Senior Cabinet ministers are standing by like a bunch of anxious midwives in case the impending birth of Steven Joyce's grand business super-ministry turns into another restructuring debacle.

Joyce has left nothing to chance.

Appointing David Smol to shepherd the merger of four Government entities into the Ministry of Business, Innovation and Employment was an adroit move.

Smol underlined the challenge in a speech to the Trans-Tasman Business Circle (distributed by the MBIE project team) which staked out the strategic thrust for bringing together the Ministry of Economic Development, Ministry of Science and Innovation, Department of Labour and Department of Building and Housing.


He also talked through the merger process basically setting out a text-book approach to managing change.

It is entirely possible that if all goes to plan, Smol may be appointed on a permanent basis as the new ministry's inaugural chief executive.

His address focused on how the ministry can help the Government deliver on the Business Growth Agenda which focuses on ensuring businesses have access to six critical inputs: skills, innovation, capital, resources, infrastructure and export markets.

It was a broadbrush address.

But the critical aspect is Smol's confidence that the merger would succeed because the potential benefits were clear; the leadership of the four organisations wanted to make the merger work and people within the four organisations "are committed to delivering better outcomes for New Zealanders" and understand that the new ministry will enable them to be more effective.

Irrespective, every step of the merger process will be discussed and signed off at Cabinet committee level before the new ministry kicks off on July 1.

Business will want the new ministry to be results-oriented and focused on "outcomes" rather than "outputs".

There is a tremendous opportunity to create substantial outcomes in thorny areas such as ensuring New Zealand leverages its natural resource advantages.


Oil and gas exploration remains a significant opportunity and one that the Government could leverage to taxpayers' advantage with a more skilful and aggressive approach to ensuring New Zealand gets greater upside from foreign investment.

Michael Enright's upcoming revision of the 1991 Porter Project on New Zealand's competitiveness will provide plenty of food for thought on why many New Zealand firms do not succeed to their potential.

A ministry peopled with top players with orchestrational ability could spur new energy.

Contrast this with the weeping sore that is the Ministry of Foreign Affairs and Trade (MFat).

At a time when MFat should be rolling out the Government's "NZ Inc" strategies to develop key markets the ministry is still in turmoil.

Negotiations on key trade agreements with South Korea and India are stalled. Some key MFat negotiating officials have yet to be replaced. There is little public engagement on the trade-offs implied by the Trans Pacific Partnership negotiations.

It is fair to say that MFat boss John Allen must by now be feeling he is effectively chief executive by name after the very public drubbing he has been administered by Foreign Affairs Minister Murray McCully.

Allen - who was handpicked for the role (the job spec was basically designed to attract him) - will be feeling betrayed by his political sponsors. But his big mistake was in not reaching broad agreement within MFat first on the strategy before turning to staffing issues.

Contrast this with Fonterra chief executive Theo Spierings, whose "strategy refresh" was pulled together by a process involving a "team of 50" top managers, no outside consultants (he trusted his lieutenants) and a small co-ordinating group.

In Allen's case, the ambassadors were not called back to Wellington for strategy discussions until the wheels had fallen off.

The word is that in McCully's absence overseas, Trade Minister Tim Groser finalised a paper for the Cabinet which insiders describe as "thoughtful and incisive".

Nothing has emerged formally.

But already there is speculation that if Allen decides not to see out his contract as MFat chief executive, the State Services Commission might prevail upon Maarten Wevers (head of the Prime Minister's and Cabinet department) to take control of the ministry in an acting chief executive capacity. Wevers is a former MFat senior official.

The argument goes he has the right temperament to settle the troops down and get the organisation refocused on delivering on agreed strategy.

Wevers is due to retire soon from his present role. Among those being talked about as a possible replacement is NZ Post's Brian Roche, who is highly experienced in senior circles.

With the international environment still volatile - and likely to be so for some years yet - it is important that the new ministry is a success and MFat gets its act together fast.