LEADERSHIP. Leaders on. Andrew Mackenzie. Peter Coleman. John Bertrand. Lyall Gorman. Professor Ian Williamson LEADERSHIP CONSULTING.

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1 LEADERSHIP CONSULTING Leaders on LEADERSHIP Andrew Mackenzie CEO BHP Billiton Peter Coleman CEO Woodside John Bertrand Lyall Gorman President, Swimming Australia Executive Chairman, Western Sydney Wanderers FC Professor Ian Williamson Melbourne Business School

2 Leaders on LEADERSHIP Strategy + culture + shared leadership = smooth execution To gain an insider perspective on the rapidly changing business models confronting Australian companies today, we invited some of our most forward-thinking business leaders to discuss the role played by corporate culture in individual, team and organisational effectiveness. There was unanimous agreement that having a higher purpose and a culture that supports that purpose inevitably leads to a smooth execution of the organisation s strategy. In fact, intentionally shaping your culture to align your people to strategy and purpose will almost certainly guarantee success. In the following pages, the leaders reveal exactly how they are approaching the challenging task of aligning and engaging their teams. In our own experience in assessing and developing individuals and teams, and shaping corporate cultures, we know that the two main questions asked by CEOs when it comes to their top teams are: How can I get the right people exhibiting the right behaviours? How can I make sure I am preparing the next generation of leaders? Every year, with predictable regularity, corporate surveys emphasise the importance of talent management and succession planning as the top concerns for organisations. Yet proper planning is done only by around 50 per cent of companies of all sizes and shapes around the world. Why isn t planning done more often? The answer is two-fold: Companies tend to take action only when an event makes a problem visible. When they do take action, they often leave out an important part of the puzzle the forward strategy and how to align the culture through a motivated top team and workforce to execute on the mission. 2 Leaders on leadership

3 Our approach is to start a process of discovery, which looks at the strategic direction of the organisation up to five years out, while at the same time assessing internal talent and mapping the external talent market. It is increasingly common for chief executives to find that current leadership may not be sufficient for the forward direction. At that point, CEOs can turn their attention to precisely what changes are needed in the strategy from technical, behavioural, and cultural perspectives. Getting the right fit for all involves a structured approach, looking at four main features of the organisation: 1 Strategic direction 2 Desired culture 3 External brand expectations 4 The leader s desire to develop their leadership style The outcome of the process is a leadership journey which both develops and acquires the best talent to fire up the engine for the next phase of growth. The questions Follow-up questions revolved around the challenge of developing cultures by design which facilitate agility, consistency of the enterprise across geographies, and a sense of engagement with the broader community. There was general agreement that: The current business outlook is uncertain. A sense of purpose is fundamental to success. Engaging the workforce around the how of strategy, or execution, is the hardest thing to achieve. The answers, in their own words, follow. We asked our corporate, academic and sporting group of Andrew Mackenzie, Peter Coleman, John Bertrand, Lyall Gorman and Professor Ian Williamson to discuss: The role culture plays in individual, team and organisational effectiveness. The changing nature of strategy in an increasingly fast-moving world. The desired profile of future leaders. Heidrick & Struggles 3

4 ANDREW MACKENZIE CHIEF EXECUTIVE, BHP BILLITON Higher purpose means higher performance Not only is the world demanding high performance in today s business climate, but in themselves people want to wake up every day and do extraordinary things. 4 Leaders on leadership

