THURSDAY, 18 SEPTEMBER 2008
Matthew Quinn CEO, property group, Stockland
speaks to
Narelle Hooper Editor of BOSS magazine
NARELLE HOOPER: What a momentous time we’ve had. There’s a real sense that we are living through history. So it is excellent timing for our special guest at BOSS Club, Matthew Quinn, the managing director of Stockland. Matthew began his career in the United Kingdom as a chartered accountant and moved to Australia in 1987 with Price Waterhouse. He joined the Rockingham Park group in 1998, which is a Western Australian property group, and was headhunted across to Stockland in 1999, and came into his current role in October 2000.
Now, since then he has taken the company, founded in 1962 by Ervin Graf, on a very substantial expansion path, and it went from something like $1.5 billion market capitalisation to about 7.7billion.
Stockland has held up much better than many on the market if you see what has been happening in the real estate investment trust sector. And he’s been voted by fund managers as one of the most admired chief executives in Australia. So, Matthew, from your perspective how do you read the events of the last few days?
MATTHEW QUINN: I think one of the things that happens is that people assume that history repeats itself and all economists, and I hope I am not insulting anybody here, they're all what I call mean reverters, they assume that history repeats itself and history is the best guide to the future, and some of the things we are hearing at the moment are the same as '92, '87, '74, '29, and I think the problem is that this is 2008 and 2009, hopefully not 2010, and we’re seeing things now for the first time. Even though it’s a very bumpy ride and it is not nice to go through all of this, we’ll actually look back in 10, 20 years’ time and say we were around when that happened, half of which we probably know already and half of which we probably don’t.
But it brought it home to me when you literally see people in significant positions of authority controlling billions and billions of dollars of investments in some of the derivatives you’re talking about, pointing at a computer screen saying that can’t happen, when it just has. We are actually seeing things now for the first time because a lot of the derivatives and the financial instruments have only been here for a short period of time and this is all very very new.
NARELLE HOOPER: So where does property sit?
MATTHEW QUINN: There are three common myths flying around about the property industry, and I will bring this back to Australia in the first instance before we talk about overseas.
Firstly, that if it happens overseas it happens here; property values dropped by 30 per cent in the UK, therefore they will drop by 30 per cent in Australia because property is a global asset match. That is just wrong. If the price of iron ore drops, then it hurts the people in Brazil just as much as it does in Western Australia because that is a global commodity, but property is a very micro-driven thing. It is like saying if you have got a house in a certain suburb, it drops by 10 per cent then on the other side of the country or in another country it will drop by the same. That is absolute nonsense. So people have confused globalisation of capital with globalisation of the fundamental assets. So that is the first myth and there is a lot of people who are running for cover because property values are crashing around the world and they are assuming that the same will happen here, even though the circumstances are quite different.
The second myth is things were bad in property. When were they last bad in property? 1992. Oh well, it must be the same as 1992 again and I will run for the hills. Again, a myth. In 1992-1993 the national office vacancy rate was 26 per cent and they were still billing more. It is currently four. Supply and demand was totally different, the economic conditions were totally different. So again just because it happened in 1992 and this was the outcome, it doesn’t mean it is going to repeat itself this time. As I keep on saying to people, fortunes are made in our industry at the bottom of the cycle because people overreact and that’s the time that you can pick up bargains and you can always tell the bottom of the cycle when certain types of buyer come into the equation and again I will elaborate on that later. And I can imagine the audience can imagine who those people might be. In England a lot of those people live in the northern part of London and Tottenham.
The third myth is that a few property groups have done bad things and bad governance and have really blown up, therefore all property people are bad, and there is such a lack of trust when you talk to investors that you really have to prove to them, look them in the eye, can I really trust you any more because all of your colleagues in your industry who I used to trust have let me down, and without mentioning names, there are literally those who looked people in the eye and told them that everything is fine and then two weeks later have blown up, and because of that there is fear. What you have got to do at the moment is differentiate yourself and say just because X, Y and Z have done that doesn’t mean that we are going to do it as well. We have high standards of corporate governance and you can trust us for these reasons.
