NZIM - MANAGEMENT STRATEGIES : The Management Imperative: Time to Step Up; New Zealand Managers Are Not Up to Scratch, So Where Do We Go to from Here? This Is a Significant Economic Problem for New Zealand, One That Has Not, Historically, Been Seriously Addressed Either by Business or Political Policy Analysts, Writes Reg Birchfield

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Byline: Reg Birchfield

New Zealand must C[pounds sterling]transformC[yen] both its level of management competency and the Kiwi workplace. Whatever other spin is put on the findings of the recently released, government-sponsored research report entitled C[pounds sterling]Management Matters in New ZealandC[yen], that conclusion is at the heart of the matter.

It is an important and tricky issue to resolve. Resolution isnCOt made any easier by the fact that New ZealandCOs economy is in large measure dominated by small, family firms which are, when it comes to measuring management competency scores, C[pounds sterling]consistentC[yen] underperformers.

The survey, for instance, recommends that C[pounds sterling]family firms should make a long-term commitment to fostering management performance and capability and ensuring that key management positions are filled by merit and talentC[yen]. That, for a plethora of everyday reasons, may be too much to hope for.

Still, Economic Development Minister Gerry BrownleeCOs recent announcement on changes to government-subsidised training and development services, aimed particularly at small businesses, suggests an intention to act on the studyCOs findings. Under the changes, businesses eligible for training and development subsidies will get them directly through a voucher system rather than funding by third-party training providers and, there will be a move from full to partial subsidies for training and development services.

The 29 CyBiz InformationCO walk-in centres set up under Labour will be closed over the next six months. According to the Minister, the services they provide will continue in other forms. C[pounds sterling]Businesses can apply for up-skilling vouchers which they can spend with service providers that best meet their needs,C[yen] he said in announcing the shift. Other initiatives are likely to be announced in coming weeks.

The study, while it focused on the manufacturing sector, is important for all New Zealand. It is the first piece of substantial research into measuring the relationship between better management and enhanced economic performance generally. Treasury has consistently played down the importance of the relationship, a stance that has often impacted policies that shape the business environment and encourage spending on management development.

This survey says quite emphatically that: C[pounds sterling]We know that better management is associated with enhanced productivity performance at the enterprise and industry level.C[yen] What they donCOt know are the drivers that lead to the adoption of best practice management.

The findings donCOt reveal much about Kiwi management that hasnCOt already been identified. The mediocrity of our management is consistently highlighted by the New Zealand Institute of ManagementCOs own Management Capability Index. When other countries, such as India, Malaysia and Canada use the Index to measure their management capability, they outperform New Zealand on most measures. The Index also shows that, when Kiwi managers self rate their performance they acknowledge that they donCOt perform up to their potential.

New Zealand, like every other nation, now faces troubled and turbulent times. The management conundrum needs resolution as part of a coordinated and sustained programme to have us meet the obvious challenges ahead and simultaneously exploit the quite unique advantages the nation has including our benign climate, relatively clean environment, energy and resource riches, agricultural and scientific knowhow, capacity for innovation and abundant water to name but a few. These riches cannot be exploited without wise leadership to develop the strategies and skilful management to execute the plan.

According to the survey, multinational corporations (MNCs) C[pounds sterling]clearly outperformC[yen] domestic firms. A solid 70 percent of firms interviewed with below average management performance are domestic enterprises. …