On Monday, 16 June 2014 – two nights before 2014 State of Origin Game 2 – the AGSM hosted Australian Rugby League Commission CEO David Smith in the latest instalment of their Meet the CEO series. As usual, the Sydney Four Seasons Hotel was packed out, and the event certainly didn’t disappoint.
After being introduced by ASB Dean Professor Geoffrey Garrett and NRL Commissioner and ASB Business Advisory Council member Cathy Harris, Mark Scott (Managing Director, Australian Broadcasting Corporation) got down to interviewing David.
I have to admit that I was (pleasantly) surprised by David’s style. I’m a strong believer in using sporting teams rather than military teams as the basis to study business leadership, management and strategy. I went in thinking that David would use lots of sporting language in his interview. Instead, we were presented with an articulate, sophisticated banker who talked about managing an iconic Australian sporting organisation in an intensely competitive and challenging environment.
At one point in the interview he explained that this was a business audience and the conversation was about the business of sport, so he felt it was the appropriate language to use. He talked a lot about market positioning, local and international growth strategies and leveraging brand equity. It was all very insightful, however I felt at a couple of points that his responses were more rehearsed and media-trained than spontaneous. Nevertheless, he was still very polished and impressive.
I won’t summarise the interview, but here are some of my take-aways from his answers.
Need for strong business discipline
No matter what sort of organisation, at some point it will need to be managed professionally if it is to be sustainable and grow. The NRL is a perfect example. Even with strong cultural and community roots and passionate (fanatical) supporters, when David took over it was in pretty bad shape for an organisation of its size and age. The NRL Commission and David have implemented rigorous business thinking and strategies, and the results are evident in both on-field and off-field performance of the League.
Ability to abstract and apply transferable skills
At first, the choice of an investment banker to run a national sporting organisation seems strange. But as both Cathy and David pointed out, one of the reasons he’s able to do well is the ability to apply transferable skills that he brings from his previous roles. David mentioned that this was his fourth “career”, including an engineering background, military service and banking.
In addition to the ability to abstract problems and apply skills learned in seeming unrelated fields, I also think that introducing someone from outside an industry vertical provides an opportunity to approach issues from a fresh perspective. In my own career, I’ve found that this has helped me challenge embedded assumptions and re-frame conversations.
Stay connected to your origins
When asked how he is able to relate to the everyday person and the NRL fans, David talked about staying connected to his origins. He talked about coming from a mining town with modest means, and not forgetting that.
This reminded me a bit of Cameron Clyne, the CEO and Managing Director of the National Australia Bank. In his Meet the CEO interview, he talked about growing up in a mining family and using the strong work ethic instilled in him to stay grounded.
Speak the appropriate language
The other advice he gave was to speak in a language that was appropriate to your audience. The obvious example was his use of sophisticated business terminology suited to the audience at the event. However, he said that when talking to the clubs and their members, he uses terms and ideas that make sense to them.
Seems a bit obvious, but a good reminder nevertheless. This is especially important for technology professionals, who need to get better in speaking in terms of business problems and solutions rather than IT implementations.
It was a great event, and the AGSM did a great job hosting it. (The arancini balls at reception were awesome!)
If you’re interested, the recorded video of the interview is well worth watching:
As always, I continue to be amazed by my kids’ abilities to teach me lessons by forcing me to think about behaviours – theirs, mine, and people’s in general.
A lesson in the wild
This one came about during a recent camping trip. Hamzah and I camped overnight at the beautiful Bents Basin Campground, where we spent the day walking around trails and exploring the area. The next morning as I was preparing breakfast, Hamzah asked if he could have an Up&Go first. As I gave it to him, I asked him to sit down and pay extra special attention while he drank it. I told him that if he spilled it over himself we wouldn’t have a spare set of clothes for him to change into.
Now I know that he’s only 5 (or 5 and a half as he likes to correct me) and doesn’t really have the ability to sit quietly and drink out of a straw from a milk pack while actually wanting to run around with his friends, but hey, I can try, right?
As I finished cooking the eggs and toast, I went over to check how he was doing and found him sitting very quietly. When I squatted down, his eyes were full of tears and he said “send me to the naughty corner Baba”.
At first I didn’t understand. But when he repeated that he should be sent for a time-out as punishment, I noticed that he had (almost predictably) spilt a little milk on himself. As I smiled, gave him a big hug and wiped the tears (and spilt milk) away, it struck me how important it was to him to try to do what he thought was the right thing.
I hadn’t threatened him with punishment or even pressed the importance of not spilling the milk on him, merely made a passing comment as I had handed him the pack. Yet, he felt his mistake was bad enough to be disciplined, that he had let me down in a major way.
