Her most recent role was with the Bay of Plenty Polytechnic as learning resource developer.

PMO across the Enterprise? At Project Plus we have years of experience in designing and implementing PMO’s for all needs. From enterprise models to support functions, we can rapidly design and deploy a solution for your specific needs. Get in touch to learn more. JULY 2011

| | 37

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38 | | JULY 2011

Vol 9 No 3

JULY 2011

Governance lessons From the rubble of the recession

Doug Matheson researches the changing state of governance p40

Food for thought

on director feedback p42

Learning to align

Maori and Pakeha governance p44 JULY 2011 | THE DIRECTOR | 39

Governance lessons From the rubble of the recession Governance expert and author Doug Matheson has so far identified five key lessons from the GFC and its ensuing recession as he researches the changing state of governance for a new book. He shared some of his findings at a recent Institute of Directors presentation.


oards of directors are under pressure to lift their performance – more so since the GFC hit and the recession lingers. Directors must, as a recent McKinsey Consultancy’s Global Survey put it, “take more responsibility for developing effective strategies and overseeing business risk”. The research I have been doing for my new book, a kind of sequel to my Complete Guide to Good Governance and Great Governance books, has revealed five key lessons that I believe directors should focus on to deliver better governance in future.

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The first, and perhaps the most important, is board composition. The recession has shown in spades that organisations seriously suffer from a lack of independent board membership. And while I appreciate that New Zealand struggles with the limited gene pool from which to draw competent directors, boards must make a greater effort to think outside the “old boy network” for new blood. There is a serious lack of relevant diversity in the composition of our boards. They simply do not consist of the best possible mix of individuals with relevant skills such as experience,

competencies, background, perspectives, age, gender and ethnicity. The lesson is: get the right people on the bus. There have been far too many non-paying fares filling seats. Boards should regularly identify the best mix of the attributes identified above. To elaborate on the gender issue for example, women comprise only 9.3 percent of directorships in NZ Management magazine’s Top 200 companies but make up half the nation’s total labour force and 64 percent of our tertiary graduates. Something is askew there. The same bias applies to age representa-

tion. Boards suffer from a lack of younger directors with their fresh thinking, youthful perspectives and mindset, their specialised knowledge and more recent education. A more diverse ethnic mix would deliver important different perspectives and experiences to board tables. Diversity brings relevant strategic views and competencies to add value to the performance of the organisation – business or public sector. The second lesson comes from examining what boards do. There is a lack of director clarity about their role at the board table and that led, and still leads, to ineffectual governance practices. Directors are too often unclear about the board’s role, about the extent and nature of the board’s involvement in strategy, performance oversight and in managing risk. Effective governance has little to do with regulators and laws and everything to do with what transpires inside the boardroom. If directors want to avoid a repeat of the disasters of recent history, they must improve their performance in the key governance roles and responsibilities of: • Strategy – short and long term • Oversight of performance and fiduciary • Oversight of risk management • Ensuring compliance. Uncertain board environments will, in my opinion, deliver a new paradigm of unpredictability and uncertainty in what is an increasingly complex commercial world. To be clearer about their role, directors must understand exactly what oversight means. It means they must monitor, review, examine, inspect, supervise, watch and take responsible care. Good governance, therefore, means effective board oversight of strategy implementation, performance (including fiduciary and financial status) and risk management. It is insufficient for boards to merely note out-of-line performance. Directors must ensure appropriate and timely action is taken to correct performances that are out-of-line with expectations. Trust, but verify. Safeguarding future performance is the overriding aim of performance oversight. But a word of caution – don’t get involved in management. Governance is about “what” not “how”. And now the sensitive lesson – chief executive performance and remuneration. Rather more offshore than here, the abuse of

governance in this quarter of board responsibility is painfully apparent. But the lessons are just as relevant here. Greed and hubris are insidious human failings and boards have a duty of care to society to keep them in check. In short, boards did not act responsibly in respect of chief executive remuneration. Remuneration’s relationship to organisational performance is fundamental. There is no question that a chief executive should be fairly rewarded for what she or he achieves. The GFC showed that incentives, in a steadily growing number of cases, encouraged high risk taking at the expense and often to the ultimate demise of the enterprise. Chief executive non-performance is one of the most important issues any board must deal with. Directors cannot ignore continuing poor performance. Boards must identify, counsel and, if necessary, terminate an inadequately performing chief executive. Lesson number four is about compliance with directors’ duties. Too many directors lack a comprehensive understanding of their obligations and as a result fail to practise proper compliance. Directors must comply with their obligations and duties but often fail to do so. Directors’ key duties come from the: • New Zealand Companies Act 1993 • Organisation’s own constitution • Financial Markets Authority Act 2011 • Securities Act 1978 • NZX Listed Companies Listing Rules • Financial Reporting Act 1993 • Other relevant legislative and regulatory requirements. Powers of governance apply to the board but the duties apply to individual directors. Boards must monitor changes in relevant laws and confirm that the company and the board comply with new or different requirements. The Financial Markets Authority Act has, for example, new powers under which finance company directors can be sued on behalf of investors. But these duties are not the purpose of governance – they are the rules of the road. Directors should not use compliance obligations to deter them from their primary duty which is to act in the interests of the company and to grow wealth. The fifth lesson the recession has delivered is all about evaluating the performance

of a board and a commitment to continuous governance improvement – both of which are clearly lacking and contributed in no small measure to the crisis and the current recession. To facilitate continuous improvement in organisational governance, directors must ask themselves five things: • How effective is this board’s leadership and governance? • Is this board functioning at the highest standards and levels of performance? • In what ways could the board/chairman/ individual directors improve their effectiveness and functioning? • How well is the board performing in relation to the current and future needs of the company and its shareholders? • Is the board able to report to the shareholders on their performance? These questions can only be answered by a formal evaluation against agreed performance criteria. Evaluation is not a report card that rates against some abstract scale, rather it provides a means to continually improve the effectiveness of the organisation’s leadership and governance. At the beginning of the year boards should establish a set of performance criteria. Each director and the chief executive should retain a copy and use it as the basis for their personal ongoing “criteria of performance” reference. At the end of the year directors should privately evaluate the board’s, the chair’s and each individual director’s performance against the criteria. A board evaluation review meeting should then identify and agree what changes or actions would improve the functioning of the board and the chairman. Individual directors might privately discuss the evaluations of their performance with the chair. Follow-up follows. Directors agree on the improvements, changes in processes or procedures, the education or training needed or changes to the board meeting and, in some instances, a director’s tenure. I am still researching my new book. These five lessons are, in my opinion, at least some of the truths the recession can teach those directors dedicated to changing and lifting the standard of governance in New Zealand. We need to because our governance performance attracts more than its fair share of global criticism. JULY 2011 | THE DIRECTOR |


Food for thought on director feedback Director and board evaluation involves board members undertaking a constructive but critical review of their own performance, identifying strengths, weaknesses and then implementing plans for further professional development. Director evaluation is essential for good governance says Iain McCormick.

Photo: Vision


42 |


irector evaluation can take many forms – from a simple board table discussion to webbased questionnaires based on well-developed governance frameworks and a fully facilitated session run by a trusted advisor. Giving feedback to fellow directors isn’t always easy, but receiving feedback from other directors can be very difficult. I recall conducting a board evaluation for a professional service firm where this was a major issue. We had used a webbased questionnaire to gather opinions on both the overall performance of the board and the individual performance of each director. Evaluation reports had been produced and distributed to all directors. I arrived at a meeting to review the findings with the board and to write a board development plan – that, at least, was the intent. The directors entered the room and took their seats at the board table. Most of the directors clustered around one end of the large table where the chairman and I were sitting. The exception was an immaculately dressed director who sat at the other end of the table. He looked grey and stern.

The chairman opened the meeting saying that he had asked me to join the meeting to discuss the evaluation and to assist the board with a development plan. The moment the chairman stopped speaking the remotely seated director said in a very loud firm voice: “If this is what you think of me, I resign from the board,” throwing his evaluation report on the table. The grandiose gesture came as a shock to both the chairman and me. I had a sinking feeling that a great project was about to slip away! The chairman, however, had the presence of mind to gently explore the issue with the disgruntled director and to reassure him that he had indeed made a valuable contribution over the year. I spent some time talking about the overall board results and I facilitated a discussion on areas for board development. After the meeting the chairman and I talked about the situation. The chair then spent time with the disgruntled director to settle the situation. Almost everyone has, I’m sure, had some difficult experience with negative feedback. No one welcomes criticism but, it is essential for building an effective board culture and for ensuring decisions

are subject to robust debate. Criticism is important because humans seemingly learn more from their mistakes than their successes. When we succeed we usually just feel good and move on. When we err, we are more likely to initially feel smarted but then look carefully at the situation and learn from it. Negative feedback may not make us feel good but it is essential for our development as directors. We may be trained in a wide range of financial analysis or strategic planning areas, but we are seldom trained in giving or receiving criticism. Many of us are blind to how we affect others when giving criticism. Psychological research suggests that the separate neurological circuits in our brains handle negative and positive information differently. Our negative receptors are more sensitive than the circuits that handle positive feedback. Our innate ‘negativity bias’ apparently sees flaws as more important than positive attributes when forming initial impressions. And responses to loss are, apparently, more powerful and potent than responses to gains in many areas including financial risk-taking behaviour. John Cacioppo, a neuroscientist at the University of Chicago, reported in the magazine Psychology Today that electrical activity in the brain spikes more strongly in response to negative stimuli than to equally potent positive ones. “Most people respond more to the bad than to the good,” he said. Our sensitivity to the negative can cause us to exaggerate the importance of this type of feedback and even to see criticism where none exists. Our dislike of criticism is based on a fear of exclusion says Peter Gray, a research

psychologist at Boston College. The criticism in a board evaluation is obviously not life threatening, but human responses evolved in circumstances where individuals couldn’t survive outside of their cooperative hunter-gatherer groups. To be excluded was potentially fatal; sometime it feels as if it still is. Understanding this reality can help directors frame more constructive criticism. Dealing with the fear of exclusion before making criticism can also help. Stating that “You are a valuable member of the board, but we would like you to be better prepared for meetings” is likely to be accepted as constructive by a sensitive director. Starting by asking questions such as: “How do you think you are doing?” is also useful. The comment suggests joint ownership of the issue. People never want unsolicited negative feedback. So board agreement on the evaluation’s purpose and process is important. It’s designed to provide context for feedback. Proceed with an evaluation only when everyone is comfortable about giving and receiving feedback. No matter how criticism is delivered, the recipient will feel defensive. When getting feedback, take a deep breath before responding. And don’t expect the other person to welcome your comments when giving negative feedback. Director evaluation is a key to good governance; make sure it includes both constructive positive and negative feedback. Iain McCormick runs and provides feedback for boards in New Zealand and Hong Kong. • Reference: articles/201103/how-take-feedback

Effective feedback

Karen Wright, a writer in Psychology Today, suggests some rules for conducting feedback discussions • Always start with questions such as: “How do you think you’re doing?” It gives the other person a sense of joint ownership of the problem and helps the individual feel included, not excluded. • Only give criticism when the process has been mutually agreed; unsolicited negative feedback is unwanted. • Make sure you are seen as having the authority to give corrective feedback. Criticism from the chairman is easier to take than from fellow directors. • Never give feedback when you’re angry – anger alienates the listener. Expressing disappointment is more productive than criticism stated in anger. • Know the personality of the person you are talking to – some individuals will take any criticism as a personal attack. • Know yourself. If you are relatively insensitive to criticism, watch your tendency to be heavy-handed when delivering it. • Expect defensiveness as a first response to criticism; a change in performance may come later.

Contact Carrie Hobson or Stephen Leavy Auckland Office T +64 (9) 379 2224 PO Box 362, Auckland 1140 Level 3, Shortland Chambers, 70 Shortland Street, Auckland 1140

Wellington Office Hobson Leavy MGT0910.indd 1

T +64 (4) 460 5244 Level 16, Vodafone on the Quay, 157 Lambton Quay, Wellington

17/8/10 10:21:09 AM



Learning to align Maori and Pakeha governance Iwi trusts and assets are among the fastest growing and most dynamic sectors of the New Zealand economy. Wiwini Hakaria is helping Maori directors and trustees master the rules of the governance game.


he total asset base of the Maori economy is reportedly now around $35 billion. The Director last year (September) reported that iwi trust investments are growing 50 percent faster than community trusts in general in New Zealand. Maoridom’s assets, investments and other enterprise activities are burgeoning. Iwi governance is, as a consequence, under pressure to build its competencies. Competent governance in the Pakeha world is rare enough, but, says Auckland-based Maori business services manager at BDO Wiwini Hakaria, Maori must deal with additional overlays of complexity. Balancing the needs of the entity, trustees and beneficiaries with economic, cultural, spiritual and social considerations is one example. A general lack of financial literacy – not peculiar to Maori but at this point more prevalent in its ranks – often leads to result-versus-expectation misunderstandings. Being able to ask for assistance while still maintaining mana, pride, standing and power sometimes raises issues, as does keeping “personalities” out of the conversation when judging the merits of various opportunities. “Actually, governance has existed in Maoridom for many years,” says Hakaria. “It is just a different format. In pre-colonial days, Maori had resources and individuals who had to govern what happened with those resources to the benefit of their whanau, hapu and iwi.” Hakaria believes the terminology can be re-framed to explain the process whereby traditional forms of Maori governance

44 |


Wiwini Hakaria… “Maori boards must balance up spiritual, economic, environment and social needs.”

are retained and effectively aligned with governance in the Pakeha sense. Profit is not the singular objective of most Maori businesses, says Hakaria. “Consequently we need to balance up the spiritual and other needs such as providing jobs, education and social support. There are four considerations – spiritual, economic, environment and social. The governing body must represent all of these interests. Maori boards must be sufficiently diverse and skilled to meet all these needs.” To provide an acceptable measure of effectiveness in the pragmatic commercial world in which Maori trusts and businesses must operate, the largest trusts are rethinking board composition, says Hakaria. “They might, for example, have six trustees of which three are Maori. The three non Maori will have a different perspective and bring a more robust debate to the table.” Measuring effective performance is, in his opinion, invariably different because

Maori trustees tend to take a long view. They secure against the future rather than perform to deliver a short-term cash dividend. “Don’t get me wrong, they still have to perform to provide funds or different benefits back to their people,” he adds. “But Maori strongly believe that they are temporary custodians (of their assets) and must look after them for future generations.” Hakaria concedes that the shortage of financially literate Maori poses some difficulties. For example, only two percent of New Zealand’s 30,000 strong accounting fraternity are Maori. It will take time to change that. He takes heart, however, from a trend toward appointing Maori trustees to the boards of some of New Zealand’s largest state owned enterprises and private sector companies. The business and investment landscape is changing rapidly for Maori. As a consequence, they are consulted and more frequently involved in organisational governance. Consulting firms like BDO are, for example, providing specialist advice to Maori. “My job is to help Maori entities. But I also help educate others within the firm about Maori protocol and tikanga, customs and traditions,” he says. Hakaria believes there has been a “huge shift” in understanding in the last two to three years. “Companies are beginning to realise just how large the Maori economy is and how rapidly it is growing.” Given the size and dramatic growth of our Maori economy it is hardly surprising that a new appreciation of the need to build governance competencies is, from both Maori and Pakeha perspectives, finally emerging.

