‘Where is our ambition?’

Poor productivity is a cross we have had to bear for a long time, says consultant and board director David Downs CMInstD, with the humble Kiwis’ lack of ambition weighing New Zealand down.

“Stubbornly poor productivity has been such a weight around New Zealand’s neck for so many years and it doesn’t seem to be improving,” Downs says.

“Everyone has to step back and look at it. Business, government, economic development agencies, whoever it might be, needs to ask, ‘Are we empowering businesses in the right way to make the decisions to improve their productivity? Have we got the exemplars? Are we telling the stories? Are we enabling companies enough?’ ”

Downs says there is no simple fix, or we would have found it by now.

“We seem to have structural issues trying to resolve it. We’re not really innovating ourselves at the level we need to. We’renot adopting technology that allows us to potentially be more productive. At the heart of it is a business owner or leader who wants to improve and change, and make cultural shifts.”

He says the language of productivity often leads people to think we are accusing people of being lazy. In fact, it is quite the opposite. “New Zealanders are working too hard,” he says.

“It gets couched in an accusatory sense that people are saying, ‘Oh, we’re accusing you of being lazy, or not adopting technology because you are somehow not capable of it’.”

Downs suggests it is often the other way around. “Because of our nature, we’re a country born of tinkerers and the ‘Number 8 wire’ mentality. And our history is such that we are very self-reliant and the easiest place in the world to do business. We have one of the lowest corruption measures of any country.”

He says it is a cultural challenge to change the Kiwi mindset.

“Why would I buy a piece of technology when I could do that myself? Why would I hire a marketing system when I could do that?” And you probably could, he says, but it means it is going to take longer, you are going to work harder, it will probably cost you more, and you will probably not get the same outcome.”

In the SME world, in particular, Downs says he sees it time after time. “Again, there’s no coincidence we’ve got this correlation between the easiest place to set up a business and do business, and then one of the lowest productivities. We’re just constantly starting and beginning, instead of really pushing forward and trying to optimise.

“It goes back to this cultural challenge that even within New Zealand we are not aware of how good some people are and how productive they can be. It’s a mixture of the Tall Poppy Syndrome, the ‘kumara does not speak about its own sweetness’ (Māori proverb), and these cultural norms about being humble.

“There are really good things happening around us, but we are just staying in our lane and not paying attention. We could learn more from some countries that are more vocal about their achievements and happy to talk about them.”

In his day job as CEO of the New Zealand Story, an organisation marketing New Zealand to the world, Downs says they are looking at how New Zealand’s science, education and technology sectors are perceived internationally.

“And the answer is not at all. There is a very poor perception. And yet when we have international round-table sessions and we show people examples of New Zealand’s space industry, or our sustainability sector or even our food production, they’re blown away by the technology and the innovation that exists here.

“I’d say the number one thing that differentiates a New Zealand company and an international business is their level of ambition.

“It’s not the technical skills, access to technology or capital. When you set your eyes on a certain horizon, you tend to get there. And New Zealand is just a small domestic market. The nature of our long, spread-out country means you can be quite successful in your own domain and you think, ‘OK, I’m successful’. But if you go to America, they’re going, ‘How do I become a billion-dollar business?’ We’re going, ‘How do I become a million-dollar business?’ It’s just a very different level of expectation.”

Downs says there are companies that have changed their game, setting their benchmarks as global companies where they measure their success.

“We all get the same 24 hours a day to spend at work. It’s where you spend it and where you decide you’re going to land that makes a difference. Bill Gates has only got 24 hours a day to work and he decided he would build a hundred-billion-dollar business. That level of ambition does make a big difference.”

During an earlier role as general manager at New Zealand Trade and Enterprise | Te Taurapa Tūhono, Downs recalls an international advisor being perplexed at New Zealand’s standing in the business world, using the All Blacks as a comparison.

“I don’t understand it,” the advisor said. “You come out onto the rugby pitch, give this most incredible challenge, play the fiercest game of rugby anyone has ever seen and yet you can’t bring it to the business world. Those guys are nice, respected, good human beings, but they play to win and they play with a ferocity that makes a difference. You should bring more ‘haka’ to your business. If you were to do that, you could be very successful.”

As chairman of business growth centre The Icehouse, Downs says it comes back to the simple things of management capability and skills as essential skills, then ambition and vibe.

“It’s not just managing the business, it’s managing the people in the business and empowering them, giving them the right skill set, getting them on the right training, whatever it might be to make sure they’ve got the level of expertise they need to do their jobs.

“There’s so many times you see businesses trying to employ or install new tools and technology, and then not train people properly. Skills on tools is important, but it is also in the ways of working. There are modern ways of working these days, such as agile working, that significantly change the way businesses can think and grow.”

Downs says he sees hope in the early stage startup-type businesses, particularly in the tech world, with boards in tune with the Four Pillars of Governance Best Practice.

“One of them is helping and guiding the strategy for the organisation. If the board has set the strategy at a certain level you are almost certain to keep that level straight away. So your board, by definition, has got to be really pushing your chief executive, your leadership and management team to go bigger. And they’ve got to hold them to account, while clearing the roadblocks and making sure they have the resources they need. But it starts at defining and setting what success looks like for this business.

“This is going to sound terribly controversial, but if your board is your accountant and your brother-in- law, you’re unlikely to get the level of challenge that you probably need. You should find board members who have been there, done that at a level 10 times what you want to be and they’re going to drag you into that future.” 

David Downs CMInstD, a self-confessed genetically modified optimist, will be speaking at the IoD’s 2024 Leadership Conference in Christchurch on May 13-14. The author and former comedian will host a breakout session, “Taking the ‘bored’ out of board meetings: 10 tips for better board meetings”.