FRIDAY, 28 AUGUST 2008

Hear it from the BOSS Resilient Leadership (Sydney)

Transcript

This is an edited transcript of the Hear it From the BOSS forum in Sydney on August 28, 2008.

The panellists were Andrew Mohl, director Commonwealth Bank and former CEO of AMP; Elizabeth Ann Macgregor, director of the Museum of Contemporary Art; Pat Grier, director and former CEO of Ramsay Health Care; Rebecca Huntley, Australian director of ipsos.com; and Ahmed Fahour, CEO of NAB´s Australian operations. The ABC´s Adam Spencer moderated the event.

ADAM SPENCER: What makes a great leader? How do you lead in tough times and who will be the leaders of tomorrow? Well, here to help me chew through those big issues is an illustrious panel of thinkers and doers who have been all hands on deck through these tough times, as they were in the preceding easy times and many of them the tough times before that. These people are here to help us understand staying power, resilient leadership for today and tomorrow.

PAT GRIER: I want to start with the Ramsay story because that's the one that really kicked my career. When I joined Ramsay I didn't realise what I was getting into. In fact, towards the end of the month, I realised that things weren't all that good. I saw this big rush at about 2 o'clock on a Friday afternoon and I said, Where are all these people going? They said, They're getting their expenses in before the money runs out. It was pretty tough times.

Let me tell you what it was like at that time. First of all, we were mainly psych, 80 per cent of our business was psych. I was soon told by the health funds that they were going to close down on psych very soon. Our products were pretty shaky, wobbly or whatever you want to call it. I remember going to one of our hospitals, just near North Shore Private, and there was this ward where people said,Come along, there's a birthday. And I went along to the birthday. I discovered the person was having his third year in the psych ward, having a birthday there because he had been there three years. He had been there three years. I said, Are these people getting any better? No, no, no, no, no, we don't get them better because that means we don't get the money for them. We've got a problem with our product here.

Then I have realised that the money was a problem, especially when people phoned up and said,I can't pay the tomato bill. The guy who sells us tomatoes, I can't pay him. And I said,Who else is asking? He said this, this. I said, If you don't pay for the tomatoes does that mean your name gets bad in the community? And he said,Yep. And I said,Well, pay the tomato guy and worry about the bandages tomorrow. That was what it was like. It was not good at all.

But we did have some very good people. We were the only ones really in psych. We had some pretty good facilities but we had no direction. So I called all the people together, the doctors and industry people, and really got them all behind us. I remember the strategy meeting that we had. We worked out that we had to delist. Being in the public eye and people beating us, we couldn't do what we wanted to do. We had to sort out our funding. We had to sort out our product. And, thirdly, we had to shape our future. We had to enlist our people. People were leaving, they didn't see any future, they were very worried about our future, et cetera, et cetera.

And so the things that came out of that strategy meeting was, one, we had to sort out our finances; two, we actually had to downsize, we had gone into all sorts of areas that we knew nothing about; and, thirdly, we had to actually get the people behind the organisation. And the other thing we did, we said, we've got to shape our future. So we cleaned up our act, we got the psych starting to work, the product became better, and we actually went to Woolridge and said the health funds are about to foreclose on us. Look at how good a job we are doing now. I think you should bring in legislation that health funds should have to cover psych. That was a major initiative for us to actually try to create our future.

So the things that came out: one was we created our own future, said yes, we'll do that. Also, we put in place management principles that we live with today. We explained to the people what the management principles of Ramsay are all about and we introduced, which Adam talked about just now, we introduced what we call the values of Ramsay which then became The Ramsay Way.

The Ramsay Way has seen us through some very, very tough times. Getting the right people and getting them behind the organisation actually saved us and as far as the psych was concerned, actually made our future. Several times since then we have had to go back to those principles, go back to those values and create a whole new life for Ramsays to get out of other problems. But it was those early days that actually set the direction for Ramsays.

We were down and out, we were mainly psych, we couldn't pay the tomato bills and this sort of thing yet that has actually driven our business through all the tough times and has now given us what we are today. So it is interesting that in tough times if you bring the people together, concentrate them and bring in good leadership you can see through the tough times and come out the other side with a better organisation.

ADAM SPENCER: Thank you Pat Grier. Andrew, Pat began with I didn't realise how bad it was when I arrived. In May 2003, immediately after your first AGM as executive of AMP, you described AMP as essentially in the wrong business in the wrong place at the wrong time. So you at least were aware of how bad it was. How bad was it?

