Expanding your business? Proceed carefully …

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It’s great to see Hawke’s Bay’s economy steaming ahead and to notice lots of positive signs that our business environment is thriving.As your business improves and demand increases you may be thinking about expanding by hiring new staff.

Before you start making offers however there have been a number of changes to employment law recently that you need to be aware of.

Change to 90 day trial period

The most important change if you’re thinking of new hires is to the 90 day trial period. From 6 May 2019 businesses that have 20 or more employees are no longer able to include a 90 day trial period in their employment agreements.

This means that if you are a larger business and employ 20 or more employees then you will no longer have a “get out of jail free card” for dismissing new employees that aren’t working out. You will need to revisit your employment agreements to remove trial period provisions. I recommend that you include comprehensive probationary period provisions instead – these would still allow you to dismiss an employee at the end of a probationary period provided that you follow a fair process and have a fair reason for dismissal. Unlike the 90 day trial period provisions however your employee will be entitled to bring a personal grievance if you haven’t followed due process.

If your number of employees fluctuates around the 20 mark then you will need to ensure that you are aware of exactly how many employees you have as at the date an employment contract including trial provisions is signed. If the business employs 20 or more employees at that date then you will not be able to utilise the trial period provisions if you later decide it is necessary to dismiss your new employee.

Smaller business can still use trial periods
Smaller businesses with less than 20 employees can continue to use trial periods, but you should be aware that any flaw in either the wording of the provision or in the way the contract was signed will mean that you can’t rely on the trial period when dismissing an employee. For a trial provision to be valid the employee must have had a chance to review and seek advice regarding their employment agreement before signing it, and the agreement must be signed prior to the first day of employment.

Be careful if you’re considering dismissal of an employee
I recommend that any employer considering terminating a worker’s employment using a 90 day trial provision, or in fact dismissing an employee for any reason, seek legal advice before doing so, as you may not be entitled to do so if you have not followed the right process, no matter how obvious it might seem to you that a dismissal is justified. Mistakes in process can be costly, so it is better to make sure you get it right.

Other changes to employment law

Along with the changes to the trial period there have also been a raft of other changes introduced, some of which took effect from December 2018, and the rest of which will be effective from 6 May 2019. These include changes to union access and collective bargaining processes and a greater emphasis on reinstatement if employees have been unfairly dismissed. The protections around restructuring for vulnerable workers have been expanded so that employers with less than 20 employees are no longer exempt.

Rest and meal breaks

Another change is to employees’ rights to set rest and meal breaks. Currently employees are simply entitled to ‘reasonable breaks’ and there are no specific rules for when or how long such breaks should be. The new law sets out the number and duration of breaks which employees are entitled to in relation to how many hours they have worked. This is actually a roll back to the pre-2015 position so many employers and employees won’t notice a significant difference if they hadn’t made any changes to breaks since then. I recommend that employment agreements include specific rest and meal break times that suit your business, as if this isn’t agreed then the default timing for breaks will apply.

Review your employment agreements
The changes I’ve mentioned are not an exhaustive list of the amendments to the Employment Relations Act. This article is only intended to give a general overview and alert you to the fact there have been changes. I recommend that all employers regularly review their employment agreements and better yet that you seek legal advice to make sure that your agreements are fit for purpose and fully comply with current legislation.

 

Climbing the ladder in the apple industry

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The apple industry in Hawke’s Bay is thriving. Looking at 2017 statistics published by the New Zealand Institute for Plant & Food Research Ltd. since 2015, apple orchards in New Zealand have increased in value by approximately 70 percent. In 2017 New Zealand exported 343,000t of apples (total production of 384,000t). Of which, 70 percent are grown in Hawke’s Bay. In 2019 exports are expected to exceed 400,000t.

This boom in the apple industry is leading to increased career opportunities with more skilled labour in demand. To keep pace with the fast changing horticulture sector, EIT – aligned with industry and the Industry Training Organisations (ITOs) – is constantly widening its range of programmes. A recent addition was the New Zealand Diploma in Horticulture (Level 5), Post Harvest Strand.

