CASE STUDY : Toll NZ – From the C-Suite

There’s definite sense of synergy between Toll NZ chief executive David Jackson and chief financial officer Grant Devonport – even to the shared and “mo”mentary discomfort of extra facial hair sprouted for fundraising event. Although they’ve only worked together for just over year, they’re good example of why skill complementarity rather than skill cloning works well at C-suite level.
Jackson is the people person; Devonport is more comfortable with processes. One comes from shopfloor background with strong customer focus; the other from banking background where structure rules. Recognition of their respective strengths made for straightforward allocation of responsibilities.
“Grant and I came up with an agreement – I said I’ll look after the customers and people if you look after the costs and the process – and that is effectively where we concentrate our efforts,” says Jackson.
“My strengths are not in finance. I love the people side of the business and the most value I create as leader of this business is to do with the people and customers. Grant’s value is about costs and the robustness of the process. I’m not really an attention-to-detail person, he is. It’s that complementary thing that is so important and why we work so well together.”
Not only are their skills complementary – their personalities provide useful balance.
“David is good in front of group of people – I’m more one on one,” says Devonport. “I’m happy to be the backroom person – it doesn’t bother me to play second fiddle on that side. But if David knows we’re going into discussion that’s more finance-oriented then he’s happy for me to lead it. He doesn’t believe, because he’s the CEO, that he has to up front every time on everything. There is lot of mutual trust, but it is also about knowing each other’s strengths.”
This complementarity in styles showed up from the start. Although the two men had both worked in Melbourne at the same time, they’d never previously met – Toll headhunted Devonport on the basis of recommendation from one of its clients. At that stage he’d already left the banking industry (he’d been CFO for the United Kingdom operations of the National Australia Bank in Glasgow before returning to Australia) in part because he was disillusioned by what was then somewhat stultifying and hierarchical culture. His role in Melbourne was in the entertainment industry – setting up distribution business for the Village Roadshow.
“I did that for five years and it was great job. Because we used Toll as the freight business to distribute DVDs, I got to know the Toll culture very well and saw it was the sort of company I could do well in. So when I got the approach to work in New Zealand – it was pretty mutual thing.”
But he was still surprised by the rapidity with which his next career move – back to New Zealand – was concluded. The two men met for the first time at Melbourne airport, chatted for about 35 minutes and Jackson decided he’d found his new CFO.
“Grant was amazed he’d got the job so quickly – I didn’t reference check him which is unusual for such senior position. But I had lot of faith in the guy who recommended him and we knew what he’d been doing at the Village,” says Jackson.
“Also Toll is very pragmatic place. There isn’t much hierarchy. If you want to talk to [parent company Toll Holdings CEO] Paul Little, you can; if you want to do job you just roll up your sleeves and get on with it. Grant struck me straight away as no-nonsense sort of guy.”
The sense of cultural fit was pretty mutual. What gelled for Devonport was the sense of personal chemistry and organisational culture.
“I know I’m most effective in role where the CEO says – ‘go wherever you need to go to push to make the business better’. David was very upfront about the areas he believed he needed CFO to be good at and lot of it complemented my skill set. That was the first thing.
“Second was the culture – the meeting was an affirmation of what I already knew about the company culture and I know how important that is for me to be able to operate at my best because I’ve had bad experience with culture. The banking culture at the time was very constraining – you weren’t encouraged to put your head above the parapet because you’d likely get shot down.”
However he did wonder whether he hadn’t rather jumped in the deep end when he got his first insight into the gap between their operating styles.
“I’m used to being very structured and David isn’t as structured so he challenges me. Imagine – it’s my first day on the job. I have to fly to Invercargill. David tells me we’re off to do some presentations on the annual report. That’s fine. Then on the plane he hands me the annual report and says you’re doing speech. I was bit blown away. But I’ve got used to that from him and it’s been good for me because it makes me think on my feet.”
He’s also started to adopt the more informal style that holds sway at Toll – finally abandoning tie.
The learning goes both ways with Jackson also saying he’s learned lot from the relationship.
“Grant is very structured in cost management at high level and he has very unique way of applying that robustness.”
His more systems-based approach also helps ensure that the fairly informal strategy sessions at Toll don’t go too far off the rails.
Given its ongoing negotiation with the Crown over track access, the company has found it difficult to stretch planning time horizons much past year ahead but the policy has been to take very strategic approach to customers to assure them that Toll is here for the long haul, says Devonport.
If that uncertainty wasn’t enough of an impediment, the company has also had to overcome the hurdle of being seen as an Aussie invader.
“We are looked at as an Australian company coming to New Zealand – and you get all this press about Aussies taking over local banks. I don’t think it’s exactly an anti-Australian thing but there is an element of trust involved. So we work really hard at being good New Zealand citizens,” says Jackson.
Which is why when we looked at stopping the Overlander service it was maintained despite losing “buckets of money” at the time – something it has in common with most passenger trains the world over.
“Since then we have grown numbers and given everything down to the new menu more Kiwi feel. We also have run charity train trips for schools that have suffered tragedies – all supported with volunteer staffing.”
The last one was for Palmerston North’s Russell Street School, which lost two pupils from the one family after cliff came down on top of them while they were swimming.
As well, the company is the major sponsor of the Chris Cairns Foundation (to help prevent rail crossing accidents), contributes to Cure Kids, Guide Dogs and helps many charities with their logistics.
“We try very hard to be big part of New Zealand. The company has more than 3000 people working for it around the country – so we are very much part of the local landscape.”
He’s very proud of an incident that he thinks speaks volumes for the Toll culture. One of the locomotive engineers he was talking to several months back said that while he’d seldom owned up to working for Tranz Rail, he’s happy to tell people he works for Toll and is proud of it.
“Our company hasn’t really changed. Paul Little is no different today than when I first met him – and the attitude cascades all the way down. And when you think where this company was as Tranz Rail to where it is today, the trains, lifts, forklifts – all that stuff hasn’t changed, but the attitude of the people has. If people have got job to do, we let them do the job. I see our job as managing the people, not the tasks they’re doing. If you give people autonomy they can do anything.”
The company runs its own leadership course and eight of its frontline managers have just graduated, says Jackson.
“It’s just fantastic to see them at the graduation ceremony. These are people who are terrified to