ANDREW MOHL: Well by then we had actually announced the plan to separate the company into two. The stock price had dropped from about $20 down to around $5 so there was enormous loss of value. The media was baying for blood, investors were baying for blood. We had a UK operation that was bleeding badly, that was capital hungry, and there was a fear that that contagion would spread to the Australian business and literally put the whole group at risk.

So, a bit like what Pat was saying, we stood back and said look, this is where we are, this is the situation, how are we going to deal with this? What is going to be in the long-term interests of our shareholders, how do we maximise value. And we came to the view that by creating two companies we would give investors two investments that they could appreciate better and that would realise the full value of the group as a whole. That involved enormous restructuring and change, but that decision was a very farsighted decision that involved a huge amount of the following eight or nine months, through difficult markets and takeover raids from National Australia Bank.

But it really was facing up to the reality and thinking about what was in the long-term interests of the group and driving through, over a pretty long period of time, to achieve that. And, of course, subsequent to that was a pretty strong recovery. As Pat said, getting the foundations right is the basis of sustainable long-term growth.

ADAM SPENCER: I remember reading that on your first night in the job you sent an email to staff stating the situation and your philosophy. What did you say and how would you define your leadership in that crisis period?

ANDREW MOHL: Well, I mean, it was very open. I was expressing in that email the hurt that I was feeling about the state of the group, that people weren't proud to be part of AMP. We were in a state of shock, it was almost disbelief. The media was all over us and what I was laying out was my commitment to lead with passion, commitment and integrity; to sort of drive the group forward and make the tough decisions. Through that whole period we tried very hard to be open to all our stakeholders and we will obviously come back to that point around communication throughout the evening.

I think people described me as a straight shooter, what you saw was what you got. And at the end of the day having credibility, even when the news was bad, was absolutely essential to preserving confidence in what was a diminishing asset for quite a period of time.

ADAM SPENCER: Rebecca, you believe that with younger staff in particular it is crucial that there is an honesty, an openness and a freedom away from jargon and just sort of placid statements from leaders in tough times.

REBECCA HUNTLEY: Yeah, mainly because I think that younger workers are pretty good at picking up on bad slogans and all the rest of it. But it helps all workers. If the top guy can't be honest about the situation then everybody else languishes in their naivety that it is all going to be all right.

ADAM SPENCER: Ahmed, did you guys miss out on a bargain?

AHMED FAHOUR : I didn't realise this was going to be and M&A discussion. Hindsight shows that were lucky to miss.

ADAM SPENCER: What state was NAB in when you got there?

AHMED FAHOUR: The difference between what Andrew was describing and our situation? is interesting. I came to NAB in 2004 and you may remember in 2004 there was a very ugly situation around forex and the loss around some of those traders and what they did and there was a fairly bad board split-up and lots of issues. But the difference was that the company was actually financially strong but it was culturally very weak. The real issues for our company at the time?were financial issues, like costs were a little bit out of control, but the bank was a very strong bank.

What it lacked was integrity, it lacked people who were honest; you know, the traders were obviously very dishonest people. The bank had a huge amount of arrogance. Hubris had set in. And, as we all know, hubris is what gets not only individuals into trouble, not only companies into trouble, but actually gets whole nations into trouble.

I think this is an area that NAB had lost sight of. They thought what was important was themselves and they forgot the most important person was the customer and the staff that worked in the company.

ADAM SPENCER: As a fellow player elsewhere in the financial realm at that stage, Andrew, is that an accurate assessment of where NAB were?

ANDREW MOHL: Well, the interactions we had with NAB in 2003 exemplified that arrogance that Ahmed was talking about. It was very apparent and it actually helped energise the staff of AMP. Having a takeover raid, having it fail, having what I describe as the tanks on your front law so you could actually see them, really created a groundswell of energy inside the organisation that we could come through this and if we did come through and we could stay independent we could demonstrate to the community that we were a strong, robust company with a long-term future.

ADAM SPENCER: Just before we hear from Liz Ann on what you had to do at the MCA, I want to ask quickly, Ahmed and Andrew, is it a tough time to be a leader in banking and finance?

ANDREW MOHL: Well, personally I don't think it is as tough as it was in the late 1980s, early 1990s. If you go back then you had two banks that reported huge losses and managed to wipe out a fair chunk of their capital. In this round, all the banks will be reporting substantial profits. Two of them will be down but two of them will be reporting record profits. So I think the Australian banking system has actually stood up very well in an international context.

