Global Powerhouse: An interview with Carl Powell of Fletcher Building
- 06 October, 2014 05:00
The company, Fletcher Building, was based on the other side of the world in New Zealand, and was in the midst of its biggest technology shift for businesses across 40 countries.
“It was moving from a number of well-run but very decentralised businesses, to taking more of a group view with a small active centre,” Powell says. “From an IT perspective, that means looking at technology as a group asset, rather than 50 sets of assets each individually owned by a business.”
He observed very few global businesses at this scale were still operating with that set-up, and took on the challenge. In late 2013, Powell uprooted himself from his base in Oxford, and joined the executive team of the largest listed company in New Zealand.
Fletcher Building is also Australasia’s largest building materials supplier, with iconic brands that include Firth Industries, Fletcher Steel and its New Zealand distribution businesses, PlaceMakers and Mico.
A testament to the group’s growth is its ranking as number one in this year’s CIO100, the report on top ICT using organisations in New Zealand based on screen numbers (36,114), turnover ($8.87 billion) and staff (18,600).
“I was very happy at Unipart and I would have quite happily stayed there,” he says. “But I thought it would be good to experience another global role in another continent. If I was ever going to move, the time was right, and then Fletcher’s offer came up.”
The only thing that would have stopped him from accepting the Fletcher Building role was his family – his wife and two children aged 16 and13. “But no, they were all extremely supportive and all wanted to come.”
Powell’s role was an integral part of FBUnite, the group-wide business transformation programme that has been running for more than 20 months.
“FBUnite isn’t just information technology. It’s about developing a winning culture, being responsive to market changes, optimising our operational performance and creating the lowest possible cost structure,” he comments. “So it’s across the board.”
From an ICT perspective, the next phase focuses on creating a single, integrated ICT function globally.
“Centralising in this way will allow us to more efficiently and effectively deliver technology to the whole group through ‘centres of expertise’, which concentrate on delivering strategic IT products,” he says.
“It will also allow us to offer greater career and development opportunities to our people and invest in new capabilities.”
Upon joining Fletcher, Powell says there was a need to quickly assess the current state from both a technology and capability perspective, as well as understand current business strategy and executive priorities.
“I spent the first six weeks with what felt like a fire hydrant of information hitting me firmly in the face,” he says. “After that, I could turn the fire hydrant around and start creating the high-level strategy.”
This roadmap covers three areas.
The first Powell calls ‘integrating the enterprise’, or taking a group view of Fletcher’s IT assets and consolidating these onto strategic products. These include ERP, CRM, BI and infrastructure.
“While industrialising the core, we will be preparing for a digital future. The second step is investing in high value, high impact digital initiatives,” he says. The third area of focus is creating a single, integrated ICT function globally.
I spent the first six weeks with what felt like a fire hydrant of information hitting me firmly in the face!”
The first stage has already taken place, with all ICT across the Fletcher group now reporting functionally rather than through individual business units. Powell explains that this was necessary to be able to manage the planned changes.
Prior to this, the businesses operated in a decentralised way. “All of our businesses were run by general managers who had a lot of autonomy over what they did,” Powell says.
The result was each of these became “very, very close to the market and the customer, however from an ICT perspective, it caused an incredible amount of diversification”.
The transformation programme is not intended to change this customer relationship.
“Putting the customer at the centre of everything we do is critically important to us, so we must ensure that as we create the new centralised organisation structure, IT remains very customer intimate,” he says.
“We will do this by ensuring the divisional and business unit heads of IT remain close to their business but functionally understand the overarching group strategy.”
The shift, Powell explains, encompasses a number of other business areas such as HR, finance, and group procurement.
“Taking away transactional activity from our business units, like accounts payable, for example, allows the businesses to focus solely on their commercial activities and customers.”
Digital opportunity and risk
Digital transformation is a major component of Powell’s portfolio and goes beyond information technology.
“The term best demonstrates how the boundaries of IT are changing. Information technology used to be seen as something inside the four walls of enterprise control,” he says. “Digital is a term that was christened for expanding our mindsets on what information technology is and can be and makes us look outside our four walls.
“I see the word ‘digital’ as a call to action for all business communities – whether ICT, marketing or operations – to look at an entire ecosystem of technology.
“This [includes] mobile devices, social technology and physical objects, all of which are an opportunity or a threat depending on how you choose to use and interact with them.
We’ve recently set up a digital innovation lab with the sole purpose of rapidly turning ideas into value-creating reality.
“Although it is unpalatable to some organisations, this is also a space where you need to take some risks,” he says.
Applying this perspective to Fletcher, Powell says the group is assessing digital opportunities and creating capabilities across different businesses units to capitalise on new, emerging and disruptive technologies.
Powell says the company recently set up a digital innovation lab with the sole purpose of rapidly turning ideas into value-creating reality.
“We’ll take a few risks along the way and I’m sure we’ll make some mistakes, but I also believe we’ll create real value and make it easier for our customers to do business with us.
“Our construction business is one where digital technologies are playing a strong part in directing the industry at the moment,” he says.
