Crap business management – the elephant in the office

Are our business owners and managers deserving of the faith – and dosh – the Government handed over in last week’s Budget?

Don’t think so. There’s stacks of evidence that too many are just not very good at running their businesses.

Of course there are some great managers out there who’ll repay the Government’s faith and others will have more reasons to get their act together. In many cases though, it’ll be trust,expectation and money down the tubes.

A screed of reports and surveys show many of our bosses can’t foot it internationally, though there is evidence that the situation is improving.

For some reason this issue largely gets ignored in debates about how to drag this country out of its economic rut.

Evidence of the problem includes:
• “Few firms have yet to match leading international benchmarks – no more than 2-3% of firms appear to be approaching international standards of performance on practices such as strategic planning and leadership, supplier relationships, employee performance management and benchmarking, or actively pursue strategies of innovation.” (MED)
• “New Zealand suffers a dearth of high quality managers and entrepreneurs. This lack of managerial talent could be affecting both a firm’s ability to internationalise and also the average firm’s ability to identify new opportunities and grow.” (Treasury)
• “[Despite some good news] the downside is that the Canadians have now joined a slowly growing list of countries whose managers outperform ours.” The New Zealand Institute of Management.

We also rate poorly in international surveys such as the World Economic Forum’s Global Competitiveness survey.

And then there’s the circumstantial stuff:
• “What is holding New Zealand back is a widespread lack of management and leadership skills among SME owners, which translates to disengaged workers and low productivity,” (Grant Hally, chairman, Independent Business Foundation)
• “The low productivity is mostly from significant mismanagement: The greatest differences identified here are in: GroupThink; “number 8 wire and not learning from others”; hostility to constructive criticism; discounting of formal qualifications; ignorance of both quantitative management and systems-approach management; “the old boy network”, and many more.” (2025 Taskforce)
• “Something I have noticed peculiar to New Zealand is a lack of commercial impetus due to dire motivation. I am frustrated by the isolatory and timorous attitude of NZ’s senior management who appear closeted within a fall-out shelter of “tried & tested” cladding, as if sticking their heads above an imagined parapet would render them terminally radioactive.” (UK immigrant to New Zealand commenting on the NZ Institute’s NZ Ahead website)

Over the next few days I’ll post on what may be behind this situation and what’s being done to fix it.