So it is about dispelling those three myths because at the moment with those three myths there is a huge weight hanging over the Australian property sector which is going to take probably six, 12, 18 months to lift.
NARELLE HOOPER: So you’re saying that the translation of the international property reaction does not necessarily come to here?
MATTHEW QUINN: No, I am not saying it is necessarily going to be optimistic and good. It is just that you can’t transpose something from overseas and say it will happen here. It is just far too simple.
NARELLE HOOPER: There are expectations that we will have a substantial fall.
MATTHEW QUINN: Property values might fall. They may not, they might. What we have got to do is plan for the fact that they may. There is no point saying that they won’t and cross your fingers and if they do, realise that you’ve got a problem. I keep on saying to the team in our organisation my job first and foremost, and to the board as well, is to make sure that we can withstand whatever the market throws at you. It might mean that you have got to do things quite differently, but you are still able to go to work and have a job because the organisation is not in peril.
That’s why our debt levels are low and we have run our business conservatively because we have always got to plan for the fact that things might not carry on like this. Property values might fall and even if they do, you can withstand it.
NARELLE HOOPER: How do you prepare for a downturn, yet still take advantage of growth opportunities?
MATTHEW QUINN: Yes, it is the biggest challenge. I’ve got to say to myself what’s the time horizon I should be looking at, because if you take one year, three years or five years – there is no point having more than five years because the world is going to change in that time – at any point in time you have got to be working along that curve. If you’re always planning for five years and not planning for the one or three, you are probably not going to be around in five years. You have might have the best big vision but if you don’t plan for the short-term as well and work for the short-term you’re not going to be around in five years. But if you only work for the next one year or two years, by the time three or four or five come you’ll look back and say, gee, if only we’d done this we’d be able to capitalise on the opportunities and develop a much broader strategy, because one thing is for sure, that the world goes in cycles and at some stage the cycle will change and we’ll come out the other end and we’ll look back and say, if only we’d done this and picked our opportunities. This is when fortunes are made. Cycles have been with mankind forever. I think the first recession was in Egypt in about 3000 BC.
NARELLE HOOPER: … and that was a really bad one.
MATTHEW QUINN: Cycles are all down to human nature and human nature is, in a lot of cases, about follow the herd. When things are going like that everybody jumps on the bandwagon and it always goes too far and then it falls.
All we are in now is a cycle but a cycle that has really been made worse and exacerbated by the fact that there has been too easy credit, money’s been too cheap, and I think in about 10 years time, maybe five years time we’ll actually be able to look back and say what caused all of this, and I think some of those causes are actually starting to emerge already. The good commentators in the paper are actually picking up on what some of the causes were. Bill Clinton deregulated the financial sector and when you deregulate the financial sector and reduce interest rates to very, very low levels and there are no regulations to stop greed and stupidity happening, then greed and stupidity will happen. People that put their snout in the trough really gobbled it up and we are now paying the price for that.
NARELLE HOOPER: So is it the end of an era? Glenn Stevens, the Reserve Bank Governor, was talking the other day about now we have to learn to live within our means. It’s a new era of austerity. Do you side with him?
MATTHEW QUINN: I do. I’m not sure I would be as dramatic as that but we do have to live within our means because debt has been cheap, debt has been freely available and it is like, where does that debt come from? Two years ago we had the wall of money. Everybody remembers the wall of money. Nobody knew where it had come from but they knew it was there, and now the wall of money has just disappeared and no-one knows where it has gone. The whole thing was just an illusion. It was just debt that had been created from nowhere that everybody has borrowed. Now everybody is asking them to pay that debt back and they can’t because there’s no money to repay it.
