Kate Carnell became the first female Liberal state or territory leader in Australia five years ago when she assumed the role of Chief Minister of the ACT. Her portfolios include responsibility for financial management, public administration, business development and tourism, asset management, and information technology and multimedia. Kate is a pharmacist by profession. She is also a Fellow of AIM.
AIM: How has management played a role in your career?
Carnell: I bought my first pharmacy when I was 24, so I suppose I have always aspired to work for myself or to manage rather than just work for somebody. It is rewarding to run your own business and produce outcomes.
The other side of it is the great challenge of managing staff and making sure that people working for you feel part of a team, not just employees. I hope that’s something I have done reasonably well over the years. I think it’s something that women do well.
AIM: What is the role of communication in management?
Carnell: Management has fundamentally changed, and the days when the boss ordered staff around and expected them to toe the line are gone. It is definitely not the way to get the best out of staff. Communication is the major element of management.
AIM: What specific management strategies do you employ in your current position?
Carnell: The first challenge for me, as chief minister, was to get the books in order. They were operating at that stage on a cash-accounting basis and there was little knowledge of how much things cost. There was an input-based approach to budgeting generally. We immediately changed our whole accounting system and were the first state or territory to adopt full accrual accounting.
The reason that is important from a management perspective is that it’s hard to get a team to share goals if you simply don’t know where the goal posts are. We had to move to output budgeting so we would know what we were trying to achieve, not just in dollar terms but in actual output terms right across government. People co-operate more readily when they know where they are heading and what is required of them.
That was the initial challenge. Our operating costs are down to $34 million and we will go into the black next year. That is a pretty good outcome for us.
AIM: What was the most difficult management challenge you have had to overcome?
Carnell: Resolving a $344-million operating loss in a small economy, and one that the Commonwealth Government was significantly downsizing at the time. The thing that I’m most proud of is that we have managed to do it while increasing education spending. Anyone can cut budgets but it is important to make sure you target your cuts in the areas that can most handle it. Our greatest resource is our trained workforce.
AIM: How important is education to management?
Carnell: We’ve got to make sure we keep spending money on education and keep producing the best trained workforce, not just in the region, but in the world. Over time the global economy will be a knowledge-based economy. The level of training of our workforce will determine just how competitive we are in the future.
AIM: Do you think Australia’s management skills are improving?
Carnell: We are improving as a nation. In terms of management, Australians can be quite broad-ranging in their styles. Maybe the thing we have done badly has been to look too much to the past; to look at the way we used to do things, rather than accepting that the whole basis of management, of our society, has changed fundamentally, and is going to change even more with the advent of e-commerce. E-commerce is still quite small but it will become vital to most businesses.
AIM: What is the biggest management lesson you have had?
Carnell: I have had to learn not to get caught up in the fighting of brush fires that endlessly break out in government and probably small business as well. It is easy to get caught up in the minutiae of problem solving. The chief minister or CEO must keep a clear view of where we are going, rather than solving the problems of today.
AIM: What is the most rewarding aspect of management?
Carnell: People issues – seeing people I am working with really blossom. Thirty percent of our senior executive service is women. We’ve got quite a number of people from non-English speaking backgrounds in senior management jobs. It is great seeing people achieve what they are capable of.