Boardroom Conversations with Dr Kirstin Ferguson

Episode 3: Dr Kirstin Ferguson: Why modern leaders use both their head and their heart

Dr Kirstin Ferguson AM FAICD is an author, columnist, and company director. She’s the former Acting Chair and Deputy Chair of the ABC, and currently on the boards of PEXA and Envato. We talk about leadership lessons from Kirstin’s military career, her first board positions, and advice for directors on social media. Plus, we discuss Kirstin’s new award-winning and best-selling book “Head and Heart: The Art of Modern Leadership.” What qualities do modern leaders need? Which attributes should boards look for when they’re picking their next CEO? And what can directors learn from world leaders Jacinda Ardern and Volodymyr Zelensky?

Show notes:

• Click here to find out more about Kirstin’s new book “Head and Heart: The Art of Modern Leadership” 
• Click here for the Head Heart Leader Scale 
• Click here for Kirstin’s article on the AICD website 

Transcript

BENNETT MASON

Hello and welcome to Boardroom Conversations, a podcast from the Australian Institute of Company Directors. My name is Bennett Mason. Thanks so much for joining us. In each episode we'll have candid conversations with some of Australia's leading directors, delving into their background, journey to the boardroom and some of the challenges they've faced along the way. Our guest this time is company director and leadership expert Dr Kirstin Ferguson. Kirstin currently sits on the boards of PEXA and Envato and she's a regular columnist for Nine newspapers. Kirstin's also a former acting chair and deputy chair of the ABC and previously was a director with SCA Property Group, CIMIC, Queensland Theatre and many others. Her latest book is called “Head and Heart: The Art of Modern Leadership”. Kirstin, thanks so much for joining us today.

KIRSTIN FERGUSON

Thank you for the invitation. I'm thrilled to be here.

BENNETT MASON

Now, Kirstin, one thing I did not mention in your bio is that you were also an officer in the Royal Australian Air Force for many years. Now, that's not something that many company directors have on their CV. What did serving in the Air Force teach you about leadership and maybe being a director?

KIRSTIN FERGUSON

Well, my flippant answer is I'm never late for a meeting, so I've certainly got that ingrained in me from my years in the military. But I went and trained through the Australian Defence Force Academy all through the early 1990s, and that was a pretty tough period, especially for female cadets. I was only 17 when I joined the military to become a RAF officer. And I was at ADFA during a period which has now been subject to much review and fairly broad condemnation, including from the military themselves, because there was a lot of screaming and yelling and that style of leadership that cadets were emulating, having watched Platoon probably too many times. And that was a great lesson in how that style of leadership, which is obviously feels completely out of place now, how ineffective it is. And even that command and control idea that you can just tell someone what to do and they'll do it is an ineffective way of leading. And so, I was able to experience that firsthand at the academy. And then I was only 21 when I was posted to RAF base Amberley, and I was leading people who often had been in the Air Force longer than I'd been alive. So that really teaches you a lot about the importance of earning the respect of those you lead. And that just because you have a title, or in that case a rank that might make you an officer, as compared to some sergeant that you're leading. In fact, you are there to learn from them. And that leadership truly is a privilege and not an entitlement.

BENNETT MASON

So are there principles from your time in the Defence Force, which you carried over to the boardroom?

KIRSTIN FERGUSON

Yeah, I think one of the things we were taught was this idea that if you think back to World War One and those poor soldiers who had to go over the top from their trenches. And you wouldn't want to be the young lieutenant or captain that came up over the trench and looked behind them and their men were not following him into battle. And the only way people are going to follow you into battle or follow you on a decision you make or on a vision you have for an organisation is if they trust you and if they respect you, and if they believe that you've got their interests at heart. And so, whether it's on a battlefield or whether it's through decisions you're making in a boardroom, it's the same kinds of principles. Unless you're bringing everyone along with you and they trust you, really, you have no point in being there. Because in the end you're going to look behind you and no one that you need is there alongside.

BENNETT MASON

Let's talk a little bit now about how your board career began. Now, your first director position was with Sunwater. What advice would you have for people who are just beginning their board career and maybe how could they get their very first board position?

