with greg layton

The Inner Chief is for leaders, professionals and small business owners who want to accelerate their career and growth. Our guest chiefs and gurus share powerful stories and strategies so you can have more purpose, influence and impact in your career.

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In this episode of The Inner Chief podcast, you’ll hear from tech industry pioneer Tristan Sternson, CEO of ARQ Group, on being answerable to investors, systemising values and culture, and building equality through technology.

Tristan is an Australian tech industry pioneer and CEO of multi-award-winning company, ARQ Group. ARQ is one of Australia’s leading providers of digital and tech services, with a client base spanning Government and more than half of Australia’s top 20 ASX-listed companies.

A serial entrepreneur and growth expert, Tristan boasts a decades-long career in IT, including advisory, experience and design, engineering and managed services.

Since being appointed CEO of ARQ in December 2019, Tristan led one of Australia’s greatest turnaround stories, resulting in ARQ’s $290 million acquisition by Singtel subsidiary NCS in April 2022.

Tristan’s actions have also had a direct impact on Australia’s tech skills shortage, establishing education programs within ARQ’s Academy and growing their headcount by 75%.

In this episode we talk about:

  • Starting a data business off the back of the GFC in 2009;
  • Being answerable to investors while systemising values and culture;
  • How technology like blockchain and the Metaverse is building equality into the world; and
  • What a high-performance culture looks like in the technology industry.

Connecting with Tristan Sternson

You can connect with Tristan via LinkedIn.

Books and resources

 

“We started every board meeting talking about what impact we made in the last month before we even got to the CEO report or financials.”

 

On early career lessons

  • My first ever real job was with Dodo internet under Larry Kestelman, one of the founders, and just watching someone build an absolute empire of a business. I was a programmer there from the start, and it gave me a little bit of a thirst to where I wanted to go.
  • I went on to do a PWC graduate programme, where I learned to be a consultant and do my trade that I do nowadays, professional services. From there I decided I knew I was going to do my own thing. But first I went and worked for Accenture, because I had experience at PwC, who were amazing at consulting, but Accenture was amazing at sales and delivery. So I wanted both experiences.
  • And off the back of the GFC in 2008, I realised there was a real need for more data businesses, because a lot of what happened was driven by sub-prime activities, which, if you had more data and governance around it, would've been critical.

On being the CEO who could code

  • Whenever I built up businesses, it was building something that I knew how to do. So what I talk about is stocking your own shelves or eating your own dog food.
  • I went into an industry where I was an expert and I had business acumen. Am I a business person or am I a leader? Or am I a techie? No, instead I built the combination of those into who I am.
  • I actually knew our product as I could code it. I've been referred to as “A CEO who can code” because I knew our product, and I knew the commercial lens of it too, so I felt I had an advantage over other people.
  • My entrepreneurial flair has just been something I've always had. At university I used to sell computers to people as a side hustle. In 2000 I was selling the Y2K bug fix. I ventured with a mate across to India one year to get blankets made up in footy colours to bring back to Australia.

On metrics and scoreboards, and business valuation

  • I'm quite analytical, which is not surprising given data is my technology strength. For me, a good business knows exactly what it's doing, it knows all the key metrics of what you need to grow and to sustain and everything else behind it.
  • I learned about valuation the first time we tried to exit the business before we sold to Melbourne IT. We went to an advisor and he looked at the business and I said, “I think the business is worth this.” He jotted it on the whiteboard and broke it down as earnings, revenue, tenure of staff, all these elements, and then he said, “These are the things you need to do to get to what you think the business is worth.”

On being answerable to investors

  • For techies in particular, a lot of people are getting accelerated into lead positions at the moment because of the accelerated use of digital tech off the back of COVID. If you don't understand the business side of what you're doing, you tend to fail, or you go sideways, and you get frustrated as well. It doesn't matter if you're a technology business or you're a supermarket or you're a bank, there's the same fundamentals. 
  • You’ve got to be able to create something that returns value to the investors of the business. The investors are the owners, that’s all that matters.
  • It's also about your reputation. If you're doing well, your investors are happy, your customers are happy, everyone's happy, your staff are happy.
  • A lot of times people think, “If I just make a little bit less on this, but I invest more on that,” but you're not operating at a market standard, you're not a real business. And that's a critical element to realise.
  • The bigger the firm, the more investors you have, and you've got to keep them all happy. They're effectively the reason you get to come to work and work in an amazing place. Now, you can have your purpose and your vision and everything else, but that can still co-exist with being a good commercial business. Your job is to make them all work together. Typically, people are happy when you're operating in a way that people love working for you and feel a real purpose and you're engaged together.

