COVER STORY : John Key Why 2010 Will Define His Leadership; John Key, New Zealanda[euro][TM]s Prime Minister, Is a Work in Progress. Can the Man Who Made His Personal Pile in the Heat of Currency Trading, Be a Game-Changer for a Nation That Has Been Sliding Down the Global Rich List? If So, He Must Start in 2010. NZ Managementa[euro][TM]s Political Writer Colin James Talked at Length with Him for This montha[euro][TM]s Cover Story

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Byline: Colin James

In the 2008 election that propelled him to power, John Key declared himself a[euro]ambitious for New Zealanda[euro]. He makes speeches that enthuse audiences but which, in executive suites in the cold light of the next day, leave lingering doubts he will turn ambition into strategy.

That is a puzzle. His extraordinary public acceptability would enable him to sell major initiatives that could change the game. But in his first year he seemed content to play in the pack on topics like climate change, for example. Even in rejecting the smacking referendum, where some colleagues saw courage, he simply sang in tune with the majority, comfortable with compromise.

The cruisey first year is also at odds with his origins. As a teen he was determined to be Prime Minister. In his early working life as a trader he would, according to a workmate, analyse thoroughly and then take big risky positions which almost always turned out right.

From trading room to cabinet room, Key sees parallels between trading and politics in the mix of collective and individual decision making.

In the trading room, he says, a[euro]layers of risks are woven togethera[euro]. A collective house view is formed of the short and medium term, which must be supported by the economic fundamentals and take into account what clients are thinking, but which also gives them the a[euro]righta[euro] advice.

Then individual traders are expected to take a view. They are held more accountable for making money than for holding to the house line.

a[euro]I used to take quite large short-term risks, whereas a lot of people took smaller, long-term risks,a[euro] says Key. a[euro]Mathematically you dona[euro]t have to be right 50 percent of the time and wrong 50 percent of the time. You can actually be right 20 percent of the time as long as you are disciplined about the way that you handle your losses.a[euro] As in trading, so in politics: a[euro]If I am on the wrong side of something, I tend to cut it.a[euro]

Key extends the parallel: a[euro]Question time [in Parliament] is exactly like the trading floor. Ita[euro]s about theatre, intimidating opponents and enthusing your supporters.a[euro] After a hesitant start learning the ropes a[euro]" the unwritten rules of the House collective, Key showed enthusiasm and verve. By the end of last year he had Labour leader Phil Goff, a 25-year political veteran, on the ropes.

That is Key: a fast learner who backs himself after doing the homework. Foreign affairs grandees are impressed with how quickly he has come from scratch to skill in a complex and subtle field, albeit with the odd lapse such as his dismissal of Europe when he visited Japan.

Parliamentary question time offers another parallel with the trading floor. Its rituals mystify outsiders. A visitor to Parliament sees bullying, bluster and barracking. MPs see a take-no-prisoners battle. Reputations are made and lost on the floor of the House. Keya[euro]s is being made.

Key extends the parallel even wider. His National caucus is a[euro]58 individual franchises bound together by the master franchisea[euro] a[euro]" the party. a[euro]Youa[euro]ve got a whole lot of individuals but collectively youa[euro]ve got, hopefully, a view that binds you together,a[euro] he adds, instancing Sandra Goudie, whose Coromandel electorate requires a different approach from other electorates.

Warming to his theme, Key adds: a[euro]Traders are born, not made. Politicians are too. You cana[euro]t teach people instincts.a[euro] But both get better with experience and acquired institutional knowledge. Key instances Winston Peters, a man he does not otherwise admire.

As on the trading floor, so in the cabinet. Keya[euro]s Labour predecessor, Helen Clark, kept close muster on her herd. Her chief of staff, Heather Simpson, was her enforcer. Key thinks this a[euro]slowed up activity because too much went to the [prime ministerial suite on the] ninth floora[euro]. …