ceoforum.com.au: What attracts you to invest in, or make a personal commitment to, an industry?
Corrigan: Other than a brief period in the development capital business, I've only been in two businesses: finance/investment banking and the transport/logistics business I'm in now. In the first case, I'd always had a childhood ambition to go into the investment capital business, and spent twenty-odd years in it. But the thought of spending the second half of my career in the same business was boring, so I looked around for other opportunities.
Initially I had a go at development capital, but found that extremely difficult, both in terms of return on capital and return on effort. I left that after five or six years, and decided to use one of the businesses we acquired to get into the waterfront initially, and ultimately the broader logistics business.
ceoforum.com.au: To an outsider, finance and logistics seem very different types of businesses - one is highly conceptual while the other is much more concerned with tangible products.
Corrigan: That's true, and I was interested in why it was that few people had successfully made this type of shift. I was also a bit curious as to whether I personally could make that shift, so this was also a factor.
ceoforum.com.au: Why the waterfront in particular? At the time you entered that business it didn't seem the most attractive of propositions.
Corrigan: I saw it primarily as a business opportunity, so I was always acting primarily with shareholder interests in mind. It's also true I've always had a fairly moralistic attitude to business, and would not do anything that I considered improper. As a consequence, I have occasionally pursued issues during my career that other people might have avoided.
A good example of that is back in the eighties, when, with some of my then colleagues, we fought to remove fixed commissions in the stockbroking industry. We didn't do it solely out of a desire to reform the finance industry, but equally, we didn't do it with the idea of achieving a massive gain. It was simply something that we thought needed to be changed in the finance industry at the time. We had to sue the then federal government - which was a Liberal government - in order to achieve a result. We didn't shy away from that fight, but we didn't benefit hugely from it either.
ceoforum.com.au: What are the difficulties involved in moving from an analytical business, like investment banking, to one that has a strong operational emphasis like logistics?
Corrigan: It takes a lot longer than most people think, and that most people are prepared to give it. I'm a firm believer that to really understand a business takes years, not months. As an investment analyst you think you understand a business from the outside, but the reality is that, once you are inside, you can go on learning for five or ten years. If you come in thinking that you can come into a business, understand it within six or twelve months, and then know how to drive it, I think you are underestimating the complexity of the business.
If you look at what investment analysts do, for example, they analyse an industry in the time frame they have, and with the information they are given. They may be able to understand the business as an investment, but to understand the operational details in that time frame is simply not possible. As a manager, you need a lot more time, and more information, to understand the business properly before you attempt to start pulling the reins to steer it in a particular direction.
ceoforum.com.au: How do you see your role in the day-to-day running of the business?
Corrigan: I'd use a yachting analogy. If you were engaged in a yachting race, you'd need to look at the weather patterns, the course, the tides, the competitors, and all the other environmental aspects. You would then look at your own equipment, and would select a team to crew the boat. You would then need to adapt your tactics during the course of the race.
To me, business is similar. You need to look carefully at your environment, then examine your business to see what capabilities you actually have got. You need to look at your strengths and weaknesses in relation to the environment you are in, and then choose a team that's appropriate for the type of race you are in. All that takes time, a lot of thinking, and it all needs to be implemented as a consistent, well thought-out process.
ceoforum.com.au: How do you spend your time? Do you have a consistent approach to time allocation, or is it event-driven?
Corrigan: I generally work a month or two out, in terms of what are the key issues we need to address in the coming month and what are the things we need to achieve. I then allocate my time accordingly. The reality is that you sometimes have to fight for your time, as there are a lot of external pressures on CEOs all the time.
I think a CEO today could spend their entire waking life dealing with the investment community, friends with special interests, people who want to sell you ideas, and charity. You could fill your whole day dealing with external factors, and not attend to the business at all! The hardest thing to deal with time-management-wise is managing these pressures, as many of them are worthwhile activities. But as I get older, I find I need to do fewer of them.
ceoforum.com.au: What are the keys to driving change through a business?
Corrigan: The critical thing is getting the right fit between the people you employ and the strategic challenges facing the business. In the case of Virgin Blue, for instance, the need is to gain more market share, so you need people who are oriented towards that. In the case of Pacific National, it's more about getting our costs down, and our work practices right. It's a totally different task, and usually needs totally different managers, in terms of their style and execution capabilities.
ceoforum.com.au: Are there any personal qualities you look for in your team, over and above the good fit with the strategic brief a role requires?
Corrigan: Not really. I think different tasks require different types of people, so if you have in mind a kind of ideal personality type, you will tend to choose that type all the time, even when they are unsuited to the task at hand. You have to assess people in the context of what the particular task is.
ceoforum.com.au: Do you prefer to recruit internally or externally?
Corrigan: I think internal is preferable, as it is much less risky. Candidates always look more attractive the less you know about them!
ceoforum.com.au: Has the creation and/or reinforcement of a particular culture or set of values been an important priority for you in leading Patrick Corporation?
Corrigan: I believe in culture very strongly, but I think it's hard to define a culture in a few words. I think our organisation rewards substance over form, we like efficiency and productivity, and we reward success. It's very much a performance oriented culture, which has something to do with my own influence - just as Bankers Trust was also very much a performance culture when I was there.
ceoforum.com.au: Do you think people can easily underestimate the difficulty of changing an organisation, and that 'change management' can become a bit glib?