Sir Ray Avery A thoughtful thinker

In this issue • Leaders For Our Times Compassionate, courageous and committed Reg Birchfield, Jo Brosnahan P22 • Sam Robinson Agriculture’s Leadership Challenges Reg Birchfield


• M innie Baragwanath’s Journey To… The Land of Be. Jo Brosnahan P26

issue 7 WINTER 2011


Leadership New Zealand Trustees

Enriching New Zealand through active

• Jo Brosnahan – Chair, Leadership New Zealand; Corporate Director

leadership in a connected community.

• Tony Nowell – Deputy Chair, Leadership New Zealand; Founder,



Growing, celebrating and weaving together

• Mark Otten – Financial Trustee, Leadership New Zealand

New Zealand’s leaders through conversation.

• Reg Birchfield – Publisher, RJMedia

Values Courageous

• Dr Morgan Williams – Principal, FutureSteps • Maureen Crombie – Chair, ECPAT International; Alumnus 2006

Generous of spirit

• Teresa Tepania-Ashton – Alumnus 2006


• Grant Bunting – Alumnus 2009

Acting with integrity Innovative Celebrate apolitical diversity

• Sina Moore – Chair, C-Me Mentoring Trust, Alumnus 2008,

Alumni Representative

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PO Box 5061, Wellesley St, Auckland 1141

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Leadership New Zealand Staff Megan Barclay – Executive Director (Alumnus 2006) Louise Marra – Programme Co-Director

• John Hinchcliff – Advisory Trustee, Leadership New Zealand • Peter Kerridge – Director, Kerridge and Partners Ltd

Christine Spicer – Programme Co-Director

• David McGregor – Senior Partner, Bell Gully

Judy Whiteman – SkillsBank Director

• Ian MacRae – Managing Director, Hay Group

Manu Keung – Programme Leader

• Louise Marra – Director (Auckland), Ministry of Economic

Julie Courtnell – Office Manager Vijaya Nory – Administrator

Development; Leadership New Zealand Programme Co-Director

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The opinions expressed in this publication do

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While every effort has been made to ensure the

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accuracy of the information, no responsibility

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can be accepted by the publisher for omissions,

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typographical or printer’s errors, inaccuracies or changes that may have taken place after publication. All rights reserved.

EDITORIAL TEAM Reg Birchfield, Jo Brosnahan, Megan Barclay, Julie Courtnell,

Leaders is published by Leadership

Gill Prentice, Vijaya Nory

New Zealand. Copyright © 2011: All material appearing in Leaders is copyright

Alumni Committee

and cannot be reproduced without prior

Rewi Spraggon (2005), Mike Davies (2005), Adrian Sole (2006), Peter Fenton

permission of Leadership New Zealand.

(2006), Neville Pulman (2006), Mark Baker (2007), Jennie Vickers (2007) Sina Moore (2008), Manu Keung (2008), Essendon Tuitupou (2008), Karam Meuli

Issue 7 WINTER 2011

(2009), Adrian Wimmers (2009), Hilary Sumpter (2010) and Bernie Chote (2010)

issue 7 WINTER 2011

It’s time to join the movement The first Leaders magazine was published in Spring 2005. It was designed to focus on stories about our leaders and, most importantly, to stimulate discussion on the creation of a positive future for New Zealand. It was another strand in the kete of Leadership New Zealand; weaving leaders together through a nationwide conversation about leadership issues, building leadership capacity, strengthening bonds between sectors and making us a stronger nation. In her foreword, our chief executive of the time, Lesley Slade, quoted Waitakere Mayor Bob Harvey: “Young leaders must be on the alert for that one crucial moment which can belong to

Contents Chair’s Foreword It’s time to join the movement Jo Brosnahan


Love letter from Auckland to Christchurch Selina Tusitala Marsh


Executive Director’s Letter A record-breaking year Megan Barclay


Ray Avery A thoughtful thinker Reg Birchfield


you. And when you find it, and you will, grow that moment into a vision that belongs to you. Own it like a brand and watch the critics disappear, for then you will understand that this is your grand moment of epiphany.” This was also the role we saw for Leadership New Zealand, delivering a programme designed to help participants define their moment of epiphany and translate it into a vision for themselves and for the nation. Six years on and it is now appropriate to reflect on how successful we have been. At the end of this year we will have over 200 Alumni. They have all experienced a programme of conversations with New Zealand leaders which has, in many cases, changed their lives. We have a growing family of funders, forum members, speakers and trustees and we are connected to a broad cross section of leadership organisations. But are our leaders making a big enough difference to this beautiful country that we love? We have over the past few years identified ourselves as a movement. A movement doesn’t do everything itself – it relies upon the capacities and commitment of others. More recently,

2011 Programme Launch A photo essay


Having Their Say Thoughts from the Class of 2011


we have identified like-minded leadership organisations in the space around Leadership New Zealand. We must nurture and support these partners as they in turn grow leadership in different spheres. The inspiring story of Minnie Baragwanath (page 26), one of our early Alumni, and the establishment of her Be. Organisation, is an example of such leadership in action. So what does success look like for the Leadership New Zealand movement now? We have a diverse network of leaders who are impassioned about creating a better future for this country. They have a deep understanding of New Zealand and its issues, they celebrate diversity, they have the conversations we need to have as a nation and they are making a difference in every walk of New Zealand life. But we need many more. We don’t yet have critical mass. Yet New Zealand needs these leaders urgently. We need thousands of Leadership New Zealand Alumni involved in growing New Zealand. And we need to encourage and nurture the initiatives of our Alumni so they too can grow and succeed. Then it becomes a movement. Join our movement. Attend one of our functions to feel the warmth, energy, passion, talent and opportunity. Leadership New Zealand is unique. It forges deep bonds between leaders from across the community. The diversity of the individuals involved makes for rich conversations and an excitement about future possibilities. Apply for the Programme. We intend soon

Leaders For Our Times 22 Compassionate, courageous and committed Reg Birchfield, Jo Brosnahan Sam Robinson Agriculture’s leadership challenges Reg Birchfield


to run more of them so that all potential leaders have something appropriate and accessible. Provide a scholarship for a candidate who would otherwise be unable to attend and help us ensure that all leaders can participate. Provide a project for SkillsBank where our Alumni give back to not-for-profits and schools. Give and receive. Be a part of something greater. Grow our kete. He taura waka e kotia

Unlike the mooring rope of a canoe

He hone tangata kore e kotia

A human bond can never be severed.

Minnie Baragwanath’s 26 Journey To… The Land of Be. Jo Brosnahan Acknowledgements

Jo Brosnahan Chair


Love letter from Auckland to Christchurch This is a love letter Sprawling and true This is a love letter From Auckland to you, O Christchurch We kneel in the ruins with you We stare at screens Can’t believe it’s true We sift through the ruins with you We read headlines Can’t make it undo itself We stand barefoot On roads with you We look to the sky And disbelieve it’s still blue And the sun it still rises And sets each day And the birds they still have Something to say To each standing tree, Each falling flower, As if each day comes With its own power When there is no power Nor water, nor road Nor phone line, nor ambulance Nor relief from the load Where once were towers, Ceilings, spires, Now gape holes Gasping air from the mire Of debris, of ages And ages of history Skin and bone, steel and stone, Shattered brickwork, split masonry We kneel in the ruins with you O, our beloved Garden City! 100,000 tonnes of liquefaction Homes red-stickered for demolition Smashed glass, crumbling concrete The dead, the injured, the shell-shocked, the defeated A never-ending surreal nightmare Windows blaze with the neon word CLEAR CLEAR Stairwells spiralling in toothless halls Skinless office blocks, in aftershock pause Ashfelt rising in irritated protest Through smoke of burning waste laid to rest Against lego cars crushed, bridges broken And the unspoken promise That this could never again happen to us Like mud pools spiralling anomalous Across the road’s median strip A masked workman stands against a metal dragon’s head 2

Both incline their faces, to the lost, the dead Ruptured and severed pipes, hills, dreams, and hearts Steel foundations ripped apart Now nail-driven spikes scorn the unforgiving air Black like the headlines at which we stare Black like the growing missing persons list But a shaft of light in the stories of ‘just missed’ We kneel in the ruins with you Of his sound device, the expert revealed If you dropped ten cents from the end of a rugby field It would hear it, it would hear life But after Wednesday, all was silent A sound so unrepentantly violent We watched Avon’s weeping willows grieve We saw doors, doors, doors, but no key But then someone wrote ‘we can rebuild’ In a sandcastle on the curb Amidst this destruction, someone created Cantabrians – you’ve got some nerve! See the man, who, with hands Lifts concrete blocks from cars See the mother, with no cover Waiting for her son to rise from the shards See the school girl, pony-tail awhirl, share her lunch with a stranger See the grandfather, who would rather, put his own life in danger To check on a neighbour – he’s an everyday saviour, See Christchurch full of them See fire-fighters thick, with dust reach for brick In the hopes of another alive See the doctors leave, their own families to grieve To tend when the injured arrive See Hagley Park become, Relief Centre number one While Ellerslie Flower Show shelters, Buds bent, not broken, suddenly woken By quaking helter-skelter See students rally, in a facebook army, offer their hands to the cause See the Navy and Police, give release, to a city haemorrhaging through its pores The Rangiora Earthquake Express trains in food Donations from the nation doing good Supplies from HMNZS Canterbury Water, muesli bars, cans of spaghetti Can openers, tin foil, burger buns, bacon Tampons, sanitary pads, toilet paper, tins of corned beef, tuna, beans, nappies Chicken nuggets, chocolate, torches, batteries Baby formula, bottles, milk – long life Sugar, pet food, candles, bowls, a knife Tarpaulins, tents, foam pads, beds Something, anything, to cover body and head Gas and electric barbeques

Air Force Iroquois gives a bird’s eye view Of Christchurch – a city shipwrecked on land Engineers, inspectors, on deck – all hands Nurses, relief workers, overseas urban rescue As the dust settles, lock down curfew We kneel in the ruins with you Cadaverous topography split in two Face of the earth with its petulant pout World turned upside down and inside out 12.51 etched in our national psyche Vigil’s bell tolling, that 6.3 On the 22nd of the 2nd 2011 We kneel in the ruins with you The Art Gallery, formidable rescue base The defiant beauty of its crystal face Un-shattered, un-cracked, indescribably intact Your indomitable Mayor Bob Parker The personification of kia kaha For hundreds of thousands and more The lifeboat mantra: stay safe, stay sure Boil water, care for others, and boil water some more Civil Defence, spares no expense, knocking on every door The Army’s mobile desalination plant Reverse osmosis: who says we can’t? Salvation Army assembles on the ground Red Cross deals with loss and small miracles found There are thousands of them around See the love that settles, with the dust and metal Firming up this shaky ground Slowly, slowly Fortitude, patience, modern day Crusaders Fighting and rising from the region’s nadir Of loss, loss, grief and loss Tearing the fabric of this community Sewn up again by shared tents in Aranui Knit by shared blankets in Lyttleton Strangers clasping hands in New Brighton Sumner summers will return soon, soon This National State of Emergency Is a state in emergence, you see Because then little Alyssa, the quake baby, arrives Followed by Joseph who cries he’s alive And in six days 62 others are born And a city lying ruined, forlorn Is still making history Baby by baby. By Selina Tusitala Marsh (LNZ Alumni 2010)

executive director’s letter

The Leadership New Zealand team: Vijaya Nory, Office Adminstrator; Jo Brosnahan, Chair; Megan Barclay, Executive Director; Louise Marra and Christine Spicer, Programme Co-Directors; Judy Whiteman, SkillsBank Director; Manu Keung, Programme Leader; Julie Courtnell, Office Manager.

