WEBVTT - Leading Through Uncertainty: Mike Henry's Final Lessons as BHP CEO 0:00:02.759 --> 0:00:13.760 Bloomberg Audio Studios, Podcasts, radio News. If you look back 0:00:13.760 --> 0:00:16.759 at the history of not just BHP, big companies in 0:00:16.760 --> 0:00:18.880 the sector, one of the lessons is that when a 0:00:18.920 --> 0:00:22.599 company gets walks into a corner where it has to 0:00:22.640 --> 0:00:25.159 pursue m and A, that leads to all sorts of 0:00:25.239 --> 0:00:28.680 untold problems. I know how bad things can get when 0:00:28.680 --> 0:00:31.200 people chase after something, or if you get worried that 0:00:31.520 --> 0:00:35.400 failing or being rejected on a transaction becomes a reputational issue. 0:00:35.600 --> 0:00:37.599 You end up in very deep water then and can 0:00:37.640 --> 0:00:40.159 cause yourself all sorts of problems. 0:00:42.720 --> 0:00:45.400 I'm Francis Laqua and this is leaders, the podcast that 0:00:45.520 --> 0:00:49.519 explores what drives the world's most influential people well. This 0:00:49.560 --> 0:00:53.720 week's guest is Mike Henry, the outgoing chief executive of PHP, 0:00:54.360 --> 0:00:57.840 the world's largest mining company. It's really a pivotal moment 0:00:57.880 --> 0:01:01.400 for the industry. Global demand for critical minerals is soaring 0:01:01.760 --> 0:01:04.880 thanks to the energy transition and the AI boom, and 0:01:05.000 --> 0:01:08.280 major producers like the HP are actually finding it challenging 0:01:08.319 --> 0:01:11.240 to keep up. Mike Henry has led the company through 0:01:11.280 --> 0:01:17.080 a particularly active and transformative period, spinning off its petroleum business, 0:01:17.400 --> 0:01:20.880 collapsing its duelistic structure and giving the green light to 0:01:20.959 --> 0:01:24.760 the vast Jansen potash project in Canada. So we get 0:01:24.800 --> 0:01:27.640 into all of those choices. In our conversation which we 0:01:27.720 --> 0:01:30.880 had back in January before he announced he was stepping down. 0:01:31.440 --> 0:01:33.640 We talk about leading a mining giant at such a 0:01:33.680 --> 0:01:37.800 consequential time, and what it's like when big acquisitions don't 0:01:37.800 --> 0:01:50.600 go your way, and how he's thought about succession. Mike Henry, 0:01:50.600 --> 0:01:52.240 thank you so much for speaking to Bloomberg. 0:01:52.480 --> 0:01:53.760 Thanks for Seine. It's great to be here. 0:01:53.800 --> 0:01:56.760 We're in a peculiar moment for the industry because so 0:01:57.360 --> 0:01:59.560 much is changing. Do you feel like you're in a 0:01:59.600 --> 0:02:00.240 different moment? 0:02:01.240 --> 0:02:03.880 Different but good Different. But I've spent my whole career 0:02:03.880 --> 0:02:06.800 in resources, and for most of that time, nobody really 0:02:06.840 --> 0:02:09.160 wanted to talk to miners. It was not seen as 0:02:09.200 --> 0:02:12.120 being an industry of today perhaps, But what we've seen 0:02:12.160 --> 0:02:14.680 over the past three or four years is this awakening 0:02:14.800 --> 0:02:17.000 to the importance of metals and minerals. You know, you've 0:02:17.000 --> 0:02:19.080 got policy makers now trying to figure out how do 0:02:19.080 --> 0:02:21.600 they go about securing critical mineral supply chain resilience. Is 0:02:21.600 --> 0:02:23.720 there going to be enough copper? How do they go 0:02:23.760 --> 0:02:27.040 about facilitating that, and so mining has gone from a 0:02:27.080 --> 0:02:29.840 back burner industry to now being front and center of 0:02:29.880 --> 0:02:32.359 some of the big conversations that are happening globally. 