Boral CEO Mike Kane works hard at future-proofing himself
The one-time factory foreman has scaled back on the profanities but refuses to give up the emotion. The other secret to his success? The CEO of Boral spends more than half of his time strategising for the next 10 to 20 years, writes Kirsten Galliott.
How do you define good leadership?
I’ve been at this for 45 years and the longer I’m at it, the less convinced I am there’s any best definition. The biggest mistake leaders make is to try to pretend they’re perfect, that they’ve got all the answers. Nobody believes that. What you have to do [as a leader] is decide you’re not the centre of the universe and it’s not all about you. It’s a coaching role in wellrun organisations. For those that are in deep trouble, it’s command and control – you’ve got to get in and get things fixed fairly quickly. At Boral in 2012, there were a lot of things that needed to be fixed but you quickly have to get to a point where you’re standing on the sideline, coaching. You’re not a player.
So has your leadership style changed at Boral?
I haven’t changed a bit but the way I manage has. I came here in 2012 and orchestrated a 1000-person reduction in the Australian organisation, from the centre. I wiped out three-quarters of my management team. You’d have to say that was complete command and control. That’s what you must do when you have to turn the ship. But you can’t keep doing that. The fatal flaw with a lot of leaders is they see how that works and they think that’s the medicine for all problems.
Have you failed often in your career?
I’ll use the analogy of baseball. To be a world-class baseball player, 70 per cent of the time, when you go to the plate, you strike out. Thirty per cent of the time, you get a hit. In business, you don’t get to fail 70 per cent of the time but I’d argue that you’ll fail 30 per cent of the time. Big failure is tough to come back from; small failures are the things you need to learn from. You don’t learn a lot from continuous success.
What do you take the most pride in?
In the past 40-odd years, every company I’ve been in has had a worse safety performance when I arrived than when I left. It’s the most meaningful thing. It’s important that you provide employment for people; it’s important that you have a profitable company so people can take care of their families. I don’t discount that at all. But a lot of people can do that; not everybody can fix industrial safety issues.
You split your time between Sydney and Atlanta.
Sydney and the rest of the world. It’s two months here, two months back, two months here and then off to Asia. Actually, I try to stay out of Atlanta.
It’s the headquarters for the American business and I’ve got a CEO running that. If I’m there, people are going to walk by his office and into mine for the “better” answer. So I can’t do that to him; I can’t undermine him.
That comes down to self-awareness, doesn’t it?
Hierarchies are not bad; they’ve been with us forever. How you manage them is important.
But some CEOs are still caught up in the cult of the CEO.
Some of the worst examples I’ve seen are in Silicon Valley. The founder of a startup I was involved in told me in the first month, “You know, Mike, CEOs out here are rock stars.” I thought, “Really? They shouldn’t be.”
How much of your strategising is for longer-term plans?
Sixty per cent of what I do is long-term focus – 10 to 20 years. Forty per cent of the time, we’re reviewing operational results on a month-to-month basis but the most important decisions I’m making have to do with capital investments with a 30-year life span, such as the [$3.5 billion] acquisition of [American building products manufacturer] Headwaters. The benefit of that will come in the next couple of decades but the work has to be done now – and well.
Some leaders don’t concentrate on such long-term strategy.
If you listen to certain – not all – elements in the investment community, you’d think your entire purpose is to improve the share price in the near term only, even at the disadvantage of the long term. I’ve always seen my job as preparing for the future.
Is there work to be done educating shareholders?
There is. When we did the Headwaters deal [in 2016 and 2017], I had investors saying it didn’t fit their investment thesis. My answer to that was, “Well, that’s interesting but our strategy isn’t built on your investment thesis; it’s built on what is in the best interests of Boral in the long run. If you don’t like that, then you have a choice to make.”
You’re a straight shooter. Is that a help or a hindrance?
What’s my alternative? I grew up in the Bronx [New York City] in a culture where people say exactly what they think, perhaps too much. I try to tell people who work with me, “Argue with me!” It’s difficult for people to argue with the CEO, I understand that, but I want people to challenge me. I put people in roles because I respect them and I want their opinion.
What advice would you give to a new CEO?
Find a handful of advisers, inside and outside the company, whose judgement you trust so you can go to them in a crisis and say, “What do you think?” If you’re doing it by yourself in the closet somewhere, you’re going to confuse yourself and there’s a danger that you’ll believe your own headlines.
Are there gaps in your leadership?
The balance between strength and too much strength is the toughest thing to manage. You need to have a pretty tough eye to do this job, which means you can be very intimidating. Sometimes in this role, you need to be intimidating – not with the people who work for you but with outside audiences; sometimes investors, the media, unions, other third parties, government. We had a big stoush with the ACCC [Australian Competition and Consumer Commission] over the bricks business a few years ago and I had the head of the ACCC telling me that I mishandled the situation. I said, “Well, that’s your opinion but I don’t agree with you” [laughs].
I read that your father advised you to take an American civil service exam and become a firefighter or police officer.
I thought, “Nah, they’re not making a lot of money” [laughs]. I developed my education through work. My biggest transition was understanding how to deal with senior management. In my early years, I would sprinkle my language with a lot of expletives, on a consistent basis, and people would tell me, “Mike, you can’t talk like that!” I cleaned up the language but I never cleaned up the emotion. People need to believe you. Nobody wants to follow a cold fish and nobody wants to follow someone who looks uncertain. People have to believe you’re committed. At work they think, “Well, he might be a little crazy from time to time but he’s our guy and he appears to have my best interests at heart.” That’s an important conclusion I want people who work for me to have. What are you expecting out of people? To sacrifice themselves for you? They will. They will if they believe in you.