Tony Garnier and Ray Porter: Success is just a state of mind

The definition of New Zealand's prosperity and success has more to do with Government economic and social objectives and less to do with how business defines the pillars that underpin the business environment.

It also has less to do with comparing different smaller countries to New Zealand. Recently New Zealand has tried to follow economic objectives to provide similar social policies to Ireland, Finland, Norway, Sweden and others.

Critics of our economic strategy tend to want New Zealand to emulate other smaller countries like Singapore and Malaysia where economic policy (not social policy) is an end in itself. Economic pillars are the latest trend to discuss.

Regardless of economic objectives, the silver bullet allowing businesses in successful countries to perform to potential is from the barrel of an economic vision. This is something we seem to lack in New Zealand.

Positive economic vision provides a business environment rooted in a societal value system that encourages co-operation between government, business, trade unions and institutions. The vision must come from a sense of nationhood (even patriotism) shared between these groups. Governments seem to have managed it well in times of crisis, as in wartime. Why cannot they manage it now? The answer lies in the lack of visionary leadership for the last 40 years. We should be more concerned about recent years because, for the first time in decades, all our commodity prices have been high creating downstream positive effects for the economy.

Unfortunately, the present Government has delivered more social change than economic vision. It has also introduced considerable constraints to doing business successfully.

It has been left to isolated business leaders to use recent times (which are conditions of chance) to position their businesses. Among the leadership skills a business leader needs in a world of constant change is the ability to be strategically flexible, seize an opportunity that was not in their long-term plan and take it.

The point: While Stephen Summers' seven pillars of growth (Business Herald, May 24) offer a useful template for helping businesses to perform to potential, they are incomplete. Fortunately, and regardless of lack of governmental economic vision, we still have a Kiwi value system - an important key because it is the foundation of the confidence, skills and resolve of our business people to take on the world to turn challenges and chance into opportunities and do the business. Like it or not, our value system ring-fences the roles of government, business and trade unions (but, unfortunately, not all our institutions). Regardless of individual objectives, they have shared meeting points.

That is not how it is elsewhere. If a question is asked to explain Ireland's economic success over the past 20 years, the response invariably begins with the tripartite accord forged decades ago to drive up living standards through a shared agenda.

Over-arching every business and the key categories that enable or hinder its performance - infrastructure, laws and regulations, skills, investment, marketing, trade - a business needs to take into account is a vision or business concept and the determination and process to implement it.

Our work and experience with CEOs has shown that businesses with strong, clear visions will use it to drive all aspects of the business, including and especially the seven pillars of growth identified by Summers. They won't be put off. Pity that successive governments cannot manage our country in similar fashion.

The challenge for business leaders is internal and external. They can run their business effectively but also must stay alert and open to the opportunities and chances that are constantly emerging. Part of the external challenge they face is to manage their operations without a strategic vision from government. It is legitimate to ask how many are up to this complex task. Do they have the skills and aptitude to stay focused on running a successful business and, at the same time, the flexibility to see a seemingly tough market as an opportunity for growth?

In other words, successful business is a state of mind: if the market you're in isn't growing, you'd better find a way to make it grow.

* Tony Garnier and Ray Porter are Auckland-based business adviser partners for VSG Consulting Group.