Wednesday, 22 September 2004

Theresa Gattung, CEO, Telecom NZ

Speaker: Teresa Gattung
The outspoken boss of Telecom NZ was the guest speaker at the AFR BOSS Club in Sydney on September 22.

Theresa Gattung was appointed Chief Executive of Telecom New Zealand Ltd on 1 October 1999 having been Group General Manager Services since 1996. She has led the company’s transformation into an Australasian online and communications company, providing a full range of communications services across Internet, electronic commerce, mobile, data, calling and access.

In 2002 and 2003 Ms Gattung has been named in Fortune magazine’s list of the 50 most powerful women in international business.

Before joining Telecom in 1994 as General Manager, Marketing, Ms Gattung was Chief Manager, Marketing for Bank of New Zealand, and had previously held executive positions with National Mutual and TVNZ.

Ms Gattung graduated Bachelor of Laws (LLB) from Victoria University in 1987 and Bachelor of Management Studies (Honours, with majors in Economics and Marketing) from the University of Waikato in 1983.

Transcript

This is an edited transcript of the address given by THERESA GATTUNG, CEO of Telecom NZ, to the AFR BOSS Club in Sydney on September 22, 2004

THERESA GATTUNG:

I thought I would traverse a few things: the last five years of being Telecom's CEO, some of the lessons I've learnt; a little about management styles, what I think works; a little about the industry and challenges we've got.

Next week I celebrate five years as CEO of Telecom New Zealand. That was actually a goal I set 25 years ago in my first year at university. Seriously naff, wasn't it? I was wearing suits to university! Everyone else was out having a good time and I decide I'm going to be a CEO of a public company before I'm 40 and I'm going to figure out how I do that. And what I did at university was very quickly I worked out that it's not always the most talented students who succeed. I figured out in every situation there was nearly always a gain. There was nearly always a particular way the lecturer looked at things, wanted you to think about things. So quite early on in life, I guess – and you could say this was quite good training for corporate life – I learnt to actually think about the people aspects of what was going on.

I can remember being asked to give a case study for an advanced management class. It was billed as a strategy class, and we were given all this material and all these difficult problems, and I presented a case study in a very deep intellectual way. And the lecturer who was grading it didn't give it a very high mark, and he said, "You've completely failed to think about the people dimension. What are people's agendas here and how might that inform the future choices this company makes.?" And, of course, when you work in the real world and don't just do business at university you realise how true that was.

I did a business degree straight from school and I did a law degree afterwards. In hindsight, I think it would have been more effective probably to have worked for a while before I actually did a business degree.

So five years as CEO. And I wouldn't presume to really give advice to any other CEO because I think every situation is different. But there is probably just about one thing that I think might be universal, and I know this because I got it wrong. That is, you want a small board and a small executive team. Believe me, your life is so much easier if you just have a half a dozen to eight people on the board and half a dozen to eight on the executive team.

Now, I know not every CEO thinks that. I didn't think that five years ago. I spent two years with 12 or 13 direct reports before I got religion. The company has performed better, I've had a much less stressful life, and I've stopped doing other people's jobs for them. So a small executive team has really worked for me.

What happens when you have a big board or a big executive team is it's really hard to avoid an A team and a B team. It's really hard to avoid.

The Telecom New Zealand board is unique in a way because it's quite small. At board subcommittees, nearly always the whole board comes to the subcommittee meeting. So you never have a situation where the board could dump on the audit committee, say, or dump on the HR committee, because everyone is really involved in the formulation of strategy. Now, I'm not saying that's right for every board, but it does have the advantage of alignment about strategy. And the same thing with the executive team. It's been much easier for me to get a real esprit de corps and a real sense of alignment with seven people than when it was a dozen. You just modify the number of relationships that have to work and make it that much harder for yourself.

Well, one of the things it was suggested by BOSS that I might want to talk about tonight was customers, managing complexity, and it's really a truism that businesses have to put customers at the heart of the business. But that's a particular challenge for telcos. I think it's a challenge for all telcos. It's a challenge particularly for incumbent telcos, of course, because we come from historical backgrounds of monopoly. But it's also hard for any telco, for a number of reasons.

It’s hard is because the market itself is not at all convinced about what I see as the two – still, really, the two reasons – why telcos in many ways have never recovered from the boom share prices of the year 2000. I mean, Telecom New Zealand's share price is the second-best performing telco in the world in the last three years, over three years, and we're still below our peak. So why is that?