A record breaking year


e have a record intake of 36 leaders on this year’s Leadership New Zealand programme. Take a look at their bios in this issue of Leaders and you will see just how diverse the class of 2011 is. It represents a pretty good cross section of the New Zealand community. So far this year we have taken the programme group to Te Tii Marae at Waitangi, to the agricultural hub of the Manawatu and to diverse communities across Auckland. We have encouraged them to consider personal and societal leadership and New Zealand’s constitutional leadership. Our guest speakers have encouraged participants to consider whether we are: • A country in which diverse backgrounds and perspectives exist to build a healthy, wealthy and creative society? • A global breadbasket? • The creators of a bicultural nation? • Compassionate and committed to doing the right things? • Courageous in thinking sustainably? And this year we are committed to telling compelling leadership stories. They will more often than not be based on capturing moments when those among us have faced personal challenges and found ways to win through. We will use publications like this magazine and our various events, to tell the stories of our Alumni, our guest speakers and others who have acted courageously, with compassion and who have committed themselves to positive action. It is all part of our theme this year which is: “Leadership for our Times – build-


ing a nation on courage, compassion and commitment.” And thanks to the Alumni of the 2010 programme, this year will deliver the inaugural Alumni Retreat, hosted by Mission Estate Vineyard in Hawkes Bay. The retreat will bring all seven years of Alumni together to connect with each other, share respective leadership journeys and consider how we can individually and collectively make a positive and effective contribution to building this nation. Our collective concern is that New Zealand lacks a shared vision of the future. We think more can be done to help deliver such a vision. Creating a shared vision requires innovative and creative thinking, and a genuine commitment to building a healthy and wealthy nation for all New Zealanders. Leadership New Zealand wants all its programme participants to commit to making a difference to this country. By the end of this year we will have more than 200 Alumni from our seven years of programmes, out in the community, telling the leadership story. The basis of the Leadership New Zealand experience is robust discussion and shared experiences. It is a programme for learning about self and community and how the two come together to build nations. It works by helping individuals take the space and time to think about their life experiences and how those experiences can be used to contribute more to the world around them. And by sharing the knowledge and experiences of established leaders, the programme

participants become aware of their potential, gain a better understanding of the ways of politics, the economy and a host of other local and international topics and, build a network of friends and contacts they could never otherwise construct. To continue to nourish our Alumni and broader leadership community outside the programme, we are this year facilitating leadership workshops in areas such as mindfulness in leadership and creative thinking. These developments will provide an opportunity to learn more about how the brain works to enhance an individual’s capacity to be fully and clearly aware of what is going on in the present moment and to provide clarity of thought and action. We are also focusing on future thinking. Again these presentations will introduce attendees to some cutting-edge discussion around nation-building strategies. Our conversation events are focusing on evocative leadership stories – about doing and being. They are designed to make people think and to engage both sides of the brain. They are stories told by leaders with different perspectives and experiences of leadership. The focus of the team at Leadership New Zealand is to provide the infrastructure to deliver New Zealand’s most relevant and influential leadership development programme. With the encouragement of our growing leadership network, generous funders and supporters, we are busier and better supported than ever before. Megan Barclay, Executive Director


Leaders have no respect for the status quo. Nothing satisfies them. They are always searching for the new whatever.

My job is to encourage people to become more resilient and to take any difficulties encountered along the way in their stride.


Sir Ray Avery

Cover Story

A thoughtful thinker

Last year was one for the books for scientist and entrepreneur, Sir Ray Avery. He was named Kiwibank’s 2010 New Zealander of the Year, received the Sir Peter Blake Medal for Leadership, his autobiography was published – and sold like hot cakes – and, to top it all off, he was knighted. Now he is one of this country’s highest profile leaders. How does he feel about that? By Reg Birchfield.


eadership is about timing. “History illustrates that,” says Sir Ray Avery. “But great leaders are those that stand up to scrutiny over the years.” What also intrigues New Zealand’s new knight about the individuals we call outstanding leaders, is the frequency with which they are found to suffer from “huge character flaws”. Think about United States presidents Bill Clinton and John F Kennedy for example. Sir Ray isn’t sure anybody really knows the answer to what makes a good leader. “I suppose a leader is what people, in their own mind, perceive an individual to be.” For him, true leadership involves the distillation of multifaceted personal characteristics into a single entity. “Leaders must be holistic,” he says. “You can’t, for instance, be a leader unless you are looking after your kids and mentoring them or making some commitment to community.” This personal philosophy encourages him to spend a good percentage of his time talking with various youth and aspirational organisations. The young Avery was no stranger to childhood neglect and abuse. According to his autobiography, Rebel with a Cause, he was the product of an ill-fated post-war fling which, when his ill-suited parents married, created a “toxic” family mix. Now he is a knight of the realm, an accolade earned for his success as a scientist and business entrepreneur who has spent much of his career saving lives in third world countries. Sir Ray’s evolving thoughts on leadership have him thinking about what being a leader really means. He finds himself, for instance, questioning the rationale of successful individuals who reject what they call, “getting into the leadership thing”, opting instead to focus on and feel personally satisfied with activities like “building sustainable” enterprises. “It seems to me that one of the most important sustainable activities anyone can undertake is to pass on personally acquired knowledge and enthusiasm to the next generation,” he says. “And maybe also provide some reflection on values that might help keep them safe.” Sir Ray is looking out for the next generation. “The people who keep me most focused are my children,” he says. That in itself is


interesting, given the man never married until he was 60 and was a year older when, in 2008, his first daughter, Amelia, was born. Leadership is, he says, about “trying to tick all the boxes”. He does not rate individuals who succeed at some specific endeavour – such as business, politics or sport – particularly when they accomplish these things to the exclusion of their family or society in general. “If you single-mindedly focus on something and disregard other aspects of your life, there is no question you can be successful,” he says. “A leader is more rounded than that. It is someone who encapsulates what society believes at the time.” Our cultural obsession with the search for good leaders is, he says, an entirely understandable human condition. “It is part of our society. We look for leaders and almost revere them. We look for them constantly and in every field of endeavour. But leaders, true leaders, are hard to come by,” he says. The problem, as he sees it, is that individuals are flawed and therefore those we identify as leaders tread a fine line between reverence and rejection. Sir Ray, on the other hand, thinks his personal flaws are what “endear” him to people. The difference is, he says, that he is willing to front up to his failings. He drinks a bit and could probably be accused of “excessive due diligence” in the 60 years he spent searching for his wife Anna. For confirmation of this and his other colourful life exploits, read his autobiography which was published last year and been reprinted four times already. Leaders must have certain common core characteristics. “They must be ambitious, fearless and intelligent. And they are generally charismatic,” he says. “The other ubiquitous leadership characteristic is that they have no respect for the status quo. Nothing satisfies them. They are always searching for the new whatever. “I spend much of my time seeking things that no one else has thought of doing. In my case, I have acute observation skills. I think that is born out of my dyslexia and the inadequate education system I was exposed to. But without my observation skills I would never have been able to transcend some of my inventions into reality,” he adds. His own experiences suggest to him that leaders are probably more often than not good observers of the world around them. “I suspect they pick up on social and cultural changes, which makes 5

Cover Story

The greater the cross pollination of leadership skills and understanding the more likely we are to have a positive impact on society.

them intelligent. They see things others don’t,” he adds. Sir Ray says he is reluctant to either see or call himself a leader. “For much of my working life I was happy to be the second in command. I liked being in the background because I did not really enjoy the politics of being the leader. This was certainly true of life in the pharmaceutical industry and academia,” he says. “I was happy leading research teams to discover things.” His world is different now. He thinks of himself as a “figurehead” rather than a leader. “The stuff I do requires the efforts of a whole lot of people with technical skills and other capabilities. I am a focusing mechanism for those people. If they were honest with themselves, most leaders would agree that they are simply someone who helps others do great things,” he says. There is no question Sir Ray is a clever and intelligent man. But what encourages people to follow him is, he thinks, his ability to 6

communicate with them. “I am a good communicator. And I know how to empower people to do the things they want to do and know they can do, if encouraged. I am the enzyme that makes it all work,” he smiles. “Leaders are also ferociously resilient,” he says. “They do not give in, no matter how difficult things get. My absolute commitment is all that separates me from those I work with. My job is to encourage people to become more resilient and to take any difficulties encountered along the way in their stride. In research, things that don’t work are simply a cul de sac on the road to the truth.” Stylistically, Sir Ray describes himself as inclusive. “I try not to be up myself and don’t see myself as particularly special. Leaders must have followers and be in tune with their followers’ needs and understandings. Leadership,” he says, “is like a cooperative. Followers must be in sync with where the leader is taking them.” He used to call himself a benign dictator because he was reluctant to listen to things with which he did not agree. “Over time I have become a better leader because I listened more.” He believes he is benevolent and “ferociously” honest. “Others sometimes describe me as fearless,” he adds. So, how does Sir Ray feel about the three qualities of compassion, courage and commitment that Leadership New Zealand has chosen to focus on as central to its 2011 theme of ‘Leadership for our Times’? “They are entirely relevant and pretty much at the heart of things,” he says. “The only value in promoting leadership per se, is to encourage individuals to become leaders who will exemplify the best characteristics of what it means to be human.” Sir Ray thinks social ethics have, for a variety of reasons, been seriously eroded. Consequently, the world “needs leaders that tick all the boxes in order to save us from ourselves”. “We must inspire more people, particularly young people, to embrace the kinds of leadership principles Leadership New Zealand is promoting to save our society. We need leaders with the attributes that tick all the boxes to make society function. With those qualities we can cope with the Pike Rivers and the Christchurch earthquakes that happen and test us,” he says. Sir Ray thinks society has become distracted by technology’s toys. “Toys have become icons and status symbols which distract individuals from the really important issues of life,” he says. “We now see leaders as people who are successful in a given career and who make lots of money. “Leadership, like being a Kiwi, is a state of mind. And the way to encourage more individuals to adopt the right state of mind to lead and to become a more committed Kiwi is,” he says, “to tell more compelling leadership stories. “We must create leaders and tell the world about them – otherwise there is nothing to aspire to. On the other hand, getting the story across that it is good to be good, is not easy. The media isn’t much interested in good news stories. Corporates in particular need to get on the programme and understand that it is good for them to be good.” Society is also increasingly building walls – around houses and

Cover Story

even around countries. “It seems incredible to me that someone with millions of dollars will build a huge home and surround it with a wall so they can live in a separate community within a community. How can they not feel that those actions are wrong? That is not leadership,” he says. “Many people see the moneyed lifestyle as an aspiration. We need to change the goals. We should aspire to be respected, loved, revered and be successful to be a good leader. Those leadership aspirations can happen at any level and in any activity. We need to promote leadership and the values-based qualities that go with it,” he says. Leadership is also not, according to Sir Ray, about moments of bravery. “It is a long term commitment to promoting what is great to be human and what is important to contribute to humankind. If we get enough people committed to that state of mind, society will change,” he says. Despite his concerns about the state of many aspects of society, Sir Ray is optimistic about the future. “The alternative is beyond comprehension,” he says. “The world will find solutions to its problems because we are,” as he puts it, “hugely adaptive creatures. Just as the world is now tackling environmental issues so it will tackle the moral values conundrum. History shows that we eventually catch ourselves.” Good leaders are the conduit needed to ensure the right things happen, and in time. “We need leaders to change things.” Perhaps the greatest difficulty facing the advocates of true leadership is, he says, the growing disparity in wealth created by excessive remuneration policies adopted by large organisations. “We need this game change perhaps more than any other. The race for money and respect based on wealth alone is fools’ gold.” Sir Ray was, he concedes, personally caught up in the money chase and expensive lifestyle earlier in his career. The fast car, expensive house and other trappings did not, he says, make him happy. “There was something missing which,” he says reflectively, “I found when I became involved with Fred Hollows and his Foundation’s global programme to help the blind in some of the world’s poorest countries.” His personal leadership objective now is to have everyone who meets him be in some way better off for having done so. “That is my personal mission statement,” he says. “And I work on it.” He is, he says, still acquiring knowledge and wants to share it. “I spend a good deal of time evaluating what I am doing and measuring it for effectiveness. And I use story telling as the process for sharing what I have learned about life. That is why leaders must be good communicators. If they are not, leading doesn’t work.” Leadership is also about diversity. “The greater the cross pollination of leadership skills and understanding the more likely we are to have a positive impact on society,” he says. Sir Ray is also a man who takes pride in his ability to think. “I am a thinker,” he says, “and not just about technical things and problem solving. I think like a social anthropologist. I like to understand what drives people to do things and how they can be motivated to do something else that is better. Observation and thinking are symbiotic. It is not possible to do one without the other.” WINTER 2011

Sir Ray Avery is the founder and chief executive of Medicine Mondiale, a charity devoted to improving the health of people in third world countries. He was born in Britain in 1947 (Canterbury), trained as an analytical chemist and established a series of private analytical testing laboratories. He came to New Zealand in 1973 and was a founding member of the University of Auckland’s Department of Pharmacology. In the early 1980s he set up an independent testing laboratory before assisting Douglas Pharmaceuticals to create a world class pharmaceutical R&D manufacturing facility. In 1992 he joined internationally renowned and New Zealand-born ophthalmologist Fred Hollows and helped him establish intraocular lens manufacturing laboratories in Eritrea and Nepal, providing cheap sight-restoring lenses for the blind. Sir Ray established Medicine Mondiale in 2003 and has since earned an innovators award for an Acuset (a simple reusable clamp for regulating drip flow, developed protein food supplements for countries where malnutrition is endemic, and is now committed to manufacturing an inexpensive fail-safe baby incubator for third world economies.









The launch of the 2011 Leadership Programme in February was very well attended, with Alumni, sponsors, friends and families among guests wishing the newly recruited participants well on their journey ahead. Scholarship recipients were announced, and our generous sponsors (Young Hort of the Year, Management magazine, Hay Group, Kerridge & Partners, CPA Australia, and the Leadership New Zealand Alumni) were acknowledged. Their support ensures a diversity of programme participants through the scholarships provided. Tama Potaka, 42009 Alumnus and MC for the evening, shared his experience as a Leadership New Zealand participant. Longtime Leadership New Zealand advisory trustee Bob Harvey was guest speaker. Opera singers Darren Pene Pati (tenor) and Marlena Devoe (soprano), accompanied by Claire Caldwell who has worked previously with the NBR New Zealand Opera, added a very special dimension to the evening. Josie Ogden Schroeder, chief executive of YMCA Christchurch and a 2011 Programme participant, spoke on behalf of the 2011 participants. In acknowledging the privilege it is to be part of the 2011 Leadership Programme, she thanked the families and employers of those involved for7their support.