This was interesting. What was the reason for him to not only recognise that he had done something wrong, but to also ask to be sent to the naughty corner? Was it the thought of having disappointed me? Was it the intrinsic recognition that he had made a mistake?
This got me thinking about something I had heard a few days earlier …
An example from the business world
I recently attended an AGSM Alumni event on Customer Centricity, hosted by Dr Linden Brown, author of ‘The Customer Culture Imperative’. Also on the panel were John Parkin – Director of Customer Enablement, Telstra, John Stanhope – Chairman (nonexecutive), Australia Post, Professor Adrian Payne – Professor of Marketing, Australian School of Business, UNSW, and Dr Judith MacCormick, Partner, CEO and Board Practice, Heidrick & Struggles.
It was an excellent session, and is well worth listening to the audio recording as the panel discusses how to build strong, adaptable and innovative customer-centric cultures.
One of the insights from the panel discussion was that customer centricity depends on highly engaged employees. Dr Brown related a story from one of his case studies about Zane’s Cycles, where the store had agreed to put a purchased and decorated bicycle in the store’s display as part of a customer’s Valentine’s Day gift. For some reason, the bicycle wasn’t put on display, resulting in a very upset customer.
The rest of the story about how the business handled the situation is exemplary, and resulted in a happy outcome for both the business and the upset customer. However, one of the incredible parts of the story that stuck with me was the store employee who had been responsible for putting the bicycle in the store display recognised his mistake, and voluntarily wrote out a cheque for $400 to the store as compensation for the incident. To me this was an example of an employee who was so engaged that he volunteered to be (financially) disciplined.
Here is the 3-and-a-bit minute video of Chris Zane – owner of Zane’s Cycles – talking about the event and how it unfolded. Well worth watching.
Creating strong engagement
I had a think about both these situations with Hamzah and the bicycle store employee, and how people get to the point where they are completely engaged. I can’t comment on the culture at Zane’s Cycles since I haven’t experiences it first-hard, but there are plenty of articles and videos on the internet discussing how they operate. I also recognise that Hamzah is only a child, and my child at that, so there is a certain amount of influence that filial piety plays in that situation.
However, I’ve also observed this sort of engagement in my own teams, and here are some of the things that I believe can help create an environment that supports it.
Have clear and genuine values
Everyone, including organisations, have values, whether they explicitly recognise them or not. The important step in creating engagement is to be clear about what these values are, and why they are important to you. In addition to this, you really need to live these values – to lead from the front, so to speak. When people believe in your values and see you living and breathing them, they will usually follow.
Provide people the freedom to make their own mistakes
This is about empowering people and giving them the latitude, respect and encouragement to try whatever path they want to take to get to the goal. Needless to say, this must be within reasonable boundaries and in congruence to the values discussed earlier. I’ve found that if you give people responsibility, trust in their abilities and provide a safe environment to fail, they intrinsically become committed to “going the extra mile”.
Don’t sweat the small stuff
Finally, remember that everyone makes mistakes. I make them all the time. If the mistake is genuine (i.e. not deliberate) and can be recovered from without too much effort, sometimes it’s better just to let it go. People remember this and give you emotional credit for it, and when the time comes around where extra effort is required, they will put it in without being prompted.
Creating a culture that promotes strong engagement is a long-term and complex endeavour based on leadership and insights. What have you found that works for you?
Interesting fact: In 2003, the first business leader hosted by the AGSM in the inaugural Meet the CEO event was Richard Branson.
It was somewhat poetic, therefore, that almost exactly a decade later the last Meet the CEO event of 2013 held on Monday featured John Borghetti, CEO of Virgin Airlines.
The stage was set from the beginning. There were a number of immaculately groomed Virgin Airlines stewardesses in their distinctive red livery in addition to the AGSM staff welcoming guests to the evening. They even opened the doors to the hall where the interview took place, and ushered us in with effortless smiles and practiced efficiency. I almost wished we had reserved seats so we could have been directed to them.
Dean of the Australian School of Business Professor Geoffrey Garrett was engaging and humourous as always in his introductions. UNSW Chancellor David Gonski in his welcome was even funnier and had the packed hall laughing out loud. The twist – instead of Dr Garrett chatting to the guest as usual, there was also a guest interviewer. Mark Scott, Managing Director of the Australian Broadcasting Corporation stepped onto the stage and masterfully conducted the interview.
John discussed the history and challenges faced by the aviation industry in general and specifically in Australia. He also touched on the opportunities and challenges faced by Virgin as part of competing against Qantas and the brand repositioning strategy he implemented after joining Virgin in 2010.
You can watch the video recording of the interview to catch the whole thing, but here are my observations and insights about John’s leadership style from listening to him tell his stories.