On how to execute vision and mission and business operations

  • You’ve got to live and breathe it yourself as a leader, and then let it propagate its way down the business. You’ve got to walk the walk, not just talk about it.
  • I reckon if you ask 90% of businesses, they're going to say, “Yeah, we make an impact.” Well, what does that mean? I say if you make more of an impact tomorrow than you did yesterday, you're improving something. But you need to be able to measure that.
  • At ARQ our vision and purpose is ingrained into everything we do, and that cascades its way through all the meetings and levels. So whatever it is, it's how do you bring it into the fabric of your business and really operate within it, so everyone feels it all the time.

On innovation and automation

  • What excites me the most is innovation and anything that's new tech. There's been a huge acceleration of technology-driven by COVID, which is great, but we're always looking at the next horizon of tech. So what's coming up? Right at the moment, I'm getting quite into robot process automation, RPA. I think that is a really cool area of tech, which is allowing us to be more efficient in what we do by taking out repeatable processes.
  • A lot of people think of robots and AI as things that are going to replace your jobs. It's not really, it's just replacing processes that are just cumbersome and not required and letting you focus on cool and exciting stuff. We don't have enough tech people in the country at the moment, and most companies don't have enough. There's a huge tech skills shortage across the board and everyone thinks we need to find more people. How about automating some of the processes instead?
  • It's probably code, but it's doing something that a person would've done. A good example for us is internally, if someone doesn't fill in their timesheet, we would go and chase them up. We would now have an automation in Salesforce that will go and chase them up automatically. Every time a human does it, it takes about 30 minutes. Instead of that, we can turn that into a process that's automated with a few variables. So you're training it to do what a person would do.
  • If you're in manufacturing, you should be on quality control and making sure the product is of the right scale, rather than the inputs that get you to that, for example.
  • With RPA, they're often the jobs that people don't want to do. So if we get something else to do that, then people can do the more valuable stuff. Ask yourself, “What's a better way to do the stuff that's cumbersome that allows us to focus on the more important stuff?”
  • It’s an absolute given that automation will happen; autonomous cars and a lot of things are just being replaced by processes.

On the future of technology and building equality

  • There's blockchain, there's crypto, but – and I'm not quite sold on it yet – there’s the metaverse. I'm slowly coming around to it. I've got a 7-year old and a 10-year old and I look at them and the way that they're interacting with their friends, and then I try putting a corporate lens on the metaverse to see if I could allow our business to operate in a hybrid environment.
  • By hybrid I mean being able to interact with the physical universe. I think that's really something that's going to change. We're all doing it a little bit without even knowing we're doing it. Even this conversation, we're not in the metaverse, we're in the physical universe, but we could be, right? We could have an avatar and we could be doing an interview in that area. 
  • Last year we did an indigenous art market on a platform similar to a metaverse. It's a tool called gather.town out of Silicon Valley. Everyone had an avatar and the group sold 25 pieces of art from remote communities around Australia using it. This is a real example of how the metaverse can work, because sellers were all over the country and so they couldn't physically bring their art to a market. We built in a way so you could have a real digital view of each artwork and the artist was in the room and talked to the art, showed you the art, gave you the dimensions etc. So you're interacting between the physical and the nonphysical world, and then you can actually sell.
  • These artists were previously selling their art to dealers via a broker, and the dealer would go and on-sell the pieces. So they would not only lose the rights to the art after they sold it, they would lose a huge cut of their profit through a dealer. The only reason they had to go through a dealer is because they were remote and they couldn't always get their artwork to the big cities to sell it. The metaverse was just cutting that all out, which resulted in more money to the artist, and more royalties over time. And that's helping communities and people grow, so it's really building in equality into environments.

On leadership roles in technology

  • There's two paths that people go down. One is they become good technicians and as a result they become Tech Leads, and the other path is as a People Leader. The difference between the two is that the best technical person shouldn't necessarily manage people.
  • However, to get that people management perspective, you've actually got to get to be a leader in that space and leading people. You've got to learn how to lead people and you've got to learn from good leaders. I've been fortunate to work with good leaders and learn from them.
  • A lot of companies will forget the training; they just promote the next best person and they become that leader and that’s where we've found it's failed over the years. They should be looking at career progression, learning and development, even physical and mental preparedness.
  • As a leader you've got to bring your whole self to work and that then allows other people to bring their whole selves to work.
  • Be more present – don't be on your mobile phone and emails when someone is talking to you as it's so disrespectful to someone. “Oh, I'm your boss, and I've got more important things going on over here.” If you're with someone, you've got to be with someone and just focus on them. I'd rather give someone 15 minutes purely focused, than an hour where I'm on and off my mobile phone.

