Forget the dodgy entrepreneurial decade of the 80s and the fanatical bottom line focus of the 90s, managers now have the opportunity to inject inspiration, humanity and imagination into their leadership. Queensland-based company director and former CEO John Reynolds talks to Richard Jones about some of the key issues.
John Reynolds’s management career spanned the 70s, 80s and 90s and he is convinced that it is time for a new approach to management and leadership. The entrepreneurial decade of the 80s, he says, was a time when people borrowed a hell of a lot of money, lost a lot of other people’s money and just about anything could be done. He believes the 80s were somewhat out of control and as a result there were a lot of failures.
We then moved through to the 90s which was a period of focusing on results at all costs. During this period cost cutting and cost control were very much part of the agenda. It was a time of rationalisation and a reduction of staff and CEOs were preoccupied with how many people they got rid of. It became a highly introverted period of management and it was both debt and risk averse.
I think the challenge now as we move into this decade is how do we get the right balance. It’s time for a new paradigm.
Reynolds warns that the winners in this decade will be organisations with an outstanding people culture. He says managers need to pay attention to people so that the company becomes a preferred employer. The question is: how do you do that?
Reynolds also warns that the corporate phase of driving profits irrespective of people is an old-fashioned concept and there is room for a new one.
I don’t quite know what the new paradigm will be but it will be an injection of passion and humanity and support. Intellectual capital is the key. The question is: how do you get it and how do you keep it? These companies will have a competitive advantage.
As a company director, business mentor and consultant he believes there are a number of key management issues that need to be addressed differently in this decade.
Reynolds sees leadership and management as different things. Leadership, he says, is about defining a preferred future, a strategic vision for the organisation or for the individual. Management, he sees, as the function that gets the job done it gets the rubber to hit the road.
I absolutely believe that you can learn these skills. I guess that some of the leadership skills are innate but I would define a strong leader as someone who can craft that strategic vision for the company; somebody who can take a group of people with them. The true test of leadership is how you behave when things are not in great shape and the news isn’t that good.
He continues: I think people watch you very closely and that’s the defining moment for leaders. You have to cope with being lonely in leadership and to be able to tread paths that other people haven’t been down and feel comfortable doing that.
You have to genuinely inspire, to put energy into your people and to breathe life into the organisation.
Reynolds believes that, today, organisations are not particularly joyful. And he believes a leader has to have skills to change that; to give a sense of purpose, certainty and direction.
Results are absolutely critical. We are defined by our performance and the day we don’t achieve the metrics is when we are in real trouble. But, it’s time for a quantum shift for both leadership and management, whereby we inject humanity back into the workplace. I don’t see metrics and profit as being in conflict with injecting humanity back into the workforce. I’d actually go further and say how do we inject love into the workplace.
According to John Reynolds there are a number of key issues on the table that have to be addressed by management.
Getting Things Done
The first is the challenge of simply getting things done. It’s a lost art. He believes many corporations have been overwhelmed by strategising in the past and the ability and capacity to execute should be higher on the agenda.
We need to put emphasis on execution. It doesn’t sound that sexy but the basic ability to get things done to turn plan into action is critical. People are very good at the vision stuff but ain’t so good at making things happen. So I put a lot of emphasis on the art of execution. Organisations need to be easy to do business with.
So the focus for all managers is a bias for action, keeping it simple and getting things done.
The second key issue is what Reynolds calls numerator management.
I use this term not to be clever but to say that the thrust of an organisation should be on the top line rather than the bottom line.
This has to be all about, how can we grow more, how can we sell more, and make new connections, rather than how to drive the cost equation, how to squeeze costs.
I suggest we have squeezed the lemon and made the pips squeak enough and now it is time to determine how we grow the company organically, grow revenue and be market oriented. I believe these skills are in real demand in the marketplace. If you are just focused on costs then it is a pretty impoverished form of management and leadership.
He also believes that some business development skills such as adding value, growing revenue, effective representation, salesmanship and public relations have been lost in the system. It’s about going back to the future and polishing these skills at an organisational and individual level.
Grasping the Nettle
Reynolds suggests the third issue facing organisations is that of grasping the nettle; in other words, understanding what the facts are telling you.
You need to be able to see these facts early and be able to pick the trends. You need to interpret the metrics so you can navigate your business. You have to read the play very carefully and I suggest a lot of us don’t grasp the bad news as quickly as we ought. Give me the good news, give me the bad news, give me all the news facts are friendly.