But there are obviously a lot of issues from an international situation. But when you look through all of that, we have an extremely strong banking system. I think there are only about 20 AA-rated banks in the world and four of them are in Australia. So I think that sort of tells you just how robust the system is. Running a bank today is a lot tougher than it was a couple of years ago but we have got to remember that we had 15 years of economic prosperity and they were just incredible times and eventually they were going to come to an end, and they have. But, you know, we will get through this and good times will come back.

ADAM SPENCER: Ahmed, if you are at a dinner party and you say,Hi, I'm the CEO of the NAB, what do people say to you?

AHMED FAHOUR: I can tell you what my hairdresser said last week. He was cutting my hair and he said,When are you guys going to pass on some of these profits and help us out with some interest rate cuts? There is no question that people are feeling some pain but I agree with Andrew in the sense of the banks are quite profitable here in Australia and vis-a-vis the rest of the world and the economy is travelling much better.

I will tell you two things. One is that last week I was in New York, when I was really worried about the Australian economy, prices and so forth. I got to New York and, I tell you, having spent a week there we have got it fantastic. I would not trade one bit of what we have versus the issues that the American economy is going through, the UK economy is going through. It is very serious and we should be very appreciative of what we have.

That said, everybody is worried about the fact that grocery prices, petrol prices, interest rates and anything you want to touch has gone up. And it is not so much the average person, there is a whole bunch of people in our society who are finding this very difficult.

What is really interesting for me, as a leader of a successful organisation, is the fact is that you look out and you think, gee, you know, if I think I have got it hard I ain't seen nothing compared to some of the people who are really, really straining. I feel that while the job is very challenging right now, I actually feel very privileged to, one, have a job that pays well and to have an opportunity to lead an organisation. That is not necessarily hard work. Hard work is something like my dad who had three jobs and slept four hours a day for about 10 years just to keep us all going as a family, that's hard work.

ADAM SPENCER: What are customers, what are consumers saying, Rebecca Do people sense that there is brave and rigorous leadership in these tough times in Australia or are they sensing a crisis of leadership?

REBECCA HUNTLEY: It is interesting just listening to the comments then. In all the research that we do with sort of average consumers there is a lot of complaints about the costs of essentials that are going up. No one is complaining about the cost of plasma televisions, because they have actually gone down.

I think the thing that is interesting, though, and what is often not recognised either by politicians or the business community is, underneath that, the consumers we talk to recognise that we have managed to avoid a lot of the financial pain that is happening globally, that the reason why we are in this trouble is because of the incredible amounts of personal debt we are in, and there is still a relative amount of confidence in the employment market. So people do recognise that while things are tough they could be a lot worse.

There is a lot of uncertainty about where it is going to go, how bad is it going to be; is it going to be a recession or a slow down? At the moment there is almost no Federal Government leadership about where the economy is going to go so people's anxiety is exacerbated by the fact that they don't really know how it is going to go. But there is, I think, a recognition that when we say we are doing it tough, we are not sort of sweeping the streets or having to, you know, eat the dog. Unless you have a taste for dog.

But the thing that is also interesting, the thing that is forgotten, is that the people who are really doing it tough, the bottom 10 to 15 per cent of Australian society, were doing it tough during the boom times as well, and these are the people who were in many ways completely left out of the last decade of prosperity.

ADAM SPENCER: Okay, so crisis, tough times, anxiety, it sounds very familiar to when you arrived at the MCA, Liz Ann Macgregor. Tell us a bit about your story at the MCA.

ELIZABETH ANN MACGREGOR: I was at a dinner a few years ago and I was a party to a conversation about dangerous sports. It was, I have to say, mostly blokes around this table and they were talking about bungey jumping and heliskiing and all this, and somebody turned to me and said,What's the most dangerous thing you've ever done? And I said,I think giving up a secure job to go halfway around the world to take on institution on the verge of bankruptcy is pretty dangerous?, and indeed that's what I did.

I came out almost exactly nine years ago on a sort of reconnoitre with the board who wanted me to come prior to me taking up the full-time position in the following September. They set up all these appointments for me over 10 days to meet the key stakeholders who would be important to rescuing this bankrupt institution. I am talking about the Premier of NSW, the then Lord Mayor Frank Sartor, the Vice Consul of the university, the head of the Sydney Harbour Foreshore Authority, all these amazing key players that would have such an influence on the future of the museum.

