Ralph Waters is an old-world kind of boss but, he is certainly not old school. He was, for instance, the first managing director in Australian manufacturer Email Ltd’s history not to avail himself of chauffeur-driven car. He didn’t even drive new car, being perfectly happy with second-hand Holden. So it is at Fletcher Building where he drives used Honda.
Waters is usually first to arrive in the morning at Fletcher Building’s marble edifice in Auckland’s Penrose suburb. He also refunds the company the cost of his private telephone calls and travels business, rather than first class, on overseas trips.
This behaviour is not part of new-age management fad or an example of mid-life quirkiness. It reflects his straitlaced Queensland upbringing – reputedly strictly Baptist – though Waters seldom talks about what shapes him.
His office, like the man himself, is minimalist. The conversation is similarly so. The normal small talk that warms up the many brash Australians who run New Zealand companies is lost on Waters. “I am not interested in talking about me,” he says in that politely blunt manner that is his hallmark.
The trouble with Waters’ well-practised corporate monasticism – leadership style that turned the hotchpotch arising from the break up of Fletcher Challenge into New Zealand’s hottest company – is that it becomes all the more attractive when you’re asked to ignore it. It is parody on the old saying, “Don’t mention the war”.
Waters’ view is that the company is larger than him yet he admits his corporate traits (such as early to work and refunding private telephone charges) have become infectious – not by direction but by emulation.
“It is interesting that what you do at the top sets the standard.”
Waters’ mantra is simple: “Hard work and thrift.” Yet it tells only part of the story of the spectacular success of Fletcher Building.
When Waters was appointed chief executive in 2001, executives were still in the Fletcher Challenge mode. Within two years they had pruned costs, lifted their game and changed the company’s culture for the better. Waters was the catalyst in the turnaround.
“There was very big cultural shift in that first period and [the staff] had to live and breathe it.”
Waters introduced range of new processes, such as giving directors greater power to approve or veto capital spending. “The board was not asking for [the power]. There is [now] lower level of stuff going to the board [for approval].”
Waters believes the greatest thing that brought about change in Fletcher Building’s culture was the strong financial performance of the company. But the building blocks were well in place when he got there. Fletcher Building was market leader, even if it wasn’t fully aware of its strengths.
It is, according to its skite sheet, big player all round:
* the sole manufacturer of gypsum plasterboard;
* major player in the steel industry;
* major producer of aggregate, cement and concrete products in New Zealand and South America;
* wood-fibre panel manufacturer;
* an extruder of aluminium components for windows and doors;
* leading marketer, distributor and manufacturer of premium decorative surfaces in Australia and New Zealand;
* distributor of wide range of building materials in New Zealand;
* substantial construction contractor in New Zealand and the South Pacific; and
* major house builder in New Zealand.
Its operations, which employ more than 11,000 people in New Zealand and overseas, contain many household brands – Winstone Wallboards, Fletcher Aluminium, Fletcher Reinforcing, Pacific Steel, AHI Roofing, Firth and Golden Bay Cement, to mention few.
When Waters arrived at the company, these subsidiary brands were promoted at the expense of Fletcher Building. Now the Fletcher Building name comes first. But that is the extent of any centralisation under the 56-year-old Australian. Indeed, Waters’ approach has been to strengthen the subsidiaries. He visits the companies regularly and has pushed through major capital spending in the provinces where appropriate. This means that $70 million will be spent on new Golden Bay cement plant, $44 million on new or improved PlaceMakers stores and $100 million is earmarked to improve existing businesses.
That’s what financial journalists should be writing about, says Waters, not his views on the effectiveness of transTasman economic union or his management traits.
Of course, Fletcher Building has been lucky. Its short life has coincided with sustained building boom – something Waters acknowledges but doesn’t fully accept.
“We have had terrific conditions. It is like batting on perfect wicket in perfect conditions. [But] if you look at the first two years, if it was all just strong market, you would have seen the top line going up, not the bottom line.
“All through this boom period we had either none or negligible price increases. [For] our plasterboard, where we have 95 percent of the market, we have not increased prices in three years.
“We have had tremendous market but there are whole lot of things that have been done that help us sustain our position.”
If market conditions aren’t the cause of Fletcher Building’s spectacular growth, then it comes down to the skills and style of the chief executive – something Waters is reluctant to talk about.
Without actually saying so, Waters is no fan of management-style political correctness. The tick-the-box annual appraisals of senior staff aren’t his thing – he would much rather ask poor-performing managers to account for their actions before their peers – and much of the company’s human resources needs have been brought inhouse. One gets the impression that management consultants, who earned healthy living in the days of Fletcher Challenge, would get slim pickings from Fletcher Building these days.
The best description of Waters probably comes from its chairman Roderick Deane who, in 2003, described his CEO as “great operational manager”.
This was in eulogy to Waters on his selection as the Deloitte/Management magazine Top 200 Companies’ Executive of the Year.
Said Deane: “This is guy who really knows how to operate business. On top of that he’s very good strategic thinker – so you’ve got the two overlays you need as chief executive. He has lot of good commercial common sense.”
According to Deane, Waters doesn’t get “carried away with the chase in takeover”. And Waters, said Deane, gets “greater pleasure from touring cement works than an art gallery”.
Deane is probably off the mark on this last observation: Waters’ entry in Who’s Who in Business in Australia suggests varied interests – rugby union, cricket and opera. The first two are common to working-class Queensland boys; opera is an acquired taste.
By the time Waters eventually leaves our shores, we might know what really makes him tick but don’t hold your breath. Just when he might return to the Lucky Country is matter of speculation. Don’t believe talk in the New Zealand Herald of “power struggle” among his possible successors. No date has been set and there is no way Waters would tell the media ahead of anyone else.
“It is not [this] year. I am not about to start telling journalists when I am going. I have an obligation to tell the shareholders at the same time.”
If Waters does depart, the shareholders will miss him. Deane announced to the Fletcher Building annual meeting last November that full-year earnings will be in the range of $475 million to $500 million – well ahead of the $460 million for 2003/04.
What’s more, the directors even got pat on the back from the normally grumpy Shareholders’ Association.
Waters is probably happy with that. Far better, in his view, the praise is spread than being heaped on the chief executive. The cult of the all-conquering CEO is not Ralph Waters’ style. He’s too much of gentleman for that.
RALPH GRAHAM WATERS
Born: January 13, 1949, Redcliffe, Queensland
Educated: Redcliffe State High School, Royal Melbourne