There will be a levelling off. There will be in the future much lower levels of debt than we’ve had in the past and there’s going to be a huge shake-up while that happens. As to whether that happens quickly or over a gentle period of time, I think that’s really for the governments to work out. It depends on how short and sharp they want this to be, and the Americans, I mean they really hold the cards with all of this and they have taken the approach at the moment that they will bail people out as much as they need to to keep things going, but they are picking and choosing who they bail out. Lehman Brothers, no, we don’t like you, you can go. AIG, you’re very important because the world will stop if you fold, OK, we’ll bail you out. But what they are doing is very dangerous. You know, the precedents that come out of this basically in privatising the profits and socialising the losses, I mean that’s a very very dangerous thing to do and if they don’t do that in a very careful way and we are having this levelling back to living within our means, then that is going to hurt people big time.
It is basically already happening in the UK because the banks over there don’t have any money. HBoss which is the biggest mortgage lender in the UK with a market share of about 20 per cent was taken over by Lloyds last month, they have not had any money. People who want to get into the residential property market in England literally couldn’t get in because they couldn’t borrow. I remember when we bought our first house, if you didn’t have a stamped saving book with a certain building society and a three-year track-record of saving, it didn’t matter who you were and what your job was, and a 20 per cent deposit, you could not borrow money. If you go back two years in England, if you had a pulse and a job, you would be lent 120 per cent of the value of the house, 120 per cent of the value of the house. That’s now gone back to if you haven’t got a book that has been stamped and six months saving and 20 per cent deposit, don’t even bother asking. So it has quickly gone back there and as a result of that the UK market has panicked and prices have gone through the floor.
I don’t think that will happen here. There is too much structural support, too much demand over supply and a good banking system, but if the banking system collapsed here to the same level, we would quickly go back to the old austere days and living within our means, because in England people are going back to living within their means very quickly, and it is brutal and people are going to be on the streets as a result.
NARELLE HOOPER: Tell us a bit about your background because you didn’t set out to be an accountant.
MATTHEW QUINN: We grew up in the middle of England, fairly working-class area. It was actually in the time when Margaret Thatcher was elected and, again, we could see what was happening at the time but we didn’t know what it was really about, but 10 years after the event you can look back and see it. I don’t know if anybody remembers The Full Monty, but that scene at the start, in the steelworks in Sheffield, that was basically what it was like. You had unproductive industry one day that was being supported by the government, the taxpayer, and nothing the next. The town where we grew up, I think there were 13 coal mines there when we went to school and none when we left because Margaret Thatcher had shut them down and just to make sure they could never reopen, they poured water down them. They are probably trying to bail it out now because the coal price has gone up. We left school, went to university. In those days it was probably because they gave you a grant to go to university, which was quite good. There was no HECS; you didn’t have to pay it back. It was a free option for people. They went to university to get a degree but also to learn about life. It is very different to the Australian system. You actually left home to go to university.
So we grew up in the Midlands. I went to university in London. I’d enjoyed science at school, so I did science at university. What’s the job going to be at the end of all of that? I had no idea at all. I did chemistry and I had no idea what the job was going to be, it was just that I enjoyed doing it. The government paid me to go to university, go to London, drink a bit of beer, make a few friends, and why wouldn’t you do it. It was good. I remember my mother drove me down with a little black- and-white TV and a few boxes and dropped me off outside the hall of residence, “Do you want me to come in and give you a hand?” “I’m fine thanks.” Shut the door. “See you at Christmas.” You know, it was a time to get away, 18 years old. You wouldn’t have dreamt of living at home. I mean anybody who was more than 18 living at home, you’d sort of have a badge on your forehead, something wrong with you. And you went and were very self-sufficient – learning life at the same time as being educated.
After two years of chemistry I realised I didn’t want to do that because there’s not much of a living you can make working for ICI, wearing a white coat and smelling carcinogenic stuff, so I just said I want to do something that is more business related. This was one of the first universities to have an MBA, Imperial College, they had the management school there and they had this course that was a joint honours degree in chemistry and management science. If they hadn’t had that I would have flunked out and gone and done something, I don’t know what, but because they had that I transferred to the management course and really enjoyed it. Towards the end of the management course I was feeling a bit more ambitious.
