Keith Newman discovers two groups charged with gearing up regional businesses for efficiency and growth have been getting a taste of their own medicine.
The shake-up at the Hawke’s Bay Chamber of Commerce that resulted in its feisty offspring Business Hawke’s Bay leaving the fold earlier this year, has forced both parties to lift their game in supporting regional businesses and growing the economy.
Business HB, hamstrung by the Chamber’s governance structure, including a single chief executive officer (CEO) across both organisations, was by Christmas 2012 planning an exit strategy so it could more effectively carry out its role as Hawke’s Bay’s de facto economic development agency.
The 18-month-old group, formed as an arms-length Chamber committee, had operated for six months without a CEO, and in April during independence discussions it was conceded the joint CEO role was too much for one person.
The man who had successfully bid for the role, former Waikato Chamber of Commerce CEO Wayne Walford, was informed the job was now simply CEO of the Hawke’s Bay Chamber of Commerce.
These and other internal wrangles played out during the last days of a severe drought, in the aftermath of grim unemployment statistics and the release of the McGredy Winder report, which confirmed Hawke’s Bay desperately needed unity, clear direction and strong political and business leadership.
The two key players had been distracted from giving their full attention to some of the region’s biggest issues – the proposed Ruataniwha water storage project, oil and gas exploration, better access to rail and air transportation and input into the potential shape of council amalgamation.
Physician, heal thyself
The Chamber of Commerce and Business HB took their own medicine, putting themselves through an independent business assessment, with world-recognised business mentoring group The ICEHOUSE, which officially launched its Hawke’s Bay presence in the midst of the churn.
A peaceful passage through sensitive territory was negotiated with ICEHOUSE regional manager Peter Wogan, ahead of sorting out the terms of Business HB’s independence, including what level of financial support or sharing of resources would remain when it left the nest.
Chamber president Katja Williams says ICEHOUSE was a great facilitator, helping analyse strategic drivers and management structures and sorting out both agencies in a kind of ‘due diligence’.
For all the tension, the split is being touted as amicable allowing both parties to re-envision their own destinies. Business HB chairman Stuart McLauchlan says, his group couldn’t continue under the wing of the Chamber and needed to be in a complementary peer relationship to deliver the best for the Bay.
New CEO steps up
In the midst of its own review process, the Chamber announced – from an initial pool of 18 candidates – the appointment of Hastings-born Walford as its new CEO.
He was still house hunting in preparation for his return after 25-years away from the Bay when BayBuzz caught up with him. His stated priority was to grasp the ‘nuances’ of what makes us tick – listening, connecting and consulting – before applying his own experience and systems.
He’d worked in the Whakatu freezing works computer department before running a motor camp in Tauranga, heading the Tauranga Community Arts Council, taking on regional development contracts and then for four years was chief executive of Waikato Chamber of Commerce.
As a new boy to the hot seat, Walford sees opportunity everywhere, including “huge global businesses operating under the radar”.
There are exciting prospects to inspire people about living, working and playing in the Bay. “We need to create some raving fans for the region and celebrate success,” says Walford.
The tall, confident, pony-tailed networker of Maori and Italian extraction has creative, technological and business nous and is a welcome arrival for the previously headless organisation. He joins his wider whãnau still living in Hawke’s Bay and was reminded during interviews earlier in the year of “the summers I used to have”.
Williams likes his enthusiastic person-ality, impressive networking skills and open engagement, which she says, people in Hawke’s Bay will appreciate. His biggest challenge will be to connect quickly with stakeholders, get traction with members, understand the need for change, and discover how to best use his voice for lobbying.
The need to improve “the value proposition”, a term used in Williams’ and Walford’s press releases, should be the mantra of every membership organisation, says Williams. The Chamber could do a much better job of making members feel more empowered through feedback and forums. “To justify the cost of membership there has to be a return on investment.”
The fact that up to 30 people have been turned away from Business After 5 events suggests there’s a strong demand for networking, but the value has to be greater than nibbles, a glass of wine and meeting a few people. It should be an opportunity for discussion and for people to have a voice.
Walford says any Chamber of Commerce needs to have a credible voice and members who feel they’re listened to. He sees value in the Chamber and Business HB working collaboratively to grow the region with plenty of room for cross-referrals and connections.
Value might also mean buying power with alliance partners, events, mentoring, networking functions that inspire and influence young business people, ways to encourage the wider business community to get involved and the ability to connect with 22,000 other Chambers across the world.
He says he’s here to help make Hawke’s Bay the best it can be without forcing anything. “The prospects are fantastic for uncovering gems and influencing a sense of pride in the region and what it’s doing commercially.”
Glue for new agenda
Walford needs to be the glue that binds the fractured Hawke’s Bay Chamber of Commerce together and drives a new agenda for the 20-year-old, 500-member group, formed in May 1993 from a merger of the Napier Chamber (1883) and the Hastings Chamber (1907).
