- Managing Me
- Big Ideas
- Managing People
How can Australia recapture the fire it had in its belly post-World War II, to enable it to meet the might of emerging economies? It's a question that plays on the mind of one of the nation's most forthright CEOs, Alex Malley, who heads the successful international accounting body, CPA Australia. He believes the answer is in Australia's nimble entrepreneurial flair and that encouraging it will take strong leadership.
Malley's passionate focus on what makes leaders tick permeated his early career as an academic and continues today as the chief of an organisation with some 140,000 members in 114 countries. As host of national TV series The Bottom Line, on Australia's Channel 7 Digital, Malley has explored the leading modus operandi of some of the world's sharpest decision-makers and business luminaries. In an exclusive interview with Knowledge@Australian School of Business, he shares his insights on leadership with Julian Lorkin.
An edited transcript of the interview follows.
Knowledge@Australian School of Business: To start with, what qualities do you think are important in a leader?
Alex Malley: The really stand-out qualities are: having the courage to fail to meet a vision - we don't see enough of that today; having the passion to be where you're at, so that encourages an energy that's above the normal; and, certainly, to mobilise people through example, but also through influence. They are all really the key. If you can do that and inspire your board, your management and your stakeholders, then you're on your way as a CEO.
Knowledge@Australian School of Business: From all the people you've interviewed as part of The Bottom Line TV show, is there one overriding notion - one overriding principle - that you see has guided those leaders?
Alex Malley: The overriding principle is that they've all done what they love doing. The great mistake you can make in life is to try and attempt to be something or someone you're not. And all of them had a foundation interest in what they were doing.
Knowledge@Australian School of Business: So for those leaders who are often taught how to act as a leader, in reality it comes down to their personality and being able to be themselves?
Alex Malley: Well, you've got to be yourself. Obviously, in your younger days, you've got to play the game and be disciplined and so on. But always, you've got to make sure that who you are stays strong. That doesn't mean you're disrespectful in the workplace, but you can't lose your inherent character, and that can happen along the way in attempting to please as many stakeholders as you feel you need to.
Knowledge@Australian School of Business: Isn't that part of what many leaders go through? They realise they have to make compromises, and those professional motivations that they initially start with - perhaps when they leave business school - disappear on the greasy pole into management?
Alex Malley: It's always a difficult thing to completely maintain your own self in everything you do, but it's the only thing that will allow you to maintain your leadership qualities. If you look around the world, we're seeing leaders who turn away when the heat's on, or actually don't go down the path they originally intended to take. To a great extent, that's to do with the fact that they've compromised their own souls, and that doesn't help anyone, including them.
Knowledge@Australian School of Business: In Australia, do we give enough support to leaders who show true grit?
Alex Malley: What we need to see is leadership in politics and leadership in business and community. There's no doubt that Australia at the moment is locked in incremental leadership. If you were to test the Australian electorate and ask them what the vision for the country is, you would get a lot of different answers, including if you spoke to the politicians.
So we need to start from the political level. Australia needs to build its vision. It needs to agree on some core principles, and we need to see that long-term spirit of leadership that we don't see at the moment in Australia.
Knowledge@Australian School of Business: In part, might that be why we're seeing a real problem with productivity in Australia?
Alex Malley: There's no doubt that there's a level of uncertainty that businesses are dealing with, particularly those like ours that have an international footprint. Some markets are asking questions about the certainty of policy in Australia and that's affecting people's investment capabilities. It's putting pressure on our costs and our businesses, and so productivity is challenged. Plus [many of] the markets we deal with have much lower labour costs, so that also adds some tensions.
Knowledge@Australian School of Business: Is there a real difference in leadership qualities in these different countries? The fact that they're willing to look at things, and maybe in this country we're not prepared to play with it?
Alex Malley: Australia post-World War II had a fire in its belly that's hard to replicate today. Why? Because we were starting from the ground up. To a great extent, the emerging economies have that fire in the belly now and we have a bureaucracy in our belly. It's a very tough scenario that we face. We have to find young people with the ambitions similar to the ones we had post-war, and allow them to drive the economy and the country forward.
Knowledge@Australian School of Business: In one of your interviews with Wizard Home Loans founder Mark Bouris, you noticed in him the willingness to challenge the oligopoly. Perhaps that's a leadership quality we need to encourage?
