1 00:00:04,019 --> 00:00:06,870 Adam Lang: Welcome to the Fear and Greed Daily Interview. I'm Adam 2 00:00:06,870 --> 00:00:09,659 Adam Lang: Lang. We talk to a lot of business leaders on 3 00:00:09,660 --> 00:00:12,900 Adam Lang: this podcast. Leading a modern company is not an easy 4 00:00:12,900 --> 00:00:16,950 Adam Lang: job. For instance, there's a greater focus on environmental, social 5 00:00:16,950 --> 00:00:19,890 Adam Lang: and governance factors than ever before. Mostly it's known as 6 00:00:19,920 --> 00:00:24,210 Adam Lang: ESG, and for some companies, this requires a significant shift 7 00:00:24,210 --> 00:00:27,630 Adam Lang: in thinking. Then there's the challenge associated with a business 8 00:00:27,630 --> 00:00:30,180 Adam Lang: as it grows, that changes to a company culture through 9 00:00:30,180 --> 00:00:34,199 Adam Lang: acquisition, or just scaling up. Dee Fitzgerald is the executive 10 00:00:34,200 --> 00:00:38,580 Adam Lang: director at Russell Reynolds Associates, an organization known for leadership 11 00:00:38,580 --> 00:00:43,170 Adam Lang: advisory and executive search, but also assisting companies undergoing a 12 00:00:43,170 --> 00:00:46,410 Adam Lang: merger or acquisition. Dee, welcome to Fear and Greed. 13 00:00:47,190 --> 00:00:48,780 Dee Fitzgerald: Thank you, Adam. Lovely to be here. 14 00:00:49,470 --> 00:00:53,460 Adam Lang: Let's start with environmental, social and governance issues, better known 15 00:00:53,460 --> 00:00:56,730 Adam Lang: as ESG. Do you see many leaders failing to keep 16 00:00:56,730 --> 00:00:59,370 Adam Lang: up with the shift towards ESG issues? 17 00:01:00,480 --> 00:01:03,450 Dee Fitzgerald: Well we've certainly seen in our global leader monitor this 18 00:01:03,450 --> 00:01:08,250 Dee Fitzgerald: year, Adam, is that ESG issues feature very heavily as 19 00:01:08,250 --> 00:01:11,250 Dee Fitzgerald: a key risk amongst leaders in Australia. 20 00:01:12,090 --> 00:01:16,110 Adam Lang: So directly in your business at Russell Reynolds Associates, how 21 00:01:16,110 --> 00:01:18,510 Adam Lang: does this form part of your leadership recruitment? 22 00:01:19,170 --> 00:01:24,090 Dee Fitzgerald: Increasingly, it's becoming an important part of the leadership requirements. 23 00:01:25,290 --> 00:01:29,009 Dee Fitzgerald: So when you look at leaders who have a sustainable 24 00:01:29,010 --> 00:01:31,680 Dee Fitzgerald: mindset, you are looking for the sort of leader who 25 00:01:31,709 --> 00:01:35,459 Dee Fitzgerald: is able to look systemically at what's required for the 26 00:01:35,459 --> 00:01:38,310 Dee Fitzgerald: future, who's got that long range vision, and who's got 27 00:01:38,310 --> 00:01:43,770 Dee Fitzgerald: a much more inclusive approach to stakeholders including their communities, 28 00:01:43,860 --> 00:01:45,150 Dee Fitzgerald: government, et cetera. 29 00:01:46,680 --> 00:01:50,040 Adam Lang: So sustainability seems to me to underpin all of those 30 00:01:50,040 --> 00:01:54,720 Adam Lang: environmental, social and governance issues. Are you finding that executive 31 00:01:54,720 --> 00:01:58,320 Adam Lang: teams are more aware than boards because they're on the 32 00:01:58,320 --> 00:02:00,960 Adam Lang: frontline or on the ground? Or do you think between 33 00:02:00,960 --> 00:02:04,470 Adam Lang: executive teams and boards, their mindset, their consciousness is basically 34 00:02:04,470 --> 00:02:05,490 Adam Lang: on par with each other? 