NARELLE HOOPER: I was going to ask that when that came on you.
MATTHEW QUINN: I’ve never been what I call a money hungry person but I was quite ambitious and wanted to earn a good living. So I remember saying to the people at the university, “What’s a good way to get into business and earn a good living”, and went and spoke to the banks. That didn’t really interest me and they said, “Talk to the accounting firms”, because if you go and look at all the leaders of industry most of them have got chartered accountants, it’s a good passport to business. I said OK, so that’s where I went and ended up working for Pricewaterhouse.
I didn’t want to live in London because it was too expensive. So we moved to Nottingham and worked there for Pricewaterhouse, trained there, graduated. You know one of those where you have to work 60 hours a week because in those days it was how many hours you had done, not what your output was. It still is, isn’t it? I don’t know. I think it might be changing these days.
NARELLE HOOPER: When you say “we”, that was you and your wife, Julie. It sounds like you grew up together?
MATTHEW QUINN: Yes, we grew up together. We were childhood sweethearts, met when we were 16 kind of thing and still here today of course. And so anyway, we lived in Nottingham. Julie was a nurse. I was doing this, working 60 hours a week, studying and graduated. Didn’t really enjoy what I was doing. I remember I used to go to work in the morning in the dark, come home in the dark …
NARELLE HOOPER: So Perth was looking pretty good at that stage.
MATTHEW QUINN: We agreed at the same time let’s go overseas and one of the good things about Price Waterhouse (later PricewaterhouseCoopers) was that they offered the opportunity to work internationally. They would basically do you on a two-year contract, do all of the visas and that kind of thing, and it was, why not, let’s give it a go. It was an adventure. They said: “Where would you like to go?” We basically said, well, where does everybody go? They said well, they normally go to Sydney or Melbourne. We basically said well, we will go to the other side then.
NARELLE HOOPER: When you landed there that was not long before the '87 crash.
MATTHEW QUINN: June 1987, just before the crash. My first job in Perth for Price Waterhouse, was the audit manager on Bond Corporation.
Price Waterhouse in Perth was an awful place, they were awful people and really to them I was just canon fodder. They basically said, you are going to go and sit in the Bond Corporation, work 80 hours a week and probably won’t see daylight for three months, and I said no, I won’t, absolutely won’t. I am judged on my output, not on how many hours I put in and just because you want to work that way, don’t think that I’m going to do the same, and I was seen as a bit of a rebel at the time. But it was very low key, old fashioned. It was 1987 but 1987 before the crash was full of testosterone and we can’t do anything wrong and the world’s going like this, very similar to what is happening now.
And I remember going to Bond Corporation and after about four weeks the partner said, “We would like you to come into the office and give us an update of what is going on”, and they were all a part of it as well, the world was going that way and I said to them, “I actually don’t know what these people do”. I said, “I’m used to people who buy stuff, turn it into something else, sell it and make a profit. I actually don’t know what these people do because they seem to be able to just create profits out of not much at all.”
Anyway, it all unfolded because that was the year that Price Waterhouse basically said to them, “Your profit has to come down or we’ll qualify the accounts” and were sacked, which was the luckiest thing that ever happened because Arthur Anderson got the job and they went belly up the next year and got sued for zillions. That was a lucky loss. But the funniest thing was with the whole Bond Corporation, it was bizarre. It just wasn’t what I was used to at all.
NARELLE HOOPER: What did you learn out of that?
MATTHEW QUINN: When you ask people to re-locate to the other side of the world to come and work for you, make them feel special, not make them feel like this. I ended up leaving Price Waterhouse after about 15 months because that kind of environment just wasn’t for me.
