The great achiever. An interview with Sir Ralph Norris

Starting his working life as a cadet at Mobil Oil, he spent a decade as CEO of ASB and later ran the bank’s Australian parent company, the Commonwealth Bank of Australia (CBA). Currently the chairman of both Contact Energy and Fletcher Building, Sir Ralph also led the revival of Air New Zealand following a government bailout of the airline in 2001. MEttle met up with Sir Ralph to understand how a logical outlook, sense of humility, and unwavering work ethic have served him over the years, and to also learn of his concerns for a future technology-driven job market and how we can avoid group-think at the boardroom table.

"Scar tissue is incredibly educational." Sir Ralph Norris, Director

HUMBLE BEGINNINGS

Being brought up in a state house in Mount Roskill, Sir Ralph Norris learnt early on the importance of hard work and providing for oneself. After his parents split up when he was around 10 years old, Sir Ralph reflects how he and his brother “were kept on the straight and narrow” by a disciplinarian mother: an upbringing he says he has a lot to be thankful for.

“I hold a lot of regard for my mother’s actions and what she did bringing us up at a time when social benefits weren’t around. A sense of entitlement doesn’t exist when coming from a humble background, as you don’t know what entitlement is. There’s something to be said for a bit of hunger and not having a view that anything is yours by right.”

Not coming from a position of privilege did mean however that university was not a readily available opportunity. Instead, after “doing alright in maths at School Certificate level”, he joined Mobil Oil as a cadet.

“I hold a lot of regard for my mother’s actions and what she did bringing us up at a time when social benefits weren’t around. A sense of entitlement doesn’t exist when coming from a humble background, as you don’t know what entitlement is.” Sir Ralph Norris, Director

TURNED ON BY TECH

It was at that time that the then Auckland Savings Bank was advertising for young recruits to be trained in computing. After passing an IBM aptitude test, Sir Ralph joined ASB in 1969, and that he says became his tertiary training.

“Getting into tech early was my education. When you look at computer programming in particular, it follows a certain mathematical logic. I remember the day when I was taking part in one of the computing courses when it all fell into place. I realised that I could do this – and from then on it became easy and gave me a great sense of confidence.”

So, at a time when the two 20-somethings Steve Jobs and Bill Gates were kick-starting the computer revolution in Silicon Valley, a young Sir Ralph found himself in one of the best places to be, as banks across Australasia looked to overhaul their operations to keep pace with the new computing technology.

“Coming through IT was a great opportunity for me. The bank was in the process of going from mechanised accounting machines to computer systems. I got in on the ground floor and had to learn a lot about banks existing processes and how to convert manual/mechanised accounting systems to computer systems.”

Quietly progressing through the ranks, Sir Ralph moved to the position of CIO and, in 1991, when the business was looking for a leader to drive its digital future, a 41-year-old Sir Ralph was appointed the ASB CEO, a position he would hold for ten years until he left in 2001.

SKILLS VERSUS QUALS

It is well canvassed how Sir Ralph later went on from ASB to head Air New Zealand and the Commonwealth Bank of Australia (CBA), cementing himself as one of New Zealand’s big business statesmen and a steady hand at the board table.

Instead, we are going to focus more on how young people today can learn from Sir Ralph as they look to get their own careers going. He takes great interest in how school leavers are being groomed for future job prospects and, echoing a certain computer technician’s logic, perceives it as very much an input-output situation.

“People knew I came from a relatively humble background in my early years, but very few people would have thought that as my jobs grew in size. Had I joined CBA from school, there was a certain level I wouldn’t have been able to rise above without a University qualification.

“While I appreciate that things have changed somewhat now, not coming from a traditional formal qualification route was certainly no barrier for me. I probably learnt a lot more about management through on-the-job training and had opportunities and promotions a lot earlier than had I gone through the normal banking stream.

“I therefore see it as a responsibility for tertiary institutions to provide education of value and see student loans taken out as an investment rather than a liability. There is a real risk that there may be an oversupply of talent coming out of university and, furthermore, some degree courses are questionable as to whether they are a good match with the requirements of the job market.”

PREPARING FOR THE FUTURE JOB MARKET

Ensuring young workers have the right balance of skills and qualifications is one thing, but another is preparing them for the transformational change expected in the job market over the next two decades due to the speed of growth and capability of artificial intelligence and robotic logic.

It’s no surprise that this is a topic Sir Ralph talks on with enthusiasm – less-so from an innovation perspective, but more how it will influence what he often refers to as the most important part of business: people.