35 00:02:06,780 --> 00:02:08,940 Dee Fitzgerald: Adam, I think they're on par with each other. They're 36 00:02:08,940 --> 00:02:12,630 Dee Fitzgerald: both thinking about sustainability as an important part of future 37 00:02:12,630 --> 00:02:16,770 Dee Fitzgerald: proofing the business. And we've seen that recently as well 38 00:02:16,770 --> 00:02:21,900 Dee Fitzgerald: with the emphasis on energy and climate change. And certainly 39 00:02:21,900 --> 00:02:25,350 Dee Fitzgerald: one of the key issues that is seen as extremely 40 00:02:25,350 --> 00:02:29,790 Dee Fitzgerald: important amongst Australian leaders this year, so it's certainly top 41 00:02:29,790 --> 00:02:32,459 Dee Fitzgerald: of mind for both boards and exec teams. 42 00:02:33,270 --> 00:02:35,820 Adam Lang: Well, that's obviously good because they need to be aligned. 43 00:02:35,820 --> 00:02:38,790 Adam Lang: There's a lot of work to get done. Do ESG 44 00:02:38,790 --> 00:02:42,270 Adam Lang: factors ever take hold in a company at a grassroots 45 00:02:42,270 --> 00:02:44,610 Adam Lang: level? So not just the executive and board, but at 46 00:02:44,610 --> 00:02:47,880 Adam Lang: a grassroots levels before it reaches the leadership? So we 47 00:02:47,880 --> 00:02:51,930 Adam Lang: always talk about things filtering down from the top, but 48 00:02:51,930 --> 00:02:54,120 Adam Lang: is it the case that sometimes it can go the 49 00:02:54,120 --> 00:02:54,750 Adam Lang: other way around? 50 00:02:55,620 --> 00:03:00,570 Dee Fitzgerald: Absolutely. Leaders need to set the tone from the top around ESG, 51 00:03:00,780 --> 00:03:03,630 Dee Fitzgerald: but the lived experience of people on the ground is 52 00:03:04,169 --> 00:03:10,200 Dee Fitzgerald: extremely important. And we know that certainly next generation leaders 53 00:03:10,200 --> 00:03:13,529 Dee Fitzgerald: are looking for organizations that have a much stronger sense 54 00:03:13,530 --> 00:03:18,960 Dee Fitzgerald: of purpose and are much more inclusive. And that's reflected 55 00:03:19,320 --> 00:03:23,730 Dee Fitzgerald: as well within the communities and the consumers that organizations 56 00:03:23,760 --> 00:03:27,060 Dee Fitzgerald: people want to see, that ESG is important. They want 57 00:03:27,060 --> 00:03:31,230 Dee Fitzgerald: to see their leaders living the values around ESG. And 58 00:03:31,290 --> 00:03:34,470 Dee Fitzgerald: if that's not their lived experience of the organization, we 59 00:03:34,470 --> 00:03:37,230 Dee Fitzgerald: know particularly with NextGen leaders that they're much likely to 60 00:03:37,230 --> 00:03:37,980 Dee Fitzgerald: go elsewhere. 61 00:03:38,970 --> 00:03:42,690 Adam Lang: Right, so given then that what you are seeing is at the 62 00:03:42,690 --> 00:03:45,390 Adam Lang: grassroots level at executive and board level, are you seeing 63 00:03:45,390 --> 00:03:49,350 Adam Lang: the pace of change with ESG requirements speeding up? 64 00:03:49,920 --> 00:03:54,480 Dee Fitzgerald: Certainly has over the past few years. And we see 65 00:03:54,480 --> 00:03:59,310 Dee Fitzgerald: that having a sustainable mindset is critical for leaders in 66 00:03:59,310 --> 00:04:02,970 Dee Fitzgerald: the future. Leaders need to think differently. We know the 67 00:04:02,970 --> 00:04:08,370 Dee Fitzgerald: requirements for leadership have changed. And in safeguarding the future, 68 00:04:08,670 --> 00:04:12,630 Dee Fitzgerald: those companies that are thinking about sustainability are the ones 69 00:04:12,630 --> 00:04:15,600 Dee Fitzgerald: who are most likely to survive. 