Right heir, right now

Right heir, right now

The next generation of chief executives is starting to appear - and they are very different to the people they are set to replace.

At the base of Victoria's rugby union scrum in the early 1990s, 1.98 metre-tall Cameron Clyne put considerable effort into pushing New Zealanders backwards. As boss of National Australia Bank's New Zealand operations, he is now out to help them fly. The first thing to go when he arrived at the head office in Auckland was all the partitions to provide the open-plan - or is that free-running? - environment he prefers. "It connects you more with your executive team and makes the team much more accessible to general staff," the 40-year-old Clyne says. In his previous role heading group development at NAB, Clyne worked closely with chief executive John Stewart. "If [staff] wander down and see you sitting at your desk, they are more likely to approach you if they have an idea or, more importantly, a problem." The arrangement means he "just has a desk [with] a window looking into another building". But as he spends much of his time visiting the bank's 6000 staff who "are spread right across New Zealand, I am not too fussed about the view".

Clyne's career outlook is rosier. While he is predictably coy about his ambitions, the former financial services consultant is one of NAB's acknowledged rising stars and, potentially, a future chief executive of Australia's biggest bank. Whether or not Clyne makes it to the top of NAB, he is widely expected to step into one of the nation's top jobs in coming years, as one of a new crop of young leaders and ascendant senior executives.

Certain traits of good leadership may be perennial, such as the ability to add value for shareholders and build a growing, sustainable business, but today's Young Turks have broadened a talent for numbers or analytical skills into a flair for people - and a marked lack of self-importance. Adaptable and internationally experienced, they understand and communicate effectively with a varied list of interested parties.

Like their predecessors, today's leaders can make the hard decisions needed to bring about culture change or turn a company around. However, they prefer to listen to, learn from and empower their staff, rather than take an autocratic approach. And while they profess a passion for their business, they are open about the need to find a balance between family and work.

"Where we have had change clearly is in the style of leadership," Australian chairman of executive recruiter Spencer Stuart, John Mumm, says. "Leaders are much more rounded individuals in being able to achieve results with and through other people ... and they have activities in their lives other than their job."

In the corporate United States of the late 1980s and early 1990s, celebrity chief executives such as Chrysler's Lee Iacocca and General Electric's Jack Welch were seen as the sole authors of their companies' fortunes.

Australian businesses and boards also embraced the cult of the chief executive, before the unravelling of Enron, Tyco and HIH Insurance revealed the individuals atop such corporations as self-serving, unethical and sometimes incompetent.

Australia's new breed of business leaders tends to be far more self-effacing. Alan Joyce, 41, may have given Qantas a huge growth platform with Jetstar Airways, the first low-cost carrier spun from a full-service airline to have recorded a profit every year since its launch in 2004. Yet the chief executive says his biggest achievement was pulling together the business team that started Jetstar and who are still with the airline today.

In Australia's retail banking market, ANZ bank has been the fastest growing of the big four since Brian Hartzer, also 41, was made group managing director of ANZ's personal division in May 2004. "[I] believe very strongly that you only succeed through others," Hartzer, a former financial analyst, says. "It is really much more about the team working together to achieve some sort of change."

Self-promotion is no longer correlated with executive success, the regional managing partner at Heidrick and Struggles, Steve Langton, says. "When we are doing assessments of executives for future succession, humility is really important. It's not about subservience or being passive. It's about [being] willing to take the blame but apportion the credit. We've shifted from celebrity status into things like employer of choice."

In an era of almost full employment and the weakening workforce loyalties of generation Y, corporate leaders must make a conscious effort to keep their employees onside. "[Staff] don't want to put up with the aggressive, take-no-prisoners, hierarchical approach that many organisations used to have," Hartzer says.

Mercer's head of human capital for Australia and New Zealand, Ken Gilbert, says: "Employees are expecting a greater involvement in what is going on in the business and a great desire to understand where it is heading, what it is going to deliver for the business, and what it is going to deliver for them."

Globalisation is also creating new definitions of leadership competencies, Gilbert says, with international experience an important attribute for Australia's corporate up-and-comers. Before chief executive Jason Murray, 40, joined Just Group in 2003, he spent five years working in London and New York as a management consultant with McKinsey & Co. Clyne, who worked for Price Waterhouse (now PricewaterhouseCoopers) in Asia and in New York, says: "It is certainly an asset to have worked in larger [financial] markets. It also gives you a network of contacts, as well as a broader world view."

