Getting comfortable with change and risk

The CEOs of non-profit organisations got some sage advice about leadership and teamwork in challenging times from an Australian captain of industry at this year’s Better Boards Conference.

Above: Captain of industry, John Fletcher, speaking at the Better Boards Conference 2013.

By Keryn Curtis

A successful high flying and at times controversial corporate CEO, shared smart and inspiring leadership advice with CEOs from the non profit sector at the CEO’s day, part of the Better Boards Conference 2013.

The overwhelming message from former CEO of logistics conglomerate, Brambles and retail giant, Coles Myer, was to work as a true team and get comfortable with change.

Mr Fletcher urged all CEOs to focus on the core fundamentals of leadership and seven principles for success when consciously addressing a period of change. He said the nature and quality of the leadership team was critical in achieving the organisation’s goal. 

The best chance possible

“Having the best possible team in place is critical,” said Mr Fletcher.  “Determine who you want before you decide where you want to go. Get people on the team because they have shared views about leadership and change and they want to work with the other people on the team.”

“A mediocre team will achieve a mediocre outcome,” he added.

According to Mr Fletcher, another key foundation is to firmly establish and demonstrate the organisation’s standards.  

“This needs to come from the CEO and the CEO needs to model it,” said Mr Fletcher.  “People will listen to what you say but they will watch what you do.”

Mr Fletcher described his experience coming into Coles Myer in September 2001 charged with turning around the flagging fortunes of the company.  

Setting an ambitious five year goal to double the company’s underlying profit, he said it was essential to have every employee across all the businesses on side so it was essential to remove all the symbols of opulence and excess associated with the company’s past.

“The first symbol was the top floor at head office. There were private lifts for the CEO and huge marble bathrooms and mahogany and artworks everywhere and there were only six people on that floor. I got rid of it,” he says.

“The second symbol was the travel policy. We kept it simple with one rule for everyone. For domestic travel, everyone goes economy class, including the CEO.  If you’re flying internationally, everyone flies business class.

“The third one was around team member discounts. As with most retail businesses there is a staff discount and there was one discount for most of the employees but the biggest discount was for the senior executives. They earned the big incomes and had the greatest ability to pay yet they got the biggest discounts. That had to go,” he said.

Mr Fletcher said it was ‘one team, one standard’, emphasising that if you want to have one team, with everyone working together to achieve the one goal, then you need to have one standard for all. 

Egalitarian approach

Mr Fletcher converted the head office building to an open plan layout where he joined everyone else.  He also got rid of the company’s art collection, replacing it with photographs of staff serving customers and made sure all head office staff understood customers and retail staff by working stints in the retail stores.  He spent a week stacking shelves at Target himself.

Responsibility for establishing the shared values of the organisation was given to all the staff in the various businesses via a company wide consultation involving 2,500 focus groups with staff.  

“We asked two questions. One, what sort of company would you like to work for? And two, what kind of leaders would you follow?

“After that process, a group of 66 people from around the whole company, involving no senior leadership, got tasked with the job of developing the values,” said Mr Fletcher.

“There was no interference from senior management at all. They came up with four values and it was so good, we didn’t change one word.  

“We ended up with four values: integrity; respect and recognition; passion for excellence; and working together.  And these became embedded in our recruitment processes and informed all our staff performance indicators,” he said. 

Engage the board

Mr Fletcher told the CEOs that there was no more important relationship than the one between the CEO and the board.  

“Boards need to be involved in the journey.  They hate having all the work finished and just presented to them. We asked board members to sit in on the final sessions of the strategy days. And it was not discretionary, not an option for them. Board involvement was an integral part of the process.”

He said boards can make the mistake of focusing on risk management rather than strategy.  “The board and CEO must be aligned about what you want to do and accept that some mistakes will get made. You don’t need your boss when you are right.  You need the boss when you’re wrong,” he said.  

Seven principles for change

Mr Fletcher outlined seven principles for change:

1.   Develop an atmosphere that welcomes change and initiative. Have people fully comfortable about doing new things and taking a risk.  If you make no mistakes you are not making enough decisions.

2.  Aim for the impossible. Never set a target you know you can meet.

3.   Hire the best people you can get. “If you haven’t got at least one person working for you who you would work for, then you are the limiting factor.”

4.  Over communicate. “Share and share. Be as open as you can. You can’t tell them enough.”  

5.   Take responsibility. “There will inevitably be some tough decisions but you have to make them; that’s part of being a leader.”

6.  Never underestimate the leader’ s potential to share the optimism.  “Lead optimistically. Lead by example. Be consistent.”

7. Never forget to celebrate success.

Keryn Curtis attended the Better Boards Conference 2013 last weekend, including the CEO day on Friday 5 July.  Australian Ageing Agenda is a media partner with Better Boards.

Tags: better-boards, better-boards-conference-2013, ceo, john-fletcher, leadership, not-for-profit,

2 thoughts on “Getting comfortable with change and risk

  1. Great advice. If only more CEO’s would take this advice and use it!! Those who do are an inspiration to work with & make going to work an experience that is exciting and reward and where challenges are welcomed.

  2. Mr Fletcher makes an interesting comment about the board being engaged in the strategy. I always believed that was a core role of the board. Having said that I am aware some nonprofit boards are passive participants, simply rubber stamping the CEO’s recommendations. This is not good enough. Every board member should be engaged in the strategy setting process and should be prepared to question every assumption that underlies management decisions. This is not a suggestion we return to the old days where committees of management meddled in daily operations (and some still do), it is an argument for better board involvement, board members that take time to understand the business model, the service delivery framework, the desired outcomes and social impact. The better a board member seeks to understand the more questions they will ask, the more effective they will be and better the relationship with the CEO

Leave a Reply

Your email address will not be published. Required fields are marked *