This paper examines how major efficiency gains and improved effectiveness were simultaneously achieved at the Reserve Bank of New Zealand over a five-year period. It identifies the business management concepts that were used to transform the organization, outlines how they were applied, and evaluates the benefits obtained. The paper concludes that substantial real efficiency gains were achieved, while effectiveness was maintained or enhanced. Looking more widely, the business management concepts used to achieve these benefits could be applied to other central banks.
leadership by example and new incentive systems. Making managers accept personal responsibility for decisions was a key goal.
The RBNZculture has certainly shifted. Change is itself viewed more positively. Behavior relies more on judgement, less on rules. Initiative is more likely to be encouraged. The management team will often confront a difficult decision, express a diversity of views, and set a clear direction rather than search for consensus. Staff throughout the RBNZ are franker and less likely to hide their opinions. Status barriers have been lowered in many ways