- Managing Me
- Big Ideas
- Managing People
There’s a historic reason why pharmaceutical company CSL holds its annual general meetings at the National Tennis Centre, outgoing chief and avid tennis player Brian McNamee told shareholders at the company’s AGM this morning.
“Our first AGM after listing was in a Sydney hotel,” he said.
“It was an excellent AGM, but it tended to go a little long. In parallel with ours, Coles Myer were holding their AGM in a larger room in the same hotel. To our horror and dismay, by the time our AGM had finished, Coles Myer had eaten all our lunch.”
“Thereafter we concluded we needed to be separate from other companies… and the Tennis Centre has been excellent for us.”
CSL’s shareholders were today voting on a new company constitution, and executive remuneration which, as proxy groups pointed out, was higher than normal.
Nonetheless, the AGM was short and uncontroversial. Shareholders used the opportunity to thank McNamee for his 23 years leading the company. McNamee is retiring next July.
The Australian Shareholders’ Association was free in its praise. “It’s a very rare acknowledgement for us, and it doesn’t go with the job,” the ASA’s monitor said.
“Brian McNamee can rightly claim to be one of the most successful CEOs currently serving in Australia.”
A retail shareholder said he’d been attending CSL’s AGMS for the past 10 years, and felt he had to speak up.
“It’s our last chance,” he told the chair, molecular biologist Professor John Shine.
“The main word I think of is [McNamee’s] brilliance, in so many different things, and his persistence.
“Once, at a very critical time for the company, he ran it from his hospital bed. And I think that’s the measure of the man.”
His retirement notwithstanding, it’s rare for shareholders to be so effusive in their praise of a CEO. There’s plenty leaders can learn from McNamee about leadership.
Beating the odds leads to the greatest rewards
When Brian McNamee took over what was then a government-owned entity many had written off, he was 33.
A doctor by training, McNamee tried his hand at professional tennis for a year, before putting down his racquet to take a job in the pharmaceutical industry. He was hired by blood products supplier CSL in 1990 as the second-in-charge, and became managing director six months later.
McNamee earned accolades by making the company respectable again after a consultant’s report recommended it be striped for profits and parts just before he took the helm.
The company was on the brink. The government had lost faith in it, and a key customer was looking elsewhere.
Moving quickly, the new chief quickly scored some coups. He convinced the federal government to give CSL a partly-built fractionation plant that supplied CSL’s raw materials, in exchange for equity in the company. This tied the government back into dealing with the company, which McNamee used to secure the support of CSL’s major customers.
He also rebuilt the company’s scientific credentials, convincing respected scientist Ian Gust to leave Melbourne’s Fairfield Infectious Diseases Hospital and head up CSL’s research and development programs. This would have taken a great deal of convincing: CSL at that stage was a company without much to show for itself scientifically.
McNamee made sure Gust was well-resourced. The company prioritised R&D, and today puts $400 million towards such research every year.
This has reaped huge dividends for shareholders. Since the company listed in 2004, its share price has multiplied 50 times.
As he restructured the company, McNamee sacked 30% of CSL’s workforce (350 staff). But breaking with tradition, he kept many of the existing senior executives rather than filling the positions with his own. This was the start of a trusted relationship between McNamee and those who report to him.
He also promoted and took risks on others, like when he promoted then 41-year-old Peter Turner to lead the development of CSL’s most critical investment. When the project went over budget, McNamee backed Turner, who went on to sit on CSL’s board before retiring at today’s AGM.
Longevity and dedication
It takes a great deal of maturity to lead the same company for so long. That’s because CSL’s failures and successes up to this point can be attributed to the company McNamee has built.
He has continued to deliver for a very long time. This year, the company passed $1 billion in profits, building on steady growth for the past five years, making it Australia’s most successful manufacturing business.
CSL has expanded its operations overseas; it is not the Australian-oriented company McNamee inherited. After more than two decades, it now makes most of its money in America, and more than 40% in Europe.
Don’t write off your industry
And lastly, McNamee is an optimist.
In the early 2000s, there was a global glut of blood products, leading to prices plummeting. In an interview with BRW in 2007, McNamee was fiercely positive about the period.
“A lot of people get demoralised in a downturn, and start to say, 'this is a terrible business to be in',” he told BRW. “I say ‘No! It is just that things are tough’.
"The good news is you make the most money in acquisitions in the buying, and downturns are the best times to buy. We bought [German rival] Aventis at a phenomenal price. It was a once-in-a-lifetime deal."