Innovative NZ perfect new-tech testing field

By VICKI JAYNE*

You can't help warming to someone who describes New Zealand as having "world-class" operators and service providers.

It's a refreshing antidote to the somewhat peevish noises from those who blame local business limitations as justification for taking their ball off to play in bigger paddocks overseas. And when it comes from a man whose management experience spans the worldwide, high-speed telecommunications industry, it has a more than feel-good clout to it.

Swedish-born Goran Olsson could be described as part of the local brain-gain. He came here 18 months ago to head Ericsson New Zealand and is busy putting into practice his belief that this country is well suited to the origination and testing of leading-edge products.

A recently announced joint venture between Ericsson and Synergy International will create a local "centre of excellence," with headquarters in Wellington and dedicated to researching and developing mobile internet applications.

New Zealand was chosen, says Olsson, for its "depth of talent" and the project will supply at least 150 good reasons for that talent to stick around.

Ericsson already employs 280 people throughout the country and has a research and development facility in Napier which has come up with some nifty new products - such as its HiS (home internet solutions) router, which gives PC users simultaneous access to phone and internet. With its expanding ranks of grapevines, Hawkes Bay may not seem the logical place for a mini "telecoms valley" but all the fundamentals for world-class R & D are there, says Olsson. And Kiwi curiosity makes this a good testing ground for new products.

"People here are innovative; they are early adopters - and you find out quite quickly what works and what doesn't. It is perhaps a function of the country's size, but the uptake and penetration is very good."

He has also found the business environment competitive.

"Everyone is trying to differentiate their offering to the end customer [domestic and overseas].

"That means a lot of innovative new services are introduced here and you have to be pretty good to be successful."

For Olsson, New Zealand was a lifestyle choice. He has been with Ericsson since 1980, when he joined their extensive R & D section after graduating as an electrical engineer. He quickly moved into cellular design, spent seven years in the burgeoning North American mobile telephony market, then returned to head Ericsson's global switching business from Sweden. But the amount of travel involved was making him a stranger in his family and when it was decided a move was needed, New Zealand featured on a "very short list" of options.

"We wanted somewhere English speaking, that was safe and offered our family a quality lifestyle. New Zealand was perfect."

Although Olsson is a newcomer, his company's history here dates back nearly 100 years. Ericsson started making phones in the 1870s and Sweden's size prompted early overseas expansion. The company had agents as far away as New Zealand by the early 1900s.

Its entry into the cellular market was given a helping hand in the 70s when the Swedish Government (as telephone network owner) decided to join its neighbours to establish a pan-Scandinavian cellular network. The design brief went to Ericsson and Finnish counterpart Nokia. Enough said, really.

Ericsson now has 30 per cent of the international market for mobile systems and is one of the largest cellphone suppliers, shipping more than 30 million in 1999. The need to keep ahead is recognised with R & D spending that represents 15 to 20 per cent of its sales.

Olsson believes the need for new-tech companies to be constantly innovating helps determine the way they are managed.

"I am convinced of it. You are the mirror of the industry in which you are working."

The tendency is towards a more informal, collaborative, people-centred management style. "Respect" informs both internal and external relations and is one of Ericsson's guiding corporate values, along with "perseverance and professionalism." Operationally, the guiding stars are speed, quality performance and cost-efficiency.

"If you are going to live according to such principles, you have to have the right people.

"Then you create a structure that doesn't hinder them from being their best."

At Ericsson New Zealand, that structure is organised around customer needs, which gives the company good focus when it comes to management by objectives - "because our success is completely tied in with their success," says Olsson.

It also means that new offerings will be designed to meet a relevant need.

In an environment where speed to market with a new product can make or break its long-term profitability outlook, there is always the danger of being a little too enthusiastic with new ideas, acknowledges Olsson. There are many whizz-bang new widgets out there hunting a market home.

"I think we are reasonably good at listening to our customers and adding value to what they are trying to do with their business. I guess the opposite would be to tell your customer what you think they want," he says.

"If you have a good understanding for the segmentation of the market, then at least you can pitch your proposition to the right segment. If you then get a positive reaction, you can continue on to try and create a broader market. But if you don't get a good reaction, then I think you forget it."

And the future for mobile internet?

Don't think cellphone. Think of a credit card with an antenna that can pinpoint your exact place on the planet, wax lyrical on local landmarks, take and e-mail pictures of them and you to your loved ones.

"Imagination is the only limit," says Olsson.

* Vicki Jayne can be e-mailed at vjayne@iconz.co.nz