0:02:32.680 --> 0:02:35.040 How do you respond to being in this moment? Is 0:02:35.080 --> 0:02:37.960 it a lot of pressure? Do you feel responsibility? Or 0:02:38.000 --> 0:02:41.120 is there only with hindsight that you realize how crucial 0:02:41.360 --> 0:02:42.280 this period will be? 0:02:42.520 --> 0:02:45.320 No, no, no, So I and others definitely recognize how 0:02:45.320 --> 0:02:49.440 crucial this this period is. And to the extent that 0:02:49.480 --> 0:02:52.399 there's I feel pressure, it's well more than offset by 0:02:52.440 --> 0:02:55.080 the opportunity. If you look at copper, for example, copper 0:02:55.120 --> 0:02:57.080 demand is going to almost double over the next twenty 0:02:57.080 --> 0:02:59.320 five years because it's needed for the broader economy, it's 0:02:59.360 --> 0:03:02.440 needed for the energy transition, the AI revolution, and yet 0:03:02.480 --> 0:03:04.840 coppers becoming harder and harder to find it. People are 0:03:04.840 --> 0:03:07.000 now cottoning onto that, and they're saying, well, wow, if 0:03:07.000 --> 0:03:09.320 we don't do anything, we're going to see super high 0:03:09.320 --> 0:03:12.560 copper prices or shortages at a given times. And so 0:03:12.600 --> 0:03:15.200 the policymakers are now weighing in with industry to figure 0:03:15.200 --> 0:03:16.680 out how do we go about ensuring that that's not 0:03:16.720 --> 0:03:17.240 what happens. 0:03:17.280 --> 0:03:19.600 Can you tell me about a meeting where you felt 0:03:19.919 --> 0:03:21.280 all of that coming together. 0:03:21.760 --> 0:03:24.000 A fellow CEO and myself were called into the Oval 0:03:24.000 --> 0:03:26.960 Office to meet with the President and the Secretary of Interior, 0:03:27.000 --> 0:03:29.480 Secretary Burgham, because we have a specific copper project that 0:03:29.520 --> 0:03:31.600 we're trying to develop in the US. This project could 0:03:31.600 --> 0:03:33.880 supply twenty five percent of the US's corporate demand for 0:03:33.880 --> 0:03:36.440 decades to come. Having that level of attention on our sector, 0:03:36.440 --> 0:03:39.400 that level of support, what that symbolizes then for b 0:03:39.400 --> 0:03:43.760 other governments has been such a big difference from where 0:03:43.760 --> 0:03:47.160 we were a few years ago. Yes, it creates uncertainty 0:03:47.240 --> 0:03:50.480 pressures at times, but big picture, this is a net 0:03:50.480 --> 0:03:51.480 positive for the sector. 0:03:51.720 --> 0:03:54.360 Mike, tell me a little bit about how you transform BHP. 0:03:54.600 --> 0:03:56.680 First of all, I've been with PHP since two thousand 0:03:56.680 --> 0:03:59.040 and three, became coolready the beginning of twenty twenty, and 0:03:59.160 --> 0:04:01.680 within three months we were into the middle of COVID, 0:04:01.960 --> 0:04:03.920 And so you know you were asking earlier about whether 0:04:03.920 --> 0:04:06.920 I feel pressure. The pressure of today is nothing compared 0:04:06.920 --> 0:04:09.640 to the pressure of the big decisions that we all 0:04:09.680 --> 0:04:12.480 needed to take in the face of the uncertainties that 0:04:12.560 --> 0:04:15.640 COVID brought. But as the impact I and the team 0:04:15.920 --> 0:04:18.960 have had on the organization. Over the past six plus years, 0:04:19.160 --> 0:04:22.120 we've reshaped the BHP portfolio. So at the time we 0:04:22.160 --> 0:04:24.640 had about eighty percent of our EBIT DOT being generated 0:04:24.640 --> 0:04:29.000 by combination of oil and gas, thermal coal, cocing coal, 0:04:29.040 --> 0:04:31.400 and iron or so steel making raw materials in a 0:04:31.440 --> 0:04:34.239 world where over the long arc of time we should 0:04:34.240 --> 0:04:36.440 expect the world to decarbonize and we're going to see 0:04:36.480 --> 0:04:39.280 peak steel in China, beyond which we'll start to see 0:04:39.320 --> 0:04:41.480 the iron or market shrink. So we needed to make 0:04:41.480 --> 0:04:43.640 sure that we had a portfolio that was fit for 0:04:43.680 --> 0:04:46.120 the future. We've spun out our oil and gas division. 0:04:46.400 --> 0:04:48.520 We've have the size of our core portfolio now only 0:04:48.520 --> 0:04:49.920 focus on the best coals for steel making. 0:04:50.120 --> 0:04:50.719 Change the listing. 