Trade chief on a tough mission

Peter Chrisp, CEO of New Zealand Trade and Enterprise. Photo / Brett Phibbs

If Peter Chrisp has got the weight of this country's export sector sitting on his shoulders, he doesn't show it.

The New Zealand Trade and Enterprise chief executive, who took the top job at the Government's export development agency late last year, bounds out of the lift into the Auckland office, eyes twinkling, takeaway coffee in hand.

If you're expecting Chrisp, who presides over an organisation with an almost $200 million annual budget, to fit the dour public servant stereotype - think again.

He's not even wearing a tie, and there's something about the Gisborne-born 49-year-old, who began his career as an Engineers' Union advocate, that suggests he's a man on a mission.

Engineering, Printing and Manufacturing Union senior national industry officer Paul Tolich remembers Chrisp from his union days in the late 1980s and early 1990s, when the country's economy was undergoing a wave of deregulation.

"I think most people who worked with him were always taken by his infectious energy," Tolich says.

"He's got an understanding of strategy and vision."

That's a good thing, as the Government has set some serious goals to increase foreign exchange earnings, such as boosting New Zealand's exports from 30 per cent of GDP to 40 per cent by 2025.

That might sound easy, but Chrisp says it's highly ambitious. "Ten per cent of GDP is a huge number."

Such growth in exports is needed, badly. Chrisp places a graph on the table, which shows New Zealand's tradeable, or export, sector has been largely in decline since late 2005.

The Vietnam War was still raging the last time NZ earned more foreign exchange than it spent, in 1973.

Chrisp points out that Denmark, a country that has much in common with New Zealand, grew its exports by 323 per cent between 1972 and 2009, from US$22 billion ($26.1 billion) to US$93 billion.

New Zealand's exports rose by only 144 per cent, from US$9 billion to US$22 billion, in the same period.

Chrisp says Denmark benefited from its European Union membership, but although New Zealand has had some success in diversifying its exports away from agricultural commodities into manufactured, value-added goods, the Scandinavian country has managed to diversify "massively".

"That's the difference."

Coupled with the challenge of increasing New Zealand's export earnings, Trade and Enterprise has been facing internal issues.

Media reports described a trade tour to the Middle East last year as highly dysfunctional, plagued by missed meetings and late arrivals.

One unnamed delegate was even quoted in a newspaper report as saying the trip was "a cross between The Beverly Hillbillies and speed dating".

A State Services Commission performance review, conducted at Chrisp's request and released this year, rated the agency poorly on aspects such as culture and values, engagement with ministers, leadership, governance and financial efficiency.

The review, which rated the agency highly in some other areas, said its culture needed to be less risk-averse and more encouraging of innovation.

"People need to see beyond their immediate teams and work together to deliver for the organisation's clients," it said. "There also needs to be a much stronger sense of consequence; for example, that success will be recognised, outstanding performance rewarded and poor performance dealt with effectively."

And late last month, the China Beachhead Advisory Board - a group of private sector advisers providing assistance to New Zealand firms in China - quit en masse during a meeting in Beijing, saying the agency was undermining its work.

Chrisp says he found a "frustrated" culture when he became chief executive last year, replacing Tim Gibson, who resigned in October 2009.

"You've got people [working for the agency] who are enormously driven by a cause - which is a belief in this country and a belief in the companies - but they were feeling constrained," he says.

But Chrisp says the frustration within the organisation was only skin deep, and big changes are at hand.

After the commission's review was delivered, the structure and leadership of the agency was overhauled.

The entire management team has been replaced, save for one person.

Chrisp says a "strategy session" was held in April, which involved the Ministry for Economic Development, Ministry of Science and Innovation, Ministry of Foreign Affairs and Trade and Treasury, as well as Trade and Enterprise's board and the new management team.

"We spent a couple of days with a proper organised process generating what the direction of the organisation needed to be." Chrisp says the agency has taken to referring to the companies it works with as "customers".

The "old organisation", Chrisp says, tended to think of the Government and ministers as the customer.