The Chamber has a critical function to bring cohesion to the region’s businesses if it’s to gain the traction needed in the next few years, as well as fill an administrative role in issuing export documentation. The good news is that free trade (FTA) export certifications reached 822 for the year to mid-April, a number not achieved until June the previous year.
It will run the 16th annual Westpac Hawke’s Bay Business Awards in June, and collaborate with the Hawke’s Bay Mãori Business Network, the Enterprise for Education (E4E) programme in schools and the Young Enterprise (YES) scheme. Its Hothouse programme helps businesses refine their skills and performance.
The Chamber has a track record of supporting proposals likely to enhance or assist business growth in Hawke’s Bay. Recently that’s meant plans by entrepreneur Rod Drury and Hastings mayor Lawrence Yule to court contact centres and consult around the future of the Hastings CBD.
Beyond cosmetic changes, Chamber president Katja Williams wants a strong plan to make the CBD more economically viable, even suggesting an entertainment focused 24-hour destination where people can live and play.
She also wants to see the Chamber take the lead in revisiting viability of the Gisborne to Hawke’s Bay railway line, shut down by NZ Rail last year, and pushing for the expansion of the Hawke’s Bay Airport, both of which she believes could be game changers for business in the region.
Business HB freed to focus on regional development vision
Business Hawke’s Bay’s declaration of independence from the Chamber of Commerce is not a snub to the group that nurtured it, but an attempt to grab the reins of uncoordinated regional potential and make up for over a decade of failed economic development efforts
If sufficiently resourced, Business HB believes it can coordinate disparate agendas, reduce duplication of resources and ensure Hawke’s Bay gets “the best bang for its buck” from economic development money being invested across the region.
Chairman Stuart McLauchlan says an independent Business HB, guided by its advisory group and tightly linked with business mentoring group The ICEHOUSE, could become a regional hub with everyone sharing ideas under the same roof, including council economic development people.
Business HB board member Hamish Whyte, managing director of Furnware, says it’s time for honesty about what’s really going to work for the region rather than different parties running around like chooks with their heads cut off.
He says Business HB has taken a good hard look at its own processes and will be more selective about its projects and the outcomes expected. That will mean clarifying opportunities and placing responsibility back on industry sectors and businesses to evaluate their own readiness before seeking help.
Rather than “throwing money at things or chasing rainbows”, board member Robert Darroch, managing director of Future Products Group, says disparate efforts need to be prioritised and coordinated, particularly across the region’s councils.
Template for success
Business HB has developed a new template to help identify business capabilities and opportunities for growth, particularly around exporting. “If we see the value — good management, structure and strategies — it won’t be just another talkfest.”
Trade and Enterprise New Zealand for example has two people in Hawke’s Bay and 22 customers when they need 60. “They’ll work with us and the Chamber and we’ll co-ordinate so they get the best out of everyone,” says Darroch.
Once the basics are sorted, business mentoring group, The ICEHOUSE can help them tick all the boxes. He says the relationship with the Chamber of Commerce is pivotal, “we need their membership to be involved, in fact we need them to double or treble their membership.”
Business HB takes its main lead from the Business Hawke’s Bay Advisory Group, which helps to deliver the region’s economic development strategy.
The group includes representatives from the five councils, Hawke’s Bay Tourism, the Chamber of Commerce, the wine industry, Food Hawke’s Bay, EIT, Hawke’s Bay Airport, Ngãti Kahungunu, the Ministry of Social Development, Export New Zealand and New Zealand Trade and Enterprise (NZTE).
Business HB also has strong links with the Pan Sector Leadership Group, specifically assisting Food Hawke’s Bay build relationships and add value to the supply chain.
Much of the big picture thinking is around identifying opportunities and preparing business to get involved, whether that’s the water storage project, oil and gas exploration, aviation, information technology and communications (ICT) clustering, adding value to primary produce, or evaluating the region’s export capabilities, with an initial focus on China.
Business Hawke’s Bay came into being around 18 months ago, but its potential as a full-fledged economic development agency (EDA) was only recognised by the Hawke’s Bay Regional Council (HBRC) late last year.
Its predecessor Venture Hawke’s Bay, a fully staffed and resourced unit of HBRC with a dual tourism mandate, was phased out over three years ago after an embarrassing budget blow-out. That capped off close to 15 years of council attempts to showcase and expand the region’s capabilities.
Earlier iterations – Vision 2020 and Hawke’s Bay Inc – also failed to deliver the promised benefits to a region desperate for traction in shaky economic times.
On the demise of Venture HB, tourism responsibilities were passed to Hawke’s Bay Tourism, a partnership between the private Wine Country group and the HBRC, and economic development was taken back in-house.
Critics blamed weak business foundations, a strategy that delivered little more than research and development, rebranding and piles of reports, and a failure to engage with the commercial sector and complementary agencies.
It was the desire to rescue this pivotal role from council bureaucracy that led business-focused folk at the Chamber of Commerce, under the guidance of then CEO Murray Douglas, to form Business Hawke’s Bay.
