MANAGEMENT HISTORY The Turbulent ’80s – The pace of managing quickens

Robert Townsend of Up The Organization fame had some definite views about management consultants: “They are people who borrow your watch to tell you what time it is and then walk off with it.”
Whatever Townsend thought of them, the early 1980s was internationally boom-time for consultants, by-product of the specialisation of management. Consultancy was flourishing in New Zealand and we had our own stars, with one, John Wareham, regularly featuring in Management. He had views on most things, including executive stress: “It has been commonly assumed that ulcers, blood pressure et al are sure signs of successful executive. In fact, it is the executive who is out of his depth who becomes ill, for it is the person who is unable to cope with pressure who yields to it.”
Some critics of New Zealand management’s perceived poor performance were insiders like J T F Francis, who wrote in 1980: “Ask any manager what business he is in and it’s odds on he won’t be able to tell. Ask him where his company will be in five years time and he won’t have thought that far. Ask him his golf handicap and he will talk to you for hours.” There was now proliferation of business-related degrees, diplomas and certificates but, Francis wrote, there was an urgent need for graduate business schools to give young lawyers, arts and science graduates path into the business world. “New Zealand business management has always been the preserve of the accountant or Bachelor of Commerce graduates who major in accounting … The very nature of accountancy training tends to produce people who are ‘after-the-fact orientated’.
“The chief executive of business and indeed all managers have to think two steps ahead.”
Ownership of Management passed from Modern Productions and Shane Niblock to The Magazine Factory Co and publisher Glen Le Noel in April 1981, bringing changes to the look and contents of the magazine, edited by Anthony Glanville, Steven Searle and Neil Prentice in fairly short order. Reflecting the mood of the time, there was an immediate increase in political coverage, with Prime Minister Muldoon, trying to quell talk of changes to the New Zealand economy, featured on the cover of the new proprietor’s first issue. He wrote: “Many people, including some prominent businessmen, speak of the necessity of economic adjustment and last year the term ‘restructuring’ was the ‘in’ word, until, as is the case with most fads, it became cliche and then, in turn, dirty word and an object of scorn.” Wishful thinking. Nevertheless, the prime minister was soon writing monthly column for the magazine, with David Lange continuing to do so after the snap election in 1984 turned New Zealand’s political, financial and commercial world upside down.
Muldoon had not, of course, been able to suspend all economic change and none was more dramatic than the increasing Japanese domination of the New Zealand car market. As Le Noel wrote in April 1981: “Launches of Japanese products from the Mazda, Ford and General Motors stables this year represent the inevitable coup de grace to the market domination achieved by the Japanese – and will quickly see the demise of English vehicles as force in the market.” Among the other recurring themes in the early 1980s was the quickly realised potential of Closer Economic Relations with Australia (CER), fraught industrial relations and the numbers of working days lost through strikes and stoppages.
Ever since managers considered themselves professionals, there has been keen interest in comparing salaries and fringe benefits with overseas colleagues. 1981 PA Consultants report, dissected in the May issue, showed that the 17.7 percent increase in New Zealand chief executive salaries in 1979/80 had been cancelled out by the 18.4 percent CPI increase. Australian CEOs, on an average $42,960 year, were $12,000 better off than their New Zealand counterparts. Was it surprising, the magazine opined, that so many of the best and brightest executives were heading across the Tasman?
Helen Place, author of the influential book Women in Management, wrote in the February 1982 issue: “The increasing numbers of women in lower level management will be followed in the near future by even more women becoming ‘the first woman in this company to …’ until one is, at last, ‘the first woman to be chief executive officer of this major NZ company’.” It was to be the rather further future as the latest available statistic showed that, while 42.6 percent of the total employed workforce were women, only 0.8 percent of them were managers.
Maori were another management minority. New editor Neil Prentice’s ‘Maoris: Battling in Hostile Environment’ article in the May 1982 issue interviewed Professor Ngatata Love. He said: “I equate the position of Maoris to that of women. Because so few have gone through into management in the past they have to be exceptionally good to get recognition. I don’t think it’s racial factor – I think, as is the case with women, there is holding back because they are different.”
An Auckland University research project showed, when the results were published in 1982, that on average company directors spent 3.7 hours month attending meetings and another 1.6 hours preparing for them. Twenty-plus years later it is considered preparation work should at least equal meeting time and that it’s impossible to do justice to more than four or five directorships. Lyn Papps, doyen of New Zealand professional directors in the 1980s, was serving on 20 boards, and chairman of number of them, when he advised Management readers in August 1984 about the duties and responsibilities of directors. Their paramount duty, he said, was to take all legal steps to maximise profits. It was view that found less favour after the spectacular company crashes of the late 1980s.
There was the first tentative mention of ‘stakeholders’ other than shareholders in the early 1980s, but very little about morality. Possibly the first mention of ethics – admittedly in relation to the Code of Christian Business Ethics – was in July 1983 issue of Management. John Kennedy, the colourful editor of The Tablet, wrote: “The code is based on the premise that growing number of people in the business world are searching for motives in their working lives … that profit … is not the sole end of business.”
At the end of 1983, Reg Birchfield, the magazine’s current publisher and one of the founders of Fourth Estate, publishers of National Business Review, bought the company and its magazines from Le Noel. Prentice continued as editor of Management, now ‘The Magazine for People in Business’. January issues were dropped and the ‘Top 100’ survey of New Zealand’s leading companies was expanded to the ‘Top 200’, the increasingly comprehensive surveys subsequently linked to the premier Top 200 Business Awards, which celebrates 15 years in late November this year.
There had been successful business books before, but the early 1980s launched the first business bestsellers, with Peters’ and Waterman’s In Search of Excellence selling three million plus copies in short order, and spawning similar local study by the management studies department at Auckland University. Management reported in April 1985 that pilot study had identified the managerial principles the participants viewed as central to becoming excellent within their own companies. The top eight principles were, in order: actively promoting quality/service as key company value; ensuring proper rewards for effective performance; encouraging autonomy and entrepreneurship; identifying key company values and publicising them from the top; keeping in touch – management by wandering around; the Deming approach to productivity and quality; and developing good formal corporate planning processes. As project director Professor Brian Henshall wrote: “… the research indicates that suggestions made by Peters and Waterman … have been adopted at least psychologically by members of the s