The NZ Productivity Paradox is one of the issues of our time. Our nation is poorer than it should be despite growth-friendly structural policy settings. We should generate GDP per capita 20% above the OECD average, but we actually generate more than 20% below average. Closing this gap would dramatically lift incomes and wellbeing for all New Zealanders. It would also mean we don’t have to trash our environment by trying to extract one-off value from the environment and could create a fairer society, based on social justice, liveable communities and high levels of education.

All very inspiring, lofty stuff, right? Yes – but it is also important stuff. In this post I aim to outline why Radically has chosen this problem as the thing to set our sights on.

Sir Paul Callaghan’s watershed presentation Sustainable economic growth for New Zealand brought an incredible amount of truth to table for many New Zealanders. “We are poor because we choose to be poor” remains etched in my mind for eternity.

Sir Paul brought up some painful myths we tout in NZ – “great place to live”, “relaxed lifestyle”, “clean and green”. The truth is actually quite the opposite.

NZ has some of the worst statistics in world relating to families. We are the bottom of the heap (or close to it) in child poverty, teen suicide, jobless households, environmental awareness, teenage birth rate, inequity in education, inclusive economy, and child murder. But does the lifestyle in New Zealand makes up for that? No, unfortunately it doesn’t. We are the second hardest working country in the OECD, yet the lowest in terms of productivity. The lifestyle isn’t so relaxed after all.

But we are so clean, green and 100% pure! We know this is not true to the point where it has become a bit of an embarrassment. With the 2017 OECD report finding NZ is reaching its ecological limits, we can no longer stake this claim. We simply can’t continue to haul money out of the ground (milk, meat and forestry). It is what Sir Paul labelled egregious hypocrisy.

But this data is from 2011. Things have gotten a lot better since. Sadly, no. Most of our economic growth has simply come from adding more people.

So what’s going on? Our education system is as good as anyone’s in the world. We are a stable economy with all the right basics. Why have we continued to slide?

The answer is relatively simple: we choose to engage is low wage activities.

In 2011 our per capita GDP was $40k/year. To maintain that, we need about $120,000 per job. On average, tourism earns us $80,000 a job. That drags the average down. The wine industry drags it down too – $90,000 a job. If it is wasn’t for dairy farming, NZ would be extremely poor.

And therein lies our paradox: how do we increase our GDP AND be more sustainable when so much of our success is based on an industry that is pushing the limits of our environment?

The NZ Productivity Commission did some great work to try an answer this question. Their key findings are available to all in glorious detail, but the key aspects are:

  1. Our physical distance from key markets
  2. New Zealand’s low R&D investment
  3. How we use information and communication technology
  4. Our managerial practices – i.e. how our companies are run.

It is a significant issue. The empirical studies show that these factors combined account for 17 – 22 percentage points of the 27 % productivity gap.

But there are two key points that stand out for us.

Firstly, there are significant gains available to us by lifting our investment in ICT (as a key driver of innovation). However, “in order to maximise the return on this, our firms must adopt business practices that better exploit the new technology”.

In other words, there is no point in blindly investing in technology without understanding how to exploit it. Practices such as Agile, Lean and Design Thinking help test and validate assumptions and risks early, leading to higher tangle ROI.

But practices alone are not enough. Agility and customer-centricity are more a mindset than a set of processes and methods. As the 11th VersionOne Annual State of Agile Report shows, the top 7 challenges in adopting these practices are all about the organisation and its leadership.

This aligns with our experience. Unless transformation is aligned to organisational strategy, and is led and modelled from the top, its chances of success are low. In order to thrive, organisations need to find better ways to lift their game to increase productivity to more competitive with what they currently have.

The second finding is curious: poorly managed firms survive better in NZ than in high-productivity countries (such as the US). While this isn’t a surprise, it is alarming. In a globalised marketplace, NZ firms have gotten away with complacency only because of low levels of competition. In other words, sleepy old NZ is wide-open for disruption. We need to lift the capability within organisations, as well as those of our leaders and our managers. Leadership and management is drastically different in this day and age, and most organisations have under-invested in the right kind of capability uplift.

You can see this happening now. Companies from highly competitive marketplaces (such as the US or China) decide to expand into NZ sending shockwaves throughout our local companies. Just look the pressure in the retail sector right now with the arrival of Amazon. Media has been experiencing it too – just look at Sky TV’s recent challenges after it’s bid to join forces with Vodafone was rejected.

Yet all of this was predictable and predicted. In 2015 I presented Deloitte’s Digital Disruption Map to a range of clients across NZ in exactly these industries, as well as at various conferences, suggesting this was coming and that organisations needed to become more adaptable in order to respond. I suggested developing a capability in organisational agility – what I refer to as “the ability to change course without penalty”. Yet here we are…

And Accenture recently released a major study showing nearly two-thirds of large companies face high levels of industry disruption, and 44% are highly susceptible to disruption.  And Accenture’s report mirrored findings of the Deloitte report – “disruption is continual and inevitable – but it’s also predictable”.

From the report – “incumbents need to radically transform the core business while scaling new businesses. But pivot too quickly, and they will likely stretch themselves too thin financially; pivot too slowly, and they risk becoming obsolete.”

This is why we started Radically. To help organisations leaders transform their organisations to achieve radically better outcomes. Not small, cosmetic changes. The time for that is over. It is time for Radically better outcomes.

Our mission is to help New Zealand organisations thrive and succeed on a global stage. This is what we strive to achieve.

This is our mission.

