The Scottish CEO of BHP Billiton has a background in science, a love of language – he speaks five – and a strong belief that different is good and preparation is everything.
Current role: Chief executive officer of BHP Billiton
Previous roles : Chief executive of Non-Ferrous, BHP Billiton; chief executive of Diamonds and Minerals and chief executive of Industrial Materials, Rio Tinto; and several roles at BP, including group vice-president of Technology and Engineering and group vice-president of Petrochemicals
How do you define good leadership?
A willingness to learn. I’m very curious so I naturally find out about other ways of leading. I’m also quite experimental so I’ll try different styles of leadership to see what works and what doesn’t.
With different people?
With different circumstances. You change roles depending on the circumstance you face. I think you’ve got to be open to being coached and getting feedback and to be very self-aware. Then you put together a toolkit of the most effective expression of yourself, to move the job you’ve been given forward.
Have you learnt from previous CEOs you’ve worked with?
Totally. As a leader, you have to be humble if you’re trying things. I never have a perfect day. Leadership is as much about what you don’t do as what you do, where you get to the end of the day and say, “I could’ve done that better.” You make mistakes all the time.
How do you gauge feedback on your leadership style?
We have [formal] processes for that – 360s and so on – but I think there are a couple of things you can add. First, as a strong leader, you develop very good self-awareness – some people might call that a sixth sense – where you say, “Yeah, I know that worked” or “Yeah, I know that didn’t work.” And you can read between the lines in emails. Second, you have a sense of body language because you’re also learning about your own. As you lead, your body language is critical. You also want [to encourage] an environment where people feel they can speak up and even criticise you. But if you overindulge in feedback, you can come across as being a little insecure and it’s a bit weary for the organisation because they want a degree of strength from you.
Do you find it tricky to manage people who are not self-aware? How do you deal with them?
I’ll change that question around a bit because success and leadership mean you need to blend together a whole list of [people’s] styles. We are very committed to diversity of thought and people with different backgrounds and how they spark off one another. They all bring a different approach. If you can blend that all together, you get a far more powerful result. So I don’t really like to go down the negative line
of condemning people by saying they are difficult. I would rather say they are different.
Where do you do your best thinking? I gather it would be difficult to carve out time for strategy?
Yes, and I think it would be a mistake to carve it out, to be honest. I do some of my best thinking very early in the morning.
How early? Not 3am?
Sometimes! I find that when I wake up and I don’t have to jump out of bed, I get a rush of good thoughts. And when I engage in gentle exercise – I love walking to and from work – I get some great insights, like how to present our results. The 3am thing is interesting – what keeps me up at night is a good idea.
Does the CEO need to be the smartest person in the room?
Absolutely not. But I think you need to be sharp. I have a massive decision to make between now and 12 o’clock that’s really going to affect some big things – and it’s a decision that I have to make. If you’re going to give people [the power to make decisions], they’ve got to know what they’re doing. They have to be able to weigh it out. I’m a great believer in people, functional specialists, and that decision-making should be done at the right level with the right skills. So, no, you don’t need to be the smartest guy in the room – if you think you are, you’ll be a bad CEO – but you do need to be sharp. And I’ve found that the more senior I’ve become, the more important it is that I work fewer hours. A rested Andrew can do more in four hours than a tired Andrew can do in eight. It’s not only diminishing returns; [not being rested] is like a scorpion’s tail – it can undo things. That’s true of everyone’s productivity, particularly in an intellectual role like that of a CEO. A lot of boards don’t get that. People need to be fresh.
There’s so much research about lack of sleep impacting on performance. How much do you get?
I’m pretty good at that. I’m very strong on “healthy mind and healthy body”. I’m thoughtful about what I eat and how I rest. If I’m well exercised and well fed, I’ll need slightly less sleep but I still need that core seven hours, maybe 6.5. But if I’m not well exercised or on a sensible diet, that can stretch to eight. And if I feel I need to take that extra hour to be on my game, I’ll take it.
How do you manage that? Presumably you’re always “on”?
This is a global company so I kind of have to be on 24/7, otherwise the whole company will become inefficient. If everybody has to wait for me to get up and have breakfast in Melbourne, issues can result. I’ve developed a technique where if something comes up, 10 minutes, email, done, forget. Our biggest challenge is that people could be doing things late in the evening or early in the morning but they still feel they have to show up for work between eight and six or nine and five, which is nonsense. If people have a lot to do in the early morning, there needs to be some compensation for that or they’re going to suffer from the scorpion’s tail of performance. I like to do things early in the morning, for the reasons I just described, and then I exercise. But I get in here quite late by modern standards and I leave quite early because I know I’m going to work in the evening.
