The Treasury Wine Estates CEO has faced multiple crises since he took on the top job but is convinced a culture that focuses on strengths will drive results.
Current role: Managing director and CEO, Treasury Wine Estates
Tenure: 18 months
Previous roles: COO; deputy COO; managing director, Europe, SEAMEA & Supply Chain; and director, Global Supply Chain, Treasury Wine Estates
How do you define good leadership?
I define it as “be better every day”. That’s my leadership mantra. It’s not an easy thing to do – show up as your best every day – but it’s realistic.
You took over as CEO 18 months ago after the bushfires, in the midst of a pandemic and with tariffs in China about to up-end your business. You describe yourself as an optimist but you must have been tested?
No doubt. It certainly does test your resolve and your ability to cope with multiple crises at the same time – and you know, we also had the wildfires in California, which just added to the mix. You have those moments where you sit back and wonder how you’re going to take it forward but then you quickly engage with the rest of your team and share the load. We got through it together.
Were there any moments where you actually felt scared?
Never scared. But there are moments where you’re going to make a decision or say something externally that could well define a path for multiple years to come so you’ve got to get it right. There were some nervous moments.
When you have to speak publicly and there’ll be a lot of attention on what you say, how do you prepare? Do you practise over and over?
No, practising over and over has the reverse effect for me. I have four or five key points that I need to get across. My ability to follow a script is not great [laughs] and I find it dilutes the message.
You were deputy COO and COO before taking on this role. What’s been the biggest surprise for you in stepping up?
The nervousness for me was the external world – dealing with investors, media and analysts – and the amount of time I spend with the external world. That’s number one. And number two is that I used to think no day was the same in my previous roles but now I genuinely have no day the same. It’s an interesting task to go back and look over your calendar during a certain week to see the scope of areas that you’ve covered in that week. It’s actually the best part of the job but the breadth surprised me.
What are the advantages of taking on this role during a time of crisis?
It enabled us to do things in 12 months that would have taken longer. And it enabled us to drive a different culture within the organisation, which from a leadership point of view allowed me to put my stamp on the way I wanted our organisation to behave and be seen.
How have you changed the culture?
I’m a big believer in strengths-based leadership. First, focusing on people’s strengths makes them understand what they’re good at and that’s the same whether it’s an individual, a team or a business. Second, when people work with the majority of their strengths – and spend the majority of their time being able to exercise them – performance is going to improve. A by-product of this is everyone is not good at everything so it means we can supplement that and have very open conversations around what our strengths are, what our team members’ strengths are, what we have as a team and how we supplement that. That’s a big shift in the culture.
When you discover gaps, you presumably need to bring other people with those skills into the business. Does it mean the team gets bigger?
The team gets bigger in some cases. We have matrices – we’re all quite transparent about what our strengths are across the leaders and the teams in the business. Generally you’ll have a blend across the board but where you do have gaps you can bring others into those organisations to change that. We’ve made hiring decisions based on people’s strengths, as opposed to their experience, as the main overriding factor. Functional experts don’t always make the best leaders of people and we need to get that balance right.
Let’s talk about China. That market was worth more than $500 million a year in revenue to Treasury Wine Estates (TWE) but it’s gone thanks to hefty tariffs. Some commentators have said the company put too many eggs in one basket. What’s your take on it?
We’re one of the more diversified wine businesses around the world – whether that be United States-sourced wines, Italian, French, Australian, New Zealand – and we sell in lots of markets across the globe. But China was our largest growth market. I understand the commentary but the upside from our point of view is that there is an appreciation now that we’re more than just “Penfolds in China” for investors. For the first time in seven years, we have more wine to sell than we have demand for globally, which is a good place to be if you’re a salesman. We’ve always been constrained in terms of the amount of wine we could sell because the China demand was such a dominant part of our business. Did we put all our eggs in one basket? Absolutely not. We still have great strengths in other Asian markets but it’s just not China.
How do you fill the gap? Is there enough growth in other Asian markets?
It needs to be multiple markets, not just Asian, but we think that over the next two to three years we’ll be able to fill the gap for the business. We also don’t think the China market for TWE is over. We’re looking at different ways to try and take advantage of the consumer adoration for Penfolds, which is so, so strong in that market.
Beyond tariffs in China, what’s the biggest disruption the wine industry is currently facing?
How to engage with younger consumers coming into our category. The traditional marketing of brands and heritage brands has a strong place in the wine industry but younger consumers are looking for a different proposition. They’re looking to engage digitally and for brands that aren’t what their parents drink.
What’s your take on the low- and no-alcohol trend?
I think it could be a game changer for our industry. The wine company that cracks the technology to create the best tasting low-alcohol and zero-alcohol lines will have a huge competitive advantage.
You have a strong sustainability focus. Is that being driven by consumers or is it a business decision?
It’s being driven by consumers more so now. There have always been the climate and environmental issues we have to deal with – and make sure we’re doing the right thing by our business and the industry long-term – but the social piece is huge. We see it within our own workforce. When I do town halls, half the questions are around sustainability – what are we doing on this project, what are we doing with this brand, how can we create something that actually is a lot more than just profit taking? It’s a real driver of building that engagement and culture.
You’re a mad cricket fan and you captained the under 19s in South Australia. Have there been skills you’ve taken from the sporting field and used in business?
Don’t commentate, play the game [laughs]. Some would argue I use too many sporting analogies but they paint a good picture. I learnt a lot from playing reasonably highlevel sport at a young age with older team members. It was a huge learning for me of how you fit in, how you see them operate and how you win as a team. The feeling of winning as a team is so much better than doing well yourself.
What would you say is your biggest gap as a leader?
I could listen better. I can form a view very quickly, which is a strength, but I can also sometimes have the blinkers on for that view. I need to make sure that others are challenging that view and I’m having the right input to make me think differently around a path.
What advice would you give a brand-new CEO?
Make sure you’ve got the right team around you. Trust them and they’ll trust you.