Well, without giving you a lesson in telecommunications, although I know a lot of you here are from the sector, the first and biggest reason, I think, is technology, and the second is regulation. I don't want to spend too much time on regulation, but the regulatory issue is simply that there is no world's best practice. Regulators don't tend to draw a line. They tend to like to make their sandpits bigger, and so there's always a danger of regulatory creep.

But the biggest factor, I think, is technology, and that also comes into play in terms of making it quite hard to always put customers at the heart of the business, because you're always making calls about technology bets that are many years, many decades in the gestation to figure out whether you've got it right or not. And I think that because the share price of IT&T stocks was so low for so long there was a sort of mistaken impression that the sector was subdued, there wasn't much going on.

Well, nothing could be further from the truth. You know, Alcatel and Microsoft still spend the same proportion they always have of their revenue on R&D. So A2.11 – you guys would be familiar with that – but A2.16 is going into commission now and A2.20 is in the labs, and telcos simply can't say "stop". We can't say, "Let's just sit here. We'll stick with what we've got."

We're all on the same path, and the market worries that that path leads to more and more technology investment for no extra revenue. They bought the idea that broadband and data was going to be an additive to the business in the way that mobile was a decade ago, and now they're not so sure. And given where telcos come from, it's quite hard if you're just providing a facilitating role to figure out how you get that match-up between customer demand and technology.

I'm pretty sure, although no one's stood up and said so, that it wasn't a telco CEO who was smart enough to see that texting would be the killer application for mobile, and I'm pretty sure that no telco CEO saw two years ago that we'd be downloading more ring-tones on our phones than buying CD singles. So whatever I tell you will be the killer application for broadband, all I know is it's wrong, and yet here we are, and here Telstra is and here Optus is and every telco on the planet is – BT, Horizon, you name it – madly investing in broadband. And I'm not saying that's the wrong thing to do; au contraire, it's the right thing to do. But the thing is that we have got quite a challenge on our hands once you move past the roll-out, because the day will come manifestly felt a few years ago. So how do you get that middle path that actually matches the technology investment of what customers might want, and how do you get over the hang up that customers don't give a damn about the technology anyway?

We talk about the last mile. Customers only care about the last millimeter – what their handset looks like or what's on the PC. So that's a real challenge for the industry. So how have we responded to that?

Well, the first thing we tried to do was shift critical mass in the business. So we've outsourced a lot of the core things that you might think telcos do – build networks and maintain networks. We've outsourced all of that. We now have considerably more IT people in Telecom than telco people, and that's because we see our future as a communications services provider, and we really have to maintain a premier position in the convergent IT&T space. That was really behind our most recent acquisitions of Gen-i and Computerland, and our real push in this whole advanced solutions area.

But herein lies the rub. If you go into your office tomorrow and your LAN is down so you can't use your PC, you're going to be annoyed. If you pick up your telephone and you can't get dial tone, you're going to be astonished. Now, when telcos set out to hold themselves out to be a communications services provider, once they stop saying, as we have said, "No, we no longer just go for a jack point in the wall. We'll go all the way to the desktop with you, either by ourselves or in partnership with others," then the same 99.999 per cent reliability standard that telcos are held to in the voice world get supplied to the data software world. And yet Microsoft, the most successful company on the planet, hasn't been able to deal with security issues, hasn't been able to provide robust, bug-free software, but telcos are expected to do that. Now, I'm not saying that's wrong. We should all expect that.

The point I'm making is that once we choose to redefine the space that we play in, then the definition of what has always been one of the strengths of telcos goes with us. So that also is definitely a challenge.

So among our strategic responses has been really to try to be clear about what are our committed steps at any point in time and what we still have as options. And so I really see that one of my key jobs or key roles or key functions is having to lead an organisation under conditions of great uncertainty, when you have to be flexible but you've got to make decisions over the long term.

We had a gathering recently of Telecom's top hundred people, and I love horses. I've got several racehorses, and I love riding horses. And I use an analogy about jumping, because I particularly like jumping, and it struck me one day after I'd been riding that jumping was a bit like being a CEO because when you approached a fence you had to be totally committed. You actually had to say to the horse, "No option, mate. We're going over this fence. You're not running out on me. You're not stopping." But because you can't control the jump-off point the horse decides – he might put in a short stride, he might do a long one – you have to be ready to go with it and stay in balance when the horse goes. So that combination of total commitment and flexibility, how do you get that? So we've chosen to do that by keeping a really tight alignment at the senior team, and being very clear with our people in the market about what we've decided and what the options are.

