I recently sat down with ChatGPT for a 30-minute interview on a topic I've been thinking about for a while: New Zealand's productivity challenge. Rather than writing a traditional article, I wanted to explore the issue in a conversational format — treating AI as an interviewer that could push me on my thinking and draw out perspectives I might not have articulated otherwise.
What follows is an edited version of that conversation. It covers the systemic, structural, and cultural factors that contribute to New Zealand's productivity gap — and some practical ideas for what businesses and leaders can do about it.
The Interview
Q: New Zealand consistently ranks below the OECD average on productivity. What do you think is really going on?
It's a combination of things, and none of them are simple. The obvious factors are well documented — geographic isolation, a small domestic market, relatively low levels of capital investment. But I think the bigger issue is structural. We have an economy dominated by small and medium-sized businesses, many of which operate in industries that are inherently difficult to scale.
Agriculture, tourism, construction — these are important sectors, but they don't naturally lend themselves to the kind of productivity gains you see in tech or advanced manufacturing. And because our businesses tend to be small, they often lack the resources or expertise to invest in the systems and tools that drive productivity improvement.
Q: So is it a scale problem?
Scale is part of it, but I don't think it's the whole story. I've seen plenty of small businesses that are incredibly productive — lean, focused, and well-run. The issue is more about capability and mindset. Many NZ businesses are still operating with manual, paper-based, or heavily people-dependent processes. They haven't adopted the tools and technologies that are standard in other countries.
And it's not because the tools don't exist or aren't affordable. It's often because there's a cultural resistance to changing the way things are done. The "she'll be right" mentality can work against us when it comes to operational improvement.
Q: What role does management capability play?
A huge role. This is something that doesn't get talked about enough. In many NZ businesses, people are promoted into management roles because they're good at the technical work, not because they have management skills. So you end up with managers who are essentially senior practitioners — still doing the work themselves rather than building systems, developing their teams, and improving processes.
Good management is a force multiplier. When managers understand how to set clear objectives, establish routines, use data to make decisions, and create an environment where people can do their best work — productivity improves significantly. But when management is ad hoc, reactive, and personality-dependent, you get inconsistency and waste.
Q: How does technology adoption fit into this picture?
Technology is a huge lever, but it's often applied poorly. I see businesses that have invested in expensive software systems but are using maybe 20% of the functionality. Or they've adopted a tool but haven't changed their underlying processes to take advantage of it. The technology ends up as a digital version of the same inefficient process.
The businesses that get the most value from technology are the ones that start by understanding their processes first, then select and implement tools that genuinely improve how work gets done. Technology should serve the process, not the other way around.
Q: What about AI specifically — is that part of the solution?
AI is absolutely part of the solution, but not in the way most people think. The narrative around AI tends to focus on dramatic transformation — replacing entire roles, reinventing industries overnight. The reality is much more practical. AI can make a meaningful difference in everyday tasks: drafting documents, analysing data, summarising meetings, automating routine communications.
For a typical NZ SME, even modest AI adoption could save hours per week per person. Multiply that across a team and you're talking about significant productivity gains. But you have to start with the basics — having clear processes, good data, and people who are willing to work differently.
Q: What would you say to a business owner who wants to improve productivity but doesn't know where to start?
Start with visibility. Most business owners don't have a clear, honest picture of how their business actually operates day to day. They know the outcomes — revenue, profit, customer complaints — but they don't always understand the processes that produce those outcomes.
Map your core processes. Understand where time is being spent. Look for the bottlenecks, the rework, the handoffs that create delays. Talk to your team — they usually know exactly where the problems are, they just haven't been asked.
Once you have that visibility, you can make informed decisions about where to invest: whether that's in training, technology, process redesign, or simply removing unnecessary steps.
Q: Any final thoughts on what it will take to shift the dial on NZ productivity?
It needs to be a collective effort. Government policy, industry bodies, education providers, and individual businesses all have a role to play. But if I had to pick one thing, it would be management capability. If we can lift the quality of management in NZ businesses — particularly SMEs — the productivity gains will follow.
That means investing in management development, not just technical training. It means creating cultures where continuous improvement is valued, not just tolerated. And it means being honest about where we're falling short, rather than accepting mediocrity as the norm.
New Zealand has enormous potential. We just need to be more deliberate about how we work, not just how hard we work.