BOM, Brexit, Bureau of Metereology, Business Insider Australia, CDOs, CEO, CTC, GFC, global financial crisis, Gonski, Kevin 07, Lafarge, Malcolm Turnbull, Pauline Hanson, PM, Prime Minister, S&P, Standard and Poors, The Construction Training Centre
I’ve been a CEO over 20 years and this week I passed the milestone of 10 years as CEO of the Construction Training Centre. According to Business Insider Australia the average tenure of a CEO is 9.7 years so I’ve managed, just, to scrape over that particular hurdle.
They rather unhelpfully, from my perspective, think the optimal lifespan of a CEO is a mere 4.8 years. Gulp! That’s to suggest I’ve outstayed my welcome by some 5.2 years. They cite three main reasons why CEO’s generally move on being burn out or loss of enthusiasm for the job, external changes in the market where skill set requirements change and when Board’s decide enough is enough. And I get all of that. It’s hard to maintain drive once you emerge from a purple patch. For many the inexorable torrent of KPI achievement gets to the point when alternatives look rosier. Quite often CEO’s transition to not for profits tired by the singularity of the commercial world. Others, and I’d like to think I’m one of them, aim to expand the outcome metric such that there are a range of measures by which one can evaluate their own performance and therefore continue to grow and thrive.
I call these pivots. In the brave new Australian business world, without the ballast of our resources sector in overdrive, we have to look elsewhere to drive economic growth to generate the prosperity that we have become so accustomed to. As a country we need to pivot. This was one of the messages of the Coalition’s not so successful election campaign in the Federal election. At the time of writing, almost a week on, we are still not definitively clear as to who will govern the country. If you think the lifespan of a company CEO is short, spare a thought for the CEO of our country; the Prime Minister.
Over the last five years we have had something like five Prime Ministers. There are all sorts of performance metrics to determine whether a Prime Minster is successful but it appears to me we only look at a few when making this judgment. The first is the country’s financial performance which in a globalised world is not really in the full control of the government anyway. In CEO terms this is the state of the balance sheet and importantly, in the short-time horizon thinking that besets both Boards and voters, the profit and loss. For Prime Ministers there is the other key measure which is the opinion poll measuring the most nebulous of characteristics – popularity? Be warned. Popularity can easily beget populism.
With the rise of Trump, Lafarge, Xenophon, Hanson et al serious political commentators and writers are warning of the danger of the tide of populism that is entering the world of politics. Populism can mean many things to many people. To some it’s having their local representative totally aligned to their own views and in these cases they regard their politician as ‘on the money’ and ‘in touch’. One of the worst criticisms that can be levelled against a politician is that he or she is out of touch. Populism though for me is a kind of giddy political surfing where the incumbent politician rides a number of waves hoping always to catch the best ride to take them safely to the beach. The only grasp you get of their underpinning values, beliefs and thought processes is the particular fad (wave) of the day.
So how should we measure a politician’s success? One logical way is to define what the criteria for success is from the outset. If we carry the hypothesis forward that the PM is the CEO of the country then we might just be able to use the essential success factors of a CEO as a guide. Getting an overall consensus of what makes a successful CEO is no easy feat but there is a consensus of sorts that suggest the CEO only needs to do three things:
- Set the overall vision and strategy and communicates this to all stakeholders;
- Get the best skilled people together to make the vision a reality; and
- Make sure there’s enough cash in the bank.
Applying this to our recent election then….
The message from Malcolm Turnbull was one of jobs and growth. The rhetoric of this was repeated in a mantra-like fashion but what wasn’t clear to many, I would suggest, is what this means to the individual in the street. Underpinning all of this is this vague concept of innovation. Innovation as a buzz word caught on quicker than a Medicare text alert. As an aside I put myself in Turnbull’s shoes when the Medicare ‘text’ scare emerged. He never really properly neutralised this attack. I would have issued a Coalition Bureau of Meteorology (BOM) storm warning text the morning of the polling saying something like. ‘BOM Beware- dangerous tropical cyclone Hanson on the horizon’. So on the count of clear message Turnbull, the supposed great communicator, was found wanting.
Getting the best skilled people to make the vision a reality comes down to how we educate and train our people to confront what’s coming. The challenges are many and while, yes, it’s an exciting time to be an Australian I think it’s also a scary time for a young school leaver or graduate (from Uni or TAFE) to firstly choose a career path that has some degree of protection from automation and secondly to be able to ply your ‘trade’ in a meaningful job in your field of study. This to me was the missing opportunity in the campaign. Labor focused on education only with respect to Gonski which I’m still convinced very few Australians (me being one of them) understand the detail of, or rationale behind. We need to radically address education and training across all spectrums of pre-school, primary, secondary, VET and tertiary if we want to compete globally. This is an even better legacy to leave behind than a huge surplus which we partly squandered on school halls. Perhaps our surplus in the Rudd years would have better spent on soft education structures than physical ones.
The final measure is cash in the bank. We have had a shot across the bows this week from Standard and Poors who have put us on credit watch suggesting that our much treasured AAA credit rating is in jeopardy if we don’t start addressing our growing deficit. For me this is a simplistic view and I have complete disdain for these rating agencies. We should always remember that they gave AAA credit ratings to bundled collateralised debt obligations (CDOs) that in reality were of junk bond value. And we all know where that led…that’s right the GFC.
As I reflect back on my ten years I have achieved consistently across the three key success criteria. For me though that is no real measure of success. Those three are a given that any CEO is expected to achieve and therefore I don’t think you can really judge your time with any sense of pride if those has been your sole outcome. For a PM one key measure surely must be the degree of community cohesion. This is important right now with elements in the Senate with an agenda likely to cause social division. As a CEO this translates into how well the team is gelling to get results. Perhaps the most important test is how well are those for whom you have stewardship faring. For a PM that is how content and cohesive is the community. For the CEO this translates to the degree of well-being expressed by the work team. Our recent staff survey would suggest that we are in pretty good shape. For me the whole-hearted employee is what we should strive for. Achieve this and you just know your customers will be taken care of. All Turnbull needs to do now, on the eve of his first term as an elected PM, is get his team to work as one, sharpen his message, get it out there, bring us back to surplus and make us all happier and content with the way things are. Good luck with all that. With 20 years under my belt, and to quote a fellow Queenslander, my name’s Phil and I’m here to help!