The best and the worst managers

Friday 13th February 2004

They woke up sleeping businesses, made hot ones hotter, brought corporate discipline to messy organisations. Some of them you won't have heard of, others are household names. But what they all have in common is that they know how to lead.

'There's a Chinese saying that a great leader is one where the people say, "We did it ourselves,"' University of Auckland Business School head of graduate programmes Dr Gary Clayton says.

Some managers have situational skills that is, they might be like Winston Churchill and good in wartime but not in peace, or be great at keeping a show on the road but no good at turnarounds.

But few management specialists are purist about the distinctions.

'The skill sets that make you a good leader make you a good manager,' Unitec's Professor Gael McDonald says.

THE STANDOUTS

John Hood

Vice-chancellor, University of Auckland

Key achievements:

Established the new Auckland Business School and the Performing Arts School

Auckland punched above its weight in research funding

John Hood didn't enter the university world in the usual way as an academic and that shows. He is a global benchmarker who would measure his own performance not against Bryan Gould (Waikato) but Larry Summers (Harvard), which probably reflects his fiercely competitive nature. He doesn't waste energy.

"You can tell this from the way he talks he never says much more than he needs to, he conserves words," an education source observes.

Hood has a reputation for running the university the same way only doing what he needs to, and letting others do the rest. He is also seen as a "great systems guy" even sometime critic Jane Kelsey admits this has been one of his strengths and he listens to people.

He has a reporter's knack for asking straight questions and exuding the kind of body language that makes you want to talk and talk. This is pretty unusual with Kiwi businessmen and a characteristic that has made him a lot of business friends. It's one of the ways he does his best research, which will be invaluable in his new job as vice-chancellor of Oxford.

David Houldsworth

Managing director, Hellaby Holdings

Key achievements:

Reported record profits for the company's two largest subsidiaries;

Moved into a "growth-oriented phase" by buying up three new businesses

Like the company he runs, David Houldsworth is a quiet achiever. He sees Hellaby's role as being "a good business owner" rather than an asset stripper. That strategy has meant Hellaby gets fewer headlines than other investment companies no bad thing and his approach has paid off in increased profitability up 57% to $22.2 million last year.

Houldsworth's strategic approach has succeeded in turning around investments such as subsidiary Rodd & Gunn and shoe retailer Hannah's. Their sales fell slightly but their gross profit went up and expansion started to pay off.

Blame that focus on profitability on Houldsworth's background as a banker he has held big jobs at Citibank and Chase Manhattan Bank's New Zealand operations as well having been the executive director of Landmark Corporation in the late 1980s.

Houldsworth combines the banker's financial discipline with a relaxed approach when dealing with the managers of Hellaby's 12 investment companies.

Shareholders' rights crusader Bruce Sheppard describes Houldsworth as "humble in his own way but remarkably effective."

He also gives Houldsworth a big tick for his frugal corporate style. "You should visit their offices they're not flash."

Hellaby's shares were trading at $3.13 this time last year this week they changed hands at $5.10.

Brent King

Chief executive, Dorchester Group

Key accomplishments:

Cleaned up corporate governance

Moved into the IPO market

Cricket buff Brent King he is on the board of Auckland Cricket talks a lot about teamwork, but judging by the performance of Dorchester, it is not just talk. Until recently Dorchester had a bit of a daggy hangover-from-the-1980s reputation and suffered from being lumped in with other finance firms with toffee-nosed English names (Lombard, Hanover) but it is not likely to be mentioned in the same breath with those now.

As part of his move to address concerns about governance, King brought Sir William Birch on to the board and worked hard at getting the fundamentals of the company right. Initiatives included being lead broker for the initial public offering of 42 Below, positioning Dorchester as an advocate for a new wave of marketing-driven new listed companies.

Since King worked at changing perceptions of its corporate discipline, Dorchester's share price has doubled.

"It's one of those little stellar performers," Sheppard says. King has great networks don't try to get him out of the Auckland Club early on a Friday lunchtime and has put in practice the edict that good managers surround themselves with good people.

He looks after them, too. A recent work retreat included a study session of a different sort a course at the "Vodka University" from client 42 Below.

Ralph Norris

Managing director and CEO, Air New Zealand

Key achievements:

Turned Air New Zealand's $319 million loss into a $165 m profit

Launched the no-frills Express class

Initiated Qantas merger process

Taking on the toughest job in New Zealand, Ralph Norris showed he could handle what management gurus call strategic adversity and operational adversity translated that means he was being attacked on all sides. But he rose to the challenge, becoming possibly New Zealand's only billion dollar turnaround man.