70 00:04:16,380 --> 00:04:19,710 Adam Lang: That's really interesting. And in terms of measurement, how people 71 00:04:19,710 --> 00:04:22,979 Adam Lang: measure the requirements for their company on environmental, social, and 72 00:04:22,980 --> 00:04:24,930 Adam Lang: governance, are you seeing that change, too? 73 00:04:25,890 --> 00:04:30,720 Dee Fitzgerald: Certainly through the surveys that organizations hold, you see it 74 00:04:30,720 --> 00:04:34,229 Dee Fitzgerald: featuring as a much more important factor. But also in 75 00:04:34,230 --> 00:04:40,979 Dee Fitzgerald: relation to the UN guidelines and people following those as 76 00:04:40,980 --> 00:04:43,110 Dee Fitzgerald: part of their kind of governance processes. 77 00:04:43,440 --> 00:04:45,539 Adam Lang: Stay with me Dee. We'll be back in a minute. 78 00:04:51,480 --> 00:04:54,659 Adam Lang: My guest this morning is Dee Fitzgerald, Executive Director at 79 00:04:54,660 --> 00:04:59,400 Adam Lang: Russell Reynolds Associates. So I mentioned earlier, the growing pains 80 00:04:59,400 --> 00:05:01,859 Adam Lang: a company might experience as it gets bigger. And so 81 00:05:01,860 --> 00:05:04,770 Adam Lang: to what extent does a company's culture need to be 82 00:05:04,770 --> 00:05:07,950 Adam Lang: reviewed as it goes, for example, a startup, a back 83 00:05:07,950 --> 00:05:11,010 Adam Lang: room operation, a garage, or whatever, then a handful of 84 00:05:11,010 --> 00:05:14,160 Adam Lang: people to even having an office full of colleagues or 85 00:05:14,400 --> 00:05:17,700 Adam Lang: even businesses setting up in other markets and countries? 86 00:05:18,330 --> 00:05:22,860 Dee Fitzgerald: Yeah, absolutely. And as the business grows, culture tends to 87 00:05:22,950 --> 00:05:28,049 Dee Fitzgerald: become diluted and it's harder for leaders to really create the 88 00:05:28,050 --> 00:05:30,630 Dee Fitzgerald: sort of culture they were able to in the early 89 00:05:30,630 --> 00:05:33,750 Dee Fitzgerald: days. And we know that building a culture of innovation, 90 00:05:33,750 --> 00:05:39,930 Dee Fitzgerald: inclusion and agility is the best formula for success. And 91 00:05:40,080 --> 00:05:44,460 Dee Fitzgerald: once the business starts to get bigger, it's harder to 92 00:05:44,460 --> 00:05:47,580 Dee Fitzgerald: keep that sense of agility, that sense of inclusion, that 93 00:05:47,670 --> 00:05:51,779 Dee Fitzgerald: innovation going. So what do you need to do as 94 00:05:51,779 --> 00:05:54,690 Dee Fitzgerald: a leader, is to be really clear about what it 95 00:05:54,690 --> 00:05:58,560 Dee Fitzgerald: takes to create a successful culture and start to think 96 00:05:58,560 --> 00:06:00,960 Dee Fitzgerald: about what are the attributes that we really want to 97 00:06:00,960 --> 00:06:05,940 Dee Fitzgerald: preserve as the business gets bigger? And what does that 98 00:06:05,940 --> 00:06:09,900 Dee Fitzgerald: mean in terms of what's distinctive about our culture and 99 00:06:10,110 --> 00:06:13,620 Dee Fitzgerald: how well do we understand that culture? And in what way 100 00:06:13,620 --> 00:06:17,400 Dee Fitzgerald: is it getting out of alignment because of expansion? And 101 00:06:17,610 --> 00:06:20,910 Dee Fitzgerald: how do we, as leaders in a team, need to 102 00:06:20,910 --> 00:06:24,360 Dee Fitzgerald: change to build the right culture as the business grows? 