After Bond Corporation I was seconded to Rothwells, the merchant bank. I didn’t know anything about it. They wanted me to do it because I was a cleanskin, knew none of the local people, seemed a bit smart and my job was to go to Rothwells and reconcile and find what they called the black hole, which was a $50-million black hole that nobody could find where this money had gone and I had to try and find the black hole. We found about half of it. There were all sorts of shares that were buried and people are owed their money. It was quite bizarre
NARELLE HOOPER: So then property beckoned very quickly and you spent time at Rockingham. That was where you found one of your mentors, wasn’t it?
MATTHEW QUINN: It was, yes. We had a couple of kids by then, as you did in those days – 25 years old you had a baby, 22 years old you got married. Anyway, so I decided it was time to move on. I wanted to get involved in business but didn’t know how to do it. You see all these people doing business stuff but you don’t know how to move from one very structured career, you know the chartered accountant is very structured, and how to get involved into a business environment, and just by luck one day somebody pointed out to me that this chap was looking for somebody that he could bring into the business and start to hand over the reins to and I went for an interview and he gave me a job.
NARELLE HOOPER: That was John Simpson, founder of Rockingham.
MATTHEW QUINN: Yes, John. I was there for 11 years.
NARELLE HOOPER: And that was good grounding for before Peter Daly came knocking on the joint venture.
MATTHEW QUINN: Yes.
NARELLE HOOPER: And a number of years later you came to Sydney.
MATTHEW QUINN: In 1999 I got the opportunity to come over to Sydney and off we go. I think we started to get itchy feet about four years before we moved and we probably didn’t have the courage to move.
One of the lessons that comes out of that is you have got to set your goals and if you need to take a risk to achieve those goals, take the risk, you know, don’t play it safe. You have got to say to yourself if you do take the risk and it goes wrong, what’s the worst that can happen. I was always a bit risk averse.
NARELLE HOOPER: What is the worst that can happen?
MATTHEW QUINN: You’re unemployed, I suppose. The worst that can happen is you make a mistake. One of the things that I have learnt over the years is if you do things it actually might work, rather than if you do things it is going to go bad. Probably the English in me, because the English always expect the worst.
NARELLE HOOPER: We have a bit of that in Australia too. One of the things they say is we talk about how you should be allowed to fail but we don’t like people to fail.
MATTHEW QUINN: We love people to fail, especially the chief executive who is paid a lot of money. Tall poppying in Australia is just as big as anywhere else in the world. People love people to fail. Even though they say it is terrible, they actually love it.
NARELLE HOOPER: So how do you find that middle ground where you are allowed to experiment and occasionally fail and do you bring some of that culture into your organisation, Matthew?
MATTHEW QUINN: I think it is what I call discipline and measure and it means that you have got to take calculated risk, but it doesn’t mean you have to be risk averse and it doesn’t mean you have to be a cowboy.
People confuse the two. Most of the entrepreneurs in the 1980s were just cowboys who were just given money to do it and a lot of people think they actually know what they are doing when they had no idea at all. A true entrepreneur is somebody who takes calculated risk and they might be some of the most intense, disciplined people that you would ever find.
NARELLE HOOPER: You were given the role of running Stockland, and it was a family owned company with a very strong heritage. How did you approach that and were there tenets that you laid down there that kind of formed a framework for the organisation these days?
MATTHEW QUINN: One of the good things that happened, and again I think a lot of organisations can learn from this, succession planning is critical to success. You can really make or break an organisation through the succession planning and this was an organisation where the founder of 1962 was still there in 1999, approaching 70, and if the board hadn’t tapped Ervin on the shoulder, he would have literally been carried out in a box, still with a cigarette in his mouth, but he would have been in a box. They had to say, “Look, time’s up”, which he found very hard to deal with but afterwards thanked them because he died four years later and he had four years with his grandkids and had a bit of life. Peter Daly was the managing director and became chairman and they realised they had to go outside to find a new chief executive. For some reason he tapped me on the shoulder.