The fourth key issue is trust. While Reynolds says corporate governance attempts to legislate for trust, it is something that is not really possible to legislate for. I consider the focus on corporate governance has been positive but we shouldn’t get carried away with it as a process and sterile activity. Its only value is when it gets translated into the day-to-day fabric of the life of the corporation and if it is not getting through to the coalface then it is probably too process driven.
Trust is now absolutely critical; the fact that it has not been seen as a finite, tangible asset before is wrong. I would suggest Australian corporate life is now setting a very high standard and we should be very proud of its leadership. The day an organisation is not trusted they are in trouble, he cautions.
People and Humanity
Key issue five is people and humanity. Reynolds says that while everyone in business quotes the mantra that people are the greatest resource of the company, they then often proceed to act in a diametrically opposite way.
We are running into a period with workforce trends where there is a serious shortage of skilled workers. The 55 plus grouping is going to grow, the 3555 group is going to decline and the demand for skilled people of all professions is going to diminish. There will be real workforce shortages and the critical question is: how are we going to face this challenge?
One critical role is education. Clearly there are going to be gaps between current performance and preferred performance, so the responsibility of organisations such as AIM to develop the right sort of skill bases and the right sort of personal qualities in the work place is critically important, he says.
The Mentoring Role
As part of his reassessment and personal portfolio John Reynolds has focused on getting graduates to be job-ready.
His proposition is that a lot of graduates are very fine young women and men and technically and intellectually competent but lacking in workplace skills – they are simply not job fit.
We have been doing a lot of work on qualities you need to acquire to become job-ready so the transition into the workforce is effective more quickly and seamless.
Just visualise, you are walking off a campus and if you look back over your shoulder, it has nothing to do with where you are heading. They are two different worlds!
I am all about encouraging and supporting young Australians such that the transition does not erode their energy, aspirations and creativity.
This is very relevant to AIM which does a terrific job closing these gaps between actual performance and preferred performance. AIM conceives and delivers really practical and flexible programs.
Having returned to Brisbane one year ago the transformation of AIM in this State is quite remarkable. It is relevant, vibrant, contemporary, useful and creative. Not bad ingredients for the new leadership paradigm!
Career Transitions are Critical
Reynolds believes there are a number of critical transition points in everyone’s career and that these points need to be negotiated carefully.
You have to manage those transitions in both a professional and a personal sense, he believes, and he lists five key points.
Backpack to Briefcase
The first transition is the move from education into the workforce. He calls this the backpack to briefcase transition.
Economy to Business Class
The second transition is in the late 20s. I observe this is the time an individual commits to be really good or mediocre. He refers to this as economy to business class.
The Holistic Approach
The third watershed late 30s is where the individual moves from the functional role, for instance in sales or production, to a broader role and moves into the management stream with a more holistic approach leading to general management and COO and CEO roles.
Executive to Portfolio
The fourth transition he recognises is in the 50s and refers to it as executive to portfolio. You can get it very right or very wrong!
A couple of years ago I took this phase of my life very seriously. My executive career was coming to an end and the future options not exciting. Then someone said to me wisely, this is a beginning, not an end’. I strongly advocate that if you see this transition from that perspective this era becomes one of immense richness, creativity and satisfaction for which the previous 40 years have prepared you. This is my gift to you.
For my part, I have never been more fulfilled than in the last two years. For the first time I have achieved the right work/life balance. I determined that my purpose is to be a positive catalytic force in the lives of other people business, family, friends, community . . . What a wonderful privilege!
Reynolds suggests executives in this group ask themselves what they are going to do with the next 30 years of their lives.
For my part, in the professional area of my life I decided to pursue formal directorships and advisory positions. Secondly, I wish to be a corporate advisor and thirdly I wanted to get involved in university education and the role it plays in the business sphere.
I strongly believe there is a fifth transition but I am not there yet. I suggest in our late 60s we actually see the light and I refer to this as the getting of wisdom.
I am truly looking forward to that!
- Santos Limited, Executive General Manager Corporate, 2001-2002
- Normandy Mining Limited, Executive General Manager People and Public Affairs, 1997-2001
- Normandy LaSource (Paris based), Directeur Generale
- David Syme & Co Limited (The Age), Managing Director, 1995-1997
- APN News & Media, Chief Executive, 1989-95
- The Bell Group, Chief Executive The West Australian, 1972-1989
- Chairman, CH4
- Director, Bank of Queensland, Queensland Cotton
- Corporate Advisor, several Queensland and Australian companies
- Strategic advisor, University of Southern Queensland
- Adjunct Professor, Bond University
- Visiting Fellow, QUT