From representing Australia in rowing at the 1996 Atlanta Olympic Games to steering Wesfarmers, Rob Scott FAIM has proven himself just as adept with a briefcase as he is with an oar during an illustrious sporting and corporate career.
Illustrating a hunger to excel, a desire to learn and an ability to apply oneself both on the water and in the boardroom, Mr Scott’s tenure at the helm of Wesfarmers thus far has been typified by one term: collaboration.
One of Australia’s largest listed companies, Wesfarmers is a crucial stitch in the fabric of the Australian economy through its significant portfolio of assets. Spanning retail, chemicals, fertilisers, liquor, hotels, office supplies, department stores, coal mining and industrial and safety products, Wesfarmers’ businesses include Coles, Liquorland, Bunnings Warehouse, Kmart, Target and Officeworks, amongst others. In a role described by AIM WA CEO Gary Martin FAIM as “not for the faint of heart”, Mr Scott is only the eighth leader to head the conglomerate since its establishment in 1914.
The role, which he has been in for less than a year, is about acknowledging that it is impossible to be across everything and make every decision, according to Mr Scott.
“If I set out to have a detailed understanding of each issue, and a detailed understanding of every force both internal and external impacting our business, I would totally burn myself out,” Mr Scott said. “This experience is showing me how much I don’t know, and how quickly things change in the businesses and the industries in which we operate.”
Working two stints at Wesfarmers, interspersed by a stretch in investment banking, Mr Scott held managerial positions across the corporation’s industrial, insurance and financial services divisions before filling the seat left behind by Richard Goyder AO in November last year.
But it hasn’t taken long for Mr Scott to make waves at the organisation, with Wesfarmers announcing in March its intention to demerge from its Coles division and reposition both businesses across the next decade. In May, Wesfarmers also withdrew Bunnings from the United Kingdom, in a move Mr Scott said would help restore shareholders’ faith in the conglomerate.
Speaking at an AIM WA Inspirational Leader breakfast in August, Mr Scott shared his take on leadership and his role in moving forward the objectives, goals and values of Wesfarmers.
Keeping an even keel
Wesfarmers is a brand characterised by a dynamic and transformative culture which has grown and adapted with the times. This philosophy of change is embedded in the company’s overarching framework and business model called ‘The Wesfarmers Way’. This framework is baked into the dayto- day operations of the conglomerate’s numerous businesses – which, with 220,000 employees and a shareholder base of 530,000, is no mean feat.
During a recent trip to Greece with his family, Mr Scott noticed a quote at the Prison of Socrates; “True wisdom comes to each of us when we realise how little we understand about life, ourselves, and the world around us”.
“I think this perspective has a lot of personal implications in terms of how you approach leadership and I think it also has organisational implications,” Mr Scott said of the quote. “At Wesfarmers, we have a model that I think is very relevant to this. It acknowledges we will make better decisions when we empower our people. We call this The Wesfarmers Way.”
Relying on the framework to empower senior managerial figures to make the right decisions when he isn’t in the room, Mr Scott said The Westfarmers Way boiled down to a handful of crucial points.
“It starts at the top with our core objective to deliver a satisfactory return to shareholders,” he said. “We then have value-creating strategies that each of our businesses focuses on, regardless of what industry they are in, and the enablers of the growth that essentially go to our operating model. These are all underpinned by our core values. “The focus of so many listed companies is the short term, which looks at quarterly sales reporting and performance relative to annual budgets.
“A lot of these decisions may not be in the best interests of shareholders in the long term, so reinforcing this within our organisation has been very important.
“We need to deliver in the long term and the short term, but what I am trying to do in the organisation is bring a greater focus on creating value over the long term.”
Both oars in the water
Many of Wesfarmers’ policies consider contemporary ethical and environmental issues such as emissions reduction, indigenous employment, gender balance and other, broader community talking points. A prime example of this is Bunnings Warehouse and its weekly sausage sizzles and cake stalls.
Enjoyed by thousands of patrons every week, these events provide ongoing assistance to a vast range of local community groups.
“For these to happen, not only do we need the leadership of Bunnings, we need every member of Bunnings to be on board,” Mr Scott said. “Every time they bring in a community group, we engage with that community group. That is what goes towards our reputation. “If I look at what Coles has done in terms of our breakthrough effort in improving indigenous employment, a lot of that has happened at a grassroots level in our communities."
As CEO, Mr Scott said it was his role to not just reinforce the importance of community engagement programs, but also deliver team members with the right, the permission and the tools to make effective decisions in the field.
“There has never been a more important time for big businesses in Australia to behave in a way that ultimately builds trust with the community,” he said. “We need to move away from this narrative of policies that are seen as being good for business – a lot of the policies that might be good for business ultimately create jobs and prosperity, generate taxes and value in our society that can help those in need.
“That is why shared value and building trust is so critically important for the future of Wesfarmers.”
A fundamental facet of The Wesfarmers Way is to constantly evolve what the company does within its business. A key component of this is an investment and implementation of data and digital assets, which is something Mr Scott said his company wasn’t afraid to address and collaborate on as it improved its advanced analytics capability.
“This will enable us to make better business decisions and improve our productivity,” he said. “It will let us serve our customers better, it will give our team members the tools they need to make the right decisions and ultimately it will help us build new businesses.”
Wesfarmers, as a result, has created a new advanced analytics centre that has brought in some of the best data science software engineers in the world. Mr Scott said tools and sophisticated data analytics afforded the company a deeper insight into every facet of the business than before.
“We have also started to elevate the focus on divisional board meetings, developed an analytics academy that we are currently rolling out across 200 leaders in all aspects of the business, whether it be finance, operations, merchandise, supply chain or human resources, to learn about advanced analytics,” he said. “When you start to incorporate aspects of machine learning and AI it gives us the opportunity to tackle problems and develop solutions that simply weren’t possible before.”