103 00:06:24,360 --> 00:06:28,920 Dee Fitzgerald: So really, it's a process of self- reflection both individually 104 00:06:28,920 --> 00:06:31,979 Dee Fitzgerald: as leaders and as a team. It's an opportunity to 105 00:06:31,980 --> 00:06:35,400 Dee Fitzgerald: really pinpoint where the problems might be. As you expand, 106 00:06:35,400 --> 00:06:38,279 Dee Fitzgerald: move into new geographies, et cetera, what you can tend 107 00:06:38,279 --> 00:06:41,550 Dee Fitzgerald: to find is that you have a number of subcultures, 108 00:06:41,820 --> 00:06:44,130 Dee Fitzgerald: and that that can seriously get in the way of 109 00:06:44,190 --> 00:06:47,310 Dee Fitzgerald: creating the sort of culture that you want in the 110 00:06:47,310 --> 00:06:49,620 Dee Fitzgerald: future. So being able to pinpoint where there might be 111 00:06:49,620 --> 00:06:53,820 Dee Fitzgerald: particular problems, whether it's within an area of function, geography 112 00:06:54,060 --> 00:06:57,240 Dee Fitzgerald: early on and take action is really critical. 113 00:06:57,540 --> 00:07:01,380 Adam Lang: That's so interesting. So I think what that speaks to 114 00:07:01,380 --> 00:07:04,859 Adam Lang: is having to have a system of targets and discussion 115 00:07:04,920 --> 00:07:10,290 Adam Lang: articulating environmental, social, and governance, but also continuous review so 116 00:07:10,290 --> 00:07:12,900 Adam Lang: that you keep involving people in it and how you're 117 00:07:12,900 --> 00:07:14,700 Adam Lang: going to execute it. Is that right? 118 00:07:15,630 --> 00:07:18,780 Dee Fitzgerald: Absolutely, and what we do know is that standard surveys 119 00:07:18,780 --> 00:07:23,400 Dee Fitzgerald: tend to paint an overly rosy picture of culture, strengths, 120 00:07:23,910 --> 00:07:27,510 Dee Fitzgerald: and risks. They really tend to tap into how people 121 00:07:27,510 --> 00:07:31,290 Dee Fitzgerald: are feeling at any point in time. And as a 122 00:07:31,320 --> 00:07:33,150 Dee Fitzgerald: result what you find is you miss some of the 123 00:07:33,150 --> 00:07:37,620 Dee Fitzgerald: early warning signals. And when things go wrong, it's typically 124 00:07:38,490 --> 00:07:41,010 Dee Fitzgerald: been a buildup over a period of time. And if 125 00:07:42,360 --> 00:07:46,380 Dee Fitzgerald: you haven't got a real sense of what's actually happening, 126 00:07:46,950 --> 00:07:49,890 Dee Fitzgerald: if you haven't got that sort of rigor and accuracy 127 00:07:49,890 --> 00:07:52,740 Dee Fitzgerald: around the data you collect, it can be really challenging 128 00:07:52,740 --> 00:07:56,730 Dee Fitzgerald: to pinpoint where those problem areas or those hotspots might be. 129 00:07:57,390 --> 00:08:00,810 Adam Lang: So I imagine without sort of divulging any names or 130 00:08:00,810 --> 00:08:05,340 Adam Lang: particular situations, where have you seen this work really badly? 131 00:08:05,340 --> 00:08:08,790 Adam Lang: Because that can often expose the why, the stick in why we 132 00:08:08,790 --> 00:08:10,800 Adam Lang: need to do things. And where have you seen it 133 00:08:10,800 --> 00:08:14,430 Adam Lang: happen really well, the aspiration of how we can be better? 