Be bold and be different to succeed in changing world – what does that mean for you?
Murray Jack: When New Zealand businesses face an uncertain future, they quite often go into their shell bit and become more risk averse and hunker down. It occurred to us that often in these times if you are bold and different, you can change your market position to advantage by taking some calculated risk and taking advantage of uncertainty. We’ve seen some examples globally where some sovereign wealth funds have snapped up some major US banks – opportunistic moves designed to take advantage of conditions and create wealth. So to what extent can New Zealand firms look to take advantage of conditions?
What advice do you have on how they might do this?
Nick Main: They need to step back and think about the options. If you’ve got good strategy it will hold during the bad times and the good times. Typically, the tough times are when you can sort the winners from the losers, those who can from those who can’t. Looking back down that path, there are some good exemplars there, organisations that have reinvented themselves to deal with tough or different economic environments. For example, Fisher & Paykel [Appliances] which was always the exemplar for ‘make it in New Zealand and sell it overseas’ – now designs and develops it here but makes it overseas. It has made some key acquisitions in terms of manufacturing in the US, Europe and Asia – so now it has quite different supply chain and perspective. Some of those moves have been quite bold and, I suspect, quite calculated, and as an organisation it is now lot stronger.
You can use change as an excuse to take outrageous risks and that won’t do you any good. Sometimes New Zealand just needs to celebrate its success more. We can do things here which are bit distinct, bit different, which have impact and work for us. We just have to make sure they’re strategic and calculated decisions, not rash ones made as knee-jerk response to change.
How do you get people to see change as an opportunity rather than something to be scared of?
MJ: It’s about working on their aspirations. It’s about lifting the aspirations for their business, to want to grow larger, be more diversified globally and so on. If you can get business owners and business leaders to raise the level of their aspirations, then change becomes requirement because you’re not going to get to those aspirational goals by doing the same thing. You have to enter new markets, you have to develop new skills and capabilities and this brings change with it.
Fisher & Paykel is local example. What are some global companies which have embraced change and done well?
MJ: The oft-cited examples of transformative types of action are Nokia, which transformed from forestry company to high-tech telecommunications company out of necessity, and Apple, which went from PC manufacturer to consumer electronics design icon.
I think you’ve potentially got another one about to happen with Hewlett Packard’s acquisition of EDS which is going to fundamentally change the nature of that organisation if it is successful.
NM: Think about British Petroleum which, about five years ago, started calling itself Beyond Petroleum and branding itself green, which is an extraordinary thing for petroleum company to do. Just look at Exxon which has taken different path – and I think the jury is still out on who is going to win that game – but BP now finds itself, in many ways, better positioned for the changing energy economy because it’s transformed the organisation into thinking beyond liquid fuel. It spotted an opportunity early and decided to take that different path. It was bold move.
What are the barriers and potential risks to taking bold step?
NM: Change is risky. When you change you take more risk on, so if you miss the mark or your strategy is not as well attuned as it should be to different market, difficulties can arise.
We’ve emphasised this couple of times, but, change has to be deliberate and calculated. It has to be strategically insightful change. If you just go and say: “I want to change, I’m going to jump off this bridge,” then you’d better have pretty strong bungee cord. If you do that and you have that strong bungee cord then you invent whole new tourism industry. It’s about implementation skills too.
MJ: Yes, it does come down to execution. You can have vision for change but you actually have to back up that change with set of strategies which build the right capabilities, whether it’s by acquiring new kinds of businesses that take you into new markets, or building up your own capabilities and resource base. It’s lot of hard work – it’s not just case of saying: “We need to enter the US market” and suddenly it will be done. It requires set of deliberate actions which have to be executed against.
NM: There are definitely local examples where people haven’t quite met the challenges that change has thrown up. Moving into new markets in Australia for example, where they haven’t quite read the situation correctly and encountered few surprises which have knocked them around bit. Things like different cultural environment for business and trade where they might not have quite the right analysis of what the core skills and competencies to take into that environment are.
It can be very worthwhile to ask why things sometimes don’t work out – is it because they’re really not capable of such moves? Or was there just point along the way where things weren’t read or planned as well as necessary? Often I think it’s the latter, that execution lets things down.
What happens to growth amidst all this change, is it still the holy grail?
MJ: Growth is always important. Organisations that don’t grow ultimately wither and die because product and service life-cycles are finite. You need to be able to continue to grow, particularly in terms of new products and services otherwise, eventually, your organisation will atrophy. There’s lot of good research around that which supports the notion that growth is important for survival and certainly crucial for prosperity.
NM: It’s no different to individuals. If you think about individuals, you’re constantly reinventing your career and your knowledge base. You can’t say: “I think I know enough, let’s go and start new career.” I think organisations are very similar to that. There has to be sense of purpose, of growth and of moving on.
How is Deloitte, which operates in traditionally conservative sector, embracing the ‘Be Bold, Be Different’ challenge?
MJ: We are taking advantage of the current economic uncertainty in terms of our merger with McCallum Petterson which extends our range of services in business recovery and forensics – areas which are going to be in high demand with this uncertain business environment likely to prevail over the next couple of years. That was deliberate move to take advantage of economic conditions.
We also saw strong opportunity around growing our management consultancy business at time when most of the global players have withdrawn from the New Zealand market. That created gap in the market which we were in unique position to exploit.
How far ahead do you have to be gauging and planning these things?
MJ: It was probably about year ago that we decided business recovery and forensics was something we needed to address.
NM: I think the point is though that opportunity comes to the mind that’s open to opportunity. So if you’ve done the thinking and you know strategically where you’re strong and where the opportunities are – and some of this stuff will be opportunistic – then things tend to come more to those who are thinking in that way. If you create that environment and an organisation then wants to
