The standard advice for eager young executives is to focus at least a couple of career moves ahead. But Wesfarmers CEO Richard Goyder says the best advice he ever received was exactly the opposite.
“Early on in my career, Phil Arnall, the Tubemakers western region general manager, said ‘Richard you need to focus more on your current job than the job three moves ahead’,” says Goyder, adding that he’s always been ambitious.
These days, of course, there’s little need for Goyder to climb the corporate ladder. In July, he celebrated 10 years at the helm of Wesfarmers, the conglomerate that houses some of Australia’s best-known retailers, including Coles, Bunnings, Target, Kmart, Liquorland and Officeworks.
Overseeing a behemoth that earned revenue of more than $62 billion and net profit of $2.4 billion last financial year, Goyder regularly appears on lists of Australia’s most powerful CEOs and last year chaired the B20 meeting in Australia of world business leaders.
Not bad for a self-described “farmboy from Tambellup”, a sheep and wheat region 300 kilometres south of Perth. In fact, Goyder says his farm upbringing has without doubt helped his career.
“It teaches you resilience and a bit of self help and you certainly live through different cycles,” he says. It also taught him that he didn’t want to be a farmer.
“As a young boy I thought my father was the best farmer in the world but he and mum still went through financial hardship because of things like commodity prices and climate issues. So early on I decided I would do something else.”
He’d always been interested in the commercial side of running the farm, suggesting myriad changes to his parents including selling up and putting the money in the bank, where the interest would pay more than the farm earnings. So it made sense that the “something else” began with a commerce degree from the University of WA.
Then came what he describes as his biggest career break. Not, as one might expect, the $19 billion acquisition of Coles in 2007, which remains Australia’s largest corporate takeover and turned Wesfarmers into a retailing powerhouse. Goyder says his most important career step was his first post-uni job at industrial conglomerate Tubemakers of Australia, which he chose over job offers from a bank and an audit firm.
From there he joined Wesfarmers in 1993, rising to finance director nine years later and CEO in 2005, taking over from the highly regarded Michael Chaney (who returns to Wesfarmers as chairman on 12 November). Goyder is just the seventh CEO since the company was established as a WA farmers’ co-operative in 1914.
Goyder agrees that the Coles deal has been a highlight of his decade in charge, but there are others. The turnarounds at Coles, Kmart and Officeworks he describes as “really pleasing”. He’s less pleased about Wesfarmers’ present focus on improving Target because the problems were largely self-inflicted post-acquisition.
“Target was a strong performer,” he says. “It’s recovering now after a poor period but it makes one reflect on what could have been done better.”
The Wesfarmers’ formula for a successful turnaround is pretty simple, Goyder says. “We can bring two great assets to bear, good people and our balance sheet. It’s about getting really good talent and supporting it and not being too overly influenced by short-term market decisions. You have to do it properly and make decisions for the long term.”
As for lowlights, Goyder nominates legal action by the Australian Competition and Consumer Commission (ACCC) against Coles for bullying suppliers, which was settled last December on terms including a $10 million fine. “The ACCC unconscionable conduct action against us was a blot against our reputation and anything that hits your reputation is a lowlight,” Goyder says.
Even more galling for a CEO who says his personal philosophy is to do the right thing. “This sounds like schoolboy stuff but I do try and do the right thing, in my dealings with people, family and in business,” he says.
Another lowlight was the global financial crisis, which hit about a year after the Coles acquisition, pushing the Wesfarmers’ shareprice down to $14 on concerns about its debt levels (it’s now around $41). “I remember when Lehman Brothers collapsed [in September 2008] and I stared out the window and thought, ‘Oh my goodness this is really big’,” Goyder recalls. “We got punished because of nearer term debt needing to be refinanced.”
After weathering these challenges and more over the last 10 years, Goyder says he’s learned plenty of lessons that make him a better leader. An example? Wesfarmers’ acquisition of industrial and medical gas company Coregas in 2007 didn’t work out as planned. “That was a lesson about not being challenging enough on the downside scenario,” Goyder says.
He’s also learned that sometimes a leader’s job is to keep out of an issue. “Sometimes people come to you with stuff they think is urgent, but it might be best for me to go for a run or a walk or sleep on it. You can overreact to some things.”
Goyder says he’s always strived to be his own person, including making his family his top priority – although Wesfarmers comes a close second. Ask him about his biggest achievement and he doesn’t hesitate: “A strong marriage and four great kids [aged 17-27]”. Soon after Goyder became CEO of Wesfarmers, his youngest child, William, developed Type 1 diabetes and Goyder now sits on the council of the Juvenile Diabetes Research Foundation.
He’s also comfortable to speak up on various social issues such as racism and marriage equality. After AFL footballer Adam Goodes withdrew from a game in July because of crowd booing, Goyder tweeted his support, describing Goodes as a brilliant footballer and a champion Australian. “I felt personally compelled – I couldn’t do much but I thought, I’ll just do a tweet,” says Goyder, adding that he witnessed aboriginal disadvantage first-hand growing up. (Wesfarmers has 2000 indigenous employees and is aiming for 5000 by 2019.)
In August, Goyder joined about 500 other business leaders in signing a letter supporting gay marriage. “As CEO of Wesfarmers, the largest private sector employer in the country [with 205,000 employees], it was right for us to sign up and right for me to put my name to it and a lot of people in this organisation support it,” he says. “But I occasionally cop a whack around the ear for it.”
Richard Goyder’s perfect weekend
Read: A biography, usually about a leader or a hero, something with a human interest angle. I’m presently reading Mark Donaldson’s book [The Crossroad, about Donaldson’s courage as an Australian soldier in Afghanistan, for which he was awarded the Victoria Cross]
Eat: A BBQ. I just love chops and sausages.
Drink: A glass of Western Australian cabernet.
Sport: Watching a good game of AFL football. [He is an AFL Commissioner and was on the board of Fremantle for five years. As a “no-regrets” person, the only one he’ll admit to is the Dockers losing the 2013 Grand Final.] And I really enjoy golf, although I only get to play about once a year.
Activity: Walking and talking with my wife. And one of the wonderful things Wesfarmers has brought me is an appreciation and experience of the arts. Although in the early days I went to the opera and my wife said the only thing that would save my career was that my snoring was not as loud as the chairman’s.
Get away: We’ve got a place down on the south coast at Augusta [320 kilometres south of Perth] and I love getting there.
Indulgence: Reading the Saturday morning papers for as long as I want.