Kiwi firms told to harden up in 2012

08 February 2012

A leading Auckland economist is calling for New Zealand firms to stop blaming the usual four hackneyed Kiwi excuses for poor performance and start “hardening up” this year.

Dr Rhema Vaithianathan of The University of Auckland Business School says she is sick and tired of Kiwi businesses blaming finance, bureaucracy, isolation and size for “having it tough.”

She is instead urging New Zealand businesses to upskill in order to recruit, retain and promote young talented Kiwis thinking of heading offshore permanently, and says a large “thought-shift” is needed for the coming year, tipped to be a difficult period for business.

“I have developed the New Zealand ‘FBIS’ theory of business,” Dr Vaithianathan says. “This is where New Zealand businesses convince themselves that they have it tough because of ‘FBIS’… finance, bureaucracy, isolation and size.

“These are the four great Kiwi excuses for non-performance and, like the Kiwi, they just don’t fly. New Zealand is the third easiest place to do business in the world, and these are just excuses made up by failing managers so they don’t have to get out there and actually get some proper management skills.

“Now is the time to stop whinging and start acting. And if we start by making sure we can recruit, retain and promote talent – and importantly, move the non-performers on – then we’ll be getting somewhere in attracting our talented ex-pats back.”

Dr Vaithianathan, who ruffled feathers last year when she blamed New Zealand’s "brain drain" to Australia on New Zealand’s bad and incompetent managers, says the four excuses used by Kiwi businesses are effectively nudging top talent onto overseas-bound planes with one-way tickets.

International research shows New Zealand companies are bad at moving poor performers out of their roles or even moving them to less critical roles as soon as weaknesses are identified. Managers do not generally do "whatever it takes" to retain top talent, and top performers are often not actively identified, developed and promoted, Dr Vaithianathan says.

Senior managers generally get no rewards for bringing in and keeping talented people, and don’t regularly and systematically pinpoint and concentrate on star performers.

Dr Vaithianathan says these statistics are incredibly worrying. “If two people both join a company, for example, and five years later it is evident that one is much better than the other, does that firm promote the talented staff member faster? For many New Zealand businesses, the answer would be no because management skills are seriously in question here.

“If a company can get at least half of these crucial activities right, then it’s equivalent to increasing their labour productivity by 25%.”

New Zealand scores at or near the bottom of 16 First World countries in management skills, and Kiwi managerial skills are significantly worse than in Australia, Dr Vaithianathan says.

“Perhaps if there was a World Cup in management, we might see more action. This issue is critical for New Zealand business and productivity, and we have to urgently change our thinking if we are to move forward this year.”