KIRSTIN FERGUSON

Yeah, I look back now and that was well over a decade, maybe 12, 15 years ago now. And I was CEO of an international consulting group based in Brisbane, but working around the world and I had no thought about sitting on boards. But I did receive a call one day and Sunwater is a government owned corporation in Queensland. And I received a call about whether or not I'd be interested in sitting on the board of Sunwater. So, some of this is serendipity and being in the right place at the right time. And I remember being on the phone and Googling Sunwater. I wasn't too sure what it was or what was involved, but I've always been one to say yes to opportunities. And I said yes on the condition that, in fact, I was put through the AICD company director course. So that is a shameless plug, but not asked to be plugged. It's certainly what happened. And so that was my first introduction to boards. And it was really a huge learning curve for me. And I was on the Sunwater board for maybe seven or eight years. But my advice around that first board position is there's often some people who'll say go try a not-for-profit board or try and find a board that you're passionate about. And if there is one that works for you, that's fantastic. But I did find that government boards were a wonderful apprenticeship because generally speaking, they've well-governed and there's processes and resources in place. So go and find the register for nominees. It’s certainly what it's called in Queensland. Every state now has it, where you can register to be considered for a government board as it comes up. And I do think that's a great way to try and establish a board career.

BENNETT MASON

Do you think government boards sometimes can function differently to either company boards or NFP boards?

KIRSTIN FERGUSON

Oh, absolutely. And you know, as a brand-new green director, I was yet to learn what that might be like. And having now sat on all types of boards, including listed boards, private boards, small, listed boards versus large, listed boards, boards that have majority shareholders on them and boards that are full of independents. Every board is completely different, and I think it is really important for directors to understand that you do need to really appreciate what those differences are going to be. Not-for-profit boards, and having sat on different sports boards and arts boards and charitable foundations, they're very different in that they often have very few resources and the expectations of directors are quite different. I've sat on very large ASX 20 boards and they're so large that you're quite a long way from the action, in terms of the people out doing those and making those decisions and on the ground. And yet I've also been on listed boards where you feel quite close to the action. So, they're all very different and I think it takes quite a few years of experience to understand and find out what your sweet spot is, where it is you're most comfortable.

BENNETT MASON

You said a moment ago that you've been on boards of all shapes and sizes: listed, unlisted, NFP, government. You must have had all sorts of offers and approaches. What factors do you look at when you're considering whether or not to join a new board?

KIRSTIN FERGUSON

Well again, that has evolved as I've become more experienced and gained different scar tissue across the years. Because I think early in your career, you might be so eager to get a board that you perhaps - you do your due diligence, of course - but you overlook or you don't think to look at things like: “what will it mean if I'm one of only a minority of independent directors?” “What will it be like if I'm on a board when everything hits the fan and there's more people on that board with skin in the game who've got more to lose? What will that do to out different risk appetites?” So right now, I'm much more focussed on choosing boards with which there's a really effective chairman and the dynamic around the table is healthy. Because having been through different crises on different boards, it's so important that you have people around the table you trust and want to work with and want to spend time with you. And you spend a lot of time with your fellow directors. So, I think all of those things are important. Of course, you have to check the financials and do everything that the very good AICD checklists on due diligence recommend you to do. But a lot of it is hard to pinpoint and you really don't know until you talk to people about what that board is like in a crisis, for example. So, I think for me, it's less about the industries. And I know for anyone seeking board roles, head-hunters will say: “Well, what particular industry are you interested in?” I've always been a generalist director. I've never come from the industry of any of the boards that I've sat on. So, the industry is actually one of the least important parts of what I consider for me personally, because I chair Rem committees, I like to have employees. So, I've never sat on a board that doesn't really have any employees and they're just moving money around.

BENNETT MASON

We'll talk about chairs and some of the other areas you raised in a moment. I just wanted to go back, you mentioned earlier that you were a CEO before you became fully focussed on your board career. A lot of directors are former CEOs or former senior executives. Did you find it challenging at all going from being a hands-on CEO, in the thick of it, to a different sort of role as a director or board member?

