RICH THINKING ISSUE #6
This exclusive interview was first published in Rich Thinking, a fortnightly weekend read delivered to Yahoo Finance's Fully Briefed subscribers. Get it straight to your inbox here and read Issue #1 here.
Do you prefer being chairman or CEO?
I definitely prefer being the CEO. I really loved being the CEO. I love to shape organisations. But over COVID, I was glad I was the chairman and not the CEO.
I’d like to start by talking about productivity and prioritising your work. I can only imagine, as the head of Deloitte for 12 years, your to-do list was lengthy. What was your best method for prioritising what you needed to do in a day or a week?
That's the one thing I pride myself on, my to-do list was always short. That was, to me, the absolute key to success.
When I came into Aurecon, the company had some challenges. I could have had the longest to-do list that you'd ever seen in your life.
At my first board meeting, I said to the board, "This is insane. I've been at the company for a month, but just in today's board meeting alone, I have been given more than 30 things to do, and I'm not going to do that. That's not how I work.
“Instead, I'm going to write down seven things on the white board, and for the next five months, I'm going to focus on those seven things. You can debate it, and if you tell me I've got one wrong, because I've only been here for a month, that's fine. Tell me what goes on and tell me what goes off. But eight doesn't happen."
The board was quite shocked. I said, "Folks, the reason why you're underperforming is everybody is doing everything. Nobody is having an impact."
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Why seven? Is that just a number you like?
Well, I actually like five a lot. But I thought I could cope with seven, because it's only two more than five. No magic behind it. It’s just how focused I am.
That's how I approach my executive career. But I always knew what was most important, and what I was going to focus on. And I would hire people to do the rest.
When you say you knew what was most important and would have the biggest impact on the organisation, how did you choose those things? Was there a formula you used?
It is just with experience. You're not going to always get it right. That's a second thing I said to both boards in my interviews. "Don't expect me to try and get 100 per cent of my decisions right. If I can get more than 70 per cent right, I'm really happy. I will take corrective action for those that I get wrong, and I will admit to having got them wrong."
I didn't expect to be perfect with the seven, but I had enough experience, and I've seen enough companies to say: "If I can get these things done, I will have a significant change in the company."
As a CEO, with so many decisions to make - and often fast decisions - is there a method you use to help you make good and/or fast decisions?
I was very disciplined at employing very strong people around me, to do the things well that I do badly.
I play to my strengths, and I hired for my weaknesses.
So it’s about hiring very good people around you that are different to you. But they've got to be very strong. You don't hire “yes men” and “yes women”.
At Deloitte, I was fortunate that I had very experienced executives around me, and we could robustly debate the decisions. We often disagreed on a point.
There is a point where I'm the CEO, and I have to take the decision. But I only take the decision after very robust debate. I really want people to speak up if they have a difference of opinion. It is so important.
I could never work on a team of people that don't have the courage to stand up to me and to challenge what I'm thinking.
On your own personal productivity, what's non-negotiable in your daily working routine?
I start off my day quite early. I get up at about 5:30am. My exercise time starts at 6:00am - I go for a walk or I go to the gym.
But before I do that, I go through my emails and delete what is not important and look at what I should be dealing with.
The ones I can do quickly, I can do over my morning cup of coffee. The ones that need a bit of thinking, I can think about when I go for a walk.
I generally try to walk into the office with all my emails at least read so I know what was going on.
Any other non-negotiables?
If you're in a meeting with me and you touch your phone, you're out of the meeting.
Even when I run workshops of 40 or 50 people, they all know, touch your phone and I will stop the workshop. You'll walk out. If we're getting together to talk about something, we will have all our attention on that topic.
I can't stand sitting there when people touch their phone the whole time because I know their concentration breaks.
What about laptops in meetings?
Oh, that's the same thing. People claim to take notes. Bad luck. Take notes by pen. I'm old fashioned. The moment you start taking notes on your laptop, you're also reading your emails. We all know that.
You've made it to the top of your game and were very successful in Deloitte. What's the one way you think you have to think differently to your peers? What sets you apart?
At Deloitte, because we were in so much trouble and we were so much smaller than the rest, we had to think unconventionally. The logic was just, you cannot go to battle with the other firms - when you are that much smaller - and succeed if you're going to be predictable in how you think.
I saw my personal role as challenging people to think, and that's how design thinking came into my life. The moment I understood the power of design thinking, that changed my life, and it changed the organisations that I was involved in, because it allowed us to look at things through a different lens.
