Fahour and Stanhope pull their sausages.
While Australia post sails downstream, with staggeringly bad reviews from all angles, about all issues - Fahour and Stanhope are tugging away at the mutual stupidity BBQ.
http://www.theaustralian.com.au/business/companies/australia-posts-ahmed-fahour-john-stanhope-get-chemistry-right/news-story/
Australia Post’s Ahmed Fahour, John Stanhope get chemistry right
Damon Kitney
Almost seven years into his tenure at the helm of Australia Post, Ahmed Fahour clearly is not going anywhere — and that is music to the ears of chairman John Stanhope.
“I don’t need this job. I want this job,” Fahour says with pride.
“One of the major reasons why I stay in this role is because of this relationship.”
He is talking about the past two years he has worked with Stanhope, the former career Telstra chief financial officer who began his working life at the Postmaster General’s Department in 1967 and took over as Australia Post chairman in November 2014.
It is rare for the chief executive and chairman of a big company to share a stage together. So when Fahour and Stanhope did so recently at a Trans-Tasman Business Circle luncheon in Melbourne, it made for compelling viewing.
They come from different worlds: one is a suave, self-assured (critics say cocky), super-connected former banker; the other is a straight-shooting career numbers man with a dry sense of humour and a poker face to match it.
Yet their partnership is one of the reasons behind the financial turnaround of the government enterprise, which last year reported pre-tax profit of $69.4 million after a bumper $314.4m profit in its parcels division offset a $138.2m loss in letters operations.
The letters loss was a big improvement on the red ink in 2015 that totalled $207.5m after the federal government last year approved the postal operator’s plan to restructure the division, with two-tiered delivery times and higher stamp charges.
Before that, Fahour faced loud calls for his head last year when Australia Post delivered its first annual loss in three decades. His pay has also come under fire from politicians and unions. It increased to almost $4.8m last year, up from $2.1m a year earlier when he did not take a bonus.
Stanhope says his chemistry with Fahour goes back to a three-hour meeting between them at the end of 2014 that was all about “sorting ourselves out”.
“It was about understanding each other, to understand right where we come from, our backgrounds, why we are who we are, why we do things perhaps differently from each other, but understanding each other’s style, character and upbringing.
It was so important to understand each other and how we react to each other. Because we are different. We are quite different,” he says.
Fahour says the key is that their relationship is not just a transactional one about business.
“We love our footy ... we love sports, we have a lot of mutual friends. So it is being able to make it really real — because the job is so hard — and to know that you can openly and honestly talk about whatever is on your mind and sit there and really have someone who has the best interests of doing one thing — getting the best outcome for the organisation — and then having your interests at heart. It allows you to stay sane as a CEO.
“If he was not a very nice person, I promise you I would have quit by now.”
Fahour says he and his chairman both have a “terrible attitude to people who politicise, who want to jockey or make things up. We both have a violent reaction to that. While we are different people, we have the same attitudes to how work should be done, how people should treat each other.”
Stanhope is careful to ensure Fahour has room to move. While he encourages Australia Post’s board to make suggestions and offer ideas, there is a line they cannot cross. “You just can’t have directors going into the organisation all over the place asking questions. So we don’t have directors climbing over the operations.
The management team has to do their work,” he says, noting all directors must contact Fahour and his management team via the company secretary.
And while Fahour supports the helicopter, non-emotional view of directors in the business, he emphasises “boards are there to govern, management are there to lead the operations”.
He notes the total serious interaction most non-executive directors have with any big business in two years is 20 days a year, so 40 at most.
“Imagine you are running a company and someone you hired a month ago comes into your office and starts telling you what to do after being with the company for 30 days? All I’m saying is, you need to get to know the company a bit better before you start spouting these ideas,” he says.
Fahour is a non-executive director of Raphael Geminder-backed packaging firm Pro-Pac. “We have to be careful you (as a non-executive) understand how much knowledge you have and what your role is ... You have to separate governance from running the business.”
Stanhope is also clear there is a line he draws with Fahour. While he says they have a good relationship, they maintain “chairman and CEO objectivity”.
“I have seen places where chairs and CEOs get too close and something goes terribly wrong and they both disappear off the map. You have to continue to have that objectivity and I think we do. We have debates. We have different views about things — we will have that discussion, one of us will say let’s go home and we will sleep on this, we will come back next day and talk through the logic of both points of view and reach a compromise position.”
Given their respective experiences in public companies — Stanhope at Telstra, Fahour at National Australia Bank — do they find it easier to work in an unlisted public company such as Australia Post?
Speaking after the luncheon, both point out the firm’s books are inspected rigorously by bureaucrats each quarter, that they provide forecasts to the government that must be met and that Fahour regularly fronts Senate estimates hearings. And while they no longer answer to a share price, as Fahour says: “It is just one indicator of what happens in a company”.
“Having worked in public companies beforehand, I don’t feel any less accountable in the short term than I did anywhere else — other than the share price,” he says.
“I certainly believe being a private company we are able to have a more balanced conversation about the long term and not just the value of the company. A wider conversation about the ecosystem in which we operate.”
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