27 May 2015
In this year’s PwC annual global CEO survey, 84 per cent of New Zealand CEOs were concerned at the shortage of key skills. What are those skills?
There’s a skill shortage at two levels. First there’s a shortage linked to the whole building industry, the Christchurch reconstruction and the Auckland housing challenge.
The other is around the technology and digital area. As an example, three of the fastest growing areas in our firm are cybersecurity, digital consultancy and data analytics - cybersecurity wasn’t a word many people used years ago. Four or five years ago we didn’t have dedicated teams; there were only one or two people. Now some of these teams have more than 25 people in them.
The speed of the technology age and changing business models mean there are a whole new range of skills that are needed today and in the future.
How can that shortage be addressed?
We have to get this right at secondary schools. We have a mindset that everybody has to go to university. I think that’s just wrong. We need to encourage more of a renaissance in the trade sectors, apprenticeships and technical skills.
At the other end, for the technology skills, we’ve got to do a better job of encouraging students to focus on the sciences and maths rather than choosing easier subjects. All of the jobs in the future (in this area) are going to have a heavy science/maths overlay.
Digital disruption is going to eliminate many jobs that exist today.
We need to make sure students understand the connection between the subjects you choose and what it could mean for future career options.
Every day New Zealand companies go into liquidation or are put into receivership. What, in your opinion, are the biggest mistakes made in business that lead to failure?
The vast majority of businesses in New Zealand are well run and people work really hard.
But the common thread we see in businesses that fail is they haven’t focussed on cash flow.
And because of the speed of change and the disruption it causes, we are also seeing many traditional business models, such as the retail sector, getting into trouble much faster than 10 years ago. If your industry is not yet experiencing digital disruption, you’re probably just a timing difference waiting to happen.
Do small-to-medium privately-owned businesses call for help early enough?
I think that’s a real issue in New Zealand. It’s a Kiwi culture thing, “it’ll come right”, “we’ll sort our way through”. The speed of change around business models is exposing this even more. I think in the next five years we’re going to see a whole array of what have been, in the past, well-managed traditional businesses that are going to come under real pressure.
In terms of strategic planning, how far ahead should companies be planning?
The CEO survey showed that the strategic planning cycles are getting shorter. They used to have a five-year window, now they are increasingly heading to a three-year window.
Strategic plans need to be much more dynamic; they need to evolve and change as the world around us changes.
How will CEOs need to adapt to this rapid change?
CEOs are going to have to be much more flexible, much more adaptable, understand what technology and the digital world can mean for their business and how they can embrace it. The speed of technological change was the number one concern of all the global CEOs and the New Zealand CEOs in our survey. If you can’t understand technology and what it could mean for your business, then your business is going to be under severe pressure.
What are the two main things you have learned from years of business experience?
Embrace change and turn it into your competitive advantage. And critical to any business success is having great people. If you don’t have great people you won’t be able to build a great business.
You studied commerce at the University of Auckland: what were the key lessons you’ve taken into your business career?
There is no substitute for hard work. And university taught me to focus on what is the real problem, the real issue. Keep the solutions simple. The temptation is that you get distracted by stuff that is not that important or you over-complicate the problem. The number one skill I learned at university was how to think in a structured way. What is the problem, what are the issues, find what the options are to solve it or recommend a way forward.
What advice would you give someone considering studying business, or increasing their qualifications and skills, but who is unsure of what direction to take?
Think through: how does the decision you’re going to take flow into a career opportunity? How will it help you have a successful career? I don’t think enough students do that.
What do you do to unwind?
I’ve got a boat so I like water skiing, fishing, water-based sports. But I need to spend more time unwinding.