0:04:50.839 --> 0:04:52.760 We collapsed listening into one. We had a bit of 0:04:52.760 --> 0:04:54.960 a funny structure, was called a dual listed company. Two 0:04:55.279 --> 0:04:58.120 primary listenings to head offices and so on. Collapse that 0:04:58.120 --> 0:05:00.600 that was a big value on law for shareholders. And 0:05:00.640 --> 0:05:03.800 we've grown markedly in copper and products. We've grown copper 0:05:04.040 --> 0:05:05.760 by thirty percent over the past few years. Were the 0:05:05.760 --> 0:05:08.640 world's largest copper producer. In addition to that, we've improved 0:05:08.680 --> 0:05:10.560 operational excellence. We've gone from being a lagger in the 0:05:10.560 --> 0:05:13.600 sector to being best in class from an operational perspective. 0:05:13.720 --> 0:05:16.719 Johnson, right, I mean, did you feel the need to 0:05:16.800 --> 0:05:19.039 go at speed? Who you were listening to? Was it 0:05:19.080 --> 0:05:20.159 your gut or other people. 0:05:20.320 --> 0:05:22.640 I've learned actually to rely more on gut over time, 0:05:22.680 --> 0:05:24.680 but these were all very well thought through. You don't 0:05:24.720 --> 0:05:27.840 trigger at an investment decision the size of Jansen on 0:05:27.920 --> 0:05:28.960 god alone, and do. 0:05:28.960 --> 0:05:30.800 You feel the need to do it in one year. 0:05:30.960 --> 0:05:33.599 I'm often told that actually when you become chief executive, 0:05:33.680 --> 0:05:35.960 you have a short amount of time to make a 0:05:35.960 --> 0:05:38.680 big difference that people will accept, because then it gets lost. 0:05:38.920 --> 0:05:41.719 So I've never been one to coast in micro whatever 0:05:41.800 --> 0:05:44.000 role I've gone into, you have to bring energy to it. 0:05:44.040 --> 0:05:45.760 I also believe, though it's coming back to your point, 0:05:45.800 --> 0:05:49.320 that there's never a better time to drive change when 0:05:49.320 --> 0:05:50.840 everything's up in the air a little bit. I had 0:05:50.880 --> 0:05:52.800 a very clear view of what was going to help 0:05:52.880 --> 0:05:55.599 drive value for the company over the next twenty or 0:05:55.600 --> 0:05:58.320 thirty years. We were then able to trigger a series 0:05:58.360 --> 0:06:00.560 of distances. Actually on the same dayunce that we were 0:06:00.560 --> 0:06:03.400 collapsing the corporate structure, we were spinning out our oil 0:06:03.440 --> 0:06:05.480 and Gas division. We were selling down parts of our 0:06:05.480 --> 0:06:08.200 core portfolio, and we were investing in jans and the 0:06:08.240 --> 0:06:10.960 first phase alone, biggest ever capital project for PHPA. 0:06:11.040 --> 0:06:13.160 Right, a lot of shareholders could have pushed back against 0:06:13.200 --> 0:06:16.279 these individually, but by the fact that you bundled them, yes, 0:06:17.400 --> 0:06:20.560 everything was like okay. Was that a strategy to communicate 0:06:20.600 --> 0:06:21.440 at the same time. 0:06:21.520 --> 0:06:24.119 We knew all of the things that we wanted to do. 0:06:24.160 --> 0:06:27.039 We also believe that by being clear with the market, 0:06:27.040 --> 0:06:28.919 particularly around the spin out of oil and Gas and 0:06:28.960 --> 0:06:31.200 the investment in the potash that we could make it 0:06:31.320 --> 0:06:34.240 clear to our shareholders how we were thinking about the 0:06:34.240 --> 0:06:37.479 shaping of the portfolio and why one decision needed to 0:06:37.480 --> 0:06:39.560 be seen in tandem with the other decision. For sure, 0:06:39.640 --> 0:06:39.960 is that. 0:06:39.839 --> 0:06:41.719 How you get your nickname meticulous Mike. 0:06:43.839 --> 0:06:47.400 So sometimes your reputation outgrows you. You know, I am 0:06:47.520 --> 0:06:51.040 somebody who pays attention to detail, high sense of accountability, 0:06:51.120 --> 0:06:54.760 and I think maybe that's what sits behind the Moniker. 0:06:54.960 --> 0:06:57.160 Do you think when we talk about this new world order, 0:06:57.200 --> 0:06:59.039 is it being overstated or understated? 