Next Generation Leadership Report April 2021

WELCOME

What is Next Generation Leadership? Because at the end of the day, a Next Generation Leader is not In a world where change is the only defined by profits or share prices constant, Next Generation Leadership – they need to inspire, connect, and act is the relentless desire to ask: “What’s next?” in a manner that drives benefit for all. The global Covid-19 pandemic has changed the way we work. Consumers are now more empowered than ever thanks to digitalisation.

Leaders today need to juggle I hope that the insights and opinions authenticity with brand image, in here either reaffirm your beliefs, community outreach with give you pause to think, or open organisational culture, and your mind to new considerations. sustainability with the bottom Because Next Generation Leadership line; against this backdrop, is not just about operating for today, Next Generation Leadership is a it is about changing for tomorrow. quest to find the values and mindsets I am glad to report, however, that based that are key to challenging the on the thoughts and opinions offered status quo – for ourselves, for our up by business leaders communities, and for the environment. featured in this paper, tomorrow will To seek these elusive answers, be an exciting day indeed. BMW New Zealand has worked with a collection of the most innovative, progressive and respected business leaders in Aotearoa to develop this report.

The company also commissioned a survey that analyses the responses of 500 business leaders in New Zealand – gathering their thoughts on the most pertinent issues facing leaders today, and the KAROL ABRASOWICZ-MADEJ opportunities that lie ahead for future Managing Director leadership to complement the report. BMW Group New Zealand EXECUTIVE SUMMARY

Good business leaders possess an After in-depth discussions with a group 04 almost instinctive understanding of of New Zealand’s most outstanding their company and the ecosystem in business leaders, and a wider piece which they operate – from the right of proprietary research analysing decisions that trigger development of a the thoughts and opinions of 5001 new product or service, to the ‘sweet- more, we have determined five crucial spot’ price point that drives customers components New Zealand business to their most profitable product. leaders can embrace today, in order to succeed tomorrow. But there’s a secret ingredient that transforms an ordinary business into a powerhouse – and that’s leadership. 1 Pure Profile Survey, 500 Business Leaders, February 2021

Next Generation Leadership Generation Next 01 02

CHARACTERISTICS COMMUNITY & INCLUSIVITY

A strong character remains a highly No business operates in a vacuum coveted leadership trait – but not in in this digitalised world; even in its the traditional sense. Strong-arming most immediate operating vicinity, in meetings, boardroom power moves a business is supported by its and over assertion are now passé; community. Next generation leaders instead, Next Generation Leaders must forge connections and support need to display traits like integrity, the community that it is interdependent empathy, accountability and a knack on; they must also keenly address for authentic communication. topics at the forefront of conversations today around diversity and inclusion. 03 04 05

WORKPLACE WELLBEING SUSTAINABILITY INNOVATION

If the global Covid-19 pandemic and It might sound like a buzzword that Resources are finite, but growth must widespread switch to remote work has businesses cannot do without in carry on; the way businesses innovate shown us anything, it is that there is 2021 but be wary – the empowered is very much the factor that will a much greater public consciousness consumer sees right through tick-box define their survivability in the future. for workplace wellbeing and mental initiatives. Next Generation Leadership Innovation has long been a barometer health. Next Generation Leaders is not merely about creating a good- of success, but Next Generation Leaders need to walk the talk and recognise looking campaign and leaving the in New Zealand believe innovation is the that purpose and empowerment, not balloon afloat; it is increasingly believing bridge that will link together seemingly wages, is the main motivator for an that sustainability should have equal impossible concepts for growth and engaged and productive workforce. – if not more – footing with profit. sustainability in the future. OUR BUSINESS LEADERS