Most people think they differentiate, but it just looks like everybody else.
It's very hard to come up with something that is different to what all the other smart people have come up with.
You've got to work really hard at it. You've got to be trained on how to think differently.
What’s a simple tip on how to think differently?
One of the key things is, when you have people brainstorm an idea and they come up with a solution, you park that solution and say:
"This solution is wrong because it is most likely the exact same solution that a similar group of people like ourselves debating this would have come up with in two hours.
“That's too easy to get to that point. Everybody can get to it. Now we know where we're not allowed to go. Now let's come up with a solution that looks different to that solution.”
That forces you then to think away from the conventional, and go towards the unconventional. But the issue with so many people who get to the top of business is they want to get speed to decision making, and speed to conclusion. You walk into a meeting and everybody is competing with who sees the solution first.
The only thing you always get is you get the wrong answers.
There are executives that I always knew, as soon as they found the solution, that it would be a bad one so I knew to park that one. They were the canary in the coal mine because they would just not spend enough time thinking about it. It’s called convergent thinking.
I'm the absolute opposite of convergent thinking. I like a bit of ambiguity, I like a bit of time to think about things. At Deloitte, as just a fun thing, we ran a test of all 700 partners, and we only found 10 partners that weren't convergent thinkers.
On the back of that, in your opinion, what’s the best business school or course that teaches this way of thinking that CEOs or executives could jump on?
There were three courses that really changed me.
The first was presented at Kellogg Business School in Chicago, and it was called something like Leading Change Through People, where you really had to inspire people to change. It was led by two professors out of France that Kellogg brought in especially for this course.
I did it early on in my CEO time with quite a few of my executives. It was game changing. I did the course with Gary Hamel on how to innovate within existing organisations, and what it takes for an existing organisation to become innovative.
Then, the ‘design thinking’ course presented by the joint venture between Berkeley and Stanford was just an eye-opener. We all left there after seven days going: "Wow, we have just seen something that nobody in Australia has seen before." This was in 2008, 2009, long before anybody in Australia had heard the words design thinking.
Is it popular here now?
I think a lot of people thought it was a fad. That's fine because as long as enough people think it is a fad, those people that know it well have a competitive advantage.
The other thing with design thinking is there's a lot of training on it that is so superficial. If you go to a two-hour course on design thinking, it seems really easy.
If you do a day course, you realise it's maybe a bit harder than you thought. And if you do a two-week course, you realise it is impossibly difficult.
What is something you see other business leaders get wrong time and time again?
Everybody says: "I hire the best people”, but I'm not convinced that many business executives are really obsessed with the people that they recruit. For the 16 years that I ran companies, we were very clear that the apex of our business model was people.
I had so many fights about whether clients or our people were number one. Clients are not number one. Your people are number one.
When I walked into Deloitte, we had messed up the people. Having bad people go to good clients is not a good idea. You want to have great people, and then go to the clients.
I think what we're going to face in 2022 is the biggest challenge for executives that aren’t used to working and inspiring people.
There's so much talk about the Great Resignation of '22. We're going to see a lot of executives being exposed and feeling very uncomfortable because they're just not going to be capable of leading to the level that people are going to expect them to lead.
The employees will have the power in 2022, in this country and in America.
So when it comes to hiring the best people, what do you look for?
I look for attitude before I look for skills. I want to make sure that the person has got the courage to have a few setbacks.
I was hired for two turnaround situations, and therefore I needed people that could deal with the issues that they were going to face, knew they weren't going to win the whole time, but had the courage to give it a go.
Once I thought they had it in them to go into a street fight, then I made sure they had the skills.
I'm obsessed with looking for potential, rather than looking at track record.
You've commanded a significant salary as a CEO. Does money make you happy?
When I didn't have money it made me more unhappy. Remember, you're talking to a person that immigrated out of South Africa when he was 40.
I started my life over financially at 40.
I am very frugal. I looked after my money carefully. I think most people that worked with me or for me, or that I reported to, would say that I'm not overly greedy when it comes to salaries because I thought I was paid very, very well by the two organisations. It gave me the comfort that there would be enough assets for my family.
I didn't chase the money just for the sake of money, because my needs aren't those sort of spectacular needs. I don't need to show off with money.
Was there a salary that you reached or a salary that you had in mind that you thought, "Okay if I get there, I'll be content?
I more had a financial target for what my balance sheet should look like before I would feel safe.
Whatever I could earn to get my balance sheet to the target, that was important to me. Once I reached that, it just gave me the comfort that I could then know that if I had to walk away from a job because I couldn't work with a board or something like that, I would be able.
