Tuesday 25 June 2024

"...'A Lister' management types who have no in-depth knowledge of the technical, engineering workings of their industries?"


"The Board Chair of Kiwi Rail, David McLean, is a lawyer. He did a Bachelor of Law degree at Victoria University. The CEO of Kiwi Rail, Peter Reidy, has a Bachelor of Commerce degree in Accounting from Auckland University, where I work. 
    "Both were asked about what caused the Inter Island Ferry to crash. I assure you - nothing about how trains or ferries work is covered in law or commerce degrees. 
    "Why is productivity low in NZ? Could it be so many of the Boards & CEO positions in NZ are made up of 'A Lister' management types who have no in-depth knowledge of the technical, engineering workings of their industries? ... 
"Was Google started by accountants & lawyers? Was SpaceX started by lawyers & accountants? Was RocketLab started by lawyers & accountants?"


Duncan Bayne said...

To reverse this trend, we'd need to encourage long-term employment & staff loyalty, and resume the old practice of promoting leadership from "the ranks".

Those practices had their problems, though, including unsustainable growth of middle-management, and "make-work" in an environment of lifetime employment.

I'm genuinely unsure how to resolve this tension.

MarkT said...

Having engineering knowledge certainly helps, and probably the reason NZTA is not as bad as Kiwirail (there’s a lot of engineers in NZTA). It takes a special level of disconnectedness to launch into the acquisition of big new ferries without any idea of how the ports are going to accommodate them, as Kiwirail did. But you need two other things too in senior positions:
- (1) Being able to see the forest for the trees - something most engineers lack, and (2) Giving a shit about avoiding waste and inefficiency - which most whom work for government z(and often corporates) lack.

Chris Morris said...

When one looks at the boards and senior management of many companies, it is very rare to find one person in each group who has had real first-hand experience of what the company does. Being in Accounts or Personnel departments of the company before promotion doesn't count as real experience.
There should be a diverse group of skills and experience among the decisionmakers, but not at the expense of having come up in that environment. I am currently working through the report on an Australian power station that blew up, nearly bringing down their grid. The report is critical of the organisational structure; finding faults that it was owned by the government, had senior management without relevant experience and rapid turnover of station leadership. The clip the ticket and move on mentality.