Running on oily rag
It wasn’t until late in 2012, that HBRC began referring almost affectionately to Business HB as a partner and independent facilitator of relationships between businesses, industry sectors, government agencies and local authorities.
There remains mute embarrassment that HBRC still stumps up close to a million dollars annually for HB Tourism while its de facto EDA, as Darroch says, “runs on the smell of an oily rag”.
In the 2013-2014 annual plan budgets, HBRC is expected to firm up its annual $100,000 commitment, Hastings up to $50,000 and Napier, other than approved projects, zero. With an additional $240,000 from the private sector, Business HB’s current budget is around $390,000.
It’s hoped that by adding value to the 3,000 businesses on its database and tapping other sources it may become self-supporting within two to three years.
Meanwhile both Darroch and Whyte are clearly tired of their companies being singled out as Hawke’s Bay business success stories; they want to see 50 more companies the media can talk about. “We’re not here to be puppets; we want to see local businesses enabled and getting some traction,” says Darroch.
They want to help businesses become financially stronger, more stable, sell more and employ more. Even if only 10% of those evaluated through the Chamber’s Hothouse or the ICEHOUSE process are able to export and avoid making bad decisions, that’ll be reason enough to crack open the champagne, says Whyte.
Chamber chaos contained after CEO, board challenges
Power struggles, tensions in the boardroom, a raft of resignations, a presidential coup and conflicting media reports have given the impression over the past year that the Hawke’s Bay Chamber of Commerce is a hotbed of conspiracy rather than the driver of ‘business vitality’.
Katja Williams, the German-born ‘change agent’ at the centre of the storm, admits she faced a “curve ball” with the loss of two consecutive CEOs and in hindsight could have handled things better as she picked up the reins and tried to keep moving forward.
Williams, agricultural and commercial relationships manager at the National Bank, saw a shift coming after the resignation of five-year Chamber CEO, Murray Douglas, and the opportunity to change direction and reduce confusion.
With the CEO responsible for both the Chamber and Business Hawke’s Bay and Napier lawyer Stuart McLauchlan as Chamber president chairing both boards, it was “impossible for outsiders to understand who was doing what,” she says.
McLauchlan was planning to step down from one of those roles when vice president Williams staged her coup. She insists her bid to oust the four-termer, backed by proxy votes and giving less than a day’s notice, was within Chamber rules.
Those rules, which enabled all Chamber members to vote for the president and vice president, were immediately changed. “I’ve always said … the Chamber Board [needs to] elect its president because they’re the ones who know what value each member delivers. Every corporate does it like that.”
The role of president, says Williams, required someone who was mentally robust and available and could be calm in a storm. “I’ve done that.”
The drama began to unfold on the departure of Douglas, the vocal CEO and driver behind Business HB, who announced his retirement in July and was gone by September. Although Business HB was seeking more autonomy, any clarity around this was overshadowed when Gavin Bush signed on as new CEO in early October.
Within weeks rumours were flying, and after a string of denials, Bush’s resignation was confirmed after he failed to show at the prestigious Chamber-run Westpac Hawke’s Bay Business Awards in November.
Conflicting media reports said he’d quit after staff threatened: ‘it’s us or him’, while Williams cited ‘urgent family reasons’. Bush claimed “philosophical difference”; later there were suggestions the Chamber struggled with funding, which Williams denies.
Then Lynn Cheyne’s appointment as food facilitator was announced by Williams and debated in the newspapers before either the boards or Food Hawke’s Bay staff knew a thing. Further embarrassment came when Williams was rejected after going cap in hand to the three local councils for additional funding for the Business HB CEO role.
With no chief to keep things in line and internal and external critics becoming more vocal it appeared the Chamber was in crisis, although Williams insists her supporters knew what was going on.
One observer insists “errors of judgement” and a “lack of transparency” left the Chamber of Commerce looking more like a “chamber of comedy”.
Resignation road bumps
Just before Christmas the mess hit the fan; after allegedly being denied the opportunity to discuss ‘leadership issues’, Business HB chairman Stuart McLauchlan, nine-year board member Anna Lorck, and Andrew Bayly who’d been on board 18 months, resigned.
Then McLauchlan had a change of heart, agreeing to stay on with Business HB, fearing the group may lose momentum if left leaderless.
Now Williams’ change management efforts were more about holding things together. “A road bump hits you and you handle it as best you can, tying down the luggage and keeping things moving forward.”
She attempted to communicate with board members at the same time she was getting calls from newspapers and radio wanting comment and she claims things were “misinterpreted and taken out of context.”
What matters, says Williams, is that the Chamber continued operating within its brief. She’s still not sure whether she ended up with the raw end of the deal or whether this was the right environment to manage change.
She acknowledges it was a tough time for herself and McLauchlan who both juggle their volunteer Chamber responsibilities with full-time jobs. “I know that I’m not going to be everybody’s friend; some people don’t like it but down the track when the new model is bedded down, they might say, that was a good job well done.”
As for her future, Williams imagines a new skill set will be needed within two years. “I will have passed my use-by date and it will be time to move on.”