0:06:59.360 --> 0:07:03.839 I certainly don't think it's being understated. So things are 0:07:03.880 --> 0:07:08.840 definitely more uncertain and more volatile so it's worth pointing 0:07:08.880 --> 0:07:10.960 out that in terms of our sector, the decisions that 0:07:11.000 --> 0:07:14.840 we take these are ten twenty thirty year decisions, and 0:07:14.960 --> 0:07:19.360 over that time horizon, we know for sure that demand 0:07:19.360 --> 0:07:21.720 for some commodities is going to increase, and that then 0:07:21.760 --> 0:07:24.280 informs our selection about which commodities we want to be 0:07:24.280 --> 0:07:28.280 involved in. Now, how you operate in that environment, of course, 0:07:28.320 --> 0:07:30.760 that's informed by all the turmoil that we see in 0:07:30.760 --> 0:07:31.480 the world around us. 0:07:31.520 --> 0:07:33.880 Can you talk to me about how difficult that is 0:07:33.920 --> 0:07:35.960 to make decisions where you actually don't know where this 0:07:36.040 --> 0:07:37.200 new world order ends up. 0:07:37.520 --> 0:07:40.680 It's increased the need for us to be planning through scenarios. 0:07:40.680 --> 0:07:44.720 So rather than trying to predict a specific individual future 0:07:44.760 --> 0:07:49.080 outcome in twenty years time, we've continued to reinforce our 0:07:49.120 --> 0:07:52.440 ability to develop different scenarios. So we then test our 0:07:52.480 --> 0:07:55.200 decisions against and one of the things that will allow 0:07:55.280 --> 0:07:59.400 us to be successful is making decisions that are as 0:07:59.480 --> 0:08:02.240 resilient to possible under a range of different scenarios. It 0:08:02.440 --> 0:08:05.960 is an added complexity, you know, creates higher stakes in 0:08:06.040 --> 0:08:09.400 some instances to the decisions we take. But this is 0:08:09.440 --> 0:08:11.520 a world that we have, and as I said earlier, 0:08:11.520 --> 0:08:13.920 on a kind of net basis. This is a real 0:08:13.960 --> 0:08:15.400 opportunity for the sector. 0:08:15.960 --> 0:08:18.440 After the break, Mike Henry tells me why he has 0:08:18.480 --> 0:08:22.960 no regrets over walking away from BHP's highly publicized and 0:08:23.160 --> 0:08:33.560 ultimately failed acquisition bids for Anglo American. The mining industry 0:08:33.679 --> 0:08:37.080 is in a major consolidation phase, with many players pursuing 0:08:37.240 --> 0:08:40.600 M and A to beef up their metals portfolios. While 0:08:40.600 --> 0:08:44.480 BHP is no different, their success has been mixed. Mike 0:08:44.480 --> 0:08:48.320 Henry tried and failed twice to acquire Anglo American. Not 0:08:48.480 --> 0:08:51.360 only did they say no, the British mining company is 0:08:51.400 --> 0:08:55.680 teaming up with BHP rival Tech. With all this happening 0:08:55.720 --> 0:08:58.520 in the public arena, I wanted to know how Henry 0:08:58.600 --> 0:09:02.000 handled the bid when, whether he had any regrets, and 0:09:02.040 --> 0:09:06.040 how he stays focused in the face of rejection. You 0:09:06.120 --> 0:09:09.200 tried to buy Anglo American twice, We did yes, but failed. 0:09:09.200 --> 0:09:10.720 What did you learn from those failures? 0:09:11.440 --> 0:09:14.640 So why did we pursue Anglo American in the first place? 0:09:14.720 --> 0:09:17.000 Is because we like copper. We've grown in copper over 0:09:17.160 --> 0:09:20.560 by thirty percent. We've developed Fig four big internal copper 0:09:20.559 --> 0:09:23.720 growth options. But we're php we have the ability to 0:09:23.720 --> 0:09:26.440 do even more. We thought that there was a great 0:09:26.440 --> 0:09:29.040 opportunity to unlock value for both sets of shareholders through 0:09:29.080 --> 0:09:32.520 bringing the two companies together. It wasn't to be the 0:09:32.520 --> 0:09:35.200 first time around. Second time around, we were faced with 0:09:35.240 --> 0:09:37.160 the decision of, well, we, of course, for all the 0:09:37.200 --> 0:09:40.000 same reasons we engaged at the first time around. Do 0:09:40.040 --> 0:09:42.840 we reapproach see if there's any more interest now given 0:09:42.840 --> 0:09:45.400 that they had progressed some of their strategy, or do 0:09:45.440 --> 0:09:48.360 we hang back for fear of being told no again. 