Recent events have focused reflection and discussion on the New Zealand economy’s ability to compete in diverse, fast changing and competitive global economy.
The trend of corporate flight to Australia and beyond, for example, baits both market and political debate. And the announcement that Fletcher Building is considering moving its headquarters to Australia served to heightened the rhetoric.
The Fletcher announcement, the Rank Group’s purchase of Carter Holt Harvey, Air New Zealand’s dramatic downsizing and similar announcements from Fonterra, have all added fuel to the already significant fire burning on the doorstep of an economy that continues to reshape itself as needs demand.
Corporates are not, however, alone in their response to changing economic conditions. variety of small and medium sized businesses are also downsizing to meet the marketplace’s new demands.
And the drive for efficiency and more competitive market has also affected other sectors such as tertiary education. Recent discussions at the University of Canterbury regarding staff cuts in the College of Arts and Humanities reflect the endemic and wide-ranging results of fast-changing demographics in international tertiary education.
Much of the discussion surrounding these events has focused on investment, productivity and New Zealand’s emerging role in the global economy. There has, over recent years, been concerted effort at various levels to improve the country’s productivity and general competitiveness.
The productivity debate flicked back into the spotlight recently when Statistics New Zealand presented data that reflects the country’s annual private sector labour productivity growth as being marginally better than Australia’s between 1988-2005 – revelation that runs contrary to conventional wisdom and argument. The new data seems to reflect that New Zealand gets fair degree of growth out of the application of good ideas rather than just putting in more hours. This news was, however, tempered by the fact that our overall level of productivity is only 80 percent of the OECD average and still 30 percent less than Australia’s.
So the catch-up has begun. But how does it really move New Zealand into the ‘space’ of significant growth economy midst huge challenges?
While competent technology platforms are essential to enhanced productivity, competitive advantage in the 21st century inevitably requires more sophisticated approach to leveraging ‘the people difference’. Informed and capable leadership is crucial to ensuring our future.
Twentieth-century management focused on managing risk. The focus for leaders and organisations was on increasing control and predictability. Twenty-first century leadership is about tackling uncertainty and taking decisions in the face of this.
Effective leadership this century will comprehend changing economic markets and demographics; it will understand the need for fluid organisations and structure, and appreciate the nature of changing talent pools and the unpredictability of consumer behaviour.
The challenge for 21st century organisations is the ability to synthesise information – to choose, organise and communicate it effectively and efficiently. Talent will remain scarce and organisations will have to enhance their ability to attract and retain it. Hierarchical leadership and management structures are things of the past. Leadership is becoming shared and participative responsibility which encourages nimble workforce with the autonomy, knowledge and initiative to act swiftly.
Lean and flexible isn’t simply for recession time. They are ongoing principles for organisations that wish to survive and prosper through all economic cycles. Well-led organisations will support, motivate and enable employees to contribute maximum energy and ability to the success of the organisation.
Empowerment may be an over-used term, but its relevance to the successful 21st century workplace is nonetheless powerful. Modern leadership that sets goals and boundaries for individuals and teams should support the unique methods, measures and strategies which employees create to achieve goals. Employees empowered to manage their activities should, in time, reduce organisational structure and increase effectiveness that historically seemed impossible.
A more sophisticated workforce requires radically new level of meaning and satisfaction around the jobs performed.
New Zealand’s future success should focus on innovative ways to define our business models, and on discovering and adopting new sources of value. We must continue to radically rethink how we do more with less, understanding that the right focus on people will help meet these challenges.
Leaders need to rethink how more diverse workforces are leveraged and deployed, and how value can be achieved through outsourcing many organisational functions.
Our challenges are not insignificant but, as our understanding grows of how well-managed and well-led people can leverage value in uncertain times, so will this unique country become more competitive.
Ian Taylor is director/partner of Sheffield Limited.