On a high performance culture in technology

  • The key feature is that the organisation has a culture of understanding what they're trying to achieve. What are your metrics? What makes success for you? As an example, we look at billable days per month and every day we look at that. Have we got timesheets in? Where are we at? How are we tracking? What’s ahead? So we know what our key metric is and everyone's aligned to it, and everyone knows how to look at it. And then we've got cascading dashboards, so people can actually look at it.
  • A high-performing culture knows where they're heading and knows how to achieve it, but then is not afraid to smash through that and try and achieve a higher result, without the fear of failure. The other side of it is where people set soft targets. That, to me, is frustrating. That means you've got a higher ability, but you're just holding yourself back because you're happy with mediocre.
  • The other one is one where you're solution focused, not problem focused, so you would say, “Hi, I've got this problem, and here are three ideas of how I think I'm going to solve it.” Failure to do this means that as a leader, you'll just continually get drained on making decisions and coming up with solutions for people's problems. It makes people lazy. They come into an environment, say, “I've got this problem. Oh, I'll go to Tristan, he'll solve it for me.” I want them to come and give me some options. I then get to choose from those.
  • I think a high-performance culture right now is a diverse culture. There's a lot of conversations about diversity and how it’s trendy. It's not cool at all. It's important. It's imperative to what you do as a business. You can't perform as a business unless you've got different minds. And I'm not just talking gender, I'm talking age, experience.
  • Another one is creating that safety net that so that people can fail. And when they do fail, it's okay. If you don't fail, you don't succeed. You've got to allow people to make the wrong decision. And plenty of times my gut has been, “Oh, I don't think that's quite going to work,” but if it's not going to kill the business, I let them try it. And you know what? Sometimes I'm wrong. But if they don't fail, if they're afraid to fail, then no one will ever give you solutions.
  • And the other thing is when you make the mistake, you have to own up to it, but be OK with it. When I make a mistake I'll say, “Oh, I stuffed up. Sorry, guys. This is how we're going to fix it now.” And they know when they make a mistake, it's going to be treated the same way.

On evolving as a leader

  • You’ve got to maximise your time. I'll go off on a tangent, but Steve Jobs used to wear the black turtleneck every day. And if you've read any of his books, you'll realise the reason he did it is decision fatigue. You've got finite amounts of decisions you can make effectively in a day, so how do you come up with the right one?
  • Stop wasting time on things that you don't need to waste time on. So the ability to say no to people. “No, I don't want to meet with you because I'm not the right person.” It's not an ego thing or it's not that I'm too good for you. I struggled with that early days, I'd just meet with everyone, and happy to do it. And sometimes I'm not the right person to meet with. Or my time's not going to be valuable, because I'll meet with you, but I'm going to be off thinking about something else. So that's number one, if I don't need to meet with someone I won't. And that's important.
  • Then, you should shorten the amount of time and ensure it’s more quality short time, quality interactions rather than long meetings. In my Accenture days, I'd have hour-long meetings for everything, with everyone in the room. Now, we have a rule – there’s a function in Outlook which allows you to do this – that every meeting by default is 50 minutes or 25 minutes. So I get that extra few minutes in between meetings so I can do what I need to do to be present about things as well. It's good to chat and have a friendly meeting and all that, and be social with people. But then when you get to the meeting, just get through what you need to and then move on, because you don't need to be sitting around.
  • We've also started doing huddles rather than meetings. So we have 15 minutes every day, rather than meeting for two hours every week. It’s a more effective way of using the time.
  • My number one interview question is that I will always ask something that makes the candidate feel uncomfortable. There's three types of responses from people: 1) those that will ask questions about the question or scenario, and try to come up with a solution, 2) those that will come up with a number, but they're just bullshit artists, and 3) some people ust sit there, sweating nervously.

Final message of wisdom and hope for future leaders 

  • Think differently. There's no textbook to how to do this, and the world is changing ever so quickly. COVID's a great example of it. Just think differently. Don't think the same way as everyone else has in the past; there are some standard things you need to do, but think your own way and put your own mark on things.

Stay epic,
Greg