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At the crossroads of economic development: Are we ready to sell less for more?

With over thirty years in boardrooms confronting many difficult strategy and design challenges, Brian Richards shares his thoughts on why we struggle to sell less for more. 

There is no part in our economy where niche opportunities cease to exist. From dairy to digital, it’s a mind-set change which we as a nation of businesses find difficult to make.

We have a monstrous agribusiness doing more for less with a vengeance (simply land mining) and a lazy bums-on-seat tourism industry where, at present, the Tongariro crossing is akin to an Eden Park queue. From forestry to fashion, there is an obsession with volume instead of value and a continuing love affair with improving processes rather than shaping actual products.

So why haven't we been able to turn the corner?

Most management teams I observe never work directly with customers. Product or service innovations take years to filter through to the investment stage before implementation. Acorn thinking is so quickly dismissed in the interests of business as usual.

Boardrooms find it difficult to engage in innovation because of the initial ambiguity so necessary in finding something new.

Internal cultures seldom celebrate product innovations and recognise those who deliver them. They are led by directors who are often so obsessed with risk, regulatory compliance and so-called governance that they lack the passion to try new things.

Our smugness is a strong companion of our splendid isolation. By comparison, there’s never been much milk and honey in Israel – yet as a small nation like ours, it’s miles ahead in realising unique IP because of its adversity.

There is so much unique IP in New Zealand which we fail to identify because of the domestic lens we’re so used to looking through. Latvian ladies could well love our skincare made from New Zealand’s flora and fauna, if we could only discover each other. From forestry software for estimating tree growth to unique fishing technology, I so often see brilliance living in isolation for want of better communications and a sound strategy.

Collaborative energy has never quite flown here because we don’t like to share the problem or the opportunity. Wine is the only industry working well together as NZ Inc; most others scrap at the border and compete on price to the delight of offshore buyers.

We are buzzing at present with celebrity chefs and glitzy dinner dates. But the real engine rooms of our major food businesses seldom move in such worlds. Food technology is not an exalted career here and the nutritionists so necessary for new food strategy work are usually also confined to the margins. For many years, I’ve quoted that if we could turn our farmers into foodies all our problems in agriculture would be over. There is so much more we could do in agribusiness to reposition our products.

Nurturing IP into the commercial arena takes courage, seed funding and a supportive internal culture. For example, if you are a successful wine company with the knowledge to develop high-end liqueurs, how might these conditions begin inside a company? Who will own the project and enlist others? So often we see innovation teams set up inside companies to deliver change, but they slowly become a sideshow only occasionally visited by the CEO.

Whether it’s a beautiful landscape, a natural pasture of grazing animals, or a young PhD bristling with intelligence out to change the world, New Zealand undoubtedly has the raw materials and the intellectual capital. Our biggest challenge is learning how to sell less for more.

Love Kiwis was a tongue-in-cheek social media campaign aimed at achieving better returns from our Australian neighbours.

We need to retreat to higher ground like the French, Swiss and Swedes and defend our quality of life with better products and services – as opposed to simply producing commodities where we are the price takers. Selling less for more is firstly about wanting to get into the right space.

To reinvent products and services means joining the dots and positioning the offering with the right ingredients. Isolation has been wiped out by e-commerce and we can now deliver our nation’s stories to the rest of the globe. Designing for the world’s value-discerning consumers is entirely possible for us – given the right customer insights.

In my travels, I am surprised at how many international business people are fascinated by New Zealanders and wish to know more. Dividing into their world takes courage and tenacity, but I’ve never found outright refusals and people are always interested in listening to our story.

Fisher & Paykel is a New Zealand company that has invested wisely into product and service design.

As a nation, New Zealand lacks the lyricism of the Irish. Our brands, and the stories which support them, are safe and wholesome but seldom engage in modern contexts across the globe. We have this lovely raw sophistication that an over-hyped world is hankering for, yet we find it difficult to claim mind-space in someone else’s busy world. It’s a story we struggle to tell. There is something in ‘’the lightness of being’’ we can convey to a troubled world – which is our special ingredient. It’s not the ‘corrugated iron’ simplicity which stereotypically comes to mind – but rather our kinship with nature and the diverse cultures of people living and working in a contemporary world.

We are at the crossroads of our economy in terms of adding value. Every one of our businesses doing more than $2m in revenue will be linked to exports either directly or indirectly, so the question of how to sell less for more is crucial.

Shifting mind-sets with high-level storytelling doesn’t happen in a vacuum. In my experience, it starts with smart strategy that can generally be broken down into practical steps. Here are some of those steps that can be applied broadly to brands and businesses across New Zealand:

  • Nurture a climate of innovation that crafts disruptive acorns.
  • Invest in product and service design, as Fisher & Paykel has done.
  • Identify your unique IP and ensure it’s in your product or service.
  • Ring-fence your R&D and prototype rapidly.
  • Collaborate wherever sensible with like-minded players.
  • Be curious in your category and aware of what’s happening internationally.
  • Exploit the nationality of your brand, like Love Kiwis.
  • Understand the customer experience and act on observations.

Tomorrow’s great brands will have three distinct characteristics: ethics, aesthetics and functionality. It will be a transparent world where everything can be seen and judged instantly. People want things curated and sorted. It will please them in their busy world to know what you offer is of great value – and they’re quite comfortable paying more. 

Brian Richards is the founder and director at Richards Partners.