KIRSTIN FERGUSON

A hundred percent and I think there was probably a two-year crossover where I was still a CEO while sitting on boards and that was tough. I must make a public apology to all my fellow directors as I was a brand-new, green director while also as CEO. Because it's hard to swap your mindset from the doing to being a director, where you're obviously at that much higher level and you're not there to solve the issue hands-on. You're there to ask really good questions and influence management on different outcomes and that takes a lot of practice. And I think many CEOs think that they'll be fine. And I know I remember thinking, yes, it'll be no problem at all. But it actually is quite challenging because you might have spent the last three weeks in your CEO role doing and then suddenly, you're in a very different context, having to think differently. And it becomes easier but certainly, yeah, it was a challenge at the start.

BENNETT MASON

Kirstin, I wanted to talk now about your new book, which is: “Head and Heart The Art of Modern Leadership.” Now in the book you identify eight key attributes for a leader. Can you talk a little bit about that and how it might link into the boardroom?

KIRSTIN FERGUSON

It's really interesting that being a director and yet also, having a deep expertise in leadership and I wanted to write a book that wasn't anecdotal. It's all based on research. And I did a PhD in leadership, and I've developed a scale that forms the foundation of this book, and I'd encourage anyone to go and do it totally free at headheartleaeder.com. But what I wanted to do was understand what it is about modern leaders and what are the attributes of modern leaders that we need in the world today? And if you think about Jacinda Ardern and Volodymyr Zelensky, they stick out because they're different. But what is it about them that's different? Or what is it about your local community leader that's so effective? And there are lots of reasons that saw me down this path. But I've always believed that to be an effective leader, you have to lead with your head and your heart. And obviously they're a metaphor, but the head is all of these tangible things that for many leaders, they think are the most important parts of their role. And we on boards don't help that by looking at our remuneration, KPIs and things that are all based on quite measurable, quantifiable targets. And so, leading with your head is important because that helps us become engineers and solve problems and analyse data and all of that. But unless you can, at the same time, lead with your heart and I'll talk about what each of those means, then you're just not going to be the leader that the world needs today. And so, in my research I identified that leading with the head is things like curiosity, wisdom, which is really around decision making, perspective, which was actually the most highly correlated of all attributes. And it's being able to read a room and it's not just reading. Obviously, it can be a physical room, it could be your industry, the organisation, whatever it is. Not just reading that room but looking at who's missing from the room and seeing what's going on outside the room as well. And also, capability, which is around growth mindset. Directors need all of those clearly, and being curious and making great decisions and being able to read the room of strategy development. All of those are so important. But equally, directors need to be able to lead with the heart. And the four attributes I identified for those were: humility. And in our context as directors, it's really accepting that you just don't know all the answers. I think any director that thinks they actually know the best solution to something needs to have a good look in the mirror. The other three are: self-awareness. So really knowing what's true, what might trigger you, and the impact you're having on others. Courage to speak up, even in the face of pressure, not to do so. And for directors that comes up very often. And the last one’s empathy. And empathy, for me, when I looked at the definition, I specifically added in the dimensions of diversity and inclusion. Because unless you are able to put yourself in the shoes of someone whose lived experience is very different to your own, it's impossible to lead with empathy. And for directors, we obviously must be able to put people, particular those who are different to ourselves, in the centre of, whether they're our customers or they're our shareholders or they're our employees, whoever it is. Directors in Australia right now tend to be from a very narrow, privileged cohort - of which I am one. We are leading and responsible to people far beyond our experience. So, empathy really helps with that.

BENNETT MASON

You've talked a lot about empathy in the book. Directors obviously aren't there every day. They're not on the shop floor. What's your advice on how directors can really get a sense of what's going on in their organisation? How can they really know what the culture is? Do you have any tips on that?

KIRSTIN FERGUSON

It's invariably very difficult because we aren’t there all the time and for good reason. But I do think directors can hone their cultural antenna and their leadership antenna by being the kind of person who is humble enough to just listen and not need to be the smartest person in the room and have all the answers. And when they do meet management or employees spend the whole time talking. I think if directors listen a lot more than their antenna gets practised, and you pick up on a lot of cues about things that might be happening or a bit of a red flag. Sitting in the boardroom, watching the relationship between a chair and the CEO, or the CEO and their management team. All of those interactions require leaders to have that real self-awareness of what they're observing. What might be working, what might not be working. And then you triangulate all of those heart-based emotions that you're feeling with data, like cultural surveys and all the feedback tools, 360s, whatever it might be. I think unless you are actively doing that in every interaction, you are going to miss some of the red flags. And every director does and every organisation that has some cultural scandal happen, the directors have missed something. And we've all been in that position. So, it just requires us to be ever present and on guard for what's going on around us.