I've also learnt as CEO that it is very dangerous to think out loud – extremely dangerous. I have a tendency to do this because I'm a raging extrovert, but I've learnt that I'm watched going to the toilet and it's best to say nothing because whatever I say can be newsworthy – and I particularly learnt to keep my mouth shut and go nowhere near the media in the few weeks leading up to a profit announcement, because then it's potentially dangerous.

That's really at the heart of what we've got to do – manage an organisation in conditions of uncertainty.

One of the things that will help that is high levels of employee engagement, and that's really a key thing for us. It has been for a while, but it's a more marked theme now because we've spent a few years really doing a lot of the other things that I talked about – outsourcing a lot of the key functions, making some of the big technology calls. I've had a very stable management team now for a couple of years, and I feel very good about that. We're on to now, how do we deepen this employee engagement? That's something that BOSS magazine writes about a lot, and I guess some people might be tempted to say, "Oh, gosh, all this EQ stuff and Daniel Goleman – go and take a hike. It's all nonsense." But I don't think it is, and I think that the technology that we are all so used to using has actually made that more so.

I can remember about eight years ago when the Internet was just starting to be used commercially I was at a presentation about it and a woman in the audience said, "That would be terrible because then we wouldn't know the truth," and the audience laughed, because the idea that there was one truth was quite funny. But the essence of what she was saying was right, because you guys can come out of this session tonight and you can send an email to one person or a million. You can give your view of what happened or didn't happen and what was said and what you thought about it before I've got back to my apartment, and that whole dynamic really has changed, I think. It has actually made it quite hard for a patriarchal model to work because the natural things that have always happened – people talking to other people – have now been enabled by the technology. So it's fundamentally anarchic. I'm not saying it's a bad thing. It just is.

So I think there has been a global energy shift. Now, I think it depends on the company you're running. I think if you run a multinational in really discrete product categories you might be able to run silos, you might be able to run divide and conquer, but for me, running a networked business, where you've got to be fleet of foot and open to the fact that you're going to get some things wrong, the trick is you can't not make a decision. I've already been through that. You get left behind. It's making a decision, assessing it and being prepared to change if you've got it wrong.

In that situation I believe you need really good teamwork, and that doesn't take anything away from individual accountability for results, but you can't have a silo mentality. You can't have a very rigid demarcation of roles at any level in the organisation, and that's my very deep personal philosophy, at least for the sort of businesses that I'm in.

My favourite management text for the last five years is Good to Great, because what Jim Collins preaches pretty much starts there. You've got to get the right people in the bus sitting in the right seats working in the right way. I have seen the pattern of building a team, the actual business metrics, starting to improve and then the financial results coming, and its reverse – financial team dynamic weakening, either because of a change of leader or whatever, business metrics weakening and financial results weakening, so many times in my life in business.

But it's always easy to tell stories about that. It's always easy to talk about the market or the industry or whatever. Often you don't realise those patterns until it's too late, and sometimes it is hard to tell because leadership styles vary, and when I was younger and more arrogant than I am today I thought leadership was about personality and a little bit about technique.

You can't really do a business degree without thinking something about technique; otherwise, why do you go to business school? But as I've got along in life I've concluded that it's very little to do with personality and even less to do with technique, although good, basic disciplines always hold true. It's mainly about character. Because it's about character, truths ring true, and so you can't tell for a while because different people do things in different ways.

I've worked with some incredibly successful introverted leaders who may as well carry around a clipboard, because every time they see a person they're on a very structured conversation about “have they done what they said they would do by X date?” I've worked with some equally effective leaders who had a totally different style. They went for a heart-level commitment to the goal and very little supervision of the specific details about how that was to be achieved. And both styles can be effective with different groups of people in different situations.

There’s no magic formula about this, but the one thing I think is consistent is that you do need a culture of openness and honesty and people not being scared to actually say what they think – of it not being career limiting to actually say, "That's a sacred cow and it's time that we had a really good look at it."

And that's quite hard, because people do get fearful – and we've had situations in Telecom where I and a couple of our senior people have been involved in the beginning when a crisis has developed, and I know that our behaviour has been really about problem solving and not about blame but the people involved in it still felt that, and their peers were basically saying, "Oh, God! You know, you've stuffed up the rest of us."

