The fatigue from Covid-19 impacts and increased regulatory change has made this the most difficult KPMG Agribusiness Agenda to write in the report’s 12-year history.
KPMG Global Head of Agribusiness, Ian Proudfoot, says there is a fundamental pressure on leaders, and it was clear from conversations that industry morale has fallen significantly over the last year.
“We could sense anger during our conversations, particularly in relation to the labour shortages the sector faces. At times it felt as though we were talking to leaders who were primarily focused on finding the strength to fight another day rather than the energised leaders of previous years.”
The practical labour and shipping challenges that Covid-19 has created are consuming most executive time and effort. The speed at which things are changing is unprecedented and very often means that the appropriate decision in the morning needs to be revised in the afternoon.
The pace of regulatory change is also greater than it has been in recent years and is expected to accelerate as the Labour Government looks to implement its transformation agenda. Each new rule brings new compliance and reporting requirements and often requires changes to core systems.
“Change is good for our country; however, the point was made that it is the breadth of change that is stretching many organisations.
“In addition to this, the Climate Change Commission’s final advice on farming has also presented pressure for the sector to do its part, or even to do the heavy lifting for New Zealand,” says Ian.
For these reasons, it is the first time in writing the Agenda that there are tangible concerns over the ability of New Zealand organisations to engage in the great big, beautiful tomorrow that is emerging rapidly across the global agri-food sector.
There is a global food renaissance happening right now and we strongly believe that the ability to connect and participate in the future of food at scale, remains available to New Zealand organisations. However, the people that can make this happen, executive teams across the industry, are the same group of people that are currently under significant pressure dealing with the day to day challenges of their businesses.
While this Agenda recognises that the industry is currently operating under extreme pressure, it also illustrates that there remains great potential to become highly involved in shaping the global food renaissance in many ways.
“New Zealand is in a good position but it’s not going to be good forever. Our organisations need to act now and leverage our current reputation to secure a place at the table before our invitation to join the global food renaissance expires,” says Ian.
Our message this year is clear - it is crucial that we invest in enabling our current leaders to secure the critical seats the country needs at the top table of the future food system.
Ian says that the pandemic highlighted the lack of depth within many executive teams and we need to strengthen the executive bench.
“Given we expect our organisations to be globally competitive, we need to recognise that having appropriate depth across executive ranks is essential. It is no longer possible to short-change ourselves on executive talent; the cost of doing so is significant and growing.”
This means that seeking diverse opinions is now more relevant than ever, but to deliver on this, executives need to have the time to invest in their people and seek out alternative perspectives.
“We suggest executives need to place a high priority on taking the time to listen, reinforcing the need to ensure the leadership bench has enough resources available to it,” says Ian.
Over the last year, maintaining and developing networks and relationships has also been challenging. Zoom and Teams calls have kept us in touch but the personal elements of face to face meetings have been lost.
“It is critical our leaders have the time to reinvest in key networks and relationships. Without taking this time, there is a risk we are not engaged in key initiatives for our future, simply because we are out of sight and out of mind.”
The challenge for Directors and Governors of our organisations is to ensure they are focused on governing with a growth mindset.
“We must resource industry leadership to change the momentum of morale in the sector and orientate focus towards the future. We cannot afford to miss opportunities to step into and leverage the great big, beautiful tomorrow that the global agri-food renaissance is creating,” says Ian.
Regarding regulatory pressures, our conversations saw a simple ask to the government: please ensure that work is co-ordinated across agencies so that consultation occurs, and regulations are drafted in a way that reduces the burden placed on executive time.