"You do not get the sense he is panicked, he's in charge. I really like that," University of Auckland's Gary Clayton says.

Others say Norris' cunning plan has been keeping Qantas tied up in regulatory knots for years over the merger proposal, distracting the airline's major competition from all-fangs-bared competition.

This may be partly PR spin but Norris gives the impression he knows what he is doing. "Ninety per cent of leadership is confidence that the boss knows what he is doing," Clayton says.

Ann Sherry

Chief executive, Westpac NZ

Key achievements:

Boosted profit from $509 million to $581 million (normalised result)

Positioned Westpac as being in the forefront of the work-life balance debate

"For the first time branch managers are getting to meet their CEO," one Westpac insider says of mould-breaking chief executive Ann Sherry, who is known for getting out and about to meet her staff and other stakeholders as well. The much-used phrase "people person" can be excused in this case, as it is so apt for Sherry.

A great communicator, she is also rated highly by the University of Auckland's Clayton, who says she thinks outside the traditional mindset of a banker.

Clayton praises her commitment to work-life balance programmes. Although the benefits are hard to quantify her vision will pay off in the long term: "What that will do is ensure good retention of valuable employees," he says. And how many banks have backed their staff publishing a book, as Sherry has with Woman2Woman: New Zealand Women Share Their Experiences of Career and Business.

Jill Tattersall

Chief executive, Les Mills International

Key achievements:

Expanded the Les Mills franchise to 8500 gyms worldwide;

Increased total international revenue to $US32 million and LMI royalties to $10 million

You could be forgiven if you have an image of the chief executive of Les Mills International as a lycra-clad gym bunny. But you would be dead wrong.

Jill Tattersall's CV is more Condoleeza Rice than Suzy Aitken. She has an impressive public policy background in key advisory roles in the Beehive, working for Sir Roger Douglas when he was finance minister and later, Mike Moore.

She moved to Auckland to become then mayor Dame Cath Tizard's assistant and stayed on with successor Les Mills. When Mills left office she moved with him to Les Mills International in the early days when the gym company was starting to export its exercise products, such as Body Pump, and has managed the company to become a multimillion-dollar success story.

Under Tattersall's leadership the company took the freestyle aerobics pioneered by Phillip Mills and exported it using pre-choreography CDs, tapes and videos with written guidance so the group fitness classes can be replicated in clubs around the world.

Tattersall's strategic vision has been based on understanding that fitness is moving from being a service industry to an entertainment industry.

David Ware

Managing director and founder,
TeamTalk

Key accomplishments:

Bought $10 million of assets from collapsed South African company

Launched new finance plan for customers

David Ware has moved from being an eccentric entrepreneur who skateboards round the office to a fully fledged corporate player.

After being recapitalised in 2000 Ware turned the company around to report a small profit ($1.4 million) for the six months to December and its first dividend. TeamTalk is expanding its network and has trialled a new alarm monitoring product using radio bandwidth rather than telephone lines. There is talk of an IPO and with ex-BIL bods at Active Equities as shareholders that wouldn't be a surprising move.

But Ware has not given up the company's maverick culture completely "he's trying to keep the good bits," a close associate says.

TeamTalk's phone message still says "hang on for the good guys," staff have an annual ritual of walking across hot coals while chanting the company name, and many of the staff have TeamTalk tattoos.

"If you've got a tattoo saying TeamTalk, how the company is performing is personal," a TeamTalk source says.

Ware has an MBA and a background in sales and marketing as well as techie training, so he covers most of the bases. "Which makes it even more unusual that he leaves his people to it," a source says.

Mark Weldon

Chief executive, NZX

Key accomplishments:

Floated the NZX, launched the NZAX

Addressed the market's "wild west" image

When Mark Weldon came home to New Zealand to take over at the NZX, he looked as though he might suffer from head boy syndrome you know the sort: comfortable winning prizes, playing golf and being popular, but not used to hard knocks.

Not so. Friends say he is a thinker and a loner a trait that has helped him during the sometime thankless task of changing the Stock Exchange from fusty old club to modern listed company.

The transformation is paying off in increased profits and the buoyant local market has helped too. Even hard-headed market sources are prepared to give him his dues. "He has effected very good change at the NZX I'd put him on the good list," Shareholder Association's Sheppard says.