5 I don t like the word behaviours because it sounds like a correction. People can become overly compliant due to fear, so you need to change the way you do things in order to remove fear and unlock the potential of your people. Culture is all about the higher purpose. Start with the why. People need to have a connection with the purpose. At BHP, we have a single-minded focus. And if you do this, you will find that when you shift the mean performance to your highest performance, your competitors won t see you for dust. If the right values are not present, you cannot have an aligned culture. We believe in a sense of service to the nation. We say to Australians, We re not working for the fat cats we re working for you. While culture is hard to define, you will know when it is not working. My view about culture at the executive level is that leadership covers everything it s the you don t send or the phone call you do make. It s about authenticity. But the CEO sets the tone and must personify the culture. We have a step-up culture which helps people to grow. We will grow our company not by using more capital, because that won t help people do their jobs better. We will grow the company as people step up and add more value. You can have a million conversations about how people can be more productive, but what improved productivity actually means is a radical re-direction of people s time. But culture alone is not enough. You need systems in place. Strong systems will facilitate creativity. We will soon have everyone globally on SAP. You need systems to know what s happening in an organisation in order to identify what s working and what s not. Lastly and this is hard you have to pull away parts of the systems that have become self-serving. I don t like the word behaviours because it sounds like a correction. People can become overly compliant due to fear, so you need to change the way you do things in order to remove fear and unlock the potential of your people. How do you change beliefs? I don t think you can but what you must do is to couple your goals with people s need for self-actualisation. You have to change the conditions that people impose on themselves. So you don t so much change the beliefs as change the context so your people can perform. They need to feel more selfdetermined and empowered. Heidrick & Struggles 5

6 PETER COLEMAN CEO, WOODSIDE Culture of we with a flexible, global outlook We believe that culture is all about the we, not the me. At Woodside we don t manage risk through assets but through relationships. So we are constantly engaged in a global team-building exercise. 6 Leaders on leadership

7 While we have the Woodside compass which expands on who we are (culture), what we do (strategy) and how we do it (the hard part), it could be summarised simply as do the right thing. The first two who and what set the expectations and the how is where we create value. Getting the right graduates and developing them is important, assessing the executive talent we have, and developing them, is important, and then buying people off the street to fill the gaps is also necessary to bring in fresh blood and new ideas. today we are learning to embrace uncertainty because that is where the value is captured We are a knowledge-driven and relationship-driven industry. The oil and gas business is a long-dated industry. And engineers love certainty. But today we are learning to embrace uncertainty because that is where the value is captured. For a CEO today, understanding business on a global scale is a huge part of the job. While 95% of our value comes from assets in Western Australia, the Asian market beckons, and we need to have global intelligence. We need to understand what is happening in governments, sectors, new areas that are opening up, potential disturbances, and the commoditisation of technology. Our executives today are those with a broader view. They need to be open to our competitors critiquing the company, and they need to examine the way we are treating people and how we are interacting with the marketplace and our customers. Our executives also need to be flexible. The markets are becoming more liquid. Where once the spot market for gas was 1%, now it s 30%. Heidrick & Struggles 7

8 JOHN BERTRAND PRESIDENT OF SWIMMING AUSTRALIA FORMER AMERICA S CUP-WINNING SKIPPER BUSINESSMAN AND PHILANTHROPIST Trust, transparency, and world leadership In business, as in sport, you have to understand that you are not competing against your competitors you are competing against yourselves. You re competing against your inability to take the blinkers off and ask, How will this look in five or 10 years time? 8 Leaders on leadership

9 If that is the prevailing mindset, your human capital, your people, will be unleashed, because we know that in the future, the game will be much more sophisticated, much more efficient. Higher, further, faster. History tells us that. The question is, who can get there the fastest? We know the future of this great country of ours is to unleash the creativity of our workforce and our people. We would never have won the America s Cup if we d accepted the status quo. We were in the business of endeavouring to understand and apply what the game would look like in 20 years time, within our world of administration, technology and team-building. We then launched ourselves on to a new S-curve of high performance. We knew we were in the business of creating sporting history. Leadership is about the creation of high-performance teams. In swimming, you have a group of individuals who have to work as a team. The vision for Swimming Australia is eventually to have the Americans benchmark Australia as the pinnacle of achievement. We aim to excite the minds of our swimmers and coaches, and our administration, to empower them to search for excellence as we become the world s best in everything we do. Great leaders are listeners they learn and lead. The three Ls are listen, learn, lead. And the starting point for leadership is vision. People need to know where they are going. And natural leaders are natural visionaries. They have the ability to communicate and constantly reinforce that vision. What defines a leader? Leaders have the ability to form teams of people with complementary skills around that vision. They also have the ability to live their life with a strong set of values, so that people want to be involved. These values will typically be very basic human traits trust, integrity, honesty, and transparency of communication. I would add another element for Australians having fun. You could also call it passion. Two sports are fundamentally important in the Australian psyche globally cricket and swimming. When we re not on song with these sports, it affects the nation. So there is real responsibility here with Swimming Australia, and of course a wonderful opportunity. We will generate substantially more medals at the next Olympics than we did in London. By 2020 and this is the big vision we aim to be the Number One swimming nation in the world, from the Olympic podium and Paralympic podium, through to grassroots. It s a huge challenge, and an exciting challenge. We are in the business of exciting the minds of our swimmers, and empowering them to search for excellence. We are in the business of leading the world. What defines a leader? Leaders have the ability to form teams of people with complementary skills around that vision. They also have the ability to live their life with a strong set of values, so that people want to be involved. Heidrick & Struggles 9

