A conversation with Nicholas Anderson – Group Chief Executive, Spirax-Sarco Engineering PLC

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Part One 

LM:

My Brother, Thank you so much for an opportunity to converse on a range of topics that would interest young and aspirant leaders across Africa.

NA:  

Thank you! It is a real pleasure – and an honour – for me to be able to contribute with such a great initiative.  

LM:

When I asked you to participate in this conversation, you readily agreed and expressed support towards leadership development, why are you so passionate about it and how have you given meaning to this passion within your Organisation? 

NA: 

Leadership Development has been a personal passion for many years. I am convinced that better leadership is directly related to making the world a better place for all of us.  And this belief applies not only in a business context but also is our communities, family or social environments, as well as politics or economics.  I have always tried to apply this belief in all my activities and since becoming CEO I have significantly enhanced our Group’s investments in Leadership development programmes, not only at senior levels but importantly also at early career and middle management levels of the organisation.  

LM:

You have a very unique background and identity, tell us a bit about your early years and how they have helped to shape who you are? 

NA:  

Although from a British family, I was born in Argentina and later moved to Brazil in my teenage years where I met my wife, an Italian, while I was at University.  I also had the opportunity to travel extensively during my life, for pleasure and work, visiting almost 80 countries.  

During my career I have lived and worked in Brazil, Argentina, USA, Singapore and the UK, so you can say that I have quite a broad international background and experience, not only in developed nations but especially also in emerging countries.  This has shaped the way I see the world and how I have approached opportunities and challenges.  

LM:

What were your great influences in your early years? 

NA:  

In the early years of my career I learnt a lot (good and bad!) by observing the behaviours and practices of a few business leaders within the companies I worked for.  From a business thinking perspective, I admired the books of Peter Drucker – a very simple minded, pragmatic, visionary and humble business consultant.  Probably the first real business Guru.  

LM:

We both spent time at the Harvard Business School in 2013, what value did you find from your experience there, and what are the greatest lessons you took away from the HBS AMP? 

NA:  

Attending the HBS AMP was one of the most gratifying and intellectually challenging experiences of my life.  We were almost 180 senior executives from 60 different countries and every possible type of background, experience and area of expertise.  During nine weeks (and 7 days per week!) we studied and discussed over 170 different business case studies covering almost all aspects of business and economics with some of the world’s top faculty in those matters.  The most significant value I got was the opportunity to interact and learn from such a high calibre and diverse group of people, as we re-lived and experienced such a diverse set of topics.  One important lesson I took away, which I hadn’t anticipated when I started the programme, was the realisation of how many different views or outcomes you can get on the same theme.  

LM:

There are those who argue that globalization is dead, does the current rise in nationalism across different parts of the world spell the end to globalization, or is it a signal to change its course or impact? 

NA: 

I don’t believe globalisation is over, but I do think it needs to change.  I believe the global rise of nationalism is a consequence of unbalanced economic growth.  While the global economy continues to grow in absolute (GDP) and relative (per capita) terms, clearly not all parts of our global society are benefiting or prospering from this economic growth.  This is leading to a growing part of society feeling disaffected and searching for alternatives within nationalistic or radicalised movements, which I fear could have negative consequences in the longer term for our global societies.  

LM:

You were appointed as Group CEO in 2014, taking over from Mark Vernon, how do you think other companies could learn from the succession process and transition between you and Mr Vernon? 

NA: 

The process my predecessor set up for our transition was exemplary and I plan to repeat it with my successor.  I believe the key to a successful transition is that the outgoing leader needs to step back and allow his successor to start taking over certain processes and making his/her own decisions, ahead of formally taking charge of their new role.  The outgoing leader should be gracious enough to share their experience without trying to impose their views, while the successor should be humble enough to listen and learn from his predecessor, without trying to change everything he/she inherits. As you can see, part of this is process driven and part of it comes down to personalities and not allowing egos to get in the way of a successful transition.  

LM:

Many leaders find themselves in the position you were in 2014, where you succeed a leader you have worked with, who has had a great track record – how did you balance the need for change whilst preserving the key strengths of your organisation. 

NA: 

It starts with recognising the strengths and successes of the organisation you are inheriting and not trying to change everything – don’t try to fix what’s not broken! Then look out for the areas you feel your knowledge and experience could add value, reinforcing the strengths you’ve inherited.  

LM:

When you took over as Spirax-Sarco Chief Executive, you set out the focus areas and priorities for the Group, how has the Group performed since then? 

