Barely a year since Sir John Key — he was knighted in August — quit as New Zealand prime minister at the peak of his game, he’s carving out a new career in the boardroom. He has joined the board of Air New Zealand and was recently appointed chair of the ANZ (New Zealand) board.
For more than eight years, Key pursued an ambitious reform agenda and won three elections, a record that would be the envy of just about any leader in the world today. What was Key’s secret? He offers five leadership lessons, equally applicable in the party room and the boardroom.
1. Stay focused through the ‘white noise’
Social media, the 24/7 news cycle and winning the day in politics mean governments are increasingly dealing with “white noise” as they try to achieve their political agendas. You have to be able to hammer home your core objectives while dealing with the daily distractions and competing pressures, Key says.
“Like anything in life, first define what success looks like. There’s a lot of white noise, with the media focused on issues that are, individually, relevant on the day. If you say, ‘This is what I think is going to be important over a reasonable period of time’, then you have to be working on those issues.”
This can be hard to achieve in an age when the long-term objectives of business run counter to short-term election cycles and consumer demands. But the boardroom must have the capacity to seek out and act upon opportunity, he says.
“It’s absolutely critical. If politicians work on a 24-hour news cycle, then so do businesses. They can be disrupted or gain massive opportunity quickly. The board has to have a sense of that.
2. People matter
Key also thinks the business sector has to be more in tune with the sentiment of its customers. In Australia, he says, “the way banks are perceived by their customers is that they’re not terribly honourable businesses. Now, that may be factually incorrect and unfair, but it’s what they think. The way we treat our customers [means] more than obeying the law, it’s about being perceived as good public citizens.”
3. Get comfortable with change
Change has been a constant theme in Key’s professional life — across banking, politics and business — and his advice is that it’s better to get comfortable with change now. “If you don’t do it yourself, then someone is going to do it for you and it’s going to be much more bruising.”
Key believes the board not only has a duty to represent the shareholders, ensure all regulatory responsibilities are met and that management is held to account, but also to test the opportunities with the executive teams.
“I’ve asked questions that, frankly, are pretty basic. But they make everyone [think about] why we do something a particular way or if we could do it a bit differently. If you don’t kick the tyres in that world, and in a world of activist shareholders, then things can change very quickly.”
4. Leave something in the tank
After winning three elections and riding high for a possible fourth term, Key announced his decision to step aside in December 2016. He says knowing when to go is an important sense to have — in politics and in business.
According to Key, political leaders tend to hang on a little too long and the same is true of directors. “If you want to leave at the top of your game, then you have to leave something in the tank,” he says. “I didn’t leave because I was exhausted from the role or couldn’t carry on. Realistically, after a decade at the top, I probably wasn’t the right person to lead the next five years and I thought that my deputy prime minister [Bill English] was.”
5. Bring through new talent
Creating a pipeline of talent for the future is an important consideration. While English stepped into the leadership role after the PM’s resignation, Key points to the vacuum created in the left of NZ politics when formidable former PM Helen Clark departed almost a decade ago, along with her finance minister, Michael Cullen.
“I think that’s true of boards,” says Key. “If you don’t have new people coming through, the board risks being out of touch and the minute a problem comes along, they look flat-footed. I don’t think that’s healthy.”
“It isn’t just about a defensive position, it’s about an offensive position as well. The constant renewal of the board challenges the company to think about its future and to test that direction. It’s always going to more dramatic when you change the CEO than when you change the chair, but they go hand in hand.”
The Rt Hon Sir John Key will be a keynote speaker at the 2018 Australian Governance Summit, talking on how government and business can co-operate to support long-term decision making.
Visit the Australian Governance Summit website for more information or to register.