0:09:49.000 --> 0:09:51.160 I would back us any day of the week to 0:09:51.240 --> 0:09:54.040 do the bold thing, which is to reapproach, And in 0:09:54.080 --> 0:09:57.080 both times we showed discipline. I know how bad things 0:09:57.080 --> 0:10:00.880 can get when people chase after something money wise, money wise. 0:10:01.720 --> 0:10:03.600 So badly that you're prepared to buy. 0:10:03.400 --> 0:10:05.560 It anymore, or if you get worried that you know, 0:10:05.679 --> 0:10:09.560 failing or being rejected on a transaction becomes a reputational issue. 0:10:09.720 --> 0:10:12.440 You end up in very deep water then and can 0:10:12.480 --> 0:10:15.959 cause yourself all sorts of problems. So we went into 0:10:15.960 --> 0:10:18.760 both approaches with a clear sense of we will only 0:10:18.880 --> 0:10:21.439 do something that we believe creates value for BHP shaholders, 0:10:21.480 --> 0:10:24.480 and if we can't say see that, then we'll step away. 0:10:24.800 --> 0:10:27.360 How did it feel like at the time you approach. 0:10:27.080 --> 0:10:31.520 Those things with a sense of optimism, a sense of pressure, 0:10:32.120 --> 0:10:35.800 but coming away from it, you know, momentary disappointment. But 0:10:36.120 --> 0:10:39.640 alongside that the confidence that we've done the right thing 0:10:39.679 --> 0:10:42.120 by way of shareholders and confident that we've made the 0:10:42.160 --> 0:10:42.680 right decision. 0:10:43.000 --> 0:10:44.959 How did you manage through it? So you still have 0:10:45.400 --> 0:10:47.760 staff that you need to speak to, morale that you 0:10:47.800 --> 0:10:49.440 need to boost or at least keep steady. 0:10:49.800 --> 0:10:52.680 We've got such a professional team and so it's perhaps 0:10:52.679 --> 0:10:56.080 a little bit less disruptive inside then people might think 0:10:55.880 --> 0:10:59.960 looking outside. In people are very clear that they like 0:11:00.080 --> 0:11:02.640 the boldness. So the fact that you know BHP is 0:11:02.640 --> 0:11:05.240 willing to back itself and go after opportunities when it 0:11:05.280 --> 0:11:08.600 spots them, that's motivating for people. They also like the 0:11:08.640 --> 0:11:12.640 fact that we are super disciplined and we're confident enough 0:11:12.679 --> 0:11:15.400 in ourselves and our existing strategy and our internal growth 0:11:15.440 --> 0:11:18.720 options to back away if we don't think that we 0:11:18.760 --> 0:11:20.840 can create value for shareholders. 0:11:20.960 --> 0:11:22.400 How much time do you have to spend on that? 0:11:22.520 --> 0:11:23.760 So is it all consuming? No? 0:11:23.880 --> 0:11:26.839 Unfortunately, when you run a business like PHP have to 0:11:26.880 --> 0:11:28.520 be able to walk in chew gum at the same time. 0:11:28.920 --> 0:11:34.559 Now I do have a team that is very high performing. 0:11:34.600 --> 0:11:36.959 These are all big leaders in their own right. As CEO, 0:11:37.320 --> 0:11:39.320 I don't need to spend a large proportion of my 0:11:39.400 --> 0:11:42.120 time getting in and solving day to day business problems. 0:11:42.120 --> 0:11:44.560 The business is running so smoothly, and when problems do arise, 0:11:44.920 --> 0:11:47.160 the teams on it on their own. I continue to 0:11:47.240 --> 0:11:51.000 need to tend to other relationships outside of that particular focus. 