How intertwined are good management and marketing?
Totally, completely and utterly. The sole purpose of a business ultimately is to make money for its owners. There is only one place money comes from and it is markets: customers, the people who comprise these markets. So if your ultimate objective is to maximise profit then surely your primary objective is to orientate everything you do towards the source of that and then try to create a distance as short as possible between those two points. It’s common sense — no MBA needed.

It sounds like you don’t rate MBAs?
MBAs are probably one of the biggest barriers to corporate success I’ve ever encountered. Don’t ever put an MBA graduate in charge of anything because they get locked into “ready, aim, aim, aim...!”
They will be able to model things, process things and analyse things, but typically — and this is a huge generalisation — when they finally have to do something they get stuck. I often encounter organisations which are stuck and the bigger they are the more stuck they are, because a huge chunk of their existence is inwardly focused; simply managing stuff they happen to be doing that has little or nothing to do with their market.

So how do you fix that?
It’s very difficult if the organisation doesn’t have strong, properly motivated leadership — and I don’t mean management. The terms are often used interchangeably, but they are not interchangeable. If an organisation doesn’t have a leader who truly understands the business, who truly appreciates the vital role its people play, it’s never going to happen.

What’s one of the worst leadership examples you’ve ever seen?
A New Zealand subsidiary of a North American conglomerate had a visit scheduled from their president in Chicago. Several hundred New Zealand staff were invited to get together so he could talk to them.
The New Zealand chief executive introduced him, he walked on to the platform — looking every inch a North American corporate president — walked straight to the whiteboard, without saying good morning or anything, and wrote 0.035% on it. Then he turned to his audience and said, “that’s New Zealand’s contribution to our EBIT — we have some talking to do today.”

Did the organisation go bust?
I wish I could say it did. But often large organisations which significantly sub-optimise their potential don’t fail because of sheer momentum. But they will eventually fail on some dimension — there could be a change in management or they will be acquired by someone else.

How important a part of strong leadership is vision?
It’s vital. I’ve seen and read an awful lot of clap trap that masquerades as a company vision. To me, it’s the dream. You follow vision with mission. The mission, at a top line level, is how do you propose to realise and live the dream. But most mission statements are written by some smart consultant who’s convinced a CEO and his management team they need to go off to a luxury lodge for two days, have a visioning session and play a lot of golf.

So what should a company do?
A good leader has to have the dream themselves. They have to be able to articulate that dream in a way that is meaningful to all their stakeholders groups and — I hate this phrase — they have to achieve buy in from those groups. Then they have to get individual managers to develop plans on how they are going to deliver their contribution to that dream.

How many companies do you think get this right in New Zealand?
About 5%. It’s about not understanding the core concept of what a business is and therefore what can make it successful. And while I don’t think that’s that intellectually challenging, actually doing it is extremely hard work. So even if there is an understanding people back away from it because it’s too hard.

What’s the one thing New Zealand needs to do?
To create leaders in our businesses who understand the very simple concept of what a business is. That an organisation will only achieve its goals by identifying and/or creating needs and wants amongst a chosen market and fulfilling them at a profit, time after time.


Real management faux pas from Meredith’s archives:

Vision: “Oh yeah, did one of those at the last manager’s conference — think it’s stuck on the wall in the boardroom now”

Mission: “Never did know what this meant — something to do with vision isn’t it?”

Business plan: “Yep, pretty sure we’ve got one. CEO has it — talks about it sometimes, but it’s pretty confidential. Don’t have a copy myself”

Boss to staff member: “What do you mean you would like to renegotiate your deal? What’s wrong with the one you’ve got — you work and I pay”