FACE TO FACE : Andrew Ferrier: Change Driver

If Andrew Ferrier hadn’t spent month hitchhiking around New Zealand as 21-year-old, he might never have returned to lead this country’s biggest company four years ago.
It’s not just that Canadian-born Ferrier liked the place. More that the character traits which prompted his year-long solo voyage of discovery around the world back in 1981 also helped fuel the stellar career that put him in the running for the top job at Fonterra. He thrives on challenge, embraces change. They’ve proved useful attributes in the world of business.
“I’ve always been excited by change. When I was on my travels, I’d wake up in the morning and take out map of the world to look at where I was going next. It was exciting, also little bit nerve-wracking. And that’s what change is all about. It’s bit nerve-wracking, it’s exciting, it’s challenging – that’s what makes it fun.”
Sitting in Fonterra’s airy head office with its views over Auckland Harbour, 48-year-old Ferrier is underlining the conversation with his hands – they are circling, tapping, carving patterns in the air – exuding an infectious energy. He’s physical person who still plays ice hockey (though it’s the “old farts” version which comes minus body checking) and likes to draw on sporting analogies to make business points. favourite is the quote from ice hockey star Wayne Gretzky whose stated tactic for sporting success “I skate to where the puck is going to be” is often used to highlight the importance of forward-thinking business strategy.
More surprisingly, Ferrier can draw on his rugby experience (yep, Montreal rugby players may be rare breed but they are passionate about the game, he avows) to illustrate the importance of teamwork in achieving business goals.
Sport offers the same buzz of challenge that has fed Ferrier’s natural migration toward corporate leadership roles. And he reckons the ability to be excited by change is also great business attribute – particularly at CEO level.
“You wouldn’t want everyone in the business to have it – but I think if you’re at the top of the organisation, you need that intrinsic headset. I don’t think it’s easily taught. You either have it or not and you can build on it through what you choose to do in your life.”
He has put it to good use, gaining reputation for his ability to generate transformative momentum in the companies he’s headed over the past 18 years. He found that first and foremost he needed to thoroughly understand the business – to know more about it than anyone else – then he was better able to pinpoint where it could be changed for the better.
“Right through my career I’ve found ways to change business, to get it to point where it’s delivering better returns or better value than it was before – and that is something I like to preach: come to work prepared to transform things, not just to manage them.”
That is very much part of his current challenge at Fonterra. Appointed CEO in 2003, he’s been leading the culture shift needed to both provide greater internal cohesion and to position the dairy cooperative as truly global company.
“It’s been about driving culture change from the very distinct cultures that existed in Fonterra’s legacy – between the two cooperatives and the dairy board – and prevailing culture that was all about getting products out of New Zealand. We had to re-programme that ‘sell, sell, sell’ approach to one that is driven by customers first, is about maximising value from our portfolio of products and getting added value above commodity.
“It’s an enormous amount of change to go through. It was under way when I got here and is still changing today but there is still long way to go.”
Then there’s the planned capital restructuring that could see partial listing of the company two years down the track – farmers willing. That’s also part of its global strategy. As the world’s fifth largest dairy company it already has global footprint but, says Ferrier, it has to stay on the front foot in terms of positioning itself for growth. And for that, it needs access to more capital.
“When you look at the evolution of the market and we see our key customers globalising so much – they want partner who can be with them in every single part of the world. We want to be in that space now but the reality is we’ve got long way to go before we are solidly there – producing product in multiple origins for these customers and positioning ourselves higher up the value chain.
“So we’ve got lot of movement to do on this strategy and we have got to bring our farmers with us.”
The two-year consultation process that was recently kicked off to help gain shareholder buy-in to its planned capital restructure was probably not the sort of conversation Ferrier envisaged having with local dairy farmers when he first arrived on New Zealand shores 26 years ago.
Born in Montreal, middle child in family of six, he’d just earned his degree in business administration from the University of New Brunswick. He didn’t have any strong ideas about what he wanted to do when he grew up – still doesn’t, he quips – but was up for some excitement.
“I wanted to go see the world – in particular I wanted to visit Australia because I had some cousins there, so it was bit of an anchor destination. To do it I went out and worked in the bush in Northwest Canada – one of those places where you can work 14 to 16 hours day, seven days week and make money quickly. As soon as I had enough, I bought one-way ticket via Hawaii and Fiji down to Sydney.”
His big OE included “wonderful month” in New Zealand and seven months in Australia before he headed up through Asia, across Europe and back to Canada.
“It was fantastic experience that really opened my eyes to different cultures, different peoples.”
It also helped him get his first job with Montreal-based Redpath Sugars (formerly part of Tate & Lyle) at time when the employment market was tough.
“There was recession in Canada at the time and it was incredibly difficult to get job. One of the things that caught their eye on my CV was that I’d spent year going around the world and sugar is very international business so that was important to them.”
It was lucky break for Ferrier as the company proved an excellent training ground for someone with his skills and drive. There was strong ethos of employee development and its management wasn’t afraid to “give you some rope”, says Ferrier. He soon got tossed in the deep end and at the relatively tender age of 26 became vice-president of company with turnover of US$400-$500 million.
But first the young MBA graduate was given valuable lesson on the importance of keeping his ego in check.
“I was called into the office of [Redpath’s then] president who was very wise man with great people skills and he said to me: ‘You probably think you’re hot-shot with your MBA, but there are lot of real-world skills out there you have to learn and your MBA isn’t going to help you.’ So he made me figuratively hand over this piece of paper I had and put it in his drawer.
“About two-and-a-half years later, after spending time as sugar trader then running the planning area, I got transferred to the vice-president’s role in much bigger sister company [in New York] so it was huge step up. The president called me back into office, opened his drawer and handed back my MBA.
“But it was all about not thinking you’re better than others because you have this piece of paper. It’s about keeping your ego in check – and that’s message I’ve had reinforced in so many ways. You can’t be bigger than the company. You might be coach or captain or leading the charge but you are part of team and the team is what counts.”
Coming from large family along with playing lot of team sports meant the need to curb his ego was not new notion. And it’s become central to how he sees his role as CEO – he’s there to serve the company and to help create an inh