BENNETT MASON

That oversight of the CEO and senior management is, of course, one of a board's key roles. Are there certain questions or issues that you always raise with CEOs or management when they when they meet with the board?

KIRSTIN FERGUSON

Well, it's interesting. I tend to chair the Rem and People committees on all the boards that I'm on. And one agenda item I have at the top of the agenda of every meeting, and it never is a paper. It's always verbal. And I call it the “vibe report”. And it's after “The Castle.” You know: “It's the vibe, it's Mabo.” And I ask the Chief People Officer, never the CEO, to just talk to us about what the vibe is around the place. And it's incredible what often comes out from that. And I think if you get a written paper, you might not write down what you would perhaps say if you're just in a conversation about the vibe. And so that vibe report is something I've been doing for years and years, and it's particularly effective in the role I have in that chairing that committee.

BENNETT MASON

Everyone loves “The Castle.” Now another key role for the board is, of course, succession planning, CEO succession planning. So, what advice would you have for boards who are looking for their next CEO or next general manager or senior leader? What should they be looking out for?

KIRSTIN FERGUSON

I think what we really need boards to do is to look for modern leaders. And of course, I'm going to say that, but really look for modern leaders. Don't look for the person who has risen to the top of their organisation purely through their technical expertise, or because they've got excellent industry contacts, or they've sold the most widgets or whatever it might be that saw them progress. I think we make the mistake that we assume those individuals who are highly talented in what they do will also be really fabulous leaders. And I think if we're talking about the most senior leader in the business, you need someone who absolutely puts people at the centre and that is prepared to make different decisions, rather than someone who's solely driven by sales or whatever it might be. Those kinds of choices that you have to make are really difficult. But if you have a leader that truly understands how to lead with the head and the heart, you're more likely to avoid the many issues we read about in the papers that happen. We're more likely to have a CEO who's really aware of the importance of culture and they their antenna is absolutely top notch because they're constantly looking for those red flags. That's very different to the skill set of those really important people, but who are the leaders in their industry. They're not necessarily the same people.

BENNETT MASON

Now, getting back to the book for just a moment, you got some great case studies and examples in there. People like BHP CEO Mike Henry, ACTU boss Sally McManus and some others. What were a few of the lessons you got from Mike Henry, Sally McManus, and some of the other case studies?

KIRSTIN FERGUSON

Those two are interesting because they obviously come from very different worldviews and different perspectives, but they're both incredibly effective leaders in their context. You couldn't swap them into different roles, that would never work. But in the context in which they're leading, they're absolutely the right people. What I wanted to do with those interviews though, I think about two dozen and they're really different. So, you do have the CEO of one of the largest companies in the world, but also, he was interviewed alongside teachers and creatives and people who were very different. Because that message of “everyone is a leader” is something that's all through the book. But I think from Mike and Sally, what I found somewhat amusing, maybe because I'm just a nerdy researcher, was that they're both very similar in how they approach their leadership. And I asked them both: would they think they were more of a head or a heart leader? And they both gave me very specific answers. They started to categorise each, and one gave me a percentage rating. So, I pointed out to both of them that probably indicates you're a more of a head-based leader. But yeah, it was really insightful. And Mike in the book talks about what it was like to lead at the start of COVID and then how he managed that through BHP. They're both terrific interviews.

BENNETT MASON

I want to keep talking to you about leadership, but different sorts of leaders. Let's chat a bit now about the role of the chair. Now, you've been on lots of boards, you've worked with all sorts of chairs, and you've also been a chair yourself. What do you think makes for an effective chair? And then the other side, what makes for a bad one?

