AHRI chairman Peter Wilson AM (FCPHR) talks to Michael Fraser (pictured left with AGL chairman Jerry Maycock) about AGL’s shift to a values-based culture and his reflections on his eight years in the role of CEO.
Peter Wilson: Reflecting on your AGL tenure, which will end next year, what have been the biggest challenges?
Michael Fraser: When I started in the role [in 2007], it all happened in a hurry. The previous CEO had been sacked and the company had just had a very big, unexpected profit downgrade. The ratings agencies put us on ‘credit watch negative’ and employee morale was effectively broken.
One week I was a senior executive, the next week I was the CEO. There was a lot of pressure to rebuild the company’s reputation, rebuild capability within the business – a lot of very good people had left – rebuild our credibility in the financial markets, and our capability to run the business. And we were going through a big SAP migration and the traumas associated with that.
The other big challenge, that I didn’t foresee, was just how much of a political football the industry would become, from carbon tax and renewable energy debates, to energy prices going where they went to and people looking for someone to point the finger at, to the politics and activism around coal seam gas. That’s been hugely challenging and certainly wasn’t anticipated when I came into the role.
PW: How did you manage those public challenges?
MF: Being CEO of AGL, or any listed company, comes with having to be prepared to have a public profile. But I had to do a lot more than I had originally anticipated in arguing the case for the industry and for the company. Not just on the political front. We’ve also had a lot of community angst around projects, such as people who don’t like wind farms – we’ve built many of them over the last several years – and at the other end of the spectrum, people who don’t like coal seam gas. That’s been very interesting.
PW: And that debate is continuing.
MF: It’s going to go on for a while yet. There is the RET Review by Dick Warburton [chair of the government’s review of the renewable energy target] and the politics around that. With respect to coal seam gas, we’ve just received approval to go to the next stage of our project at Gloucester in NSW. We know by looking on Twitter, etc, that the activists are calling for people to blockade. We know the police are all over it; the government is all over it.
PW: How much time have you spent on people management?
MF: We had a lot of good people leave, so we had to get talent into the business. I did road shows around the values of the company – a values-based, can-do culture. How we need to look at the world through the eyes of our customers and not just look inwardly at the business and what suited us.
We then had to think about our employee value proposition. Why would anybody want to come and work at AGL? What were the development programs we had in place – frontline leadership through to MBA-type, Harvard-type programs – so people could see they were going to be able to build a career at AGL.
I’m a huge believer in people being key to whether you’re going to have a successful business or not. Jane Thomas, our head of people and culture, likes to say “culture is strategy”. You can have the right strategy, but if you don’t have the right people with the right skill sets, you’re never going to be able to execute it. I continue to spend a fair bit of time on the people side.
PW: Any work-life balance insights?
MF: When I first came into the role, there were a lot of things to fix with the business, but also in that first year I had my son doing his final year of school, and then my mother-in-law got terminal cancer. Trying to get balance in that first year was extremely difficult.
You have to be disciplined and a little courageous in saying to everybody, “Well, hey, I’m not going to be here.” A message I’ve given to all of my leadership team people is to get out of the office when they have personal stuff to juggle.
PW: Any plans after you finish up as CEO next year?
MF: I’ll no doubt do some things around the industry, plus spend some time improving my golf handicap.