COVER STORY : Lifting NZ performance – Why the focus falls on management

A quick poll around mixed dinner party highlights the problem. There’s Jo – she was fifth in what had been an effective 11-person team to leave after new manager was appointed. Nine had quit before the powers that be started wondering about the manager’s capability.
Then there’s Matt – dedicated health worker whose qualifications are in short supply. His problem was manager whose relentless demands for ever more detailed paper trails so compressed actual face time with ‘clients’ that they successfully pushed the stress factor of difficult job well out of comfort zone. He finally left.
Sarah meanwhile has ongoing problems with same-level manager whose communication failures are effectively doubling her own workload. She’s started scanning job ads.
You get the picture. There’s no shortage of manky management anecdotes. There’s also research to show that staff tend to join company but leave manager.
This is not being over critical of managers. Theirs is not an easy job and even those academically qualified to do the job often lack the temperament or experience to practise the so-called “soft” skills that enable them to deal with conflict, mitigate stress, encourage creativity and generally get the best out of people.
It’s not new problem – but there’s new sense of urgency in the need to lift this country’s management capability. The world of work is changing – competition for talent grows ever keener; managers need to deal with increasingly diverse, more distributed teams; exporting is national business imperative; and innovation has become vital key to building business at home and in global markets.
To improve New Zealand’s economic performance, we need to create more globally competitive firms, says Economic Development Minister Trevor Mallard.
“But there is shortage of the skilled managers that our firms need to achieve their goals.”
A good level of management and leadership capability is fundamental to business performance and, adds Mallard, international management expertise is critical for firms aspiring to compete globally.
“With the small cohort of global companies in New Zealand, and our distance from markets, there are relatively fewer opportunities for New Zealand firms to develop that capability and gain the experience required to compete internationally.”
But, whether the problem is lack of time or absence of rigorous self assessment, the will to build up capability is not always evident.
Says Mallard: “There’s concern that while New Zealand managers and owners are positive about developing the skills and capabilities of their employees, they don’t embark on their own formalised training or take advantage of the wide range of capability development tools available to them.”
That’s particularly true in the SME sector. The quality of management is often not really focused on as skill that contributes to business success, says Charles Finny, CEO of the Wellington Chamber of Commerce.
It’s this reality that has prompted bunch of private and public sector organisations to team up on Management Focus initiative designed to prompt business folk to take mental stock-take of their upskilling needs and to provide the inspiration, motivation and information to do something about it.
“We want to encourage people to focus on management as an essential skill needed to grow their businesses – and for them to be open to new ideas,” says Finny.
Developed under the auspices of the Business Capability Partnership, it’s being pushed by private sector groups such as the NZ Institute of Management, Chambers of Commerce, Employment and Manufacturers Association, Institute of Chartered Accountants and Business NZ amongst others with support from government agencies like the Department of Labour, New Zealand Trade & Enterprise and the Economic Development Agency (EDANZ) as well as groups representing the education sector.
It’s the first time such range of interest groups have combined to tackle what is now seen as an essential lever to lift New Zealand’s business performance. The extent of the collaboration is “impressive”, says NZIM CEO David Chapman – and there’s general consensus as to why managers matter.
“They set the tone in any business or organisation and they either draw out the best in their people – or they switch them off. So they’re pivotal,” says Paul Winter, chief executive of the Employers and Manufacturers Association.
‘Pivotal’ is also the word used by NZIM’s David Chapman.
“They have such pivotal role to play in our economy. Good managers know how to develop their people, to keep them engaged, motivated and happy. They also know how to nurture innovation and thereby improve business performance and growth.”
Managers are critical enablers, agrees Business NZ CEO Phil O’Reilly.
“Managers are the keystone to lot of things that occur in companies. If you think about the propensity to invest, if you think about fantastic workplace practice, if you think about business choices around growth – these are decisions made or critically influenced by managers.”
The Department of Labour’s work around productivity has helped push home that message as DOL deputy secretary Andrew Annakin (who heads the Workplace Productivity Working Group) explains.
“We’ve identified seven key drivers of productivity – and number one is building leadership and management capability but all the rest flow from that. Creating productive workplace cultures, encouraging innovation, investing in people and skills, organising work, networking and collaboration, measuring what matters – they’re all about leadership and management.
“One of the strongest influences on improving productivity and workplace practices is the quality and capability of leaders in the organisation. In terms of having step change in workplace productivity, we very much look to workplace leaders to be the agents of change.”
And demands on those leaders have changed markedly as our labour market has become tighter and more diverse, adds Annakin.
“It means that managers and leaders need to either improve or change their skills.”
Skills most lacking In terms of what areas need most improvement, there’s no silver bullet – but perhaps the biggest opportunity to step up is in an area hardest to pin down; basic people skills.
At the top of Paul Winter’s list is “engaging people to win their hearts and minds”. Sure we all have to go to work to earn dollar but research tells us remuneration is only part of the picture.
“In terms of personal satisfaction,” he says, “the question for managers is how do you better align the personal aspirations of your staff with the goals of the business.”
Annakin believes upskilling needs are very much on the “soft” side.
“We can all go on specific courses to learn project management or accountancy – the transferable skills. But the leadership skills around changing workplace practices – gaining more effective engagement with people, improving work processes, skills around encouraging innovation and creation – they’re leadership skills. And I’d like to see lot more focus on the soft skills to go alongside entrepreneurship or business processes – the ‘hard’ skills of management.”
As “an old HR guy”, Phil O’Reilly puts the emphasis on workforce development.
“We’re already operating at very low levels of unemployment and that’s likely to continue. And if we look at the number one competitive advantage 20 years out it can only be skills so I’d suggest workforce development is critical issue. Managing the workforce in order to gain, retain and build skills represents huge opportunity to improve – and it would be tectonic shift in how New Zealand business views success.”
Mallard sees greater exposure to offshore markets as something local managers need in order to boost the capability needed to successfully compete in international markets.
“We are looking at how we might help achieve this. Firms also need to develop the general management competencies