At the coalface - CEO Forum Group

At the coalface

Nicole Hollows - CEO - Macarthur Coal

Macarthur Coal

Nicole Hollows

When Nicole Hollows was appointed CEO of Macarthur Coal three years ago, it came with one day’s notice and at a time of significant organisational change. Hollows describes how both she and her role as CEO have evolved over that time and shares her insights on leadership, culture change, being a female CEO and lessons from the GFC.

ceoforum.com.au: How has your approach to leading Macarthur Coal changed since you first became CEO?

Nicole Hollows: When I stepped up as CEO, I had all of about a day’s notice as a result of some unfortunate circumstances with our existing CEO at the time. I had just stepped into the role of deputy CEO, and was then made acting CEO and then two months later CEO.

I am a lot more aware of myself and the impact that I have on others.

In this time, we also went from being a management company, in which we just managed the mining contracts on two mines, to being the owner/operator of one of those mines. At that time I was very focused on the basics and getting the operations right.

Now, I am more focused on strategy and leading the company forward as CEO. I am mapping out where we are going and where we want to be and ensuring that we deliver on that. I spend much more time on this now, but it’s easier said than done in trying to create the space in your diary to do that.

I would also say that I am a lot more aware of myself and the impact that I have on others. So it’s not just about delivering on results and trying to get to the next goal posts, but more about being really involved in the strategy and demonstrably participating in it, and seeing that through to the end.

ceoforum.com.au: What do you see as your priorities over the next twelve months?

NH: As a mining company, it would have to be maintaining high safety standards and delivering milestones for future growth opportunities, particularly in relation to infrastructure challenges that we’re grappling with in our industry. A third challenge would be cost management. We’ve had an increase in our cost environment over the past four years, so we have to make sure we can manage those costs as best as we can.

The final challenge would be improving our culture across all operations. One of my biggest goals is to have a strong focus on people development. This is one of the big changes for the company moving forward, and a priority for me is in providing the leadership to do this.

ceoforum.com.au: How has the culture of the company changed since you became CEO?

NH: Ten years ago when Macarthur Coal was founded, we were only a very small team of about six people and we had one goal: to develop and operate one mine. The culture was a “work hard play hard” one in my predecessor’s time, and that’s what we did.

Now, the company is much larger and the culture has changed significantly. There’s a saying that leadership drives culture and culture drives performance. If people are happy and want to be at work they’re going to perform better, and this is something we are actively working to improve on.

Leading by example is something I try and do. If I can do this, openly encourage people to talk about issues and show that we’re all working together to get a better outcome, then the challenges the business faces at every level can be resolved more quickly. It’s about having the trust to actually talk about the issues so we can try and resolve them as a team – whether that’s a small team of a few people or the whole company.

In terms of our people on the mine site, it’s about them understanding what their impact is in the organisation. If someone is driving a truck, for example, and they don’t meet their required number of cycles at the end of their shift, then that is going to have an impact on the organisation because somebody else is going to have to play catch up. As a 24/7 operation, this can snowball and impact the production profile and profitability for the year. So everyone needs to understand every single part that they play.

So we need to find ways to bridge that gap between their daily work and the picture of the bigger company. This is easier said than done and something I am still grappling with, but it is a significant priority for us to instill that culture throughout the whole organisation, no matter where you are or what site you’re based at.

ceoforum.com.au: As CEO, what role do you see yourself personally playing in the process of culture change?

NH: We are currently undertaking a 360 degree leadership survey, starting with myself and my direct reports, and it being rolled out further across the company.

I believe it’s important to acknowledge that we’re human and that we all have faults, so I made some of the results of my leadership survey available to everyone in the company. It was important to say “None of us are perfect, we’re trying to make this transition to deliver a better culture, this is what I’m trying to do and this is what I’m going to work to deliver on.” That was a very confronting step for me personally; the person who said “it’s lonely at the top” was right.

It was also a learning process for me. I didn’t fully understand how much I impacted people because of the way I do things. When you’re conscious of that impact, the realisation I came to was that I was actually part of the problem. It’s much easier to blame everyone else. Once I came to that realisation, it was easier to understand what I needed to change in myself. Part of this process is being ok with making mistakes. It’s okay to make mistakes if you’re aware of them and if you learn from them. It’s not okay to continually make the same mistake.

The person who said “it’s lonely at the top” was right

ceoforum.com.au: In your experience, what are the most important things a CEO can do to build a culture of strong execution?

NH: There are three key factors: providing guidance; support; and clear expectations. Leading by example closely follows, as you have to demonstrate that you are delivering as well. If you want to drive a strong execution culture, then you’ve got to make sure you can execute, because people will look at what you’re doing. If you’re not delivering on your goals and promises, then you really can’t expect other people to deliver on theirs.