So even when you think you have a senior leadership dynamic that's really open to making mistakes – because if you don't make mistakes you don't grow, et cetera, et cetera, et cetera – it's very hard to weed that out in the organisation. We're all inclined to judge if we don't understand the facts of a situation.

So that's my preferred leadership style. I've been on record as saying many times that I think that the John Wayne model is a doomed management, a doomed leadership, style. Bill Gates summit, but I go to the Bill Gates summit of CEOs quite regularly and it's very interesting. It's a mixture of American CEOs and international CEOs. There can be very reasoned debates about whether you should structure your company along market segment lines or along product lines. Different CEOs do it differently; everyone understands the arguments for doing it one way or the other. But on this matter of should the chairman and CEO be the same person or a different person, it is like a religious war.

The international CEOs can't understand how you cannot have a separate CEO and chairman because that's the British model, it's the Australian model. The American CEOs cannot understand how you can have anything other than one person at the top, because the way they look at it is there can only be one jockey on the horse. And my partner John once said to me that I could learn everything I needed to know about corporate life, at least in America, by watching lots of Westerns. I didn't actually take that advice.

I wanted to make a few observations about New Zealand and Australia, too, because I'm a really proud Kiwi and I really love the time that I have spent and do spend in Australia, and in many ways I've come to appreciate what I think is the best of both countries. I have an apartment here and I spend at least a week a month in Australia, and I have done for five years.

What I've observed is that we probably are more different than you might expect. It's really obvious that if you go off to do business in Asia it's going to be different. It's not so obvious that Australia and New Zealand are different. There’s the idea of women rising to the top in NZ, and I think that's one of the nice things about the Kiwi psyche. No one said sheilas couldn't have a go. So sheilas do, and have, and that really is quite well accepted.

There's quite a bit of research that shows once the number of women in a profession get above a third, the status of that profession and the pay rates drop. This is true. No bunkum. And there was some research in Australia recently that suggested that was happening with GPs and medicine: more women in it, you know, status dropping, et cetera. So it's possible that with more women in leadership positions in New Zealand, leadership positions get devalued.

One of the nice things about the Kiwi psyche is that egalitarianism streak, that complete classlessness, that sense that anybody can have a go. But with that comes really a bit of a lack of celebration of success, unless it's on the sporting field. Now, contrast that with Australia. It has some of the same heritage and history but it's a more confident country. It doesn't have a cringe factor about people being successful. It's much more likely to say, "What can I do to be like that?" than to knock the person.

Now, I love sport, and I have noticed so many times Kiwi teams choking, just choking at the end, and I observe that the Australian psyche is to always believe that you'll win, never accept you've been beaten. You don't accept you're beaten until after the final whistle. If the Kiwis are in the lead 10 minutes from the end they say, "Oh, we're in the lead. They'll let us win." How naive is that? And I see a little bit of that in business.

The reason it's important is I think we're on an inexorable trend for the Australisation of business in Australia and New Zealand. One of the reasons we bought AAPT was we did not want marooned in the South Pacific. Now, it's fair to say the New Zealand economy has had a really good trot in the last four years. It's outperformed Australia, and it's slightly closed the gap that you guys built up over the previous 15 years: four million people; it's been growing at 4 per cent per annum. It's a very attractive market.

And partly because of that, I guess, a lot of Australian companies, particularly in an uncertain world with a lot of the hassles that Aussie companies have had expanding into either Asia, America or England, have started to really look at New Zealand assets. Obviously the Aussie banks have always owned New Zealand banks, but that's now more so with ANZ buying National Bank, which was British owned. Of course, Toll Holdings bought TranzRail last year, and Fairfax bought INL's newspaper businesses. I see now in The Fin Review more New Zealand content, given that linkage. You see in the New Zealand papers that Fairfax own more Australian content being sourced directly from here.

There are a lot of people who do what I do – you know, Australians working in New Zealand, New Zealanders working in Australia, people commuting regularly. And so probably over time the differences are going to get less. At least in the business sense it's going to get more homogenous, but I think it is wrong to think that we start out the same. We actually do come from slightly different perspectives, and I've learnt that you have to think about that if you're in a leadership position across both countries, because it's quite easy to assume that staff are going to respond in the same way, and that ain't necessarily so.

QUESTION: What has been really the hardest thing about being a CEO for you? What's been the biggest challenge?