How do you prepare for difficult conversations?
Again, it’s like difficult people; I prefer the phrase “different conversations”. Every conversation is different and I don’t think you can be overly afraid of them because you think one will be difficult and one will be easy. You have to prepare for every conversation. I put it in my diary then I think about how to prepare for it. Often I will write, “What is the outcome of this conversation?” And I might write the answer in the past tense – it’s what I have to feel one minute after the conversation ends. In all of this, you need to have the highest level of integrity and to honour your word. In some cases, that can be the promises you make to yourself about what you’re going to do in the conversation.
There has been a lot of talk about CEOs and their role beyond their own company. Obviously, you feel quite passionately that you have a right to speak about things that are of concern to BHP employees.
I do. This is an iconic company that is arguably the most global organisation in Australia. It’s actually very important for the world, because almost everything we sit on, what we eat from, starts with most of the resources that we produce. Nothing falls out of the air; everything starts from being dug up. The most important job I do is run the company well for the sake of long-term shareholder value. But that, of course, requires you to look after your workforce, communities, suppliers and customers and to respect that, for geopolitical stability, governments need to function, trade needs to happen. Therefore, from time to time, you might just chuck a few ideas into the hopper.
How do you keep everything in your head?
I find it much easier to remember concepts than numbers. I always make the joke that Einstein said he was far too busy using his mind for other things to remember numbers so he wrote them all down. I think there’s something to that. At times, you have to show up being very numerate. Preparing for results is like revising for finals. I learn the balance sheet, the profit-and-loss statement. It’s crazy, really; I could look it up but I have it in my head because I know it’s important. But where it’s not necessary to have instant recall, I always use a prop. I used to do a lot of speaking where I would wing it but I don’t do that now.
You were widely praised for your handling of the Samarco tragedy [in which 19 people died following the collapse of a mining dam in Brazil in 2015]. What did you learn from that experience about crisis management?
There is no substitute for doing the difficult thing. It’s where you’re most able to learn so you shouldn’t be frightened by the fact that a lot of the learning is going to be in real time. There are many people out there who will say, “I’ll tell you how to do crisis management,” and they’re only willing to sell you their services for significant sums of money. But what most of those people have done is analysed previous crises and come up with a how-to guide when they’ve probably never experienced those crises. They’re like the guy in the stands of an AFL game, complaining that a player didn’t get the mark. If you’re not on the field playing, you can’t get what it’s like; you have to recognise that. In a crisis – particularly early on – your capacity to learn how to do things better is enormous. I spoke to loads of people about how they handled them.
Was that in real time?
Yes, real time. I have a big network of fellow CEOs. I’m not an expert on crisis management now but I can tell you what Samarco was like. If somebody asked me, “What’s the one thing you would do when managing a crisis?” I’d recommend that you contain its impact on the organisation. With Samarco, everybody – for all the right motives – wanted to help. And I just said, “Stop. The way that 99.9 per cent of people at BHP can help with the Samarco crisis is to do their jobs even better. I need more productivity and more safety.”
How important is good delegation?
Delegation is very important for a CEO. For me, the best way to make a decision is to delegate it to the person who really understands what’s at stake and give them the power and capability to make it. Interestingly, in decision-making, it’s how you front-run these things: it’s how you choose between the decisions you have to make and those you can delegate. That’s still an area of great frustration for me and I’ll probably go to my grave [not mastering it]. I think I’m quite good at pushing a difficult decision down to the person who’s most able to make it and empowering them to do so. But I’m lousy at encouraging the decisions that can be made so much more quickly to flow up to me. So people will sit on it and spend a week working on something I can make a decision about in 10 seconds.
What do you hope your legacy at BHP will be?
I’m not a great one for legacies. The company has been around for more than 100 years – and, I hope, for another 100 years – and I’m very fortunate to have been given the incredibly fun job of stewarding it for a period of time.
Is it always fun? Obviously, there are challenging times, such as when commodity prices are falling.
As long as I’m looking after my health and wellbeing and I’m able to prepare [for work], as long as I get my sleep and live true to working less in order to stay on my game, it’s always fun. When it’s not fun is when there’s ill-discipline on my part and I allow myself to overdo it so I’m not 100 per cent on my game.
This interview was originally published in October 2017.