And I said to the board what I really had to do was spend the bulk of that time with the staff. This was an institution that had been subjected to incredible criticism in the press, a very brutal restructuring ? really very, very bad on all fronts and was looking like it was on the verge of going under. They were naturally somewhat suspicious of this tartan-clad outsider who was coming across to try and fix things. So I insisted on one-on-one conversations with every member of staff, and rather than talking about the past I asked them for three things that they wanted to see happen. This quite simple exercise was incredibly useful because, first of all, it gave me their confidence that I knew what I was doing. Secondly, they gave me lots and lots of really terrific ideas, several of which were very simple and could be implemented immediately without costing a lot of money. So they could see I could actually implement as well as talk, and I had to do a lot of that. And, thirdly, I had to establish my authority with the board and insist that getting the core values of the institution back across to the staff, who were after all our biggest advocates out there in the community, was a critical part of the strategy to get the museum back on track.

I was somewhat dismayed just before I came to take up the position to read an article by one of our well-known columnists in The Sunday Telegraph that described a grant from the Government to the museum as a grant for a venue for wankers. So I knew the scale of the problem I had in terms of perception, and indeed that was the first thing I had to tackle, was to change that negative perception.

That is where communication skills are so critical, internally and externally. To be able to talk with great authority and passion about the core business, to actually sort out what the message is. And in our case it is very simple: supporting the work of living artists, the artists of today, and bringing their work to as wide an audience as possible. And that covers an incredible diversity of work.

It took quite a while. We had lots of ups and downs, lots of encounters with various possibilities in terms of getting the funding model right. We were able to negotiate new partnerships with both the private sector, in terms of companies, and also with private individuals, who were fantastic at supporting us in those difficult times.

I had some terrible moments of doubt. There were moments when I really thought there was no way we were going to do it. That we were actually just going to have to give up the whole thing and the museum would close. But we pulled through. We introduced free access and I have to say, thanks to an inspirational piece of sponsorship by Telstra, we opened the doors and people came flooding in.

And I am delighted to say they still are and I am particularly delighted that the so-called venue for wankers was this week named not only Sydney's best museum in the business awards but also Sydney's favourite cultural attraction, which goes much wider than museums. That award is an accolade to the front-of-house team we have at the museum, who were there along with our volunteer guides to receive the awards this week. So we have gone a long way.

I think knowing your business, knowing your core business, being able to promote it, being absolutely tenacious. It doesn't mean that you can't be flexible and change direction but being very, very clear about what it is you want to achieve and why and being able to communicate that. Knowing what to say when and to whom is a very important skill. I have to say, in my early days, I had a very public falling out with an extremely important individual. Everything we did was under the scrutiny of the press and I think that is pretty tough for any company in business.

We are seeing record attendances and we have come through the difficult times. I am very glad they are behind me. I do thrive on challenges but the level of adversity is something I am delighted has gone and that we can focus now on the core business of getting more people to enjoy the fabulous things that Australian artists produce today.

ADAM SPENCER: Thank you, Liz Ann. It is interesting, you have all spoken about the culture: The Ramsay Way culture, the culture you had to innovate at the MCA. Andrew, you said the AMP wasn't just a financial disaster, it was a cultural disaster. Now, for a lot of people in the audience, they're not CEOs or non-executive directors ? yet ? but that is the way you lead. You sit out there and go, this is what it is about, here is the vision, here is the culture. What is the role for people coming through an organisation in tough times who want to make an impact, who want something done? What is the role that these people play? It is easy for Elizabeth Ann to sit down with every single employee for a few minutes and ask them questions. How do people energise themselves in their positions?

ELIZABETH ANN MACGREGOR: I think they have to really enjoy what they are doing. They have to be committed to the business. And I think that can go right through all the jobs in an organisation, not just the creative, interesting bits that you might think of in a museum, such as meeting artists and making exhibitions. Everybody can contribute and I think that is the kind of atmosphere a good leader has to foster, so the people really feel they want to come to work in the morning and they want to talk about what they do when they're at dinner parties and out with their mates.

PAT GRIER: I have always believed that things don't just happen, they are made to happen. We have spent a lot of time trying to find out how we can re-energise ourselves. We are always looking for new leaders. We have got a future leaders program. I am very involved in it and I always start off my talks with them saying,I work on an 80/20 principle?. 80 per cent of leadership can be self taught and it is up to you. You have got to start with yourself. Do you really want to be a leader? Are you going to take the pain for the gain? If you really believe you can be a leader and you are willing to take the pain with the gain, you can be a leader. The other 20 per cent there is the certain person who has a special quality or a sparkle, and you actually can see them?

But I give our people a lot of encouragement to be leaders by saying to them 80 per cent of leadership can actually be talk. I talk about techniques, I talk about leadership principles, values, all those different things, but I actually do look to who are the leaders of the future and I give them a lot of support and we genuinely try to bring up the young people, the X and the Ys. I pick them early but give them a lot of encouragement by saying 80 per cent of leadership can be self-taught.

