Archive October 2011

Making New Zealand Too Small To Fail Robert Hickson Oct 25


Rather than thinking that we can’t be prosperous (economically and otherwise) because we are small and isolated, we should consider how we can make New Zealand ‘Too Small To Fail’ during turbulent times.

Fail (with a capital F) is when our economic, social and environmental performance not only decline but remain where they are now. Because, as Sir Paul Callaghan has pointed out, we need to be a country where talented people want to live.

Too small to fail isn’t about being risk averse and irrelevant. It is about capitalising on the advantages of our smallness to not only get us through turbulent times but to prosper. What are advantages in being small? Agility, cooperation, openness, and ingenuity are common attributes.

During times of uncertainty and change experimentation, rather than conservatism, is often a better strategy. Old solutions are unlikely to work for the new environment. So as a country we have to be willing to experiment and take calculated risks. This involves being prepared to fail (with a small ‘f’). Being small lends itself to a greater capacity (and necessity) to learn from both successes and failures and to adapt quickly to those.

You may grumble that we have experimented before with tragic results -  Think Big, Rogernomics, and the 2007 Rugby World Cup All Blacks reconditiong programme. But you can also experiment by making small bets that don’t risk as much.

New Zealand’s approach in recent times to finding solutions has been to go for high profile events such as the Knowledge Wave and the Jobs Summit. These haven’t resulted in much, perhaps because they focused on quick politically palatable actions rather than long term strategy.

The Knowledge Wave and Jobs Summit do, however, demonstrate that we can get most of the countries movers, shakers and leading thinkers in the same place at the same time. Being small we can do this well.

Despite being small we still like to create silos, both inside government and across the private sector. In a changing world problems and opportunities aren’t neatly packaged. Business models are changing. In the pharmaceutical sector there is a realisation that companies have to move from a ‘profit alone’ mentality to a collaborative ‘profit together’ approach. The same will hold for the energy and other sectors as new technologies, processes, fiscal and social requirements emerge.

Our science system has recently been encouraged to become more collaborative. New Zealand firms also need to consider where collaborations can improve their business.

Being small also tends toward having fairly flat managerial and political structures — both in government and firms. So information, ideas and changes can theoretically move quite quickly; if the right incentives and processes are in place. Adaptability is likely to be a critical success factor in the future, and this is where small can be advantageous.

For most people it is often the small or local things that are of most importance — the things our local council and school boards do. So part of becoming ‘Too small to fail’ is paying greater attention to the little things and local issues, voting and demanding better performance and accountability from those elected.

Rory Sutherland is better at illustrating this than I am.

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Small is also about stopping problems becoming too big to handle. This requires being well informed of challenges and opportunities, as well as knowing the underlying issues and being prepared to act. Sweating the “small” stuff can be important.

As the leadership expert John Kotter has described, good administration and management is fine for an army in peacetime, but during a battle leadership not management is what matters. The same principle applies to getting New Zealand through turbulent times. And it is not just leadership from the top. We are small so everyone has to act.

If most of the country can get behind making an international sporting event a success, what is required  to get them involved in something that’s really important?

What other attributes of smallness do you think New Zealand can prosper from?

Transforming Not Recovering Robert Hickson Oct 24


In my previous post  I noted some of the major global changes underway. No one has the solution to how best navigate the energy, economic, educational, and geopolitical transitions underway. So what could New Zealand do?

Futures practitioners often write about ‘possible futures’, ‘probable futures’ and ‘preferred futures’. The object of the last is to identify where you’d like to be and the actions that will help you get there.

What are preferred futures for New Zealand in such an environment? A range of recent discussions have looked at where New Zealand needs to be in the future. These tend to focus on a particular issue — such as the need to be more sustainable, or to have a more diversified  and productive economy

These are good and necessary aspirations. But will they be enough given the other changes going on in the world? I don’t think so because we also need to create a society (not just an economy) able to not only weather but prosper through the turbulence. Dame Anne Salmond  also recently passionately urged the need to think beyond technical innovation to improve New Zealand’s well being.

One thing is certain, we need a plan. Muddling through won’t do. Ernest Rutherford’s bon mot ‘we’ve got no money, so we’ve got to think’ applies to more than science. Other countries are strategically stronger and committed to long term planning.


Strategic Planning

China is onto its 12th five year plan  (see also The Economist). Whether you agree with their approach or not, they have certainly made things happen. We aren’t, and don’t expect to have, a centrally planned and controlled economy like China. But countries such as Denmark also plan well. In 2006 they created a strategy to prepare the country for the future, with a particular focus on improving innovation. 

We can do that too. Again. We have looked to the future many times [PDF, 1.9 MB], but what we haven’t done well is to link such activities strongly to national policy and strategy, and to follow through. The Sustainable Future Institute has recently attempted to stimulate development of a strategic plan for New Zealand.

Management gurus have noted three strategic approaches to uncertainty (it mostly seems to be three of anything with management gurus) . Shape, adapt and ‘no regrets’ moves (where what you do is good no matter what happens).


Improving Education

An obvious ‘no regrets’ move is to improve the education system — making it relevant to the changing nature of work, as well as engaging a greater proportion of students. Kiwi kids can do very well in school in certain measures of educational achievement. But there is a long tail of educational underachievement. Our universities, while having some great researchers and research teams, are also slipping in international rankings.

