The importance of vision and people

Seek to work alongside the best people who will challenge your ideas and assure your vision is achieved

By Laurence Cox AO

You are the future leaders

Today you join a distinguished club. The impact of this University’s alumni on the story of Australia is considerable. When I was standing in your shoes in 1960, graduating in commerce, my colleagues and I were unaware to what extent Australia’s future prosperity lay in our collective hands. Little did we know of the huge and imminent changes that would influence our future.

History’s view of Australia in the 1960s can be grim. We lacked confidence in our future. There were lingering concerns about communism, the White Australia policy was still on the agenda, and there were fears that emerging technologies were going to put us all out of work. Today our economy is booming and we boast one of the most sophisticated and envied economic management systems in the world. We have evolved from a rurally based economy to become a significant player in the new globalised world, not only supplying valuable natural resources but also providing education and financial services to our region.

Many of the business and community leaders of tomorrow are in this Hall. All of you will be involved in some form of leadership and with that comes great responsibility. Each one of you has professional competence that you are about to take into the community. Take heed of Paul Keating’s advice: ‘Leadership is not about being wise. It is about being right and being strong.’ The extent to which you succeed will depend on many things. It will not be measured only in dollar terms but also by the quality and balance of your involvement in the broader community.

Organisations large and small are also assessed today on their culture, their ethics and the extent to which they engage with the wider community. Paying lip service to community responsibility is not an option. Unless ethics and community responsibility are part of your way of operating, I can confidently say you will not enjoy long-term success in the commercial world.

A varied – and valuable – career

So what can I share of my journey, to give you some insight into the sort of leadership that will be required of you in the future? Over the years I have worn many hats, which have given me insights into the things that work in a professional career as well as the things that do not. Arriving at this University as a student in 1957 as the son of a Victorian farmer, I could not have dreamt of the opportunities that were about to be opened for me by my time here. Let me spell this out.

When I stood impatiently at my conferring ceremony over 40 years ago, I was about to join the stockbroking firm Ian Potter & Co. I became a young research analyst and was given the opportunity to work with and learn from the legendary Ian Potter, who later became a major benefactor of this University. His firm was regarded as one of the leading financial services companies of the day and, with the benefit of hindsight, it was a great privilege to learn from and watch one of Australia’s most insightful and visionary financiers at work. He was an old style leader but he lead from the front foot, clearly articulating his purpose. He took big but well thought out risks, and usually ‘got it right’.

Since those early days, I have had experience as a director of various listed companies – leading manufacturing groups, a pioneer in private investment in important public infrastructure assets, and one of Australia’s most successful international financial services organisations with assets and businesses in 24 countries around the globe. Each company provided me with an insight into different industries and hence the broader Australian economy.

I have also witnessed the development of the Australian securities industry through a variety of roles, including chairmanship of the Australian stock exchange and membership of the international advisory board of the Nasdaq stock market in the USA – the leader in using modern technology to recreate markets. I witnessed the transition of Australia’s closed parochial stockbroking industry as it was when I left university, into today’s national electronic market which is regarded as one of the most efficient and competitive in the world.

These changes were facilitated by well thought out deregulation plans from industry leaders working closely with government. Those leaders had a clear long-term vision for the future of the industry, and their decisions have a direct bearing for you as graduates. When you enter financial markets in this country, you will be stepping onto a truly global platform. And that is because of the foresight of people who helped to position Australia as a leading financial market attracting the world’s best players.

The lessons learned from these experiences gave me greater confidence in playing a leadership role in the various activities I have pursued.

My professional career has given me the opportunity to give back to the community through the chairmanship of the Murdoch Children’s Research Institute. Based in Melbourne, it is Australia’s largest medical research institute focusing exclusively on children’s health.

Vision and people are the keys to success

What has emerged from all of my different activities is that the ingredients for their successful outcomes have been almost identical. The two guiding principles that were vital in the success of these endeavours have been vision and people.

To have vision, you must have an idea of your strengths and what you want to do with them. You must be able to think outside the square and then have the courage to implement your ideas. As Tony Blair has said: ‘The art of leadership is saying no, not yes. It is very easy to say yes.’ To succeed in your vision you must work alongside people who are motivated and find fulfilment in what they are doing. For me, a choice between a team of brilliant people working in a low growth industry and a mediocre team working in a booming industry would always be easy – I would follow the talented people.