ANDREW MOHL: One of the great things about a crisis is that it usually brings in new leadership and that it brings about a process of really thinking hard about why are we here, why do we exist, what are we trying to achieve? I think that process can then really be very powerful in the organisation. So everybody can start to understand what they are here to do, how do they measure success? How do they improve, How does it all contribute to the organisation being more successful? That takes a lot of time but it is such a powerful process. With the right leadership at the top that sets the basis for this to start to happen. A very large organisation is going to take a lot longer than a smaller organisation, but without that you just breed apathy and people just switch off, because they can see there is a lack of direction in the organisation. That process of leadership and discovery is just so important in turning an organisation around.

ADAM SPENCER: Ahmed, you are 41, is that correct? That is a comparatively young age to be in an extremely influential position. Ten years ago would people have been going,that Ahmed guy, he's going to be where he is now?. When did you develop the hunger?

AHMED FAHOUR: It was probably 10 years ago people were saying,that Ahmed, what are we going to do with him?, and maybe that's part of it. It is kind of interesting, if I put myself in when I was 30 years old and I was sort of thinking about what I was doing, it is kind of ironic. I have a slightly different view maybe to Pat on this point but I am not exactly sure if it is a different point.

I never tried to say, right, if I do this and then I do this then I will get to this?. As a matter of fact, I found with people in my company and where I was previously if they overtry they actually can shoot themselves in the foot. Don't try to be somebody else. Be who you are. Because, you know, the model that got me to where I am was appropriate for me, for what my strengths and weaknesses were in the circumstances that I was in at that time.

Every single circumstance is unique, every person is unique and the environment and the forces around them are completely unique. There is no do A, B, C, D and E and you will be a CEO. I think it is complete garbage. If anybody says to you buy this book, apply these seven techniques and you'll be a CEO, I think it is complete garbage.

Don't sit there and try to over-plan it because nobody has a crystal ball. If I had told you what I was intending to do when I was at university, I was doing an econometrics thesis and I was going to be an academic and that's what I was planning on. I only took a job because I needed some money to pay off a mortgage and to pay off some debt. To a bank.

ADAM SPENCER: I was going to ask which bank but you'd be angry if I even used those two words back to back.

AHMED FAHOUR: I don't know whether my fellow panel members would disagree with me on this, but if I had then tried to manage my career for what I thought was really important then I could have been a cardigan wearer and lecturing.

ADAM SPENCER: Liz Ann, where did you forge that will to get through those tough years?

ELIZABETH ANN MACGREGOR: I have absolutely no idea. I totally agree with Ahmed. I think a lot of these things are a matter of being in the right place at the right time and making the most of your opportunities. I never planned to go into the arts at all. In fact, I went to university to study languages and I took art history because it didn't start too early in the morning and it didn't seem to interfere with long lunches in the student union. And something clicked and I just went wow, and even when I finished university I had no idea what to do with it and there were many options. So it is kind of hard to give advice about planning to get into those positions.

Developing resilience, comes over time. I mean, my previous job wasn't nearly as taxing but it had its challenges. I worked in a very tough city. I spent 10 years in Birmingham, in a city where you wouldn't naturally expect there to be lots of arts activity, but it was a very interesting time to be there, when there was a political climate that wanted things to change. I lived through the Thatcher years, when there was an incredible attack on the arts. We all had to justify ourselves, in ways I think were actually in the end really positive. Because getting those messages out about the value of what the arts do and so on was not a bad thing to have lived through.

The downside of those years was huge unemployment. So I agree with what was said earlier about it really ain't so bad here yet.

So I think those kind of years really forged my determination and my passion, I suppose, for making those arguments that as a society we need more than, you know, food on the table. We actually need to feed the spirit, we need things that will uplift us, we need things that will challenge us, we need things that will make us think differently, and these are all things that I believe the arts contribute. It is just over a period of time that I think I have been able to articulate it.

ADAM SPENCER: You get to a certain point where the things you do are unpopular. Is there a certain point beyond which you need a thickness of skin?

ELIZABETH ANN MACGREGOR: Yes, it's called the Sydney media. I got a big shock here because I wasn't nearly as scrutinised in Birmingham and I could say what I like. And I was astounded, I would say things and they would end up on the front pages of the newspapers and it was incredible.

ADAM SPENCER: Ahmed, do you just get to a point where you can't afford to worry about certain opinions and certain things that are said?