0:11:51.080 --> 0:11:52.839 So it increases in the amount of time that you 0:11:52.920 --> 0:11:55.360 have to take, but it can't become all consuming for 0:11:55.400 --> 0:11:56.160 the CEO. 0:11:56.360 --> 0:11:58.640 After the first bid that didn't go through, did you 0:11:58.679 --> 0:12:00.839 already know that you'd go after during a second time 0:12:00.920 --> 0:12:02.880 if the opportunity was there, not at all. 0:12:03.160 --> 0:12:06.680 In fact, the board and I have been very very 0:12:06.679 --> 0:12:10.360 deliberate about crafting a BHP strategy and that would never 0:12:10.400 --> 0:12:12.439 be dependent on M and d A. If you look back 0:12:12.480 --> 0:12:15.439 at the history of not just BHP, big companies in 0:12:15.480 --> 0:12:18.000 the sector, one of the lessons is that when a 0:12:18.080 --> 0:12:21.560 company gets boxed into a corner where it has to 0:12:21.600 --> 0:12:25.640 pursue M and A, that that leads to all sorts 0:12:25.679 --> 0:12:28.960 of untold problems. And so we've been very deliberate about saying, 0:12:29.000 --> 0:12:30.720 first and foremost we have to be able to get 0:12:30.760 --> 0:12:32.560 more out of the resources that we have, and that 0:12:32.559 --> 0:12:35.439 then enables us to be quite discretionary about whether we 0:12:35.480 --> 0:12:37.040 want to pursue a opportunity. So when we back away 0:12:37.080 --> 0:12:40.319 the first time, we said our prime focus is this. 0:12:40.720 --> 0:12:43.640 When we approach, spotted a further opportunity, where the question 0:12:43.720 --> 0:12:46.679 arose for whether we should we should approach again, it 0:12:46.720 --> 0:12:49.640 was the same attitude. We don't have to but because 0:12:49.679 --> 0:12:51.959 we believe there's value to be created for shareholder's almost 0:12:51.960 --> 0:12:54.560 incumbent on us to make an approach. If there's not 0:12:54.600 --> 0:12:57.360 a meeting of minds, then fine. We know we've got 0:12:57.360 --> 0:12:59.360 a great strategy in our own right, great growth ahead 0:12:59.360 --> 0:13:01.800 of us in the right commodities, so we'll stay focused 0:13:01.840 --> 0:13:02.040 on that. 0:13:02.240 --> 0:13:04.040 Do you think there was a way of getting it? 0:13:04.080 --> 0:13:06.720 You didn't want the South African operations right of Anglo, 0:13:06.760 --> 0:13:08.800 but had you spent more time in reassuring them, or 0:13:08.920 --> 0:13:12.559 we're spending more time with the Australian shareholders, maybe something 0:13:12.600 --> 0:13:15.439 could have moved more in your direction. Is that fair criticism? 0:13:15.600 --> 0:13:19.040 We will never know. I'm very comfortable with the way 0:13:19.080 --> 0:13:22.439 that we attempted the original structure. If we had structured 0:13:22.440 --> 0:13:25.160 it differently, would that have made a difference maybe, but 0:13:25.240 --> 0:13:28.160 that would have run up against the main objective here, 0:13:28.240 --> 0:13:30.640 which is to create value for PHP shareholders. So I 0:13:30.720 --> 0:13:33.800 don't have any regrets over having approached the way we 0:13:33.840 --> 0:13:37.360 approached the first time around or the second time around. 0:13:37.480 --> 0:13:40.400 What's the right way of approaching some of these transformational deals. 0:13:40.400 --> 0:13:43.640 You have to have like a clear strategy, and I 0:13:43.640 --> 0:13:44.880 don't know how you would describe it. 0:13:45.040 --> 0:13:47.640 You have to be very clear, clear thinking. And if 0:13:47.679 --> 0:13:51.520 you think about the Anglo deal, it was wholly consistent 0:13:52.040 --> 0:13:54.360 with the strategy that we laid out as a company, 0:13:54.559 --> 0:13:57.000 the commodity that we wanted to grow in, how we 0:13:57.040 --> 0:13:59.760 thought about M and AA, the sort of assets that 0:13:59.760 --> 0:14:02.400 we were willing to acquire. Where you get into trouble 0:14:02.559 --> 0:14:04.480 is if you're not clear on what your strategy is, 0:14:04.600 --> 0:14:06.600 or you start chasing after a deal to get a 0:14:06.640 --> 0:14:10.040 deal done, or because you don't have alternatives, So you. 0:14:10.000 --> 0:14:11.959 Almost have to set that strategy in the as soon 0:14:12.000 --> 0:14:13.440 as you take over. 0:14:13.720 --> 0:14:16.240 You don't want to be setting strategy in the middle 0:14:16.320 --> 0:14:18.080 of a transaction, that's for sure. 0:14:18.160 --> 0:14:20.760 Assum chief executives change strategy, Why do you think that 0:14:20.840 --> 0:14:21.600 is well? 0:14:21.600 --> 0:14:24.080 When a business isn't performing well, or when the world 0:14:24.200 --> 0:14:27.560 is changing in a way that demands a rethinking of 0:14:27.800 --> 0:14:30.400 of strategy. Of course, then as CEO should get in 0:14:30.440 --> 0:14:33.960 and rethink it. But with ours, you know, we remain 0:14:34.080 --> 0:14:36.480 confident in the strategy that we have and in the 0:14:36.480 --> 0:14:37.600 commodities that we've chosen. 