An understanding of markets in the US, Asia and, in particular, China, is an important selection criterion for Australian chief executives, "even for domestic companies, because it's an obvious growth market which Australia is well placed to serve", Langton says. "In the last 12 major chief executive appointments that we have had the privilege of doing, an exposure to international [markets] has been quite significant. It has been a reason why there has been such an import of foreign chief executives over the years. But the vote will go for an Australian who has been exposed to international [markets] now - that is going to be a significant theme [in succession] over the next five years."

Like Hartzer, who came to Melbourne from the US in 1994, Jetstar's Joyce was born and bred overseas, in Dublin, but cut his corporate teeth in Australia. The airline executive, whom Qantas chief executive Geoff Dixon reportedly calls "my little Irishman", is known as one of the nation's more affable leaders. Nonetheless, Joyce says it is vital to "know when hard negotiations and decisions are needed and that people know that you are going to be tough".

Executive recruiter Mumm says such qualities are becoming important in the boardroom. "I have never seen boards more interested in determining that leaders will actually get things done, and get them done in an acceptable manner, than in the last two years."

With scrutiny of Australia's listed companies on the rise, the ability to communicate clearly with stakeholders ranging from shareholders to media and regulatory authorities has also become a sought-after leadership attribute. "Directors and chief executives are now needing to be more responsive to all stakeholder requirements, and, increasingly, to community requirements as well," the head of industrial research at Shaw Stockbroking in Sydney, Scott Marshall, says.

The Just Group's Murray adds: "Investors, employees and customers are demanding integrity, transparency and a very high level of openness. They are also looking for more breadth and balance in business priorities, and an ability to make a difference in business, in society and globally."

As the global head of sustainability at Lend Lease, Maria Atkinson, 41, is charged with ensuring that the construction giant meets its corporate governance and social responsibilities, as well as implementing cultural change across the organisation and helping to find new opportunities for clean-energy technologies.

Corporate sustainability may be an emerging role among companies including Woolworths, Boral and Commonwealth Bank, but green trends are still regarded in a cynical light by many executives, Atkinson says.

"Most people in sustainability suffer from being the visionary, not the pragmatist, so it is very important to develop a rapport where people understand that your approach is pragmatic and well thought out."

Today's young Turks also seek to make a difference outside of the workplace. Hartzer, who has four children aged between one and six, chairs the charity Save the Children in Australia while Clyne, who was recently chosen as a young global leader by the World Economic Forum, hopes to use the opportunity to "meet with some extraordinary leaders and gain a new perspective on critical issues of the moment, like climate change".

While companies once celebrated executives who devoted their lives to their work, social expectations are a new source of pressure for chief executives, Langton says, with corporate leaders expected to make time for their families and extracurricular interests amid the unprecedented access demanded by corporate boards and shareholders. "It takes a very courageous chief executive to say, 'My BlackBerry is switched off when I go home'."

Still, some chief executives appear to have mastered the juggling act. For example, Murray says he cooks dinner most evenings for his wife and two primary-school-age children.

With succession planning now being embraced by corporate Australia on a much broader scale, harnessing the talent of the next generation to ensure that success is sustained is becoming a crucial issue for business leaders. In his revamped employment contract announced last August, substantial performance payments valued at $6.6 million were linked to John Stewart's involvement with the process of finding a chief executive to succeed him at NAB.

The Scotland-born former Barclays Bank executive has certainly overhauled the bank's executive ranks, with NAB believed to be in the strongest position to hire from within since the departure of former chief executive Don Argus in 1999. Over at Qantas, chief executive Geoff Dixon has also built up a widely lauded leadership team, with Joyce, chief financial officer Peter Gregg and executive general manager John Borghetti regarded as leading internal candidates in the succession process Qantas entered into some eight months ago.

"Those senior executives have provided performance for the organisation that is unprecedented in the world in their industry," says Langton, whose firm, Heidrick & Struggles, has reportedly been engaged to fill the chief executive position at Australia's flag carrier.

In 2000, when it became apparent that Dixon would succeed James Strong as chief executive of Qantas, Gary Toomey, his main internal rival for the job, announced that he was leaving the airline to head Air New Zealand. Executive search consultants acknowledge that one of the challenges of choosing a replacement for a chief executive is managing the fallout from unsuccessful candidates. If the process is run well, companies can minimise the prospects of important executives leaving, Mumm says. "But I would sooner have a richness of talent prepared internally that creates that risk, than to have a one-pony contest and/or an absence of talent for the chief executive role."