Left Montage (Opening Retreat Cocktail Function):                               1. 2011 Leadership Programme Participants. 2. Josephine Bartley (second left) celebrating with family members. 3. Master of Ceremonies, Tama Potaka. 4. Megan Barclay (left), Executive Director, and Jo Brosnahan (right), Chair, with guest speaker Bob Harvey. 5. Josie Ogden-Schroeder, 2011 Programme Participant, with Peter Kerridge of Kerridge & Partners. 6. Rewi Spraggon (Alumni 2006) with son Kawiti. 7. Darren Pene Pati (Tenor Performer). 8. Marlena Devoe (Soprano Performer). 6

Right Montage (Programme Sessions) 1. Bob Harvey speaking at the opening retreat in Parnell. 2. Participants at Treaty Grounds in Waitangi during Session Three. 3. Teresa Te Pania-Ashton, Alumni 2006/Trustee speaking at the opening retreat in Parnell. 4. Pita Tipene, speaker at Session Three at Waitangi. 5. 2011 Programme Participants Hans Verberne (left) and Peter Wilson, with Louise Marra (left) and Christine Spicer, Leadership New Zealand Programme Co-Directors. 6. Tim Miles speaking at the opening retreat in Parnell. 7. 2011 Programme Participants (left to right) Carey Griffiths, Dan Walker and Shalini Pillai at the opening retreat in Parnell. 8. 2011 Programme Participants (left to right) Cate Thorn, Russell Little, Josephine Bartley (Carey Griffiths in background) and Liz Hampton at the opening retreat in Parnell.


Having Their Say Thoughts from the class of 2011 Max Adler Central Place Manager, Community Services, Auckland Council Like many of us, I’m a cocktail. I have come from Germany (1879), Ireland, Scotland and England. I’ve lived in Marton, Morrinsville, Dusseldorf, Dunedin, Hamilton, London, Brisbane, East and Central Africa, the Middle East, and Auckland. I have qualifications in German literature, law, theology, international aid and development management. I have worked for government on environmental monitoring and compliance, and more recently on social and economic development in local communities. I like to spend time in awesome natural landscapes. I work for the Auckland Council and find that local government presents an amazing opportunity to strengthen

communities and give them a fair go at achieving what they really want for their futures. I lead a team of senior advisors who spot the opportunities and find partner organisations to co-lead or advocate for social and economic development initiatives where they are most needed. Participating in the Leadership New Zealand programme has made me think about the New Zealand brand. What are the stories we tell about our nation, how true or well informed are they, what do they omit, and what vision do they have for our future? How can we construct a New Zealand brand that is more honest and potent than “New Zealand Pure” and gives us a greater sense of our history and our hopes? I have also been struck by the value in talking about leadership and New Zealand across the disciplines and sectors present in our study groups, and note the challenge of trying to emulate that in the real world.

Janine Attwood Human Resources Manager Simpl Group South African born, my love for travel led me to spend nearly six years in the UK where I not only met my husband, but also kick-started my career in the human resources field, initially in the hospitality industry. New Zealand has been home for eight years now, where I have continued to grow personally and professionally. My role as Human Resources Manager at the Simpl Group is focused on creating a ‘happy and well’ organisation. Being an IT services company means that Simpl’s people are at the heart of what we do, so all our HR strategies and plans revolve around supporting the business and individuals to thrive in

what they do best in the IT world. With a background in organisational psychology, I love the challenge and variety that comes with working in the people space; I learn something from someone every day! Having worked in a number of organisations and industries over the years, I have come across many leaders, but few who stand up to those I have met through the Leadership New Zealand programme so far. Human, humble, insightful and inspiring are words that I keep using to describe my experiences of every session to date. Not only are our speakers’ leadership journeys conjuring up these words, but the topics and other participants are enlightening and most definitely opening and challenging my thinking beyond the traditional management and leadership theories. The ongoing challenge is to take back my learnings and insights into my everyday life, to continue the positive effect wherever and however I can.

Josephine Bartley Advisor, Ministry of Consumer Affairs My background is in community and law, and I have moved from volunteering to governance roles for community organisations. I practised law in South Auckland then joined the Ministry of Consumer Affairs where I combine both consumer law and community through clinics at the Otara and Mangere Community Law Centres and our consumer rights workshops. I have served as Regional Vice President for PACIFICA, a nationwide women’s NGO, and am currently Chair of Ka Mau Te Wero Charitable Trust, a community development organisation in Glen Innes. My passion for serving community has seen me stand for Parliament in Tamaki

in 2008 and elected in November 2010 to the Auckland Council Local Board for the Maungakiekie Tamaki ward which represents 74,000 people. Leadership is not negative, it is positive; this comment challenges me. I find it so easy to fall into an emotional reaction to a situation. It is also common given the predominance of the adversarial system to appoint blame and find fault. The Leadership New Zealand programme is challenging me to think past finger pointing to collaborating to find solutions. I have found the reflection sessions awakening, especially the feedback I received – less heart, more head. The leaders we have heard from are leaders because they are all doing something about something, they are not watching from the sidelines. They are solid in themselves as to who they are as people; I’ve learnt it’s not just about what you do, but how you be who you are.


pen portraits

Mike Brooker General Manager Legal Foodstuffs (Auckland) I am the General Manager – Legal at Foodstuffs (Auckland). Prior to 2009, I had spent 19 years in private practice law and for the last nine of those years was a partner at DLA Phillips Fox where Foodstuffs was a major client. With a number of retirements imminent in the Foodstuffs’ senior executive area, an opportunity arose in 2009 to create, for the first time, a legal team within the business. I jumped at this opportunity as it was new, exciting, varied, challenging, similar in some ways but very different in others, and gave me the opportunity to maintain close links with DLA.

I am part of an executive team of seven, and am responsible for all legal and risk issues across the business as well as a number of special projects. It would be fair to say there is never a dull moment. My Leadership New Zealand experience so far has been about taking time to reflect on leadership and to learn from both the participants and the presenters. For me, leadership has always been something easily recognised but challenging to define. I remain of this view, but it has been interesting to be exposed to a wide variety of viewpoints and perspectives on leadership. There are some common threads but also many diverse views. I think there is opportunity for everyone to take from the experience the parts that resonate for them, and have a bit of fun on the journey.

Janette Campbell Partner, Cowper Campbell At the end of 2001, after seven years in one of New Zealand’s largest law firms, I took the plunge into small business, founding Cowper Campbell with my former boss. Nine years later, we’re all still having a ball, working with major infrastructure providers, large corporates, central and local government entities, environmental groups and other not-forprofits. We provide advice to applicants for resource consent, to those opposing and to regulators (but not all at the same time!). Much of our work is outside of Auckland, and I have worked from Northland to Southland and points in between over the years. I

enjoy the insights into a wide range of business activities. It is fascinating to see the different styles of leadership that our speakers and this year’s participants exhibit. The successful leaders that I have been exposed to prior to starting the Leadership New Zealand programme had a large number of common attributes and a similar leadership style. I’m intrigued by the less overt leadership styles that I have witnessed on the programme and the concept of collaborative leadership. I’m equally interested in the rejection of such approaches by some of our speakers and participants. I look forward to forming a view as to the necessary characteristics of leadership. I also value the opportunity to discuss the big picture issues with a diverse and interesting bunch of people and the candour and honesty brought to our discussions by both speakers and participants.

Henare Clarke Regional Manager Operations, Northern Region, Downer EDI I am of Ngati Porou descent and enjoy having time out with my wife, daughters and grandchildren. My role with Downer New Zealand is Regional Manager for Auckland North Operations which currently stretches from the Bombay Hills to the lighthouse at the top of the North Island. Being a Manager for Operations means I provide leadership, guidance and advice across a large team of people (approximately 400) of varying cultures and experience inside the roading and transport sector. The biggest demand for me outside of delivering the sustainable financial result our shareholders expect is people

management and leadership. I enjoy the freedom of being able to help and mentor some of our younger people coming through our business and provide support and advice on their journey. It is very rewarding to see the growth in a person and know that you have made a small difference in their lives – hopefully. I recently received the New Zealand EEO Trust Award for leadership (Walk the Talk) so I guess I must be doing something right! Leadership New Zealand has exposed me to people outside of whom I would normally associate with but more importantly has started to expose me to issues I had taken for granted and also prejudices formed by ignorance. It is also showing me that leadership is not just about leading people, it is about a role that we all have to play in our society; it is not accepting things as they are but challenging them and where possible influencing change. Bring on the rest of the year!



Megan Courtney Auckland Convenor Inspiring Communities Growing up in the rural Hauraki Plains, ironically much of my working life in Auckland has focused on ‘recreating’ small town heart in the ‘big’ city – which for me means communities that are connected, collaborative, supportive, vibrant and proactive. Working for local government in Waitakere gave me an awesome start. I was always encouraged to ‘push the boundaries’ and do things differently – empowered to dream, and to work with others to make things happen. Now part of Inspiring Communities, a small new NGO, my belief in communities and their power to achieve great things

has been fed again. Our mission is to grow the recognition, understanding and practice of community-led development in Aotearoa, New Zealand – inspiring communities, to be inspiring communities! My participation on the Leadership New Zealand programme to date has reinforced the need for a new kind of collaborative leadership in New Zealand – people from all sectors talking and working together at many different levels. No one person, agency, or sector standing alone can take New Zealand and its diverse communities forward. We’ve also heard how effective leadership is about courage, humility, caring and character – it’s about who you are as much as what you do. As ‘future leaders’, we’ve been challenged from day one to take care of ourselves, and those closest to us, and to focus on developing ourselves, not just our leadership practice.

Margaret Davison Director Policy & Research, Ministry of Pacific Island Affairs (MPIA) With almost 20 years’ experience working in community economic development in Scotland, my role in Ministry of Pacific Island Affairs has allowed me to reconnect with the work that I am most passionate about. Grassroots economic development provides a great opportunity to make a difference to the lives of those in our communities. The Ministry has a broad focus on improving outcomes for Pacific people living in New Zealand – including education, youth and economic development, housing and health. I work with a broad range of stakeholders including government, local government and community. Our work involves policy development and influencing the work of others to ensure positive outcomes for Pacific people. I have a degree in Public Administration and a Masters’ degree

in Business Administration. I worked for a number of years for Scottish Enterprise, Scotland’s economic development agency, before setting up my own consultancy. The work of the consultancy was at a more grass roots level working with a wide range of not-for-profit organisations, supporting their growth and development. I worked closely with a number of innovative housing associations and led on a Community Wind Farm project. I established a ‘best practice’ European Development Key Fund project to provide small grants to not-for-profit organisations. Leadership New Zealand has provided me with a unique opportunity to examine in-depth many aspects of New Zealand society, culture and leadership. Engaging with so many inspirational Kiwi leaders in such an open and honest manner has been absolutely fantastic – a once in a lifetime experience. Furthermore, the breadth and diversity of the 2011 group has further enhanced the experience. It is not often in our busy lives that we get the opportunity to step back and really examine what’s important to us, who we are and what makes us tick. Leadership New Zealand provides that environment and I am extremely thankful for that.

Dickie Farrar General Manager Whakat hea M ori Trust Board I returned to live in my hometown of Opotiki in June 2010 after living away for a number of years. My background has been in nursing and management, and I have worked primarily in supporting Iwi development for the past 30

worked with a number of organisations at a management and executive level. At present, I am the General Manager for the Whakat hea M ori Trust Board, and I manage the social, commercial and fisheries arms of the organisation. The Leadership New Zealand programme has changed my understanding of what effective leadership is about by acknowledging that leadership is a dynamic and changing beast that does not rest. Gone are the days of traditional leadership where authority ruled. Leadership has shown me that it is okay for leaders to be vulnerable, to be human, and be adaptable to all issues affecting people, and communities. To be effective as a leader for me means to be humble, to be open to new things, new ideas, and to be flexible with a touch of tension.

years. I am of Whakat hea, Te Whanau-a-Apanui, Ng ti Porou and Kahangunu decent and I have a passion for initiating change and driving for quality improvement. For the past 20 years, I have

not often in our busy lives that we get the opportunity “ Ittoisstep back and really examine what’s important to us, who we are and what makes us tick. ” Margaret Davison 12

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Penny Fitt Head of Design, Toi Whakaari: New Zealand Drama School I am, like many of the staff at Toi Whakaari, part practitioner, part educator. I will always be developing my practice as a stage designer as well as creating effective ways to help students understand design. Beyond my own discipline however, there is another great question for me: As the national drama school, how do we understand our emerging identity and express the school’s purpose and significance clearly to those inside and outside (our performing arts community, the country, the international theatre community, educators everywhere)? After beginning in the model of a British acting school we have, over the last eight years, developed and expanded; shifting from a single discipline (acting) towards multi-disciplinary conserva-

torium. We have centralised difference as a gift as we build community and collaboration across all our courses. At our best, we reflect this in the way we frame the learning and in our practice when we make performance work. My Leadership New Zealand cohort is a fantastically diverse group and this is (as well as everything else) a great opportunity to seek out different perspectives and test my emerging thinking in a new context. As a recent arrival to New Zealand, I am wondering whether there are qualities inherent in the attitudes and values of the cultures here that help us do this. Can we maximise the collaborative frameworks distinct to Aotearoa/New Zealand to excel in this area? Can we break free of a notion that European models are always better and be bold enough to create something new based on us being here on the Pacific Rim, based on a new understanding of our emerging nation? I am learning about the essential notion of inclusivity. Whose voices do we hear?

Richard Fitzgerald Chief Executive New Zealand Young Farmers I am ‘living the dream’ by marrying a farmer’s daughter. Ruth and I (actually Ruth) farm a 243 hectare livestock and cropping property on the Canterbury Plains. This started my connection with the Young Farmer organisation which has now spanned nearly 20 years – initially as a member, then as a volunteer helper, to become the National Manager of the Young Farmer Contest nine years ago. Through a huge restructuring and evolution of the organisation, I now head up the organisation as CEO. This is a dynamic and challenging role as the organisation has grown at over 25% per annum for the past five years with nearly 3500 members throughout New Zealand. The

role is diverse through mixing with volunteer members, corporates and politicians of all kinds; sponsorship and commercial contract services with a fair bit of television work thrown into the mix. It is a role which tests my leadership skills on a daily basis and I love it! The Leadership New Zealand programme has broadened my leadership style in three areas. Firstly, I have endeavoured to become “the leader that I am”. Relaxing into who I am is shaping my leadership style to become more values driven, which includes developing and trusting my instinct. Secondly, I am learning the art of asking the right questions. This involves listening to what is being said, processing the information and responding in a considered way. Finally, I am learning a greater appreciation of different people’s perspectives. I have always been open to others but the course is helping me discover a deeper level of openness that celebrates diversity; I am exploring how these things operate in my circle of influence.