With Peter, he was in Sydney and I was in Perth and he rang me up and said, “Are you interested in coming over and doing this job and we will have a succession, if you do a good job you might do my job”, and I thought why is he asking me this, he hardly knows me, but sometimes you have got to back people and he’s got incredibly good judgment as to where people’s capabilities are and one of the good things was that he had been there for 30 years and he knew that I had a totally different style of doing things than he had. He knew that the way that he had always done things wasn’t the way that it needed to be done in the future. It needed a change and he accepted that and was chairman for three or four years and would have looked on and realised that he would do things differently but that was OK.
It takes real courage to do that. For a managing director to go into a chairman role and endorse somebody running an organisation completely differently from how they have done it before. If you look at all the succession that has happened in the last few years and the ones that have gone well and not gone well, that is probably one of the best in my view because of the approach that he took.
NARELLE HOOPER: So would you describe your style?
MATTHEW QUINN: Firstly, our corporate value paths and mission vision actually mean something. The organisation lives and breathes from the people at the top, myself included. If the top of the organisation is bad, dishonest, lacking in integrity, the whole organisation will fail. So utmost honesty, utmost integrity, not just the letter of the law, the spirit as well, do the right thing and treat people the way that you want to be treated yourself. You know, just some simple basic ethics. I’m not a Christian but if you read the Ten Commandments a lot of the principles still exist and you have got to live by those principles.
NARELLE HOOPER: So when things are going exceptionally well and you are being lauded how do you know that you might be going down the wrong path or who is it that tells you hang on a minute, Matthew, that’s not the right decision
MATTHEW QUINN: You do have instinct but you need to surround yourself with people who will tell you.
NARELLE HOOPER: And will they?
MATTHEW QUINN: Absolutely they will. If you surround yourself with people who all they do is nod their head and tell you you’re a legend, you’ll fail. Also, I think, you need a very solid group of people at home, wife and kids, who will tell you to pull your head in.
That is very very important. And kids are very important because for them this whole thing – you are in the newspapers and you might be on the TV a bit – you know, people develop this kind of awe that you must be different, when you’re not. You still go home, sometimes make the kids’ dinner and put the bin out at night. I won that award a couple of years ago, the BRW thing that you are talking about, and when it came out, there was a huge photo of me on the front of BRW. My daughter, who was then 10, went, “ooooh”. You know, you’ve got to make sure that you don’t start to believe what Peter Daly calls believe your own bullshit and start to think that you are something you are not.
NARELLE HOOPER: And is that easy to do?
MATTHEW QUINN: If you’re surrounded with people who tell you that it is, then yeah, sure, but if you surround yourself with those people then you probably shouldn’t be doing the job in the first place, and a lot of the things that have unfolded in the last few months will purely be because there are people who are sitting in a room together, telling each other how good they are. One of the interesting things is Goldman Sachs is coming out of this mess quite unscathed and one of the things that will go down is, there is this young research analyst – this is how the folklore goes and there is some truth to it – at Goldman Sachs who did a piece about two years ago on the fact that this whole sub-prime thing was absolute garbage, an accident waiting to happen and did this report and sent it to somebody, they read it, sent it to somebody else and it worked its way right through to the top of the organisation. They did a lot of work, took it all seriously and they basically quit out of these toxic products that Warren Buffett was talking about and they are now coming out of this pretty unscathed. I reckon there’s a lot of organisations where they would have fired the guy for, questioning what they were doing.
NARELLE HOOPER: We’ll take some questions.
QUESTION: I saw an interview with a man from AIG (American Insurance Group) and they were asking him why this had happened and he said that the risk minimisation strategies that they had put in place over the years had been systematically dismantled by the management and he had lost his entire net worth. And it seemed like a really simple explanation but we talked about it today and planning for a worst case scenario is forgotten. Would you like to comment on that?
MATTHEW QUINN: People talk about risk management as if it is the secret stuff that you do that is box-ticking and compliance and form-filling. It is not. It is a part of the culture of the organisation.