THERESA GATTUNG: Well, the first year was definitely the hardest because I had reported to a CEO for a decade – different CEOs – so I really did think I knew it, I really did think I knew what the role would be like and all the rest of it, and it's not until you get into the role that you realise it is different; it's not the same as being a chief operating officer, it is different. … one of the things I've always done in my life is surround myself with good people and ask for advice, and integrate it with my own sense of what's right. But the point is that it is different – the expectation that's upon you, the fact that you've got to think about so many different audiences all the time and that the buck does stop with you. I found that hard for the first six to 12 months. It took me – and I don't have any problem making decisions – it took me about six to 12 months to feel really, really comfortable about that, to stop thinking, "Gosh, if I wait long enough the adults will come into the room."

Q: What are the issues that keep you awake at night?

THERESA GATTUNG: Not much keeps me awake at night. We still haven't cracked Australia. We're totally committed to this market. The strategic reasons for being here are manifestly in evidence. ….So we've absolutely got that to a really robust position, and we still would like it to be growing faster. So that's definitely still there.

The technology calls we have to make in mobile, we've made a committed call to roll out EVDO, which is the 3G standard on the CDMA path. We have as an option potentially rolling out a wideband CDMA network at some point, which is a 3G standard on the GSM path. So that's still work under play. We are buying cell sites but we haven't yet decided whether we're going to roll the network or not, or how we would do it or who we'd do it with. Things like that that really are about how the market might develop, where might Hutch go, where might Vodafone go, how many 3G networks, when will scale move to 3G, when will scale move from a 2G world to a 3G, how proprietary is a 3G world going to be compared to the 2G world? They'd be a couple of big ones.

Regulatory? You know, the best way probably is to just get on with doing the right things by the customer, and we'd love to do that but because we're the biggest company in New Zealand we're always going to be the target, so it's quite hard to do that and to sort of manage that dynamically. You don't put too many resources into being defensive when really what you need to do is get on and actually create new opportunities, such as what we're doing with our Advanced Solutions area. There's probably a longer list, but that will do.

Q:: Theresa, the Labor Opposition here has indicated that if they get elected they'll seek the separation of Telstra into two separate units of retail and wholesale. What are your views in terms of how that would impact your business here in Australia?

Well, there was an article today that Lindsay Tanner was talking about a virtual separation. So they'd move from sort of a – this must be because they think they're going to win, and on October 9 they don't want to be called to account for something they said on September 22! Anyway, he was quoted as saying that they would seek a virtual separation in other words, that the structural separation light that Richard (Alston) put into play would be toughened up but that they weren't going to go for full physical separation. He was still talking about forcing a divestment of Foxtel, but he said they weren't looking to, you know, force them to divest anything else.

So, look, who knows? I mean, when a government becomes government things change. You know, all the officials roll up and say, "Well, here it is. These are the consequences, Minister. Did you realise?" And, you know, it's all on for man and boy, or woman and girl. I've spent a lot of my life dealing with officials and Ministers, and it's very good, and it's very enjoyable, but it's very different from dealing with the corporate world.

So what would it mean for our business? Look, we do support the privatisation of Telstra, subject, of course, to the right sort of regulatory framework, because it's really hard playing on an uneven playing field, and, you know, that's the guts of what it is. Now, you could argue we've made our own bed, because it hasn't changed. I mean, we came into Australia many years ago and it was like that then, so it's hardly a surprise. But it's very difficult. If you're in the Government's position it's very difficult for a majority shareholder to balance up, you know, what Treasury would be saying with a desire, which the Government genuinely do, I believe the Australian government genuinely have a desire to have a competitive playing field.

My view about the biggest single impediment to that is that – and I'm not quite sure how it's ended up like this - but it's the time frames and layers and layers of time that's built into the system. We face a mobile termination inquiry in New Zealand. Douglas Webb, the telco commissioner and New Zealand has a stand alone telco commissioner, whereas Graham Samuel has lots of things to worry about, he'll bring down a recommendation by Christmas on mobile termination rates, and it will be law shortly thereafter.

Now, here in Australia, the ACCC has done the approximation months ago but you've got Optus and Vodafone in court trying to, you know, stall it, and that could take six to 12 months. And Australia has an extra layer of appeal because it goes to the ACCC, the Competition Tribunal, and it can go into court, and New Zealand doesn't have the equivalent of a Competition Tribunal. So one of the frustrating things about the regime here is just the sheer time frames. It's very hard.