“I have a view about robotic logic and its move up the job chain. We’ve seen over the last 100 to 200 years the replacement of jobs in a range of categories as various technologies develop. We saw it start with the Industrial Revolution with machines replacing labour, which has led to the creation of new and higher value jobs since that time.

“Over the next decade much higher value jobs will be replaced by sophisticated processes driven by robotic logic and artificial intelligence in professions such as accounting and law. An often-quoted mantra is that more new jobs will be created by disrupting innovation – but will they this time?

“Is there a risk of a paucity of higher value jobs in that mid-range? We have people coming out of universities with significant debt, how are they going to service that debt if they don’t have jobs or ones that generate sufficient income.”

In coming up with solutions, Sir Ralph says a universal basic income is one response that needs to be part of the discussion.

“In the end, all Government tax revenue comes from business, either a direct tax on companies or PAYE for individuals, so if we have less people working there needs to be a realistic mechanism to enable Government to replace the loss of revenue to meet the potentially higher unemployment claims.

“I may have scoffed at the concept of universal basic income – I’m starting to wonder if it is a position we may need to adopt if a number of jobs disappear.” Sir Ralph Norris, Director

“A lot of things are bound up in this and, while in the past I would have scoffed at the concept of a universal basic income, I’m now starting to wonder if it is a position we may need to consider if a significant number of jobs disappear. The big risk is if we don’t actively think about this, it could lead to a breakdown in society. I know this sounds extreme but I believe the impacts of the changes ahead are going to create significant social issues.”

“By looking at an issue logically, I like to break things down into simple pieces – make the complex as simple as possible.” Sir Ralph Norris, Director

DON’T COMPLICATE IT

It’s often thought that great executives possess a rare mix of left and right brain: skills of logic, and incisive business acumen mixed with big picture, people skills and intuition. Sir Ralph is no different and has some simple advice for aspiring CEOs.

“By looking at an issue logically, I like to break things down into simple pieces – make the complex as simple as possible. You can get yourself into a situation with complexity where you end up chasing your tail. By breaking it down the solution becomes easier – an insight I probably learnt from my computing background.

“Another key factor is the importance of team work. I led small groups in projects in my early 20s. If you define what the objective is and everyone understands what their responsibilities are within the team, and help people when they are struggling, you can accomplish a great deal. If you can master that, good people in the organisation start to gravitate towards you and want to work with you. Looking back over my career it was probably a skill set that gave senior managers the confidence to assign me difficult projects in the knowledge I could put a team together and deliver it.”

Sir Ralph says that the best managers he has encountered were those who were the best leaders of people, they coupled encouragement with good judgement. “It’s about making sure you’re clear about what’s expected from your direct reports and holding yourself to the same standards. Consistency of approach is really important and is captured in the phrase by the former US President Teddy Roosevelt, ‘people don’t care about how much you know until they know how much you care’.”

CONFLICT AND DIVERSITY AT THE BOARD TABLE

When it comes to governance, according to Sir Ralph, a bit of conflict (constructive) and diversity is key for the boardroom table to really test financial and strategic decision making. Two areas he says that New Zealand still needs to work on.

“I do have a concern about the level of collegiality that can develop with some of our boards here, which gone unchecked can lead to group think.” Sir Ralph Norris, Director

“Having a good mixture of people and diversity of background, gender and culture is really important to the composition of a board. It’s not helped by people making moves into governance roles too early, when they haven’t come up against adversity. Scar tissue is incredibly educational, and it’s crucial to see a strong track record of achievement and application of skills. Directors also need to have a keen sense of curiosity and ask questions. These aren’t normal Dorothy Dixer questions, but questions with weight and thought behind them.”

Even with all the prerequisite qualities for an effective board Sir Ralph points out that preparing for crises is something that cannot be taught – and an open mind and a willingness to learn and be held to account are imperative.

“The nature of big business is that unfortunately things don’t always go to plan, and you need to try and understand why. Whether it is a profit downgrade or another unexpected occurrence, it’s important to go through the experience and check why did that happen and what can we as a board change and manage as a risk going forward.”

PEOPLE, PEOPLE, PEOPLE

It would be difficult to identify a singular take out from the illustrious career Sir Ralph Norris has built to date. One where he has served some of the biggest organisations on both sides of the Tasman, and continues to do so, but to ask the man himself it is clear where he sees priorities in the business arena should lie.

“If you look at property it’s all about location, location, location. If you look at business it’s all about people, people, people. From your customer base to your employees to your stakeholders and your license to operate with the community, structuring your business around people is paramount. It’s important to remember this because too often we can get buried in the profit and loss statement and not give enough weight to the company’s people agenda addressing talent and succession.”

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