A Tale of Two SOEs

Two recent media articles illustrated the different approaches to innovation taken by a pair of high profile state owned enterprises (SOEs) with which I am well acquainted. What these stories have in common are the fact that both businesses were turned around by strong leadership.

Rod Oram’s pre-Christmas cracker about Air New Zealand’s cabin layout innovations was a timely reminder about how (with an injection of taxpayer funded capital) the national carrier went from being a basket case to business success. I love Rod’s work and the fact that he has been for many years a tireless champion for innovation and technology as a way for New Zealand businesses to add value to exports and grow the economy.

The second story was about MetService, my former employer. The NZ Herald article outlines how the company leveraged a stake in a UK company to acquire expertise in the European marketplace. The company executed this strategy under the tutelage of Paul Reid, who is about to move on from the company. Reid inherited a mess when he took over the CEO role several years ago but he forged ahead and infused the senior management with some core competencies that had been somewhat lacking previously. Incredibly for a knowledge based business, the company had limped along for many years until this time without either a human resources manager or a CIO. He also took the time to genuinely listen to any staff member, his door was literally always open.

Being a former Air New Zealand staffer himself and mindful of the highly competitive nature of the industry, Reid actively led MetService away from its traditional aviation market base and into the media and consumer markets of Europe and the Middle East. This has proven to be a good move, although in light of volcanoes and snowstorms and rapid developments in platform technology, aviation still looks like a missed opportunity for the company. Unfortunately, it was very clear to me at the time that it meant a death warrant for the position I was employed in. But now that I’m engaged in a challenging role developing a high growth technology export business that I actually have a stake in, it seems like the best possible outcome all round.

Best wishes for 2011.

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