KIRSTIN FERGUSON

I think if you've been on board long enough, you've had good chairs and dreadful chairs. And you've probably had excellent moments as a chair yourself, and you've had moments where you wish you'd done things differently. I think one of the key things for me in a chair is remembering you are the first among equals. So, I think unless it's a very rare occasion and you own the business and you’re the executive chair or there's a real power differential. If you are on a fully independent board, you are the first among equals. And so that means as chair, you're almost like a conductor. You're facilitating great discussions to get this terrific outcome that brings together all the disparate views around the table in a mutually respectful way. And you’re bringing through management, making sure they're being heard and all of those kinds of things, you're conducting it in a way that everyone participates. I think chairs that think becoming chair means they are someone more than anyone else in the room, or if they see anyone else as “others”, I think it's a death knell for the modern board. It's a real challenge because it implies that there's different levels of importance and it implies that some people's views are perhaps not as important as someone else's. So that's probably my number one. And then I think for chairs, it's imperative that you’re open to feedback and you're providing feedback to other directors. So, it always astounds me. We obviously invest a lot in management tools and 360s and feedback sessions, everything we can to help management teams work really effectively. But rarely do we invest the same in directors. And I remember as a new director and still now, I crave for feedback because it helps you become a better director. It helps you understand obviously where you could be doing better. But it's often challenging for chairs to feel comfortable to give feedback, let alone receive it. And yet, if you have a board that has a feedback culture, it's much healthier.

BENNETT MASON

Those conversations must be quite difficult sometimes though. I imagine many of the directors listening to this will have been on dysfunctional boards. How do you begin those conversations where you have an open discussion with the chair, giving them that feedback?

KIRSTIN FERGUSON

It is really difficult, and I have been in those situations. I think the more dysfunctional a board, the less able you are to have the kinds of feedback sessions I'm talking about. But that's why it's so important, I guess, to appoint a chair that is able to lead a functional board. When it's functioning, feedback conversations are pretty easy because you know that feedback is being provided with the intent of just helping make the board work as well as possible. I think if you've got dysfunction, then it's awful because you end up, there's lots of side conversations, strategizing how best to do it. And you can't have those transparent conversations about what is in the best interests of the organisation and that's why we're there. It's not about personal ego and it's not about not upsetting people. We’re there for our shareholders, or for the stakeholders, who benefit from our governance. And I think if every director has that at the forefront of their mind, these kinds of conversations become very challenging. But you realise you have the courage, and you have to have them.

BENNETT MASON

In a time of crisis like Covid, the pandemic, which was very global crisis, does it require a different sort of leadership? Or do many of the same leadership principles apply?

KIRSTIN FERGUSON

I spoke earlier about leading with your head and heart. It actually applies more so. I mean, it always applies. But if you think back to the pandemic, I know I was sitting on boards where we were making decisions about laying off people, which even weeks earlier wasn't even on the cards. So suddenly you're having to make decisions with very little information. And without all of the strategising and the papers and the weighing up risks and rewards that you would normally do. You just have to make decisions. So that requires a huge amount of self-awareness around what your triggers are. Because at the start of the pandemic, let alone the people we lead were feeling anxious, so were directors themselves. We had no idea what was going to happen. And so, you needed to be aware. “Okay, this is stressful time. This is how I act when I'm stressed. I need to manage it in this case.” Or, how are we going to manage salary pauses and salary reductions and all those things that are affecting people's lives. So, yes, I think times of crisis requires you to be particularly focussed on the impact that you're having on others and to be able to appreciate that decision making changes. It just needs to be done in a very different way than you might do it normally.

BENNETT MASON

Hopefully COVID is the last pandemic we face, but it certainly won't be the last crisis or great challenge for directors. But do you think after having gone through that, boards are maybe better prepared for the next crisis?

KIRSTIN FERGUSON

I think we're now aware black swans happen and rather than thinking of it theoretically or watching circumstances, black swan events happen outside our orbit. We now know actually we're all going to live through at least one, if not more. So, I do think it means contingency planning and risk mitigation and likelihood and consequence conversations are somewhat different. Because if you'd had “pandemic” in 2019 on your likelihood matrixes, it would probably be pretty low even though it had high consequence. And I certainly don't recall talking about what we were going to do in a pandemic any time before March 2020. So, I do think we now have a different appreciation of what's possible. But I'm sure the next generation that won't live through it, we all repeat the mistakes of history.