“The diploma is spread over two years to meet the needs of people working in the horticulture industry,” explains horticulture tutor Chris Thorman, the programme coordinator for the programme. “This means students can work and study during the year and it is tailored to fit around the busy packing season.”

Joe Dale and Rachael Marston are two current students. These pack house managers have several years of experience in the industry and are now studying to keep up-to-date with current developments.

Joe, production manager at Freshco, says, he worked his way up from the ground. He left high school and started to work in orchards and then packhouses and in doing so, gained a lot of background knowledge about the industry. “The course enhances my management skills and gives me a deeper understanding of things that I’m doing,” says Joe who is responsible for a team of 100 employees.

“Ninety percent of the apples that get graded and packed on site are exported,” says Joe pointing out the challenges of accommodating all the various market requirements. Apples destined for the Japanese market for instance, have to be fumigated for two hours and stored at two degrees for 25 days. Joe notes that some markets even require the apples to be presented in a certain way and are happy to reject a consignment if the aesthetics standards are not met.

Rachael too has climbed the ladder in the industry. The 26-year-old oversees the crop logistics at Johnny Appleseed by organising and controlling all the incoming fruit from the orchards and outgoing consignments to cool stores and customers. “For instance, I have to check all of the bin dockets on every incoming load, whether the information displayed is correct and the fruit has met all the legal requirements. It’s all about traceability and food safety,” she points out.

Rachael was offered the chance to gain the qualification by her boss. “I thought that there would be nothing wrong with expanding my horizons and streamlining my knowledge. I’m able to understand the process now, for example why we store fruit in certain way and what difference it makes to fruit.”

The industry realises that well-trained people are the key to success and fully supports the programme which enhances the career prospects within the industry. The next Horticulture diploma (Post Harvest, Level 5) starts at the end of July at the EIT Hastings Centre.

CGT debate over, a flying start to 2019 set to continue

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Now that the debate about the introduction of a comprehensive capital gains tax is out of the way, we expect confidence to build further in the commercial property sector over 2019.

Starting with such a strong base to grow from, with over $138 million in commercial property sold in 2018, up from $116m the previous year, we knew 2019 would be off to a flying start. But, CGT discussions did muddy the outlook despite positive deals concluding as was recently showcased with a notable sale at 96 Austin Street leased to FPG, a world-leading food display and retail solutions business based in Hawke’s Bay.

This is one of the largest industrial sales Hawke’s Bay has seen for many years with the leasehold and freehold sold for a total of $15.620m.

There are already a number of positive sales and leasing transactions under negotiation that will create further market confidence, especially with no additional capital gains tax requirements. Providing market confidence in Hawke’s Bay’s future activity is the great wave of economic positivity we are experiencing.

Data from Statistics New Zealand, ASB Bank and research entity Infometrics are all fairly consistent in their assessment of our region’s economic prosperity.

They all show a rise in Hawke’s Bay’s population, GDP, employment, the number of businesses, agricultural outputs, construction activity, household income and retail spending. Not only has the many positive indicators provided ongoing confidence, it has translated into higher property sales turnover and supported steady leasing activity in the region.

Significant investment forecast in both infrastructure and construction over the next few years will also assist deliver new growth opportunities.

Development in Irongate, Omahu Road and Whakatau are growing in popularity due to the opening of the expressway extension.

As such, we see Hawke’s Bay remaining as one of the most confident markets in New Zealand, with enquiry from all over New

Zealand setting record prices for quality property, and investment yields in the 5 to 7 percent range.

Hawke’s Bay remains a safe-haven for investors, with strong population growth and a booming regional economy. The latest quarterly Commercial Property Investor Confidence Survey, released in March showed a net positive 22 percent (optimists minus pessimists) of respondents expected investment conditions to get better over the next 12 months.

This was broadly in line with the last four quarter survey results. Napier/Hastings had a standout result with a net positive 24 percent – the highest on record since the survey began almost a decade ago.

Considering the survey was undertaken during the release of the Tax Working Group’s final Future of Tax report, it is easy to expect higher confidence in market activity now.