I am digressing, a pet subject of mine is that people over-complicate things. We were starting to see in our organisation about three years ago that people were just over complicating things. I would get reports to approve expenditure that were 60 pages long, and we said we don’t need this information, right, do it in 10 pages, and next time it would come around and it would be in 10 pages plus 50 pages of appendices. It is quite interesting because one of the people at the time said, “Hey, we only need to do five pages now. We don’t need to do due diligence.” And I said, “Completely wrong. You still need to do all of the due diligence that you have done before. It is just that you don’t need to tell us all of these things about it.”
Risk management isn’t about ticking boxes, it’s about culture and about the attitude of the people who are doing it and whether they are really good at what they are do or whether they are slapdash and whether they will abuse the system, because if you don’t put the right checks and balances in place and have the right trust in people who work the system, then they can send you broke as well.
NARELLE HOOPER: So what do you lose sleep over as a CEO at the moment?
MATTHEW QUINN: Not a lot. I used to.
NARELLE HOOPER: When did that stop?
MATTHEW QUINN: About four years ago. I think you learn to take things less seriously than you did before, because if you take things less seriously you’ll actually do a better job. If you’re worrying about things and you’re losing sleep and waking up in the middle of the night, then you probably shouldn’t be doing it. If you’re that worried and you’re that stressed by it, then don’t do it. I’m not saying that you should be relaxed and three steps removed, I’m not, but you’ve got to remain objective about things as well and roll with the punches and take things in your stride. If you lose sleep and get stressed about things, if I was losing sleep, getting stressed, changing my work habits, my working hours, the way I talk to people, our organisation, people would say straight away, they would say, “Gee, if he’s doing that and he’s worried, then guess what, I’m going to lose sleep as well”.
NARELLE HOOPER: Bush telegraph.
MATTHEW QUINN: Absolutely.
NARELLE HOOPER: So do you have a feeling for what a balanced work life is?
MATTHEW QUINN: I think this whole work-life balance thing is a last-10-year thing, isn’t it. One of the things that interests me is that when I talk to people who I respect, who are probably 55-60 plus, men, and I say to them, “What have you learned? Any regrets”, the one regret that comes up time and time again is, “I wish I’d spent more time with the family and I say to them, “Well, what stopped you from doing that?” And I think their era was very much about testosterone. You know it was, unless you were working 14 hours a day you weren’t a real man.
NARELLE HOOPER: So what’s a real working day for you?
MATTHEW QUINN: I like to miss the traffic in the morning, so I would normally leave home about 7-7.15 and I get back by 7 o’clock at night. When the kids were younger I used to get back about 6-6.30. Now they’re older and they probably don’t care so it doesn’t matter so much. We like to get home by seven and have the family dinner if we can. They still grunt at you over dinner but at least we try.
You know, there’s a really big dichotomy out there – on one hand we want people to work and be really successful and on the other hand we want them to be good parents as well, and good parenting to me is about being there when they need you and you don’t know when that’s going to be. There’s a polarisation at the moment between the quality people – which is be there as much as you can – and the quantity people – which is I am not going to be there much but when I am I will buy them everything under the sun and take them to Disneyland – and that’s wrong to me, it is a quality thing. You know, you’ve got to be around.
It is like leadership, with your employees. People say to me what is the biggest attribute of a leader. The biggest attribute of a leader is time, because people need your time and if you don’t have that time as a precious commodity to be there when they need you, then you’re not doing your job. It’s the other way around from how people think it is.
When I go to employee engagements, the facilitator is there and the first thing they will say is, “Thanks, Matthew, for coming along. It’s a real privilege. We’re so lucky blah blah blah because we know you’re really busy” and I say, “It’s actually my job.” They think it is this secret world of the CEO where you do all of the secret stuff but they’re not sure what it is. I say to them, What do you think I should be doing instead? Talking to shareholders. Yeah, I’ll probably a bit of that this afternoon. That’s important yeah. Making decisions. Yeah, sure, I make a few decisions. They actually don’t know what you do but they think because you’re the CEO, you should be the busiest person in the place, on a plane, running around, doing busy stuff, when it is not. Your job is to have time, flexibility and be available for people.