Improving achievement in the basic skills is important but it is not the end point, and there is the risk of stalling education on measuring national standards.  Secondary Futures explored ideas for the future education environment in New Zealand a few years ago, but this has been discontinued and it doesn’t seem like any of their findings are informing educational policy. Alternatives forms of teaching at university — concentrating on teaching how to learn are being explored overseas.

New Zealand has produced some remarkable and influential educationalists in the past — such as Clarence Beeby & Sylvia Ashton-Warner — while current educational entrepreneurs such as Wendy Pye are having a significant international effect on curriculum development for literacy.

Many factors go into having a great education system. Copying these in another country doesn’t necessarily lead to the same outcomes. So focusing on building an educational system that meets the requirements for the future will be a considerable competitive advantage.

Another ‘no regrets’ move is to reduce social inequality. As Anne Salmond and others have noted, creating a fair and just society will be critical for both economic and social well-being. New Zealand has led before in introducing far sighted social policies. It is time we do again.


Energy Change

In the energy sphere we are certainly in a position to both shape and adapt to low carbon economies. In terms of natural resources for energy and food production, we have an enviable set of cards. The challenge is to play them well. Others already consider that we have the potential to be a leader in being able to do more with less.


Geopolitical Shifts

We will need to adapt to the changing geopolitical environment. Remaining neutral as the US and China consider each other’s geopolitical capabilities and ambitions is likely to be a good strategy. What would it take for New Zealand to become a Switzerland of the South Pacific — a country that prospers in part from geopolitical neutrality? What does New Zealand need to prepare for to manage challenges (and opportunities) likely to arise from environmental migration?


Economic Transformation

Economically New Zealand is weakening in terms of global competitiveness. Philip McCann has pointed out how our geographic location can influence productivity. In addition to geography, under achievement may be attributable to the modest ambitions of many businesses, lack of capital, under investment in infrastructure and R&D, and unsophisticated management. So, business as usual won’t be a great help. Shaping, adapting, and no regreting will all be required.

To borrow from Umair Haque, we should be thinking beyond recovery (such as catching up with Australia) and be focussed on transformation.

In the next post I’ll look at why being small can be beneficial for transformation.


Update 26 October - the NZ Institute has updated their “Report Card” – Ïmprovement in some measures, but on the whole they give NZ a “C”

Turbulent Transitions Robert Hickson Oct 17


If you are keeping up with your futures’ reading then you’ll know about the plethora of trends and drivers that are shaping, or could shape, our future — continuing globalization, population growth or stagnation (depending where you live), multilateralism, paying down debt, urbanisation, aging western populations, obesity, rising economic inequalities, energy crises, climate change, technological convergences, economic growth across Asia, open innovation, and the rising costs of health care, to name a few.

Thomas Friedman provides a précis of two books that highlight potential threats and opportunities from the combination of some of these trends. To hear more about one of these books, listen to Paul Gilding talk about the ‘Great disruption’ on Radio New Zealand National.

Four particularly significant transitions occurring at the moment revolve broadly around energy, economics, employment, and geopolitics (they are inter-related to varying degrees).


 Energy Transition

In a previous post I touched on the transition from fossil fuels to a lower carbon economy.  See also this critique of the techno-optimism of some in the oil industry. Some countries and large corporations are already planning how to reduce their reliance on fossil fuels for economic rather than environmental reasons.  


Economic Transition

Following the global financial crisis (the 2008 one) there was much speculation about whether that model of capitalism was at an end. Despite on-going protests it hasn’t expired yet.  But significant economic upheaval is looking more likely and may lead to a new economic paradigm. Various prescriptions of what a new capitalist system could or should look like have been prepared by Leadbeater, Haque,  and others.


Employment & Education Transition

As the Economist noted recently in a special report on the Future of jobs, globalisation and technology are changing the shape of the labour market and the types of work. There is an emerging divide between well paid interesting jobs and commoditised low skilled jobs. Lynda Gratton has written about the need for serial mastery — where most workers having to acquire new skills every few years.

This will require a new approach to education and training. Ken Robinson and Charles Leadbeater  have pointed out that the current educational system in the west was designed in the industrial era to largely create workers for factories.

 ”The tragedy is that meeting the many social, economic, spiritual and environmental challenges we now face depends absolutely on the very capacities of insight, creativity and innovation that these systems are systematically suppressing in yet another generation of young people.”  Ken Robinson

India is experimenting with industries having a more active and driving role in educating its future work force. This may be picked up elsewhere, but are firms currently any better at identifying what skills and knowledge they will need in the future than traditional education and training organizations?


Geopolitical Transition

If China, India and other Asian nations continue to develop (not necessarily smoothly) then greater geopolitical tensions seem likely, particularly in the South China Sea and more widely in the Pacific.  These changes will have trade and security consequences. The implications of the rise of the emerging economies doesn’t just rest with what they do. How existing economic powers respond will also be crucial . Colin James has also pointed out that for New Zealand we need to think carefully how we manage the management of us by China.  

The main message from these transitions is that there are high levels of uncertainties within and between them and it isn’t possible to predict what will happen. There aren’t clear scenarios around which to plan. So what choices does New Zealand have? Are we able to identify where we are able to shape strategic responses, what we need to do to adapt to the chances, and what we can do that will be important for our prosperity and well being regardless of what happens?

I’ll look at these questions in the next post.

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