Australis’s blue-chip CEOs win kudos from their peers for their entrepreneurial flair

Leo D’Angelo Fisher Columnist

Blue-chip CEOs win kudos from their peers for their entrepreneurial flair

Published 08 November 2013 12:19, Updated 08 November 2013 14:01

Richard Goyder’s resilience, resolve and purpose are central to the Wesfarmers’ ‘culture of trying to do things the right way’. Photo: Claire Martin

It is often remarked upon that when it comes to running a nimble company that understands its markets, is quick to exploit (or better, still lead) business and commercial trends, embraces change and inspires its employees, entrepreneurs provide the template for big business to follow. Large corporations can be fixed in their ways and changing strategy or approach can be as challenging as growing a third leg. Add to this the fact that large companies have slashed their internal management resources to the bone in a seemingly panicked response to the unpredictable economy, and many big companies simply don’t have the capacity, much less the interest, to create and realise a vision for the future. The prevailing attitude in corporate Australia seems to be: when in doubt, just keep cutting. Which is why AFR BOSS magazine provides some welcome and reassuring news in its annual Most Respected Companies rankings for 2013. The List demonstrates that blue-chip chief executives can be as entrepreneurial as the most audacious and dextrous entrepreneur. More to the point, they understand that the future belongs to those companies that can think and behave entrepreneurially.Peer-based plaudits

The Most Respected Companies List, compiled in conjunction with global management consulting firm Hay Group, is based on a survey of chief executives, board members and executives from 24 industries. This peer-based survey makes clear that the leaders who are most respected by their fellow leaders are those who are prepared to re-invent their organisations – and occasionally themselves.

The No. 1 ranked Australian company in this year’s survey was retail leviathan Wesfarmers, up from No. 2 last year. (Wesfarmers’ retail portfolio includes Coles, Target, Bunnings, Kmart and Officeworks.)

For chief executive Richard Goyder, the success of Coles supermarket after years of stagnation has been a stand-out achievement.

“Wesfarmers . . . was repeatedly cited [by peers] for turning around Coles supermarkets by bringing in executives from outside Australia to help break paradigms and shake up the organisation,” writes AFR BOSS deputy editor Patrick Durkin.

“The Coles turnaround has taken several years and even when things looked shaky early on, the company stayed focused on fundamentally transforming the business.”

Goyder’s resilience, resolve and purpose have been critical to Coles’s rebirth as a leading supermarket brand.

“We copped a fair bit of criticism on the way through but we have stuck to our guns,” he says.

The power of such resolve – displaying an entrepreneur’s self-belief and determination – should not be underestimated in today’s skittish economy in which fair-weather boards are all too easily spooked into abandoning strategies and chief executives in mid-play, and chief executives themselves are just as likely to waver as they attempt to second-guess their boards and the investment community.

For Goyder, doing the right thing – by his employees and customers, and by himself – is critical. It is often said that it is far easier for entrepreneurs to be true to their values and vision because they only have themselves to answer to. But Goyder, obviously with the support of a board that trusts its chief executive, understands the importance of values.

“At Wesfarmers there is a culture of trying to do things the right way. My test is, can you look at yourself in the mirror and say that you did this the right way,” Goyder says.

But this should not be mistaken for a disdain for the fundamentals.

“I like to think of us as a really good financial business with a heart and soul, but you have got to have the former because you are nothing unless you create returns for shareholders,” Goyder says.

Power of transformation

Transformation looms prominently in the list of Australia’s most admired companies and their chief executives.

John Borghetti’s remarkable transformation of Virgin Australia (No. 3 on theAFR BOSS list), creating a full-service offering for business travellers, has achieved the unthinkable in successfully taking on Qantas which not so long ago had the market to itself. (Qantas has dipped from No. 4 to equal No. 10 along with Flight Centre, which debuts on the list, and ANZ, which returns to the list for the first time since 2010.)

Qantas dropped the ball in permitting Virgin to take market share in a moment of vulnerability – costly and damaging industrial disputes, the questionable decision to summarily ground the entire fleet in 2011 and a growing perception that the airline was taking its customers for granted – demonstrating that no brand is safe from the onslaught of a committed, aggressive and savvy competitor.

Qantas, and its controversial chief executive Alan Joyce, have won points from peers for “continuing to adapt, change and reinvent the service to stay ahead”.

Flight Centre, which began life as an entrepreneurial start-up, is a case study in reinvention, but also in staying the course. The company, founded by Brisbane entrepreneur Graham Turner, built on a shop-front model of service and price, was not so long ago considered at risk of being overtaken by online travel-booking services.

But the company has overcome the competition by retaining its entrepreneurial culture and successfully transforming itself “from a travel agent to world-class retailer of travel products”.

Like all good entrepreneurs, Turner places the customer first, which is why he will not be abandoning his shop-front model. “Some people [still] like to see the people giving them advice,” he explains.

Transformation also figured prominently in the peer recognition of biotechnology and pharmaceutical company CSL, which debuted on the list at No. 8. Peers praised CSL’s success in “transforming [itself] from a government-run business to now [being] a world player in the development and marketing of plasma and related products and services”.

The vision thing

Peers voted Westpac back in to the top 10 (ranked No. 7) for the first time since 2011 for its “clear vision” and refreshing communication policy of “not trumpeting success unless it was justified”. Chief executive Gail Kelly won plaudits for radiating confidence and being “straightforward to deal with”.

Samsung, which debuted on the list at No. 4, was also rewarded for its confidence, “believing they could be No. 1 when everything in the market seemed against them”. If that’s not an entrepreneurial trait, nothing is.

Enjoy and learn – and take some comfort – from the AFR BOSS Most Respected Companies 2013. It’s good to see that Australia’s leading companies, and their chief executives, have kept their heads in one of the most volatile and unpredictable economies since the Great Depression.

Confronting change at a time of economic uncertainty and deep structural change – an era-defining confluence of events that has got the better of many companies and their leaders – these adroit and innovative companies have shown themselves to be entrepreneurial and unfazed by the enormity of the enormous challenges ahead.

At a time of too little inspiration coming from the C-suites of Australia’s biggest companies, the AFR BOSS list of most respected companies comes as welcome relief, and is just a little bit inspiring.

AFR BOSS MOST RESPECTED COMPANIES 2013

01 Wesfarmers (chief executive: Richard Goyder)

02 Apple (Tim Cook)

03 Virgin Australia (John Borghetti)

04 Samsung (Seung Ro Yoon)

05 Commonwealth Bank of Australia (Ian Narev)