High Performing Teams – Interview with Grant O’Brien, CEO Woolworths

Grant O’Brien is the Managing Director and CEO of Woolworths, Australia’s largest retailer. Woolworths has more than 3,000 stores across Australia and New Zealand with interests in food, liquor, petrol, general merchandise, home improvement and hotels. The company employs more than 198,000 people and serves around 28 million customers each week.

Grant’s rise to CEO was unconventional, starting his working life in Tasmania as an electrician before heading interstate to explore the prospect of becoming a professional AFL player with the Carlton Football Club.  While playing football on the “mainland” he studied accountancy, which laid the foundation for his future career. After recognising that he wasn’t going to reach the top level as a professional footballer, Grant returned to Tasmania where in 1987 he answered a Woolworths’ advertisement for a Company Accountant.  After working in various roles across the business including buying, marketing, operations and business development, Grant was appointed Managing Director and CEO in 2011.

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Mark:                What do you think is required to create a high performance team?

 Grant:               When I think about creating high performance teams, four things come to mind: clarity, openness, accountability and energy.

As a leader it is important that you are really clear about where you are going, what the strategy is and what each person’s tasks are. But what’s just as important is that you create an open environment where the truth will be spoken and feedback welcomed. An environment where people feel like they can contribute and are being listened to and I think that in order to create an open environment leaders have to recognise that they don’t have all the answers. A little humility is useful.

Openness is not just a soft thing, it’s a hard thing as well. What I mean by that is being open is not just being nice and being a listener, it’s also about being frank and straight. An essential part of openness in a team is being able to comment freely on strategy and performance. Without openness and clarity of purpose it’s hard to build a high performance team.

Mark:                What do you mean when you talk about accountability?

Grant:               In a general sense it’s about being very clear both in communication and also written strategies about who is accountable for what so people understand the specific tasks they have to deliver on. People need to be able get out of bed each day knowing what’s theirs in terms of roles and expected results.  But that’s not the whole game.

Accountability is not just delivering on the specific line items in a strategy, it’s understanding what you’ve got to do to get to that strategy, because quite often the delivery of strategies don’t get achieved simply by delivery of the line items. You know you have accountability if the written strategy says A, B, C, and then D and E occur in the market place and people don’t stand round wondering who’s going to look after D and E. If you’ve got accountability there’s a feeling of ownership and the unexpected scenarios get picked up. That’s the broader accountability I like. That’s high performance.

Mark:                How important is it to have a culture of accountability?

 Grant:              I mentioned that openness involves being straight with each other and think that merges into a having a culture of accountability which is very important and something  we’ve been working on over the past couple of years.  We’ve had a number of high calibre people come into the business from overseas and it’s been interesting getting their take on our culture.

In talking to them about how they saw our culture, they all mentioned that the company seemed to have a “family” feel about it. Most people would find that hard to believe. Woolworths is often portrayed as being a big dark knight, but it’s actually a very caring environment. But the problem with a family culture is that often you don’t have the straight conversations because you don’t want to hurt anyone’s feelings and this was happening with us.

As a leadership team we recognised that it was creating inertia in the organisation and needed to be addressed.  People understood who within the team were high performers and who weren’t and they were saying “how can we be a high performing team if poor performance is not addressed?” And the good ones were also saying “it’s not fair that I always over perform and yet you pay me the same sort of bonus that the others get.”

We realised that to be a high performing team and organisation we needed to move from a culture of being “nice” to a culture of being “fair”. We wanted to continue to be caring, but we wanted to be fairer and more accountable. So a couple of years ago we introduced guidelines that tried to better differentiate between poor performers and high performers. Most people have really embraced the change and the increased accountability has been quite liberating from an organisational point of view.

Mark:                You mentioned that energy was important. Can you explain what you mean?  

Grant:               For me, even though it’s an intangible, energy is really important if you are trying to create a high performance culture. It’s about entering a room and adding to it not draining it. It’s providing the environment for optimism; and that’s not going round and slapping everyone on the back and telling them they are doing a great job and isn’t it a great day and all of those sorts of things. It’s talking about progress and it’s also talking about ambition because both progress and ambition are motivating. You’ve obviously got to back the talk up with a good strategy, but energy is important.

Mark:                So how do you go about creating energy?

Grant:               It’s hard work. Energy is linked to a few things but one of the most important is being positive.  I’m a huge rap for optimism and I’m a glass half full person. I think the role of a leader in a high performance environment, at least in the early stages when Chicken Little is saying “the sky is falling” is to say “no it’s not”. That’s your job as a leader. Your job is to give people faith and give people confidence about what’s coming. If people are confident energy comes. If people are not confident energy is a mile away, so it’s largely about building confidence. Lots of things come into play in terms of building confidence, but being optimistic is definitely one of them.

Mark:                What’s the link between ambition and energy?

Grant:               Having ambition helps create energy. The energy in the organisation four years ago in my view was low because people didn’t believe that there was the opportunity to grow like we’d grown before. Many people believed we’d hit a ceiling. We wanted double digit growth. Initially people were sceptical but we did a tremendous amount of work on setting out how we could actually achieve what people originally thought was impossible given the state of the market. Having an ambitious plan, which spelt out what we each had to do helped turn pessimism into optimism and that brought an incredible energy to the business.