When we look at each property sector in more detail, we note that the office sector continues to show solid tenant demand and especially low vacancy rates in Napier and Havelock North.

To release some pressure more premium stock will come to the market in Hastings, with The Tribune redevelopment, One Havelock Road in the Village and The Hastings Hive offering shared office

spaces for tenants looking to accommodate 3-15 staff in flexible leasing solutions.

Retail property is also experiencing a boost due to ongoing growth in retail spending. Retail Electronic card transactions data from Statistics NZ show core retail spend aggregated to $55,487 million for the annual year to February, climbing 4.4 percent from the previous year. The industrial sector which is getting a boost from logistics, warehousing and manufacturing sectors means demand for space remains high. We continue to see tightening vacancy rates across the Bay, particularly Onekawa which is already at historically low vacancy levels. This supports property fundamentals in an already strong investment sector.

While activity is expected to increase, supported by positive market conditions, continually unlocking opportunities can be challenging. If you are unsure of your next leasing, purchasing or selling move, or would like some more information on latest market activity, please get in touch with me.

Local design and construction excellence

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A team of Hawke’s Bay design and construction excellence has delivered Hastings a world class Primary Health Facility.

“The way we procured and built the project meant we were all one team working in partnership,” says project manager Nick Ward of Proactive Management (PML).

He’s full of praise for the team of local construction specialists with main contractor Gemco Construction, Architecture HDT, building services engineers Ensor Consulting, consulting engineers LHT, geotechinical engineers RDCL and planners and surveyors Development Nous.

“Gemco came on board during the early design process and were actively involved in the documentation phase advising on efficiencies, buildability, materiality, budgeting, sequencing etc.

“We de-risked the project before we got to commence construction which helped to ensure an efficient build phase, reduced construction queries, mitigated any construction cost surprises, and streamlined the construction programme.”

At any one time, there were up to 80 contract staff working on the site.

The health centre was built to highly technical specs as it needs a much stronger structure that was heavily engineered above and below ground, along with complex and intelligent building systems and services throughout.

The wall cladding was constructed of thick precast concrete panels with the structural steel frame and the heavy foundations, engineered to be resilient to seismic activity.

The patterned exterior precast concrete panel claddings are a unique feature that’s a first for Hawke’s Bay. The concrete was poured into cleverly-made rubber moulds to achieve the textured look.

Glenn Cook Technologies, maintain HHC’s servers, medical databases, email and applications. GCT also provides offsite backup services, firewall management, reporting and support to medical staff.

The move to the new premises involved detailed planning to enable the practice to close at the former site and open at the new site the following morning with zero business interruption.

“We are proud to have played a major part in the success of the new health centre,” says Glenn Cook. Visitors, patients and staff can now enjoy a world-class health facility.

2019 – innovation and entrepreneurship

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At Business Hawke’s Bay we love BIG ideas and BIG themes. 2019 is Hawke’s Bay’s year of innova- tion and entrepreneurship.

We’re starting a nationwide conversation that celebrates and draws attention to Hawke’s Bay as a place where people with bright ideas can flour- ish. We’re calling on everyone from across the Bay; from schools, from iwi, from councils and from the busi- ness community to join us and help to tell Hawke’s Bay’s stories of inno- vation and entrepreneurship.

Hawke’s Bay offers great lifestyle, world class wines and amazing produce, but for many from outside our region that’s where our story ends. Hawke’s Bay is all these things, but it’s so much more. It’s also a place where creativity and innovation is woven into the fabric of the community. And it’s a place full of opportunity for investors, entrepreneurs, businesses and people with skills.

Business Hawke’s Bay was inspired by the organisers of New Zealand Techweek, who are focused on New Zealand to be globally recognised as a beautiful country where world-leading solutions are born. We’re applying that thinking regionally, showcasing our leading edge innovation and amplifying brilliant ideas.

The Why? Because great things grow here

We believe that greater innovation and entrepreneurship will unlock Hawke’s Bay’s full potential. With everyone on the lookout for opportunities to be more innovative and telling their stories of innovation, together, we’ll start a movement.

