James Munro, former CEO of supermarket bank Superbank and ex general strategy manager for TVNZ, is diving with stingrays, finishing his DiveMaster certification and spending quality time with his young family whilst keeping watchful eye on the New Zealand executive employment market. Like many experienced senior executives, Munro knows there’s plenty of top talent in New Zealand and only small pool of positions; he also knows that CEOs who want to live and work here need to stay in touch with recruiters and personal networks, and be able to bide their time.
“All jobs require compromise, just like life. What I won’t compromise on is that I want to work for, and with, people I respect,” says Munro.
Munro, who has financial qualifications and international management experience in the media, finance and retail industries, says he returned to New Zealand some years ago after passing up financially lucrative opportunities in the US and UK for better family life.
“I knew New Zealand was not the place for CEOs intent on career advancement and large salaries. The population is too small, there’s low concentration of industries beyond the primary produce sector, and no broad path for large numbers of executives,” says Munro.
That said, Munro says he found opportunities in New Zealand smaller than he realised and had to refocus his goals to suit the market. What followed were “two good steps backwards” in his career path, followed by redundancy from TVNZ and another from Foodstuffs joint venture Superbank earlier this year. However, there were no hard feelings, says Munro.
“I was made redundant [from Superbank] along with around 50 people, but it was the right decision for management to make and I supported it,” says Munro.
He says good leadership opportunities take long time to gestate in New Zealand – conversation started on one day can take three months to develop into an opportunity, and the glut of talented candidates on the market results in high level of competition.
“I have missed some really good roles where I have been in the last two or three [candidates] and that is quite heart rending. But anything good in life is worth working towards,” says Munro.
Munro is nothing if not philosophical, but his good credentials probably won’t save him from six to 12 month wait for the right private sector position, say recruiters – the average time it takes to place an experienced CEO into medium or large size organisation in New Zealand. That wait is between four and six months for positions in the less attractive public sector.
Where are the good jobs?
Recruiters, CEOs and employment analysts all attribute the dearth of large CEO roles in New Zealand to short list of key issues. One is the generally small size of the New Zealand business environment (exacerbated, say economic analysts, by lack of savings by New Zealanders and corresponding lack of investment in private and publicly listed companies). Another is the so-called ‘Australianisation’ of New Zealand businesses, or the buy-up of New Zealand organisations by Australian equity investors who must find somewhere to invest the billions being generated by Australian superannuation funds weekly.
The resulting acquisitions and mergers are widely considered to be reducing the number of executive positions available to New Zealand CEOs. Local middle managers are reporting back to Australian-based parents, or the parent company has placed an Australian CEO in New Zealand position.
Jo Brosnahan, chairman for Leadership New Zealand and former CEO for the Auckland Regional Council, says while she is happily immersed in Leadership NZ and directorship with LandCare Research, she sympathises with experienced CEOs looking for good opportunities in New Zealand.
“The scary part is that if you are really talented CEO and want to stay in New Zealand, the likelihood is that you won’t be able to. Our big companies are being absorbed by Australia – look at Griffin’s, WasteCare and Feltex – and it is happening all the time. Inevitably, the new owners put their own executive people in and lot of our top CEOs are being deposed as result,” says Brosnahan.
Tony Nowell, managing director for Griffins Food for six and half years until its divestment to Pacific Equity Partners in June, has long and illustrious executive management CV. He says he has yet to reach his own conclusions about what he wants to do going forward, but sees three obvious problems for New Zealand CEOs: diminishing opportunities as boards fail to see the reservoir of CEO wisdom in New Zealand; senior decision-making roles moving across the Tasman, and New Zealand companies looking offshore for CEO candidates. Nowell says when decision-making roles are removed from New Zealand, learning opportunities for CEOs and leaders go with them.
“There needs to be more creativity out there on the part of boards; they need to work out ways to adapt their business models to best utilise the talent pool available,” says Nowell. At the same time he says “the market is the market”.
“When you have stock market that is rapidly diminishing, the roles are not there. There is an answer; but it’s not an easy one – if New Zealanders start to save and invest more in equities, this will make more robust public equities market and New Zealand will need more CEOs and directors for more public companies,” says Nowell.
Peter Harbidge, executive general manager for recruiters Hudson, agrees that there has been reduction in the number of “meaningful” roles for New Zealand CEOs heading organisations of more than 200 people.
“[Australian] owners take those roles to Australia or bring in their own people and local CEO roles are downgraded. Mergers also mean role elimination – two companies can’t merge and have two CEOs.”
However, Tim Kernahan, director for executive recruiters Swann Group, says while internationally owned companies are increasingly reducing the number of head offices in New Zealand, putting country managers and not CEOs in charge, and driving finance and even marketing from places like Sydney, Australian-owned businesses don’t always want their own people in place.
“A lot are more sophisticated [than that]; if company needs to be quickly integrated into the parent way of doing things they may send someone over, but they also realise the benefit of having local people at the helm.”
International experience
Aside from difficulties posed by any ‘Australianisation’ of the market, recruiters say New Zealand CEOs are also being pushed out of contention by local boards wanting international candidates and large companies such as Carter Holt Harvey, Fletcher Building, Fonterra, Air New Zealand, Telecom and TelstraClear restructuring and displacing senior and group general managers.
Maurice Ellett, managing director for recruiters Signium Executive Search, says New Zealand, Asian, UK, and European CEOs are perceived to have less exposure to the desired win/lose cultural approach of CEOs from US and South African markets.
“These are perceived as more aggressive markets and New Zealand [boards] feel this brings something extra into the New Zealand market; different cultural environment experience is also considered valuable,” says Ellett.
But Brosnahan contends that there is almost an assumption by New Zealand boards that an international candidate is always better than local one because of the perception they operate more aggressively and competitively. “They don’t have to be as efficient and cost-focused as we do in New Zealand. The problem is one of perception,” says Brosnahan.
Harbidge says that, ironically, the desire for an international CEO candidate carries more risk for employers. It is harder, and therefore more expensive, for recruiter to secure an international CEO because of relocation and family costs – and it’s not unheard of for an internationally acquired CEO to suddenly head back home because his or her family is homesick.
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