Ron Ainsbury: Why does NZ accept second best in business?

Defeat at the top levels of rugby draws massive analysis and scrutiny of leaders in New Zealand, but less so when it happens in business. Photo / Photosport

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We fret when the All Blacks aren't winning.

We have endless debates in newspaper and magazine columns. On TV sports shows. Online. In bars. Who will be the best coach? Who should be in the squad? What halfback/first-five combination will work best? We look at what's happening in the Northern Hemisphere's Six Nations and argue whether some of what is happening there might help us improve here.

And it's not just in rugby.

In all sports, Kiwis strive to be the best they can be. If we're not winning then we must at least be seen to be competitive. You name the sport – we're exploring the latest thinking and using the latest technology. As Team New Zealand prepares for the 2021 America's Cup in Auckland it's setting global technological standards for yacht design.

So what about business? What about the people that lead and guide NZ in this field of endeavour? Are we recruiting the best and brightest? Do our business leaders constantly look at what's happening in business in the rest of the world and seek to introduce those innovations here? 'Fraid not.

In which sport would New Zealanders be satisfied that players and coaches were adhering to the standards of training, development, strategy, tactics and performance set 70 years ago?

In a recent high- profile report on board performance, the authors happily write about "Pressure on the 1950s operating model." Yes, you read that correctly; the 1950s operating model.

In a recent article "Is NZ short of equity capital", Dave Heatley suggests "plausible explanations include low managerial quality in NZ firms, resulting in flaky decisions or poor execution of overseas expansions".

In a small business discussion group the other day, one member related with horror, how she had found herself on a high-profile board. She asked a fellow director what had prompted him to become a director. "Well, I've retired now. Needed something to do but not too taxing. And the director fees cover my golfing expenses."

I rather suspect that there are far too many similar stories to be told around the country Too often the role of a director is seen as a sinecure not a profession.

Bryan Gaynor, writing in the Herald, laments board selection issues, and sets out several current examples of clashes over board selection where the competence of a director is being called into question. He writes: "Surely it should be all about competence."

Indeed, but where is the pressure for improving board competence?

The Institute of Directors and MinterEllisonRuddWatts have published a report "Always on Duty: The Future Board". The goal of the report was to stimulate discussion about changes that NZ boards might want to consider, specifically "how boards may evolve and operate in the future". Why the future? What about now?

Almost without exception, all the recommendations in the report not only could be implemented now – but should have been implemented years ago in New Zealand.

Leading companies around the world have been following these standards and implementing most of the recommended "ideas for discussion" already.

Indeed, the report lists sundry examples of current good practice from abroad – but presented in a way that says "maybe New Zealand directors could start to think about introducing these ideas?"

Imagine the public outcry if the response from New Zealand rugby to Northern Hemisphere rugby clubs introducing an innovation such as GPS Player Tracking was ... nothing. "Nothing to see here. Our current methods are just fine. No need to change."

Ron Ainsbury. Photo / supplied

To be fair, it's not just NZ boards that warrant attention. A McKinsey global survey revealed that one in three directors had limited or no knowledge of the dynamics of the industry in which their business operated.

The modern board should be a professional team, led by the chairman. They need to be competent, active and engaged. They must be prepared to invest time in understanding the nature of the business and the modern VUCA (volatile, uncertain, complex, ambiguous) environment in which it operates. And, yes, be properly compensated for their performance.

Then perhaps we might see higher standards being set for and more demanded of senior management in business in New Zealand.

• Ron Ainsbury has more than 30 years of international business experience as coach, consultant, trainer, researcher and CEO.