0:14:37.760 --> 0:14:39.880 That's bold, isn't it. It's kind of like. 0:14:41.480 --> 0:14:43.320 You have to you have to be bold in these roles. 0:14:43.400 --> 0:14:48.000 It's kind of an informed boldness. Our sector is such 0:14:48.200 --> 0:14:52.920 a dynamic, important sector that if you're not bold, that's 0:14:52.960 --> 0:14:56.080 where companies go off course or they fail over time. 0:14:57.240 --> 0:14:59.680 And so when I stepped into role, I told myself 0:14:59.680 --> 0:15:01.880 I need to be bold. But I also like the 0:15:01.880 --> 0:15:05.120 fact that it's no regrets, because you could procrastinate about 0:15:05.160 --> 0:15:07.280 things that you could have done differently or you should 0:15:07.280 --> 0:15:09.640 have done. So we face this was a key point 0:15:09.640 --> 0:15:12.400 that we faced in the second approach to Tanglo. You know, 0:15:12.480 --> 0:15:15.400 some people would say, well, do you really want that 0:15:15.480 --> 0:15:17.760 to be seen in public and again the second time, 0:15:17.880 --> 0:15:20.320 and of course you don't want it. But when faced 0:15:20.360 --> 0:15:22.160 with that choice of well do we take that on 0:15:23.040 --> 0:15:25.160 but do what we believe is right by shareholders by 0:15:25.240 --> 0:15:28.560 reapproaching and have that level of boldness and confidence or 0:15:28.600 --> 0:15:30.760 do we stay away from it for fear of looking 0:15:30.840 --> 0:15:33.240 like another failure We back ourselves. 0:15:33.320 --> 0:15:37.680 Industry rivals or industry players are now actually coming together. 0:15:38.080 --> 0:15:40.320 If you were to be Number two mining company in 0:15:40.320 --> 0:15:42.520 the world instead number one, does that make a difference. 0:15:42.600 --> 0:15:45.080 It makes no difference whatsoever. I don't worry at all 0:15:45.080 --> 0:15:48.680 about losing the bragging rights of being the biggest minor 0:15:48.680 --> 0:15:52.680 by market capitalization, both because I don't it doesn't actually 0:15:52.800 --> 0:15:55.040 lead to greater shareholder value in my view. But secondly, 0:15:55.080 --> 0:15:57.160 I know that the minute that we get into a 0:15:57.200 --> 0:15:59.720 headspace that says we have to chase something just to 0:15:59.720 --> 0:16:03.360 be No. Number One, that's where things become much much riskier. 0:16:03.400 --> 0:16:05.440 It's never a good idea to pursue a transaction because 0:16:05.480 --> 0:16:07.000 somebody else is pursuing a transaction. 0:16:09.320 --> 0:16:11.960 When we come back, I ask Mike Henry about stepping 0:16:11.960 --> 0:16:15.120 away from BHP and what a chief executive should do 0:16:15.240 --> 0:16:22.040 to guarantee a successful handover. When I spoke to Mike 0:16:22.040 --> 0:16:25.600 Henry in January, there had been rumors circling that after 0:16:25.640 --> 0:16:29.640 six years he was preparing to step down. Since speaking together, 0:16:29.920 --> 0:16:32.600 those rumors proved to be true, and he plans to 0:16:32.600 --> 0:16:35.280 hand over the reins on July the first, knowing that 0:16:35.320 --> 0:16:37.640 his departure could be soon, I wanted to hear more 0:16:37.680 --> 0:16:40.800 about how he handled the day today while at the 0:16:40.840 --> 0:16:44.760 same time preparing for succession. Would you hope your successor 0:16:44.800 --> 0:16:46.680 can learn from the last six years. 0:16:47.000 --> 0:16:49.760 My successor is going to have the opportunity to learn 0:16:49.800 --> 0:16:53.000 from all of the work, both of my time and role, 0:16:53.120 --> 0:16:55.920 as well as from the long arc of BHP's history. 