FACE TO FACE : Jim Minto – The Power behind Tower

It says something about Jim Minto that he doesn’t wake up worrying about work but he does sometimes puzzle over where he is. As Tower’s trans-Tasman group managing director, Minto buzzes between his Sydney, Auckland and Wellington offices.
At the moment he’s in Auckland to front the giant Tower group’s demerger – move which flies in the face of the growing number of trans-Tasman corporate mergers which are usually sold to the public as the cornerstone of cost-cutting and sensible rationalisation of resources. In Tower’s case, the urge to un-merge stems from desire to simplify operations and to bring the two management teams closer to the markets in which they operate.
Minto’s message to consumers right now is that the break up is really about how the company is owned. For them, he says, it will be “business as usual”. He does concede, however, that Tower has an uncommonly large overlap between its shareholder and consumer groups. That dates back to 1999 when the organisation’s demutualisation saw parcels of shares handed out to large numbers of its policyholders.
That leads to some curious conversations at Tower’s shareholders’ meetings which spill over into customer issues such as whether or not people got discounts and other detailed stuff. “They feel like it’s their organisation,” says Minto, “which is how it always used to be.”
Minto’s own corporate memory dates back to 1988. To November 14, to be precise. He reels off the date of his first day at work there. That may be the chartered accountant showing through. Since then, he’s worked his way through series of organisational shifts: from head of the company’s trust business, through managed funds, health and life areas, before taking on the role of chief executive of Tower New Zealand in January 2002. He’s since climbed further up the corporate ladder racking up roles as CEO of Tower Australia and later group managing director, overseeing all Tower businesses and reporting direct to the Tower board. When the demerger goes ahead later this year he’s tipped to settle back over the Tasman as the Australian operations’ chief executive officer.
Rumours persist that the split aims to prep Tower New Zealand for sale: notion that Minto rejects as impractical, to say the least. With its projected $22 million price tag, the demerger will be no cheap stroll in the park. So why bother doing it, he asks. Why not just sell immediately and save the dosh? On more personal note, he points out that Tower New Zealand has just succeeded in enticing into its CEO role, Rob Flannagan. Stepping across from industry rival Promina, Flannagan has accepted three-year contract with Tower – situation that Minto says is unlikely to have occurred if the company were being groomed for deconstruction.
In his own 18 years with Tower, Minto has both witnessed and weathered more than his fair share of corporate highs and lows. Somewhere along the way he’s gained the mantle of the turnaround king. Four years ago, over in Australia, for example, he had to cut out cool A$34 million – third of total company costs.
“We laid off lot of people very quickly,” he says. “The dilemma then is how to create trust with your people. The reality is you have to explain why you have to do it: because the place won’t survive if we don’t. They understand the need and the why, and that you respect them in the process.”
At such times, he’s learnt to bear in mind the mantra of former Tower chairman Olaf O’Duill who once told him to keep his head, keep thinking and just get on with it.
“There are so many forces coming at you all the time that you can’t be emotional,” says Minto. “Lose your nerve, or lose the plot, and it’s really tough.”
A faster cut may be kinder one but that hasn’t always been possible. Witness the stress-inducing situation Minto faced back in 1999 when he took up the reins of the health and life business and marched slap bang into major do-or-die cost-shaving scenario.
His was the task of telling staff in the six branches around New Zealand that not only were they going to be made redundant but they had to keep working until specified date. The rules? Only those people still at work on their last day with the company could walk out the door with redundancy package. His message, not surprisingly, was hugely controversial.
“It was really important that everyone had chance to get new job,” explains Minto. “If I had let some people go immediately to other jobs we wouldn’t have had enough people to do the work and the rest of them were going to be flat out trying to keep up [with the work] and wouldn’t have had enough time to go out and do interviews.
“Boy, that created lot of heat. But after about two weeks it went dead calm. They all realised it was the right thing to do and backed it.”
Fronting up with both good and bad news is part of Minto’s personal credo. When he came back to head up Tower’s New Zealand operations at the start of last year, he says, he walked into the perfect storm. The new consolidated office in Auckland’s city centre was fast bleeding staff who didn’t want to make the transition from the more convenient climes of the North Shore. Many of them, he discovered, were mothers with young children for whom the daily crossing of Auckland’s Harbour Bridge was munching into valuable time.
It was, he openly admits, massive management mistake. “Our service went right out the window. Something like 60 percent of all people who called us hung up because they couldn’t get an answer. The phone systems were playing up and we didn’t have enough people to do the work. It was unbelievable.”
Minto’s first reaction was to fess up to staff that management had failed them. “We had put our staff in an impossible situation where they simply couldn’t deliver good service.” Slowly, he rekindled relationships and went on to build on common ground between staff and company needs.
Minto had already had plenty of practice at the cut and thrust of public debate. He’d cut his teeth on talkback radio where throughout the early ’90s he’d fronted business programme unravelling the mysteries of trust and estate planning for perplexed public. And he’d rolled up to Fair Go when it had questioned his company’s activities.
“You’ve got to be accountable,” he insists. “You must face your reality. If there’s not close correlation between what you’re trying to do and what the world expects of you, there’s going to be conflict. Business needs to communicate more openly about issues.”
In Minto’s view, there are wider issues that New Zealand must both communicate and resolve as nation. He had been, he says, “a little reluctant” to discuss some of his thoughts at an open – and on the record – forum at recent Trans-Tasman Business Circle lunch in Auckland. In the end, he had reasoned that he is, first and foremost, Kiwi and his latest hop across the Tasman is only the latest in series of such moves.
Some of these amount to ideological differences between Australia and New Zealand and must, one suspects, have been thrown into sharp relief in Minto’s Tasman-hopping career to date.
A core concern is Minto’s perception that New Zealand’s predominant baby boomer thinking is locked in the memory of the state-controlled Muldoon era and the desire never to return to those days.
While other countries have adopted what he terms “more pragmatic” approaches to key policy issues, “any suggestion in New Zealand of middle ground approach is often challenged without assessing options”.
“People my age who’ve seen Muldoonism have this view that they must never return to any form of subsidy or incentive,” he says. That’s all fine until Kiwi corporates battling for dollars offshore find themselves in an unequal fight against business folk wielding stronger fiscal weapons.
While Minto rejects the re-introduction of “silly incentives or subsidies that create the wrong thing” he believes there is place for “things we want to encourage”.
He takes heart