Mackenzie to test EQ and IQ on BHP bottom line
BHP Billiton's incoming chief, Andrew Mackenzie, may have been anointed to run the company only a matter of hours before, but he has been careful to make all the right moves, from calling his employer an "iconic company" through to talking up his new home, Melbourne.
He is good with people and has a softer side to him than outgoing chief executive Marius Kloppers.
English-born, Scottish-reared Mackenzie described BHP as one of the world's greatest companies in his initial comments on Wednesday, carefully ticking the right boxes for the local media.
Mackenzie grew up in Glasgow, but his wife hails from Edinburgh, which made him well used to the rivalry between Sydney and Melbourne, he said, as he prepares to move to Melbourne.
For BHP shareholders, the key will be his ability to expand the company after the failures of his predecessor. Rival Rio Tinto blew billions with its disastrous $US27 billion ($26 billion) purchase of Alcan Aluminium, a takeover that only last month claimed the scalp of its chief executive, Tom Albanese, who was replaced by the grandfatherly Sam Walsh.
At BHP, it was not a disastrous takeover, but rather a failure to land any of the deals that it launched - bids for Rio and Potash Corp of Canada - or to consummate the planned iron ore joint venture with Rio, which some say cost Kloppers his job. But the contrast between Kloppers and Mackenzie couldn't be sharper.
Aside from Mackenzie's intellect, the Scotsman has a strong "emotional quotient" (EQ) which meant he was good at dealing with people, one person close to the transition said.
"Compared to Marius, whose IQ is sky high but his EQ is not, Andrew has a much higher EQ. He is very good with people. He has got a softer side to him than Marius has. Really, these days you want in business someone who has got a good IQ and a good EQ, so they are good with people, they communicate well ... and people relate to them."
In public, Mackenzie comes across as a reserved and earnest member of BHP's team. He holds a PhD in chemistry and his academic research produced findings still in use by academics and oil explorers.
Mackenzie spent 22 years at BP before joining Rio as the head of its industrial minerals division in 2004. He was persuaded by Kloppers to join BHP five years ago. Married with two daughters, he speaks five languages.
He may have gained a good grounding in working at the senior ranks at BP, but it was at Rio that he made his mark, putting him on the radar at rival BHP.
At Rio, he merged three separate businesses - borax, talc and Dampier Salt - into a single unit. Reporting was streamlined, simplifying some services that were formerly duplicated or even triplicated. He is also credited with developing a $5 billion metals project in Africa while at Rio.
"I get an enormous buzz out of creating wealth and wellbeing from natural resources," Mackenzie said while at Rio. "At BP, that was expressed in just two products - oil and gas.
"Here at Rio Tinto, the real excitement for me ... is that we have the whole periodic table to play with.
"I've moved from organic to inorganic chemistry and I've had the chance to open up whole new chapters in my geology textbooks. It's no longer just drilling muds and sandstone; nowadays I'm into sedimentary rocks, metamorphic rocks, igneous rocks, the whole gamut."
Now Mackenzie has been anointed to run the show and shareholders will be looking to see whether he can create more "wealth and wellbeing" from natural resources than the outgoing Kloppers did.
On Wednesday, Kloppers got the final word back at his chairman, Jac Nasser, following suggestions of tension between the two, which led to speculation of Nasser tapping Kloppers.
In an in-house video outlining the change in command, Kloppers said former BHP chief Paul Anderson had asked him upon his promotion to the top position to start thinking of his successor immediately.
"That was good advice," Kloppers said. "One of the first decisions I made was to recruit Andrew," making his role in the selection of his successor crystal clear.
Frequently Asked Questions about this Article…
Andrew Mackenzie is the incoming chief executive of BHP Billiton. He holds a PhD in chemistry, spent 22 years at BP, led Rio Tinto’s industrial minerals division, and was persuaded by Marius Kloppers to join BHP five years ago. Shareholders care because his track record of merging businesses, developing a $5 billion metals project in Africa and his people skills suggest he may be better placed to pursue expansion after the previous leader’s failed deal attempts.
The article contrasts Mackenzie’s higher emotional quotient (EQ) and people skills with Kloppers’ very high IQ but reportedly lower EQ. Mackenzie is described as softer, good with people and a reserved, earnest public presence — qualities the piece suggests could help with communication and stakeholder relations.
Mackenzie spent two decades at BP, ran Rio Tinto’s industrial minerals unit, merged three businesses (borax, talc and Dampier Salt) to simplify reporting, and helped develop a $5 billion metals project in Africa. Those operational and project-development credentials are presented as experience that could help BHP pursue expansion and more successful large projects or deals.
The article notes Kloppers failed to land several major moves: bids for Rio Tinto and Potash Corp of Canada did not succeed, and a planned iron-ore joint venture with Rio was not consummated. Those missed opportunities are framed as central worries for shareholders seeking growth.
The article uses Rio Tinto’s disastrous US$27 billion purchase of Alcan — a deal that reportedly cost Rio’s then-CEO his job — as a cautionary example of takeover risk. It contrasts that high-profile failure with BHP’s own history of unsuccessful bids, underscoring the stakes for large mining mergers and acquisitions.
The article reports Mackenzie talked up Melbourne as he prepared to move there. While it doesn’t detail financial effects, his public support for the city and willingness to relocate suggest he’s making a visible commitment to the company’s Australian base, which may reassure local stakeholders.
According to the piece, investors should value a combination of high intellect (IQ) and strong emotional intelligence (EQ): someone who understands complex projects and numbers but also communicates well, relates to people, and can build relationships — all qualities the article attributes to Mackenzie.
The article says Kloppers received the final word from chairman Jac Nasser amid speculation of tensions, and that Kloppers himself acknowledged being asked by former chief Paul Anderson to think about a successor — which led to him recruiting Mackenzie. That account shows the board and outgoing CEO were actively involved in succession planning.
Call 1300 880 160
Start a chat
Schedule a call