NA:  

I inherited a Group that was already growing and performing very well, so my challenge was to define ways in which we could make the Group even more successful. While still in the transition to the CEO role I initiated a full strategy review and made a point of involving most of the senior leaders of my organisation in that process. Although I had a very clear view of what I wanted to achieve – both from a Business Strategy perspective (for organic growth) and from a Corporate Strategy perspective (M&A) – I also wanted to ensure I captured the contributions and “buy in” of my team in order to maximise our success.  More importantly, I also ensured we establish a very clear Strategy Implementation process with dedicated resources and disciplined governance procedures, as any strategy is only successful when effectively implemented.  Nevertheless, strategy implementation is a lot more challenging (and less glamourous!!) than strategy development.  In the almost 5 years since we launched these strategies, the Group’s revenues have increased by almost 65%, the Group’s profits has increased by over 75% and our employee population has increased by over 50%.  We have become the most profitable industrial Group amongst Britain’s publicly listed companies, and as a result our share price during this period has gone from £30/share to over £70/share, creating substantial value for our shareholders.    

LM:

How do you keep in touch with your key clients across the world, how important is it for the CEO to interface directly with clients? 

NA: 

I believe it is hugely important for all business leaders to remain in close contact with their customers, to personally assess if we are servicing our customers correctly and truly satisfying their needs.  For CEOs this is even more important (and challenging!) given the number of organisational layers between the customers and the CEO. The way I try to achieve this is by asking my team to schedule customer visits during my visits to our operating companies around the world.  

LM:

We once met in South Africa on your visit to the Spirax-Sarco business unit there, how do you spread across the different regions of your organisation? What does your engagement model typically look like when you visit a country or a region? 

NA: 

I plan my calendar with more than one year in advance.  By early September of this year, I had already planned my diary for all 2019.  When I do this, I ensure I travel to all regions of the world where we have operating companies at least once a year.  During these business trips I will see a mix of larger and smaller business units (no one should be forgotten), visit our facilities, meet with employees (especially rising talents) and hold an Operating Review with the local leadership team.  Whenever possible I also want to visit customers.    

Part 2

LM:

What impact have the new technologies had on your R&D, product development and Direct selling capabilities? 

NA: 

New technologies are contributing to advance and improve the performance of our R&D processes, the ability to measure and monitor the performance of our products and our ability to add further value to our customers.  The IoT (internet of things) and the digital revolution are constantly being incorporated to our products and processes, which means that we also have to advance the training and development of our employees in order to improve their capability to service our customers with these new technologies and processes.  We have also invested in digitising our training and sales development tools, allowing the Group to share substantially higher volumes of information and training materials in 16 different languages, across 62 countries in 5 continents and in a much faster manner, with incremental graphics, videos, 3D simulations, etc.  A couple of years ago we created the Spirax-Sarco Academy, an internal organisation with its own budget and structure, in order to boost the knowledge, skills and capabilities of our Direct selling organisation and these new technologies are a cornerstone of the Academy. 

LM:

You have had a successful focus on emerging markets, which emerging markets are key in your plans, and how do you deal with either the real or perceived risks in emerging markets? 

NA: 

Spirax-Sarco Group has always focused on growing in emerging markets, long before that expression even existed.  

For example, we entered Latin America almost 60 years ago and have been present in India since 1946.  Given my background in developing nations I found it very gratifying to come work for an organisation with that leading-edge mentality.  Since joining the Group in 2011, I’ve placed special focus on accelerating our penetration of many emerging markets where we still didn’t have a presence, such as parts of Eastern Europe, Latin America, Southeast Asia and especially the Middle East and Africa.  As a result of this focus, in the last six years we opened new operating companies in the UAE, Egypt, Kenya and Morocco, as well as sales offices in Ghana and Ivory Coast.  We also tried to open a sales office in Zambia, but that hasn’t worked out yet.  Undoubtedly, operating in emerging nations is more challenging from an infrastructure and business practices perspective, however it could also be more rewarding.  In my view, companies willing to operate in emerging markets must maintain a long-term business perspective while being unwavering in the application their Values and Business model until they identify the correct market niches in which they can grow and prosper in the correct way.  

LM:

There are currently alot of corporate scandals across the world that taint the image of leadership in the eyes of broader stakeholders- how do you instil an ethical culture across your organisation? 