So when you are thinking about commercial, which is regulatory, which if you're in attack against an incumbent you're always weighing up the counterfactual. In Australia, the counterfactual on the regulatory side is very, very, very long term, and that pushes you towards the commercial side. You end up signing deals that are confidential, so you haven't got a very transparent regime. New Zealand is a much more transparent regime, and the counterfactual for our competitors is much quicker decisions in the regulatory framework than happens in Australia.

So, I suppose, Labor are clearly on record as being more pro competitive, their stance in the telecommunications sector. Depending on what that ended up looking like, it could benefit the business here. You know, it really just depends how that would play out. But I'm not necessarily assuming that it will. I think there's always the possibility that they become government and, you know, have a rethink.

Q: In five or 10 years' time do you see anyone using a fixed telephone line?

Absolutely, absolutely. I think that in our industry we overestimate change in the short term and we underestimate it in the long term, and I think five years is still reasonably short term. I do not think in five years' time that corporates who have mission critical call centres will be entirely wireless. I just don't. There are some things that the wire line network does better than wireless, and what you've got really in the world of telco, in my view, is you've actually got several technology paths which started out in different places and may or may not converge.

You certainly have got more developments in wireless. You've got 3G on divergent paths, you've got the fixed wireless fraternity, both going in Australia and New Zealand, and there's a range of different subtypes in that. You've got the IT community, starting with A2.11 and getting into telecommunications on their technology path, and you've got the fixed path, which in New Zealand and Australia we're rolling out a next generation network with Alcatel, probably converged services on the one physical infrastructure, and I don't think you should count that path out and assume that one of the other three paths will get there faster or better or be better for customers or will dominate or make more money, because, hell!

You know, when I joined Telecom 10 years ago people were writing off the copper network. And you know what - in New Zealand today over 93 per cent of lines are broadband enabled by that little copper network because someone came along and figured out a way to put something into put a box into the exchange which enabled it to be supercharged, and Telstra is doing the same here absolutely driving DSL really hard. So I just wouldn't underestimate it, and I wouldn't say I mean, it depends if you've got the Vodafone religion. Vodafone are probably the only people in the world who think wireless is going to completely dominate. Most of the suppliers would think there's going to be a place for all these emerging technologies. Some may drop by the wayside because they're just not cost efficient once you scale up, but I certainly wouldn't write off the fixed network.

Q: Theresa, I think you said that it was in your final year at university that you decided that you wanted to be a CEO of a major public company. So congratulations on achieving that goal. But I got a multipart question out of that. First of all, why did you set that goal for yourself? Have you actually accomplished what you thought you were about to accomplish? And, finally, what's next?

I'm a funny sheila really, and when I was at university I loved business studies but I also really enjoyed women studies, and I'm a feminist and a capitalist. That's a very unusual combination to be anything, even a CEO of a public company, and it just seemed to me the complete dearth of women in senior management and the importance of business to shaping outcomes and particularly this industry - I mean, there were some companies I was never going to be interested in being part of - It just seemed to me like a worthwhile goal to dedicate, you know, a good chunk of my life to.

Have I achieved it? It has been harder than I thought. It's taken longer. It took me longer to get the management team in place. I had some of the right people and some not and some in the right seats and some not, and I underestimated how hard it is I think there are different challenges becoming CEO coming into an organisation from the outside versus going up through the ranks. I think there are different challenges. But you shouldn't assume if you come up through the ranks that everyone is going to greet you with hallelujah and, you know, wave the palms in front of you. I mean, you get a huge range of responses, and people that you thought were great colleagues suddenly get gripped with the green eyed monster and say "I can't work for you," and people who you didn't rate before because you didn't interface with them you suddenly realise how valuable they are.

So I'm really comfortable about where we've got to, and in some ways I'm surprised it's five years because it doesn't feel like five years, and if you asked me would I have thought it would have taken five years, no, probably not. I thought we could have done it faster.

Q: At a personal level has it delivered everything, you thought you'd get from it?

I've had great satisfaction from, you know, having such a big sandpit to play in in terms of leadership and, you know, the ability to attract really great people and really big people who could choose to do whatever they want with their lives. I get tremendous emotional and psychic satisfaction and intellectual from the team that I have gathered around me. There has been a downside. One of the downsides is it's hard not to avoid getting more cynical. I mean, when I became CEO I found a whole lot of new best friends and, you know, people play to your ego. You have to really try hard to stay grounded and not to believe your own bullshit and, you've got to project confidence but you've got to also project authenticity or you can't last in the longer term because, as I said before, character is the most important thing.

