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Face To Face: Mark Solomon – A leadership model whose time has come

Written by Toni Myers, New Zealand Management, July, 2012: 

Leader amongst leaders; strength with humility; pulls no punches – all epithets attaching to Mark Solomon, chair of Maori economic powerhouse, Ngai Tahu. Although softly spoken, there’s no mistaking the passion for his people – his iwi and all Maori – or his determination to create the best possible conditions for iwi success. And now he’s being shoulder-tapped for leadership roles beyond Maoridom. He talks to NZ Management’s publisher Toni Myers.

The idea of giving away their valuable IP is anathema to most commercial organisations. But that’s exactly what Mark Solomon, Kaiwhakahaere (chairman) of Te Runanga o Ngai Tahu, did. Ngai Tahu, along with Tainui, is a top-performing iwi authority – it received its Crown settlement of $170 million in 1998, and has now grown its total assets to $730 million.

Such is his determination to facilitate iwi and Maori success that Solomon opens his doors – and the runanga’s operating manuals – to tribes that want to check out the Ngai Tahu model. Many years ago now, in the early days of Ngai Tahu Holdings Corporation (the commercial arm of the iwi authority) he surprised a manager by essentially giving away the delegated authorities manual –‘had he any idea what that cost?’ With the ream or two of paper, about $15 to $20, he said. “Mark, that cost the organisation $120,000!” Unfazed, he told the Corporation to “Get used to this. I’m going to do it for every tribe that walks in this door.” Today Holdings Corporation is right behind this approach.

The first time was for Ngapuhi chairman Sonny Tau. Solomon had photocopied authorities manuals, office procedure manuals and whatever he had in a document form. “I said to Sonny, ‘Basically mate, this is our structure. I’ve printed all this off for you to take home; use what you want, put aside what you don’t want. But if you come up with a better model, come back to me.’”

Solomon challenged the Corporation: “Look at it from this perspective: if I could get 10 of the 57 tribes to work with us in business, does that cover the cost of your intellectual property? And the CE at the time just looked at me and said, ‘Never thought of it like that. Give it away to whoever you like.’”

He believes in acting on the values of the organisation: “One of those values is manaakitanga (hospitality) and another is whanaungatanga (kinship).
“It’s a different paradigm – the Maori paradigm. Some iwi do not as yet have the resources behind them to set up like we have.”

The success of Ngai Tahu’s operating model owes a lot to Solomon’s focus on two key factors: an overriding focus on the people and a commitment to distributing funds. He’s a fan of the late US professor and hero of the post-war Japanese manufacturing revolution, W Edwards Deming, who Solomon quotes: “The man at the top is no more important than the man at the bottom.”

Solomon believes that if, at the first sign of a downturn, a company drops staff it will find all the skilled people gone when it needs to ramp up again. “Dropping people should be the last thing that you do. Do you throw your children out when times are tough? It’s the same thing. No longer are there ‘jobs for life’ but if values are important then practise what is preached.

“It’s people first, second and always.

“And look what tends to happen with the cutbacks in the public sector? Consulting costs go through the roof.”

Looking to identify common elements in long-term successful businesses, Ngai Tahu researched companies that had lasted for more than 100 years; what were the common factors? “They commonly distributed four to 6.5 percent of the net asset value per annum so that is what we aim for; last year on an operating net surplus of $37.28 million, we distributed $22.60 million with the rest held for reinvestment.”

In the 12-year history, to 1 June 2011 of the iwi authority, it had distributed $227.9 million; $56.9 million more than the total settlement.

“And it’s done with a debt ratio of around 20 percent. With the earthquake and rebuild debt levels will go up in the short term but the objective will be to bring them down again within a couple of years.”

Solomon does acknowledge that there is some growing comprehension in both the business sector and across New Zealand’s communities in general of the size and potential of Maori economic activity. He was recently invited to join the board of green growth campaign Pure Advantage alongside corporate luminaries such as Sir Stephen Tindall and Joan Withers. But you sense a lingering frustration with a lack of real awareness of Maori business on the part of the corporate sector.

Solomon was invited to Auckland in November 2010, to meet with the Committee for Auckland. On arriving he discovered other Maori leaders were also invited, and there was a big banner up on the wall: ‘Are iwi ready to invest?’ They were welcomed by Sir Ron Carter of Beca who told them that after they had introduced themselves there would be a panel discussion on the government’s proposed public private partnership framework.

