From March issue NZ Manufacturer magazine www.nzmanufacturer.co.nz

By David Altena and Rob Bull

David Altena is Head of Growth & Partnerships | SmartSpace.ai Co-Founder | The Better SMB Podcast. David is a tech sales leader focused on revolutionising how business succeed, unlock growth and scale through leadership, strategic innovation and the right technology.

Rob Bull is Director & Principal Consultant | Plexus Consulting, Co-Founder & Host | The Better SMB Podcast.

Rob’s mission is to make NZ the best place to do business by helping leaders use LeanThinking to drive productivity, smarter processes, and sustainable growth.

New Zealand’s productivity crisis has dragged on for decades, waiting hasn’t worked.

Our productivity lags other OECD nations, with clear consequences: stagnant wages, reduced competitiveness, declining living standards, weak business investment, an over-reliance on commodities and low-value industries. We work longer and harder, not smarter.

The Treasury has called it our biggest economic challenge, yet we continue to treat it as an abstract problem rather than an urgent, business-led priority.

 

The Numbers Don’t Lie

To make any meaningful progress and catch our peers, businesses en masse must focus actively on performance improvement. Even with that level of action and momentum, it would still take three to five years before we begin seeing national productivity improvements.

To achieve this, we’re not talking about “some manufacturing businesses” making incremental improvements. We need to redefine New Zealand’s economic landscape… According to Statistics NZ (2023) there are ~ 23,000 NZ manufacturing businesses. For meaningful change we need 15,000 manufacturers, or two-thirds, to make this their top priority for the next five years.

Why Government Targets Won’t be Enough

Our government has set ambitious targets spanning:

• Doubling exports
• Improving R&D
• Strengthening skills
• Reducing crime rates
• Improved healthcare
• Focusing on sustainability

But these span every sector and shift with the political cycle. While government policy provides a foundation, it’s not enough. Business leaders must take charge. Without individual businesses improving their performance, national productivity will remain stagnant.

What if prioritising productivity delivered more impact than today’s scattergun approach?

• Without productivity gains, even billions in funding won’t move the needle
• Businesses, not policymakers, are the primary drivers of change
• Waiting for ‘the right conditions’ is exactly why we’re failing

Challenges Are Opportunities

Labour shortages, rising costs and global competition are often seen as barriers. In reality, they are forcing functions that should push businesses to innovate and:

• Improve leadership and strategic alignment to lift performance and sustainability
• Define, systemise and automate operations to reduce reliance on manual effort.
• Use data intelligently, moving beyond gut feel to tracking performance and driving continuous improvement.

Decades of Stagnation: Time for a New Approach

The reason nothing has changed for generations isn’t a lack of solutions, it’s a failure to act at scale. Too many businesses haven’t prioritised operational improvements and view them as optional or “nice-to-haves.” In reality, they are the only way forward.

We’re living with a problem that each of us can fix for long enough. It’s time to shift the focus from waiting on the Government or talking about lifting productivity, to making it a daily business priority.

Stop Guessing: Start Planning for Success and Execute

At a recent event, the Mahi Tahi TechFest, focused on supporting businesses to underpin innovation with technology, I laid out the core principles needed to improve business performance. If you haven’t already:

• Defined clear, measurable KPIs for your business
• Adopted a continuous improvement mindset at every level
• Leveraged technology to support innovation to free up time for higher-value work

…then you’re not working toward your full potential and run the risk of competitors passing you by.

This isn’t just about your business, it’s about New Zealand Inc. If 15,000 manufacturers take their business performance seriously, we can transform New Zealand’s economic trajectory and national productivity.

But that change starts with individual decisions.

What will you do today to make building a higher-performing team and business a reality?

Taking Action: Where to Start

If this resonates with you, don’t just nod along, you need to act. The difference between businesses that thrive or struggle is execution, you could:

• Attend an ASB Manufacturers Workshop run by the EMA across NZ until June to discover the benefits of becoming a data-driven business. It is a small investment but provides insights into what a high-performance manufacturing business looks like.
• Apply for a Callaghan Innovation Smart Industry Assessment, if you qualify, to understand your next steps and have a pro in your corner to support you on the journey (currently only available until June 30, 2025, due to disestablishment of Callaghan Innovation)
• Get a step-by-step breakdown of the core productivity principles David shared at the Mahi Tahi TechFest if you’re not sure where to start

But How do I Fund This?

You don’t need funding to get started. Putting time aside to learn the fundamentals of continuous improvement such as Lean Thinking, is free.

Start with blogs, YouTube and explore best practices from businesses on a Lean journey. Inspiration is everywhere, here are a couple of examples from Rob:

A practical look at why improvement should always be a priority.

Simple ways to introduce Lean principles into your business.

As your business grows and you look to scale, investment will be needed, whether in automation, technology or workforce development.

There is a perception that securing funding for initiatives can be tough, that banks don’t support businesses and prefer to lend on housing. But the reality is different, banks are data-driven. To approve lending, they need high-quality information. The businesses securing funding today meet lending requirements. It’s that simple.

Our businesses have underperformed for decades, and now we lack the capital needed to invest in transformation. We need the support of the banking sector to make meaningful progress, but businesses must present a strong investment case.

Start with what’s free. Learn, act and build momentum. When you’re ready to scale, be prepared to engage lenders with a clear, data-driven business case.

What steps will you take today?

Your business’s performance isn’t just an economic issue, it’s about you – your leadership, your edge, your workforce and your legacy.

The time for talk is over: Act now, or watch others pass you by.

This is the challenge, and opportunity, of our time. Businesses that act now will define the future of the manufacturing industry and national economy.

The power is in your hands.

https://blog.hague.co.nz/is-capability-the-missing-link-in-nzs-productivity/