Dr Daniel Norton is chief executive officer of the Hydro Electric Corporation of Tasmania. Before that he was secretary of the Tasmanian Department of Premier and Cabinet, deputy secretary of the Tasmanian Department of Treasury, and senior manager of corporate affairs at the Australian Wheat Board. He holds a PhD in economics and business from North Carolina State University.
AIM: You have managed Tasmania’s largest business since May 1996. What are the greatest challenges?
Norton: The challenge is to keep my eye on the ball, with 1700 employees, at the same time as being involved in determining how a part privatisation may occur. We have made major progress in reducing expenses, which are down by 4% every year for the past four years. In the past three years we have averaged $100 million in capital expenditure from internal funds, and we have significantly increased after-tax profit and paid back $250 million in debt. Hydro assets are long-term assets, built up over many years through debt financing: the corporation has $1.43 billion of debt and $500 million in annual revenue.
AIM: What are the long-term implications of privatisation?
Norton: Many governments are asking: “What is the reason for government ownership?” Often the answer is: “No reason, because we can control it through external regulation.” For example, the retail (hydro-electric) market moves very quickly and it is an environment in which competitors bundle products together. You need more flexibility than is usually possible in a government business. There is reason for government ownership when there is a monopoly, but much less so when competition is the norm. Ultimately, it is changing government’s role away from being a provider of services and towards being a purchaser of services.
AIM: You have been involved with government departments as well as the corporation. How would you evaluate politicians understanding of management and industry issues?
Norton: I have run across politicians with a very good understanding of complicated business arrangements and who are forward thinking, and I have run across politicians who have little grasp of it. I don’t think there is much difference between the two sides of politics. In Australia, both sides are fairly pragmatic once they get into government.
AIM: What has been your greatest challenge in management?
Norton: Coming to the Treasury in Tasmania was the hardest thing I have done, because I did not have a treasury background and I had to move interstate (from Victoria). I had no track record in public-sector finance and it took me six months to get up to speed.
AIM: Can management be taught?
Norton: It can be, but as far as the individuals are concerned, you can’t just go to a course and become proficient. It requires analytic ability and a strategic focus, which only some people have naturally. And there are rare skills like strategic vision. I do not know whether change is harder to deal with now than it was 15 years ago, but you certainly have to take into account many factors at the executive level. We spend a lot of time trying to anticipate the future not to find out what will happen, but to position ourselves for potential developments. Globalisation, for instance, affects us all. Ownership is changing and the multinational companies are spreading into a lot of different countries. In every competitive area they have a range of operations throughout the world, and a lot of expertise. That makes competition even more significant than it would otherwise be.
AIM: What is the worst part of your job?
Norton: I like assisting in the change process, but you see people who find it difficult to cope with. There are casualties. Most people grasp the nettle and work through it and I like trying to help people through it but it is sad at times, especially when you see people invest in a career only to see it become a dead end. The human dimension can be the hardest part to deal with.
AIM: What do you consider the most important aspects of management to be?
Norton: Two things. In any managerial position you are only as good as the people you work with, and you have to concentrate on teamwork, communication and motivating people. That becomes even more important when change hits. The other rare skill is strategic vision, and that is a teamwork issue as well, because only some people in the organisation will have it.