Don’t be afraid to be yourself.
A lot of John’s personality showed through his answers. I’m sure he’s had loads of media training as most people at his level do, but his answers were somewhat less reserved and guarded than the other CEOs I’ve seen interviewed.
For example, he quite happily pointed out that the decline in the Australian resources boom was great, because it meant that mining organisations were now looking for cost efficiencies and open to renegotiating corporate contracts. He then realised that it may have sounded like he was happy about the resource decline in general, and sheepishly clarified that he meant it was great for Virgin Airlines, not necessarily for Australia as a country.
Share your success. There’s plenty to go around.
He talked about and shifted credit away from himself and senior management to front-line staff. Basic leadership recipe, but well executed by publicly acknowledging the importance and achievement of everyone in the organisation.
If you’re in a service industry – like airlines – focus on getting the right people on board (no pun intended).
John pointed out that when you’re flying, you’re basically in a “tube”. The tube is essentially the same regardless of the airline you choose, so the key differentiator is the people who deliver the customer experience.
When asked to elaborate, he said it came down to recruiting well. You have to create and maintain a service culture, and find and attract people with the right customer service attitude and focus. This meant going outside the airline industry to find individuals who were “service people” – whose attitude is based on wanting to please people.
It’s also important to then let those people be themselves, and not beat that attitude out of them.
“Screw it, let’s do it.”
Advice from Richard Branson when faced with rebranding Virgin Airlines Australia differently from the rest of the global Virgin brand. Enough said.
Listen to your front-line staff.
John said that it was impossible for a CEO to “go undercover” and pretend to be a customer. Everyone recognises you and treats you differently – like the CEO. Even if they didn’t, at best you might pick up on some of the challenges faced by front-line staff on the day, and those might not be the most difficult ones they normally face. Rather, spend time talking to them at every opportunity you get, take that feedback on board, and act on it.
Process your email backlog at 3am on Sundays.
Ummm … I might pass on this one for now.
Learn to read people.
John started working in his father’s coffee shop aged 10, and was challenged by him to up-sell to potential customers. It was here that he learnt salesmanship and reading people. He pointed out that this is important because it enables you to understand where they are coming from (empathise with them), which in turn gives you the ability to decide what to do (how to fulfil their needs).
Have a good process to solve problems.
You can’t anticipate all the problems that could potentially arise in an endeavour. However, you know that they will come up, so have a good process to deal with them as they do. Each problem might be different, but having an approach to solving them will go a long way to successfully resolve them.
Work hard and focus on doing a great job.
When asked what advice he had for someone starting off in the airline industry, John responded with the advice he gave his own daughter, not specific to airlines, but for careers in general:
Work hard. Focus on your current job and do it well. You will see other people around you get ahead without working hard. Don’t worry about them. They’ll come crashing down eventually.
Really good advice, and something I’ve personally observed.
Thanks AGSM. Really enjoyed the conversation, and am looking forward to meeting more CEOs next year.
I was asked an interesting question recently:
“When someone comes to you with an issue, how do you determine whether it’s a reason or an excuse?”
I think that the answer is largely a matter of perspective, the situation and how the problem is positioned. Semantically:
Reason: (noun) A cause, explanation, or justification for an action or event.
Excuse: (noun) A reason or explanation put forward to defend or justify a fault or offence.
If someone comes to me and just says that something can’t be done because it’s too hard, too complicated, will take too long, will cost too much or the technology just doesn’t support it yet, it feels like an excuse.
However, if they make the same argument and recognise why it was important to do the task in the first place, and what alternatives could be used to achieve the same outcome, I consider that a reason.
However, it’s all contextual as well – what the issue is, what the ramifications of not resolving it are, what my working relationship with the person relaying the issue is like, and whether or not they are actually capable of resolving the issue on their own.
Having said that, the more important thing is not the theoretical comprehension of the distinction between the two, but how self-aware you are in applying it to yourself.
Last Sunday – which was unusually windy – I noticed my five year-old hanging out around a window and looking out quite excitedly. He came to me and asked if we could go to the park near our house and fly a kite. My response: “Daddy’s a bit tired, so let’s do it some other time.”
Then I realised that I had just given him an excuse, and even though he’s only five, as his dad I need to practice what I preach and teach by example. So I went and found him watching the wind buffeting the trees outside, sat down on the floor next to him, and explained to him that if we went to fly the kite that day, Daddy would get even more tired and he wouldn’t be able to do all the other things that he needed to do. However, we could print out some arts & crafts templates and do a small project together.
The result: a similar outcome to what he was after – spending time with me doing something he enjoys, while I was able to turn an excuse into a reason.