NA:  

  • Clearly define the organisation’s Values;
  • Communicate, communicate and communicate.  There is no such thing as over-communication when it comes to Values;
  • Demonstrate by your daily actions that you practice what you preach.  

Leaders must lead by example because people believe what they see, not what they hear.  Also, I believe leaders must demonstrate zero tolerance for anyone that does not follow the Values of their organisation.  No result is acceptable if achieved in contravention of the organisation’s Values.  

LM:

You speak 4 languages, how important is it for global leaders to understand the linguistic and cultural nuances of the different regions where they do business? 

NA: 

I believe this is very important and I always insist with my managers that are working or visiting a different country to their own, that they must make an honest effort to learn the language, culture and business etiquette of their host country.  For me this is not only a way to show respect for your host country, but it is also an enriching experience that will make them better leaders.  Importantly, by embracing cultural diversity leaders will be better prepared to understand different trends, opportunities and threats, making better decisions for their organisations.  

LM:

There is an age-old debate in management theory about the role of corporate Head office and the role of countries or regions; between centralization and autonomy of frontline business units etc. In the real world, how do you drive synergy between your colleagues at the Head office and those in the regions? 

NA: 

Our group has historically operated in a very decentralised manner, empowering operating companies around the world to drive the growth of their businesses in the manner they see best, respecting the realities and culture of their respective countries.  From the Head Office we set the overall Strategy, Vision and Mission, delegating to the operating companies the responsibility for execution and strategy implementation within the boundaries of our Values. The Head Office also monitors the performance of the operating companies through a series of common KPIs/metrics, sharing best practices, seeking to maintain strategic and operational alignment across the business and looking for opportunities to leverage our global scale in certain aspects such as purchasing, IT, etc.  

LM:

How do you see the role of corporates in dealing with both socio economic challenges and environmental concerns for the future? 

NA: 

I truly believe that as active members of society all corporates, irrespective of size, have a role to play improving the socio economic and environmental circumstances of the communities in which we are present.  We must engage with our communities in a mature and responsible manner, not just “giving money” in an arms-length manner.  In our Group, we encourage operating companies and employees to engage with local initiatives preferably related to youth education and professional skills development, as well as environmental monitoring, control and improvement. We are particularly keen on fostering and developing greater diversity – in all its forms – across our workforce and helping attract more women into STEM careers (Science, Technology, Engineering & Maths).  I am a strong advocate of education as the best way to sustainably improve the socio-economic realities of future generations. 

LM:

What leadership and management competencies have you and your team invested in to prepare your leaders for future challenges? 

NA: 

Strategic Thinking, problem resolution, communication, influencing and emotional intelligence are a few of the competencies we believe help develop better leaders.  Personally, I believe emotional intelligence to be one of the more critical leadership competencies as I have seen too many cases of technically competent people with high IQ that fail as leaders due to low EQ.  Another very important competency in my personal opinion is Leadership Courage, although this is not always something that can be developed.  

On that point, I’d like to share with your readers my preferred definition on the difference between leadership and management:  Management is about doing things right, while leadership is about doing the right things.  Of course, usually the right things are the more difficult ones and therefore I think the best leaders are those that have the courage to do the right things. 

LM:

How do you balance your life, keep in touch with friends and family and still run a global company? 

NA: 

Despite my busy schedule and long work hours, I always try to find time to go to the gym (take care of my own health); go out with my wife and friends to restaurants, cinemas, theatres; take time off to relax or travel to new places and take holidays with my family.  I avoid working on weekends and always take my holidays.  I believe we must control our diary and not allow the many demands of the job control our life.  I thoroughly enjoy what I do, but I have always put my family, friends and health above work. 

LM:

What message do you want to give to young leaders and entrepreneurs in Africa and other emerging markets about working towards excellence and success? 

NA: 

The pursuit of excellence and success is a never-ending quest, so you must prepare yourself well and enjoy the ride. Preparation starts with studying and continues through hard work.  Great achievements and realisations don’t come easy, so you need to be prepared to work hard for them. It is important that you enjoy what you do and put all your passion into pursuing your dreams.  But remember: there is never really an end destination only a direction of travel, so you need to enjoy the ride. 

LM:

Nick, thank you so much such a wide-ranging conversation, I’m sure many young and aspiring leaders will benefit from your insights and perspectives. 

NA:  

Thank you, Lincoln. As I said before, it is a pleasure for me to be able to share my views and experience with rising talents of wonderful and beautiful Africa.  

Regards

Lincoln

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