It was a really good feeling to be able to look at the chairman and say: "You know what, I really want to do this, but I really don't have to do this." It changes the relationship that you have with the board dramatically.
What's been the best monetary or financial investment you've ever made?
To be honest, the money I spent on investing in myself. The very best financial investment I probably made was a very small one when I came to Australia.
Before that, in 1995, I did a course at Kellogg Business School on how executives communicate effectively. When I arrived in Australia in '98, I discovered that what I was taught in America - that worked in South Africa - was not working over here.
I paid to do a communication course with NIDA (National Institute of Dramatic Art). This is where I got trained in how to communicate in Australia.
The person that was the NIDA coach in that session became such a good friend that today he is a Deloitte partner.
That's really interesting. Your answer is the same as Warren Buffett’s. He says the best investment he ever made was a communication course with Dale Carnegie early in his career.
Ok, if I gave you $10,000 today to invest for, say, a nephew or for a niece, how would you invest it?
I'd probably buy one of the index funds. It may not be the general index. I may buy half of it in the general index fund, and half in a very specific index fund, and just leave it aside.
I have a lot of my money in some very interesting index funds - very specific ones. Their performance has been absolutely stellar over the years. I'm very, very happy with what I've achieved with them.
Can you give us any examples?
One that I really like is an index fund called HACK. They just invest in a big spread of companies that look into cyber security. You can imagine the growth market in cyber security. That means I don't have to pick one company to back.
I've got a group of people that have an algorithm that picks really good companies. I have a spread of the best cyber-security companies all over the globe. If you look at the performance of that index fund you'll be very impressed.
If you’re looking at the general one, there's one called QUAL. That's a little bit different to the general ones. This is an index fund that looks at the highest-quality companies on the globe and then invests in them.
All you need to do is quickly check - which I know you are going to do - the performance of QUAL over the last 10 years, and the performance of HACK over the last four or five years - when it's existed. You'll see why that’s a good investment.
Stories on themed ETFs are becoming more popular with our readers.
I think if you pick a few themes that you believe in, then you cover yourself there. I've moved past the point where I back individual companies - except in unusual circumstances - just because I don't have the information that the professionals have, and I'd much rather have a balance of it.
But I do like the themes. They're so cheap that the growth that you get out of them is all yours.
Any thoughts on Bitcoin?
I don’t invest in things I don't understand.
If you had an extra 10 hours in your working day when you were working as CEO, where would you invest that time?
I would've used most of it for thinking time.
I think busyness is the enemy of greatness.
So many CEOs fall in the trap of diaries that are just back to back to back, and it's a grind, and you just don't have time to think.
I did a lot of global meetings, so I did a lot of flying. Much as I hated flying, at least on the aeroplane, I had time to read those three interesting articles, to sit back and think about what I should do, to write a letter to my partners to share some thoughts with them.
But if, at that stage, you said to me I'd have another 10 hours, eight of them would definitely have been spent just going for a stroll, going to an interesting lecture, going to expose myself to thinking.
That's how I discovered design thinking. I was invited to a breakfast by UTS (University of Technology, Sydney), and the breakfast had a real wanky title. At the time I thought: "The Opera House is close to my office. Breakfast in the Opera House will be fun."
I walked in there and they sat me next to the guest speaker. I met a guy called Roger Martin, who a few years ago was voted the most influential thinker in business in the world. He started to talk about design thinking and I was blown away. He gave me a copy of his book, and I went back to the office and said: "I've just found something."
That was because every month, I invested time and allowed myself a lot of time just to go and explore new things; expose myself to thinking that I would not normally be exposed to.
You waste a lot of time in the process. A lot. But every now and then, there's something that changes everything for you.
You mentioned reading. What's your favourite reading material?
I used to read a lot of business articles, and I really enjoyed business books because it exposed me to thinking. Because I'm no longer in an executive role, I find reading some of those articles quite frustrating because I can't do anything with them.
I probably now rather read about fly fishing or something about cooking or wine. Something that I can enjoy.
I'm a big fan of Professor Scott Galloway and his podcast Prof G - every podcast episode exposes me to a different way of thinking. He looks at a company and he explains what he would do with it. I just listen to it and I go: "I didn't see that coming."
Giam, that's been so interesting. That will definitely inspire a lot of people, so thank you so much for your time.
Great pleasure. I hope you got something you can use.
Note: This interview transcript has been lightly edited for brevity and clarity.
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