This week NZX announced a better than expected profit of $2.9 million.

Martin Wylie

Chief executive, Ihug

Key accomplishments:

Took over a company then valued at $7 million and sold it for $82 million

Everyone knows the story of Ihug, the "runaway bride" of ISPs. It kept getting to the altar with would-be buyers Sky Television, Force Corporation but never tied the knot.

When it was almost sold in 2001 it was valued at $120 million but by the time Martin Wylie took over in August 2002 it was in the doldrums, struggling to position itself in a tough market.

Wylie, who knew the telco industry from the other side of the fence as Telecom's former company secretary, took less than a year to restructure the business, streamlining the telephone and internet operations, and then pulled off a transtasman deal that made founders Nick and Tim Wood and other shareholders very wealthy again.

Wylie's CV shows he can turn his hand to any business but always shakes things up when he does he fired some shots at entrenched player Southern Cross when he ran the rival Aetna health insurance business and pushed to bring corporate discipline to the cushy innards of lawfirm Simpson Grierson as its CEO.

THE STAND-DOWNS

Four managers whose stories should be case studies

Michael Beard

In early May 2003 the managing director of Tranz Rail said his company was "not a basket case" even though its shares were in freefall. In late May the government had to bail out the national rail carrier with a $44 million loan. What happened in between? Account "oversights," profit downgrades and cash crises not to mention barmy legal action against credit agency Standard & Poor's. Tranz Rail was so poorly managed troubleshooting CFO John Loughlin had to be brought in full time to try to clean up the mess. Before the collapse Michael Beard was full of big inspirational plans about re-engineering the company but in hindsight it is plain to see he failed to get the basics right. He finally left in October last year when Toll Holdings took over and not before time, according to investors.

Murray Bolton

This audacious former management buyout dealmaker has been off the corporate scene for years, but his management style came under the spotlight this month when he and three other directors of Skellerup subsidiary DML Resources paid $7 million to settle a reckless trading case. Maine Investments-linked companies DML, Levene's and Palmers Garden Centres collapsed under the weight of debt after the Bolton-led MBO.

Sharon Crosbie

The last year of Sharon Crosbie's tenure at Radio New Zealand was marked by dysfunctional staff relations, employment disputes, newsroom warfare and allegations of financial mismanagement. Insiders said there was a siege mentality and outsiders said Crosbie had failed to address criticisms, including increasingly strong accusations of left-of-centre bias in its news coverage.

Caron Taurima

It is theoretically possible to be a great manager and oversee a company that collapses, but Unitec's Professor Gael McDonald says the failure of Caron Taurima's training company, Carich, looks like a fundamental mistake of management. Taurima obviously has great chutzpah but did not find someone with strong financial skills to complement her entrepreneurial energy. Given that her company was in a high-risk situation where the withdrawal of a couple of key contracts could see the entire business threatened "that's just a bit silly, on reflection," McDonald says.

ONES TO WATCH

Bruce Cotterill

The former real estate salesman knows how to close a deal as head of ACP Media he managed to nail down the purchase of Liberty Press' Property Press and Motoring Guide titles. He has left Kerry Packer a happy man ACP paid a $48 million dividend this year. Bruce Cotterill's new challenge is the global expansion of the Canterbury sportswear brand, which he took over in November.

Phil Newland

The former Cullen Investments managing director worked hard behind the scenes to introduce corporate disciplines to Eric Watson's investment company less swashbuckling, more seriousness. Cullen is not obliged to release financial statements so it is nigh on impossible to work out how its investments performed, but at least one subsidiary, Excell, went from the red to the black on Newland's watch.

Mark Bilton

The new head of 2002's best performing company, Designer Textiles, has lots to be going on with the acquisition of the Logan brand and the company's expansion into China for a start. Marketer Mark Bilton joined the company from textile wholesaler Charles Parsons and is considered a bright cookie. (He must be his name popped up as a winner in the NBR Biz Quiz.)

Vicky Salmon

Vicki Salmon got off to a rocky start as chief executive of Restaurant Brands it's not a good look to be seen to be slagging off the previous CEO, publicly at least, and she was quoted as blaming predecessor Jim Collier for a profit downgrade. But from now on it will be all her own work and she has a big job on her hands arresting the decline in KFC sales while dealing with the fraught issue of the fat tax besides which she has to get rid of a mountain of potato "mashies," a product that simply didn't sell.

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