“Leading is not the same as being the leader. Being the leader means you hold the highest rank, either by earning it, good fortune or navigating internal politics. Leading, however, means that others willingly follow you—not because they have to, not because they are paid to, but because they want to.” – Simon Sinek

If your employees were all volunteers, would they still follow you, or would they up and leave? The days of leading from position are long-gone – it’s not enough to have title, rank or authority as a platform to lead. As the battle for talent takes center stage in this digital age, leaders have to actively grow and intentionally practice their leadership skills if they are to thrive and succeed. A good test for this is to ask yourself, would your team follow you if they didn’t have to?

It goes without saying, that in order to be a leader, you have to have followers – A leader has followers if they truly believe that their leader has their best interests at heart. For this to happen, employees have to feel safe to be who they truly are. Then, and only then, will they trust, follow and fully throw themselves into their leader’s cause. This is true follower-ship.

With disruption in technology today, there is also an exponential rise of confusion within leaders, many of whom find it difficult to connect with a changing digital workforce. This culture can be impatient, fast paced, ever-changing, experimentation driven and information rich. While this could be mistaken as the millennial effect, a recent Forbes article which surveyed leading millennials, gives us an insight that regardless of generation and environment, common sense leadership principles prevailed.

The article captures four key principles to leading millennials:

  1. Empower your team
  2. Think long term
  3. Acknowledge what they do
  4. Treat them as individuals

What is interesting is that the principles above aren’t at all unique to the environment or types of employees being led. Distilled to its core, the type of leadership required in a digital organization is simply genuine leadership. Despite the changing times, the core skills of leadership have not changed. Employees will follow leaders who have their interests at heart, understand them as individuals and sometimes even make decisions at their cost.

What we see is a rise in employees who are hyper-sensitive to genuine leadership. We often hear employees don’t leave organizations, they leave managers. This couldn’t be more true. It is this that showcases the vital role genuine leadership plays when finding and retaining great talent, which can make or break your organization.

So what makes a Genuine Leader? Here are four characteristics to reflect on,

Genuine Leaders take time to understand the individual as a whole

So much of who we are, how we think and behave is shaped by our past experience and how we have grown up. A conversation I had with my CEO recently went like this:

“Hearing how you grew up in Singapore and the environment there, helped me understand how you make decisions and what you are influenced and shaped by”

It’s easy to fall into the trap of focusing on the tasks at hand, simply working through what needs to be done with employees. The problem with this is that when conflict arises, most of the time it’s due to individuals looking at a situation through different perspectives. Their perspectives are shaped by who they are, and we often don’t take time to understand those who we lead fully, in order to stand in their shoes and see their perspective.

How often have you been in the situation where you can’t seem to get through to someone and no matter how many times you try, they just don’t seem to be on the same page? In these situations, we can be tempted to resort to leading with authority out of frustration.

Take time to understand individuals as a whole – we expect them to bring their whole selves to work, so why not take the time to know them as a whole?

Genuine Leaders are front-stage and back-stage leaders

It’s easy to spot leaders who aren’t genuinely for the individuals in their team. In front of an audience, they say and do the right things, but behind the scenes when the individual isn’t there, their actions reflect different intentions.

Being a leader is not about prestige, nor should it be a status symbol – simply put, leadership is a choice, and that choice comes with a weight of responsibility. Individuals that follow you believe you will create a safe environment for them, and have a desire to add value to add to them. When leaders see their job at hand as a weighted burden, their perspective changes from “How can I get Bob to do what I want him to do”, to “How do I help Mary be the best she can be”.

When leaders adopt that kind of mindset, their actions naturally reflect that positive intent regardless whether they are in front of a stage, or whether they are working behind the scenes.

Genuine Leaders understand that people learn at their individual pace

Giving feedback is an important part of leadership. People should never be uncertain of how they are performing, good or bad. At General Electric a culture of candor was an important part of who they were, so much so that if you saw your manager in the bathroom, it would be normal to have a quick chat around performance and progress. It was not seen as a formal thing that happened once a year, rather something natural that represented who they are.

That said – giving effective feedback is a skill, and sometimes giving direct feedback too early can rob individuals from getting true value out it. In my time leading, I’ve found that the timing of giving feedback is just as important as giving the feedback itself. Sometimes the time-pressures of a day leads leaders into feeling that giving feedback is a task to tick off. Genuine leaders take time to understand the growth journey of an individual, and understand that individuals might not change immediately not because they don’t respect or want to listen to your feedback, but simply because change is hard!

This is where understanding the individual as a whole is so important – sometimes coaching over a longer period of time is much more effective, and you’ll find that when the individual realizes their blind spot, they end up “getting it”, being a bit embarrassed, and become exponentially more committed to real change.

Genuine Leaders give context, understanding that why is more important than what

I’ve seen leaders fixated on the “what” – a decision or outcome that they want their teams to buy into, and forgetting to communicate the “why”. When we are focused on the outcome, we tend to focus on the “what”, but when we focus on leading the individual, we take a more holistic view and focus on “why”.

This is why conversations are often more important than the actual outcome. Two leaders deliver the same message, with totally different responses – one with high-performers in their team feeling demotivated, and the other who created buy-in and support from employees. Whether it be policies, constraints to work within, or simply a difficult task at hand, genuine leaders who focus on leading the individual naturally focus on the “why” and not the “what”.

If you are leading from a place of authority of position, it’s likely you’re communicating “what” you want employees to do. The next time you are struggling to get buy-in, take a step back and reflect on the conversation. Try leading with “why” before giving direction and keep your focus on genuinely leading the individual.

In a time where more and more buzz words are being created to tackle the fast changing nature of adapting to a rise in being digital, it’s important for us to understand that leading in a digital culture isn’t all that digital.

Whilst new digital tools may aid us, nothing beats genuine, authentic and real leadership.