10 LYALL GORMAN EXECUTIVE CHAIRMAN WESTERN SYDNEY WANDERERS FOOTBALL CLUB Community engagement, long-term commitment The future cannot be built entirely in Microsoft Excel spreadsheets. People are our most mportant investment. We employ people, not players and staff. We work and partner with people and organisations. We engage with people, not customers. 10 Leaders on leadership

11 High-performance organisations grow when the people within them are growing, and when they are doing what they do best. We call this is a strength-based culture. This means we don t try to teach goal-keepers to be strikers. When we created the Wanderers, we had the advantage of being able to start with a blank sheet of paper. We had a rich football heritage and multi-cultural diversity across western Sydney on which to frame our business model, but we firstly had to establish: How we do what we do our cultural and values framework What we do our strategy Why we do it or a sense of greater purpose and vision We were in a western Sydney catchment area with professional sporting codes all drawing on the same resources, and we needed a point of difference. It is the point of difference, not the point of sameness, that makes all the difference! Yet we had only three months to build up the club. When I asked Football Federation of Australia Chairman Frank Lowy how we could turn the club around in just three months, he counselled: It s very simple, Lyall just double the shifts. Armed with that sage-like piece of wisdom, and with the belief that successful organisations are built on a foundation of clarity of vision, values and culture, our journey began. Through a process of consultation, communication, collaboration and ultimately connectivity across our region, we were able to establish: Our vision to be a world-class football club, and the pride of western Sydney. Our purpose to enable our elite men s women s and youth athletes to be the catalyst for true social impact and change across the western Sydney region. We then set about recruiting and retaining the best people, by which I mean getting the right people in the right seats on the bus! Fit was critical, because our future was built around being a significant community asset through a focus on making a real difference across the western Sydney region in a values framework that had already been defined for us through our market engagement. The focus was to be proud, respectful, inclusive, youthful, raw and real, aspirational and ambitious. Ambition was defined as a future of endless possibilities and we also decided we would not be glamorous, elitist or intimidated. So Shinji Ono would fit, but Del Piero would not. Stand up for us, make us proud, and be competitive is our mantra. Authentic and relevant community and stakeholder engagement became a driving force for us. This also meant that we would regularly and consistently engage with our community at all levels, whether fostering and nurturing grassroots and community football, enhancing elite player pathways, working in schools and community organisations or partnering with business and government sectors. For us, our business the business of football is the conduit to being a true community asset and making a real contribution. When we go anywhere, the club goes, not the team. It s all about communication, collaboration and connectivity. Our culture is one of long-term commitment, internally and externally. Our vision and values drive our strategy. For example, we partner only with organisations which are like-minded. Leadership is driven by cause and not self. We espouse a culture which fosters a safe environment that allows for ideas, challenge and input to come from all. Our values a great culture flows from the consistent application of core values. Heidrick & Struggles 11