Telling a fuller, broader story of Hawke’s Bay will help our region grow, and attract more investors, businesses and people with skills that will add value to the region.

Collectively, let’s showcase the full range of opportunities and tell a “lifestyle plus” Hawke’s Bay story, demonstrating that great things grow here and so do great ideas and great businesses. We want people to know that if they come to Hawke’s Bay they can tap into a creative, innovative and entrepreneurial community.

By showing the talent, the meaningful connections and the support available, we’ll give investors, businesses and people more reasons to do business in Hawke’s Bay.

Innovation Tours of the Bay – a featured Techweek NZ week event

Being innovative is at the heart of Hawke’s Bay businesses and you’ll find it well beyond the technology sector. It’s everywhere, so let’s tell that story. Whether it’s software to grade fruit via a digital image, a frost fan that can save a grape crop, sector leading furniture design for schoolchildren or holistic nutrition to improve health and well-being, all of this innovation and the thinking behind it is borne of Hawke’s Bay.

Let’s stand up and celebrate, connect and collaborate to foster even more entrepreneurship and innovation. To ensure Hawke’s Bay innovations get the recognition they deserve and can attract the talent and capital they need to grow, Business Hawke’s Bay will be talking more about the great work being done here. One way we’re doing this is through “Innovation Tours of the Bay” curated by Business Hawke’s Bay for Techweek NZ 2019, which is being held on May 20-26.

As a Tier 1 Techweek NZ event, Hawke’s Bay’s Innovation Tours will be publicised nationally and internationally; a series of three innovation tours, showcasing business innovation across food and beverage, agribusiness, and sustainability. Each tour will showcase fantastic innovation, entrepreneurship and new technology being developed right here in Hawke’s Bay, giving it well-deserved prominence and recognition.

The Innovation Tours will be an opportunity for building connections and cross pollination, amplifying Hawke’s Bay’s unique and inspiring innovation stories. We’re excited to help promote our innovations and entrepreneurs on bigger stage. Find out more by visiting our website.

Ways you can get involved

We’d love our every facet of the community to join us. As Hawke’s Bay regional co- ordinator for Techweek NZ, Business Hawke’s Bay can support businesses, schools and community groups to create a local Techweek event. Proudly showcase your innovations throughout the year and let us know what you’re doing, so we can build enthusiasm for innovation and entrepreneurship right across Hawke’s Bay all year long.

To be innovative rather than “doing innovation” has been identified as a global mega trend. Let’s nurture and embed being innovative in everything that we do.

2019 – Hawke’s Bay’s year of innovation and entrepreneurship. Join us!

Hawke’s Bay Airport spreads its wings

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The Hawke’s Bay airport has taken a step closer to its vision to be “New Zealand’s most vibrant and successful regional airport” with the opening of the new arrivals hall.

The new arrivals hall opened in early January with Araminta Wilson the first passenger to collect her bags from the new automated baggage system.

At the same time, the airport rolled out a team of airport ambassadors, who will welcome people to Hawke’s Bay and provide some guidance to navigate around the airport as well has helpful tips to enjoy their stay.

The carpark is also being reconfigured and new parking payment technology will be introduced as the airport aims to further improve the visitor experience and the New Zealand Transport Association’s new Watchman Road, including a new entrance to the airport.

Hawke’s Bay Airport chief executive Stuart Ainslie said progress on the $20.2 million airport redevelopment is on schedule, with stage 1 finished and Stage 2 already well underway.

“Completion of Stage 1 was a big milestone for the airport but there’s much more to come as a new-look airport becomes a gateway for the region that will be much more culturally connected.

As well as the new baggage reclaim system the arrivals hall also has vehicle rental kiosks and a pop up café.

The arrivals area will remain separate from the remainder of the existing terminal. Stage 2 construction is at the southern end includes a new check in area.

Stuart says the “big wow” of the redeveloped airport will not be realised until stage 3 of a centralised hospitality and commercial hub is completed in mid 2020.