KAROL ABRASOWICZ¤MADEJ CHRIS LITCHFIELD Managing Director Managing Director 06 BMW New Zealand Coca-Cola Amatil Pacific BMW New Zealand is a leading provider Chris Litchfield is the first Kiwi appointed of luxury automobiles and is continuing as Managing Director of Coca-Cola Amatil to drive growth in New Zealand Pacific, a role he has held since 2014. thanks to its ‘Power of Choice’ product With a proven track record of strong business strategy and digital customer centricity leadership, new business acquisition, models being applied across BMW commercial planning and dedication to the and MINI. Karol Abrasowicz-Madej wellbeing of people within Amatil, Chris has has been Managing Director at BMW led a highly engaged workforce, achieving New Zealand since 2018, and has Kincentric Best Employer for five consecutive been most recently responsible for year since 2016. During his leadership, the Amatil NZ business significantly increased spearheading the roll-out of multiple its use of recycled plastic, achieved major electrified vehicles, with more to progress on sugar reduction and managed come in the near future. to return the Government’s $7.2M wage subsidy in full while keeping all its people employed in 2020. Next Generation Leadership Generation Next

RANJNA PATEL CRAIG HUDSON Founder and Director, Tamaki Health Managing Director & Founder, Gandhi Nivas New Zealand and Pacific Islands

Tamaki Health is New Zealand’s largest Founded in 2006 in New Zealand, Xero independent primary healthcare group, is one of the fastest growing software delivering care through more than 40 services companies globally with more practises from Whangarei to Christchurch, than 3,000 employees worldwide. to an estimated 4,000 patients per It was awarded as the World’s Most day. Ranjna has been awarded a NZ Innovative Growth Company in 2014 Order of Merit and a Queen’s Service and 2015 by Forbes. Craig is a key Medal, has been inducted into the NZ member of the global leadership Hall of Fame for Women Entrepreneurs, team at Xero and has been Managing and won Deloittes Visionary Leader, Director of New Zealand and Pacific EY Entrepreneur – Master Category, Islands since 2017, where he has Women of Influence Community spearheaded an authentic focus on Hero, the New Zealand workplace wellbeing for staff and Innovator of the Year Award – Te Pou customers alike. Whakairo o te Tau, and a was a finalist in Kiwibank New Zealander of the Year. DOUG PAULIN SHAMA SUKUL LEE GEOFF ROSS CEO Founder and CEO Director Sealord Sunfed Lake Hawea Station

Established in 1961, Sealord is one Sunfed, a novel hard tech company, Geoff is one of New Zealand’s of the largest seafood companies is one of the fastest growing and most recognisable and innovative in the southern hemisphere in terms innovative businesses in New Zealand – entrepreneurs – he founded 42 Below of catch, and one of the country’s creating plant-based meat alternatives vodka, was a director and chairman Top 60 companies in terms of revenue. from yellow pea protein that tastes of The Trilogy Group, and has held Owned by Moana New Zealand and like animal meat but is healthier trustee roles with Melanoma NZ, Japanese fishing company Nissui, for consumers and the planet. Endangered Species Foundation Sealord has a footprint spanning five The company has secured tens and Pure Advantage New Zealand. continents, delivering around $500 of millions in investment to fund He is currently the owner of Lake million worth of seafood to 40 countries international expansion, with Shama Hawea Station, driving a new approach each year. Doug has been CEO Sukul Lee delivering a conscious to farming that puts the ecosystem since 2020 and has taken significant leadership style that moves beyond and the environment first. strides to improve communication individual ambition, to focus on and collaboration between Sealord’s benefiting all life. hundreds of employees.

BROOKE ROBERTS LYN LIM Co-founder and 3EO Director, Restaurant Brands Limited Sharesies & Director, General Capital Limited

Sharesies is an online investment Lyn Lim (Huei Min Lim) originates platform that provides Kiwis with from Malaysia and has had decades of an easy and low-cost way to get involvement in commercial and community invested in the stock exchange. activities relating to Asian migrants in Sharesies gives people the control New Zealand. She is a Member of the New Zealand Order of Merit for services to invest by giving them access to to New Zealand-Asia relations. Lyn is a thousands of companies and funds Director of Restaurant Brands Limited and to choose from, with no minimum General Capital Limited. She is also a board investment amount, so that everyone member of Asia New Zealand Foundation has an equal opportunity to grow and Regional Amenities Funding their wealth. Brooke is one of our Board. She has long-championed inclusivity leading female entrepreneurs, and and diversity for social cohesion. She has has focused on creating a sustainable, held various high-profile roles including Chair democratic business model for staff of Foundation North and a board member and customers alike. of AUT, Public Trust, the New Zealand China Trade Association, Hong Kong New Zealand Business Association and ANZ Private Bank External Advisory Board. CHARACTERISTICS