AHMED FAHOUR: I think so. Part of being an effective leader is being able to march to your own drum beat and not be overly influenced by people from the outside that will tell you things.

Part of the problem in Australia is there are plenty of knockers around. People who will look at you and want to just cut you down. I sort of look at it like I have got four children and I look at my children and how successful they are makes me feel really proud. And you would hope that we would look at our companies or our museums and so forth and we stack them up against the rest of the world. A bit like the Olympics. I felt so proud and so wonderful to see people from our country doing so well against the best of the rest of the world.

Unfortunately in business in Australia it is not like that. We are not as proud of our corporations and of our leaders as I think we should be.

ADAM SPENCER: Pat, is your positivity and what could be interpreted as over-confidence a defining factor of your leadership style?

PAT GRIER : No, not really. I think you have got to feel at some stage that what you are doing is right but that usually comes through a lot of consultation and bringing the people along with you.

A good example, there was a time when we set a course on how we should run hospitals, using relationship building, and along came Maynes with a completely different approach. We were under a fair amount of pressure because at the start they were looking very good, they did some huge cost cutting and that sort of thing. I had to stand up to the media and say,no, we're not going that way. That is not the way we run our business. We will lose our people, we will lose our doctors. And that was pretty tough because they did actually do very well at the beginning. But in the end we got through and were proved to be right while we were under a lot of pressure to go a different way.

So it is not a case of being arrogant. It is a case of standing up for what you believe in.

ADAM SPENCER: How important is failure in developing someone's individual toughness and resilience? Andrew, Liz Ann in particular.

ANDREW MOHL: I remember going to a leadership course once and the facilitator put up a chart on how do you learn and one of the most powerful ways to learn was to fail. I always remembered that. It is such a great teacher. Because you reflect on what you did wrong, what would you do differently next time around. Every leader has failures and if you are not having failures then you are not taking enough risk.

ADAM SPENCER: Is it best to have your biggest ones fairly early on in your career when it doesn't really matter?

ANDREW MOHL: Absolutely. his idea, you never stop learning. You never stop learning. And you always should be thinking about how could you have done that better. The day you think you have got it all worked out and you're invincible is the day you should be fired.

ADAM SPENCER: Rebecca, you addressed the issue of failure once at your old school.

REBECCA HUNTLEY: I went to a selective school and I was asked to come back and give a talk to the year 12 students who were about to go off and do their HSC. And my headmistress said to me,The theme of the night is excellence so we want you to get up and talk about excellence. And I had been noticing the incredible pressure on students today to be absolutely perfect, to get the absolute stellar CV. And I was particularly worried about the pressure that puts on students to be scared to make mistakes, to not be risk takers, to not be innovative, to not trust the kind of gut instinct that speakers have talked about tonight.

So I got up and I said,I'm not going to talk about excellence. I am going to talk about failure. I am going to talk about the five or six things I did wrong and what I learnt out of them. My headmistress pursed her lips, but the students actually really responded and particularly the teachers responded. I told a story about how I wanted to do a law degree and my whole life I wanted to do my law degree and my father was the dean of Sydney Law School and I came from a big law family, and I missed out on law by .05 per cent of a percentile. I said it was a really good thing. I did other subjects. I eventually did a law degree but it was a great thing for me.

So I am particularly worried about how this emphasis on the perfect CV doesn't produce resilience, doesn't produce creative leaders and doesn't produce the kind of leaders we've got here tonight.

ADAM SPENCER: Rebecca, you have researched and observed the Gen?Y phenomena. What are some generalisations you would be willing to throw around?

REBECCA HUNTLEY: Well, as a thorough researcher I would never throw around generalisations. But I think what I can say is that the people I work with in the business community, particularly HR managers, say this generation have had it so good, they are really smart and all the rest of it, but they have never had any difficulty. And occasionally they say under their breath just wait for the recession and they'll get it in the neck and then they'll learn.

But there is a general perception that because they haven't been tested by tough economic times that they aren't resilient, and I don't think that we can know that until they are tested.

The only thing that concerns me, and I talked about when I talked about my valedictory speech, is are we building resilience into our education system? Are we building the future leaders who are prepared to take a risk? I think if we aren't going to see a generation of resilient leaders from Generation Y it's because of that, not because of any innate failing in this generation.

ADAM SPENCER: Andrew, this Gen?Y, is essentially different from the people who went before them?