12 PROFESSOR IAN WILLIAMSON MELBOURNE BUSINESS SCHOOL Leadership means being a role model For years people have talked about the War for Talent. However, I believe this war is over and talent has won. The balance of power has shifted. Today highly skilled individuals are in short supply and high demand across the globe. As such, individuals, not companies, have far more power when it comes to shaping their career paths. Thus, leadership today is more than just shaping the firm strategy. It is equally about convincing talented individuals that they should join an organisation in order to implement that strategy. 12 Leaders on leadership

13 When the leader s behaviour is inconsistent with organisational practices and values their very legitimacy to lead is questioned, as is their strategy. One key for effectively attracting and retaining top talent is the development of an effective organisational culture. Culture can oftentimes seem hard to define or measure, however, from my perspective an organisation s culture boils down to three things: 1 What you see 2 What you do 3 What you believe If culture is to be a positive asset for an organisation, leaders must work to make sure these three aspects of culture align with each other and with the broader mission and strategy of the firm. A failure to do so will cause employees to raise questions about the viability, legitimacy and even the integrity of an organisation and its leaders, hindering a firm s ability to attract and retain top talent. Senior leaders in particular play an important role in shaping what employees see. Rightly or wrongly, leaders have a symbolic role in organisations. Their behaviors set the stage for what employees expect or don t expect from their employers. When the leader s behaviour is inconsistent with organisational practices and values, their very legitimacy to lead is questioned, as is their strategy. Thus, leaders must embrace the role of being a role-model for the culture they desire in their organisations. Organisations often face situations that challenge cultural values. But these situations of dissonance represent critical leadership opportunities. It is in those moments that employees will look to leaders to reconcile the dissonance and illustrate the behaviours necessary to support the firm s culture. For example, if a firm values trust, is the leader transparent with bad news about firm performance? If the firm values collaboration, does the leader accept selfish behaviour by a high-performing executive? If the firm values innovation, does the leader punish an employee who tried an unsuccessful experiment? Each of these examples represent symbolic opportunities for leaders to reaffirm the culture of their organisation and in doing so establish the firm s credibility and their personal credibility in the eyes of talented employees. Heidrick & Struggles 13

14 Summary and conclusions Clearly, we see similar themes mentioned by the corporate, academic and sporting leaders who have contributed to this paper. This is not surprising, given that organisations are made up of people and we all have similar needs, regardless of our chosen profession. We need a clear outline of success starting with the why, and moving along a simple pathway to achieve the how, and then developing a meaningful way of achieving this within the work environment. Think of the work environment as being who we are. At Heidrick & Struggles, we help leaders understand the linkages between strategy, structure and culture in order to ensure they are all working in unison to accelerate the achievement of their business goals. We do this by working with the leadership to design a culture that fits with their specific business imperatives, assisting the leaders to live the behaviours and then provide the framework to cascade this throughout the organisation. We also ensure that there is a plan to align all systems and processes to the desired culture to ensure all is working in harmony. Sustainability is delivered through a structured transfer of competency program, enabling the organisation to continually refine the culture with the changing needs of the organisation. What is challenging is harnessing the right leaders, and then aligning them with beliefs that can engage and motivate the whole organisation into action. What is critical is the ability to create an organisation that is agile in the fast-changing global environment. At the same time, leaders need to provide significant meaning to those within the organisation so they can move together in delivering exceptional business results. we help leaders understand the linkages between strategy, structure and culture in order to ensure they are all working in unison 14 Leaders on leadership

15 Leadership Consulting Practice The Leadership Consulting Practice at Heidrick & Struggles provides a range of services including: Leadership assessment and development Senior talent management CEO succession and transition Dani Fraillon Partner Leadership Consulting Practice, Heidrick & Struggles + 61 (0) dfraillon@heidrick.com Top team performance enhancement Board effectiveness reviews Culture-shaping consulting Diana Coelho Principal Leadership Consulting Practice, Heidrick & Struggles Level William Street Mebourne VIC (0) dcoehlo@heidrick.com Lana Ledgerwood Principal Leadership Consulting Practice, Heidrick & Struggles Level 28 Governor Phillip Tower 1 Farrer Place Sydney NSW (0) lledgerwood@heidrick.com Heidrick & Struggles 15

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