Whether or not they reach the top job at their current employers, today's young Turks can look forward to a much longer corporate life span than previous generations of chief executives. "I think these people will be our future chairmen," Langton says. "I think they will be our future big chief executives as well - who earned their spurs in one industry, got to chief executive status in their 40s and then jumped industries. Outstanding younger chief executives and regional heads such as Alan Joyce at Jetstar, Ahmed Fahour at NAB, Paul O'Malley at Bluescope, all have another two decades of corporate leadership in them."

Asked to name his role models, the Jetstar chief unsurprisingly opts for his boss who, at the age of 65, is still at the helm. "When I am 65, I hope I have the same level of passion as Geoff," Joyce says. Like other rising stars, however, he won't declare his hand. "I just keep on saying that I am really focused on the Jetstar role that I am employed to do, and that's the role that has 100 per cent of my commitment."

Jason Murray, 40, chief executive, Just Group

Jason Murray remembers the moment he "fell in love with retail". The one-time management consultant was working at British retailer Asda, while based in London with McKinsey & Co, when he realised "how immediate [retail] is, and how embedded into the core of society and business it is".

Murray, who lives in Sydney, and was made chief executive of the Melbourne-headquartered Just Group in 2005 - two years after joining Australia's biggest specialty retailer as general manager of strategy - has been quick to master the sector, a Sydney retail analyst says. "He's very competent on the numbers, but grasps strategy as well as the finer points of retail and is seen as a great up-and-comer." Billionaire businessman Solomon Lew seems to agree. The former chairman of retailer Coles whose majority-controlled listed company Premier Investments made an unsolicited $900 million takeover bid for the Just Group, has said that he wants Murray to stay on as chief executive of the fashion retailer.

Alan Joyce, 41, chief executive, Jetstar

Born in Dublin, Alan Joyce arrived in Australia in 1997 after rejecting a job at Ryan Air for a chance to work at Ansett. In 2005, he knocked back another offer to return home, this time to head Aer Lingus, the Irish flag carrier that gave him his start in airline management.

"I didn't want to leave Australia and I wanted to fulfil the objectives of getting Jetstar's long-haul business up and running and seeing the airline move into Asia," he says.

In the next five years, Joyce wants to see a continuation of the Jetstar growth story. "We believe it can not only be a strong Australian brand but a pan-Asian brand."

If he is overlooked for the top job at Qantas, however, other airlines may entice the Australian rules football fan away from his Melbourne base. "Alan Joyce is seen as a star CEO offshore," an executive recruiter says. "He's been benchmarked globally and the world aviation industry has taken notice."

Brian Hartzer, 41, Group Managing Director, personal division, ANZ

Brian Hartzer was appointed head of personal banking services at ANZ bank in 2004, and the US-born former financial consultant recalls a banking analyst informing him at the time, "Let's face it, ANZ is no good in retail. You are just next in the line of failed retail executives."

Hartzer proved his naysayer wrong. The personal division of ANZ is its stand-out performer, reporting double-digit growth in both lending and deposits in annual results last year.

Before moving into retail, Hartzer won admiration for his strategic skills in redesigning and turning around the bank's profit-challenged credit card business.

Although the personal banking head was considered the frontrunner to succeed chief executive John McFarlane last year after an extensive global search, the bank ended up opting for an external candidate, Michael Smith, who gained external experience in Asia at HSBC.

However, Hartzer is still viewed widely as a leadership prospect. "He's definitely a strong candidate to lead an Australian bank in the future," says a banking analyst who likens his achievements to those of Westpac chief executive Gail Kelly when she was at St George.

Maria Atkinson, 41, Global head of sustainability, Lend Lease

Maria Atkinson may hold one of the world's most influential jobs in green building as head of global sustainability for construction giant Lend Lease. Yet she initially worked in sports marketing after studying for a bachelor's degree in applied science. "At my graduation ceremony, no one from my course had managed to find a job in environmental science," the Sydney sustainability pioneer recalls.

Atkinson first made her mark in corporate sustainability working for Bovis Lend Lease (now Lend Lease) as the project environmental manager for the Sydney Olympic Games village before leaving in 2002 to set up and run the Australian Green Buildings Council.

In 2006, she returned to the corporate fold. While the global measurement program she instigated last year is the first time the 14 businesses comprising Lend Lease have collected and reported environmental data, she eventually wants sustainability to be so ingrained in core functions "that we do ourselves out of a job".