AUDIENCE QUESTION: You mentioned that you don’t like surrounding yourself with yes people. What sort of strategy do you use to cast that down into the organisation to your next level and your next level so that they don’t surround themselves with yes people?
MATTHEW QUINN: I think it is just one of those cultural things where you have got to allow people to question and ask. I have hopefully a very good dialogue with the people who work for the people who work for me if you like, the reports of my direct reports and I would be able to pick straight away if they were just nodding like the old nodding donkey thing and just going with the flow. I think it just becomes part of the culture, that you don’t want people to be disruptive but you want people to put their hand up and stand up and be counted. I think it is just part of the culture of the organisation. If you set the tone that those are the rules, then those start to be the rules as well. You don’t have rules in place that you have got to put them through a screening process to make sure they are not a yes person.
NARELLE HOOPER: What about writedowns?
MATTHEW QUINN: We have had a few. We bought a business in the UK last year which we had to write some good will off. We bought in May 2007 and the market’s dropped quite a lot since then. Timing is everything and we got the timing wrong. But we’ll pick it up. We only made a small investment there, so we will pick it up as we go. I am quite confident of that. Why haven’t we had any big writedowns? I think generally speaking we bought well, we haven’t made a lot of mistakes and we haven’t done a lot of stupid stuff and again that comes down to being true to your own conviction and not following the herd.
NARELLE HOOPER: You said the ability to think three steps ahead was important. Think a couple of steps ahead now. When do you know or have you decided when you should be made redundant and it is time for you to find your replacement, because it is eight years now?
MATTHEW QUINN: Yes, it is a very interesting question that one and the main thing is you have got to know whether your use-by date is up, because if you don’t know and others do they will tell you and I don’t want that to ever happen to me. Look, I’ve done a bit of time over the last few years where my mind has gone wandering and that was unfair. You know, you’re just sort of missing in action for a while because you are not really focussed on it and you start to think about what you’re going to do next, not about the organisation, and that’s unfair. If you’re starting to think like that, then go and do something else.
I ask myself all the time where should the organisation go, do I want to go in the same direction. At the moment the answer is yes and certainly for the next 18 months; the next 18 months is when the real leaders are going to stand up and be counted. One of the things that I want to do is prove that I can manage in a downturn because I have never done it before,
NARELLE HOOPER: There is one more question and then we will have to wind up.
QUESTION: I just want to go back earlier in the conversation when you were getting hammered with the research analyst for being boring, how did you manage your board relationship and shareholder relationship through that period of time?
MATTHEW QUINN: Certainly with the analysts and some of the shareholders we were swimming against the tide. With the analysts definitely because you read their stuff and their stuff was no momentum, not enough deals, and you would say to them What do you mean by momentum, and they’d say, You’re not doing stuff. You’re not exciting. You’re not gearing. You’re not doing this. So you know what they’re saying. With the shareholders, they don’t really tell you, they just press the button and buy and sell. They’re very nice, they’re very polite people. There is a few who will actually say what they think but most of them they are just too polite. You have a lovely conversation for about 45 minutes, everything’s fine, how are the kids, press the flesh, leave and they will press the sell button, but they won’t tell you. That’s just the way they are.
With the board you just take people on the journey and you talk about it and you form a consensus as to what is the right thing to do and, you know, not everybody agrees at any point in time but you have a good robust discussion. And we have made a few mistakes along the way, but they’re small mistakes, they’re not big life-threatening ones. We haven’t bet the farm, even though we’d never do that. It’s the old, business is like the casino, never bet more than you can afford to lose and that’s what people have done in the last three years, they’ve bet more than they can afford to lose and they’ve now been cleaned up.
NARELLE HOOPER: Well, that’s a good time to wrap up. Thank you very much Matthew and to our audience for attending this evening.
MATTHEW QUINN: Thank you.