Trading Places
Small and medium enterprises make up 97 percent of our business landscape. These companies are packed to the brim with extraordinary people. Yet as a nation we are slipping further down the OECD productivity scale. Why? And more importantly how do we start climbing out of the doldrums?
Sandy Galland seeks the opinion of The Icehouse CEO Andy Hamilton on how to overcome our fear of success (or is that failure?), our place in the business world and what each and every SME can do to contribute positively to the economy.
“We have people in New Zealand who are world class, world competitive, and time and time again we have seen that in business, sports, politics and culture,” Hamilton says.
“But the issue for us is — are they producing in a manner which produces more economic return for the country?
“The biggest barrier is confidence to believe they can actually do it and they can be competitive globally. From what I have seen, once people become confident, then all of a sudden they realise they can grow a business into America, or into Asia or Europe or Australia.
“We are in the bottom quartile of the OECD and we are getting further behind. How do you move up the ladder? You make more money and you grow your wealth.”
For Hamilton this means earning more foreign dollars by winning business offshore as our home market is just too small. Therefore we need more Kiwi companies tackling the international markets and winning. “The ultimate is we need our existing companies who operate offshore to get bigger and we need more companies doing it offshore.”
On how we got so low on the OECD scale, he says it appears we have taken our eye off the ball and ultimately we have lost pace with many other countries around the world.
“It has just highlighted we are a really small economy which is highly dependent on us making more money outside of New Zealand. Only in the last 10 years have we started to recognise that.”
Icehouse is one of many organisations taking a hands-on approach in the battle to grow the economy — one company at a time.
In its eight-year lifespan, Icehouse has worked with more than 2000 owner/managers of successful businesses and 70 start-up businesses. These 70 start-ups have raised close to $45 million in venture capital and created more than 300 jobs in the economy.
Everyone has a role
Hamilton believes every business has a role to play. “Terms like productivity and innovation are terms people on the outside dream up when it relates to the needs of the economy. As a business owner you don’t think of it in terms of productivity or innovation, you just think about what resources are at your disposal and how do you go out and please your customer. How do you get more customers and make more money and contribute to society more?”
Face the brutal facts, he says. “Be very honest with yourself about your own strengths and weaknesses and how you can create the environment for your team to really grow themselves and their contribution.”
At times this means the owner needs to get out of the way, he adds. “But it’s hard when you are in a small business and you are doing everything.”
Ask yourself — what are the small things that I can do that give me more time in my day? Do I need to invest in my technology so that my phone is connected with my diary so I get emails on my phone and don’t have to always go back to the office?
“It’s all small steps — how can you improve productivity through technology, how can you grow your existing customers, opposed to necessarily getting new customers. These small things will help get you further ahead.”
Share with peers
Hamilton also believes it is vital to spend time with other similar business owners. “It has a huge impact. When you own a business you think a lot of your problems are unique and different and that no one else understands and all businesses are different from yours.
“The reality is all business owners are pretty similar, they have the same challenges, the same problems and same heartaches. We have found when you share that with other business owners it’s amazing the impact that can happen.”
With reflection and by comparing your business with others Hamilton is adamant you can make huge progress. “See what they’re doing and apply it to your business.” After all — why reinvent the wheel?
Every win counts and Hamilton says every success contributes to building an innovative and thriving New Zealand economy.
Success has been a constant companion to Hamilton lately. In this year’s Vero Excellence in Business Support Awards, Icehouse picked up the best education provider while Hamilton picked up the Individual Award category. He was also the recipient of the 2009 Sir Peter Blake Trust Emerging Leadership Award.
Success for Hamilton is a series of “moments”. These moments include working alongside some of New Zealand’s most brilliant business brains, and being part of the drive and taking a risk to get New Zealand back in the top half of the OECD. “Nobody else is going to get us there except our businesses and our people, so providing the environment to support them to be successful is fundamental.”
Government plays a significant role and Hamilton believes no matter how much we simplify regulation, or how much we simplify the sector, that on its own will not be enough to really get us to the top of the OECD. “We need to help our Government to be very brave in the decisions it makes and the utilisation of the resources they have.
“If our companies lack scale, we need government interventions or activity to enhance the fact we lack scale — not worsen it and I suspect if anything over the last few years its worsened it.”
He also believes it is a government responsibility to assist with creating aspiration for Kiwis to make a difference.
As a country he says this should be our aspiration: “We are known as a nation of the world’s greatest travellers — why aren’t we known as the nation of the world great travellers and traders.
“Our history has essentially been that we are pioneers; we make stuff from the land, and traditionally we took it to the gate and someone else took it to the world for us.”
It’s time to stop letting everyone else take our products and services to the world. A collective individual effort will produce positive outcomes and Hamilton believes we are headed in the right direction.
“I’m pretty confident things are changing and there are opportunities for New Zealanders to build their businesses and take them global.
“It would be great to be around in 100 years and see the impact of that.”
