Fifteen years ago New Zealand was struggling to come to terms with new economic model. Protectionist policies were being stripped away and the effects were being felt throughout the economy. In time of such disruption and uncertainty the first Deloitte/Management Top 200 awards were an important initiative to recognise and celebrate business success. Fifteen years on, we have come long way and we have much to celebrate.
New Zealand business is now more resilient, and has endured some very difficult times. International stockmarket crashes, currency collapses, fuel shocks, exchange rate swings and bursting dot-com and property bubbles have taken their toll, but the business environment has developed core robustness that serves us well.
It is interesting to consider whether the lessons we learned fifteen years ago have protected us more recently. New Zealand has escaped the bulk of the accounting scandals of Enron and its contemporaries, having recognised earlier the importance of accountability, transparency, and robust corporate governance in business. While some businesses are relatively new to the Top 200, many have been part of our corporate landscape for years. We would also acknowledge successive governments for the steps they have taken to build more robust framework for successful business.
The way ahead
Of course neither the public nor private sector can be complacent, and there is much to do for us to achieve the ambitions we set for ourselves around our standard of living and international competitiveness. Given our lack of natural resources and our distance from the rest of the world, the playing field will always be tilted against us. That said, there is some fundamental work being done now that will make or break our success as will be measured 15 years in the future.
The measurement of success is changing
Deloitte research, conducted globally by the Economist Intelligence Unit this year, highlights that only about one third of board members and top executives say their companies are proficient at monitoring critical non-financial indicators of corporate performance.
The majority of the 250 board directors and senior executives surveyed for the study said that factors such as customer satisfaction, innovation, supplier relations and employee commitment are critical to corporate success. Similar results come through from Deloitte research on the Fast 50 – New Zealand’s fastest growing companies – into the factors that have led to their success. Those surveyed admitted that there are difficulties in monitoring these drivers of organisational performance. By contrast, the study indicates that 86 percent of executives believe their companies are excellent or good at measuring and tracking the performance indicators necessary for financial reporting purposes.
Just because “what gets measured gets managed” is cliche does not mean it is not true. By developing the discipline and methodologies to monitor performance in non-financial metrics we will create new tools for ourselves to succeed on wider range of fronts.
The definition of success is changing
A changing view of the range of stakeholders in business success adds another dimension to this issue. Debate continues on the practical application of sustainable development principles in business. Issues of environmental and social sustainability will not go away, and in another 15 years it is likely that all New Zealand’s Top 200 will have made real steps towards ensuring their longevity on these fronts for the benefit of all their stakeholders.
Innovation is the key
Globally, many businesses have grown through mergers and acquisitions. While consolidation continues in many sectors, there is much to suggest companies are looking elsewhere for their next big growth spurt.
There is recognition that constant programme of innovation can drive this growth, and firms like ours are concerned with institutionalising innovation to capture and exploit new ideas. Companies are coming to terms with the idea that they can harness and benefit from disruptive growth – and that innovation is the key to success regardless of the upheaval it brings.
Change as the only constant
The shape of the Top 200 15 years on highlights the importance of flexibility around stable core. New Zealand business will succeed to the extent to which it can identify and adapt to changing international and domestic demands. We congratulate all the businesses that have passed through this roll of honour.