 Mark:                Of the four factors you have identified, clarity, openness, accountability and energy, which one do you find the hardest to make happen?

Grant:               That’s a good question. I think clarity is the toughest to implement. It’s easy to say you have to have clarity, but it’s hard to do. You can have an idea in your head, you can have a strategy in your head but if others don’t get it, and you are not able to communicate it properly you don’t get to where you need to be. Clarity is not just making a statement, clarity is about putting it out there, testing it, getting feedback, those sorts of things and that’s why openness is attached to that. Clarity I find is the biggest challenge for most.

Mark:                How do you make sure that you are clear?

Grant:               If I can use an example. When I came into the job four years ago I could see that we needed to go in a different direction but understood it wouldn’t happen unless everyone was clear on what we wanted to do. So with key members of the team we developed four key strategic priorities that were going to drive the business.  For the last four years I’ve constantly been talking about those four priorities. Whether or not that’s internally, with analysts, with investors, with new employees, there’s been a consistent message and the more you talk about it, the clearer it becomes to all. To be honest sometimes you get tired of talking about those four priorities, but you know it drives clarity and understanding.

Mark:                What’s been the best team you’ve ever led?

Grant:               It would have to be the Liquor Division team at Woolies. When we started it was a $200 million business with a modest market share of 9%. Our competitors had a market share of about 38% and they had the best brands in Australia including Liquorland.  We were really a dog’s breakfast – I think we had 30 something brands around the country courtesy of acquisitions and other things. The early days were really hard. We didn’t make money for the first 18 months or two years. It’s wasn’t a cracking business plan that just got flawlessly implemented from day one. It was learn and adjust, learn and adjust, learn and adjust and it was a team that galvanised on the journey.

Part of the reason we galvanised was because there was no room in the central offices for the team so we actually sat in a different building away from the rest of Woolworths which was a blessing – we were the little team against the world. We shunned all of the corporate pieces and questioned every charge that came our way. We acted like a small business. It allowed an environment for us to build a very close team that went to hell and back before we started to get the success we deserved.

By the time we finished the journey about six years later we were turning over nearly $6 billion, had grown our market share from 9 to 35% and had driven our competitors down to about 23%, so it was a terrific story.  It’s one of those environments, most of us have moved on from the liquor division but wherever we see each other it’s like that footy team who played in the school and won the premiership. You all have that in common but the smallness of the team helped so communication was very high. Hierarchically very flat. There weren’t corner offices, there weren’t offices, we all sat in the same space, we all parked in the same car park, it was that sort of environment and that was important.  It was a small business and we treated it like our business.

Mark:                What did you do to get the team to be performing at such a high level?

Grant:               Again it was a bit about the ambition and the clarity. We had a business that was in a way quite dysfunctional with all the different brands and almost an insignificant turnover. We began dreaming about what we could be and the resources we had at our fingertips and that it was down to us.

It was really a personal poke in the chest for everyone who was in that team. Are you up for this? And we didn’t bring anyone into the team who didn’t want to be there. It wasn’t like we were given the outcasts of talent. We were allowed to pick and have anyone in that team. They really wanted to be part of the team. That was important as well.

Everyone in the team took risks. They took risks with their careers. I took a risk with my career. I went from a very visible job as Head of Marketing for the largest division in the company to a role many considered to be a big step backwards. I remember attending a meeting the day after the announcement that I was going to be in charge of operations for the Liquor Division.  I had a meeting with a head of an agency in Town Hall in Sydney where our corporate offices were at that stage and the person was sitting out in reception when a group of Woolworths people came out through reception and they were talking quite loudly and they said “gee did you see the announcement about Grant O’Brien, he’s going to operations in liquor, geez I wonder what he did”. I took a huge risk. I went home and I remember telling my wife I’ve taken on operations manager for liquor, and she didn’t get it. But we were all in that boat and it was a fun time actually.

Mark:                When you talk to young leaders in your organisation about creating high performance teams, what do you say?

Grant:               Well first of all I highlight that they can’t effectively lead others if they don’t sort out who they are and how they want to operate. I highlight that as in sport, talent just gets you to the starting gate. You also have to love what you do. You need to kick the sheets off every morning and want to go to work and change something, achieve something, do something, develop someone.

I also talk about the things we’ve talked about today. About being really clear and communicating consistently. About having an open environment and driving accountability and bringing energy to the role. And I talk about living their values and modelling behaviour.

I use a really naff example of how I have never and I will never walk past a piece of paper on the ground in a Woolworths store, in an office, all those sorts of things and it’s not because I have a fetish for litter. It’s because I hope someone sees me do it and I hope that they see that I care about the place. I have a responsibility and accountability. What’s theirs? What’s their equivalent of picking up a piece of paper? How do they show in an unspoken way something that reflects who they are? And it works. It works. If I walk into a store and I’m in the first aisle with the store manager or a young kid and I pick up two pieces of paper in the first aisle, I don’t have to pick up another piece of paper in the entire store. They get it and they will do that. As I said it’s very naff. It’s about a piece of paper but it’s not about a piece of paper.

Mark:                It’s about showing you care.

Grant:               Exactly.