Atkinson is unlikely to remain idle, however. A member of the City of Sydney 2030 committee, and winner of a US Green Building Council leadership award, she would "ultimately love to see policy and partnerships that I can participate in that result in better outcomes for cities".

Cameron Clyne, 40, Chief executive, Bank of New Zealand

Cameron Clyne began his fast-track career at university. The Penrith, western Sydney-born rugby union player combined studies at the University of Sydney with part-time work as a financial consultant for Arthur Andersen. At 28, he was the youngest person to have been made a partner at Price Waterhouse (now PricewaterhouseCoopers).

Drafted into National Australia Bank's top echelon in 2004 - when the bank was losing market share following a foreign-exchange trading scandal which led to the resignation of its chief executive and much of its board - Clyne was soon handed an expanded role as executive general manager, group development, as well as a seat on the Bank of New Zealand board.

It is understood that NAB chairman Michael Chaney was behind the decision to give Clyne a chance to run a bank in the interests of long-term succession planning, but he demurs when asked whether he sees himself as a contender for the top job. "I'm just focused on running BNZ at the moment. I have been really proud to have been part of a strong team that has helped to turn around the NAB and I'd love to continue to be a part of that team."

Other leaders to watch:

John Gillam, managing director, Home improvement and office supplies, Wesfarmers

As chief executive of Bunnings,John Gillam, 42, was known to don the uniform worn by sales staff and help shoppers, man the cash register or even collect rubbish at one of the home-improvement chain's stores. This hands-on approach helped to transform the chain into one of Wesfarmers' star performers.

Gillam has been charged with replicating that success at Officeworks Superstores following Wesfarmers' $20 billion takeover of the Coles Group last year. Some analysts believe the qualified chartered accountant has got what it takes to make it to the top of one of Australia's biggest companies. "He's absolutely a leadership prospect for Wesfarmers, and one of the top three internal candidates to succeed current CEO Richard Goyder," a retail consultant says.

Duncan West, Head of intermediated insurance division, IAG

A former head of commercial insurer Vero, Duncan West, 45, was one of the few senior Promina executives to miss out on a senior post at Suncorp Metway when it acquired the insurer for $7.9 billion last year. Rival IAG was quick to make room for West after ousting its head of commercial insurance operations, Mario Pirone. Last week IAG appointed him to head a combined division that oversees all policies sold through intermediaries such as brokers and financial institutions.

While these are tough times for the commercial insurance market in Australia, West is seen by the market as a "good guy, very ethical, with a strong following", an insurance analyst says. West is highly regarded by former Promina chief Mike Wilkins, who was appointed chief operating officer of IAG last October and is seen by many as an imminent successor to chief executive Michael Hawker.

Mark Chatterji, Chief financial officer, Woodside

In early January, Woodside's North West Gas shelf processing facility faced its biggest crisis since production began at the huge West Australian plant in 1983. Yet by all accounts the shutdown was textbook in its operation - and, with chief executive Don Voelte away at the time, it was orchestrated by 39-year-old Mark Chatterji.

A former Wall Street banker who joined Australia's second-largest oil and gas producer from Goldman Sach's New York office in 2004, Chatterji was appointed commercial director in a management shake-up in 2006 before becoming the fourth CFO at Woodside in as many years early last year. He is now the company's top earner apart from Voelte and is believed to have played a crucial role in the outline agreement signed last September to sell up to $46 billion worth of liquefied natural gas to PetroChina, China's largest oil and gas group.

Ahmed Fahour, Executive director and chief executive, Australia, National Australia Bank

A former Citigroup (now Citi) chief executive, Ahmed Fahour, 41, joined NAB in 2004 amid public scepticism over his $18.7 million sign-on bonus. The financial services high-flier, who rapidly ascended the ladder at Boston Consulting and Citi, has been lauded widely for successfully implementing a series of programs to overhaul the bank's culture.

Known for his energy, drive and ability to get things done, Fahour has long been regarded as the frontrunner to succeed chief executive John Stewart. However, some analysts believe his abrasive management style could stymie a bid for the top job. "Ahmed has polarised opinion in the market," a banking consultant says. "Some think he is brash and cocky and is not the right man to take over NAB, but perhaps [the bank] will end up appointing someone from outside."

Four more to note:

Launa Inman, chief executive, Target

Peter Gregg, chief financial officer, Qantas

Holly Kramer, group managing director of product management, Telstra

John Douglas, executive general manager, Australian construction materials, Boral

Fairfax Business Media

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