Alex Malley: As a leader you've got to contest and challenge norms anyway. And I think Mark's journey in dealing with a nimble model against a larger set of models in banking was a really fantastic way to go. Virgin does the same thing; it goes into sectors that are fat, and it has a trimmer version.
Australia's future is in that entrepreneurial nimble flair. We see it in retail. Those young people now setting up retail operations online are buying and selling the large department stores, because they can't move with the same pace.
So that challenging of the oligopoly - challenging large business with entrepreneurial innovation - is really a great future for our country.
Knowledge@Australian School of Business: People have suggested that Australia has been missing the boat when it comes to the internet revolution. Australia was almost 10 or 15 years behind what was happening in the US and Europe. Now our internet retailing is really taking off. Is this another example of Australia not really grasping what's important?
Alex Malley: It is an issue of leadership that's steeped in history. There are many great leaders out there who grew up generationally at a different time and with a different set of events, and they struggle to understand what this all means. And that's a real test of leadership, when you're actually facing parameters that you're not familiar with, and it's how you manage that.
Organisationally, [CPA Australia has] a very active online social media model, and we populate that with people who understand it. We give them guidance and we take advice, and we say "no" when we need to. But we're not afraid to move into that new environment. There's a lot of fear in leadership on those sorts of fronts at the moment.
Knowledge@Australian School of Business: What should a leader do when they are confronted with something totally new, such as how to deal with social media?
Alex Malley: The first thing is to hire people who are smarter than you in that area. All too often, leaders tend to hire people who aren't smarter than them, and that gives them a sense of comfort. That's wrong. You need to hire people who are experts in their field, who are going to be consistent with your culture, but are going to take you to uncomfortable, but relevant, places.
Our organisation set up the online facility of TheNakedCEO.com. And that was a huge challenge for a conservative organisation that's 125 years old, to have a site that's called The Naked CEO. It was a real challenge for our culture. But it's been a fantastic outcome and it's allowed us to look at the future in a very different way.
Knowledge@Australian School of Business: Certainly, when people are looking at CPA Australia, and its tradition, they might now be questioning why it's so heavily involved in leadership.
Alex Malley: We've always been in leadership. We actually are the second-oldest profession in the world, I should note. But with that comes great experience. In many ways, accountants in organisations in every sector are leaders. But the image of the accountant over the years has been left unattended. We're trying to bring the brand, if you like, into contemporary times. Accountants are strategic business leaders and we're making that emblematic by using real people who actually have those qualifications and make strategic decisions.
Knowledge@Australian School of Business: Was that also why you founded the Society for Knowledge Economics?
Alex Malley: That's a society that's looking very much at the human capital factor in business. As a leader, your first principle should be that the key resource in your organisation is people because without them you can't achieve any goals. The Society for Knowledge Economics is doing a lot of great work in creating a whole new environment to discuss and to debate about how you get the best out of your people.
Knowledge@Australian School of Business: Neil Armstrong was a special guest at a recent CPA congress and you famously got one of the few interviews he has done in 30 years. I think it was because his dad was an auditor. That was a great opportunity to talk to him about the leadership qualities he needed as one part of the team that put man on the moon for the first time. What did you learn from him?
Alex Malley: Anyone who watched it learned a whole lot of things, as much about the traditions of honest hard work and process. As an engineer, his strength was in process. They wouldn't have got there and back without a really strong set of principles and processes.
But the foundation reason for talking to him was to really shock the world into thinking about the balance between achieving a vision and having a really large goal and managing risk, as opposed to this very clever world we've created today which is all about risk management and, occasionally, we achieve a goal.
If everyone knew as much as they know today back in the ‘60s, we never would have got to the moon. In those days, their knowledge was limited but their vision was great. There was a time in the US during the ‘60s that I don't think we've seen again anywhere in the world, where our universe was larger than earth. And I think it's getting that balance right.
A person who's founded in accounting skills today is unlikely to say, "We need to minimise the focus on risk management and seek to take those challenges and to fail occasionally, to reach some great visions" - because we're too cautious and things don't get done.
Knowledge@Australian School of Business: How can we turn that around?
Alex Malley: Even when we mentioned the opportunity to meet Neil and to have that interview, people said we couldn't do it. So you don't listen to people, you lead by example.
