Bay of Plenty Business News October/November 2017

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6 BAY OF PLENTY BUSINESS NEWS October/November 2017 The Seven Percent solution OPINION: Bay of Plenty Business News went to press the day after New Zealand First leader Winston Peters announced he would support a Labour Party-led coalition with the Greens. At the time of writing, policy substance was unclear and we will provide a detailed analysis next month. Editor DAVID PORTER looks at the new world of a tripartite governing coalition and a National Party in opposition for the first time in nine years. New Zealand First leader Winston Peters lived up to his pre-coalition negotiation characterisation by Bill English as performing a “maverick role” in New Zealand politics. To borrow a phrase from Sir Arthur Conan Doyle’s Sherlock Holmes, on October 19, Peters delivered his own version of a Seven Percent Solution to the country’s politics, leveraging his 7.2 percent of the vote to maximum party advantage. Whether the country will enjoy the euphoric buzz of the fictional detective’s self-medication throughout the new government’s term remains to be seen. What is clear is that we are exploring new political terrain. It’s now academic whether or not it is fair that the single party that won a clear majority of votes lost power. That is how MMP works, as the outgoing Prime Minister acknowledged in his gracious exit speech. However, English delivered a challenge, supported by a number of analysts we have spoken to, that the new Coalition Government would be facing “by far the strongest opposition party New Zealand has ever seen.” National has been in power for nine The best time to sell your business WE ARE REALISTIC Our appraisal and sale price differ less than 5%. WHY TABAK years, knows its portfolios inside out, and can be expected to challenge the Coalition Government at every step of the way, especially on economic policy. Peters milked the negotiations to the end, and it is apparently the case that both Labour and National learned which way he would lean along with the rest of the country. Whether a political operator as canny as Peters actually made up his mind on the night, we may never know. He certainly timed his succession of deadlines post-election night to reach peak impact for evening TV News deadlines. A number of political sources commented on the excessively downbeat nature of Peters’ announcement speech, with some seeing it as him setting up an alibi of sorts if the coalition he has brought into power finds problems in meeting the economic challenges to come. Craig Investment Partners’ analyst Mark Lister said he was on the same page as Peters in the sense that the New Zealand economy was expected to lose a bit of steam in the next couple of years. “But he obviously sounded a lot more extreme in his could be right now. WE KNOW SERIOUS BUYERS 80% of the businesses we list are sold directly to our extensive database of pre-qualified buyers. WE HAVE A TEAM APPROACH We have offices nationwide, and are backed by effective systems and processes. Our qualified brokers have the skills and expertise to value, market and sell your business and we promise to do it with: FOCUS We cap our number of listings, so we have the time and energy to fully concentrate on your business. INTEGRITY We have strict listing criteria, we tell it like it is and we only deal with quality businesses. Our regional businesses will be really keen to understand what policies are going to be delivered around issues like workplace relations, trade and immigration - which are particularly important for an export economy like ours. – Priority One CEO Nigel Tutt views. He seemed to be talking of a complete meltdown, whereas I’m talking about tail winds that over the past few years have started to lessen.” Tauranga Chamber of Commerce chief executive Stan Gregec said he would not characterise the immediate CONFIDENTIALITY Nothing goes to the market without vendor approval. Everything we do is completely confidential. 147 Cameron Road, Tauranga p. 07 578 6329 e. tauranga@tabak.co.nz www.tabak.co.nz economic outlook as one of doom and gloom. “We’ve been very upbeat and have seen a lot of growth and activity in the Bay. We don’t see that changing at all. Certainly there are challenges around infrastructure and housing, but that’s the price of being a rapidly growing region.” Regarding the coalition’s potential focus on reducing immigration, Gregec emphasised the need to focus on quality and finding the right skills for regions, rather than looking at overall national numbers. Priority One chief executive Nigel Tutt said he wasn’t expecting a large amount of change in the near term from the new government. “Our regional businesses will be really keen to understand what policies are going to be delivered around issues like workplace relations, trade and immigration - which are particularly important for an export economy like ours.” The coalition brings into government new Labour list MPs Jan Tinetti and Angie Warren-Clark, as well as NZ First’s Clayton Mitchell, who were reported as “excited” by the result in the