“When he welcomed us Sir Ron said that we needed to know that all the banks in the country were in the room and 40 of the top companies on the New Zealand stock exchange.”

Tuku Morgan (Tainui) spoke first, about what Tainui had in 1840 (including ships trading with Australia); and what they had after the land wars – which was basically nothing – and here they were today with about $650 million under management.

“I got up next and said, ‘To be honest, when I walked in and saw your banner, I considered walking straight back out. Because I think the question on the banner is back to front. The question is not are iwi ready to invest, the question is: are you ready to invest with iwi? Because the reality is for the last 150 years the tribes have been invisible to you. If you do want to work with us we’re values-based.’ And I explained our values and said, ‘But to be blunt if your values don’t match ours we don’t want to work with you. If they do, then welcome; let’s have the talks.’”

Solomon highlights the assets of that time of some of the Maori authorities represented in the room: Ngai Tahu $730 million; Tainui about $650 million; Naida Glavish of Ngai Whatua was there and collectively Ngati Whatua was worth about $500 million.

“The last speaker was Ngahihi o te ra Bidois. He was sitting in the front row and when he stood and turned around he had a full face moko. You literally saw some in the room take a step backwards. He said who he was; that his hapu was in a joint venture with Mighty River Power; that the venture was worth over $400 million.” The four of us standing in front of the banks were representing about $2.3 billion. You could see the shock from some in the room once we explained.”

Solomon sees huge opportunities for Maori and iwi to achieve even more by working cooperatively rather than independently. He started the Iwi Chairs Forum in 2005 as a response to that year’s General Election.

“In 2004 we had the forced passing of the Foreshore and Seabed legislation and in the 2005 election year National was running a ‘Kiwi not iwi’ campaign. We had Don Brash calling for the abolition of the Maori seats and Labour only just won. I asked myself, if the Crown was to extinguish the Treaty like they had Maori’s rights to the foreshore and seabed with the stroke of a pen in Parliament, what have iwi got left? And my answer was quite simple: ourselves.”

Solomon went to see Dame Te Ataarangikahu, the Maori Queen, and put his view that every tribe in the country was trying to do the same thing. “We were all trying to build our capital base; we were all trying to look after the social and cultural needs of our people; and we were all fighting to defend the natural resources within our respective tribal areas. If we’re all doing the same thing, why are we all doing it in isolation?

“I put to Dame Te Ata the idea of inviting 30 to 35 iwi chairmen to my marae in Kaikoura to discuss a collaborative approach and she agreed to support me. I sent out 30 invitations and 35 iwi chairmen turned up. And we got an agreement at that hui that we would meet four times a year. The meetings were to be held on the marae and the rationale for that was that the home people of each marae could listen in and see what we’re doing, so you demystify it; that the host iwi is always the chair and that every iwi pays an equal share of the costs.

“Some have a capital base and some don’t but if we all pay an equal share it’s pretty cheap to come to a hui like that. We meet four times a year to discuss the macro issues that affect all of us. We’re not a decision-making body; we set it up for information transfer so we can all make informed decisions. Out of that process came the iwi leaders’ forums and they are issue-specific.”

Solomon is chair of the Iwi Leaders’ Group for Iwi Collective, which is looking at ways in which iwi can get together to explore options for collective iwi investment.

He cites an example of potential for iwi to benefit from collaboration. “Ngai Tahu on an annual basis writes off a set percentage of our annual catch entitlement. We write it off either because the volumes aren’t big enough to be commercially fished or because they are species that most New Zealanders know nothing about and so there’s really no market for them.

“For Ngai Tahu to invest in R&D to value add to those species costs us an arm and a leg. But if the 57 tribes that are involved in fishing were to do it together – because we all have the same issues – it would create economies of scale. So just in one simple area like that we could do R&D work together that could value add to those species at a fraction of the cost to do individually.”

He sees other opportunities for collaboration around the Resource Management Act (RMA) and Public Private Partnerships (PPP).

“I’m on two tribal boards in the Taranaki region; it seems that every tribe in Taranaki has been looking at setting up its own natural resource unit. Why not amalgamate and have one company that deals with all RMA issues. Use your collective for economies of scale. We’ve got huge opportunities – ones that most pakeha companies would never look at.”

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