Knowledge@Australian School of Business: Was that also why you founded the Society for Knowledge Economics?
Alex Malley: That’s a society that’s looking very much at the human capital factor in business. As a leader, your first principle should be that the key resource in your organisation is people because without them you can’t achieve any goals. The Society for Knowledge Economics is doing a lot of great work in creating a whole new environment to discuss and to debate about how you get the best out of your people.
Knowledge@Australian School of Business: Neil Armstrong was a special guest at a recent CPA congress and you famously got one of the few interviews he has done in 30 years. I think it was because his dad was an auditor. That was a great opportunity to talk to him about the leadership qualities he needed as one part of the team that put man on the moon for the first time. What did you learn from him?
Alex Malley: Anyone who watched it learned a whole lot of things, as much about the traditions of honest hard work and process. As an engineer, his strength was in process. They wouldn’t have got there and back without a really strong set of principles and processes.
But the foundation reason for talking to him was to really shock the world into thinking about the balance between achieving a vision and having a really large goal and managing risk, as opposed to this very clever world we’ve created today which is all about risk management and, occasionally, we achieve a goal.
If everyone knew as much as they know today back in the ‘60s, we never would have got to the moon. In those days, their knowledge was limited but their vision was great. There was a time in the US during the ‘60s that I don’t think we’ve seen again anywhere in the world, where our universe was larger than earth. And I think it’s getting that balance right.
A person who’s founded in accounting skills today is unlikely to say, “We need to minimise the focus on risk management and seek to take those challenges and to fail occasionally, to reach some great visions” – because we’re too cautious and things don’t get done.
Knowledge@Australian School of Business: How can we turn that around?
Alex Malley: Even when we mentioned the opportunity to meet Neil and to have that interview, people said we couldn’t do it. So you don’t listen to people, you lead by example.
We need to see more examples of individuals taking risks for themselves and their organisations, achieving those goals, and actually advertising the fact that they did it. There’s a whole generation of young people who want to be inspired by great leaders and who are actually out there looking for them. Sadly, at the moment, they’re not as obviously in-your-face as perhaps they might have been in previous generations.
Knowledge@Australian School of Business: The few in-your-face leaders we do have, quite often have come up with a great idea for the internet and it’s made them a multi-millionaire overnight. But does that really inspire the kind of leaders that we want?
Alex Malley: No, I think the separation is that they [had] a great idea and they made a lot of money. Leaders are there for the long-term; they don’t put the money ahead of the vision. If you mobilise people and have them achieve a goal together, that becomes far more sustainable than a one-off event.
All power to those who have the one idea and make a fortune. The challenge for them is how they use that opportunity – how they actually spend the rest of their life trying to affect change and make it sustainable. A very big focus of mine as a former teacher is finding opportunities to allow young people to see what leadership’s about. One of the reasons I’m talking to you is because young people get to hear these insights from a variety of your guests.
Knowledge@Australian School of Business: When you were teaching, as an associate professor you won a Vice-Chancellor’s Award for Teaching Excellence at Macquarie University. How important is education for our leaders?
Alex Malley: Very important. But even more important within that is engaging young people. I could give a lecture in a lecture theatre of 600 and they would be there from the start to the end. And they never threw an aeroplane, even in the most boring topics.
Engagement becomes the king. If you can engage with your staff, if you can engage with young people – they don’t need a lot to be inspired, but they need to believe that you believe what you’re talking about.
I would often say: “Look, perhaps the topic today isn’t necessarily the most earth-shattering topic; but understand that without this set of qualifications, you’re not going to be able to get out there and have a go and innovate, and do all the things you want to do.”
We’ve got to sell that message to young people all the time. We’ve got an enormous population of great young people in Australia, but we’re just not tapping into them and giving them the right messages. In my view, we need to get better at it.
Knowledge@Australian School of Business: What are the right messages?
Alex Malley: The right messages are that you can achieve what you want to achieve; that there’ll be a circuitous journey; you’ve got to have dreams, and you’ve got to maintain them.
You put the dreams in the back of your mind, you go out, perhaps get a terrible job for the first couple of years … I often wished upon young people to get a bad job and live with it, and suck it up for a couple of years, understand what it’s like to live in a difficult set of circumstances, and only leave that job when you’re on top of managing it.
But always have your dreams in the back of your mind. Because if they’re clear in your mind, opportunities will present to you every day of your life because they’re in your subconscious, so you can chase them. Open your doors, build your networks, and always be true to yourself. They’re the prerequisites for a great life.
Knowledge@Australian School of Business: If people do find their way up the greasy pole to run a publicly listed company, how do they balance the conflicting demands of knowing what they want to do as a leader with the short-term demands of keeping the shareholders happy as well?
Alex Malley: Regardless of the size of the company, the first thing you do is build trust. You give your board and shareholders the vision with which you would like to run the organisation.
One of the greatest problems in public companies today is this whole concept of shareholder primacy, that they are the only stakeholder to the organisation that matters. There’s a range of stakeholders in an organisation. Even shareholders have to understand that the organisation has a timeline and a vision. And it’s the courage of those CEOs and those boards that are going to determine the future of public companies. In my view, there are a lot of people who are independently wealthy in senior leadership roles who do not have the courage to build that long-term vision, nor the stomach for it, but we need to see more of that.
These are topics I debate in the press all the time. Shareholder primacy is becoming a real issue. There are more stakeholders than shareholders, and increasingly the sustainability debate is starting to uphold the fact that we are running out of resources globally and we need to be respectful to a whole lot of stakeholders, including of course our shareholders.
Knowledge@Australian School of Business: Many leaders may be worried about this. At the same point, would they dare do anything when it may have catastrophic effects on shareholder value?
Alex Malley: Look, shame on them. The fact is that we need to be strong in our leadership. We’re moving to a scenario where we might have emerging economies that were producing 10,000 pushbikes a month, replacing that with 100,000 motor vehicles a month. We are going to run out of resources, and we’re going to run out of resources even more quickly if we have a vision that’s as long as our nose.
Public company CEOs and boards in Australia and around the world need to start looking at the longer-term vision and actually supporting each other in taking their companies forward, no matter the pain – and there will be – from shareholders who have short-term visions.
