Bank of New Zealand chief economist Tony Alexander last month released what he called “concerning” findings from bank business customer survey.
The survey asked what, if they were given the power to change anything relevant to their company’s success, would businesspeople choose to do. Staggeringly, only eight percent of the respondents said they would change their own behaviour. The remaining 92 percent would use their power to alter exchange rates, interest rates, government regulations or whatever – things over which they have, in reality, absolutely no control.
Alexander’s concern at this finding is understandable. Kiwi business leaders seemingly retain “ask the government” as their leadership responsibility default setting. As Alexander put it: “Relying on external changes to alter one’s fortunes is like telling MBA students that their career success will depend on the state of the economy – not on what they learn.”
So what does it mean if so few business people think their organisational outcomes reflect their own actions? Well, wrote Alexander, two key Kiwi business weaknesses – internationalisation and human resource management – won’t improve. He identified four other key management weaknesses and outcomes likely to hobble the nation’s economy, but it’s the first two with which this column is particularly concerned and because they are economic and organisational success priorities.
“Of course businesses are most responsible for their own fortunes and outcomes,” says NZIM chief executive Kevin Gaunt. “And people management policies and strategies sit at the heart of organisational performance. And they don’t rely on anyone or anything other than the organisation’s management and leadership to be implemented.”
“New Zealand business must both internationalise and lift its understanding of how people, when recruited, developed and managed properly, deliver enhanced performance. People are critical to range of organisational performance motivators and processes. They also enhance an organisation’s ability to perform and think internationally, if encouraged and included to do so.
“Diversity of every kind – gender, ethnic and ability-based – and at every level of an enterprise, strengthens organisations. As it happens, ethnic diversity addresses both the human relations and some of the internationalisation issues raised by the BNZ’s research,” says Gaunt.
NZIM’s understanding of these changing realities has prompted it to ramp up its advocacy of workplace and leadership diversity, along with other change management programmes and initiatives. As Gaunt said last year when he announced the signing of Memorandum of Understanding (MOU) between NZIM and the Government’s Office of Ethnic Affairs (OEA), “employment diversity will be one of management’s critical strategic issues over the next 20 years”.
The NZIM/OEA initiative is designed to help businesses meet new world employment, management, marketplace and growth strategies. It will deliver public and in-company ethnic diversity programmes to business and other organisations and, through its combined resources, deliver other ethnic diversity conferences and initiatives.
Leadership focused EthnicA conferences have already been held in Christchurch and Auckland this year. Another is planned for Wellington this month. “The programme aims to develop participants’ leadership skills,” Ethnic Affairs Minister Judith Collins told the Christchurch conference last month.
More joint activities and training and development programmes will be rolled out later this year, according to NZIM general manager and project manager Tait Grindley. “We’ll announce several new initiatives shortly,” he says. “An increasing number of companies want to implement workplace diversity programmes. They’re starting to realise the benefits delivered by workplace diversity strategies.”
“That so many businesses think their future success depends on external factors rather than internal management practices and priorities is worrying,” says Gaunt. “The answers to the many complex issues facing our companies can be found by re-discovering the fundamentals of best practice management. Fundamentals such as understanding objectives, clarifying goals, employing the right people for the best market opportunities and building culture to create supportive environment in which the business can thrive rather than simply survive, are all internally generated success influencers.”
The BNZ survey notwithstanding, Gaunt is optimistic that more organisations are adopting the diversity and inclusion imperative. “We see some evidence that companies are embracing diversity as part of their overall talent management practices. It’s why some of New Zealand’s largest companies are now working with us to develop bespoke, company-wide training programmes for their increasingly diverse range of employees and managers,” he says.
Business environment changes including globalisation, changing demographics, generation gaps and more dual-income families and single working mothers, are today’s market realities. Smart employment strategies reflect these changes. Diversity is more than simply mixing up workforce; it’s about customers, business partners and new market opportunities. Companies must interact with different cultures and clients in global marketplace and diversity facilitates that process.
The advantages of diversity extend beyond that, according to Gaunt, who returned from this year’s Asian Association of Management Organisation’s (AAMO) conference in India last month. “You realise just how important diversity of thinking is and why New Zealand business must internationalise more when you attend conferences like that,” he says.
Gaunt thinks the case for diversity is compelling. “All the evidence shows that it leads to increased productivity, greater creativity, new attitudes – including perhaps an improved understanding that companies are masters of their own destiny and should think and act accordingly – new language skills, better global understanding, new processes, more enlightened problem solving, greater innovation, better market insights, stronger customer and community loyalty and improved employee recruitment and retention. Businesses that fail to grasp the significance of these realities are flirting with failure.”
Other organisations in the diversity space also report “surge of interest” in the positive impacts of leveraging the talents of New Zealand’s increasingly diverse population. The Equal Employment Opportunities (EEO) Trust has been on the case for the past 17 years and, although it has recently suffered reduction in its funding from Government, says employers’ diversity mindsets are changing. The Institute of Directors has taken up the challenge by calling for more women on boards and establishing diversity mentoring programmes. And the New Zealand’s stock exchange (NZX) has changed rules around listed companies reporting employment numbers and workforce composition.
“Collectively these experiences and activities bode well,” says Gaunt. “They suggest changing attitudes toward diversity and what it offers. But we’re under no illusion about the distance managers must travel before more New Zealand businesses increase their diversity ratios and lift their human resource management game sufficiently to tap their international market potential. More importantly, Kiwi business leaders must think differently about who and what delivers real organisational success. The answer, of course, resides in their own back yard.” M
Reg Birchfield Life FNZIM is writer on leadership, governance and management. [email protected]