I'm essentially the same person because I don't think you change as a person, but I have become slightly more cynical about people's motives, slightly less believing what I see at face value. I think that's a bit of a loss as a human being. I think I preferred the TG when she believed everybody was straightforward and playing with a straight bat, and I no longer think that. But, on the whole, you know, I get a lot out of it.

Q: You talked about getting the right people in the right seats. How do you work out what's right?

That's a very good question. Well, there are studies that show that people's relationship with their manager is the most important denominator of satisfaction in an organisation. So there's a personal chemistry there that's particularly important. I knew that I wanted people of high intellect but who were essentially team oriented. I didn't want a star. Now, not every CEO comes at it that way. You know, I knew that I wanted to run an inclusive, collegiate style approach. You're always going to get it wrong. You know, you're not always going to get it right.

I have a fantastic head of HR, Trisha McEwen, who has spent her life figuring out what's going on when people open their mouths, you know, and she's definitely helped me see things that I might not have seen by myself, although I think I've always been quite good at getting the best out of people and attracting the sort of people who want to work for me. I do believe that if you create a certain culture then the word of mouth spreads and that attracts more of that same sort of people, and people who want to play machiavellian games don't go to a culture that doesn't provide that opportunity, and I don't know at what point we reach critical mass. I was very frustrated for a couple of years because I didn't think we had much shift, and at some point I think we reached critical mass. I can't really identify what that trigger was.

So there is no absolute right. I mean, sometimes it's right for a time and a place, and you trust your instinct, take advice. One thing I do, for example, is I always do my own reference checking. I do use search consultants for roles, but I will always do reference checking, because I know that if someone rings me I'll give them the unvarnished truth, the good and the bad and all the rest of it.

You're more likely to do that to a CEO than a search consultant. You're not going to put another CEO wrong. You're going to give them the real oil, the good and the bad on that person.

Q: Theresa, you say there's different leadership styles and yet you say they all have one common denominator, which is character. We all understand character. Can you give us some examples of what you think character is?

Okay. I think character is being prepared to put the company's interests ahead of your own personal interests. I think it's being prepared to essentially have an emotional relationship with the people that you're interfacing with, not just to think about them as work units. I think it's a sort of deep sense of what's right and, you know, you don't need a lot of governance rules to know what's right and what's wrong in some areas in terms of, you know, profit and loss accounts, for example.

There are some problems in corporate life around the public judging what's right and what's wrong because I think that the public often think that laws that pertain to business are a bit like traffic laws. You know when you're going over 100K, so you know when you get a ticket, you know you've deserved it and, of course, competition law is not like that. It's a whole area of grey in which you have to exercise judgment. So it's quite easy to criticise companies and CEOs for getting things like that wrong, which could well have been an honest mistake.

The most important thing is to be authentic. People know when you're not being yourself. So you have to work in a situation that you're passionate about. You won't be able to sustain it for the long haul unless you're clearly authentic about what you're trying to achieve and you find a way to communicate that.

It comes down to being true to yourself, to treating people fairly and to wanting to build something that's bigger than yourself and bigger than your own personal agenda and creating a group of people who have a like minded passion to do that.

Q: If a major decision has to be made in technology, how do you make the decisions, what are the considerations here? Could you comment on that?

One of the things I think is a real risk for Australian and New Zealand companies is the not invented-here syndrome. You know, these markets aren't big enough.It’s not about not being innovative. I think it can be very innovative if you go to market space, but the next wave of technology is probably not going to come out of Australia and New Zealand. It's going to come out of some lab in the US or Europe.

And so finding a way to access that and the intellectual property that comes with that, and we've chosen to form committed relationships with the likes of players like Alcatel to bring that to us. So deciding how you are going to access what's already available in the world, what's the intellectual property. Are you going to have someone just spend their life going overseas to conferences and are you going to send a team of people to be seconded to other to telco suppliers, for example?

We've chosen to have a few committed relationships with suppliers and to share deeply our business with them so that they can really partner with us. You don't have to do that. The traditional model is whenever you want to buy a piece, line up every supplier and choose the cheapest one after running a process for several months and then face the spaghetti junction of making it all work together.

So we've chosen a few committed relationships and a very deep sharing of what the challenges are for us. We want to understand what's happening on the markets. We don't want to recreate the wheel in New Zealand or in New Zealand and Australia, and, like I said before, that the process we use is to try and figure out, try and be clear about what we've already decided, keep open options and be quite clear about what the triggers are that will cause you to close an option down or to make a decision about it. I can't really be sort of more specific than that.

