UNDERSTANDING THE NEW WORLD : NZ as a world-leading innovator

As country, we’re failing to capture our inventive fizz. In the past 12 months slew of studies has shown we’re fair to middling in the international rankings when it comes to innovation.
Yet we continue to dine out on our number eight wire mentality. We laud the ‘She’ll be right’ hands-on heroes of garage-land. In one breath, we celebrate the good old inventive Kiwi battler. In the next, we fret over our diminishing role in an increasingly globalised world.
So how innovative are we really? And what do we need to do to lift our game as nation?
Jennifer Moxon, managing director of IBM New Zealand, argues that while New Zealand is regional force in innovation we could definitely do better.
“New Zealand rightly has reputation as an innovative nation,” she says. “Our distance from most of the world’s major markets has encouraged us to come up with creative solutions in fields as diverse as agriculture, manufacturing, education and media production.”
She points out that this year, two major studies ranked New Zealand among the world’s 10 most innovative countries. The Economist Intelligence Unit rates economies on their ability to use information and communications technology (ICT) for economic and social benefit. This year’s Digital Economy Rankings rated New Zealand 10th – up one spot from last year..
International business school INSEAD’s third Global Innovation Index rated New Zealand the world’s ninth most innovative country. This makes us the third-highest ranked country in the Asia-Pacific region and well ahead of Australia, which was 18th, says Moxon. According to INSEAD, New Zealand excels in investment in education, scientific outputs, and its government and regulatory environment.
Moxon believes that New Zealanders should be justifiably proud of these results so far, but there is still room for improvement.
“In particular, we will need to address some systemic issues if we are to maintain our reputation as an innovator – and keep enjoying the economic and social benefits that result.”

Where do we lose our way?

Others point to studies which indicate disconnect between individual Kiwi innovators – our garage heroes of old – and an ability to turn that genius into viable, world-class businesses.
Rick Boven, director of The New Zealand Institute, cites the findings of his institute’s report ‘Standing on the Shoulders of Science’. New Zealand Trade and Enterprise’s chief economist Gareth Chaplin points to ‘Playing to Our Strengths: Creating value for Kiwi firms’, an NZTE-commissioned report by economic researcher Tony Smale. Both studies, in different ways, show Kiwi inventiveness stumbles at the point where it could be commercialised.
“Our research last year suggests we are second in the world at early-stage initiation,” says Chaplin. “We have lots of very bright ideas and very good entrepreneurs. But we’re 26th out of 36 in this study in terms of execution. We’re fizzing with good ideas. But we can’t execute and we really struggle to move the idea from the lab or the prototype through to successful scale production and market. That’s the problem for our innovation system.”
It seems that the determined ‘do-it-yourself’ attitude behind Kiwi innovation is sometimes the very trait that stymies us economically.
Bob van de Kuilen, principal of Novo Management Consulting, reckons the ‘language games’ we play in our workplaces give us away. They strike at the core of who we are as Kiwis and how we see ourselves. He says it’s “distinctively New Zealand” to talk in the workplace about structure and innovation as two opposing forces.
“There’s sense that people must choose between the two: that structure inhibits innovation.” Adding insult to injury, he says our number eight wire mentality makes us look like something out of an episode of MacGyver.
“What are we saying with this concept? That we don’t have the tools we should have to do particular job? That what we have is less than optimal so we use something else at hand? It’s saying, ‘I’m not building this to be able to execute something particularly effectively or turn it into viable proposition. In New Zealand workforces, planning is not strong capability. So we see lot of stuff done on the fly.”
Van de Kuilen has been working closely with author and organisational theorist Dr Roy Stager-Jacques to question the relationship between our folk image of ourselves and our place in the world economy. Most importantly, he questions whether in today’s commercial environment MacGyver- type approach is source of competitive advantage or ball and chain around our necks.

Good management

He says that if we seriously want to talk about innovation, we need to honestly gauge the quality of New Zealand management skill. “Our management skill is not only derived from American textbooks – which have totally different context – but also our cultural heritage: our behavioural DNA. So, when we talk about hot topics such as productivity and New Zealand’s lack of it, we shouldn’t look for an easy answer such as increasing capital investment as the silver bullet for fixing this. Productivity is behavioural issue – and management is the art of getting things done through other people. It’s behavioural too.”
What can Kiwi managers do to catch up on this score? Stager-Jacques reckons we can’t, “any more than I could catch up to Sarah Ulmer on bicycle”. “And do we want to? Do we want to be as affluent as Americans at the expense of working like Americans? Do we want New Zealand to become Singapore or Hong Kong? I don’t think so.

Do what we do do well

“We need to ask, first, what we as nation want and, second, what we as nation can do distinctively well. To do this, we need to stop relying on platitudes like ‘Kiwi ingenuity’ and ‘punching above our weight’.”
Stager-Jacques lists three things that would help us more effectively move into our future. First, he says, we should realistically assess what we do distinctively well, based on global standard, and why, and then throw our weight behind that. He suggests fashion and film as examples.
Second, at the management level, we must recognise that people’s behaviour is based on feelings, not policies. “The mantra that Bob takes to his clients – ‘management is behavioural’ – is still radically new to most businesses here. As long as our business common sense dictates that management is based only on strategy, policy, job descriptions, personal development plans and contractual relationships, we are working with 19th-century British model of colonial administration.
“The contemporary model for achieving high performance is based on organisations where employees have high degree of discretion and the work is fluid, difficult to plan down to the last detail and globally competitive.”
Finally, Stager-Jacques suggests we discover what other countries learnt from industrialism. This, he says, may help us compete more effectively.
“I could quite regularly move local business forward using principles that were discovered and applied during the systematic management movement in the United States, around 1870-1900.”
Kensington Swan chairman and partner Clayton Kimpton agrees that Kiwis can be very good at finding out what’s wrong and talking over the problem, but not seeking out solution.
“We punch above our weight but the rest of the world isn’t waiting for us to turn up. We’ve got to get out there.”
NZTE’s Gareth Chaplin believes innovation failure centres around an organisation’s inability to specialise. “The reasons are around scale, business capability and, in some respects, business culture and aspiration.”
Contrary to popular thinking, Chaplin says, latest McKinsey research shows that most innovation is happening in large mature companies. “We look at the fancy creative companies, but actually very small number of them get deals away. Most of the innovation is happening in companies that have the ability to specialise

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