“Being able to use technology like tablets to visualise through augmented reality when you’re onsite what a building might look like after it’s actually been constructed, is something that’s very possible today.”
I see the word ‘digital’ as a call to action for all business communities – whether ICT, marketing or operations – to look at an entire ecosystem of technology.
Digital is also a mechanism to deliver an exceptional experience to the company’s customers, says Fletcher.
“We’re looking at using digital to drive greater customer loyalty,” he says.
“How can we interact with our customers in a way that is both more appealing for them but also makes Fletcher a very easy company to do business with?
“How can we use mobile technology much better to be able to allow our customers to interact with us? And how can we communicate with our customers in a much better way?”
For Powell, digital is also about disrupting business models. For this, he cites the case of UK online retailer, ASOS, which now ships to more than 200 countries including New Zealand.
“They have completely disrupted their own particular markets by being able to provide excellent online digital service without having the necessity for bricks and mortar shops and outlets,” he says.
“It is very clever the way they’ve done it using all of the current social and marketing techniques available and knitted these services cohesively, while being very engaging with the customer. That’s a very disruptive way of utilising technology.”
Next up: The making of a CIO
Powell has strong and focused views on the leadership imperatives of the CIO.
“Long gone are the days of the CIO being a passive or enabling leader,” he states.
“Those were the days when our sole focus was on improving efficiency through automating processes and helping our enterprises align business and IT priorities. These things are obviously still critically important, but not where we add most value.
“CIOs these days should strongly influence and in some cases actively drive business strategy by exposing new business opportunities provided by technology innovation.
“How effective we are at the above, or even if we are listened to at all, is down to leadership,” he states.
Powell splits leadership into two categories: Strategic and behavioural.
“One is as important as the other,” he claims.
“Strategic leadership is about putting the right architectures in place around vision and values, IT strategy, operating model, organisation structure and governance.
While industrialising the core, we will be preparing for a digital future.
“Although these areas are all well documented by analysts, academics and experienced practitioners, they are often not in place, or if they do exist they are badly communicated or have little buy-in,” he says.
“These architectures must be put in place and communicated well.
Behavioural leadership is about the things a leader does every day to demonstrate and perpetuate their values. It’s also about the mechanisms they employ to create a culture of employee engagement, he adds.
“There’s no point having all the strategic architectures in place if you personally don’t support them every day, or if your people are not engaged with them,” he says. “Employee engagement is something every leader should champion.
“Organisations are [made up of] people. An engaged employee contributes more to organisational success, but an organisation has the responsibility to create the conditions in which an employee can do so.
“You need to understand the facets of how to manage, motivate and inspire people. Engaging people by ensuring they understand the value of what they’re delivering and how that relates to the bigger goals within the company is critical.”
In Powell’s case, he expanded his perspective further by serving in the CIO advisory boards of Computacenter, CSC and Vodafone in the UK.
“That was very good from many perspectives; networking, keeping up to date and being able to influence some industry decisions these organisations were looking to make.”
Powell says these views were honed by his years at Unipart, where he spent the majority of his executive career.
Powell has a degree in applied physics from the Sheffield Hallam University. Prior to joining Unipart, he worked at the IT departments of Nissan Motors and Woolworths in the UK.
Next up: Leaving IT to head a startup
Stepping out of IT
Before becoming group CIO at Unipart, Powell deliberately stepped out of IT. He became managing director of its consultancy division, UEP Supply Chain, working with external customers on supply chain, change management and process improvement.
“That was an important step for me, both within Unipart and in my career,” he says of the six years he ran the division.
“It was an exciting and also a slightly scary time. It was my first non-IT leadership role. The pressures you’re put under when you’re a business leader are slightly different to those as a functional leader.”
The stint exposed him to leading a startup business, and taking an entrepreneurial mindset.
“I did not come in as chief executive of an already operating business,” Powell explains. “It was taking something from nothing through to being a fully working business.
The pressures you’re put under when you’re a business leader are slightly different to those as a functional leader.
“You had to understand all of the facets of how a business operates, rather than just the IT facets – understand your profit and loss, how you engage your people and how you motivate your teams to deliver an outcome.
“All these things were different to me at that time. But they set me in good stead for coming back into a leadership role within IT again.”
Outside of his professional career, Powell is hoping to spend more time, literally, in the fast lane.
“I am, absolutely, a petrolhead,” he says, smiling. “I spent most of the last 25 years racing in one formula or another in the UK and Europe, from Porsches to Mazdas.”
“I actually retired from racing just before I came to New Zealand. I love watching the F1 [Formula One] and now I’m over here in NZ, the V8 Supercars are fantastic. But my real passion is racing myself.”
His family had joined him during those races, cheering from the sidelines. Those holiday weekends took the Powell family across UK and into other parts of Europe.
“It was a complete release...completely different to corporate life,” Powell says of his racing persona.
“Having been to a few tracks over here to watch the racing, I’m getting itchy palms to start again.” Photos by Tony Nyberg
This article is the cover story of the leadership edition of CIO New Zealand (September to November 2014 issue).
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