Dynamics Day

Closing Keynote

Dynamics Day 2012 Keynote

Don’t forget to hand in your

evaluation forms

Hand in to any of the Intergen

team.

Draw will be made over drinks

immediately after this final

session.

Data driven enterprise Introducing Rod Oram

Game-changers

Data-driven business

Rod Oram’s presentation to

Intergen’s Dynamics Day 2012

Auckland, October 31st, 2012

Kiwiki on Facebook / Twitter @RodOramNZ

oram@clear.net.nz / +64 21 444 839

Agenda

• World

• Revolution

• New Zealand

• Opportunity

• Paradox

• Companies

Then…. …Now

• 2007-09

• Sudden liquidity crisis

• Big, quick fix

• Pump in lots of money

• Lots of political will

• Lots of public support

• Worked fast

• Markets re-assured

• Moved on to current phase

• 2009-20??

• Long-running structural crisis

• Big, slow fix

• Restructure economies

• Lack of political will

• Lack of public support

• Will work slowly

• Markets fearful

• Very, very stuck

Saving Europe is simple • All it would take is:

• French reform

• German extravagance

• Italian maturity

• …as The Economist opined May 12

People, planet • Vision 2050

• A very challenging roadmap for corporate development by World Business Council for Sustainable Development

• …NZ version just released

w • q

Agenda

• World

• Revolution

• New Zealand

• Opportunity

• Paradox

• Companies

Cradle to Cradle • One product gives rise to the next

• …waste, by-products and recycling of one, become materials for the next

• …emulating nature’s cycles

Ray Anderson • Founded Interface in 1973

• …15 years later world’s largest maker of carpet tiles

• His “mid-course correction” came in 1994, when he was 60

• 2020 goal: take nothing from the earth that could not be rapidly replenished, produce no greenhouse-gas emissions, and no waste

• By 2007 Interface was about halfway up “Mount Sustainability”

• Greenhouse-gas emissions by absolute tonnage were down 92%

• Water usage down 75%

• 74,000 tonnes of used carpet recovered from landfills

• Savings of $400m each year from no scrap and no off-quality tiles more than paid for the R&D and process changes

• As much as 25% of the company's new material from “post-consumer recycling”

• Sales had risen by two-thirds and profits had doubled

• Ray Anderson’s Economist obituary www.economist.com/node/21528583

The next 10 years • Finance and capital conditions

• Finance more expensive and less available • Market and regulatory constraints

• Less benign economic conditions

• Higher economic volatility; Increased risk

• Low carbon-economy • New disciplines & technology • Far greater resource efficiency • Technology change accelerating

• Public losing trust in business

• Scepticism over Anglo-Saxon model • More government intervention

• Social and demographic change

• New responses to retirement, pensions • New business & government solutions • E.g. more flexible working practices

“The Shape of Business”

Confederation of

British Industry

www.cbi.org.uk

Agenda

• World

• Revolution

• New Zealand

• Opportunity

• Paradox

• Companies

Slowth • We’re still recovering slowly…

…helped by rebuild of Christchurch

• Growth in year to June 2012 was 2.0%... ..could peak at 3% next year …dominated by Christchurch

• But will then sink back to its long-run slow growth average of around 2%

• Why can’t we grow faster, longer by earning a bigger living in the world economy?

…we must double growth • We need to more than double our growth rate to at least 5% a year

• …but our non-inflationary growth rate has dropped to 1.9%

• …and the growth trend will remain weak out to 2014, Treasury forecasts

Value creation & capture

• 1 Fonterra plant in NZ makes infant formula for Pfizer

• 8% Pfizer’s Chinese market share for infant formula

• US$12bn Nestlé paid for Pfizer’s infant formula brands

= 3 x Fonterra’s net asset value

Agenda

• World

• Revolution

• New Zealand

• Opportunity

• Paradox

• Companies

NZ 2050 • …by a group of young leaders…

• …under the NZ Business Council for Sustainable Development…

• …which morphed into the

• Sustainable Business Council

• Download at:

• http://bit.ly/PxiG1B

• NZ site coming soon at:

• http://www.vision2050nz.co.nz

• Vision 2050 Global report at:

• http://bit.ly/Ox0HsK

Agenda

• World

• Revolution

• New Zealand

• Opportunity

• Paradox

• Companies

Paradox

Abundance Scarcity

Re-invention

Scarcity Abundance

Poverty

Cows Scientists

Wealth

Lacto-pharmaceuticals Milk powder

a • a

How about creating global centres of excellence in: - Dairy nutrigenomics - Earthquake prediction, rescue & recovery - 21st century city systems - Antarctic research

Poverty

No.8 Game-changers

Wealth

Game-changers No. 8

LanzaTech…clean tech leader • Commercialisation agreement with:

• Chinese Academy of Sciences

• Baosteel; next pilot plant in China

• Makes biofuel from industrial waste gases

• Turns greenhouse gas liability into profit

• World pioneer of the science

• Auckland-based; NZ Steel pilot plant

• Big venture capital backing

• US$100m of capital so far

• NZ: Stephen Tindall

• US: Vinod Khosla

• Chinese and Malaysian investors too

Poverty Sustainability

Weak Strong

Wealth

Sustainability

Strong Weak

Zespri • April 2009: Published its carbon life cycle analysis:

• Orchard operations make up 17% of total emissions for EU exports

• Packhouse & coolstore processes account for 11% of total emissions

• Shipping accounts for 41% of total emissions

• Repacking and retailer emissions amount to 9% of total emissions

• Consumer consumption & disposal comprises 22% of total emissions

• Bottom line: resource efficiency builds a more profitable, resilient business

• E.G. Kite-assisted ships save 22% of their fuel bills on average

Our future

• NZ Land: 270,000 sq km

• Australia’s 28x NZ

• NZ Oceans: 5.8m sq km

• 5th largest in the world

• Australia’s 1.4x NZ’s

• Huge responsibility:

• …to nurture

• …to use responsibly

• …to sustain us • We need new values, systems, collaboration:

• …to be sustainable

• …to offer hope to the world

Poverty

Simplicity Complexity

Accounting • Fra Luca Pacioli

• …Venetian monk, polymath, friend of the clever, creative, rich and famous

• …including Leonardo da Vinci

• Published in 1494 Summa de arithmetica

• …which included the first full, public description of the secret double-entry book-keeping system used by Venetian merchants

• Basically, we’ve been double-entry book-keeping (assets/ liabilities; credits/debits etc) ever since

• Financial accounting…

• …brilliant but limited, thus flawed

Management matters • NZ government-funded study of

large and medium NZ manufacturers

• Study by London School of Economics and McKinsey… …sub-contracted to University of Technology Sydney

• Comparisons with 16 countries

Raising laggards has huge economic impact

Wealth

Complexity Simplicity

New management disciplines • Relationships: from transactions to partnerships

• …particularly highly strategic ones

• Innovation: from incremental to radical

• To meet new needs…in new ways • Open innovation and other forms of collaboration • New opportunities for NZ companies to partner with global ones

• Sustainability: from fringe to mainstream

• Measuring and managing environmental flows through our businesses • Push down the road to true sustainability

• Management: from tactical to strategic

• Need to collect, interpret and act on real-time data • Everything we do today is a piece of our big picture

Integrated Reporting • The next big initiative by corporates

and accounting bodies

• Seeking to make financial, environmental and social measures…

• …much easier, more accessible and more useful to corporates, investors and the public

• www.theiirc.org

Agenda

• World

• Revolution

• New Zealand

• Opportunity

• Paradox

• Companies

Vanguard NZ companies • An exciting new class of NZ companies is emerging:

• Hallmarks:

• Inspired products & services offering unique value

• Originality born of NZ roots

• Smart strategies for international markets

• Astute management skills to acquire & develop human & technology skills; capital

• Confidence & skills to collaborate with partners, suppliers, customers abroad

• Across the economy: domestic; import; export

Quadruple B businesses

• Building

• Billion $

• Businesses from the

• Beach

• Rod Drury…

• …serial entrepreneur

• …founder of Xero

www.3000.org.nz

“You’ll have no future…

…if you don’t make one for yourself”

… Johnny Rotten:

Thank you