As Chief Executive of the Business Council of Australia, Katie Lahey is the public face of big business. Leading the think-tank that represents Australia ‘s top 100 companies is a daily challenge. Lauren Thomsen-Moore reports.
Katie Lahey still believes one of her career highlights was topping her MBA class. I still get a tingle when I think about it. I’m not an academic I’m not academically inclined really and was surprised that I did do so well in my undergraduate degree and my MBA. I had a bit of the ‘public service cringe’. I was a public servant and the majority of the people in the class were from the private sector, and I thought ‘Well, I’m going to struggle with this’. But to top the class. . . I still pinch myself.
These days, Lahey commutes between her home in Sydney and office in Melbourne during the week to fulfil her duties as Chief Executive of the Business Council of Australia (BCA), a position she took up in September 2001. The BCA was established in 1983 to provide a forum for Australia ‘s business leaders to contribute to public policy debates with the aim of building a better and more prosperous Australia . Member companies are among Australia ‘s largest employers and taxpayers, and represent a substantial share of the country’s domestic and export activity. As a result they have a significant interest in economic reform and the prosperity of Australia .
As well as her responsibilities with the BCA, Lahey has served on the Board of David Jones Limited for eight years and is a Director of the Major Performing Arts Board.
I’m one of those people that [are] passionate about everything [they] do. I don’t do things unless I can be passionate about them. I think that it is really important. You get asked to do a lot of things when you’re in a senior position and you really do have to pick the ones where A, you add value, and B, you have a genuine interest in the subject matter. And so for me, David Jones is a no-brainer. I mean, what woman wouldn’t be interested in David Jones? Lahey jokes.
She says there is also a valuable synergy between her role at the BCA and sitting on the board of a publicly listed company. The issues we discuss around the board table are very relevant to our BCA members, so I can empathise when they are talking about the latest developments in corporate governance, the amount of red tape that companies are governed by these days, [and] the issues around industrial relations and workplace reform; we see that on a day-to-day basis in David Jones. So I get to view it from a theoretical public policy position and also see it in a day-to-day operational sense, in terms of how it impacts on the way David Jones runs its business, she says.
Lahey says that as a Director of the Major Performing Arts Board, which is part of the Australia Council, she has a useful insight into another business sector. She says that the arts is a business, a very serious business, and the Board is responsible for the government’s funding of the major performing arts companies including the opera, ballet, orchestra, and major theatre companies.
The Board controls a significant amount of taxpayer funding and my role, along with the other directors, is to see that that funding is adequately accounted for.
Management and leadership
As Chief Executive of the BCA, Lahey says she feels privileged to have access to the CEOs managing Australia’s biggest businesses.
I learn so much at every meeting we have with these very smart people. They don’t get to be in those positions unless they are smart and possess the vision and strategy to take their businesses forward. I think, more than ever, Australia is part of a global economy, so if you’re running a major bank here then you’re not just competing against the other banks in this country, you’re competing against financial institutions in Hong Kong, New York, or London. So I think I’m privileged to work with those sort of positions and to have an opportunity to advance some of these big public policy issues with them, Lahey says.
Lahey regards herself as a quiet manager of her 14 staff at the BCA.
I don’t bang the table, I don’t scream and shout, but people will know when they’ve crossed me. I’ve got a very long fuse, but get to the end of it and you’ll know.
She believes in giving people very regular feedback, and doesn’t wait for the ‘once a quarter’ or ‘once every half year’ to tell people whether she’s happy or unhappy with a particular project or particular piece of work. She says she does this because that’s how she likes to get feedback on her own performance.
I like people to tell me: ‘Have I achieved what I’m supposed to have achieved?’; ‘Was that a good piece of work?’; ‘Did that go well?’.
I think regular and constant feedback is very important, Lahey says.
In addition Lahey says she prefers to delegate, and if the organisation has the right skill base, she likes to give people as much rope as they can possibly manage.
I like to be inclusive; I think I’ve learned now, at my great age, that I don’t know everything. That there’s somebody else in the team that knows more about this than I do. So I’m very much a team player and like to involve the rest of the organisation. Lahey admits that this is one of the joys of working for a small organisation.
Lahey rates people skills as the key managerial skill for success; then there is the vision to know what is it you’re striving for and financial skills.
Probably the fourth thing I’d put on that list is self-knowledge; you need to know yourself. You need to know where your own gaps are. So it’s self-awareness and being honest with yourself about gaps in your own CV or skills base.
When it comes to Lahey’s definition of leadership and management, she believes leadership is about vision, culture, inspiration, and creativity. It’s all those big ‘nebulous’ things.
She believes management is much more about keeping the wheels turning.
Management is about processes, about the day-to-day. And I don’t think that’s to diminish it in any way. Often, the creative vision won’t work unless you’ve got a very clear idea of how you’re going to implement it. Putting it together and producing an outcome is often the difference between a successful business and one that’s not. So I think you need to get both leadership and management working together.
Lahey believes pinpointing the differences between management and leadership is a complex issue that is not easy.
I think people are looking for ways to be exposed to the best sort of leadership; they’re looking for training, they’re looking for ideas, they’re looking for exposure. I don’t think it can be exactly learned but you can learn things about it. And I think some people are better at executing it than others, she says.