“We are pretty much building a new terminal on part of site of the current terminal and increasing the footprint by 74 percent.

In August 2018 the Hawke’s Bay Airport company announced an upgrade to its terminal expansion due to a revised passenger forecast of 1 million passengers by 2025.

“We added another 500 square metres and revised the budget from $15.7m to $20.2m so that we could meet the anticipated growth as well as create additional retail and commercial offerings.

Changes to car parking are also needed due to the increase in passengers.

“The significant growth in passengers has had an obvious impact across the business, including a big increase in vehicle movements. This means that it is now unrealistic to always find a park in front of the terminal. However, in an effort to control congestion and optimise short stay capacity with close proximity, the airport will be actively enforcing the time limits on the P120 parks and ensuring that vehicles are not dwelling in the pick-up and drop off zone.”

He said new car parking payment technology will also be introduced and the airport is currently looking at options through a tender process.

Mike Pero Real Estate establishes in HB

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The savvy and experienced local business woman, has opened the region’s first Mike Pero Real Estate franchise, based in Hastings, as the Hawke’s Bay brand and territory owner covering Napier to Central Hawke’s Bay.

Fulfilling a lifelong ambition to own her own business in real estate, Amber says she wanted to bring a real point of difference to the regions highly competitive residential market.

“I’m hugely excited about the opportunities for Hawke’s Bay, particularly in Hastings which has huge potential as a growing city with coming more alive with inner city living in the planning – it’s all happening here and it’s fantastic to be part of it.”

Throughout her career, Amber’s worked across almost every aspect of the property market, first starting out at 18 in administration, then moving into property management then finance and sales.

“I’m passionate about the industry and through a range of different career opportunities, I’ve been able to gain experience right across the board both working in Auckland and the regions.”

“For the past two years, I enjoyed working within another franchise Property Scouts in Hawke’s Bay, so it’s given me a great insight into the advantages of becoming a franchisee.

“After doing my research I rang Mike Pero and we hit it off instantly.

As part of Mike Pero Real Estate, I’m able to offer an affordable option for Hawke’s Bay clients along with providing all our local listings with the significant benefits of being connected to a major brand with national marketing, scale and reach.

It’s the best of both worlds,” says Amber.

Amber has been built up great network within Hawke’s Bay, which has already seen her gaining referrals and being busy with appraisals and first listings.

“When people are listing their home, they want to know they’re getting expert advice and value for money. We have one of the most competitive lower fee rates on offer at 2.95 for the first $390,000 and 1.95% thereafter.

Mike Pero says he’s looking forward to his next visit to Hawke’s Bay to officially open the new office with Amber.

“For the last five or six years we have been very keen to open in Hawke’s Bay, but we really wanted someone who would fit in with our culture, vision and integrity. Amber is the perfect fit and we are delighted to have her as our representative based in Hastings – you will find Amber a pleasure to deal with” says Mike.

Rental housing overhaul long overdue

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The landscape of property management is changing and the days of letting your investment property to a ‘mate of a mate’ on a handshake is gone, or at least it should be.

In recent years the industry has undergone massive change and Propertyscouts Hawke’s Bay owner Duncan McLean warns there are more changes on the horizon. He says those who aren’t abreast of the changes can no longer bury their heads in the sand on the matter with the Ministry of Business Innovation and Enterprise working hard at identifying landlords operating outside the law and holding them to account.

A Whanganui property management company was ordered to pay $34,500 in damages for multiple counts of failing to lodge bonds and failure to provide insulation statements on tenancy agreements.

Duncan purchased the Hawke’s Bay franchise in 2016 after spending 18 years as a police detective.

“It’s not so different to policing in many ways. Communication is key, we forge relationships with all walks of life, ensuring tenant and landlord obligations are understood and met, always diplomatically and where possible with a smile.”

Duncan has assisted private landlords through the transition into professional management, often after issues have arisen.

