In this episode, we meet Ron Gauci. He is the current CEO of AIIA, Chairman of Vic Sport and Brad Teal Real Estate. He is also the former CEO of Fed Square, Melbourne Polytechnic, Melbourne Storm and MD of Verizon Australia.
Ron has become famous for his track record in turning around organisations and setting them on the path to fantastic success. He has been called Mr Fix-It and The Turnaround CEO because of his bullet-proof track record in getting results.
We talk all about:
- The stories of some of his major turnarounds and the key principles that guided him
- His three step process for launching turnarounds
- His powerful leadership principles and how they work in the real world
- How to have the difficult conversations and get buy-in from a wide range of often highly emotional stakeholders
Book Recommended by Ron Gauci
Good to Great, Jim Collins. Buy it here.
Ron on Leading Turnarounds
- The approach I've always taken is a three-phase approach. Phase one, just speak to as many people as possible and just learn. So be a sponge, observe, observe, observe. Stage two is then to put a plan in place that resolves the crisis, because I typically walk into a crisis, as this was. And then the third phase is to get the buy-in of all the stakeholders so that execution can be successful.
- In NRL, I had to learn everything pretty quickly. I had to learn about the people, the code, the stakeholders, and I also used mind maps quite extensively. For me, it was understanding who were the stakeholders? When you're in IT, the stakeholder community is a little bit different when you move into sport. You've got the journalists. You've got the supporters. You've got members. You've got the other NRL clubs. You've got the sporting industry. You've got politicians. Then you go to your own team. You've got your players. You've got your coaches. The mind map was quite extensive, so it was pretty significant.
- I find mind maps give me clarity of thought. A good mind map will allow you to basically move into a whole lot of different areas. So for me, mind maps can be used for a whole lot of different purposes.
- In the early part, I was seen as the enemy. I was seen as potentially an NRL or a News Limited plant, so I was copping all sorts of abuse in the social media, I was copping death threats and all sorts of things. When we went back to the members and had a conversation with them about what really happened, what was going on at the club, and what position the club was in, and what the agenda was for the future of the club, we got their buy-in, and even today, I have some very, very good friends that are Storm supporters that have maintained that relationship. That was a significant point, I think, to get their buy-in as well.
- There's lots of difficult conversations to be had when there's so much emotion involved and sport does have a lot of emotion attached to it.
- One of my strongly-held beliefs is that a crisis needs a clear mind. A crisis is when you, as a leader, are meant to make your best decisions, and if you're stressed and you're in crisis mode, you can't make your best decisions.
- It's always been a long-held belief of mine that you need to be in your best state when you are having to make your best decisions. So it was important to remove myself out of the emotion of that.
- I've also always believed that trust is a critical part of any relationship, in fact, it's the most critical part of a relationship.
- Make sure you've got the right people around you. Have those people that are there that can actually add value and contribute positively and optimistically.
- For me, ‘no data, no decision' is all about taking the emotion out of the decision and getting whatever data you need to enable you to apply an informed decision. Most of the crises I've walked into, in reality, have been on the back of emotional decisions that were made without the appropriate data and the appropriate processes.
- Reporting and information is critical to me. Having the right people around is very critical to me. Then, making sure that you create a mental state for yourself and there's a number of techniques that I use there, to ensure that, again, I'm not getting emotionally involved. I'm impartial, objective, and in a good frame of mind.
- I'm not a person who believes in cost-cutting, cost-cutting, cost-cutting. As far as I'm concerned, nothing grows while you're choking it. At the end of the day, you can't keep cutting cost out of the business. Eventually, you'll wither on the vine.
What do people misunderstand about the CEO role?
- I don't think people really understand or appreciate how lonely a role it is.
- I do think that there are people who don't appreciate the responsibility that rests on a CEO.
- A really good CEO accepts 150% of the responsibility for everything that happens, whether it's the people they've hired, the people they've acquired, the people they've inherited, where those people go from a personal development point of view, how they get to do their jobs. All of that is the CEO's responsibility.
- You're also responsible for the customers, for the markets, for the products, everything. A good CEO takes full accountability of that.
- I live by certain principles as a CEO. Firstly, I hire people who can do their job better than I can. I make sure that they have all the right tools and resources to be the best that they can be. Therefore, part of my job is to remove the de-motivators. I'm a person who believes that motivation has to come from within, so I'm not there to motivate my people. That has to come from within. So the CEO needs to remove the de-motivators. Then, making sure that they can be the best that they possibly can be. So role clarity is important. Measurement of their roles is important. A development plan is important. All of those things, for me, are fundamental. That's what also then makes a CEO's role most rewarding as well. So it can be a lonely role, it can be a challenging role, but it can also be a really rewarding role if you get the fundamentals right.
Ron Gauci's Best Questions for Interviewing Candidates
- I don't have a go-to question but the ones I have fun with are, “If I had to ask your parents to act as referees, what would they say about you?”
- I also think another good question is, “Forget this job that you've applied for. If someone gave you a clean sheet of paper to create your dream next job, what would that look like?” Get them to design their next job. Because that's really what's in their heart. That's really what's in their mind. So it's important to understand that.
The Best Advice Ron Gauci Has Been Given By a Mentor?
- Organisations and people tend to hire people they can afford, instead of people who can do the job. I think I've only ever failed once in business and that's when I hired people who I could afford instead of people who could do their job really well.
- The best advice I've been given is make sure you've got the right people around you. Sometimes, that means getting people you can't afford. You'v just got to work out how to make them affordable. Sometimes, 60% of a fantastic person is better than 100% of an average person.
What Can Business Learn from Sport?
- We have 18 teams in the AFL. 16 in the NRL. If you're setting your sights on a premiership as your definition of success, then in the AFL, 17 teams fail each year, 15 in the NRL. So maybe that's not the benchmark you want to set yourself.
- Maybe success is defined in the metrics, how many tackles, how many this, how many that? You get all those things right, then success follows after that.
- Business is not that dissimilar. If you actually pull apart the metrics.
- One of the other business models I work off is organisational optimization. It's determining each lever of the business and if I optimise each lever of the business, what success would that give me? If there's a gap, then what's my gap plan?
- Sport is not that different, it's a series of stats and metrics that you measure and if you do all these things right, then success should follow.
- But the other thing to learn from sport is if something goes wrong on a footy field, a runner will go out and tell you what's happened. You see them coming and you know. You know you're going to cop a spray from the coach or whatever. Quarter time, in AFL, everyone's in their huddle, getting feedback, getting more data, getting more strategy. You're constantly getting feedback. Then, after the game, you're getting video feedback. You're constantly, constantly, getting feedback.
- In business, we think an annual review is enough. We might get together and have a cadence call. But it's not feedback. It's not development. It's not actually helpful. So why is it in sport, we can provide so much feedback to get optimal outcome from the players and in fact, the entire squad, including the coaches? Yet in business, we think it's okay not to have to provide feedback or development opportunities or measure by metrics.
- I asked Craig Bellamy in the early part of my days at Storm, why did he think the team was so successful? In my language he said, “Everyone knows their role and they're accountable for it.”
- In business, does everyone in your business have a PD or a job description? Does everyone have clear KPIs? Does everyone then know how they're tracking? Then, are they accountable if they're not successful?
Ron Gauci's Final message of wisdom and hope for future leaders
“I think you're never too old to be challenged and to learn. Today's technology, with audiobooks and podcasts like this and personal development programmes that some great leaders are presenting to you and making available, my wisdom comment, if you like, is continue to learn. Be a sponge. Just enjoy what life presents to you.”