Mood of the Boardroom: New Zealand needs visionary leaders to tackle ageing population and healthcare costs (NZ Herald)
With the country facing significant challenges both domestically and internationally, New Zealand, more than ever, needs leaders willing to take decisive action and implement big ideas, one of our most influential lawyers says.
Dentons New Zealand chairman and global vice-chairman Hayden Wilson, says to do this, the nation’s leaders must understand there are big differences between managing a business and running a Government.
“Governments are complex. Compared to business, you don’t have all the same levers to pull – and the lag time between pulling a lever and getting tangible progress is much longer.”
He argues simply applying a corporate mindset focused on short-term wins and quarterly goals isn’t sophisticated enough, on its own, to manage the complex challenges the country faces.
Truce on infrastructure
“Every person you speak to in the infrastructure space in New Zealand recognises that we have got to end the stop-starts and flip-flops on projects.”
He says there is a critical need for political leadership that thinks beyond election cycles.
“New Zealand has significant infrastructure demands over the next five, 10, 15 years and beyond.
“We’ve got an ageing population, increasing healthcare costs, and a changing global environment. We cannot just rely on the same old solutions.”
Wilson says the tendency of new Governments to scrap their predecessor’s projects is a waste of time, money, and planning effort, pointing to the Government’s decision to shelve Auckland Light Rail and the Three Waters reform when it came to power.
“The economy and business community would be better served if both parties took an approach of improving or adapting what’s already there, instead of throwing it all out and starting from scratch.”
Wilson suggests bipartisan agreement on infrastructure is not realistic, because political parties legitimately have different ideas. Instead, he suggests a “truce” on infrastructure.
“Parties are always going to have different ideas. But there needs to be some understanding that Governments should be allowed do the things they want, and once a project starts, it gets finished, no matter who’s in power.”
He references Bent Flyvbjerg’s How Big Things Get Done. Flyvbjerg is an expert on large-scale projects who advocates for “thinking slow, acting fast.”
Wilson explains: “We need to spend more time on planning and testing ideas before breaking ground. Once we start, we should be able to complete it efficiently and quickly”.
He says New Zealand, and others around the world, tend to do the opposite.
“We rush the planning phase because we know that, in political reality, once shovels are in the ground, projects rarely get stopped.
“This leads to poor planning, underestimating costs, and exposes us to risks like political changes or global events.”
Efficiency over cuts
Wilson also sees room for improvement in the Government’s approach to public sector spending.
He believes there has been too much emphasis on cost-cutting, and not enough on making the system more efficient.
“I don’t think you could find anyone who would say that there isn’t waste in the public sector and that it is delivering efficiency,” he says.
“But while the wholesale reduction in spending might be the fastest way to give the Government something it can point to and say it has done, it is perhaps not the best way to go about it.”
Instead, Wilson argues for a more strategic approach that balances the number and quality of public servants, the use of consultants, and the government’s ability to achieve its priorities.
“You can have two of those three things, but not all of them at once,” he explains. “If you want to reduce the size of the public sector while also cutting down on consultants, then you’re going to struggle to achieve all of the Government’s priorities because the capacity to do the work simply won’t be there.”
He suggests a more collaborative effort between the public and private sectors would be more effective in delivering on the Government’s goals.
“It’s about delivering value over the long term, not just making immediate savings. It may be a slower process, but it would yield better outcomes in the end.”
Dentons is a sponsor of the Herald’s Mood of the Boardroom project.
