Moving quickly, the new chief quickly scored some coups. He convinced the federal government to give CSL a partly-built fractionation plant that supplied CSL’s raw materials, in exchange for equity in the company. This tied the government back into dealing with the company, which McNamee used to secure the support of CSL’s major customers.
He also rebuilt the company’s scientific credentials, convincing respected scientist Ian Gust to leave Melbourne’s Fairfield Infectious Diseases Hospital and head up CSL’s research and development programs. This would have taken a great deal of convincing: CSL at that stage was a company without much to show for itself scientifically.
McNamee made sure Gust was well-resourced. The company prioritised R&D, and today puts $400 million towards such research every year.
This has reaped huge dividends for shareholders. Since the company listed in 2004, its share price has multiplied 50 times.
Trusting underlings
As he restructured the company, McNamee sacked 30% of CSL’s workforce (350 staff). But breaking with tradition, he kept many of the existing senior executives rather than filling the positions with his own. This was the start of a trusted relationship between McNamee and those who report to him.
He also promoted and took risks on others, like when he promoted then 41-year-old Peter Turner to lead the development of CSL’s most critical investment. When the project went over budget, McNamee backed Turner, who went on to sit on CSL’s board before retiring at today’s AGM.
Longevity and dedication
It takes a great deal of maturity to lead the same company for so long. That’s because CSL’s failures and successes up to this point can be attributed to the company McNamee has built.
He has continued to deliver for a very long time. This year, the company passed $1 billion in profits, building on steady growth for the past five years, making it Australia’s most successful manufacturing business.
CSL has expanded its operations overseas; it is not the Australian-oriented company McNamee inherited. After more than two decades, it now makes most of its money in America, and more than 40% in Europe.
Don’t write off your industry
And lastly, McNamee is an optimist.
In the early 2000s, there was a global glut of blood products, leading to prices plummeting. In an interview with BRW in 2007, McNamee was fiercely positive about the period.
“A lot of people get demoralised in a downturn, and start to say, ‘this is a terrible business to be in’,” he told BRW. “I say ‘No! It is just that things are tough’.
“The good news is you make the most money in acquisitions in the buying, and downturns are the best times to buy. We bought [German rival] Aventis at a phenomenal price. It was a once-in-a-lifetime deal.”
Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.
