Lessons learnt from successful CEOs, World Business Forum (Sydney)
Three successful CEOs talk about the most significant challenges they’ve faced in growing their businesses and managing their own careers. Radek Sali from Swisse, Liz Butcher from ISGM and Nick Abboud from Dick Smith shared their experiences at World Business Forum with facilitator Professor Geoff Martin from Melbourne University.
Turnaround CEOs need some special skills
The Dick Smith franchise was bought from Woolworth for $20 million in 2012. Since then, the company has added $400 million in market value. To achieve that turnaround requires some exceptional skills. Nick Abboud says theleadershipstyle and key strategies required in a turnaround situation are generally similar to those required in a more standard corporate environment. “You need a plan and a direction and you need performance and measurement to be in the DNA of your organisation.” They key difference is being able to manage a complete renovation of the brand because the perception of the company has been so impacted externally. To change this perception you need to totally rebuild and restructure every component.
Timing is everything in a turnaround. When Woolworths decided to sell, Dick Smith was 1% of its revenue but taking up a lot of time. Abboud and team bought the chain it could immediately identify 30% in reductions on the cost of doing business thanks to the benchmarking they did as part of due diligence. “And we see another 1-2% of costs that could still come out,” says Abboud.
There are ways for businesses to manage the inhibitors to women rising through the ranks.
There are more men named Peter running ASX200 companies than women in total, notes Liz Butcher at ISGM. That’s a problem because statistics show that the greater the gender diversity the more successful the business will be.
Here’s how ISGM is managing the challenge:
Dealing with conscious and unconscious bias
This is still embedded within many businesses through different pay structures, reflecting different ways men and women negotiate. To manage this ISGM trains staff and hiring managers to have the right remuneration policies in place. They have gender targets to ensure there’s a real focus on gender equality and the company has a strong mentoring program to progress talented women through the business.
Finding the right path is critical
According to a Bain & Co study of men and women graduate, they had the same aspiration to be a CEO, but two years post graduation half of women decided this was not a path they could take. We need to get women into operational roles early because the path to CEO is often from operational roles.
It’s hard for women to raise a family and have a successful career. But every job can be done flexibly. We can harness a far greater talent pool if we explore more flexible arrangements.
Your team will only connect with your vision and values if you’re personally involved
For Radek Sali at Swiss, this meant communicating and connecting with the team over six months specifically to create a sense of shared purpose. “Often values are written by people far removed from the rank and file. But we regularly revise and refine our company proposition – people, principles and passion.”
Butcher at ISGM needed to communicate the company’s vision and values across 3500 contractors and 500 fulltime staff in very dispersed locations. “You have to live the values,” she says. ISGM’s management achieves this through a lot of targeted communications to staff but also through lots of time in the field. “ I spend 60% of my time out in the field talking about our values and why we exist as a company,” she says. “There’s no substitute for the personal approach.”
Great lessons on growth and international expansion
Sometimes you learn the best lessons from failure
In Australia Swisse had a brilliantly growing company and thought this success would be easy to replicate in the US and potentially China. The company realised early on that China would be difficult so launched in the US. The launch was a failure. “As a result of not planning properly, we found ourselves in a cash flow situation,” says Sali. Swisse didn’t have the support required from retailers and its field sales force wasn’t working as well as it should. However, out of that failure, Swisse negotiated with Proctor & Gamble to take the brand and model internationally to Singapore and the to Europe s they were concerned Swiss would get there in their own. And China awoke to the Swisse brand through the advertisements Nicole Kidman did for Swisse’s US launch. “You learn the most from failure,” says Sali.
A powerful database is a priority
Abboud from Dick Smith sees Alibaba as a great example. Its massive database spans multiple categories – this is what Dick Smith is aiming to achieve to help diversify. As technology changes, people won’t be watching TV commercials and companies won’t be printing catalogues. As you grow you become your own media company, and the absolute starting point of that is a huge database.
Find a gap and create an down the strategic assets
ISGM’s founders saw a gap in the market – many outsourced workers were needed in the IT, media and telco industries and there was strategic value in harnessing that workforce and owning it as a strategic asset. “The field worker sits at the heart of everything we do and making their life better leads to greater engagement and better outcomes for the customer,” says Butcher.
Differentiating for success looks like…
Being different, says Swisse’s Sali. Creating a global brand means taking the same information and research everyone has and doing things differently. This starts with learning about your business inside out and finding new ways to drive it forward. It means being more than numbers focused. It means listening to your people on the ground, your retailers as well as your consumers and getting ideas from other industries. Sali took what he learned from the entertainment business into the vitamin market, using Ricky Ponting to sell product during the cricket and Sonia Kruger during Dancing with the Stars broadcasts. Of course, you can only do that if your product is of the highest quality.
Understanding your customer’s objectives, says ISGM’s Turner. For some that means cost improvements, others loyalty and for other an improved workforce. Differentiation means standing out for helping your customers achieve what they want and standing behind them.
Moving towards an omni channel approach, says Abboud of Dick Smith. It means harnessing all your channels to deliver the one experience. Differentiation also is about innovation, looking at what’s happening offshore and thinking out of the box. Dick Smith invests 80% of its money in product and price, but when it comes to marketing, print is going out the door while digital – especially digital search – is coming in.
For more information visit the NAB World Business Forum 2015 live insights hub.