A strong character remains a highly This contrasts to characteristics coveted leadership trait – but not in previously associated with good the traditional sense. Strong-arming leaders, with assertiveness (9.7%) and in meetings, boardroom power moves energy (8.7%) seen as far less desirable and over assertion are now passé; traits in professional environments. instead, Next Generation Leaders 08 As digitalisation enables new, need to display traits like integrity, direct forms of communication, empathy, accountability and a knack clear, authentic and accountable for authentic communication. communication is going to be an In proprietary research compiled even more desirable characteristic for this report, almost one in five for the next generation of leaders. respondents believe collaboration and communication will be the highest priority for next generation leaders – stating it is a more important priority than workplace wellness, diversity, innovation and economic success.

This insight is heavily reflected in the traits we look for in our business leaders – the three most important characteristics identified in the survey were integrity (66%), communication (64%) and accountability (44%). Next Generation Leadership Generation Next

Highest priority areas of focus for next generation leaders

2% Creativity 1% Other 7% Future proofing 21% Sustainability

6% Economic success

4% Ways of working

5% Diversity

5% Technology 12% Innovation

10% Mental health 18% Communication and collaboration 10% Workplace wellness RANJNA PATEL CRAIG HUDSON DOUG PAULIN Founder and Director, Tamaki Health Managing Director CEO & Founder, Gandhi Nivas Xero New Zealand and Pacific Islands Sealord

“Next Generation Leadership is about “Next Generation Leadership is “Two-way communication is critical listening to young people, inspiring when you are able to connect, for success. Because that’s the only them, digesting what they say and understand and guide people way leaders can really discover what then implementing a plan. As you through an uncertain future. is going on in their organisation, how progress in your career it’s important For me to be that leader, I need their people are feeling, how engaged you take time to sit back and listen, to take a step back and empower employees are. and digest other people’s point of people to be themselves. That’s why Sealord is putting an online world view – it is too easy to get siloed in I think the most important characteristic into practice over the next twelve your thinking, so having an open of next generation leadership is months where people can engage mind is very important.” empathy. To be empathetic means with leadership on a two-way basis. to be understanding. It means being We’ll be analysing what people have able to walk with your people through told us and engaging them in future everything they’re going through – decisions. We want to ask them not just in business, but in life.” what our next steps should be, to help make tomorrow an even better day to come to work.

It is critically important that leaders are versatile – we’re leading different generations of people, different cultures and different genders. As a leader you can’t be one thing anymore – you have to think about the audience you’re in front of and how you’re trying to engage a particular individual Traits associated or a particular team.” with good leadership

60%

40%

20% Integrity Creative Inclusive Assertive Energetic Optimism Empathetic Adaptability Vulnerability Accountability Communication Financially mined Financially Cultural awareness Cultural COMMUNITY & INCLUSION

The increasing focus on diversity and CHINESE COMMUNITY inclusion within wider society – and Aotearoa has a vibrant and growing indeed the boardroom – is clearly community of Chinese, with close to on the radar of Aotearoa’s business 250,000 recorded in the 2018 census – leaders. But are we doing enough? or 5.3% of total population3. When you look at the Auckland region alone, the 10 According to proprietary research Chinese segment jumps to 11% of its total for this report, just over half (57%) of business leaders think we currently put population. Despite the growing numbers enough focus on diversity and inclusion of Chinese New Zealanders, 84% of – and many are nervous about business leaders believe there is enough senior representation in business. Like addressing the challenge head-on. the issue of LGBT inclusion, there is a Only 16% of respondents discrepancy between younger leaders think it will be easy to reach who think we can improve in this space – and mature leaders who think gender and ethnic diversity representation is strong enough. in senior leadership positions, so future leaders must drum Today’s business leaders are cognisant of the diversity and inclusion issue – up the courage to take on however there is room for improvement this challenge. and awareness to have the conversation for further inclusion, especially from Aotearoa’s community is a broad- business leaders under the age of 40. church, and we have selected three If anything, this is hopeful indication elements for further investigation below. that our boardrooms will become more GENDER EQUALITY multicultural and diverse in the future. The gender pay gap using median pay