Carey Griffiths Acting National Manager, National Community Policing Group, (Acting Superintendent) New Zealand Police I have worked for New Zealand Police for almost 26 years. This work has taken me into just about every situation imaginable; some stressful, some traumatic, some touching and some just plain funny. I think that policing changes the way you look at the world, as you see and do things that many other people can’t even imagine. My job has taken me all over New Zealand, as well as to countries including Rarotonga, Australia, Tonga, and soon Bougainville, in roles as diverse as child abuse investigation and traffic. My current role is significant in that it is providing a focal

point for Police in a prevention-based approach to working in partnership with communities. Police do have a leadership role in society, both in times of crisis and in terms of working with a range of agencies and the community to actualise our vision of “Safer Communities Together”. Leadership for Police can be a challenge, as everything we do is open to scrutiny, often subject to debate and media attention, and often profoundly impacting on people’s lives. I wouldn’t want to do anything else. The Leadership New Zealand journey for me is reinforcing that being a leader is fundamentally linked to who we are, not what we know. No matter the size of the organisation, leading and inspiring others, whether in Police or in the community, is a very human process. I am very excited about this journey, which I take together with participants from a wide range of backgrounds as we develop our skills and understanding of ourselves and of others.



Liz Hampton Corporate Citizenship Manager IBM New Zealand In my role at IBM I have responsibility for managing IBM’s citizenship profile and contribution in the community. I work with not-for-profit organisations and social agencies to develop collaborative partnerships that use the skills and expertise of IBMers in community programmes. My background is in communications, training and knowledge management. I am a long-time employee of IBM, and have had a number of roles within the company. I have also worked as a computer programmer, and held research positions in the Departments of

Labour and Immigration after completing a Masters in English. I also managed my own training and documentation contracting business when my children were young. Based in Wellington, I am a strong advocate for business contributions to community. I am the co-founder of a CSR network of business professionals who are responsible for corporate social responsibility practices within their own organisations. Formed more than 18 months ago, the group meets regularly to network, share best practices, and look for ways to collaborate on business and community partnerships. The Leadership New Zealand sessions have challenged and stimulated my thinking on the role of leaders, and the part that we can all play in making a positive difference to the organisations and communities where we live and work.

Dave Hargreaves Chief Executive Officer Foodstuffs New Zealand Liquor Ltd I have lived in New Zealand for nine years and in England prior to that. Having worked in retail since leaving university, it was a job offer that brought me and my family to New Zealand in 2001. I have held senior roles at Progressive Enterprises and Noel Leeming, and my current role as CEO of Foodstuffs Liquor where I am responsible for a chain of 80 retail wine, beer and spirits stores around the country. We are heavily

involved in responsible retailing of alcohol and as such, work with local and national agencies around New Zealand to ensure responsible consumption. I have found the Leadership New Zealand programme interesting and rewarding to date. My career has always been in a corporate environment and I have realised that there is more to leadership than positional leadership. I am experiencing leadership traits as much from the participants as the speakers. The programme is getting me out of my comfort zone, exposing me to situations that I am not used to, and certainly questioning my leadership style, my current role and how it all ‘works’ in my private life. A great experience so far.

Dave Harris Production Manager Thirkettle Nurseries Having always had a passion for plants and the outdoors led me to study an MSc in Ecology at Otago University. Since completing my degree, I have worked at Thirkettle Nurseries in a range of roles, currently as Production Manager. My job is to manage everything that happens during the growing process on the nursery. We produce over 400,000 ornamental plants every year, so it is a role that can be very challenging and complex, but it lets me combine my love for plants with the opportunity to work outside in the region with the best climate in New Zealand – Nelson. I am committed to the nursery industry

in New Zealand, and about attracting young people to careers within the industry. I think the first lesson I learnt as a participant in the Leadership New Zealand programme was that leadership and management are two very different things, although both contain certain elements of the other. I thought that being a good leader would involve learning certain rules to handle certain situations, but found out very early on in the programme that passion and commitment are two of the most important things to being a leader; a lesson that has been shown time and time again by many of the inspirational leaders who have spoken to the group. Before the programme, I thought that the biggest impact would be on my career, but the further we go through, the more I see myself becoming more involved in my community, and I now think that is where the leadership journey will lead me.


programme is getting me out of my comfort zone, “ Theexposing me to situations that I am not used to, and certainly questioning my leadership style ... ” Dave Hargreaves

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Brendan Hoare Managing Director Organic Systems Ltd Organic Systems is a company committed to growing the organic and eco sector of the Oceania Pacific and Asia region by working with aligned organisations to realise their greater opportunities and full potential. The company offers leading expertise and services to the organic and eco sector of the Oceania Pacific and Asia region to deliver effective growth strategies. I have been actively involved for over 27 years and over the last 12 years have served in leadership and governance roles within the agriculture sector in New Zealand and internationally. My commercial expertise is in the development and delivery of collective strategies while engaging all stakeholders towards successful and progressive solutions from grass roots organisations to trans-national companies. My passion is in demonstrating practical change. I have designed and managed numerous award-winning projects throughout the New Zealand and Asia Pacific region. I am the founder

and team leader for the Journal of Organic Systems, and was instrumental in establishing and the development of a national organic certification participatory guarantee programme, the National Organic Sector Strategy, and the formation of the new peak organisation Organics Aotearoa New Zealand. My family runs an organic certified four hectare property designed on polyculture systems of Asia/Pacific. My desire to attend the Leadership New Zealand programme is based on the recognition that leadership in the 21st century cannot solely rely on personal attributes, intra discipline mentoring, or sheer self determination. Professional training and personal development that sees society and leadership as a whole is crucial for the future of New Zealand. I believe that Leadership New Zealand achieves this. We share an outlook for New Zealand where leadership is courageous and focused on a servant leadership style. My purpose for attending the programme is to enhance my leadership abilities and attributes while gaining optimum insight into my own and others’ leadership styles. I see the opportunity to serve New Zealand and international communities better by applying myself to the programme and seeking better outcomes in commercial, not for profit and political environments.

Elaine Hultzer Partner, KPMG I am a South African who has lived in Auckland for over eight years, having chosen to make New Zealand my home country. I am a Chartered Accountant and have spent my career to date working in professional services firms, both in South Africa and New Zealand, in the role of Audit Partner. My industry specialisation and passion lies in the financial services sectors, providing audit and advisory

services to insurance, banking and investment clients. Through my specialisation in investments, I am also involved in delivering audit and advisory services to not-for-profit organisations. In addition to client service and business development, my role in KPMG also involves development and training of our staff. At this stage of the programme, along with my own experiences, my view of truly effective leadership is that without appropriate communication, respect for people, acknowledgement of people’s diversities, using an inclusive approach with people, and appreciating people for risk taking and their efforts, a leader will not have followers, but mushrooms!

John Kotoisuva Chief Executive Officer C-Me Mentoring Foundation Trust My passion for motivating and empowering the next generation started with my two sons who are now qualified and skilled in engineering. My boys are financially independent and my wife and I are very pleased with their progress so far but they have got more mountains to climb and they are still very young. With an engineering trade background, tertiary teaching and industry assessing experience, I started the C-Me Mentoring Foundation Trust that is the driver of my new initiative and innovating programme “Trades At School”. This programme manages and facilitates the transition of young people through the interface of Secondary, Tertiary and Industry through a mentor-

ing concept. A large number of our young people are at school and having absolutely no idea why they are there. They cannot connect secondary schooling to life after secondary school and they cannot personalise NCEA, it means nothing to them. Trades At School is about bringing purpose to senior secondary school students, purpose that is realistic, achievable and relevant to life after secondary school. With approximately 100 students currently in the programme, it is intended to double the number next year. Being a visionary leader can be a lonely journey therefore participating in the Leadership New Zealand programme has been encouraging and inspiring. The structure and variety in which Leadership New Zealand conducts its programme and the calibre of speakers is reassuring; “I am not alone on this journey which is challenging my current thinking and mindset on issues that I have taken for granted.”


not alone on this journey which is challenging “ I ammy current thinking and mindset on issues that I have taken for granted. ” John Kotoisuva


Russell Little General Manager, Business Integration and Network Commercial Manager, New Zealand Post I was born and raised in provincial Southland, tertiary educated in Canterbury and am now raising my own family in Auckland (and yes, my kids really struggle with the Stags and Crusaders bias). A number of career transitions over the years have seen me move from labouring in the Nelson logging sector, to managing logistics and supply chain operations in Tauranga and Auckland for several blue chip corporate companies, to leading general management portfolios in the logistics, commercial and marketing disciplines within the state owned enterprise of New Zealand Post.

Participating in the Leadership New Zealand programme has been such a privilege. I have benefitted hugely from experiencing a whole new range of conversations about New Zealand’s heritage, her people, her assets and her future possibilities. Of most importance is what I have gained from participating in conversation with leaders brave enough to share their lives with the Leadership New Zealand family. Through these conversations I have come to understand that the critical ingredient to truly effective leadership is “authenticity”. Authentic leaders give you an immediate sense that they genuinely care about a higher purpose, a higher principle, a higher community goal. Their very presence speaks of compassion, kindness, graciousness and humility borne of personal sacrifice. This authenticity and surrendering to a purpose greater than themselves gives them an aura of tremendous personal happiness (bliss) seemingly borne from accepting their own call to adventure.

Richard Llewellyn Corporate Relations Manager Auckland Airport My role is to strengthen corporate relations with key stakeholders for Auckland Airport, particularly media, government (both local and central), investors and the wider airport community. It’s about trying to understand/balance various interests and finding common ground. Auckland Airport is a place of significant business and community – the precinct is a major employer and economic growth engine, and is expected to grow at twice the rate of GDP for at least the next two decades. With more than 18 million people

passing through each year, Auckland Airport is one of the busiest locations in the country, and a great learning environment. As a listed company, it’s important to find alignment between what is good for the wider community and for shareholders. Tourism is one of the main ways we do this. We’re financially incentivised by passenger volumes and so is the New Zealand tourism industry. We see tourism as, on balance, a good thing for New Zealand economically, so we invest a lot of time and money attracting airlines and growing tourism. I’m really looking forward to the rest of the Leadership New Zealand year, and to gaining a better understanding of the nature of contemporary New Zealand leadership and how we can collectively solve some of the shared challenges we face.

Sue North Head of Business & Programme Management, Claims Management Group Accident Compensation Corporation In my role at Accident Compensation Corporation, I lead a team of talented people responsible for the planning, information and analysis, improvement, and risk management functions of the group. Over the last 20 years, ACC has offered me a challenging and stimulating environment in which to work and grow, and has provided the opportunity to take on a wide variety of

roles including case management, learning and development, and advocacy. The Leadership New Zealand programme is providing fascinating insights into the leadership challenges facing New Zealand and New Zealanders. The speakers so far have provided plenty of insights into what it means to be a leader and the conversation and discussion with the participant group has been equally stimulating and enlightening. The wide range of programme themes and the diversity of the speakers and the participant group have already increased my knowledge of issues that I had not previously thought much about, and I am looking forward to the rest of the programme with anticipation.


... the critical ingredient to truly effective leadership is ‘authenticity’. “Authentic leaders give you an immediate sense that they genuinely care about a higher purpose, a higher principle, a higher community goal. ” Russell Little

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Josie Ogden Schroeder Chief Executive Officer YMCA Christchurch I am one of those people who can’t decide whether or not I should stick with my maiden name or change it to my husband’s, therefore answering to both or either. I am expecting my third child later this year! I am currently the CEO of the Christchurch YMCA, an organisation which employs around 170 people and offers a diverse range of programmes for a wide range of people. The Y is focused on youth development, working with vulnerable groups such as the elderly and the disabled, and with the provision of programmes and services which support personal fitness and positive wellbeing. Prior to this, I was the Manager of an Outdoor Education Centre, and before that I worked (briefly) as a Police Officer and as a

Youth Worker in Christchurch prisons. I have a degree in Art History and Law, and a post graduate degree in Not for Profit Management. I am enjoying the Leadership New Zealand programme to date… So many inspirational speakers who have sacrificed and struggled to make a difference to New Zealand and to others. I am learning to think in a different way and paradoxically am also being affirmed in terms of my own personal leadership style and strengths. I am enjoying very much the conversations that are being had with my fellow programme participants, the variety in the group, and the many similarities. We are all passionate, articulate and, probably, reasonably opinionated people – always an effective recipe for a good ‘robust’ debate. Perhaps most of all, my eyes are widening – New Zealand is such a groovy place to live and sometimes, in the thick of the daily grind, we don’t take the time to reflect on this and appreciate it?

John O’Neill Regional Manager Southland PGG Wrightson Having been brought up on a farm in Eastern Southland, I attended Lincoln College in the late 1980s and graduated with a BCom (Agriculture) in 1989. In the same year, I commenced my career in the stock and station industry as a Livestock Representative in Western Southland. I have remained in this sector ever since, and through a series of mergers, have worked for four of the companies which now make up PGG Wrightson. After an initial four years as a Livestock Rep,

I moved into Rural Finance for 12 years before progressing to management roles. My participation in the Leadership New Zealand programme to date has seen me meet and interact with a diverse range of people who I would not otherwise have come to know. The range, quality and honesty of the speakers has been exceptional and their stories have been inspiring. It is amazing how these people have been able to fit so much into their lives. Given my geographic situation, I have been exposed to a number of issues in New Zealand’s society that frankly I was unaware of, and this has opened my eyes to the leadership challenges that we as a country face – and also ‘what part can I play as a leader?’ I look forward to the rest of the 2011 journey.

