New Air NZ chief in the hottest of hot seats

The man in the hot seat at Air NZ has everything to lose, writes DANIEL RIODAN.

If Ralph Norris is as smart as everyone says he is, what's he doing running Air New Zealand?

Widely acclaimed as one of country's best business leaders, he has thrown away his golf clubs and the life of a professional director to climb into the corporate world's hottest seat, with downside yawning on all vistas.

Named on Wednesday as the airline's new managing director and chief executive, Mr Norris has been a director of the company for three years, so ignorance of the huge challenge ahead will be no excuse if things go wrong.

When everything went belly-up last year, Mr Norris' predecessor, Gary Toomey, could point to having inherited a mess that - with hindsight - was already too big to clean up.

But Mr Norris is part of the team that helped create the mess, that made the ill-fated Ansett purchase, failed to recognise how bad things were till it was too late and then had to go cap-in-hand to the Government for a billion-dollar bailout.

Is he the ideal person for the job?

Probably not, but everyone bar the team at the Flying Kangaroo would love it if he can prove that judgment wrong.

Is he the best person who was available?

His fellow directors thought so - which likely reflects a dearth of top international airline management candidates and says much about the high risks involved in taking on the job.

Sitting on a board and making strategic decisions is a lot different from leading a company, and although Mr Norris' leadership skills and personal abilities aren't in question, his lack of airline operational experience is the big issue.

Mr Norris and his chairman, John Palmer - a total airline neophyte before the Government appointed him three months ago - have been at pains to emphasise the similarities between running a bank and running an airline - leadership, customer service, foreign-exchange hedging, that sort of thing. Mercifully they stopped short of equating bank tellers to jumbo-jet pilots.

Although Mr Norris will have an experienced senior management team supporting him, he will ultimately be expected to provide the X-factor that even great management teams need.

The leading light of that management team, strategy and planning senior vice-president Andrew Miller, must be doing some soul-searching right now, after being widely tipped as the frontrunner for the job.

Cases such as Mr Norris' are rare. Where directors have taken over the running of companies, it's typically been on a temporary basis, when the chief executive has left suddenly and his or her successor is still being sought. Sir Selwyn Cushing ran Air NZ for five months between Jim McCrea's departure and Gary Toomey's arrival, for example.

Some say Mr Norris' new role raises serious governance issues.

Given that he has been working alongside his fellow directors as equal-status colleagues, they wonder how willing the board will be to lock horns with him when the situation calls for it.

However, Institute of Directors chief executive David Newman sees no corporate governance issues in such a move.

Most directors are older than their chief executives. Mr Norris is only 52 and has lived without the buzz of a chief-executive role for only four months - long enough for him to realise he misses it too much.

In terms of his reputation, Mr Norris has everything to lose. He retired as ASB Bank managing director last September after 32 years with the company, having taken the former regional player to the forefront of the industry with the innovative use of new technology.

Air NZ's near-meltdown ruined his retirement tour. Instead of saying goodbye to staff around the country he was buried in successive crisis meetings of the Air NZ board.

So what kind of man is Ralph Norris?

Business Roundtable chief executive Roger Kerr describes his former chairman as a man of "total integrity and good commercial characteristics".

Few would disagree with that assessment.

The recipient of several high-profile management awards, he was a leading contender two years ago for the chief executive job at Telecom that went to Theresa Gattung.

ASB Bank staff say he's a complex personality who earned their affection and respect. And a hard-driving boss who set high standards.

Even so, he was known to ring late-working staff as he drove away at night asking them why they weren't home with their families.

"Everyone has to put in long hours from time to time but that shouldn't be the norm," he told me while head of the bank.

"People don't perform at a high level when they have other problems such as family issues weighing them down."

He says his wife, Pam, is his "great leveller". They have three adult children.

Although today he's very much part of the network that seems to run corporate New Zealand, Mr Norris carved his own road to the top.

His father was a dental technician who developed an allergy to acrylics and then became a french-polisher.

When Ralph Norris was about 10, the marriage split up and the two sons stayed with their mother in Mt Roskill, attending Lynfield College.

Although life was a struggle financially, he says he never felt poor and his mother, who worked as a quality controller at a Mt Roskill factory, encouraged the boys to stay at school. He scraped through School Certificate and had two years with Mobil Oil before joining what was then the Auckland Savings Bank as a computer programmer in 1969.

Responsibilities outside the bank included a directorship of Fletcher Building, which he says is now under review.

He is also a member of several major trusts, including the Starship Foundation, Northern Lifeguard Services Trust and the Government's Knowledge Wave Trust.

Previous Government roles have included membership of former Prime Minister Jenny Shipley's Enterprise Council and chairing the information technology group advising former IT Minister Maurice Williamson.

Almost two years ago he had to face up to the media as director of the trust overseeing the 2003 defence of the America's Cup, trying to manage the fallout from the defections of Brad Butterworth and Russell Coutts to a rival syndicate.

One of my journalist colleagues who interviewed him at the time accused Mr Norris of talking non-stop for an hour about the circumstances surrounding the stars' defections - without saying anything.

He's no stranger to hot seats.

When he took on the Business Roundtable chairmanship in 1999 (he relinquished it last year) he refused to back down in the face of Government criticism of the lobby group.

When Deputy Prime Minister Jim Anderton blamed Roundtable policies for the country's economic woes and claimed the group was out of touch with most New Zealanders, Mr Norris got his dander up.

In a Herald column defending the Roundtable's track record, he wrote: "Some of us in business don't need lessons from Jim Anderton about understanding the poor and the real world. I grew up in a state house and have spent my working life in the real world.

"Self-serving comments about businesspeople driving Mercedes and BMWs are a little hard to take coming from a politician with access to ministerial limousines and an expensive ministerial house and who has spent much of his life living off the taxpayer."

It was perhaps no surprise that Mr Norris was conspicuous by his absence from the Government's guest list at its summit meeting with business leaders 18 months ago.

Prime Minister Helen Clark said at the time she had not detected much that was constructive from Mr Norris.

But this week she was at pains to point out that while she still had her differences with him on policy, she had no qualms about his competence for his new job.

Clearly the Government had no input into Mr Norris' selection, which was ratified by the board on Wednesday morning and announced that afternoon.

The Government apparently had less than an hour's notice, and one Beehive source said Finance Minister Michael Cullen blanched when he heard the news.

That the airline's 82 per cent shareholder had no input into such a key decision is a mark of how careful the Government is about being seen to stay out of the airline's operational issues.

Dr Cullen made a pointed reference to Mr Norris' anti-union reputation when he welcomed his appointment, saying that he hoped Mr Norris would build on the goodwill the unions had shown towards the company's reconstruction.

The last thing Air NZ needs at the moment is union trouble.

Management and unions have so far been cooperating on making 600 positions redundant (out of 9500) as the airline's first labour adjustment to the tougher business environment.

Unions have so far been guarded in their reaction to his appointment, saying they hope to continue their good relations with airline management.

If Mr Norris does succeed in turning around the damaged airline - and that judgment probably can't be made for another two years - this banker-turned-flyer deserves as many kudos as the public who now employ him can offer.