"Under this organisation the ministers and the Government are the owner, and the customers are New Zealand's private-sector companies."

Chrisp says Trade and Enterprise has gone from being "ATM driven" - meaning it handed out funding to just about any company that asked for it - to being "business case driven".

The agency is now placing more emphasis on assisting a portfolio of firms that are already exporting.

That change may well have driven the finding in an ExportNZ survey, released this week, that revealed 65 per cent of the firms surveyed did not think the Government was doing enough to encourage exports, and most companies wanted more assistance in developing new markets.

ExportNZ executive director Catherine Beard says the agency's new focus on helping firms with a proven track record could leave some small-to-medium companies feeling left out.

Chrisp says the agency can only work with the money it's given by the Government.

Trade and Enterprise has just $35.8 million in grant funding to allocate in 2011/12, including the $30 million international growth fund, which is matched dollar for dollar by companies. That compares with $85.4 million in 2007/08, when the "ATM driven" model was in place.

"Who's prepared to let taxes go up to pay for more assistance?"

Chrisp adds that the agency funds a regional network of economic development organisations, such as Auckland Council's Ateed, which look after small, developing firms.

He says the 11 weeks that passed between the delivery of the commission's review and the strategy session was a "tight timetable" to implement such changes within a Government organisation.

"Speed is everything," he says. "We've got to be working quickly here because the global economy's moving quickly. The rise of those middle classes in India and China is moving rapidly, so we have to get pace on - we've got to be fast."

A report titled Service Sector in Asia, conducted by Victoria University's's School of Marketing and International Business, suggested New Zealand - the first western country to secure a free- trade agreement with China - needed to execute a "sea change" in its commercial approach to that country, including a "substantial strengthening of effort and focus for the long term".

It also said there could be a limited window of opportunity for such changes to be implemented.

Other countries are muscling in.

Yum Brands, the United States firm that owns the Pizza Hut, Taco Bell and KFC fast-food chains, announced this week that it had opened 99 restaurants in China in its last quarter.

The Government hails a 140 per cent increase in the value of this country's exports to China since the FTA was signed as a success.

But in the 2010 calendar year, according to Statistics NZ figures, New Zealand's $4.8 billion in exports to the Asian superpower included close to $3 billion in dairy produce and wood.

Clearly, the holy grail of Danish-style diversification still eludes this country's export mix to China.

"We're relying on our traditional industries and we do need to broaden our base because otherwise we've got all our eggs in one basket which is quite risky," says ExportNZ's Beard. "But I think there's an acknowledgment of that by the New Zealand Government and [the agency]."

Chrisp says 183 companies are now working with Trade and Enterprise in China, and those firms all have building sales in that country at the top of their priority list.

Companies like Mt Wellington-based Rakon, which makes crystal oscillators used in products such as smartphones, have huge potential in China, he says.

The NZX-listed company opened a factory in Chengdu, in the southwest of China, last week and is making inroads with Chinese firms such as ZTE and Huawei, large-scale manufacturers of telecoms equipment.

But he says Kiwi companies need to collaborate more to gain access to emerging markets.

"I think more and more companies are realising that to successfully go to market you have to [collaborate], but I don't think it's deep in our DNA to do it."

Chrisp says Pure New Zealand Greenshell Mussels - a joint venture of New Zealand seafood firms exporting the shellfish to China - was a good example of firms working together to gain access to a booming marketplace.

Peter Chrisp

Chief executive, New Zealand Trade and Enterprise.

Age: 49.

Lives: Wellington.

Family: Three children, aged 9, 11 and 15.

Education: Masters in Social Sciences from Massey University. Has studied law, marketing, management, accounting and finance at universities in New Zealand, Australia, Britain and Europe.

Career: Began as an advocate for the Engineer's Union in the late 1980s, before working for Fletcher Challenge Paper, which was later acquired by Norway's Norske Skog. He became the general manager of Kawerau's Tasman pulp and paper mill, before holding executive positions with Norske Skog in Norway and Australia.

Hobbies: Outdoors, staying fit and adventure.