Execution is, I think, the one fundamental thing that people in management don’t do well. I love Jack Welch’s quote: “Success is four Es wrapped in a P and that P stands for Passion.” So some people have the drive and can energise others, but execution is one area in which a lot of people fail to deliver on. Now they may fail to deliver because the goals haven’t been clear, or they’ve had no support or guidance, or the metrics weren’t right.

So you’ve got to have these key elements in place first before you can really expect others to really deliver and help build a strong culture of execution across the entire organisation.

ceoforum.com.au: What parts of your role would you say are the most satisfying and why? And what would you say are the most frustrating or challenging aspects?

NH: The most satisfying part would have to be when you’re achieving and delivering results, irrespective of what those are. I love that part of my job. It is also very satisfying when I see other people delivering and growing and developing as a result.

One of the most challenging parts of my role, especially in my earlier years, was in dealing with the media. I’ve learned to deal with it; it might not mean that I particularly like it, but I know that’s a part of the role.

Another frustrating part of my role is that there are a lot of external factors that impact what you can actually deliver on. Over the past three years, for example, we’ve had droughts, floods and then the global financial crisis. On top of that there have been infrastructure issues, and none of those factors are anything to do with our own internal company or my leadership or management. It’s like two steps forward, one step back sometimes. I know our company is no different to many other companies in this respect, but these external factors are very frustrating at times.

The other challenge for me is in providing effective leadership. The more I learn about myself and the impact I have on others, I am more conscious of this challenge. There is a big difference between management and leadership, and it frustrates you when you get it wrong and that you could have done something better.

ceoforum.com.au: What would you say are the keys to career progression and leadership as a female CEO in a blue collar, male dominated industry?

NH: For me it was all about taking the initiative and giving it a go. Being a woman in a room full of men is as much an issue as you make it, so I put the fact that I might be the only female in the room to the side. I think as a woman, the fundamental thing is to have the confidence to be able to step up. Whether it’s to debate a point, put your hand up to take an initiative on or step up to a challenge, don’t be afraid to do that.

In one way, I’ve been lucky in that I’ve been pushed or thrown into experiences, so I’ve had the chance to prove myself and swim rather than sink. I think a lot of women sometimes lack confidence so they won’t put their hand up for something. There are men that do this as well, but I think for women it’s important to not make gender an issue. Think that you are just one of the guys in the room, so if you believe strongly in something then you’ve got to put forward your view, but do so with substance to back up your view.

You could easily get hung up on this issue, but if you focused on it then you just wouldn’t survive. It has been a challenge for me at times, but you shouldn’t see yourself as any different, whether it’s age, gender or area of speciality. If you come to the table and you can add value, then do that where and as you can, and your career will progress.

ceoforum.com.au: What have been the key lessons you have learned as a result of the GFC?

NH: Communicate, communicate, communicate. I would have to say that that’s the first key lesson. Another one would be the fact that you’ve got to face up to reality, and then react quickly and decisively.

For us, within the space of two weeks a lot of our forward sales dropped off significantly, and we would have easily gone: ‘It will be alright – let’s see how we go in the next few weeks.” We realised that the market had fallen off the cliff, and in 30 or 40 years the coal industry had never experienced anything like this.

So we moved very quickly and decisively, cutting production by 25 per cent, and then we actually had to make 30 per cent of our people redundant. In hindsight, that was still the right thing to do and if we hadn’t done that, then we wouldn’t be the company we are today. Instead, we would have done an equity raising when our share price was down to around $2.50, and we wouldn’t have been able to move ahead the way we have, and we’re now back to full production.

Making those redundancies was a very difficult thing to do, because we had just spent time and effort developing our people – and then you have to make someone redundant through no fault of their own. It was very, very difficult, and it would have to be the toughest decision of my whole career. I could make the decision because I knew it was the right thing to do, the right thing for the company and the right thing for everyone else in the company.

The fact is a lot of companies made redundancies as a result of the GFC, but a key lesson for me was in how the redundancy process is handled and communicated.

We were totally transparent in our communication. As soon as the decision was made to go ahead with redundancies and it was approved by the Board, we talked to all of our people about it. I personally spoke to all the staff in our head office, then flew up to the mine site and I spoke to each crew change. I figured it was my decision and if there’s any blame to lay, then it should fall with me and not to anyone else at a different level of the organisation.

It was very difficult for some people, because they’d already heard that there were going to be job losses. We explained that the company was in survival mode, we didn’t know where the market was going and that because production was being cut, a number of jobs had to follow as we didn’t have the same cash flow. I think the fact that we were completely honest and transparent in communicating that made a huge difference.

ceoforum.com.au: Is there anything you would have done differently in hindsight?

NH: Looking back, I ask myself that same question. Are there things we could have done better? Definitely. But the fact is it was the right thing to do and I fundamentally believe that. It was very draining for me at the time, but we wanted to get it right and being transparent made a big difference.

You’ve got to have trust in your organisation and that is something that has got to be earned. If you don’t have that trust then people aren’t going to believe what you say, no matter how much you communicate.