“Often the friendship between the owner and tenant is a barrier to effective management of the investment. Properties are under-rented and inspections are not completed in a timely manner due to a perceived breach of privacy. I really enjoy the positive feedback from landlords who no longer have the stress but are enjoying better yields from their investment, knowing

Rental housing overhaul long overdue

Coming of age for residential rental market that the properties are now compliant with the Residential Tenancies Act. Many private landlords aren’t aware that without recorded three monthly inspections their insurance policies are likely void.”

He says there is no place in the industry for owners not willing to maintain healthy and dry properties, nor property managers not willing to toe the line.

Minister for Housing & Urban Development Phil Twyford makes no secret of the need for change believing proposed changes will “strike a new balance between providing tenants with more secure tenure and allowing them to make their house a home while protecting the rights and interests of landlords.”

Mandatory smoke alarms, minimum levels of insulation (by July 1st 2019) and a raft of proposed changes under the Healthy Homes Bill addressing heating, ventilation, insulation, moisture ingress, drainage and draft stopping are just some of the changes.

Couple this with ring fencing of tax losses and a Capital Gains working group looking at the possibilities of Capital Gains Tax on investment properties and there is a fair amount for property owners to digest.

There is also discussion about regulation of the industry thanks to some rogue landlords. Duncan believes regulation is definitely the way forward.

Licensing and regulation will help ensure that those involved in residential letting are following the rules and increasing standards right across the industry.

Duncan believes the list of ‘reforms’ which were all passed into law by the Australian Victorian Government in August 2018 may paint a picture of what is to come:

• allowing animals to be kept in rented premises

• allowing renters to make prescribed minor modifications to a rental property

• bolstering security of tenure and ending ‘no fault’ evictions by removing the ‘no specified reason’ notice to vacate and restricting the use of ‘end of the fixed- term’ notices to vacate to the end of an initial fixed term agreement

• establishing a non-compliance register ‘blacklisting’ residential rental providers and agents who fail to meet their obligations

• providing for the early release of bonds with the consent of both parties to the tenancy agreement

• restricting solicitation of rental bids by residential rental providers and agents

• providing for yearly, instead of six- monthly, rent increases

• providing for faster reimbursement where renters have paid for urgent repairs

• enabling automatic bond repayments, which will be available to a renter within 14 days where the parties are not in dispute over the apportionment of the bond

• requiring mandatory pre-contractual disclosure of material facts, such as an intention to sell the rental property, or the known presences of asbestos

• prohibiting misleading or deceptive conduct inducing a person into renting a property.

To contact Duncan for a no obligation discussion regarding the management and compliance of your rental property call 021-850933 or email hawkesbay@ propertyscouts.co.nz

Get your business lean in 2019

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It sounds pretty simple, and it is: the leaner your business, the better it performs.

A lean business doesn’t mean fewer staff doing more; in fact, it’s about getting the best out of people, processes and equipment.

Steffan Kelly of The Lean Hub, says LEAN is “a way of thinking and acting”. It’s being focussed on performance and creating efficiencies.

And he has practiced what he preaches, having successfully adopted LEAN while working at a cashew nut food manufacturing plant in Bali, Indonesia.

“The business was going through rapid growth with 350 staff and we needed to make changes to become more efficient. I’d heard about LEAN and thought it would be worth giving it a go and the results this way of operating produced were outstanding.

The Lean Hub has now partnered with Hastings District Council’s economic development team to offer and deliver a 12-month tailored LEAN programme for local businesses.

Last year Hastings drainage business Drainways undertook the programme and experienced its significant positive impact on the growth of their business.

The family business headed by Mark Currie and his two brothers, Jaydon and Carlton, was looking for a step change in its performance and it took up the challenge to get LEAN.

“The business was reliant on the three brothers; Jaydon and Carlton working on the tools all day while Mark was organising the work, securing new business and managing all the office administration.

“With help from The Lean Hub we set up clear roles and responsibilities so that everyone including staff knew where they stood. By clearly defining all the roles and putting in place key performance measures and targets and staff are offered a greater challenge and in turn greater rewards.”

At Drainways the business had five drainlayers of varying skills and experience. Thanks

Lean Hub’s Steffan Kelly (left) with Mark Currie from Drainways and Lee Neville, Hastings District Council economic development manager

to LEAN the roles became more clearly defined to one skilled drainlayer, two digger operators and a general labourer.