Q: What would you say were some of the main obstacles that you would have encountered in reaching a senior executive level over the years and what do you think got you through to keep going on and to reach your high levels of success?

Well, I think that it can be really good to be a woman in the middle of senior management because you have visibility, but I have definitely suffered discrimination on the way up. Not now. Now I've got power. So people usually want something from me. But, for example, I had a business degree and a law degree, and, I suppose, it would have been 15 years ago now I tried to get into merchant banking. I was working my first corporate job was with Television New Zealand media. I really enjoyed it but I wanted to work in financial services.

I tried to get into the merchant banking, and I was turned down, and the guy rang me and said, "Well, the letter doesn't say it, but I wanted you to know it's because you're a woman we don't think you're going to fit the culture," blah, blah, blah. So at least he told me that so I didn't think it was me.

So that was one example. And then there were others within individual companies that I don't really want to name. But I definitely was sort of the token woman in middle management in some places and I thought, "I'm never going crack through this and best close this door and find a window and go somewhere else." So I definitely have had, you know, those sorts of barriers. What's got me through it is understanding that sometimes you can't change a situation so you're better just to move on. I mean, you give it your best shot, but if you stay too long in something that's (negative) because eventually you do end up thinking it's you. Eventually you do. And you can't let that happen.

So I always moved. I found another company, another industry when I thought that I was going to be blocked for whatever reason. And it isn't necessarily about gender. It might be about style. My own style really works with some people and really doesn't work with others. You know, too informal, too Kiwi sheilaish. I don't know. Like I said before, though, you've got to be true to yourself or you'll never ultimately feel that you were a success. So I moved before it would start to affect my self esteem, and I always believed that eventually I would get there.

I have worked with people who are way smarter than me and I have worked with people who work harder than me, but I think what I do quite well is surround myself with good people and find a way to incorporate their advice and to my sense and then make decisions and move forward. And, so, trying to get an accurate read about what your competence is and strengths and weaknesses are, and I have a slightly unconventional view, I guess, because I know the received wisdom is, you know, you've got to do different sorts of jobs to get to be a CEO. I was head of marketing for 15 years, and all the way through that I got advice to “go and run operations. You've got to go and do something different. You can't get to the top staying in a single route, definitely not marketing, blah, blah." I basically said, "Bugger off. I'm enjoying what I'm doing.

I think I can do it this way. I don't want to go and do something I'm not going to be successful and won't enjoy." So I'm not trying to give any of you career advice, but, for me, the right thing to do was just stick with it, and then I got into a situation where that was the opening to something quite a lot bigger.

Q: Your first point was about sheilas being given a better go in New Zealand in management. Do you see that affecting the way companies are run versus the sort of male Aussie stereotype where working long hours is the norm?

Well, first of all, just to correct that, I think women have achieved leadership in New Zealand society but not so much on the business side. There's not many women who run public companies in New Zealand, as in Australia. There's not many women on boards.

I think the proportion of board seats held by women is as good in Australia as New Zealand. New Zealand is no better. Where New Zealand is a lot better is – judiciary, we're on to our second female Prime Minister, heads of government departments. So in public life women are more prominent, have more leadership positions, but in business life, particularly when the rubber hits the road and you're dealing with mainly a male group making decisions about who gets appointed and who is successful, it's still a male dominated universe.

Do I think it makes a difference to that culture? Well, hey, you know, I haven't had children, and one of the reasons for that is it's just not compatible with being a driven CEO. Now, if I'd been a competitive horsewoman I wouldn't have had children either. So, you know, you don't have to there's no violins required I struggle with myself a lot about my expectations of my team. They've all got families. They' ve all got to balance work and families, and that's quite hard because the world doesn't stop. The market judges you every quarter. A CEO is only as good as their last quarter - every 12 weeks. So it's hard work.

Now, the technology is enabling working from home. Broadband does that. You know, intranets do that. And so we've tried really hard in a way to facilitate making sure that people are able to fulfill their family obligations as well. So I think women this is a bit of a generalisation; it's not true of all women but I think women are generally quite well tapped into the emotional side. However, I think that any leader to be successful has to balance IQ and EQ and so the most successful male leaders do that as well. So I'm not entirely sure if women ran the world it would be different, you know.

Venue

The Westin, Sydney