Gill South: Good companies come in small packages: US business guru

New Zealand's journey out of recession and into the creation of wealth will be driven by medium-sized businesses - in particular those employing between six to 19 people, believes visiting international management guru Tom Peters.

The respected management author believes these firms are the most agile and can move more quickly than anyone else.

Peters, who has visited New Zealand before to help promote the Better by Design initiative, has been credited as one of the first to speak of the importance of design as a competitive advantage.

In 1982, when his book In Search of Excellence (written with Robert Waterman) was published, he encouraged US firms to deal with competition from abroad by getting away from strategies based on just the numbers. He refocused companies on the basic drivers of successful businesses: people, customers, values, "culture" ("the way we do things around here"), action-execution, and a perpetual and self-renewing entrepreneurial spirit.

Peters views New Zealand's size and history of innovation as assets during a period in which capitalism will be reinvented.

"Unlike in my home country, which has many extremely large corporations - several of which have faltered and failed recently - New Zealand's business strength is based on small and medium companies [SMEs]," he says in comments provided before his arrival here.

"The SMEs haven't had the problems that many US corporations have experienced - things like inflated bonuses, absence of internal focus, lack of innovation and white-collar crime."

After the recession, big business will not operate as it did before, Peters predicts. In his view, this creates more opportunities for the owners of small and medium-sized businesses - if they choose the right tools.

United States President Barack Obama derived his success from being able to mobilise and inspire people to believe in something, says Peters. He used technology to attract and engage his audience and convert their attention into votes.

Small businesses everywhere can learn from his success when thinking about how to reach potential customers.

Peters recommends small family companies "fight the enemy rather than each other".

"If they can overcome [infighting] and organise, they will conquer."

Peters, who yesterday hosted an Auckland workshop on behalf of business coaching company The Results Group, gave some practical tips to business owners and managers. One key message was to move faster than the competition.

"[Peters'] message is right for this year", says Ben Ridler, managing director of The Results Group. "This year is all about speed of execution."

Ridler says he expects his clients to take action after the workshop, even though many have current strategic plans.

The people attending the event were "business owners and decision makers" rather than CEOs of Fortune 500 companies, says Ridler. "These people can immediately take action."

What should they have got out of it?

"You've got to understand your strengths and weaknesses and have a plan. Whatever your strategic plan was in the middle of last year, it needs to be thrown out or at least reviewed."

The Results Group's clients have an average turnover of $6 million and employ 20 people. They include accountancy firms, construction companies and some of New Zealand's largest car yards.

Ridler says New Zealand companies often do things better than their counterparts overseas, particularly those creating products and services.

"It is such a small and crowded market. In every industry in New Zealand there are more people doing it for less money. To do well, you have to be very good at it."

It's the people who can't change quickly who will suffer in this climate, says Ridler.

"You go to networking functions and talk to people who say 'we are not worried about the recession'. People with that ostrich mentality, when they hit the tree, they will not be prepared."

Ridler, who has lobbied government on behalf of small businesses in his former role as president of the Entrepreneurs' Organisation, is not holding out great hope for political change.

"It's up to business. We can get ourselves through this if we face it and get stuck in. If we sit back and wait for government to do it, we are in trouble."

Ask yourself this - Tom Peters' questions for managers

* Have you in the past 60 days had a general meeting to discuss "things we do wrong" ... that we can fix in the next 14 days?

* Have you in the past two weeks had an informal meeting - at least an hour long - with a frontline employee to discuss things we do right, things we do wrong, what it would take to meet your aspirations?

* Have you in the past 60 days called an abrupt halt to a meeting and "ordered" everyone to get out of the office and "into the field" and in the next eight hours, after asking those involved, fixed a nagging "small" problem through practical action?

* Have you in the past week or month revised some estimate in the "wrong" direction and apologised for your lousy estimate? (You must publicly reward the telling of difficult truths.)

* Have you celebrated in the past week a "small" (or large!) milestone?

* Have you thanked a frontline employee for carrying around a great attitude. Today?

* Have you in the past 10 days visited a customer? Have you called a customer. TODAY?

* Have you at every meeting had an end-of-meeting discussion on "action items" to be dealt with in the next 48 hours? Then made this list public - and followed up in 48 hours?

Gill South is a freelance business writer based in Auckland.

- NZ Herald

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