0:16:56.080 --> 0:16:58.440 I imagine it's difficult right thinking about succession, and one 0:16:58.520 --> 0:17:01.080 of the most important roles for you it is to 0:17:01.120 --> 0:17:03.640 make sure that you think about succession, but also it's 0:17:03.640 --> 0:17:05.800 difficult to figure out the time to go. 0:17:06.200 --> 0:17:09.720 Interestingly, day one, literally day one, as in when the 0:17:09.760 --> 0:17:11.880 board made the decision to appoint me into the CEO role, 0:17:12.200 --> 0:17:14.840 my chair at the time sat down with me and said, 0:17:15.400 --> 0:17:18.439 succession starts now, and it was made super clear to 0:17:18.480 --> 0:17:21.879 me that one of my biggest accountabilities was developing that 0:17:21.920 --> 0:17:24.800 next generation of leaders. So that's always been front and 0:17:24.840 --> 0:17:28.080 center for me. It's hard, No, of course, it's hard 0:17:28.280 --> 0:17:31.360 in particular if you become complacent and take your eye 0:17:31.359 --> 0:17:34.800 off the ball and you don't continue to invest in people, 0:17:34.840 --> 0:17:38.880 in giving them different roles, expanding roles and if you're 0:17:38.880 --> 0:17:41.240 not providing them with the right support. And you know, 0:17:41.280 --> 0:17:43.000 the other part of your questions for Francine was well, 0:17:43.040 --> 0:17:44.879 what's the right time to go if you have the 0:17:45.000 --> 0:17:47.960 luxury of making that decision on your own, because there's 0:17:47.960 --> 0:17:50.920 plenty of CEOs of course, don't make the decision. It's 0:17:50.920 --> 0:17:52.920 always hard, you know. I'm sure when that day comes, 0:17:53.040 --> 0:17:56.640 it'll be a combination of personal perspective but also what 0:17:56.680 --> 0:17:59.120 we believe is right for the business. I love BHP. 0:17:59.400 --> 0:18:02.880 I know that there will come a time where fresh energy, 0:18:03.480 --> 0:18:06.679 perspective and so on will also be a positive for 0:18:06.720 --> 0:18:09.879 the organization. I'm a big believer in renewal and that 0:18:09.920 --> 0:18:12.960 applies to companies just like it does ourselves. 0:18:13.040 --> 0:18:16.160 When you talk to other chief executives, does succession come up? 0:18:16.359 --> 0:18:19.240 So it comes up more regularly than some people would think, 0:18:19.400 --> 0:18:21.960 you know, in terms of in some cases it's been 0:18:21.960 --> 0:18:25.439 their own succession, so as their leaving role. I always 0:18:25.440 --> 0:18:27.359 like to get their reflections on things as you have 0:18:27.480 --> 0:18:30.560 new CEOs taking up the role. So, for example, when 0:18:30.640 --> 0:18:33.880 I first was appointed CEO, one of the very gratifying 0:18:34.080 --> 0:18:36.639 things that I hadn't recognized was the case was a 0:18:36.640 --> 0:18:39.479 lot of other CEOs reached out and provided a bit 0:18:39.520 --> 0:18:42.119 of coaching or said welcome to the club, and you know, 0:18:42.119 --> 0:18:44.760 we've all been through this experience. If there's anything we 0:18:44.359 --> 0:18:46.520 can we can help you with. And I try to 0:18:46.560 --> 0:18:49.919 do that with others as as well. I've had discussions 0:18:49.920 --> 0:18:53.000 on succession, sometimes prompted buy me, sometimes prompted by them, 0:18:53.240 --> 0:18:56.399 about the topic or the concept of succession. How we 0:18:56.440 --> 0:18:59.840 go about building capability and PHP with CEOs from men 0:19:00.000 --> 0:19:01.600 any other industries. 0:19:01.800 --> 0:19:04.359 What's the guiding thought on leadership? If somebody were to 0:19:04.600 --> 0:19:06.720 be appointed a chief executive today and you call them, 0:19:06.720 --> 0:19:07.400 what do you tell them? 0:19:07.560 --> 0:19:08.960 It would of course be around some of the things 0:19:09.040 --> 0:19:12.040 we discussed about, being clear on strategy, aligned with board, 0:19:13.040 --> 0:19:16.399 keeping your strategy consistent, don't get blown off course, But 0:19:16.560 --> 0:19:18.720