Gill South: If you're aiming to make a real difference, better stick around

Wellington Mayor Kerry Prendergast has just announced she will be running for a fourth term. Photo / Capital Community Newspapers

This is an election year in Australia - yet it feels as though Kevin Rudd has only been Prime Minister for a minute. How can any leader really make an impact in just three years?

John Key will no doubt feel the same way when he seeks re-election next year. Surely the honeymoon is only just over?

By contrast, in early Roman times, political leaders were elected for one year and could not be immediately re-elected.

But they were expected to stay on as an adviser, explains NZ Institute director Rick Boven, who knows his Roman history. As a consequence, decisions were made for the long term.

There is a lot to be said for long-term leadership - in the corporate world and in politics - particularly when it comes to major issues such as climate change, says the NZ Institute director.

Yet the trend this decade has been for a much higher turnover of chief executives, whose tenures have been similar to that of Prime Ministers - three to four years.

A study by Drake Beam Morin of 481 large United States public and private businesses found CEO tenure during 2000-01 averaged three years on the job, with only 28 per cent remaining five or more years (down from 37 per cent in 1998-1999).

Meanwhile, according to CEOgo.com, fewer than a quarter of CEOs of S&P500 companies have been in their positions for 10 years or more. Many of the long-termers are company founders, such as Larry Ellison of Oracle, Michael Dell of Dell, and Scott McNealy of Sun Microsystems.

But business leaders should be thinking hard before they start looking around for the next move. The benefits of staying on are evident - they get to really know an industry, build strong and loyal teams, develop a vision and get to see the consequences of their decisions.

A topical example in local politics is Kerry Prendergast, who last week announced she would be running for a fourth term as mayor of Wellington.

When asked what spurred her on to try for another three years, she said it was two main things: her succession plan hadn't worked out - she had a senior woman politician in mind - and with the Auckland Super City threatening to monopolise the attention of Government to the detriment of other cities, Prendergast felt Wellington needed her more than ever.

There are many pluses to being a long-term leader, says Prendergast. "You have a really good understanding of how the organisation works. And you understand the key partnerships, and your community."

Prendergast, who has worked closely with her CEO Garry Poole since 2001, says she and the senior manager have an excellent relationship - which has meant stability and a focused direction for the city.

The idea of politicians being in power for only three years is flawed, she says. "The first year you are learning the job, the second year you put your toe in the water, make a couple of big decisions and the next year you are back-pedalling (on your decisions)."

"I think it is very easy as a new politician to bow to what could be a populist view.

"With longevity, you know that making the populist decision is not necessarily right. It's very easy to say yes, it's the hardest thing to say no."

Poole had to re-apply for his position in 2007 after nine years in the job - he has another three years to run with his current contract.

"I wanted to continue because I thoroughly enjoy the job. I'm passionate about Wellington - some people when they join local government, they get addicted to it," he says.

"It's difficult to think 'what next' when this is such an impactful job, I don't think there's anything else like it," says Poole, who previously was director of Audit NZ.

Being in the leader's seat for so long has helped him make positive changes in the city. The Karori Wildlife Sanctuary, a long-term multi-stakeholder project, is one of the projects of which he is proudest.

Poole says his relationship with Mayor Prendergast works very well - they meet at 7.15am on Mondays and go through what's happening and coming up in the week.

"Kerry is very strategic, she has a vision, is politically astute and she knows the direction she wants to take the city.

"Every action is in accord with that," he says.

Poole has his finger on the the minutiae. While having a vision is important, the reality is "the rubbish still has to be picked up, the sewerage still has to be working. We've got to make sure it all works," he says. When Auckland had its lengthy power cuts in the late 1990s, it did terrible damage to the city, he says.

Mayor Prendergast and Poole are obviously not lost for ideas and energy for the new challenges ahead. And their knowledge, vision and strong relationships with stakeholders all make the wheels turn.

The longer a CEO is there - assuming the CEO is good - the longer you see the CEO performing well, says Shaun McCarthy, chairman of Human Synergistics, a New Zealand-based international culture and leadership research and consultancy group.

Longevity in one position gives the individual a really solid ability to experience the consequences of decision making, says McCarthy. "Decisions made today will have effect in three to five years' time. What happens is CEOs are coming through making all these changes, but not having to live with the consequences."

You also become very knowledgeable about your industry, which is more important than many people believe, he says.

During Peter Hubscher's 15-year tenure as managing director of Montana Wines, for example, the company become an internationally well-known brand, and a major factor was Hubscher's long-term presence, says McCarthy.

"Some of these very good chief executives are not the ones that go from job to job.

"The fundamental thing that the chief executive does is shape the organisation, create what happens, create what it stands for," he says.

The expectation of a three to five-year tenure for CEOs has been driven by recruiters, says McCarthy. "But really good chief executives don't have that mindset," he says.

"Gail Kelly at Westpac is there for the long haul."

Gill South is an Auckland freelance writer.