Gill South: Proper planning needed for New Zealand Inc to reach its potential

Last week's Royal Commission recommendation that Auckland be governed by a super city council could enable the city to come up with a really strong, far-reaching strategic plan for the first time, unfettered by the warring factions of the past.

Business commentators are generally positive about the idea. The experience of other super cities, such as London, suggests these bodies can be surprisingly nimble if run properly.

The key to a successful strategic plan for the super city council will be its structural and organisational model, says Ian MacRae, managing director of management consulting firm Hay Group NZ.

Importantly, the simplified power structure will give Auckland a real chance to be competitive with other cities such as Vancouver, Melbourne and London, says Paul Winton, director of capital investment company Temple.

"It's what you do with that big city that counts. In 2050, what does this place look like? The super city council enables this," he says. "The great thing about New Zealand is, you can get five or 10 people in a room and change the direction of a sector. It is nimble."

Central government, meanwhile, also needs to do some thinking about its goals, he suggests. In comparison with US President Barack Obama, Prime Minister John Key has not articulated a clear planning strategy for New Zealand, says Winton.

"The National Government has been more reactive than proactive," he says. "What is the vision of how to position New Zealand to come out of the recession?"

The former McKinsey consultant believes the absence of clear thinking in the country is also evident in business.

"We are doing poorly against [other] countries because of a lack of strategy."

Like New Zealand Inc, any firm needs to think about what it is inherently good at when drawing up its strategic plan. "Take something that is a natural and defendable differentiator," suggests Winton.

Companies that have done well are doing three things, he says: protecting their business, growing new business and planting seeds. NZ Inc could, for example, be a global agriculture and biotech supplier, both good, inherent strengths. "What would it take for us to be large-scale player in these areas?" asks Winton.

Benedikte Jensen, research director at the NZ Institute, says New Zealand Inc should be leading the way for small businesses. "If New Zealand Inc has a plan, [smaller companies] can hang their hat on that," she says. New Zealand should be trying to attract mobile international talent right now. Otherwise, this country will suffer from a real skills shortage in the future. "Right now people will consider a move from crisis areas like the UK and the US [to New Zealand]. Their international networks will improve the commercialisation of businesses here."

To make a strategic plan work, she says, the organisation has to get buy-in from all the stakeholders. "One way of doing that is not having everyone in the same room. Have forums within particular stakeholder groups where they feel comfortable bringing all the [opinions] together. The aim is to get a lot of the voices heard."

Hay Group's Ian MacRae says one of the best definitions of strategic planning he's come across was given to him by a large blue-chip company. They called it "the creation of enduring competitive advantage". "It's powerful and you can apply it to big or small businesses. You can apply it to the corner shop."

He is wary of terminology that often gets used.

"Mission and vision are from the religious sphere, then strategic, tactics and objectives are from the military sphere." And there's a reason for this. "Military and religions were the first organisations."

"You have these words that are slightly impractical but are used in business. They don't have any firm meaning, they can mean what you want them to.

"Strategic planning is a process you have gone through. It's about assessing your position in the environment that you work in. You are looking at all the possibilities. You are not just magically picking the first one, first time, and the best way forward is by considering all the ways forward."

Many New Zealand companies, large and small, don't have a decent strategic plan. Or they may have a strategic plan but no processes, says MacRae.

"Before you review your strategy, take a good hard look at the processes that you are following and using, the whole approach. If the whole approach is flawed then the strategic plan you come up with will be flawed too."

He has seen poor examples of strategic plans in both small and large companies. In a small company, the strategic plan may be in the business owner's head, but he or she may be the only one who knows about it. In a large company the plan may be drawn up, all the boxes ticked, but the executive team each have a different interpretation of what the processes are.

Having a one-day retreat to sort out your company's strategic plan is not going to do it. "It's all about doing heaps and heaps of research and preparation," says MacRae.

"It's about picking the best strategy available to you. It's not about looking for a Nirvana strategy."

Selling that strategic plan at the end of the day is crucial, says business consultant Craig McIvor.

"A big part of my strategic planning is the marketing and communication plan. You need to communicate it to all stakeholders. I know that there is a lot of pressure on managers to keep their job. They feel that they need to come up with all the answers. But staff may come up with some of the solutions.

"I read a lot of strategic plans and I look at them and think, that's not a strategic plan, it ticks the boxes of a mission statement and a number of objectives, but what do they know, where do they intend to get to?"

Think of it as the little gazelle. It spends half its time looking up and half the time eating - it needs to do both to survive. "If it gives up on either of the tasks, it will either get eaten by a predator or die of starvation."