Chris Liddell: innovative man is an impatient competitor

By CARROLL du CHATEAU

Chris Liddell tells a story about how, as a seventh-former at Mt Albert Grammar, he missed getting into the First XV.

For a lightly built guy of around 1.7m, that was hardly surprising.

But he was desperate to make the squad. And by the end of the year he was not only in the team, but "I got the cup for best player."

His position? "Loose forward."

This kind of determination - enough to head the forward pack despite his build - is one of the Liddell characteristics. Show him a brick wall and he finds a way round, over, or through it.

It was like that when he missed out on a Rhodes Scholarship after being nominated in 1979, around the time he graduated BEng (hons) from Auckland University.

"Having overcome my disappointment, I begged, stole and borrowed money to go to Oxford anyway."

He emerged with an MPhil in economic and management studies.

Mr Liddell displays the same drive and tenacity in his efforts to jolt the lumbering Carter Holt Harvey out of its disappointing bottomline performance.

His ideas are brave, often out of step with present business thinking.

And, as he is the first to admit, they have yet to pay.

"All this is just promises, and people are looking for results," he says, explaining his reluctance to be interviewed for this profile.

"Our results are lousy at the moment, but I'm convinced we're on the right track."

Certainly, he is giving Carters all he has.

Says Paul Harris, who worked with him at Credit Suisse First Boston back in the 80s: "Chris is probably the most competitive person I ever met in my life. He believes that if you're there you should be winning."

Then there is that thirst for balance which drives him into the wider economic and social arena.

"I've always found diversity more interesting than specialisation," he says. "I like mixing it up across years, within days, within weeks - that's what stimulates me, gives me energy."

Next month he will take the stage alongside Michael Porter, the "clusters" man from Harvard Business School, Israel's Gurion Meltzer, former Australian Prime Minister Paul Keating and others at the Catching the Knowledge Wave Conference, which hopes to weld the hopes and aspirations of business, universities and Government together for economic and social success.

As Mr Liddell says: "I'm an optimist. I believe the future is going to be better than what we have now."

He sees his work as a director of the Rugby Union as "hopefully" being able to add value on commercial issues like sponsorship strategy and "helping get the rugby calendar sorted out - in particular how many games and when."

Then there's his golf (handicap 11), marathons, triathlons, tennis and Project Crimson - a scheme to plant pohutukawa round our coastline.

Which brings us to Mr Liddell's day job on the third floor of Carter Holt Harvey's willow-fringed headquarters just off the motorway near Manukau City, and his space in the beige, open-plan office where he expends 90 per cent of his effort.

For the past six years, four as chief financial officer and the last two as chief executive of one of the country's largest forestry companies, Mr Liddell - "the only person in the place to wear a collar and tie" - has worked in half-hour to one-hour bites.

"I don't have a tolerance for long meetings," he says. "I generally expect to get things over with quickly. I get energy and stimulation from doing different stuff."

The difficulty of making money in a challenging industry spills over to Carter Holt's lacklustre sharemarket performance and dismal return on capital figures which, according to global consultants Stern Stewart, put it in the bottom five performers in the country.

Mr Liddell takes criticism on the chin, questioning only a Stern Stewart table which has both Carter Holt Harvey and Fletcher Forests dragging the bottom compared with 25 other international forestry companies.

"I don't accept that. I don't think our performance would be significantly better or worse than the industry norm," he says, citing the worst market conditions "probably since the Asian crisis."

International pulp, liner board and export log prices are at, or near, record lows, he says, and low Australian and New Zealand housing starts are taking their toll.

He also points out that over 80 per cent of Carter Holt Harvey exports are to Australia and Asia, where conditions are "near the bottom of the cycle."

A leading forestry analyst agrees. "Market conditions are just so appalling. It's never going to reflect well on a CEO."

However, Mr Liddell is clearly frustrated by Carter's failure to lift.

Over two years he has pulled off four major deals for the company: selling its messy Chile operation for $2.5 billion; buying the Tasman pulpmill at Kawerau for a bargain $311 million; buying Brown and Dureau and CSR Panels (the latter for $400 million) in Australia; finishing a $300 million upgrade of the company's Kinleith operation.

And, still, despite the cost-cutting, streamlining and productivity improvements already in place, the bottom line sags.

"I'm the first to admit we've underperformed over the past four years," he says. "My view is that we must take different, radical and innovative approaches."

The strategy: splitting the company from six into 33 units, so encouraging all 1200 employees to "outperform."

The aim is to make each group self-sufficient, pay people well - and double revenues in the next five years.

He is also encouraging a creative, even geekish culture. Casual dress is standard and entrepreneurial ideas are welcome as his corporate venturing programme, which "pushes on every lever I possibly can," kicks in.

His i2B (ideas to business) programme, launched last July, produced 509 ideas last year.

Now, after mentoring, workshops and outside help, six new businesses are up and running.

The culture has caught on. This year 700 ideas are already in the melting pot.

"The benefit to me," says Mr Liddell, "is 1209 people actually thought of an idea and are applying creativity to what they do every day."

