Why the past provides confidence in our futureIn many respects, it's the ability to face and address failure that builds the resilience and adaptive capability required for long-term success. Tenacity matters.
The way the All Blacks play rugby today (accepting it may be an emotive topic at the moment…) is very different to how they played it over 100 years ago. The game is still rugby, but the tactics, tempo, rules and even scoring have all changed. So too has the competitive landscape — over 100 years ago, no one would have guessed that Japan would be playing rugby let alone at a Rugby World Cup in Japan.
Relevant also given this analogy is that overall success is often achieved by navigating through defeats and adversity. In many respects, it's the ability to face and address failure that builds the resilience and adaptive capability required for long-term success. Tenacity matters.
The same can be said of the first Deloitte Top 200 index. Many of the businesses operating under current brands, including Fletcher, Meridian, Fisher & Paykel, Fonterra and many others, have their genesis in businesses that operated at the inception of the awards. While they existed in some form or another in 1989, they were not the businesses they are today. Just like in rugby, the business environment has changed.
Reflecting back on the Deloitte Top 200 index, over the last 30 years, the markets have materially evolved, which has also shaped the index. Asia in particular has become a key market for the world, including New Zealand. Regulations, customer expectations, business structures and of course access to markets are also very different now to how they were 30 years ago.
And, in general, these changes have been for the better. Globalisation, regionalisation and digitisation have widened the playing field for New Zealand businesses, helping to improve access to markets and technology, while some other barriers to entry have also lowered. Related, there is better access to capital and to intellectual property in New Zealand now than there historically was, in addition to a greater acceptance of New Zealand businesses with global relevance.
New Zealand, as a country, has matured since 1989 — we are taken seriously on the world stage, and we have strong geopolitical conditions. Overall, we exhibit less populism than in many of our major western trading partners, have a better stance on climate change than many other places and on balance have a stronger economy — you only have to look at the Deloitte Fast 50 results each year to see the excellent pipeline of new businesses we have in this country and the incredible growth that Kiwi businesses are capable of. Xero is a great example of a company first recognised in those awards.
In addition, wealth that's held now has greater substance and rigour than that created and lost during the share market boom and bust of the late 1980s.
And New Zealand businesses have contributed to and benefited from these improving conditions. Take two organisations that have consistently been recognised at the Deloitte Top 200 Awards. First, Mainfreight. The company was started by Bruce Plested in 1978 with a single truck and has gone from strength to strength. It is now generating revenue of $2.953 billion in 2019 and is ranked #16 on the Deloitte Top 200 Index. And more recently A2, where new Asian markets and differences in milk consumption have taken the business from a start-up to ranking at #30 on the Deloitte Top 200 Index in 2019 (let alone the largest company by market capitalisation on the NZX).
The last 30 years, then, has seen New Zealand businesses change significantly — they have responded to market conditions and variations in customer expectations, and they have grown. The calibre of business and their ability to deliver to their societies and their stakeholders is also now much greater. They are capable today of delivering on societal and environmental promises, and they make a huge contribution to the sustainability of our business community and the regional communities in which they operate.
Of course we still face challenges in New Zealand, many of which we were also facing in 1989 (but were not necessarily as top of mind). Climate change, addressing challenges with diversity and inclusion, inequality and populism were all present in some form or another 30 years ago, and they are still present in 2019. Yet today we are making meaningful progress in addressing these challenges. Our businesses are making significant investments in halting climate change, in furthering gender and ethnic diversity, and in reducing inequality. Even at a human level, quality and longevity of life is also generally considerably better now than it was back then; accepting that this is describing a journey rather than a destination.
Similarly, the Deloitte Top 200 continues to go from strength to strength, and although businesses in it may change (particularly with regards to ownership), many of them will still be here in some form or another in 30 years' time. In fact, our new Sustainable Business Leadership Award reflects this. It celebrates the forward-facing, long-term approaches that Kiwi organisations are taking — they are increasingly using innovation and finding new ways to overcome these difficult issues.
For Kiwi organisations, it is the perfect time to capitalise on growth, to take advantage of the conditions in New Zealand today, to deliver positive outcomes for society and for stakeholders, and to take the country forward into the next 30 years of change. The Deloitte Top 200 index always reflected opportunity in the face of challenge and will continue to do so 30 years into the future.
• Thomas Pippos is chief executive of Deloitte NZ.