Patrick O’Reilly General Manager – Property DNZ Property Fund Ltd DNZ is a listed property company with 50 assets located throughout New Zealand. It is the 32nd largest company on the NZX. The property portfolio is made up of investment quality commercial office, industrial and retail property with a combined value of circa $650 million. All my academic training and work life has been within the property arena. The industry, at the level I work, is great as we work with some of New Zealand’s largest national and international tenants to provide accommodation solutions. Property is an important part of business but in most cases its ownership is

not required as part of a company’s core business. Due to our role, we are privileged to be provided strategic insight in our tenants’ business. It is not an easy role, especially in these challenging economic times, but it is a rewarding and interesting career due to the people that I get to work with. When considering further education options, I initially thought about traditional paths. I had already achieved a number of post graduate qualifications, including a professional masters. What interested me about the Leadership New Zealand programme was its focus on people and the way it challenged its participants on social and economic issues facing New Zealand. The background of its participants is varied with both commercial and not for profit backgrounds. I am enjoying the perspectives of intelligent and passionate people in regard to wide ranging topics. To date, I have found the programme challenging my own comfort zone and thinking.

We are all passionate, articulate and, probably, “reasonably opinionated people – always an effective recipe for a good ‘robust’ debate. ” Josie Ogden Schroeder WINTER 2011


Shalini Pillai Grants Advisor, ASB Community Trust I am responsible for managing the health, youth health and development and refugee and migrant sectors for the ASB Community Trust. What I enjoy most in my role is engaging with a range of communities with diverse needs and supporting them to meet their goals. The Trust funds not-for-profit organisations in Northland and Auckland and aims to be an effective grant maker with a strategic outlook. I have also worked as a development instructor on a rural development programme in India and on a street children’s programme in Vietnam. These jobs gave me an appreciation of community de-

velopment and the role of women in development. This has given me a better understanding of the diverse needs of communities and the role that a grant maker can play in effecting change. The Leadership New Zealand programme has enabled me to take time out with a diverse range of people to discuss what it means to be an effective leader. The programme provides a good platform to discuss challenging issues facing our communities today, and to come up with responses which “push the boundaries”. The importance of vision, values and authenticity are important things to hold onto as we work in an ever-changing world. The real value in this programme is the exposure to different thoughts, ideas and ways of approaching issues in our local and global community. The speakers thus far have stimulated and pushed me to think deeper and to appreciate the importance of being courageous and taking risks. The learning continues.

Damon Plimmer Archdeacon for Belmont and Vicar of St Alban’s Anglican Church Having completed a Commerce Degree at VUW and a Diploma of Teaching (Secondary) at Christchurch College of Education, I taught accountancy and economics for two years before being accepted for training as a priest in the Anglican Church. In the 12 years since my ordination, I have worked in a variety of settings, including an inner city church, a cathedral and a growing seaside parish. Alongside my role as Parish Priest, I am Chaplain at the local Anglican boys’ school and the Archdeacon for Belmont. This latter role involves the oversight and support of clergy, chaplains and parishioners in the Hutt Valley. I have further degrees in theology and philosophy/religion and am a keen runner and gardener.

Participating in the Leadership New Zealand programme has reinforced my belief that leadership is not so much about what you do, but who you are. This has been evident in the stories shared by an exceptional group of presenters and in the quality of discussion entered into by the 2011 participants. I came into the programme wanting to be enriched by the process, to broaden my understanding of the perspectives people hold on the issues facing New Zealand society, and to have my world view challenged; I have not been disappointed. The opportunity to get to know people from differing backgrounds and to reflect with them on the future of our nation has given me a fuller appreciation of the gifts we each bring to the table.

Bridgette Pretty Commercial & Private Practice Accountant, CPA Australia I am a fully qualified Certified Practicing Accountant (CPA), my entire working career has been spent in accounting and leadership positions, spanning the hospitality industry, manufacturing, commercial and the last five years in a chartered accounting practice. I am from a farming background and helped manage my parent’s hospitality business before doing my accounting degree and working in Australia for 10 years. This year I started my own accounting practice in Nelson called BDC Financial Services Ltd after identifying a great need in the market for friendly and inclusive accounting and business services for clients. This philosophy is

also something I have greatly enjoyed about the Leadership New Zealand Programme. In 2010, I was the recipient of a CPA scholarship to attend the 2011 Leadership New Zealand course. I thought this was an awesome opportunity to further my leadership, business and community knowledge. I have had a passion over many years for working with and mentoring teenagers so was attracted by Leadership New Zealand’s programme of a balanced focus on community and industry. I have found the interactive nature of the learning brings more meaning for me, rather than pure academic teaching. The major leadership insight I have taken away from every single speaker so far is the underlying importance to approach leadership with humility. This principle, along with the countless wonderful people I have met through the Programme, has been inspirational and I look forward to what lies ahead.


Naku te rourou nau te rourou ka ora ai te iwi With your basket and my basket the people will live

The major leadership insight I have taken away from every “single speaker so far is the underlying importance to approach leadership with humility. ” Bridgette Pretty

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Jo Randerson Artistic Director, Barbarian Productions I am a cross-media artist specialising in theatrical events. My award-winning performance work has travelled the world but I am currently based in Wellington with my husband, Thomas, and son, Geronimo. I am the prize-winning author of such books as The Spit Children and The Knot, and have created collaborative books with visual artists including Seraphine Pick and Taika Waititi. As a playwright, my work is frequently performed by schools and theatres around New Zealand with several of my plays in print including The Lead Wait, Fold and Banging Cymbal, Clanging Gong. My interest in spirituality, politics and commitment to

diversity keep me in demand as a public speaker. I am also a marriage and civil union celebrant and curated the exhibition My House Surrounded by a Thousand Suns at the NewDowse – a collection of visual artworks by artists with experience of mental illness and intellectual disability. I was at a point in my life where I was beginning to believe that being a better leader required me to be more strategic, more controlled and more calculated. However my experience of the leaders we have encountered so far on the Leadership New Zealand programme has encouraged the reverse in me – to be more passionate, more responsive, more driven by my heart – in short, to be more myself. The guests we have had visit the programme are all similar in their striking sense of integrity to who they are and what truly motivates them – very inspiring.

Di Rump Head of Sales & Service New Zealand Post Raised in provincial New Zealand, I really wanted to go to university from high school, however whanau circumstances meant I had to work and therefore study part-time and progressively, resulting in an eclectic mix of qualifications and a life-long passion for learning and reading. My work and career experience has largely been financial services related – covering both private and public sectors. When I reflect on my career and outside career life to date, I realise that I became a career woman more by accident than design. Our first surprise baby arrived 20 years ago at a time when the economics of the situation meant it made sense for me to keeping working and for my husband to be the “stay at home” parent. While being a stay at home father 20 years ago wasn’t unheard of, it wasn’t common either, so that set us up for a non-traditional

work/parent partnership which is very much common practice now – perfect timing for reflection of the nature and ilk that the Leadership New Zealand programme provides. Having recently accepted a new General Manager role, participating in the Leadership New Zealand programme is absolutely perfect timing from a career perspective too, and I feel exceptionally privileged and fortunate to have this opportunity at this time. The personal openness, “individual giving”, the diversity of background and thought of our 2011 participants enables a safe, profoundly unique opportunity to reflect on one’s own leadership style and life leadership journey. Like other participants I’m sure, I am fast coming to realise just what a tremendous blessing I have been given in this opportunity to take time out of life, business and “busy-ness” for personal reflection, as well as to broaden my understanding of the issues and opportunities facing New Zealand. Add the essence of being connected with “not like minded” people from different backgrounds and walks of life – what a package for supporting change at a personal level as well as redefining how we can individually and collectively contribute to the future of our country!

Catherine Schache Senior Legal Counsel, Solid Energy After nearly 15 years in legal roles in the public and private sector in New Zealand and the UK, I moved to an in-house role at Solid Energy just over two years ago. The role demands not only an in-depth knowledge of Solid Energy’s business but also advice that moves beyond the strictly legal and into strategic – and it is those demands that make the role so varied and interesting. I lead a team of six law-

yers from our head office in Christchurch as we provide advice to the company’s various operating divisions and sites around New Zealand. I have enjoyed the exposure that Leadership New Zealand has given me to peers from differing backgrounds and organisations across the full range of organisations that make up the patchwork of New Zealand’s society. The most important learning for me has been the realisation that good leadership skills are not learned or unique. There is no magic or secret trick. Rather, good leaders are people who possess traits that make us value them as good people. From that, they become respected as good leaders.

learning for me has been the realisation “ Thethatmostgoodimportant leadership skills are not learned or unique. There is no magic or secret trick. ” Catherine Schache WINTER 2011


Alison Taylor Director/Chief Executive Officer Capacity Development New Zealand Two years ago, I co-founded a new community not-for-profit organisation Capacity Development New Zealand, of which I am now the CEO. CDNZ was created by a group of people passionate about supporting and growing community organisations through strong relationships and effective capacity building strategies. We work mainly in the health, disability, social and youth sectors, and are still evolving our approach, based on a learning and development framework. My journey was through managing public health services in the UK and New Zealand; when I arrived in 1997, I was CEO of the Mental Health Foundation, then General

Manager of the Ministry of Youth Development before working as a consultant in the health and community sector. I am also a Trustee of the Vodafone Foundation New Zealand and Philanthropy New Zealand. Leadership New Zealand is an amazing opportunity to share ideas and experiences with each other and with the leaders we meet with. The combination of inspirational leaders and reflective learning through small group work has enabled me to reflect on my own practice and consider what it is to be a leader, most significantly how being in leadership positions reflects who you are as a person as well as the skills and experience you bring to the role. I have been most inspired by hearing how successful leaders have reflected on their own journeys and learnings, in particular the times when they feel they didn’t get things right, and how they grew from that. The importance of balance in life, as well as passion and drive to make a difference, have really struck home with me.

Cate Thorn Vicar of St John the Baptist Anglican Church, Northcote Anglican Diocese of Auckland Ordination in the Anglican Church emerged for me later in life. After ordination I worked at Holy Trinity Cathedral in Auckland, a context that provided me with much learning and a constant growing edge. Given responsibility to lead the Cathedral in the transition time between the retiring and the new Dean marked the time of my transition from a Cathedral environment to a sole charge position as Vicar of St John’s, Northcote. As Vicar, I have overall responsibility for managing the parish unit and developing its presence in a community with a diverse social and economic demographic. At a regional (Diocesan) level, I am a member of a number of governance committees delegated

the task of the management, administration and development of the Diocese between annual Synods. At a provincial level, I have been variously organiser, facilitator and participant of and in a number of huis called to explore and share differing, divergent, and at times, conflicting theological understandings of particular issues. Participating in the Leadership New Zealand programme provides an opportunity to encounter people from a wide spectrum of leadership contexts. Combined with input from presenters who are courageously authentic and speak about leadership as an evolving expression of who they are (including quite a lot of discovery along the way), it’s soon apparent that leadership finds expression in many uniquely different ways and forms. Meeting such authenticity and excellence in a variety of leadership styles, which can be quite different from my own, stimulates and challenges me to recognise, accept and have courage in the unique potential of my own leadership.

Hans Verberne Area Manager, Midlands and East Coast, Accident Compensation Corporation I am proud to work for ACC, an organisation that makes a difference for all New Zealanders. For the last two and a half years, I have been an Area Manager in the claims management business. The amount of change ACC has undergone in that time, and the potential changes still to come, make the role a very challenging and varied one.

My background is actually horticulture having completed a Horticulture Science degree from Lincoln University. I worked in the areas of consultancy and quality assurance before moving into management roles with the Ministry of Agriculture, AgriQuality and AsureQuality. I am thrilled to be part of the 2011 Leadership New Zealand programme and have thoroughly enjoyed the first few sessions. Already my eyes have been opened to both the similarities of leadership in vastly different organisations, as well as the differences in leadership styles and approach that people bring to their roles. The opportunity to interact with and learn from leaders, both those presenting to us and those participating in the programme is very much appreciated.

I have been most inspired by hearing how successful leaders have “reflected on their own journeys and learnings, in particular the times

when they feel they didn’t get things right, and how they grew from that.


Alison Taylor


pen portraits

Dan Walker National Commercial Sales Manager Noel Leeming Group A proud dad and husband, I have held senior management roles in the private sector for over 15 years. I am also a governing trustee of Ngati Ruanui in South Taranaki. The mandate of Ruanui is to improve the health, educational, social, cultural and environmental requirements of the 9000+ people of their tribe. I completed studies in Marketing and Accounting at Massey and Auckland Universities and am currently two months away from completing an MBA. I was recently honoured at the Aotearoa Maori Business Leaders Awards for exceptional leadership in the private sector, commitment to developing M ori

youth and work in M ori Iwi development. I was also previously awarded the IP Anderson Shield for Leadership and Te Kaea – Young Maori Business Leader award. There are few places where you can safely talk about leadership and all of its beauty and foibles. The fact that I may discuss this topic with leaders from a diverse background that is different from mine is a truly rewarding experience. My beliefs are actually changing, my values questioned and my outlook is broadened. I now have a new normal because I have been exposed to aspects of my society that I never knew existed and I realise that my life to date has been rather sheltered – the growth curve has been phenomenal. This is a deeply personal journey that forces you to confront your weaknesses and begin the tough, long road of improvement. The result has been a very empowering programme that might just change my life!

Peter Wilson Roof Tile Group General Manager Fletcher Building Ltd I am a county boy from rural Gippsland in South East Australia, moving to Melbourne to undertake tertiary studies when I was 18. I was fortunate to have a family who had always travelled and I was encouraged to explore the world once my studies were completed. This wanderlust never left me and throughout my career with BHP / BlueScope Steel and now Fletcher Building Ltd, my family and I have had the privilege to live and work in seven countries within Asia Pacific, which has now landed us in beautiful New Zealand. I currently lead the Roof Tile Group for Fletcher Building. This is a

unique, truly global business which manufactures and supplies metal roof tiles to 120 countries around the globe, with operations located in New Zealand, Malaysia, Hungary and USA. Our offer is a range of aspirational niche roof tiles sold under the Gerard and Decra brands. The programme to date has enabled me to gain an understanding of the diversity and richness that underlies New Zealand society. The ability to question and delve into challenges and opportunities shared by the wide range of speakers has prompted me to reflect on these issues and what they mean to me personally as well as the business I lead. In particular, the skills to be able to understand issues through many lenses, the need to bring people with you on the journey, and the important place of culture are all elements which have resonated with me thus far.