The change provided career progression and ultimately business growth. Staff now have a career pathway with progression to more senior roles and the business has grown from eight to 18 employees.

“You get consistency of work and no impediments as staff are no longer frustrated because they now understand the bigger picture and how their role has an impact. At the end of the day the business owner and the employee want the same and that’s seeing a positive future in the business.

Mark Currie says local businesses should take up the opportunity of going up through the programme.

“Steffan did such an amazing job, 100 percent. He was proactive and very hands on. It wasn’t all text book stuff. He came out and observed the team on projects and that also helped refine our systems and processes.

“We were able to get some early runs on the board through making some small changes that built up to the bigger changes which boosted our turnover as well as create new jobs within the business.

“Some of the simple changes included getting staff to think about reducing downtime, for example previously they would forget to take something that would be needed on site that day. They were shown what the impact of that downtime was and they put in a process that stopped this from occurring, which then boosted productivity,” Mark says.

Hastings District Council economic development manager Lee Neville says the programme has had significant success for local businesses over the last two years.

He says that for council, the spin offs are creating job opportunities and career pathways for youth as well as ultimately boosting the economic vitality of the district.

“It’s about adding value to the district’s economy but we also want to support local business leaders in their personal development, which has a positive impact on their business and those whom they employ.

“Another spin off of growing local business is that direct local suppliers also benefit. That’s been the case with Drainways, whom having gone through the programme they now have the capacity and capability to secure larger projects. This in turn means they are sourcing more products and services from other local businesses.”

Steffan and his team help put in place plans and processes that support continuous business improvement as well as providing business owners with new skills and tools to create sustainable growth.

To engage with staff, Steffan’s team use a range of fun, effective and interactive tools. These tools help The Lean Hub really engage and connect the people in the business to the performance of the business.

“Growth, profits and loyalty rise exponentially when you have committed staff who continuously create and implement productive solutions.”

The programme is broken down into four game changing quarters starting with training and application followed by sustainability and growth.

Hastings businesses can apply for funding support to undertake the year long programme. Hastings District Council has invested $80,000 into the programme with four placements available for 2019. The council’s investment into each business undertaking the programme is matched dollar for dollar, up to a maximum of $20,000.

“It’s well worth the investment, our business has already seen a substantial return on the investment in a very short time and we are now in a position for sustainable growth,” says Mark.

To find out more about LEAN visit

www.theleanhub.co.nz/hdpp

Local technology business tastes success

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It’s been a long time between drinks – eight years to be exact – but after getting as far as a finalist in 2010, the team at Hawke’s Bay Technologies has gone on to take out the Pan Pac 2018 Business of the Year.

The business has evolved from being a reseller and service provider of Ricoh copier machines to becoming one of the region’s leading IT and communications service providers.

Duncan and Amanda Wallace moved from Wellington to Hawke’s Bay in 2007 to start the business and have grown it from four staff to over 20, which now includes a number of high-end IT engineers.

The early days were tough. It was the start of the Global Financial Crisis and Duncan says that although they were working incredibly hard, the business operated on negative cash flow for its first two years.

However, they always had a plan right from the start, and Duncan thinks this has been key to their success: “If you’ve got the plan and the passion and some good advice, you should be ok.”

Still basking in the afterglow of winning the Pan Pac Business Awards 2018 NZME Medium to Large award and then the Supreme Award, we caught up with Duncan to listen to what he considers are the key ingredients to building a successful local business.

You first entered the awards in 2010 and you were a finalist; what did you go away and do to win the overall award eight years later? The business was only about three years old when we first entered and we certainly didn’t have everything we needed to win. We were a finalist in our category and afterwards we listened to the judges’ feedback, then went on to analyse why we didn’t win, what we needed to do differently, and what areas of our business needed attention.

It’s no different to playing sport and you lose and you say, ‘ok, why didn’t we win?’ We analysed our performance and we used it as an opportunity to work out what we needed to do if we entered again.

