The Government wants to know and is promoting new initiatives to find out. Our managers, or at least their capabilities, are about to go under the microscope. Managers and leaders of organisational New Zealand are headed for searching performance review.
Prompted by major 2003 British study and joint government/industry initiative called “Raising our Game”, the New Zealand Government and industry and business education organisations, particularly the New Zealand Institute of Management, are concerned about the ability of New Zealand managers to take advantage of New Zealand’s changing business environment.
The Ministry of Economic Development has started long-term “work programme” on management capability. MED’s Minister Jim Anderton wants to boost the “quantity and the quality” of management capability in New Zealand to support higher level of innovation and entrepreneurship in business. Funding for the programme will be contained in this year’s Budget and in Budgets through to 2006/07.
“There is widespread perception and some anecdotal evidence, that suggests weaknesses in our management capability,” says Anderton. “But we are unclear about whether the capability of New Zealand managers is good or bad compared with other countries.” So the Government, NZIM and other private and public sector groups will try to find out. If the findings confirm need, the Government will initiate series of programmes to help lift management performance.
NZIM has been pushing the case for lifting management capability for some years. But so far it has failed to attract any significant government support for its case. That, in large measure, is because of shortage of hard core evidence to prove link between individual management capability and the country’s overall economic performance. And, until Labour came to power, there was political reluctance to get involved in helping business solve what was seen to be its problems.
NZIM has probably done as much as any other organisation to prove the case for lifting management capability, starting with its NZIM/Wevers human resource management and organisational effectiveness research that it has been conducting for 10 years. And last year it created Management Capability Index. Other countries are now looking to adopt the index. If they do, NZIM hopes to create an international benchmark for measuring management capability.
Key concerns
MED wants to work with groups including NZIM, the Employers’ and Manufacturers’ Association (EMA), the New Zealand Business Excellence Foundation, Business New Zealand, Chambers of Commerce, university business schools and offshoots like Massey’s Centre for Organisational Research Excellence, the Tertiary Education Commission, the Council of Trade Unions and others to “promote an integrated and coordinated approach to management and business capability”.
There are four key questions this initiative is trying to address. Should New Zealand’s economic and growth performance be better? To what extent does individual management performance impact the economic performance. Are Kiwi managers performing so badly that they are letting the side down? And should New Zealand adopt the British initiatives or something similar?
Former Business New Zealand chairman and long-serving NZIM National board member Doug Marsh thinks that, economically speaking, New Zealand has to do better. His list of concerns sums up the thinking of most economic commentators, industry groups and policymakers.
He points out that:
On the eve of last month’s transTasman Leadership Forum talks, Anderton pointed out that New Zealanders now earn 30 percent less than their Australian counterparts, or $175 week less for the average person. “We were on par 30 years ago. Before that we were ahead of them,” he said.
The conventional wisdom of nearly everyone interviewed for this story and virtually all economic reports issued this year is that New Zealand must at least maintain its current economic growth rate of around 3.5 percent in order to retain or slightly enhance its position against other OECD countries.
“If we want improved quality of life, social justice, better housing, better healthcare, better education, better infrastructure and environmental sustainability we certainly need economic growth,” says Marsh. “And while the business argument that high tax, labour law reforms, energy, infrastructural deficiencies, trade and technician skill shortages act as impediments to growth is soundly based, there is also the question of whether these issues disguise more important impediment – management competency and capability.”
“If New Zealand’s economic performance had kept pace with Australia’s over the past 30 years,” says Anderton, “the Government would have had about $4.5 billion more to invest in the health system; about $3.5 billion to invest in education and about twice what it now invests in the country’s infrastructure. And we would have had that level consistently over the past 30 years,” he adds.
“These are not esoteric things. Whether an economy is working well or not is critical to whether you have social cohesion and the benefits that go with it. We cannot have first world health and education system, an environmental framework and infrastructure unless you have first world economy. If you slip 30 percent against your nearest neighbour in 30 years that is hardly world-class performance.”
Dissension and consensus
The only dissenter from the view that New Zealand should worry about its economic and growth performance is Massey University human resource management lecturer and researcher Andrew Barney. He thinks policymakers are preoccupied with following the economic models of countries with very different economies – like Australia, the United States, Canada and the UK. “These economies are much bigger than ours and New Zealand has its own very distinct [economic] characteristics,” he says. “We adopt these models because they speak English, not because they are relevant. We should look at, and measure ourselves against, economies like Denmark, for instance. You might find we perform reasonably well.”
Barney believes New Zealand beats itself up over its tumble down the OECD rankings. “The measure started back in the ’50s when we were feeding and clothing world ravaged by wars. We could command high prices and the economies of those countries were decimated – so our economy was strong and theirs were weak. There is no question that our ranking has fallen, but the others started from low base and besides we are, in absolute terms, much richer than we used to be. Our number three slot [in the OECD ranking] was an aberration,” he adds.
The general consensus, however, is that our economy must perform better. And Doug Marsh is convinced that there is an “explicit link between good management and leadership that drives business performance and the prosperity” of country. The NZIM/Wevers research, which measures the gap between managers’ expectations or stated importance of