Added bonus: Without going all philosophical, learning how to manage relationships starts at home – the most important organisation in my life. I always instinctively knew this, but first came across an eloquent articulation of this idea in Clay Christensen’s July 2010 HBR article called “How Will You Measure Your Life?” While Christensen, a Harvard Business School professor, is better known for writing the book on disruptive innovation (The Innovator’s Dilemma), his article and the book that followed (also called “How Will You Measure Your Life?”) provides great advice on how to achieve a meaningful career without compromising on your values. Definitely recommended reading.
Since the weekend, I’ve been watching my own behaviour pretty closely, and thankfully haven’t had any other instances of excuse-making.
So … what’s your reason?
Ok, so while I’m documenting insights from successful leaders, I thought I would write a quick post about things I picked up while listening to Andrew Stevens, Managing Director of IBM Australia and New Zealand last week.
As an AGSM alumnus, I get invited to the Meet the CEO series hosted by the University of NSW Australian School of Business. I’ve attended a couple of events before, where Cameron Clyne (CEO of National Australia Bank) and Alan Joyce (CEO of Qantas Airways Ltd) shared their views, and both times I came away with a sense of clarity about approaches to leadership and career management.
I don’t particularly want to dwell on everything Andrew said, since that can be watched on the recorded video, but rather the technology and leadership insights that I found interesting.
First realisation: I really need to go away and read the Australia in the Asian Century White Paper. Both Andrew and David Thodey mentioned this paper in the same week, and that tells me I better read it and take a position on its content.
- While there’s no easy and agreed-upon definition of what innovation in technology means, Andrew defined it as “the application of IT to create new services and business models”.
- An increase in consumerisation is good for the consumer, because it puts pressure on businesses to deliver better. Big Data helps this by enabling greater segmentation – down to a market of one. This helps the consumer because they can be offered a targeted product or service that they desire at a price point that is within their statistically acceptable threshold.
- Broadband: the economic utility of this era.
Management and Leadership
- A good CEO provides a balance of
- Realism – Analytical definition of the problem being faced
- Hope – That individuals and the organisation is going forward instead of stagnating or regressing
- Change management – Being able to move other people with you
- Great leaders (for Andrew) apply principles from sport – regardless of how well the game plan has been understood and rehearsed, knowing when the game has changed and adapting to the situation.
Lots to absorb and think about from an hour’s interview.
Also, I’m reminded again about the other thing Andrew had in common with David – and in fact with the other two CEOs previously interviewed in the series that I’ve attended: the total and effortless ease with which they communicate. Definitely something I need to keep working on.
I love the events at the Crescent Institute – an informal, unpretentious, no-hidden-agendas forum to listen and speak to Australian thought leaders from across the business, social and government arenas.
Last Thursday – 26 September 2013 – the Crescent Institute hosted David Thodey, CEO of Telstra. Between the free-flowing conversations, meeting new people and catching up with friends, I had the pleasure to listen to insights from the leader of Australia’s largest telecommunications provider.
Having never actually heard David speak before, it was easy to see why he heads an organisation which last year generated $25.4 billion in revenue and had a reported EBITDA of $10.2 billion. Without pulling punches, skirting around questions or trying to appease political sensitivities, he provided a lucid, honest and light-hearted account of what it means to run a company that is, to a large extent, almost pivotal to the technological success of Australia.
Among the discussion of topical issues, the history and future of Telstra and the context of technology within the Australian economy, I picked up some interesting insights about David’s leadership and management style. Fairly standard textbook stuff around change management, especially during difficult decisions:
- Be open, honest and transparent
- Plan well, retrain as many people as you can, and treat everyone with respect
- Recognise that you have many stakeholders and are responsible for the long term
What struck me was that it didn’t feel like something that he had rehearsed – it was in response to an unmoderated question from the audience and it felt completely sincere. This was also completely congruent with his overall discussion, as well as his demeanour throughout the event – warm, approachable and personal … authentic.
Side note: I’m currently very annoyed by the “authentic” leadership bandwagon … but that’s a post for another day.
His other reminder about dealing with the constant increase in pressure on your time: “Plan to plan”. While “doing” is great, you need to put some time aside to “think” about what and why you’re doing what you’re doing, and whether you’re going in the right direction.
He even chatted with me about my Nokia Lumia 925 Windows Phone. What a guy! And no … I wasn’t asking about the Amber Update – I already got it earlier this month.
All in all, I was very impressed. I have no doubt that he’s a tough, determined and demanding leader – as one would expect from someone who has reached the position he has – but at the same time I couldn’t help but be drawn in by his humility and infected with his obvious excitement for what lies ahead.
Check out the Crescent Institute’s picture gallery for more pictures of the event.