Staying Local While Going Global

To get a sense of New Zealand’s business mood, we recently surveyed a number of the country’s senior executives and board members across a wide range of industries. Our study explores the critical issues facing New Zealand, and how executives would address them via talent and leadership strategies. Despite the typical increased interest in globalisation, a surprisingly high percentage told us that growth within New Zealand’s borders is crucial to their business. They also said keeping and attracting talent is a key part of staying relevant and that they see disruption less as a threat and more as an opportunity.

To find these results, Spencer Stuart surveyed senior executives and board members in many different businesses. We received 91 responses, 75 percent of whom were board members and CEOs.

Local growth opportunities

Interestingly, New Zealand companies prioritize growth in their native land over expanding their reach globally. When asked where they see the greatest opportunities for growth in the near term, 44 percent said organic growth in New Zealand is the most important path, compared with 32 percent who listed overseas development. Twenty-four percent of New Zealand leaders say mergers and acquisitions offers the most potential for business growth.

These findings could be seen several ways: Indeed, it’s critical for companies to develop a strong base in their own country from which to expand. But others find the local emphasis a little troubling, perhaps displaying a certain level of myopia.

The importance of forward-thinking

Staying abreast of information-technology advancements is a crucial concern for New Zealand executives: 67 percent list advances in information technology/disruptors in the marketplace as the top short-term trend. That’s almost exactly twice the next two trends, changes in regulatory policies and sustained volatility of global economies, which both had 34 percent. “With our millennial customers, we must be flexible and nimble with our digital marketing solutions to keep ahead of the competition,” said the managing director of a New Zealand brewery. Next on the list are slowing economic growth in countries like China and the U.S. (27 percent), and consolidation of businesses through mergers/acquisitions (24 percent).

Being prepared for the digital age

Clearly the digital age is no longer approaching — it’s here. But staying abreast of the most recent digital/technological trends is still a large concern for New Zealanders — 49 percent listed it as a new area of expertise their boards may require. “Instead of being afraid of disruption, we have embraced digital innovation and we try and stay one step ahead of our competition,” said the managing director of one financial services administration company.

That number was more than double the next three areas: international diversity (23 percent), commercial expertise (22 percent) and industry-specific concerns (21 percent). Two other recruiting priorities, gender diversity (18 percent) and risk/governance expertise (16 percent), round out the list.

The high percentage of boards prioritizing digital/technological expertise is no surprise — in an ever-changing business environment, no one wants to be left behind with yesterday’s technology. But what may be surprising is the emphasis placed on diversity — individually, the numbers of those two categories don’t look overly impressive. But combined, the demand for gender and international diversity total 41 percent, not far below the need for directors with digital/technological focus.

Keeping up with global transformation

The relentless pace of global change is one clear reason New Zealand leaders place a high emphasis on strategic planning and business development: 65 percent said this was the most important technical competency for senior leadership teams. Casting an eye toward the business’s future was also seen as a key step, with 45 percent of leaders saying organization development and succession planning is the most crucial quality. Other important technical competencies include: commercial understanding (34 percent) and financial management and capital allocation (26 percent), risk assessment and management (24 percent) and supply chain management (18 percent).

The customer is king

Thirty-eight percent of New Zealand’s leaders say understanding customer preferences is the most important skill that senior leadership teams can display. “Five years ago, ‘customer mindset’ was a secondary consideration to a board,” said a board member and chairman of a specialized retail chain. “But now it is front and center, and decision-making revolves around the customer.”

As previously mentioned, New Zealand leaders also want to ensure they’re ready to align their businesses around transformation: 38 percent of the executives we surveyed said the ability to lead change is the key capability. Other desired leadership skills include building capability and commercial orientation (31 percent), strategic thinking (30 percent), leading people (29 percent), and collaborating and influencing and driving results both earned 27 percent.

Finding the right talent

For New Zealand executives, attracting and keeping the right people is front and center when they prioritize personnel needs. When asked the most important human capital imperatives, a combined 65 percent responded that attracting (40 percent) and retaining top talent (25 percent) came first. Ironically, despite New Zealand’s emphasis on staying local, the need to attract strong talent relates to the desire to have a larger global impact:

Other human capital imperatives include: Fostering cross-functional collaboration (36 percent), strengthening the top leadership team and transforming the organizational culture (35 percent), developing new organizational models (27 percent), and improving training and development (23 percent).