Nightmares lurking for CEOs

It's a tough job at the top and it's getting harder. JULIE MIDDLETON reports.

What gives chief executive officers sleepless nights?

It's a question you can put to Ken Parry, associate professor of management at Victoria University and director of the Centre for the Study of Leadership.

An Australian, he worked in manufacturing for nine years before turning to academia.

With colleague Brad Jackson, he wrote The Hero Manager (Penguin, $34.95), which features studies of nine New Zealand CEOs who have led major corporate change.

In-depth interviews and other sources tell the stories of Dame Margaret Bazley (former chief executive of the Ministry of Social Policy), Roderick Deane (former head of Telecom), George Hickton (Tourism NZ), Dick Hubbard (cereal king), Peter Hubscher (Montana Wines), Ralph Norris (formerly the head of the ASB, now captaining Air New Zealand), Sir Gil Simpson (Aoraki Corporation), Dame Cheryll Sotheran (Te Papa), and Stephen Tindall (former CEO of The Warehouse).

You've studied and had dealings with many chief executives. What scares them? What keeps them awake at night?

I believe we are probably no different from CEOs in other countries. What keeps them awake at night is accountability the next day.

If they're kept awake by a nightmare, it's the accountability nightmare: failure in terms of that accountability to the often conflicting expectations of an increasingly diverse range of stakeholders who operate within diverse timeframes. That is tough.

New Zealand being a small economy - and indeed, the fishbowl analogy is often used in the public sector - they're very visible and accountable. People can see how they're operating up close.

But surely there are so many and increasing external factors - social, economic, political - that make total accountability a hard task?

It's a tension they've got to deal with. It's something that's always preying on them.

Why is accountability the stuff of sleepless nights? Are our CEOs not good at it?

In some regards we're better than anyone in the world, because what we've done in the last 15 years is work out in New Zealand very close and very precise accountability guidelines as contractual obligations.

Maybe we're very good at being accountable for what our contractual expectations require of us.

But maybe what we're not so good at is longer-term accountability to the nation, to the people rather than to our shareholder, the board, the minister, to our contract.

It's short-term accountability and a short-term horizon that often, sadly, overshadows the longer-term horizon.

Why? Do our CEOs lack vision or the necessary calibre?

It's what New Zealand has gone through in the last 15 years. New Zealand was technically bankrupt in the mid-80s, so a lot had to happen quickly.

We went into this output-driven, contractual, precise accounting mechanism for performance.

We went so far so quickly that we've got a mindset that's very entrenched. We've also got a bit less control over the decisions we make - our corporations are owned by overseas companies.

Here, we can't ignore the Government, and we call our shots within the bounds set by the multinationals. We're limited to that extent.

Do CEOs talk about such pressures on them, or does the role work against such discussion?

It's probably quite dangerous for the individual to talk about his or her personal weaknesses and failings.

If you show any signs of weakness there are always those who will dive in and hustle you out and take over. Look what happened to [former All Black coach] Wayne Smith. Or it might be just our Kiwi mentality to look for faults in people rather than strengths.

There's that issue of a certain narcissism and ego involved with getting to the top and being in a chief executive role, and not wanting to show any signs of weakness.

It makes the chief executive's role a lonely and isolated one?

It's the toughest job in the world - you've got to be all things to all people.

You've got to manage finance and products, manage industrial relations and personalities, Government and the media. You've got to be a charismatic performer.

But we don't have a CEO mentality in Australia and New Zealand. We're not good followers - we're more likely to bag them, be unfair, look for them to fall down and not give loyalty where it really should be expected.

It's a function of the history of our countries. We're less likely to toe the line. Our managers here are as good as anywhere, but one of the differentiating factors is that we're not very good followers.

What are the trends that New Zealand CEOs need to keep a sharp eye on?

The trend is continuing emphasis on the social responsibility/social capital imperative.

There's external social capital and internal social capital.

External stuff is doing things for the country, society, the poor and impoverished, or seagulls, or whatever.

Internal is about how ethically you treat your people.

The community has expectations about how they're going to be treated, and about access to information.

People have got access to info in their own right via the internet and find out about whether they're being treated badly; whether they're being lied to.

The imperative for people managing companies is to make sure they can look their employees in the eye and say, "I mean what I say. You can trust me".

As for other challenges, Governments are really only concerned with their own country.

The people who have the cross-country linkages are the chief executives of the big corporations. New Zealand's got a lot of multinationals that operate in many countries simultaneously.

If you're going to have ethical responsibility or social responsibility around the world or in global units ... it's difficult to rely on Governments.

They've got to have agreement, whereas the multinational operations can do it concurrently.

Which CEOs stand out in your mind as role models?

Roderick Deane and Margaret Bazley are very good at engendering loyalty from certain people.

They also alienate others - not everyone loves everyone all the time - but they can engender loyalty from the people they need and want to have with them.

George Hickton ... is very good at simplifying the message and distilling it down to its essence so that the troops can take it up.

He uses analogies and metaphors very effectively.

Peter Hubscher's a very good philosopher - he talks about what's in it for New Zealand as well as what the relationship is between our short-term benefit and our longer-term goals, so people can see those integrations.

Why be a CEO? It would seem to consume one's personality.

That's the glass-half-empty question. Look at it as the glass half full and it's a great opportunity to make a difference.

You can employ people, contribute to the economy, provide good-quality products at a reasonable price ... and if you're serious about it you can make a difference to the country and society at the same time.

It's a chance to make a difference as well as being a bloody hard job.

Someone's going to have to do it, but let's try and make sure that the people moving through have a sense of confidence, and some of the good ones aren't being left behind by simply looking at the dark side of the ledger.

State Services Commissioner Michael Wintringham said many times that the challenge is to get people to aspire to chief executive positions.

There are a lot of good second and third-level people, but comparatively few want to make the leap into the chief executive role.

But if we look at the problems and the negative side, we'll never get more good people wanting to make that leap into the next echelon.

We need to turn our thoughts around and say: as well as holding down the toughest job in the world, what can we add to New Zealand, and even make the world a better place? It's ultimately very satisfying to make a difference to the country without going into politics.