One thing Lahey says she is very particular about is recruiting her own staff.
I’ve always spent a lot of time recruiting, selecting, and developing my team. I’ve not delegated that role, Lahey says.
If she decides to use head hunters, she will always do the referee checks or do the interviews personally.
I think that’s part of a successful organisation: attracting, retaining, and motivating the staff. I’ve always recruited staff. I’m not frightened of competition from my staff. I think it’s so important that the manager tries to recruit people that are better than themselves that have complementary skills, Lahey says.
Lahey says her role at BCA is different from other CEO roles that she has held previously [see breakout box on the right].
In previous roles I’ve been managing a lot of people and very big budgets. This is much smaller, both in terms of the dollars and the number of people I’m managing. But it has a public policy focus and a lot of the work revolves around making sure that the positions we develop in the secretariat reflect the members’ views. We develop policy positions on major issues such as population, tax, or infrastructure, and make sure that they represent accurately the big business position. Then we come up with strategies to communicate and lobby for change to improve the way our systems work, she says.
Building an ethical culture is also a major concern for business in the wake of the Enron and HIH Insurance scandals, says Lahey. This is an issue that is frequently discussed and it goes beyond simply having a code of conduct and a ‘tick the box’ sort of environment.
You really do have to walk the talk. You have to have a set of values so that people know where you’re coming from and know very clearly what the no-go areas in your organisation are. I think that it starts at the top and has to be very clearly articulated throughout the organisation, Lahey says.
Policy on ageing
Lahey is passionate when it comes to issues surrounding the looming problem of an ageing and shrinking workforce.
She says the seriousness of the issue has increased over the past few years, People are starting to realise that there’s this big bubble of baby boomers about to exit the workforce.
The ageing workforce is an area we’ve done a lot of work on because we know it’s like a train running down a track; over the next 20 years our population will age and shrink, and it will have a significant impact on our workforce.
At the moment there are six of us in the workforce supporting every retiree, but in less than 20 years there will be three, she says.
The issue, according to Lahey, really started to hit home this year. When you see the figures you realise what this means in terms of what Australia will look like in 25 years. We will have more people in retirement than we do in the workforce!.
To help prepare for this change in workforce dynamics, Lahey says the BCA would like to see an increase in the skilled migration intake.
We’d also like to make it easy for parents to move in and out of the workforce. So transitions between stay-at-home parents and the workforce should be made as easy as possible and we should be encouraging the growth of families and trying to increase our fertility rate.
Another key strategy is to try to keep people in the workforce longer.
Instead of all of the baby boomers exiting when they’re 55, it would be better for the economy if they started to exit at 60. We need to look at changes in the tax system, superannuation, and our workforce planning to make it more comfortable for people to stay in the workforce longer. Lahey adds that it requires a major cultural shift, and with managing any change, the cultural part is usually the hardest.
Lahey agrees that it is up to the CEOs of Australian businesses to take part in this process.
I think that businesses have got a very important part to play because the cultural shift has to start in the recruitment and retention practices of businesses.
She admits that at the moment there is discrimination against older workers.
It’s not necessarily obvious and it’s not necessarily conscious but we know often when companies are downsizing they often look towards the older workers and say ‘Well, you’re almost at the retirement age, it’d be good if you went’.
We’ve really got to shift that view. We know we’re going to have a shortage of workers and we need to say to people: ‘What about easing into retirement or working three days a week instead of finishing at age 55?’.
If we don’t change many people could be sitting around in retirement for what can be up to 30 years, and that’s not good, for them or the economy.
Katie Lahey’s CV
Before joining the BCA, Lahey served five years as Chief Executive of the State Chamber of Commerce (New South Wales), during which time the organisation went through dynamic change and growth. Lahey significantly raised the profile of the Chamber and developed a range of new initiatives and services, including the Sydney 2000 Olympics Commerce Centre and the launch of the Chamber’s online strategy.
Lahey moved to the Chamber after three years as Chief Executive of the Sydney City Council where she succeeded in turning a $22.5 million deficit into a $14 million surplus; developed and implemented policies to increase residential, retail, and cultural activity in the central business district and to prepare the city for the Olympic Games.
Lahey served as Chairman and Chief Executive of the Victorian Tourism Commission from 1989 to 1992.
Lahey has held a range of senior management positions in the Victorian Public Service, including Deputy Director General of the Department of Property and Services.
Lahey is a former Director of Australia Post, Hills Motorway Limited, and the Garvan Research Foundation.
In 2003, Lahey was awarded a Centenary Medal for her contribution to Australian Society in the area of Business Leadership.
Lahey has a Bachelor of Arts (1st Class Hons) and a Master of Business Administration (MBA) degree from Melbourne University . She was awarded the prize for top student in the MBA for her year.
PM on the BCA
In an address to the Business Council of Australia in March this year, Prime Minister John Howard said that over the 22-year period since the BCA began, he has had a close association in various guises with the activities of the Business Council.
The Prime Minister said one of the things that the Government had tried to do in the nine years it has been in office, was to maintain a very close link with the business community of Australia .
And that is inevitably because this body, more than any other, represents the larger corporations and business enterprises of the country; a very close link because of our very strong belief in the importance of wealth creation and the contribution that all of you as leaders of your companies and enterprises make to the Australian economy, he said.