Elaine Wong Administration Manager, Mainly Music Looking back, I can see that my background in finance and banking, teaching, serving in the community and children’s sector, and pastoral care, both in Malaysia and New Zealand, has groomed me for the fantastic role I currently hold at Mainly Music New Zealand Trust. Being the only full-time staff member in a small but supportive team, the job is mine to develop. Mainly Music is about connection eg, the local church connecting with and supporting its community families, and I am passionate about developing that link. A typical day could see me in contact with families interested in bringing their preschoolers to our music and movement sessions, communicating with our Mainly Music volunteers, explaining our concept to Pastors, raising the profile of Mainly

Music as I interact with denominational heads and funders, organising our training events and supporting our Area Coaches. My participation in the Leadership New Zealand programme to date has shown me that truly effective leadership involves: • Self awareness; taking time out to reflect on the way I operate, to question my reactions to situations, to assess my listening skills and my ability to probe to enable understanding; • Adopting a reading discipline. I have learnt so much especially with respect to ‘Our History, Our Roots’. Reading about the history of New Zealand, considering my relationship to the Treaty, gaining a better understanding of Maori perspectives, it has all been a humbling exercise; • Being conscious of what is happening at my doorstep. The session on ‘Our People: A Civil Society’ has reinforced the value of community involvement; • A community of friends engaged in conversations that aid understanding, challenge opinions and catalyse action over time.

This is a deeply personal journey that forces you to confront your “weaknesses and begin the tough, long road of improvement. The result

has been a very empowering programme that might just change my life! Dan Walker WINTER 2011

” 21

Leaders for our times:

Compassionate, courageous and committed

Photo: thinkstock/John Foxx

Real leadership is more often than not the outcome of a “time”, says a thoughtful Sir Ray Avery in our cover story in this issue of Leaders. In 2011 Leadership New Zealand is searching for the kinds of leaders we need for our times – in other words, now! By Reg Birchfield and Jo Brosnahan.




n a world context, New Zealand enjoys some fairly obvious and unique advantages, despite our location at the end of the earth. We are not as climatically or environmentally challenged as many nations – though we live on a geological fault line that recently revealed the dreadful face of ruthless natural events. Our society is, generally speaking, creative, educated, socially harmonious, politically stable and fair. We are, according to global research, commercially ethical and legislatively transparent. We are also adapting to population changes and, while our relative individual wealth is falling, most of us live safely above the poverty line. We live in one of the most beautiful and remote countries on earth which has, unquestionably, shaped our view of the world and, increasingly, the world’s view of us. And, oh yes, we are good at physical contact sports. On the other side of the ledger however, significant threats are emerging. Globalisation, urbanisation, miniaturisation, dislocation in different guises and a soon-to-be-passed population of seven billion differently motivated global citizens are collectively making life on this planet problematic. There is a growing body of local and global evidence to suggest that the “time” Sir Ray Avery was talking about, has arrived. The question, therefore, is whether our leaders are up to the challenges our times will present, assuming of course that we understand what those challenges are. Understanding ourselves might be our first real challenge. Despite recently published scientific evidence that suggests human beings are, for the most part, naturally more optimistic than realistic, New Zealanders share a sometimes perniciously pessimistic streak. We are, say the commentators, excessively risk averse and somewhat Presbyterian in our approach to business, particularly when it comes to investing in growth and development. We prefer to trim sails than set spinnakers. Then there is our embedded tendency to create “universal” welfare systems, rather than provide sensible safety nets for the deserving and needy – the principle being that the Master is every bit as deserving of a slice of the State cake as Jack. This approach has created deep-rooted pockets of state-funded dependency in society. The average New Zealander is an increasingly complex fusion of cultures, values, aspirations, abilities and motivations. This potpourri of potential offers the opportunity to yield leaders who understand the value of diversity and perhaps the wit to envisage ways of turning it to account. It offers the opportunity to have challenging conversations and to think differently. Today’s leaders need to make the connections between political, economic, commercial, environmental, social, cultural, community, ethical and moral actions and outcomes. Where to begin? A clearly articulated vision of New Zealand’s future – where we are headed and why – would help. But Robert David Muldoon’s sad Prime Ministerial vision statement that he hoped the country would be “no worse” when he stepped down from the job than it was when he stepped up to it in 1975 was enough to convince politicians since that they shouldn’t do visions. WINTER 2011

As a nation, we have only recently begun the conversations in various corners about a vision of who we are and where we are going to. It was exciting too to see John Whitehead, the Secretary for the Treasury, recently announce a project to measure aspects of success and wellbeing beyond GDP: to measure success is a start, now we have to work out the path to get there. And we need leaders throughout our society who can guide that vision. There are three particular personal qualities which, given this country’s current and future needs, leaders should focus on to build a nation for our times – courage, compassion and commitment. New Zealand needs leaders at every level in the community with the courage to deal decisively with disasters like the Canterbury earthquake and the other more frequent natural catastrophes that changing global weather patterns seem destined to deliver. We’ll need equally courageous leaders at macro strategic levels to ensure the rebuilding projects can deliver visionary solutions for community and not bend to the most vocal individual interests. For most of all, courageous leadership unites both logic and life and encourages a common exploration of the future. Courageous leaders encourage the community to look for common good solutions among the diversity of options that confront them. New Zealand faces many harsh realities. Few of them are as visually apparent as the devastation left in Christchurch. The support activities that have taken place since the quake do, however, illustrate the healing, building and galvanising power of compassion. Leaders everywhere are starting to embrace more compassionate styles of leadership. Leading with the heart hasn’t always been equated with effective leadership. But compassionate leaders must become society’s new heroes. Compassion is not simply a leadership response to disaster. It is valid in all aspects of management and leadership. Compassion comes from within the individual and is about putting others’ needs first, being sympathetic to others’ needs. Leadership is heart work. Compassionate leadership is about empathy, listening, open communication, leading by example, being flexible, not being afraid to display emotion and understanding the need to serve the interests of others, particularly the community. Compassionate leaders bring a sense of balance and a fresh approach to doing business, running governments and driving organisations of every kind. New Zealand desperately needs committed leaders. Our case for them starts with a quote from Jim Collins, the author of From Good to Great, arguably the best book ever written on effective leadership of successful organisations: “The kind of commitment I find among the best performers across virtually every field is a single-minded passion for what they do, an unwavering desire for excellence in the way they think and the way they work. Genuine confidence is what launches you out of bed in the morning, and through your day with a spring in your step,” he said. Committed leadership is, in large measure, what Collins found when, back in 2001, in investigating those great US companies which had survived and thrived, he revealed what he subsequently labelled Level 5 leaders. He unearthed them with his research for Good to Great. They are, he said, “leaders who blend extreme per23


skills, loan-funded, are understandably taken to more welcoming sonal humility with intense professional will”. ‘Level 5’ refers to and better paid climes. the highest level in a hierarchy of executive capabilities identified Science and food industry graduates, in particular, are critical to during his research. Leaders at the other four levels produced high the future of a nation that earns 50 percent of its export income degrees of success, but it was insufficient to elevate companies from from agriculture-linked industries. And agricultural graduates more mediocrity to sustained excellence. so, but we produce a mere handful each year. And we do not have Collins’ research was based on the performance of corporate sufficient organisations of the scale and capability required for us to executives. We believe, however, that the principles and qualities truly succeed on the global stage. As industry leader and AgResearch that deliver high performance leadership of the kind New Zealand chairman Sam Robinson stresses, New Zealand has just one comneeds to meet the challenges of our times are the same. And, said pany in the world’s 50 largest food and beverage businesses, yet we Collins, “Good-to-great transformations don’t happen without are a nation heavily dependent on this sector. Level 5 leaders at the helm. They just don’t.” The leaders for our times have an outstanding platform upon Collins’ discovery was both counterintuitive and countercultural. which to build. Issues raised in this essay notwithstanding, New The assumption that transforming organisations from good to great Zealanders live on a small cluster of magical islands. We are all, in required larger-than-life leaders was unfounded, he said. Rather, the one way or another, migrants. Our forebears came looking for a betmost successful leaders were modest and wilful, shy and fearless – ter life and greater opportunities. studies in duality. We pride ourselves on being innovative and resourceful. We stand They did not allow ego to impede their thinking and, they were up for and believe in our values. We champion equality, community ferociously resolved to make their organisations the best they could and the importance of personal be. If we consider what rich raw freedom. We are resourceful and material New Zealand’s leaders Committed leaders have … “a single- take pride in our relationships have to work with, there seems minded passion for what they do, an with the tangata whenua and all little excuse for them not to succeed. Genuine commitment and unwavering desire for excellence in the the diverse cultures which make up this nation. We work to put extreme humility are, however, way they think and the way they work”. right the wrongs of the past. critical ingredients and we do not – Jim Collins, From Good to Great The world is in serious trouble. often look for this in our leaders. It is running short of essential reTo grasp the concept, Collins sources for economic prosperity and wellbeing. There is a global invited readers of his published findings to consider assassinated shortage of fresh water, secure and affordable energy, productive United States President Abraham Lincoln. He was, he said, a man land, primary resources and raw materials. Demand is outstripwho never let his ego get in the way of his ambition to “create an ping the supply of essential needs, including food. Would it be enduring great nation”. Author Henry Adams called Lincoln a “quisurprising if soon the world sees our natural blessings through et, peaceful, shy figure”. But as Collins said: “Those who thought envious eyes? Lincoln’s understated manner signalled weakness in the man found New Zealand is, if it has a mind to be, uniquely placed to play themselves terribly mistaken.” a positive global role. Indeed, the world will expect us to play our New Zealanders are not easy to lead. There is a short-term fopart. We are, by world standards, under-populated. Countries are cus in our approach to most things: politics, personal investment, short of water – we are often awash with it. infrastructure planning, strategic thinking, enterprise development, Oil and now nuclear energy face extinction or at least dramatic regulations, education policies, healthcare services, environmental modification. New Zealand is a country abundant with renewable and resource management, immigration and employment policies energy resource options – sun, wind, rivers, tides and geothermal. – to name but a few. And we tend to work in silos and not look at Our natural resources and land allow us to produce food more the broader consequences and opportunities. efficiently than most. But we must grow these foods in sustainable Too little effort goes into making the downstream connections ways and, by doing so, protect the land. To take advantage of our between today’s popular option and tomorrow’s expensive and growth we need clean technologies and creative savvy. That means inadequately researched consequence. That New Zealand, because we need smart people and much smarter business models to deliver of the low investment of the private sector, has one of the lowest the future. And this requires collective vision, collaboration and a research and development spends as a percentage of gross national willingness to work together: and a philosophy that we can provide product – around one percent – of any other developed economy is for our own future and not depend on others. It also requires a hardly coincidental. “Just do it. She’ll be right mate.” compelling picture of the future which is exciting for our children This philosophy extends to leadership of the education sector. to stay and be a part of. The linkage between what educators, universities in particular, ofAll this is achievable if New Zealand can identify, encourage, defer and the graduate skills the nation needs are rarely made. We velop and unleash the courageous, compassionate and committed therefore cap graduates in specialisations in which there are few leaders for our time. or insufficient real opportunities in New Zealand. Their acquired 24

Programme Speaker

Agriculture’s leadership challenges New Zealand’s agricultural industries are critical to the nation’s future economic wellbeing. But they face some leadership issues as Sam Robinson, an acknowledged farming leader and the current chair of the board of AgResearch, outlined to the Leadership New Zealand programme in May.


cut New Zealand’s dairy industry away griculture accounts for nine “Important leadership decisions are from camp mother in England.” percent of New Zealand’s being made based on the connections The process was almost reversed in gross domestic product, between science and agriculture.” the sheep and beef industry. Basic and generates 50 percent of our long overdue leadership changes didn’t export income, and underpins 13,300 start to happen in the sector until the sheep and beef farms and 11,400 1980s. “But I find it difficult to predairy farms plus 9000 horticultural dict what circumstances will result in enterprises. sheep and beef farming leadership actSam Robinson’s first, but by no ing in a more cohesive way,” he says. means only, concern is for the state of “Meat farmers have not seen the benleadership within some sectors of the efit to them in acting collectively. They industry. And that concern is based on are short-term smart traders. There are the fact that while collectively, sheep, some good leaders in this sector but it beef and dairy farms represent a major is short on depth.” slice of New Zealand productive economy, they are basically Robinson thinks both the dairy and kiwifruit industries provide 25,000 small to medium enterprises (SMEs). And therein regood examples of the cooperative model working well in New sides a major leadership problem. SMEs, of whatever breed, are Zealand. Their collective ownership, commitment and behaviour notoriously difficult cattle to muster, so to speak. at the farm gate led to strong penetration into global markets. Robinson’s point is that each of those businesses is an SME, but “Cooperatives don’t always work,” he adds. “Think about ENZA if they can be encouraged to behave collectively they represent an – the apple and pear industry’s single desk operation.” He thinks economic powerhouse. poor governance and management that lost touch with its growers The dairy industry, he concedes, has been led more wisely than effectively undermined its performance. Another leadership issue. the sheep and beef farming sector. “Dairy farmers have used their The cooperative model is not the only option. “How the business [collective] power base and pushed their investment, influence, is owned is a factor,” he says. “But what is more important is how thinking and product and information flows beyond the farm gate, the business is led and run.” penetrating down toward the market with a good clear line of There are also important leadership issues outside the agriculture sight,” he says. sector that impact its global success and long-term future viability. “We need better leadership on the farm, to coalesce and organise Politicians for example. On that score Robinson is currently more farmers to think collectively and beyond the farm gate. The next optimistic. He sees policy settings emerging that are “encouraging” step is to get leadership beyond the farm gate to manage the value for agriculture. “Farmers need strong economic settings,” he says. chains.” “And they are coming through.” And while Sam Robinson concedes that he isn’t personally sure He is also enthusiastic about the scientific reforms taking place in how to effect the necessary leadership changes, he sees creating the agriculture. “Important leadership decisions are being made based right environment as critical to the process. “Environment spawns on the making of important connections between science and agleadership,” he says. “In the case of dairy, they have been practisriculture. It will take three to five years to show palpable monetary ing since 1930 with the original Dairy Board Act. Collectivism has returns but, the reforms are happening,” he says. been there for 80 years.” Leadership issues aside, Robinson is optimistic about the future The appointment of Bernie Knowles as general manager of the for New Zealand agriculture generally. “And that optimism is in Dairy Board between 1975 and 1985 was, says Robinson, also large measure driven by the increasing global shortage of fresh wacritical to the success of the dairy industry. “He was an absolutely ter,” he adds. “We are in a soft commodity boom that seems likely inspirational man. He was both a great leader and possessed a to remain that way for another decade or two. The underpinning great intellect. He made things happen. The culture of investof [higher] pricing is that we have a globe that is getting wealthier, ing beyond the farm gate and using the industry’s collectivism growing in size and wants quality food.” to build value chains started seriously with Bernie’s moves to WINTER 2011