immediate aftermath of Peters’ decision. Western Bay of Plenty National MP Todd Muller said the majority of the region’s voters had voted for National and would be disappointed with the result. “But the economy’s going Zespri CEO to split time between offices By RICHARD RENNIE Zespri’s new chief executive Dan Mathieson intends to split his time evenly between Bay of Plenty and Singapore as he guides the company through a strong growth phase. But he also aims to ensure value remains high enough to maintain grower viability here at home. North Shore raised and educated at Auckland University of Technology, Mathieson has spent much of his professional life offshore, firstly working for Japanese companies then moving to Zespri in 2003. Since then he has covered the spectrum of Zespri’s markets, culminating in his last stint as global sales and marketing manager based at the company’s Singapore hub. The Asian centre will continue to be home for more than half the year for him. It is a split that reflects efforts to balance staying in tune with established and burgeoning markets and keeping in contact with the kiwifruit heartland that will remain the company’s main source of fruit for many years yet. “Singapore is now proving to be a centre of excellence for our sales and marketing team, close to all markets. It also means we can focus on building those strong relationships with distribution partners, and to ensure quality is there right through the supply chain.” The split presence also reflects the shift in company personnel proportions, with almost half the 500 staff now based offshore around the company’s 22 global offices. Bay of Plenty Business News September cover. well and the region is going well. I think the economy is in pretty good shape - the regions are an attractive place for highly skilled people to come to work.” The National opposition with 56 seats (plus ad hoc support from ACT’s one seat) faces a coalition of 63. But it remains to be seen whether new Prime Minister Jacinda Ardern can wrangle Labour’s partners into a coherent force. It is also worth noting that National came away with a huge dominance in constituency seats - 41 electorate against 15 list seats, compared with Dan Mathieson faces up to the challenges of meeting global demand. Mathieson’s sound sales and marketing background reflects something of a shift in Zespri - the government mandated entity for almost all exports - as it pivots from a traditional collector-exporter-seller of fruit to a branded food company. Mathieson also inherits an enviable dilemma from his predecessor Lain Jager, who had to grapple with the impact of Psa chopping the original high value Gold variety off at the knees in 2011, but saw the industry rally with increased volumes of Green and the new Sungold. The tight supply currently has had Mathieson tasked with leading a team to manage the delicate balance of keeping supply constant to high value markets as the fruit volume continues to ramp up, while still chasing demand. That juggling act is likely to continue for at least another five-to-eight years as the industry chases a target of doubling to $4.25 billion of exports by 2025. “It is an ambitious target, but the timing is good. We Labour’s 29 electorate and 17 list seats. In practice, that means National MPs can now be expected to burrow even more deeply into constituencies around the country. “It means National will stay fundamentally strong whatever happens, because we’re connected into local communities all over New Zealand,” said Tauranga MP Simon Bridges. “As MPs who now aren’t in government, we’ll have the time and energy to get out there and work hard at that. There will be a real focus for us on ensuring the economy doesn’t go off the boil.” are seeing an exciting trend in global markets for fresh food products, and Zespri’s strategy fits perfectly with that, providing good taste, convenient eating from a very safe food source.” But the challenge now is also to retain shelf space in supermarket fruit chillers for the fruit all year round. “Consumers are saying they do not want Zespri product for just seven months of the year, they want it all year around so our efforts have been on working to grow crops in the Northern Hemisphere in France, Italy, Japan, Korea and eventually China.” About 15 percent of Zespri’s total crop is sourced offshore, and Mathieson can see that ultimately forming about 30 percent of its total supply. He is also conscious Zespri’s story cannot be solely a sexy SunGold fruit story. The “steady as she goes” nature of Green has to be maintained. “We want to keep a portfolio of products out there, so we want to have a healthy Green business, but we will see more steady growth, of about two million trays a year.” (see accompanying story) Mathieson said he was acutely conscious kiwifruit only formed 0.22 percent of the global fruit consumption, and that to grow further would require significant consumer and brand investment. “This year we spent $150 million on our marketing programme globally. “The main headwinds are likely to be more competition arising from other countries also growing kiwifruit.”