ANDREW MOHL: Well, I think they are living in a different economic environment and technology is very different, but I think fundamentally they are not that different. We have done a lot of research at AMP and one of the things that came out was that the younger generation are doing things later than their parents did. They are leaving home later, they are studying longer, they are marrying later, having children later. But their aspirations are not that different. They want a mortgage, they want children and they want a good lifestyle. So I agree it is still too early to say how will they respond.

ADAM SPENCER: Ahmed, at 41 you are pretty much halfway between the age of the more mature members of the panel and Gen?Y. How would you assess the potential of people 15, 20 years younger than you?

AHMED FAHOUR: One of the things that really concerns me is that people somehow always seem to think that just because they've made it the next generation isn't as smart as them or isn't as capable or isn't going to be as successful. Well, guess what. The majority of the world's inventions were made by people under the age of 25. So when it comes to innovation and thought and knowledge it is actually the young people that actually develop it.

ADAM SPENCER: Liz Ann, do you spend your days at the MCA just holding the door back as these young tykes of the contemporary art movement try and beat it down?

ELIZABETH ANN MACGREGOR: Well, we are the venue for Generation?Y. I mean, 60 per cent of our audience is under 30. So yeah, I'm a great fan of Generation?Y.

I think in terms of managing them, though, it is difficult and it is different. They have different expectations. When I first went into the arts it was expected that you worked long hours and you did certain things and then if you were lucky you got a break and you did something else. And they want it now and that is not necessarily a bad thing. I do worry about the lack of opportunities to fail and be tested a little bit more, though. There is a complacency. On the other hand, they are not so absolutely work focused as we were. I mean, I only discovered weekends when I came to Australia, quite frankly.

ADAM SPENCER: I will take a couple of questions from the audience.

QUESTION: If resilience is built through failure to what extent to your organisations reward failure?

ELIZABETH ANN MACGREGOR: I'll take that. We talk about failure a lot in my organisation, not least because there are no definites when you are choosing artists. Some of them will do very well and some of them won't. It is about risk taking and innovation and if you are not allowing that risk taking and innovation and therefore the failure, it is not how you reward, it is actually what you take out of it and how you help the staff to move on who have perhaps initiated a project that hasn't come up to expectations and you then sit down and analyse what went wrong and what you can take out of it and move into another scenario. What you don't do, here, is to actually clamp down and actually get more conservative and less innovative.

ADAM SPENCER: That was a cracking question too may I say.

QUESTION: I saw a documentary about the filmmaker David Lynch and he was talking about how he'll never go back to a film camera and he's going to stick with video because suddenly he doesn't need all these people around him. I am just wondering for you when times are tough do you feel that you want to cut out the voices from other people with experience?

ANDREW MOHL: Well, I think you need to do both. I think you need to be open, you need to be hearing what people are saying. But if times are really tough then you have got to be very true to your core beliefs. And so I think, particularly when you are getting a lot of negative feedback, you have got to be able to regroup and go back to your inner core and strengthen yourself to go out there and drive forward again. To shut yourself away from everybody is just not acceptable and it won't work, but at the same time I don't think the answer won't be in all of that feedback that is constantly coming to you, because it is just going to be so much noise.

ADAM SPENCER: Were there times, Liz Ann, where you just had to make a decision and stick by it regardless of what everyone else thought?

ELIZABETH ANN MACGREGOR: Absolutely, that always happens. But I think what you have just epitomised is the difference between an artist and people who work in institutions. Because I think the value in times of adversity is the teamwork and is the ability to brainstorm with your colleagues and not to be the lone leader who shuts himself in the office and tries to solve all the problems themselves.

QUESTION: Culture is something that doesn't change overnight? How do you get your people behind it and empower them to actually execute your vision?

ANDREW MOHL: It is a really good question. We didn't realise it until some time later but during the period of crisis we had a very directive culture, it was very top down driven leadership, because we had many issues and decisions to take. Once we came out of crisis we realised that that sort of leadership model wasn't going to work and we had to have a much more empowering culture. And hence we to sort of drive leadership much deeper into the organisation, much more accountability for decisions, much more clarity about what people's roles were, have remuneration structures that supported that, leadership programs, mentoring, talent management. That has taken a lot of time and is ongoing but that is the only way that I think that you can?-?I mean, a crisis is great to shake up an organisation and go back to core but you eventually come out of the crisis and then I think that sort of constructive culture, as it is described, takes many, many years to develop. But once you have done it it can become an incredibly competitive average.

ADAM SPENCER: Pat, was there a moment when you realised "The Ramsay Way" had taken hold? When did you realise the culture had set in?