134 00:08:15,210 --> 00:08:17,940 Dee Fitzgerald: Yeah. Well, when you look at culture change, it's not 135 00:08:17,940 --> 00:08:21,060 Dee Fitzgerald: a quick fix. It's something that sort of takes probably 136 00:08:21,060 --> 00:08:24,750 Dee Fitzgerald: about five or so years to create, so it's not 137 00:08:24,750 --> 00:08:27,390 Dee Fitzgerald: a once and done. It's something you need to work 138 00:08:27,390 --> 00:08:33,090 Dee Fitzgerald: hard at. And the first thing is creating the conditions 139 00:08:33,120 --> 00:08:37,740 Dee Fitzgerald: for people to actually really respond honestly and share how 140 00:08:37,740 --> 00:08:42,179 Dee Fitzgerald: they're feeling about the organization's culture. And we know there's 141 00:08:42,179 --> 00:08:46,740 Dee Fitzgerald: often a disconnect between the tone that leaders are setting from 142 00:08:46,740 --> 00:08:50,010 Dee Fitzgerald: the top and the lived experiences of people on the 143 00:08:50,010 --> 00:08:53,760 Dee Fitzgerald: ground. And what you really want to try and create 144 00:08:53,760 --> 00:08:58,980 Dee Fitzgerald: is an alignment between the two. So really getting to 145 00:08:59,040 --> 00:09:06,570 Dee Fitzgerald: unpack where the issues are, particularly around things like safety, 146 00:09:06,600 --> 00:09:12,690 Dee Fitzgerald: ethical behavior, commitment to diversity, all of those things that 147 00:09:12,960 --> 00:09:17,699 Dee Fitzgerald: organizations are trying to focus on to create an environment 148 00:09:17,700 --> 00:09:21,030 Dee Fitzgerald: where people feel happy to just speak up. We know 149 00:09:21,030 --> 00:09:25,740 Dee Fitzgerald: in response to surveys, that people tend to respond in 150 00:09:25,740 --> 00:09:29,100 Dee Fitzgerald: a way that they feel will please their bosses and 151 00:09:29,100 --> 00:09:32,610 Dee Fitzgerald: often the bosses' bonuses, et cetera, are linked to the 152 00:09:32,610 --> 00:09:36,090 Dee Fitzgerald: results of service, so it's really hard to get some 153 00:09:36,240 --> 00:09:40,770 Dee Fitzgerald: honest truths from the surveys that people conduct year on year. 154 00:09:41,130 --> 00:09:44,819 Adam Lang: And your work at Russell Reynolds is obviously specialist in 155 00:09:44,820 --> 00:09:47,940 Adam Lang: this. And what do you see happen during or after 156 00:09:48,030 --> 00:09:51,630 Adam Lang: an acquisition? What impact can that have on a company's culture? 157 00:09:52,380 --> 00:09:55,469 Dee Fitzgerald: Well, you often find that it's the last thing on 158 00:09:55,470 --> 00:09:59,610 Dee Fitzgerald: people's minds and you see a clash of cultures. And 159 00:09:59,670 --> 00:10:03,059 Dee Fitzgerald: it's something that continues for a period of time. You 160 00:10:03,059 --> 00:10:07,980 Dee Fitzgerald: often hear people many years later associate themselves with the 161 00:10:07,980 --> 00:10:13,020 Dee Fitzgerald: organization they've come from. So it really needs to be a 162 00:10:13,200 --> 00:10:17,550 Dee Fitzgerald: very proactive approach, starting with the leaders at the top 163 00:10:17,550 --> 00:10:21,270 Dee Fitzgerald: and working on what's the leadership tone we want to 164 00:10:21,270 --> 00:10:24,329 Dee Fitzgerald: set for the new organization? What do we want to 165 00:10:24,330 --> 00:10:28,800 Dee Fitzgerald: keep in terms of the attributes from each of the 166 00:10:28,800 --> 00:10:33,660 Dee Fitzgerald: organizations? Have we got the right capability to be able to 167 00:10:33,660 --> 00:10:37,530 Dee Fitzgerald: do that? So looking at leadership capability and culture hand 168 00:10:37,530 --> 00:10:38,520 Dee Fitzgerald: in glove. 