Who Are Our True Business Heroes?

I never met Michael Erceg, but he sounded like a good bloke worthy of a chat. Anyone who creates a business worth $620million in his own lifetime and succeeds internationally deserves discussion.
It would be easy to concentrate on the morality side of producing Alco Pop beverages and the well-known side issues of youth drunkenness, but this avoids confronting his undoubted abilities in business where he took on those two enormous incumbents, in the mature grog industry, Lion and DB, and succeeded brilliantly. The moral issues, after all, belong to Parliament and they have traditionally knighted the booze barons of the past, and proffered the baubles of high office to their current alcohol product supporters.
How did Michael Erceg do it? New presentations of old products, well priced and sold into the independent retail outlets with minimal marketing by piggy backing on the incumbents’ big budgets was the core strategy and it worked a treat. He then took the lessons learned here abroad get at the bigger markets, rather than just rest on his laurels.
Can any other Kiwi companies do the same?
Of course they can, but how many are? Sadly, not enough.
International investors tell us that with the possible exception of software (which has narrow investment appeal) there are simply nowhere near enough NZ companies with strategies to globalise their products in the fully scaleable high growth way that these investors seek. Instead of bemoaning the low cost production facilities in China, we should be using this capacity to take our ideas and designs to the world.
In an embryonic way I am involved in one of these in the clothing industry and it is exciting to say the very least, and we owe a debt of gratitude to the Michael Erceg’s of NZ who have more than balanced the low credibility given to Kiwi business abroad by the string of own-goals kicked by some of our highest profile business leaders.
The Warehouse is the latest in a long line who have served up disasters abroad. Air New Zealand’s dreadful foray into Ansett followed Fletcher’s UK Paper bomb, and Carter’s Chile con-carnage are just some of those we know about. Telecom looks to be reversing out of AAPT at the time that Telstra’s venture here is anything but Clear.
Do our leaders understand who our real business successes are? Graeme Hart surely is one of our best and bravest business brains and the Ullrich Brothers are a long term Aluminium success story worth telling to our kids. Are there any NCEA questions about people such as these, our real business heroes, without whom there simply wouldn’t be the economic growth to pay for the way we live.
There seems to be widespread confusion over what constitutes business success here. Awards are granted for simply being a competent CEO of a monopoly such as an airport or electricity lines company. Real business involves investing one’s own money in the venture. Not simply showing up with a CV.
Far too many of our main companies are the offspring of old quasi government organizations, again like airports, power companies and port authorities. They should be run efficiently, but they won’t produce the dramatic increases in wealth that the country needs.
Entrepreneurs like Erceg, Hart and the like can drive up our standard of living at a rate to match the changes in Asia and we need to applaud these people. There is too much of a central view that earning more than a cabinet minister is a bad thing. This is probably fair for those who, like Cabinet ministers only bring their toothbrush to the business, but those who invest their equity and take the risks deserve to be followed by the next generation.
Real opportunities have never been so evident with the growth of wealth in India and China, but just as truly the competition is getting stiffer every day and we will need to do better, particularly given the massive foreign current account deficit. The Reserve Bank will need more than interest rate tinkering to fend off the danger. A bit of leadership and celebration of the growth stories like that of Michael Erceg will help.
Wayne Brown