CEO jumped ship - against the tide

By Selwyn Parker

John Morgan is a rarity. He is one of a handful of managers who, having made their name in the private sector, upped and became a public servant.

Even more unusual, he loves it. "This is a quintessentially Kiwi business. New Zealand's food and agriculture businesses are world famous. You can make a difference here," he beams.

Mr Morgan, aged 44, is chief executive of a state-owned enterprise you probably haven't heard of. Even if you have, it probably had a different name.

This stockily built, bright-eyed escapee from the private sector runs Manukau-based AgriQuality, one of those backroom organisations which will never make headlines like Winz, but which does a big job.

AgriQuality was called MAF Quality Management until a year ago, when it became a state-owned enterprise. The organisation has been around in various guises for nearly 100 years.

The job of its 630 fulltime staff, many of them graduates with international reputations in their field, is to assure the quality of the agribusiness and food industries.

To put it simply, it is AgriQuality that maintains the integrity of the foodstuffs we eat and sell.

In the age of genetically modified food, mad cow disease and salmonella outbreaks, AgriQuality's seal of approval - the Assurance Mark - is becoming increasingly important as a verification of growers' or manufacturers' claims. Food technicians from the world's supermarket chains often visit AgriQuality staff.

"It's about verification," says Mr Morgan.

"The consumer drives this industry now. Before, it used to be legislation."

It is one of the reasons he wanted the job. To take it, he left Orica (formerly ICI New Zealand), where he was an executive director, making him one of the few private-sector executives to jump the fence.

As State Services Commissioner Michael Wintringham pointed out in his briefing for the new Government, private-sector talent doesn't exactly think of Government jobs as management Shangri-La: "In my dealings with national and international executive search companies, I have been told several times that skilled private sector managers will not consider a state sector chief executive's job."

Shorn of management-speak, this is essentially because ministers tend not to take full responsibility for the performance of their organisations and are not exactly famous for backing their chief executives.

"The interests of ministers as 'owners' and those of chief executives are weakly aligned," said Mr Wintringham.

Also, the pay is not great in the public sector. But Mr Morgan isn't complaining.

"The package was competitive enough to attract me from the private sector," he says. However, he has kept a couple of chairmanships of privately owned companies.

Although he has been in the job only since November, Mr Morgan has already found that some of the other points made by the State Services Commissioner are all too true. For example, Mr Wintringham's references to the damaging effect of constant restructuring.

Mr Morgan, who pulled on a pair of gumboots to visit staff in the field, has found many of them are shell-shocked.

"We've had nothing but year after year of change," they have told him. "We are tired of it. We just want to be left alone to do what we are good at."

Mr Morgan's conclusion: "Change has become a distraction. They want to do what they want to do. This is an extraordinary workforce who see their roles as vocations rather than as jobs. All they want to do is add value to New Zealand's pastoral economy."

In other ways AgriQuality's new chief executive certainly doesn't talk like a public sector person. Mr Morgan says he will be judged on AgriQuality's income.

"Revenue is the most important thing. No cash, no business."

Quoting his favourite management authority, Peter Drucker, he also wants growth: "The only way to measure the success of a business is that the balance sheet at the end of the year is bigger than at the start. We are here to grow the business. If people aren't prepared to give state-owned enterprises revenue, maybe it's because they're not very competitive at what they do."

And the means to that end? "People," he says bluntly. "It's people. Most employees come to work to make a difference."

However, this customer-focused boss does not mind reminding staff they are here to make a difference.

At this point of our conversation, the phone rang on his desk. Mr Morgan ignored it for the first three rings. Then he looked irritated. Finally, he jumped up to answer it just as somebody else picked up the call.

"I want phones answered within three rings," he told me. You get the feeling that he might have a quick word with the appropriate employee.

Mr Morgan learned the importance of this when, as a 22-year-old on his OE, he bought a printing franchise called Prontaprint in South Yorkshire, more on hope than anything else. "I started with absolutely nothing."

Except a determination to learn. He did every course on sales and marketing he could. Then, as he bought more franchises and found himself with a growing staff, he studied psychology and human resources.

"You need to know what buttons to press."

By the time he had bought six Prontaprints, the financial side had become complicated so he studied accountancy.

"If cashflow dried up, it hurt me personally," he says - something hundreds of small business people know and thousands of public servants don't.

He learned the importance of revenue when his small empire nearly went under during one of Arthur Scargill's long miner's strikes that impoverished South Yorkshire. "I nearly went bankrupt," he recalls.

But the business recovered and after 10 years, and still in his early 30s, Mr Morgan sold out, banked a considerable profit and returned to New Zealand, where he became general manager for then ICI's chemicals and plastics divisions. At 36, he became executive director.

"Large organisations can be so dumb," he said. Once again citing Drucker, he soon taught ICI staff the same lessons he had learned from his own business.

"Everything on the inside is costs and everything on the outside is customers. Your focus has to be external."

AgriQuality is a large organisation. A dumb one? Perhaps in some areas.

But its boss probably will not take too long to find out where.