Business ethics goes beyond compliance New Zealand fell to fourth place in the 2016 Transparency International Corruption Perceptions Index (CPI) - the second consecutive drop in a survey it has previously topped seven times. That was one of the points Philippa Foster Back, director of the Institute of Business Ethics (IBE), made to business people taking part in a recent workshop in Tauranga, which especially focused on the problems faced by smaller businesses. By DAVID PORTER The UK-based IBE was established in 1986 to encourage high standards of business behaviour based on ethical values, and Foster Back was visiting New Zealand in response to increasing interest from local business people. The IBE has also built a good relationship with the NZ Institute of Directors and has developed a business ethics e-Learning tool for IoD Director courses. The biennial Marsh Directors Risk Survey Report in 2016 showed reputational risk remained a concern among 75 percent of company directors, said Foster Back. “All organisations operate on the basis of core values – implicit or explicit,” she said. “The best include business values and ethical values.” Foster Back warned that rules based compliance wasn’t always enough and could promote a culture where people took less responsibility, and Philippa Foster Back adopted a “tick the box” mentality. “The question is often ‘does this fit with the rules, or can we get away with it?’ said Foster Back. “But the question needs to be, ‘is this the right thing to do and does it fit with our values’?” A rules-based approach could sap entrepreneurialism and weaken the drive of institutions to make themselves trustworthy, she said. “Business Ethics is discretionary and grey – there is ...the question needs to be, ‘is this the right thing to do and does it fit with our values? a choice involved. Ethics is about making decisions based on values and principles rather than compliance and rules.” Foster Back told Bay of Plenty Business News a wide ranging survey was going to be carried out of New Zealanders’ attitudes towards ethical values in the workplace by a local polling company, which is expected to completed and released next year. Small and medium-sized businesses also needed to be aware of ethics and compliance, especially if they have joined from another company which may have had different values and compliance rules, she said. BAY OF PLENTY BUSINESS NEWS October/November 2017 7 The evolving MBA There’s a reason why MBAs have remained an essential degree for men and women who aspire to become better business owners and leaders. Studying for an MBA is hands-on - it’s not about sitting quietly and listening to a lecturer. It requires participants to dig-deep, to find out what’s happening in business worldwide, reflect on their own practice and find new and better ways to lead and grow their organisations. It also means that MBA programmers must ensure what they offer is relevant. The University of Waikato’s MBA celebrates 25 years this year and course designers continually re-jig their offerings to meet the changing needs of business in what’s a much more global and fast-moving environment. Last year, Waikato MBA programmers asked business leaders what they looked for in executive education. Two clear themes emerged: first, the ability to deal with complexity and constantly changing business models and secondly, leadership development. Academic director for the Waikato MBA programme, Dr Heather Connolly, says to meet those challenges they looked at how executives want to learn. “Which is global best practice, backed-up with experiential, practical, real-life examples from businesses which have already tried different approaches – in some cases succeeding and in others failing,” says Dr Connolly. “The distillation of these real insights is what executives can take back to their organisations, making them more effective in their roles immediately. “And I believe it’s our capacity to evolve that ensures we attract participants from some of the best and innovative companies in Waikato and Bay of Plenty.” Dr Connolly says during their two years of MBA study, there’s a constant emphasis on participants’ self-development. “It’s a continuous thread. We can all go to Google to find new information. “What Google will not give us, lies in the tacit knowledge that will underpin any organisational core competency. “We nurture that through rich conversations, debates, insights and the relationships they gain on our programme.” Another feature of Waikato MBA is the opportunity to go offshore to experience global business and how New Zealand fits into the global marketplace. Sometimes participants visit countries in Asia, but other times it may be Europe. The focus of the tour varies each year and recently the spotlight has been on management innovation. This year students are going to London to visit the Catapult Innovations hubs, a network of world-learning centres designed to transform the UK’s capability for innovation in specific areas and help drive future economic growth. Dr Connolly says participants will get up close with these world-class innovations. They’ll learn how they have been developed from inception through to commercialisation; understand how to manage the process; and, more importantly, will be able to bring the knowledge back to New Zealand to implement in their own organisations.”
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Bay of Plenty Business News October/November 2017

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