PAT GRIER: I guess the whole thing about "The Ramsay Way" is values and that people feel that they are really enlisting what they want to do in life as part of Ramsays. And I guess when you get people who have just joined, the Y?Generation, that start to talk about things like that's not "The Ramsay Way", why would you do that, that's not "The Ramsay Way". When you start getting those sort of people all the way down the organisation then you know it has actually taken off.

The unfortunate thing is if you set those values and you set those standards you really are judged on them. And all the management is involved in making sure that we stick to "The Ramsay Way", the Ramsay principles and all that sort of thing, because we know that is what is energising us. It is what the people are sticking with us through thick and thin.

We have had situations where people could go across the road, North Shore Private versus the public system, and it is 17 percent increase in wages. We were way behind with the health funds, et?cetera. And we went to our people and said please trust us, we will lift your wages over a time but we can't just do it overnight. We monitored how many people we lost to the public system. It was almost nil. Because looking after your people, feeling good about being at Ramsay, being a teamwork organisation, was actually more to them, and they liked coming to work and being part of that, was much more to them than 17 percent across the road. Now that is amazing. And that was not at head office, that was in the field, in the workplaces; the cleaners, the lot. When that happens you know it is actually working for you.

ADAM SPENCER: What is it like for a leader in these tough times who announces that 350, 550 people are going to be laid off?

PAT GRIER: Haven't had that problem yet.

ANDREW MOHL: In my first three months of coming in there is that sinking feeling of knowing that you have to deliver some tough medicine, and under my watch in the first year we let go 2000 people, we fired 2000 people, and 91 percent of them were managers and above. So a lot of senior executives in the company. I got to tell you, even though it might by justified, even though these people sort of have to take responsibility and accountability, there is nothing worse than an executive to have to fire somebody. Because you know they have got families, they have got mortgages and they have got a life and this is really tough. It is not the kind of thing that I would want my worst enemy to do.

But when you do something like that I think what is key is how you do it. If you have to do it, do it fast, do it quickly, do it honestly and do it compassionately and be fair in the way you let the person go. Because nothing can change what the answer is but a lot can change in how you do it, because people will always remember that.

ADAM SPENCER: Tough times can be good for growth. You want a say, Pat?

PAT GRIER: I agree with that. I think how you do things is so important because you will come through the crisis, you have got to believe you will come through the crisis. And how you handle things during a crisis is going to reflect on your organisation for many years to come. I have always said if someone has to be laid off, give them a bit more, give them dignity and help them on their way, because you don't know where they are going to be. They might be in competition or they might be a health fund, for instance, working out your plans for next week. It is how you do it that really counts.

The people who stay see how you handle those sort of situations. So once again you come back to your culture, you are trying to get enlisting the people, identity and so on. How you do it is so important. If you believe that you have got no future well then just fire them. But if you believe that one day you are going to come out of this fine you have got to be able to look back and say we did everything right and we feel good about how we did it.

ADAM SPENCER: Someone drew the analogy recently when they were talking about leadership and they were talking about these Gen Y and Gen Xers and all these people. But, they said, who do you want there, in the middle of the perfect storm, on the decks at 4am, who do you want there on the ship? So here is the metaphor. You are in the middle of the perfect storm, it is 4 in the morning, through the driving rain and the smashing froth of the sea, you look across and see one other colleague on the deck with you. Describe that ideal colleague in three words. What are the three words you want from that person who is there for you in the toughest of times?

AHMED FAHOUR: Authentic, trusting and my CFO.

REBECCA HUNTLEY: I think candour is good. Hutzpah, which is a nice Jewish word for guts. You want your CFO but I want my mum. I want somebody with real smarts. Real smarts.

ADAM SPENCER: Pat?

PAT GRIER: I want somebody who has got ability, capabilities that maybe I can hold onto and they swim ashore.

REBECCA HUNTLEY: Dolly Parton?

PAT GRIER: Dolly Parton, I'd like to hold onto. I think we could float very well together.

ADAM SPENCER: Two words: Stephanie Rice. Yes, okay.

PAT GRIER: But it's interesting, I agree with trustworthiness. You have got to be able to trust the person in difficult times, that they will deliver with you, stick with you. I think that is very important. That the person you go with you trust and you want to work with.

ELIZABETH ANN MACGREGOR: Trust was my first. Trust, tenacity and a sense of humour.

ADAM SPENCER: It's pretty wet here, isn't it, Skip!? Andrew?

ANDREW MOHL: Passion, commitment and integrity.

ADAM SPENCER: This has been a fascinating discussion, extremely honest, extremely open. Best of luck in these tough times.