Next Generation Leadership Generation Next for the entire workforce in 2020 was 9.5% in favour of men2. It is heartening to see that 61% of business leaders in New Zealand believe that the pay gap is too large, but on the flip side, 13% believe Gender pay gaps are still it is acceptable. The global Covid-19 pandemic has only made this disparity too large in New Zealand worse as women juggle duties at home with remote work. Unsurprisingly, there Strongly 22.4% is significant variation between male and Agree female respondents. One in five male leaders (20%) don’t believe the gender Agree 38.3% pay gap is an issue, compared to just 5% of females. Neutral 26.2% LGBT INCLUSION 71% of business leaders believe the LGBT community has enough exposure Disagree 8.9% in senior leadership positions – despite none of New Zealand’s Top 100 Strongly 4.2% companies having an openly LGBT CEO. Disagree However, this opinion varies hugely based on age – 42% of leaders under the age 2 www.publicservice.govt.nz/our-work/workforce-data/ of 30 believe there is not enough LGBT gender-pay-gap-comparison/#:~:text=The%20gender%20 representation, whereas only 17% of pay%20gap%20using,%2C%209.3%25%20in%202019). 3 www.stats.govt.nz/news/new-zealands-population-reflects- leaders over the age of 60 feel the same. growing-diversity RANJNA PATEL BROOKE ROBERTS LYN LIM Founder and Director, Tamaki Health Co-founder and 3EO Director, Restaurant Brands Limited & Founder, Gandhi Nivas Sharesies & Director, General Capital Limited

“We started our business in 1977 in Otara, “At the heart of next generation “Diversity will ultimately create it was a very high needs community leadership is being driven by the social cohesion. To begin this at the troubling times of the Machete purpose your leading. Your potential change, create the first step by murders and the Dawn Raids. for positive impact for all. Never lose taking a long term view over short This community was crying out for sight of that, stay connected and be term profit especially in terms decent health care, so we became approachable to be able to get stories of people and environment. a part of it. We listened to what the and insights that will make you a better We want to support people who community needed, employed people leader. I’ve seen so many business’s are encouraging and inspiring, from the community and employed out perform others when they work people we want to emulate.” whānau from our existing staff. towards the same Kaupapa.” This empowered our workforce, because suddenly family members and friends where coming to work for their organisation. The next generation of leadership isn’t just about business. Business is something that’s needed, but when you empower your community you’ve unlocked the secret ingredient.”

Does the LGBT community have Does the Chinese community have enough representation in senior enough representation in senior business circles? business circles?

30% No, not at all 22% Yes, definitely 17% No, not at all 28% Yes, definitely

49% Yes, somewhat 56% Yes, somewhat WORKPLACE WELLBEING

If the global Covid-19 pandemic and FOUR¤DAY WORKING WEEK widespread switch to remote work Flexible working practices have has shown us anything, it is that there surged in popularity during COVID-19 is a much greater public consciousness – with one in five employees (21.8%) for workplace wellbeing and mental spending more than 50% of their time health. Next Generation Leaders working at home. 12 need to walk the talk and recognise that purpose and empowerment, not Surprisingly, business leaders wages, is the main motivator for an in New Zealand are strong engaged and productive workforce. advocates for making a four-day One third of business leaders (31.8%) working week permanent surveyed do not believe we have – with 59% of respondents enough focus on mental health and wellbeing in the workplace. One in five saying this is a good idea. business leaders believe workplace wellness or mental health should This was typically championed by be the highest priority for the next younger leaders, or female leaders. generation of business leaders. 70% of female respondents are supportive of the concept compared The challenge is how we can bring this to just half (51%) of men, and two into New Zealand’s businesses, and thirds (67%) of leaders under the age for the purpose of this report, we have of 40 strongly support the concept investigated two common initiatives compared to just a quarter (24%) quoted in the media to improve of those over the age of 50. workplace wellness and mental health: Re-evaluating mental health Next Generation Leadership Generation Next EMPLOYEE ASSISTANCE programmes for employees and PROGRAMMES demonstrating an understanding Outsourced mental health assistance of their overall wellbeing will be programmes have become a crucial component of next commonplace in many businesses generation leadership. across Aotearoa – yet our business leaders are unsure if they go far enough. According to our survey, almost two thirds of leaders (64.5%) in New Zealand believe employees need a bespoke mental health programme that stretches beyond the one-size-fits-all outsourced mental health programme. CHRIS LITCHFIELD CRAIG HUDSON Leaders are placing Managing Director Managing Director enough focus on mental Coca-Cola Amatil Pacific Xero New Zealand and Pacific Islands health in the workplace

