Newsroom

Covid could accelerate NZ’s shift from volume to value

New Zealand will benefit greatly from the way Covid-19 is accelerating global mega trends, the chief executive of NZ Trade & Enterprise tells Rod Oram

“We can come out of this with a much stronger halo effect around the country that allows us to capture premiums on our long-term evolution from volume to value," says Peter Chrisp, NZTE CEO. "Our sustainability credentials could be stronger but our reputation for having managed the pandemic well will have added to our global reputation.

“The food and beverage opportunity is at the sharp end of that. The world is hunting for health, hunting for countries that care for their people and care for the environment.”

Another big opportunity for New Zealand companies “is the massive acceleration of digital online selling. They’re saying, ‘well, I've done a bit of it before, but now I really need to pivot my whole business there’.”

Similarly, he says, the Covid crisis is causing a dramatic digitisation of companies themselves through the likes of remote working.

Above all, the speed and complexity of crisis issues has triggered big behaviour changes within many New Zealand companies. Decision-making is faster and shared more widely; morale is stronger; communications clearer; and leadership more dynamic, he says drawing on experiences from companies NZTE works with and from within the government agency itself.

There are, however, stark contrasts across the sectors NZTE focuses on. Food and beverage is performing strongest because it is an essential service here and abroad. Of its client companies in the sector some 80 percent of them have been running as normal. But some have had some freight and logistics challenges.

The export manufacturing sector is the hardest hit, with around 70 percent of companies having to halt production during the lockdown. Tech and service exporters have been predominantly working from home, but many of them are stressed because of their small size.

Early in the crisis NZTE was particularly worried about our export-reliant specialist manufacturers. The longer the ban on international travel lasted, the harder it would be for them to maintain the close relationships they had developed with customers abroad. Potentially, multinational competitors physically closer to those customers would have a chance to muscle back in. However, in recent weeks NZTE and its clients have become more confident those relationships will endure.

Working fast on these and other new initiatives through the lockdown “has generated an energy, a pulse, that’s quite contagious.”

NZTE got early insights into the Covid crisis because it has some 70 staff based in China. “That was our first window on how it was going to unfold in markets around the world and then here as well.” Half its staff work overseas in a total of 42 offices and they, like their Kiwi colleagues, shifted rapidly to working from home.

“The first lesson we learnt was that at a time of physical distancing, social connectivity jumped dramatically. We have never felt closer to our teams internationally. Today, for example, we've had three big conference calls, a couple of hundred people in each, in our three regions in the world,” he says.

“What we've shown is that in the middle of a crisis, you can keep your teams close, you can keep them active, you can keep them engaged, you can show a very high cadence of leadership, and they can also stay very close to your customers as well.”

Abroad and at home, the already strong staff morale, which the agency measures through surveys, has risen through the crisis. “People work for a cause, not an institution.”

This strong engagement has enabled NZTE to respond rapidly to new needs from its client companies. It developed, for example:

- a large new section of its website devoted to Covid-related market intelligence from around the world, government support at home, and relevant services from NZTE itself;

- an airfreight consolidation service working with Air New Zealand and the logistics sector to fill specially scheduled cargo-only flights to overcome the loss of cargo capacity on normal passenger flights (so far some 60 such flights have flown to destinations such as Hong Kong, Los Angeles, San Francisco, Shanghai and Sydney with another 40 or so planned);

- an Export Business Continuity Service which has funded more than 300 companies to get customised advice from PwC, KPMG and Deloitte;

- cashflow Clinics in which some 70 companies have one-on-one consultations via Zoom with members of NZTE’s investment team; and

- greater help for companies, backed by additional government funding, through the government’s Regional Business Partner Programme of 14 chambers of commerce, economic development advisors and council entities.

“We've had to stand up a whole new competence in digital commerce and in digital ways of finding your customers and getting your stuff to market,” says Chrisp.

Working fast on these and other new initiatives through the lockdown “has generated an energy, a pulse, that’s quite contagious.”

It’s also meant making decisions faster and in more iterative ways as situations develop. “You advocate as if you're right and you listen as if you're wrong. You also need time for reflection to keep the insights coming.”

“It’s a time where you have had to play your ‘A’ game as a leader because the environment is so ambiguous, chaotic and fast moving. If you're playing the best version of yourself, you can really, really make a difference to the people around you, to the organisation and to the work you are all doing.

“In the middle of a crisis like this you need to show energy, compassion, empathy, speed and agility. You need to show boldness and courage. You've got to ask yourself, ‘am I being all I really need to be at this moment in time?’”

Help us create a sustainable future for independent local journalism

As New Zealand moves from crisis to recovery mode the need to support local industry has been brought into sharp relief.

As our journalists work to ask the hard questions about our recovery, we also look to you, our readers for support. Reader donations are critical to what we do. If you can help us, please click the button to ensure we can continue to provide quality independent journalism you can trust.

Comments

Newsroom does not allow comments directly on this website. We invite all readers who wish to discuss a story or leave a comment to visit us on Twitter or Facebook. We also welcome your news tips and feedback via email: contact@newsroom.co.nz. Thank you.

With thanks to our partners