It is a strategy that requires great leadership - something Mr Liddell has buckets of, according to Bill Trotter, his former joint chief executive at CS First Boston.

"He's also got great ideas, he's a brilliant innovator and very creative."

Helen Sedcole, of Carter Holt Harvey's new human resources unit, Mariner7, is excited by the challenge.

Under the new regime, the HR division will not just work within the company, but also as a standalone recruitment agency, slugging it out with private headhunters.

Helen Sedcole, recently returned from a leadership conference with Mr Liddell in Brisbane, talks about his inspirational leadership and focus on people (relatively unusual in the manufacturing sector) "but not at the expense of performance."

"The breaking-up is designed to drive accountability down [the management chain]. It's a huge opportunity. There are now 33 CEOs where there were seven. We'll never survive if we don't start innovating."

Mr Liddell, who resigned from the Business Roundtable this year because "it lost its ability to adapt to the world and effect change," brings the same approach to New Zealand's economic problems.

"We've got a country that's drifting economically, and staying on our current path won't lead us to outperform. We need radical solutions."

Look carefully and you can see his prints on new ideas coming out of Auckland as a new breed of innovative businesspeople push to lift New Zealand out of the doldrums.

With Stephen Tindall, Andrew Grant (McKinsey) and Scott Perkins (chief executive of Deutsche Bank), he belongs to the informal ginger group that reached Helen Clark's ear when she was offside with business early in her term.

His wife, Bridget Wickham, runs the commercial interface of Auckland University and is a member of Competitive Auckland, the group behind the Innovation Harbour idea. Both are involved with the Knowledge Wave Conference.

"We need a circuit-breaker," says Mr Liddell. "The country needs to change course."

His answer to sceptics who dismiss his ideas as unformed is clear: "We need to grow new companies beneath those that have reached a certain size and drifted overseas - say a goal of creating 1000 new companies annually through new business programmes, venture capital, incubators, getting international experts down here to help out, creating clusters, getting New Zealanders back to New Zealand.

"It wouldn't matter at all if Lion moved away if we had 10 new breweries like Monteith's to replace it."

He also stresses the importance of wrapping those companies around things we do well or produce already.

Mr Liddell allows himself a rare smile. "We kid ourselves we can compete. Our effort needs to be targeted on things we can do demonstrably best in the world - or the region."

Exactly how does one man fit it all in?

The day starts at 6 am with walking, running or yoga, normally with Bridget, breakfast with their two younger boys, now 10 and 8, followed by the drive from the King's School end of Remuera Rd to Manukau.

Work is end-on-end meetings, interviews, conversations.

Evening means a couple of hours at home from 7 pm "to kick a ball with the kids" followed by dinner out - maybe business, more often one of his other interests.

And no, he is not exhausted by the pace. "I don't sit down and relax very much. I don't desire to. I switch on and off very easily, I'm inherently lucky in that sense. I sleep well."

The youngest child of a schoolteacher and mother, he has two doctor sisters and a brother serving as an Army major in Malaysia. Another sister died young.

The family shifted from Matamata to Mt Albert when he was 8, and he went to Mt Albert Grammar.

He was dux, best all-round sportsman and prefect in his final year.

Six years ago he married for the second time - to Bridget Wickham, who has three older children.

Apart from six months' work experience as a graduate engineer with Beca Carter, he has had only two proper jobs.

First came Jarden and Co, which metamorphosed into CS First Boston, where he worked alongside Bridget Wickham, herself a top forestry analyst.

After 10 years he became joint chief executive with Mr Trotter.

The pair, born a month apart and hugely talented "capital market animals," made a formidable team, quickly dominating the market.

Says Mr Trotter: "Chris is very capable, a hell of a good guy. By the time he left our industry he was the top investment banker in the country - at the top of his game."

In 1995 came a decision to stay in New Zealand - and the move to Carter Holt Harvey (where Bridget Wickham was working) as chief financial officer.

Four years later he was chief executive - the first New Zealander to be appointed by majority shareholder International Paper, which had previously sent Americans David Oskin and John Faraci down to head the company.

As Mr Trotter puts it: "He picked a challenge, but it's a core industry for New Zealand and it's important that Kiwi leaders take on these tough challenges."

Although people talk about the Liddell charisma, it is likely that he had to work as hard on his people skills as he did on his rugby.

As he says: "I'm not actually built like a natural rugby player."

A banking colleague acknowledges that his leadership qualities have developed and emerged over the past 10 years.

"He's probably a better CEO this year than five years ago. He's still on the escalator."

Certainly, two years into the CEO role, the grey-blue eyes are cautious, the smile slow to come.

He has never run a big company before or anything remotely like it.

Possibly, given his reluctance to talk about himself when Carter Holt Harvey's results are "lousy," the transition from "capital market animal" to managing a lumbering forestry giant has been even harder than he imagined.

Certainly, he has the ability. But maybe the quicksilver attention span has to go, allowing those steely eyes to focus on just the one slippery, pine-needle-caked, awkwardly bouncing ball.