“Work culture is one of the biggest drivers “Wellbeing and mental health are Strongly 6.3% of a business, because it ultimately vitally important. It’s something that Agree ends up reflected in your commercial I am personally passionate about, but performance. We’re very fortunate it is not just about me, it’s about the to have received Best Employer inside-out philosophy at Xero. We start Agree 32.7% accreditation for five consecutive years with the staff – how can we look after that recognises our strength in this Xero staff better than they’ve ever been area – but for us that’s not the desired Neutral 29.2% looked after before? So that when they outcome, it is reinforcement that we’re heading in the right direction. turn up in the morning, they leave in a better place than when they arrived? Disagree 28.2% At Coca-Cola Amatil we want our future leaders to understand the fundamentals But we go one step further – we can help our customers, who are small Strongly of leadership. Leadership is about 3.6% building belief amongst our people, business and accounting partners – Disagree clearly articulating where our business access to mental health and wellbeing is going and ensuring we’re doing support that they’ve never been able the right thing by our community. to access before. We’re offering that Our people live and work in our free of charge to everyone.” community, so it’s important that they believe in our authentic commitment to give back outside of the office.”

What percentage of your workforce Businesses should be now work from home for more than providing employees with 50% of their working week? mental health support beyond a free EAP service

14% said 75–100% 54% said 0–25%

Strongly 15.7% Agree 8% said 50–74%

Agree 48.8%

Neutral 25.6%

Disagree 8.1%

Strongly 1.8% Disagree 24% said 26–49% SUSTAINABILITY

It might sound like a buzzword that This generation gap is also evident in businesses cannot do without in business confidence on how to address 2021, but be wary – the empowered sustainable issues. Three quarters consumer sees right through tick-box (76%) of business leaders believe it initiatives. Next Generation Leadership will be a major challenge to implement is not merely about creating a good- sustainable practises across their 14 looking campaign and leaving the entire business – but that is driven by balloon afloat; it is increasingly believing 70% of leaders over the age of 50 who that sustainability should have equal – if think it is a difficult task, and only 31% not more – footing with profit. of leaders under the age of 40 seeing it as a challenge.

When 500 business leaders Regardless of which way you analyse were asked whether business the responses – it is clear sustainability should put sustainability ahead is a major challenge and passion-point of profit in the compilation of for tomorrow’s leaders. “Sustainability” was selected as the highest priority this report, just over half (51%) for Next Generation Leaders, with one said they should. in five business leaders believing this should be the number one area of This insight is indicative of a new dawn focus for companies moving forward. of sustainability-driven mindsets for businesses; and is driven heavily by a younger generation of business leaders who are far more environmentally conscious. Next Generation Leadership Generation Next Only 15% of business leaders under the age of 40 believe profit is the primary indicator of business success, whereas 40% of business leaders over the age of 50 believe the same. SHAMA SUKUL LEE GEOFF ROSS Founder & CEO Director Sunfed Lake Hawea Station

“Leadership is about having a higher “We all need to find ways for business level of consciousness to ensure and environmental outcomes to that what you’re building is not an work together. One way is to learn individualistic ambition but is driven to listen to your children. Millennials by a larger comprehensive vision to are incredibly engaged in politics, benefit all life on this planet. business and of course the environment, as leaders we need Conscious leadership is urgently to listen to them, they’re shaping needed in the world today, particularly tomorrow, they’re a force for the future.” as humans become more and more empowered by technology. It is important to recognise that technology is just a tool, and what matters most is the hand that holds the tool: a steady hand.

As leaders, it is important we need to focus on becoming conscious human beings so we have the competence to make balanced decisions that can better impact the world.”

Should businesses put Which area of focus should be the highest sustainability ahead of profit? priority for next generation leaders?