BENNETT MASON

Kirstin, we've spoken about your book, but I want to touch on another bit of your writing career. You've been writing a regular column for the Nine newspapers and for those who don't know, you answer leadership and workplace questions for the readers. I think you cover everything from what shoes to wear at the office to how to deal with a bad boss. What are some of the common themes that come up in the questions you get?

KIRSTIN FERGUSON

So, this is a really fun part of my life because it's called “Got a Minute?” and it's every Wednesday in the Sydney Morning Herald in The Age and it began at the start of 2021. So, we're in the third year. And it was a bit of fun to see what might happen. And it's now a hugely popular column and it is read from everyone, from really well-known chairs I know, through to people I wouldn't normally sort of get to communicate with in my writing. People working on the factory floors and doing shift work and that sort of thing. So, it gives me this enormous insight into what people are dealing with. And yes, you listed a couple of those questions. Overwhelmingly, and of course, people self-select because they only write to me if they've got a problem, it's bad bosses. It blows me away. How many bad bosses are out there? So, if you're listening and  you think that there's a letter in the column that sounds familiar. Well, it probably is. And these are bosses that just don't appreciate people. They don't communicate with people. They don't pay people properly. They expect them to be at their beck and call, buy them sandwiches at lunch, just all these ridiculous things that you think we need to stamp out. So bad bosses is definitely a main theme. Gender inequality comes up a lot still, and it's all those sorts of “everyday” things. Not necessarily letters about overt sexism and harassment, although that happens, but it's just the excluding women from different events or excluding minorities from different things. Or I get letters from new Australians, people who have immigrated here and they struggle with a second language of English. And so, then that prevents them having access, even though they've got terrific qualifications. There's just lots of systemic things we all know about. But I can tell you, if you're getting emails into your inbox every day from readers with these types of things, it's just a wonderful reminder of the privilege we have to sit on boards and the important role we play in impacting other people's lives and making sure we're putting people at the centre.

BENNETT MASON

One final thing I wanted to touch on. Kirstin, you're an avid social media user and also a very successful one. Do you have any advice for directors on how they should use social media? There will be some board members who maybe want to be a little more active on social media, but they're a bit concerned about it. What's your advice? Are there any pitfalls that directors should avoid?

KIRSTIN FERGUSON

Do you know how much I love this question? Because for me, I've come full circle. When I started my board career, maybe 12 years ago, whenever it was, a very eminent director pulled me aside because I was on Twitter and told me it would be the end of my director career if I was on social media and there was no way that a serious director would be on social media. And I remember being a bit shattered and thinking, is he right? And I stuck with my guns. And of course, he wasn't right. I knew he wasn't right. And it's probably been one of the most important parts of my director career, believe it or not, because it's imperative we’re not behind the veil of what it used to be like for corporate boards in the ivory tower. And social media let you get close to the customers you have and just understand different points of view. So, my advice for directors who are thinking about it, well, just do it because you're well behind the “thinking about” stage. That was a decade ago. Everyone's there. There's a fabulous group of directors that are using social media every day. LinkedIn is probably where I recommend everyone start. And I've spoken, I think, before to the AICD about social media. And LinkedIn is one where, I judge people if they're not on LinkedIn. It is just so much a part of your professional brand that if you don't keep your LinkedIn up to date, or if you're not there, I form a view that you are a bit of a dinosaur. You're just not there. That might be very unfair, but that's my position and I think most people do. Because before I have meetings with anyone, I go and have a look at their profile and see who they are and how we might know mutual people. So, get on LinkedIn first and you can just watch. You can be a bit of a voyeur until you're ready, but then step out from behind your screen and start sharing information on what you're an expert in. And even if it's just articles someone else has written or you can come and just repost all my things. That was my shameless plug. No, you don't need to do that. But social media is not scary, none of us are going to go and write something stupid. You would hope. I’ve never had an issue like that. Touch wood. Because I don't say things I wouldn't say in public to a group of people. And I just imagine I'm giving a speech. And if there were a thousand people there, what I say it? And if I would, then it's probably okay.

BENNETT MASON

Kirstin, that was great. Thanks so much for joining us on Boardroom Conversation.

KIRSTIN FERGUSON

Thank you for having me.