NZIM: Coming: ready or not. Trade with Asia

“Success,” said the very fine American illustrator Henry Hartman, “always comes when preparation meets opportunity.” Intra-Asia trade undoubtedly offers New Zealand enterprise some great future opportunities. Many of them were identified at the two-day Customs Brokers and Freight Forwarders Federation Conference (CBAFF) held in Auckland last month.
But the New Zealand Institute of Management’s question to the conference was simple: Are Kiwi businesses sufficiently prepared to turn those opportunities into success stories?
Businesses are only as good as their people. And employees can only perform as well as their managers and directors allow.
Business is team sport. To win, every member of the team must be fit for purpose; have game plan; be capable of executing the plan; and, most of all, be motivated to perform.
New Zealand enterprise doesn’t have particularly good track record in high-performance management. All Black rugby’s traditional obsession with first-class game preparation is seldom found in Kiwi boardrooms or executive offices.
There are, of course, exceptions to this rule. Companies like Mainfreight, Air New Zealand and engineering consultants Beca prepare their organisations well. Consequently, they succeed against the odds and win global market share in even the toughest economic conditions.
Winning performances must become the rule of New Zealand enterprise rather than the exception for the country to feel the real benefits of the Asian opportunity. But, unfortunately, there is significant body of evidence about to support the contention that when it comes to best practice management we are at best mediocre.
For example, just before this issue of NZ Management went to press, the Swiss-based International Institute of Management (IMD) released the results of its annual Global Competitiveness Survey.

Performance ranking
This survey is performance ranking of the competitiveness of 50-something global economies.
At the time of writing this year’s figures had not been released. But more often than not, New Zealand slips place or two each year. Last year we dropped just one place to 21st. The year before, we tumbled five slots. If we climb few places this year it will be welcome exception.
The IMD survey is relevant and meaningful management performance measure and shouldn’t be dismissed. It shows how and why our managers and business leaders are failing to compete successfully with the rest of the world.
There are also other measures to consider. Back in 2010, government agencies including the Ministry of Economic Development, Treasury, NZ Trade & Enterprise and the Department of Labour jointly funded some important management research.
It was undertaken by Sydney’s University of Technology as part of worldwide study led by the London School of Economics and global consultancy McKinsey & Co.
It found, unsurprisingly, that New Zealand managers are “middling” by global standards.
The study found that management matters when it comes to driving and delivering business success at home or abroad.

Management matters
The “Management Matters” report was, and is, important. Treasury had historically played down the macro-economic importance of managers per se. But as economist Gareth Morgan said recently …“without managers you’re buggered”.
The study effectively highlighted why, if New Zealand wants to succeed in Asia, more businesses must make serious attempt to prepare their people and their companies for the global business encounter. They can only do that effectively by lifting their management capability.
And here emerges, as is often the case in life, twisted irony. On the one hand, New Zealand has proven management capability problem. On the other, it has developed one of the best mechanisms in the world for identifying and addressing the problem. It is called the NZIM Management Capability Index.
Asian countries such as India, Malaysia, Singapore and, just two months ago, Australia, have adopted the index to measure and focus on building their management performance.
They do this for the very good reason that management – good management – matters enormously when it comes to competing and succeeding both globally and locally.
NZIM’s index has reinforced the findings of number of other research studies that also show New Zealand managers generally underperform. Ten years of measurement show they perform at around two thirds of their self-declared potential. That means that senior managers know they could do better, but don’t feel so inclined.
NZIM believes that management’s mindset, probably more than any other single factor, determines the culture and thereby the capability of an enterprise. For evidence of this, look at Mainfreight. It demonstrates what an effective organisational mindset can achieve. Its management mindset generated the culture the company needed to tackle the world. Its leadership and management prepared the organisation to capitalise on perceived opportunity. Success, as Hartman said it would, followed.
NZIM believes the application of the MCI performance principles helps prepare businesses for success. The index measures management capability, not competency. Competencies describe the general ability to perform successfully in particular job or position. Capability, on the other hand, is the degree to which managers use their skills, abilities and competencies to achieve results for the organisation.

Different abilities
A high-functioning management team harnesses the different abilities, preferences and strengths of an enterprise to meet the changing demands of the prevailing operating environment and to achieve outcomes. Asia is the new environment for which Kiwi managers must be prepared.
NZIM has identified nine management capability drivers that contribute to sustainable performance and profitable business growth (see box story “A world of difference”). That management organisations in other countries, particularly Asia, now use the index suggests universal acceptance of the importance of these drivers.
The drivers are both common and critical to any successful enterprise. Applied and managed properly they deliver profitable business growth or the equivalent in non-business organisations.
No matter how much the manager’s world is buffeted by the winds of change, these core competencies are critical to company’s preparedness to succeed.
Management always matters, but it will matter even more when New Zealand enterprises attempt to tap the potential offered by intra-Asian trade. M

A world of difference
The following nine factors are the key drivers of management capability measured in the New Zealand Institute of Management’s Management Capability Index.
1. Visionary & strategic leadership.
2. Performance leadership.
3. People leadership.
4. Financial management.
5. Product & service innovation.
6. Organisational capability.
7. Application of technology & knowledge.
8. External relationships.
9. Integrity & corporate governance.

Reg Birchfield Life FNZIM is writer on management, governance and leadership. [email protected]

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