Minnie Baragwanath’s journey to…the Land of Be. Minnie Baragwanath is a Leadership New Zealand alumnus. She tells Jo Brosnahan about how she went on to discover the Land of Be.


innie Baragwanath’s beautiful laugh is the first thing you notice. It captivates and entrances. And her laugh was in full voice recently in the dramatic foyer of the Auckland War Memorial Museum where, Minnie launched her newest discovery and creation, her Land of Be. New Zealanders of every hue and heritage were there to celebrate the new initiatives captured by Minnie’s dreamchild – Be. Accessible and Be. Leadership. Be. is about changing the dynamic of life for those who are disabled people. As Minnie explains through a powerful statistic, the disability community involves one in five people, and the proportion will dramatically increase as our population ages. The launch, however, was inspiring, made more so by an accompanying announcement that the Government had committed $3 million to back the initiative. 26

The Be. Trust has an impressive list of trustees and other supporters. Minnie, however, has been the driving force and this is her story. “This has been a journey for many people, getting Be. to this place. It is interesting now that it is alive, but we have created something bigger than we had imagined.” In 2001 Minnie was working for Inside Out, a television programme focused on the disability space. She decided, however, that she wanted to effect social change rather than simply report on what was happening. She applied for and was appointed Auckland City’s first Disability Advisor. She didn’t understand the job, she says with a laugh, but a mentor thought it would be just the job for her. She was given a budget of $5000 to make Auckland accessible. “Just as well I was too naïve to realise what a huge challenge it was. I had no idea how to do the job, but on the other hand, I also had no preconceptions.”

Alumni News Cover Story

Back then, a whole government strategy was prepared around disability and an inclusive society. It took a medical view and put these in a social perspective. The approach troubled Minnie. It did not, she felt, go far enough in presenting a way forward that could be truly transformative. “I wanted to know why we were defining a world in which there is disability, rather than ability?” Mark Bradshaw, a high profile Australian social entrepreneur and tetraplegic who is now a trustee of Be., crossed the Tasman and worked with Minnie and friends to produce a whole-of-life approach. Disability, they said, requires cross-sector collaboration: for government, community and society to come together. The approach involves three key pillars: physical (footpaths etc), social (changing the prevailing social attitudes toward disabled people to see them as a pool of talent), and personal (investing in the capacity of disabled people themselves). The pillars became Minnie’s road map, giving a clear sense of the how, and providing a new way to work forward. But her role at Auckland City gave her no input to strategy. It was during this initial strategic thinking stage that she knew changes needed to take place. “I had many conversations, but could not achieve substantial change,” she says. She felt stuck. She decided that she needed some personal and professional development. Her search for an appropriate programme led her to Leadership Plus in Australia (a community leadership programme for those with disabilities) and she also learned about Leadership New Zealand. She became one of the early recipients of a Leadership New Zealand scholarship. Her 2007 year on the programme led to some important personal discoveries. She had, she says, come from an environment where leadership was synonymous with management. Leadership New Zealand gave her another perspective. Minnie found the programme “nourishing” and describes it as a “gear shift”. The same year she visited Tamarack in Canada with a group now involved with Inspiring Communities and discovered the impressive work being done with cross-sector community-led development around the eradication of poverty. She finished the year inspired. After the Leadership New Zealand programme, she took a week off work “to make the most of the year”. She used the time to write a plan for New Zealand. “Why couldn’t New Zealand be the country in which every part of our success is based upon the story of our social wellbeing?” she asked. “How could New Zealand’s place in the world be such that is it based on goodness, such as that demonstrated by [eco-designer] Peri Drysdale and [scientist/entrepreneur] Sir Ray Avery?” Most people emerge from the Leadership New Zealand programme wanting to connect in some way with the social sector, through its SkillsBank activities or some other form of volunteering. Minnie was from this sector. She decided that she needed to know more about the economy and began a post graduate diploma in economic development. She was interested in the social economy, and particularly in the value to our future economy and society of social entrepreneurs. WINTER 2011

Back at the Auckland Council, the Disability Advisory Group to Council started looking for ways to leverage the Rugby World Cup to produce a legacy for disabled New Zealanders and their communities. “It is ironic that the Rugby World Cup could bring about the greatest change in disability provision in New Zealand,” Minnie laughs, “particularly as I am not a great rugby fan.” This programme, focused on using the Cup to improve the physical environment for disabled people, has now a nationwide initiative driven by Be. The creation of Be. was, for Minnie, a natural progression. She needed an organisation to drive the projects and the Be. Leadership programme for leadership in the disability community. She developed the programme in association with former Leadership New Zealand chief executive Lesley Slade. Minnie is now the CEO of Be. Be. Accessible is about focusing on outcomes rather than barriers. The organisation delivers on the three pillars, with an emphasis on leadership and innovation around social change. “I needed to carve out a new space and to model the change,” she explains. “This [approach] enables us to hold the vision of creating New Zealand as the most accessible country in the world, while holding the social and economic elements in tandem. There is a lot to learn, it is crazy, exciting and a little terrifying. I have been humbled by the goodwill and generosity of the amazing people who want to make it happen.” So where did this powerful vision come from? Minnie is partially blind. She was, however, brought up by a mother who was a powerful role model, who believed in equity, and in “doing what is right, knowing that things can be better and not accepting the status quo”. She went to a mainstream school and attended university, leaving with skills that could make a difference and which provided a sense of responsibility. “Leadership New Zealand gave me the courage to create Be.,” she says. “All of the leaders who spoke [to the programme] had decided that things needed to happen and did not wait for others. They stepped up and took risks; they changed history. It removed the mystique around leadership. They were great people who had just made stuff happen. They were focused on something bigger than themselves, were courageous, passionate and had great values. They had a sense of meaning and connection. “In the final event, leadership is about alchemy, seeing how to take the difficult parts of life and find a way to convert that challenge into light and provide greater benefit for all. Ray Avery is the ultimate alchemist – as a leader there is nothing more motivating than being surrounded by people who actually believe in you and the vision you hold. It creates a truly unstoppable and contagious energy,” she says. Thankfully Minnie has taken this leadership path. She could have taken the advice of a well meaning family friend who, during her childhood, said: “Minnie, you are going to be a switchboard operator.” Switchboards are, or at least were, about connections. Perhaps to that extent there was a little truth in the prediction. Who, after all, could have seen the scale and scope of the connections Minnie would go on to make? 27


Our sincere thanks to… Key Partners

Supporting Partners

Event Partners

Scholarship Partners


• The Tindall Foundation and Inspiring Communities for Leadership Programme Scholarships • The Tindall Foundation for the generous support of SkillsBank • Alumni who so generously contributed to the Alumni scholarship for the 2011 Leadership Programme • New Zealand Management magazine Leadership Programme Scholarship • HayGroup Leadership Programmme Scholarship • Kerridge & Partners Leadership Programmme Scholarship • CPA Australia Leadership Programmme Scholarship

• Tim O’Rourke, Oceania Coachlines – who provided transport for our participants. • Whangarei Library for hosting us during our Leadership Programme visit to Whangarei. • Debbie and Ngahau Davis and the He Iwi Kotahi Tatou Trust for welcoming us into your whanau in Moerewa. • Te Tii Marae, Waitangi for your generosity and care during our stay at your marae. • George Riley for your wise words and generous spirit. • Karam Meuli for bringing the gift of song. • Our wonderful programme speakers: Debbie and Ngahau Davis, Chris Farrelly and Pita Tipene. • Chris Farrelly and the team at Manaia Health.

Event Hosts We would like to individually thank all our hosts for hosting our various events so generously. • Stephen Guerin (Fruitfed Supplies) for providing assistance and sponsorship for the 2011 Programme Opening. • Peru Coffee for providing us with gifts for our café events. • University of Auckland and Fale Pasifika for hosting our May Conversation event. • Toi Whakaari for hosting our June Conversation event. • Botanical Gardens for hosting our June Leadership and Mindfulness Workshop. • The Edge, Town Hall Auckland for hosting our Leadership Week Dinner. • Stephen Waspe, Webfilms. • Tama Potaka for being MC at our 2011 Programme Opening.

Café Speakers We thank all speakers for their generosity in giving their time and their stories; they are the backbone of Leadership New Zealand. • Dr Marama Muru-Lanning (The University of Auckland), Bruce Waters (Mighty River Power), Penny Howard (Artist), Doug Poole (Poet), MC Selina Tusitala Marsh (Leadership New Zealand Alumnus 2010, Poet, Author and Tenured Lecturer at The University of Auckland) for their contribution at our May café event. • Christian Penny (Director, Toi Whakaari: New Zealand Drama School and Alumnus 2009), Dr Karlo Mila (Poet, Writer, Mother, Columnist, Researcher and Academic), Jessica Prendergast (Project Director 2058, Sustainable Future Institute), Nick Astwick (General Manager Consumer Finance, Kiwibank and Leadership New Zealand Alumnus 2010). MC: Richard Moss – Director, Institute of Judicial Studies and Chair, Toi Whakaari: New Zealand Drama School.

Programme Speakers: February: • Louise Marra and Anouk Graav from Spirited Leadership. • Our fabulous speakers: Tim Miles, Bob Harvey, Teresa TePania Ashton (Alumnus 2006).

March: • Refugee Youth Action Network (RYAN) Centre and Selwyn College – who provided a venue for our Leadership Programme. • Mangere Refugee Centre and Counties Manukau Police DHQ for speaking to us about the wonderful work that is done there. • Our wonderful speakers: Gary Poole, Pat Snedden, Milton Henry (Alumnus 2006), Professor Manying Ip, Dr John Hinchcliff.


May: • Grant Bunting and the team at PGG Wrightson – who generously hosted the Leadership Programme. • Massey University, Palmerston North for providing the venue for our Leadership Programme. • Farm Visit – Waitapapia Station, Hugh and Roger Dalrymple for hosting us on their farm and speaking to us about their wonderful work. • Greenhouse Gas Research Centre for an informative tour. • Our wonderful speakers: Jacqueline Rowarth, Sam Robinson, Nicola Shadbolt, Dr Morgan Williams, and Grant Bunting.

Contributing Partners • Nick Hadley and the team from KudosWeb for their invaluable web and IT assistance. • Mike Johnston and the team at Canon for support with our printing and copier needs. • Bell Gully for assistance with legal advice around our commercial lease arrangements. • David Williams of Baleringe for overseeing and stage managing the Leadership Week dinner. • Reg Birchfield for his significant contribution to the magazine. • Toni Myers, Fran Marshall, Gill Prentice, Jan-Michael David and the team at Mediaweb. • PricewaterhouseCoopers (May Lundberg and her team) for providing us with accounting and financial assistance. • Mark Otten for providing us with financial advice. • Rewi Spraggon (Alumnus 2005), Leisa Siteine (Alumnus 2005), Hilary Sumpter (Alumnus 2010), Reg Birchfield (Trustee) and Vicky Pond Dunlop for helping us with the 2011 Leadership Week Dinner. • All invited contributors and people who gave their time to be interviewed for this magazine. • Members of the Leadership New Zealand Alumni who have given their time, talents and energy at various events and SkillsBank projects so far this year. • All of our Trustees, Advisory Trustees and Funding Partners for their ongoing support and invaluable advice. • All of our conversation session speakers who have provided us with evocative and inspiring stories provoking us to think differently about leadership and narrative. • All of our programme speakers who have generously shared with us their leadership stories, time and thoughts.

A Life in Leadership CALL FOR NOMINATIONS FOR THE 2012 LEADERSHIP PROGRAMME We are searching for leaders to take responsibility for New Zealand’s future… Leadership New Zealand provides a unique opportunity for leaders with potential to engage with New Zealand’s senior leaders in conversations about the issues of greatest concern to New Zealand’s future, creating a platform for deep personal growth and insight. A Life in Leadership

Candidates should:

• Take personal leadership learning beyond natural boundaries and across sectors

• Have demonstrated leadership capability

• Learn to build dialogue with other leaders from different backgrounds and viewpoints

• Ideally have 10-15 years experience in their fields of expertise

• Be challenged… to really listen and contemplate • Be exposed to new perspectives and different environments, and begin a journey of a life of leadership in your organisation, with your teams and within your community • Hear the frank opinions and concerns of leaders from across New Zealand and learn from their experiences

• Care about New Zealand and its future • Be prepared to commit to the community through Leadership New Zealand’s SkillsBank Programme • Have support from their organisation • Be ready to make a substantial commitment of two to three days per month over nine months, starting 17 February 2012

Candidates are drawn from diverse backgrounds and are selected based on merit. Places are limited to a maximum of 34 participants each year. Some scholarships are available to assist community leaders who would not otherwise be able to participate in the programme. For further details go to or contact us on 09 309 3749 or

Applications for the 2012 Leadership Programme close on 16 September 2011

Key Partners Accident Compensation Corporation

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Foodstuffs (Auckland) Ltd

New Zealand Post

Supporting Partners

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Canon New Zealand

Hay Group

ITC Services

Kerridge & Partners


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Management July 2011  
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Management July 2011