Equally, I have seen what does not work in the commercial world. One immutable truth that strikes me again and again is that those who succumb to greed will invariably fall and fail. Sounds pretty obvious, does it not? Yet it is a recurring theme in the commercial world.

When I compare my early days with Ian Potter and my current experience at the Macquarie Group, most of the basics have changed very little. Potter hired the best people, gave them freedom to innovate and lead them to operate with a high level of integrity and independence. Today’s Macquarie model is almost the same and it has produced one of our most successful domestic and international financial services groups.

The beginning of my business career was a time of regeneration of the underwriting and investment market in Australia, and also the opening of our market to international investors. I met industry leaders I had only read about in the press, visited international and Australian investors and began to establish close relationships with key clients. It was the strength of these relationships that would later give me the opportunity to be part of the evolution of the Australian stock market. Moreover, in the years I have worked in both executive and board capacities, the importance of people and vision has been underscored.

Macquarie has for many years been more specific than many other corporates about its goals and values. These are not just part of the ‘about us’ section on the company’s website – they are actually set out in the operating manual for all staff. And they are pretty blunt:

Strive for profitability;
Work hard for clients;
Provide the highest standards of technical excellence;
Act with integrity;
Encourage teamwork; and
Deliver fulfilment for people.

Of equal importance to client commitment, profitability and technical excellence is the value Macquarie places on its staff.

Macquarie’s values are similar to the tenets that drove Ian Potter & Co. – which were to hire the best people and give them autonomy and fulfilment. Of course, there are some striking differences in today’s environment:

Management structures are flatter – greater responsibility is devolved down the line. As new entrants to the workforce, you would be given responsibility at an early stage.
There is an entirely different level of disclosure and public scrutiny in all parts of the corporate world and this is impacting significantly on governance structures.

But the key elements to success have not changed much over the years. Any organisation’s real strength is its people – their integrity, the way they work together and the fact that they are fulfilled.

Community responsibility

Using Macquarie as an example, it becomes clear that encouraging links with the not-for-profit sector promotes a fulfilled workforce. Macquarie’s charitable foundation encourages staff participation in the not-for-profit sector. Community groups not only receive grants, they also receive volunteer support from Macquarie employees. More than 60 staff currently serve on not-for-profit boards and thousands more work with not-for-profit organisations for which they have a personal passion. Macquarie’s reward is a fulfilled workforce – the broader reward is a transfer of skills and dollars to organisations that need it.

As mentioned above, my experience is with the Murdoch Children’s Research Institute, which has a close association with the University of Melbourne’s Department of Paediatrics. The Institute has grown from around 100 staff in the 1980s to over 750 today, and has led to major improvements in child health in areas such as small pox and polio, and contemporary problems such as child obesity and juvenile diabetes. The exceptional vision and leadership skills of those undertaking this groundbreaking research has enabled the Institute to obtain increased funding from both the government and the corporate sector. I have gained huge personal satisfaction from my ongoing involvement in these activities.

Vision for the future

As graduates about to enter the workforce, the next few years will be challenging. However you should look further ahead and establish long-term goals about how you want to conduct yourself. Remember, you are leading yourself. Take responsibility for thinking through difficult problems, make well-considered decisions, and carry a map of the future. You must be challenged but your vision must be achievable. And above all, it must stand the test of time. Seek to work alongside the best people who will challenge your ideas and assure your vision is achieved. This approach has given me the most important thing I value from my career – a sense of satisfaction of having helped to make a difference. I hope you find that it works for you.

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An edited version of his Occasional Address delivered at the graduation on 20 December 2007.

Mr Laurence Cox AO is Executive Director of the Macquarie Bank Limited and Joint Chairman of the Macquarie Corporate Finance Group. He is also a Director of OneSteel Ltd and Chairman of SMS Management & Technology Ltd. Prior to joining Macquarie Bank, Mr Cox was Executive Chairman of the Potter Warburg Group of Companies in Australia and a Director of S G Warburg Securities of London. He was Chairman of the Australian Stock Exchange Limited from 1989 to 1994 and was a Director of ASX from its formation in 1987. He was also a member of the Nasdaq Stock Market International Advisory Board from 1992 to 2001 and the Executive Committee of the Federation Internationale des Bourses de Valeurs from 1990 to 1992.