We need to see more examples of individuals taking risks for themselves and their organisations, achieving those goals, and actually advertising the fact that they did it. There's a whole generation of young people who want to be inspired by great leaders and who are actually out there looking for them. Sadly, at the moment, they're not as obviously in-your-face as perhaps they might have been in previous generations.
Knowledge@Australian School of Business: The few in-your-face leaders we do have, quite often have come up with a great idea for the internet and it's made them a multi-millionaire overnight. But does that really inspire the kind of leaders that we want?
Alex Malley: No, I think the separation is that they [had] a great idea and they made a lot of money. Leaders are there for the long-term; they don't put the money ahead of the vision. If you mobilise people and have them achieve a goal together, that becomes far more sustainable than a one-off event.
All power to those who have the one idea and make a fortune. The challenge for them is how they use that opportunity - how they actually spend the rest of their life trying to affect change and make it sustainable. A very big focus of mine as a former teacher is finding opportunities to allow young people to see what leadership's about. One of the reasons I'm talking to you is because young people get to hear these insights from a variety of your guests.
Knowledge@Australian School of Business: When you were teaching, as an associate professor you won a Vice-Chancellor's Award for Teaching Excellence at Macquarie University. How important is education for our leaders?
Alex Malley: Very important. But even more important within that is engaging young people. I could give a lecture in a lecture theatre of 600 and they would be there from the start to the end. And they never threw an aeroplane, even in the most boring topics.
Engagement becomes the king. If you can engage with your staff, if you can engage with young people - they don't need a lot to be inspired, but they need to believe that you believe what you're talking about.
I would often say: "Look, perhaps the topic today isn't necessarily the most earth-shattering topic; but understand that without this set of qualifications, you're not going to be able to get out there and have a go and innovate, and do all the things you want to do."
We've got to sell that message to young people all the time. We've got an enormous population of great young people in Australia, but we're just not tapping into them and giving them the right messages. In my view, we need to get better at it.
Knowledge@Australian School of Business: What are the right messages?
Alex Malley: The right messages are that you can achieve what you want to achieve; that there'll be a circuitous journey; you've got to have dreams, and you've got to maintain them.
You put the dreams in the back of your mind, you go out, perhaps get a terrible job for the first couple of years … I often wished upon young people to get a bad job and live with it, and suck it up for a couple of years, understand what it's like to live in a difficult set of circumstances, and only leave that job when you're on top of managing it.
But always have your dreams in the back of your mind. Because if they're clear in your mind, opportunities will present to you every day of your life because they're in your subconscious, so you can chase them. Open your doors, build your networks, and always be true to yourself. They're the prerequisites for a great life.
Knowledge@Australian School of Business: If people do find their way up the greasy pole to run a publicly listed company, how do they balance the conflicting demands of knowing what they want to do as a leader with the short-term demands of keeping the shareholders happy as well?
Alex Malley: Regardless of the size of the company, the first thing you do is build trust. You give your board and shareholders the vision with which you would like to run the organisation.
One of the greatest problems in public companies today is this whole concept of shareholder primacy, that they are the only stakeholder to the organisation that matters. There's a range of stakeholders in an organisation. Even shareholders have to understand that the organisation has a timeline and a vision. And it's the courage of those CEOs and those boards that are going to determine the future of public companies. In my view, there are a lot of people who are independently wealthy in senior leadership roles who do not have the courage to build that long-term vision, nor the stomach for it, but we need to see more of that.
These are topics I debate in the press all the time. Shareholder primacy is becoming a real issue. There are more stakeholders than shareholders, and increasingly the sustainability debate is starting to uphold the fact that we are running out of resources globally and we need to be respectful to a whole lot of stakeholders, including of course our shareholders.
Knowledge@Australian School of Business: Many leaders may be worried about this. At the same point, would they dare do anything when it may have catastrophic effects on shareholder value?
Alex Malley: Look, shame on them. The fact is that we need to be strong in our leadership. We're moving to a scenario where we might have emerging economies that were producing 10,000 pushbikes a month, replacing that with 100,000 motor vehicles a month. We are going to run out of resources, and we're going to run out of resources even more quickly if we have a vision that's as long as our nose.
Public company CEOs and boards in Australia and around the world need to start looking at the longer-term vision and actually supporting each other in taking their companies forward, no matter the pain - and there will be - from shareholders who have short-term visions.