BHP's bosses, by Argus

The year 2010 will see Don Argus step down as chairman of BHP Billiton, ending two decades at the top of Australian business – first as CEO of National Australia Bank and then at the top of Australia's largest company.

In a remarkable address to Leadership Victoria Argus contrasts the CEOs at BHP since he became chairman in 2000 and in the process he sets out a road map for all those who aspire to be a chief executive and, even more importantly, provides insights for all those who lead corporations or organisations.

A vast number of Australian chief executives fail to meet many of the success points that Argus found in his CEOs. When he has left BHP Argus might consider completing the picture by setting out the weaknesses of each of the BHP CEOs – and they all had weaknesses as well as strengths. Here is a snapshot of what he says about each BHP CEO, and I have added my comments.

Paul Anderson: Anderson was a " listener” and after being brought in from outside to redirect BHP he quickly created a common purpose for the employee.

"He encouraged outcome thinking by requesting the employees to advise him what was wrong with the enterprise, but also what was required to fix the perceived problems”. To Anderson "the link between deep listening, dialogue and higher productivity from outcome thinking was very clear”.

Argus adds: ”Most of us do not listen well. We get too immersed with the pace of the world around us and are preoccupied with where we are going. We spend too much time thinking about how to respond to, or one-up, the person talking to us”.

From my point of view Anderson was the best communicator of all the BHP CEO's. I was doing TV interviews at the time and after most big announcements he loved to sit down with me and explain to shareholders what he was doing with BHP. Most CEO's confine their communication to institutions.

Brian Gilbertson: All Argus says is that "the Board and Paul Anderson's successor, parted company through irreconcilable differences”. I can add that Gilbertson got the job as part of the merger with Billiton and so the very detailed due diligence that normally goes with a CEO appointment was not carried out. Gilbertson planned to substantially expand BHP and base it outside Australia. The board had a different view.

Chip Goodyear (who replaced Gilberston): Goodyear was "untried and young, and some questioned his experience to lead a large complex company that was only just settling down after the merger between BHP and Billiton.

"Chip did not lack intellect or financial skills. He realised that he had to quickly develop a trusting relationship with his people”.

Argus says that being trusting is "the ability to believe in others” and being trustworthy is "being worthy of others believing in you”

"It is the leader's job to make sure both elements are present throughout the organisation. Chip pursued this principle extremely well”, Argus says.

He lists other characteristics of Goodyear:

"He was genuine – it was important for people to touch and feel him as a real person.

"He was reliable – his word, whether spoken or written, was credible.

"He was dependable – he made good on his promises whether declared or implied.

"He was predictable – being consistent makes it safe for people to be vulnerable and work together.

"There is no doubt in my mind that in a complex and chaotic world a leader who is consistent and predictable helps the people who work for him or her feel secure. Since they know the ground is not going to shift under their feet, they are open to new ideas. They are willing to take risks”, Argus says.

What Argus does not mention about Goodyear is the family challenges a young person faces running a global organisation. All those characteristics that Argus mentioned also applied to his loyalty to his family and in the end this was a factor in him stepping down.

Marius Kloppers: Argus says, ”Prior to the appointment of Marius Kloppers we had four candidates and even had time to test the profile of the board's preferred candidate with the outside market.

"What a baptism of fire he (Kloppers) has endured. The global financial crisis, the various iterations of our proposed partnership with Rio Tinto and he has succeeded where many have failed in devolving authority and accountability to the business units in the BHP Billiton group.

"Marius quickly realised that many organisations smother the potential of their employees under layer upon layer of control and bureaucracy. As a result the human assets are painfully under-utilised, not only in a business but in non-profit organisations and governments.

"Marius has devolved authority to his workforce, with accountability, he communicates his objective and plans with simple messages and clear goals. He has created a fast flexible organisation, he shares power, trusts people's competence and judgement, and has created leaders at all levels of the organisation – people understand personal accountability”.

I was with Marius when there had been just been a fatality at a BHP site and he was genuinely upset by it. Marius is also a young leader but his different leadership style plus modern communications have enabled him to overcome some of the problems that affected Chip.

There is no simple CEO formula but if you combine the elements that Argus highlights among the BHP CEO's and avoid the Gilbertson pitfall you will have close to the perfect CEO.