169 00:10:39,240 --> 00:10:42,150 Adam Lang: And making those part of your processes ongoing, right? Because 170 00:10:42,150 --> 00:10:44,940 Adam Lang: basically this is good work. You're trying to become more 171 00:10:44,940 --> 00:10:47,699 Adam Lang: sustainable all the time to keep the company healthy. So 172 00:10:47,700 --> 00:10:49,650 Adam Lang: I imagine it just, as you said earlier, it has 173 00:10:49,650 --> 00:10:51,330 Adam Lang: to be part of your ongoing process. 174 00:10:51,420 --> 00:10:54,510 Dee Fitzgerald: Yeah. Yeah. Well in M and A, we do a lot 175 00:10:54,510 --> 00:10:56,940 Dee Fitzgerald: of due diligence around the business, but we do very 176 00:10:56,940 --> 00:11:00,599 Dee Fitzgerald: little due diligence around the people and the culture and 177 00:11:00,600 --> 00:11:05,130 Dee Fitzgerald: being really thoughtful and deliberate around what sort of capabilities 178 00:11:05,130 --> 00:11:08,069 Dee Fitzgerald: and what sort of culture the new organization is going 179 00:11:08,070 --> 00:11:11,429 Dee Fitzgerald: to need, and then working towards that aim towards that 180 00:11:11,429 --> 00:11:15,090 Dee Fitzgerald: goal is really important, both in terms of the selection 181 00:11:15,480 --> 00:11:20,370 Dee Fitzgerald: of the new leaders to run the combined organization and 182 00:11:20,370 --> 00:11:23,670 Dee Fitzgerald: the cultural tone that group of leaders set from the top. 183 00:11:24,330 --> 00:11:28,050 Adam Lang: Dee, are you finding at Russell Reynolds Associates that environmental, 184 00:11:28,050 --> 00:11:30,450 Adam Lang: social and governance work, this work we're talking about now, 185 00:11:30,450 --> 00:11:32,700 Adam Lang: has that been an expanding part of your business? 186 00:11:33,150 --> 00:11:35,640 Dee Fitzgerald: It has been an expanding part of our business, and 187 00:11:35,640 --> 00:11:40,530 Dee Fitzgerald: we've seen it expand in two different ways where organizations 188 00:11:40,920 --> 00:11:44,940 Dee Fitzgerald: are looking for an individual who can take the lead 189 00:11:45,270 --> 00:11:48,780 Dee Fitzgerald: in that domain, someone who brings in that expertise, who 190 00:11:48,780 --> 00:11:52,410 Dee Fitzgerald: operates at a really senior level in a Chief Sustainability 191 00:11:52,410 --> 00:11:56,610 Dee Fitzgerald: Officer capacity and works hand in glove with the CEO 192 00:11:56,610 --> 00:12:00,330 Dee Fitzgerald: and the board in driving that strategy. We've also seen 193 00:12:00,360 --> 00:12:05,880 Dee Fitzgerald: it more broadly as organizations seek to support all of 194 00:12:05,880 --> 00:12:09,120 Dee Fitzgerald: their leaders to build a more sustainable mindset. And that's 195 00:12:09,120 --> 00:12:11,939 Dee Fitzgerald: where it really becomes part and parcel of the cultural 196 00:12:11,940 --> 00:12:13,500 Dee Fitzgerald: fabric of the organization. 197 00:12:14,429 --> 00:12:16,890 Adam Lang: Dee, thank you very much for talking to Fear and Greed. 198 00:12:17,460 --> 00:12:18,270 Dee Fitzgerald: You're very welcome. 199 00:12:18,840 --> 00:12:23,010 Adam Lang: That was Dee Fitzgerald, Executive Director at Russell Reynolds Associates. 200 00:12:23,309 --> 00:12:25,829 Adam Lang: This is the Fear and Greed Daily Interview. Remember, you 201 00:12:25,830 --> 00:12:29,699 Adam Lang: should get professional advice before making any investment decisions. And 202 00:12:29,700 --> 00:12:32,340 Adam Lang: join us every morning for the full episode of Fear 203 00:12:32,340 --> 00:12:36,270 Adam Lang: and Greed, Australia's most popular business podcast. I'm Adam Lang. 204 00:12:36,270 --> 00:12:36,959 Adam Lang: Enjoy your day.