Since the earlier days, the business has matured. Being a small-to- medium-sized business, we realised that we couldn’t be experts in everything, so we brought in support, mainly with our human resources function and systems and process optimisation. This freed us up to focus on the strategic direction of the business.

 

We now have solid human resources processes such as performance appraisal in place, along with what we need for health and safety documentation and processes. We also have regular business improvement meetings where we are on a constant mission to just do things better.

In entering the Pan Pac Business Awards again in 2018 it was about testing ourselves and seeing how we measured up. We believed that what we were doing was good but we wanted to validate that.

What have been the initial spins-offs since winning the award? The emails and the phone calls have been fantastic; it felt like everyone was celebrating with us, which was really nice.

I’ve been called and asked for advice by senior people on boards around technology decisions. It has been difficult in the past to find appropriately qualified staff but now CVs are turning up on my desk from very competent IT engineers.

We’ve signed up some significant managed IT service business. Some of our customers had been thinking about changing so winning the award helped them realise ‘ok, we think you are doing a good job and that award tells us that you are’.

The business started out as a reseller of Ricoh copiers but technology has evolved rapidly and you’ve changed your business model accordingly, was that easy? Our main reason for change was to make the business more sustainable, relevant and ultimately more profitable. To grow we needed to look at diversification and be prepared for what it would actually cost us.

It was timing for us; we started to pick up some very significant IT contracts and people were starting to talk about us. That was after five years of graft migrating to also be an IT provider. We had to really work on getting the message out there that we not only sold copiers but had a whole new IT services part of our business to offer.

The common theme that is part of our culture has been about delivering, and that our good reputation is everything. Whatever we were getting into, I needed to make sure it was as good or better than what we have done with our traditional business. So that has always been and will continue to be what drives the business. It’s easy to jump in and do something new but you can end up doing it averagely and we were hell bent on that not being the case.

For businesses, what HBT is about is helping our customers to access the information and the tools that enable them to do their job, wherever they are, all the time. And now with the rapid growth in cybercrime, it is imperative we provide a secure IT platform designed with resilience to avoid risk and potential down time.

What have been the challenges in evolving the business? There’s not one thing that sticks out. Technology is a challenge, full stop. We have made mistakes with selecting the wrong vendors to supply certain services for us. You are only as good as the partners you work with.

In the last year we have gone to the market and built some good relationships with very experienced partners in the IT space. We have created an advisory board to help keep us on the right track. These guys are on international software boards, so I’ve gone pretty high level and it has been invaluable.

What’s the future direction of HBT? We are building a national IT network business alliance so that we can provide services throughout New Zealand for customers who have presence around the country or worldwide. The alliance will be offered to other businesses that are Ricoh distributors and service providers.

Our Onekawa premises is also running out of room. It has served us well to date but we will be looking at a building project in the next 12 to 18 months as we look to expand, so we are looking at potential sites at the moment.

How competitive is the IT market? It’s very competitive but with technology moving so fast, there’s always opportunity to bring new things to the table if you understand your customer’s business and where they’re heading.

We certainly now take more of an interest in where our customers are heading business wise and make sure our IT solutions are in line with where they are going, and that helps us guide and enable them to make wise decisions with their technology.

You need to start with the end in mind and with IT, it’s important to make decisions on expenditure now that will be relevant in three years’ time.

What has been exciting about being in the technology space? IT as a whole is super exciting. With experience you look to those things that work and those that don’t and that helps address the customers’ needs. Being a bit older and wiser helps!

What’s an exciting project that you have on the go? The Hawke’s Bay Airport project is pretty exciting. We are managing the technology aspect of the airport’s evolution and have been pretty immersed in the project with them.

We initially talked with the airport at a high level about how they were using technology, especially around security and systems stability. They soon realised that with the expansion and growing passenger numbers, they needed an airport that functioned 24/7 and had total resilience in its IT platform.

How we look at it is that it’s as important as having quality asphalt on the runway – there’s no point having a runway if the foundations are not up to scratch. It’s the same with IT.