In search of relentless management style

By SELWYN PARKER

Where are New Zealand's "Crocodile Claudes"?

Claude Bebear is the chief executive of French-based insurance giant Axa, arguably the hungriest company in the world's financial services industry and the owner of National Mutual.

Mr Bebear (pronounced "baybay-ar") provides a model for New Zealand managers, on whom the nation's prosperity largely depends.

He has dragged Axa from an insignificant insurer in provincial France to one of the world's biggest with a management style that can only be described as relentless.

He attacks costs ruthlessly. He is an internationalist, which is unusual in xenophobic France. He demands results, not promises. He is obsessive. And we desperately need more like him.

Over the past year of interviewing chief executives, middle managers, consultants and others with responsibility for growing New Zealand's economy, I got the uncomfortable but strong impression that there are not enough of them with the almost fanatic zeal of the successful business person.

Intel's legendary former chief executive, Andy Grove, once said obsessiveness about your business was not a fault but absolutely essential in today's manager.

By obsessiveness, he meant a sort of permanent dissatisfaction with the way the company performed. In practical terms that means an endless search for ideas, improvements, products, people, anything that will make the company survive and grow.

A New Zealand entrepreneur in the mould of Bebear and Grove is Graeme Avery who built Adis, a medical publishing company, from nothing to a global force and is now busy turning his fledgling Sileni wine label into an export earner.

The man behind the North Shore gold medal nursery, The Millennium Centre, Mr Avery is famous for a relentless desire to improve.

I met others prepared to cancel their holidays at the drop of an export contract, who work weekends if they have to, who never stop thinking about their businesses.

Plenty of good advice is out there for those obsessive enough to look. Paradoxically, obsession about profits may not be the answer. Although profits are the price of staying in business, they are a short-term consideration. Managers should also focus on longer-term issues.

Bruce Plested, founder of Mainfreight, says: "I've always believed that there's a short-term profit and a long-term profit. The first is what you must make now, today. The second is the development of a product, service or style that takes time to develop. Not many companies will survive without both."

Founders of companies who adopt these deeper, less tangible views of commerce seem to be those who aim to give their businesses permanency.

Cereal maker Dick Hubbard gives himself six out of ten for profit, but ten for running a business that is good to work in. Rightly or wrongly, he thinks a caring workplace should keep Hubbard Foods going for a while.

Aluminium manufacturer Gilbert Ullrich takes this a step further.

He set out to banish politicking within his company, which he said had become an unpleasant place in which to work, and to promote cooperation.

He does not know exactly what effect, if any, a more congenial atmosphere has had on profits but he does like going to the office now.

While profits might look after themselves, costs will not. Obsessive managers treat costs like land-mines.

Mr Plested, who for years drew an annual salary of just $7000, less than half his pay at his previous employer, says: "Don't rob your company. We set out to have the lowest real costs in the industry."

Designated carparks, strict dress codes, elaborate boardrooms and separate eating areas for executives all suggest a company that has lost its way.

Ports of Auckland chief executive Geoff Vazey, an engineer by training, designed his staff's offices in a style so deliberately open that executives were not even allowed blinds in their offices.

It is astonishing how many winning companies succeed by writing their own rules. Mr Bebear did that by taking over struggling companies simply because Ancienne Mutuelle, as Axa then was, could not afford to buy successful ones.

Mr Avery's Adis Press, for example, turned conventional exporting strategy on its head by achieving serious export earnings without a domestic base. And Carter Holt Harvey has just banked $2.5 billion because Richard (now Sir) Carter took a punt on buying a share in a forestry-based conglomerate called Copec in Chile, a country which had only just escaped civil war.

Neville Bain, the New Zealander who is chairman of the British Post Office, says hungry managers demand criticism, not praise. "I like irritants on my staff. I like somebody who is totally dissatisfied, who is always looking for a better way. I don't want a quiet life as a manager."

A reaction against high-priced consultants is emerging. Several chief executives have derided the skills of many of those offering conventional and derivative advice for big fees.

International consultancies can peddle solutions which originate elsewhere and are not especially relevant here. If every business is different - and it is - so is every country.

Beware especially of those promising to restructure your organisation.

Hardly anybody ever pulls off a successful restructuring. This includes those who told the commanders in the New Zealand Police they were mere managers and applied "team strategies" to the force as though it were a rugby team.

In the grey arts of management, fashions come and go in roughly 10-year cycles. Before we are too far into this millennium, management theory will come up with something else. Meantime, you interfere at your peril with the traditions of a force that has been in existence for most of New Zealand's recent history.

While endless improvement is not negotiable, a restructuring is a different animal altogether. Done badly, it can destabilise an organisation, destroy its morale, and leave its victims bewildered.

And beware this year's guru, unless it is Charles Handy, the former Shell Oil executive who has become Britain's pre-eminent management thinker.

Not for him the latest snake oil. He deplores the blind adoption of management theory, especially if it is from the United States. If managers can find time to read only one book before they return from holidays, they should make it The Empty Raincoat, subtitled making sense of the future. It should help.