2% Creativity 1% Other 7% Future proofing 14% Not at all, profit is the 51% Yes, definitely 21% Sustainability key metric 6% Economic success

4% Ways of working

5% Diversity 12% Innovation

5% Technology

10% Mental health 35% No, profit is 18% Communication more important and collaboration 10% Workplace wellness INNOVATION

Resources are finite, but growth must This lack of investment in innovation carry on; the way businesses innovate is has led to New Zealand’s economic very much the factor that will define their productivity lagging behind its peers. survivability in the future. Innovation According to the Ministry for Business has long been a barometer of success, Innovation and Employment, “low but Next Generation Leaders in New R&D investment and innovation 16 Zealand believe innovation is the rates appears to be important factors bridge that will link together seemingly behind New Zealand’s low economic impossible concepts for growth and productivity. Strong business R&D sustainability in the future. investment coupled with a developing start-up ecosystem suggests system- One in ten business leaders change in this area.”4 believe that innovation should One moment of pride for the New be the highest priority for our Zealand community has been our next generation of leaders (12%) collective response to COVID, with – but current sentiments show 60% of respondents believing we there is much more to be done. have adapted well to the challenges of last year – and there is a clear sense Two thirds of respondents (69%) don’t of optimism with two thirds (64%) think we are doing enough as a country believing we will recover from the to invest in the next generation of economic impacts of COVID-19 by 2025. leadership, and more than three quarters (77%) believe we need to invest more in science, technology and innovation to 4 https://www.mbie.govt.nz/dmsdocument/1499-research- maintain our competitive advantage. science-and-innovation-system-performance-report-2018 Next Generation Leadership Generation Next

Looking back at 2020, did NZ business leaders do a good job at navigating the challenges?

11% I don’t know

6% Absolutely not, 60% Yes, business business leaders failed leaders did a good job to navigate this crisis

23% No, despite best efforts business leaders did not do a good job KAROL ABRASOWICZ¤MADEJ SHAMA SUKUL LEE Managing Director Founder & CEO BMW New Zealand Sunfed

“Within the next five years, we will “At Sunfed empowering all life is built work hard as a team to make bold into our DNA, so our people are steps and introduce a broad range empowered to do things they did of hybrid or electric vehicles to not imagine was possible. Sunfed New Zealand. This means that for is a daring adventure, it challenges every size, segment, and class of us to rise to the occasion, look within our existing products – there will be a ourselves, unlock our true potential, hybrid or electrified alternative, priced and strive to be our very best selves. competitively, capable of delivering an emissions-free capability for at least Don’t be afraid to tackle the hard the average daily work commute. problems – they are more challenging, and there is a higher probability of And what of courage? BMW were failure, but that’s what makes it worth the first to build an ‘electric highway’ the pursuit. Invest in the long play, across New Zealand with ChargeNet, have a daring adventure.” and we will continue to take courageous steps to expand electric charging infrastructure in the years to come. Change is on the horizon, and you’ll see the most obvious changes with BMWs on the road – quite literally driving sustainability forward here in New Zealand.”

Are NZ businesses doing enough to Does the NZ business community develop next generation leaders? invest enough collectively in science, technology and innovation to maintain a competitive edge?

8% Not at all, 31% Definitely, 11% Not at all, 22% Yes, definitely we’re behind we are on track we are falling the rest of the behind the rest world, particularly of the world when it comes to developing gender and ethnically diverse individuals

61% I don’t think we are 66% No, we doing enough in this area could do with and we need to do better more investment 18

CONCLUSION

It’s clear that Next Generation wellbeing as key priorities. Leadership will play a key part in The general view is that while the future success of businesses. businesses have made progress The changes leaders make today in these areas, there is still a way will inform and mould future business to go for these priorities to be focus areas, decisions and shape common place in all businesses. perceptions for future generations. What is also clear, is that as a The insights and knowledge shared nation, we are doing better than by this group of business leaders we think. Our business leaders

Next Generation Leadership Generation Next has shed a light on the key priorities can take pride in the steps they all businesses should be focused have taken to tackle some of our on which include a greater focus greatest challenges and the positive on sustainability, community and actions they have put in place inclusivity as well as workplace to overcome them.