The Deloitte Top 200 Awards: Investing in NZ's future good for business

By Thomas Pippos

Forward looking companies are finding ways to address our biggest issues, writes Thomas Pippos

Far removed from the tumult of Brexit, America's presidential race and the ongoing conflicts in the Middle East and elsewhere, our California-sized country at the bottom of the world is a relative bolthole of stability.

Since the turn of the century New Zealand has had just two prime ministers and two finance ministers. During the same time across the Ditch, Australia has had six prime ministers (although Kevin Rudd held the office twice) and five treasurers.

Though the business landscape can be characterised as one of constant change and disruption, this political and policy stability provides our business leaders with a more certain regulatory foundation from which to address other changes.

Political stability is generally good for business. This shows in this year's Deloitte Top 200 list where overall the profits of our top companies are up 19 per cent on last year.

But the relative stability and prosperity we have been enjoying could change for any number of reasons. As a small trading nation we are exposed to the vagaries of an international market that can shift materially due to circumstances far removed from what may be happening at home.

At home, we face growing challenges from an increasingly diverse and ageing population, child poverty, high youth unemployment, the spiralling Auckland housing market and increased infrastructure demands on our cities.

Conventional wisdom says these periods of relative stability afford our largest corporates the opportunity to address more than just the bottom line.

Sayings like "make hay when the sun shines" or "the best defence is a good offence" come to mind. Certainly our politicians have been running this line, focusing on paying down debt and keeping costs under control despite the encouraging economic statistics.

For our largest companies this is an opportune time to build strategies to invest in the future, not just for the success of their business but for society in general.

The reasons are clear, with Brexit and the US election showing us the importance of maintaining the confidence of the public in the establishment; including in the largest organisations that help define who we are. Forward-looking companies are finding ways to address our biggest issues through business-led ventures that go beyond traditional business as usual.

Business as usual is no longer sustainable and social innovation and investment offers a compelling extension to the status quo.
Thomas Pippos, Deloitte New Zealand chief executive

The reality is that business as usual is no longer sustainable and social innovation and investment offers a compelling extension to the status quo. The growing majority of both consumers and talent favour transparency and socially responsible business practice and initiatives, moving social impact from a niche topic to a more mainstream discussion for the executive team and around the board table.

In fact, this topic also brings government and business closer together on how programmes are delivered. Applying business rigour around such programmes is critical and something that government is adopting to address some of our intractable social issues.

Watch: Chief Executive of the Year: Mike Bennetts

Video

The social investment approach, which focuses on the quality of spending rather than just the quantity and justifying the spending through return on investment, is becoming more mainstream. Success requires taking calculated risks and learning from failures to adjust initiatives as necessary.

The benefits for companies who invest in the wider future of society can be greater employee engagement and retention. It can also be the basis for innovation within their own business, guarding against disruptive new entrants that are often "born social."

Greater collective investment in our future by our largest corporates can also build the intellectual and other property that we can trade on international markets.

Greater collective investment in our future by our largest corporates can also build the intellectual and other property that we can trade on international markets. And it can help attract capital and labour, and maintain greater societal cohesion and stability.

In terms of this latter point, investing in the future and addressing some of our big challenges can help guard against the possibility of increased inequality at home. There's an ongoing argument about whether or not inequality is currently rising. But fact often loses out to emotion in this discussion.

The intense frustration people are feeling in other countries -- the ones we often compare ourselves to -- could easily take root here with the Top 200 corporates able to play a role in keeping it from our shores.

- NZ Herald

Thomas Pippos is the chief executive of Deloitte New Zealand.

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2017, NZME. Publishing Limited

Assembled by: (static) on production bpcf02 at 26 May 2017 20:53:43 Processing Time: 1092ms