The Conundrum of Business Confidence

A niche furniture manufacturer for the Japanese market earnestly explains how, in the midst of the lowest-ever New Zealand dollar, he was looking to apply sinking lid policy with his work force.
But why? “This ERB thing… [now the Employment Relations Act],” he says in resigned tone.
Another mid-sized business owner questioned: “This ACC thing… .” And so it went on throughout last year and, save for the farmers, into 2001.
While commentators describe the sharemarket as bullish from time to time… the business community itself is more often than not prefaced with the descriptive “cautious”, “bearish”. How about “rampant”? Apparently we are “counter-cyclical” with the outside world at the moment but the outside world economy will hit us at some point in the future – so our “cautious” (according to those daily news reports) business community is planning around that.
Last year saw some record dives in business community polls designed to reflect our so-called “business confidence”. Many questioned, as with election polls, whether the polls had the instantaneous effect of feeding themselves – self-fulfilling, prophetical doom machines of sorts.
Or did they simply reflect the way it was and is?
Had small and medium business packs lost their go-forward? Was there (yet again) little heart in the game? Talk to most non-exporters today and you hear the same phrase “bloody tough” though quizzically they also respond: “But my outlook actually ain’t too bad Mr/s Pollster.”
Are we that fragile? Is there something in the Kiwi psyche that has really shifted in the last decade or so? Does our collective business camp simply have more of penchant for wringing its collective capitalist cap?
Many in that community are not slow to point the finger at endless portents of doom sounded between the lines by media they see as keen to pick over the nooks and crannies of negative possibility. Today we do seem to now acknowledge how that old poppy syndrome cultivates reticence in the face of great results – witness the number of CEOs who nowadays say they would rather carry on quietly and not have successes mentioned.
Then again “I hear all about these business polls but they never ask me” or “Why do they never approach me?” are points laboured by many during interviews for this story.

What is business confidence?
Talk to some CEOs and we discover the morning paper is mandatory non-reading. Avoiding reality? Or simply negativity that affects that precious imponderable that is business confidence?
Makes you wonder where our own sense of taking charge begins, and where the powerful grip of general grumbling ends. Powerful enough to have given many medium business owners pause at least.
In soon-to-be published report by this writer on bathroomware manufacturer Kohler New Zealand, building and plumbing supply industry going through its fair share of gloom and doom, sounded surprising note of tough-nosed defiance by industry leaders.
Kohler’s managing director Alister Lawrence commissioned the report with brief to seek out leadership and go-forward thinking in his own industry and then reflect it back to all the players. “I’m very passionate about the idea of positive leadership… how many times do I hear of board that knows what their next step should be but the dragging weight of conservatism robotically kicks it into pro-activity.
“From the time Roger Englefield founded the company [at 50] for us, ?have to’ has also been wonderful motivator,” he adds.
Study participant, Rick Fala, CEO of Methven Tapmakers (now shareholder after an MBO in May) exudes the confidence Lawrence sought to highlight in his community. For Fala, more than anything, minutely detailed mission path and clear strength of vision have overshadowed outside determinants of progress, including Government: “We’re very focused but we never wait on the Government. As businesspersons we must lead the changes.
“We need that No 8 wire mentality back again – we could change the country and where we are headed.”
And, Fala claims, management needs to start looking outside its own industries: “Managers also need to look beyond MBA theory to the wider perspective of the here and now economy. Beyond that we need real leadership to drive beyond the theories… to lead, to motivate, managers that are able to talk to their people.
“The way I look at it – in terms of general confidence – I’ve been dealt pack of economic cards. What am I going to do if I don’t like my hand? Throw the deck away? No, I will play the best I can.
“There is no reason why we can’t be world leaders. The America’s Cup victory sent strong message to the country – that small country could defeat much bigger players.”
Neil Gunn, until recently, MD of Winstone Wallboards, and now overall Fletcher Building’s executive general manager – marketing solutions and strategy, broached the confidence issue with: “Sometimes I look at things far too simply – but I realise that if it’s going to be it’s up to me.”
Since 1996 Gunn had realised that even with the dominant market position of Winstone’s gib board product, the worldwide trend was to commoditise even further. The counter was not to wait upon the inevitable chill winds of international trade giants but act. Hence began programme of lifting the brand and creating new consumer-led pull rather than channel push: “Sure, we knew we were taking risk.
“In our game at least, different parts of the building cycle also gave us different opportunities,” he says. “After building drops away there is typically gap and then bounce back up again in the renovation market.”
Initially, he says, the trade itself was sceptical, but confidence came when the consumer market picked up on the product and service delivery hit home for the trade itself. Noticeably Winstone Wallboards staff had tapped into the new mission with their own new found zest and performance improvements, Gunn claims. “They took ownership in the new phenomena.
“If people keep looking inwards and not making decisions… (he pauses) – well, I think you’ll find more and more people are actually getting out there and doing something about it.
“So the building trade is down! – so it’s phenomenal time to drive value and make extra on the next upturn.”

Whistling in the wind?
Put aside the whistling and generate your own group-think seems to have been Wallboards other solution to generate little positive focus. Initially designed to showcase product and get closer to the building trade, the company’s Trade Lane club has had the spin-off effect of generating its own go-forward mindset, he says.
The regular, now multi-trade forum, has kept the ideal of professional business practice to the fore and indeed partnerships big and small forged, claims Gunn.
“I don’t like working in negative environment – I just don’t see the point.” For its own part it was up to his Winstone Wallboards to pull volume well beyond normal market activity: “If the market grows naturally at two percent per annum, then we need to force three or four times that with consumer pull.”
Colin Leach, managing director of Marley New Zealand, sounded note of concern on behalf of manufacturing importers: “Right now we should have import substitutors popping out of the woodwork but where are they? They don’t exist.
“I’ve been through periods when everyone thought the world was coming to an end… you certainly learn that everything goes in cycle and, in time, you learn to act consistently with your team – after all you want business to be fun, to work with humour in good and bad times.
“Situations are as good as you want to make them. We often reach to outside stimuli and fall into victim mode – which is easy to do at times like now.
“No reward for risk is the problem… if you look at us we’re small, mature economy dependent on exports for gr

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