Corrigan: People can be very glib about it. I can't tell you how many snappy ideas in consultants' brochures I've seen about how to change a business. The reality is that it takes years, and has to be done in a very systematic and rigorous way. There are certainly no easy solutions.
ceoforum.com.au: What do you see as the key elements of making those changes successfully?
Corrigan: I think it's about developing a direction for the business, and then communicating that direction to other people in the business. You have to make clear what role they will have in the business, and what their responsibilities and authorities are. You also need to have ongoing communication with them through a feedback process, to ensure they continue to work towards the same goals.
This sounds simple, but you can make lots of mistakes along the way. You can take the wrong direction in the first place, or you can fail to communicate it effectively. You can have people confused and uncertain about what they personally should be doing, or even have people taking different directions. You can fail to give sufficient feedback, so that people are unaware whether they are moving in the right direction. These are all things we fail at from time to time, but you try to minimise that wherever possible.
ceoforum.com.au: Do you personally spend a lot of time communicating the key messages across the length and breadth of the organisation?
Corrigan: I don't try and communicate with all the organisation. I think that is a mistake. After all, an organisation has a structure, and everyone has a boss, who should be giving you specific directions about what you should be doing.
I think there is a real danger that a CEO who communicates too much with different levels can result in people receiving confusing signals about what they should do. Unless each manager has exactly the same view of the business and exactly the same way of communicating it as the CEO, then the employees will get confusing messages. They will be trying to do one thing because the CEO wants it, and another because their manager wants it. I think it's a huge mistake to imagine you can be communicating with all employees, other than by conveying broad cultural values, such as productivity, avoiding waste and so on.
ceoforum.com.au: What about the public role of the CEO? You have taken public positions on issues like the waterfront and the airports, whereas the conventional wisdom amongst CEOs seems to be 'keep your head down'.
Corrigan: I've always taken those positions with a business purpose. I think this comes down to how much risk you want to take in running your business. If you want to keep your head down and tell everyone how wonderful they are, even if you think something is not right, that is one way of getting through life. I'm Irish, so it's very hard for me to do that!
ceoforum.com.au: Yet you would also know that in doing that - as in the waterfront dispute, for instance - people may cheer you on privately but publicly they may act very differently. Does that frustrate you sometimes?
Corrigan: Not really. I think I accept that there are different operational styles people have. It just doesn't happen to be mine.
I think if you are honest with yourself, honest about your objectives, you can get through those kinds of periods. Often, in time - as I would argue has happened with the waterfront - people see you were doing something for the right reasons, and that there have been good outcomes. It's not only business people - some of our employees, for instance, would agree that the waterfront is a better place to work at now than it was before. If you have a proper purpose, you can often get through in the end.
ceoforum.com.au: Do you think this approach involves a conscious acceptance of greater business risk?
Corrigan: I think I'm risk-averse in terms of value, but not risk-averse in terms of business execution - I'm probably at the other end of that spectrum. I take the view you only get one go at life and business, so you might as well give it all you've got.
ceoforum.com.au: How did your experience at Bankers Trust help you in your current role?
Corrigan: That background was very helpful in assessing business value. It also gave me an approach to analysing the macroeconomic forces that were driving businesses, financial markets and investors. I spent twenty or so years applying this type of analysis, so that is very helpful in timing investments and so on. You sense that there is a time to do things, and a time not to do things. You also develop a certain amount of patience.
ceoforum.com.au: What were some other instructive professional experiences?
Corrigan: It's hard to isolate particular instances, as you would hope that you learn something every day, even if it's something small. It is true that you are a kind of agglomeration of all your experiences, but it's hard to pick out defining moments of revelation.
One thought I often have after a particular event is that I wish I could have spent more time planning and preparing beforehand. This is easy to say, of course, but very hard to do, because you simply can't control the pace of events in business. Part of this is also the benefit of hindsight - you can always look back and see how you could have prepared yourself better.
I would say, however, that you can't overestimate the need to plan and prepare. In most of the mistakes I've made, there has been this common theme of inadequate planning beforehand. You really can't over-prepare in business!
ceoforum.com.au: What do you see as the essential characteristics for an effective CEO, and how do you rate yourself on those?
Corrigan: I think the most important CEO task is defining the course that the business will take over the next five or so years. You have to have the ability to see what the business environment might be like a long way out, not just over the coming months. You need to be able to both set a broad direction, and also to take particular decisions along the way that make that broad direction unfold correctly.
I think that has been a personal strength for me. I was able to foresee how the financial industry would unfold, and position Bankers Trust to take advantage of that. I'm trying to do the same thing at Patrick - look at how the logistics industry might evolve, and build a capability that will, in time, have us at the forefront of that business.
The other essential task for a CEO is to choose the right team for the challenge the business faces. I'm not sure that is a particular personal strength - this is something you do get better at over time, but it is improvement at such a slow rate! I do have some ability to mould a good team over time, however, and as a CEO you have to be confident that you can build a group of people who can work together well and complement each other's strengths.
If you are doing both of these things as a CEO, I think you're a long way ahead of the game!
