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Scaling Up [S3.E7]: Big and Small, Seen it All with Robbie Cooke, CEO of Tyro Payments

In this episode, Robbie Cooke discusses his lessons leading disruptive businesses.

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Ed (02:16): Robbie Cook, welcome to Scaling Up. You truly are one of Australia’s great CEOs and excited to see what we can unearth today. You’ve seen small, you’ve seen big, you’ve seen scaling companies to billions of revenue. Formally, of course, the CEO of Wotif and Tatts, and now the CEO of Tyro Payments.

Robbie (02:37): Great to be here Ed

Ed (02:38): Fantastic to have you. I’d love just a little bit of your own corporate history.

Robbie (02:42): It’s a bit of a tangled tale, but look, my corporate history, way back when, more than 30 years ago, I was a, I was a lawyer, did com law at uni, never wanted to be a lawyer, but I got conned into doing the law degree and look, it was then probably how to escape from law. So, I had a few goes. I left the law, went to, Arthur Anderson’s, and worked in tax accounting for a very short period of time. I wanted to get my P by qualifications, I hated it. I went back to law. I worked in native title litigation for a period, and that got me into a corporate role as a lawyer with what was a great Queensland Company, MIM Holdings, but I didn’t want to work on native title things, so they seconded me off into their oil and gas team, which was amazing.

It’s probably one of the most formative pieces in my career in just terms of exposure to the collision of corporate, commercial, technical joint ventures. So, I loved that period of my life. And we had assets in Papua, New Guinea and Indonesia, New Zealand offshore WA so it was a boy’s own adventure sort of stuff. And, after that, MIM got a bit of strife. They invested in a few assets that didn’t quite do it for them, so they did a bit of a restructure, and my business unit was put up for sales. So, I, worked on selling my business unit, basically I was working in, then Sando bought my business unit, and they hired me back into that unit in a commercial role. So finally, I escaped as a lawyer, got in a sort of commercial world, which was great, and working in, in the JV sort of space in oil and gas. And from that I took a very weird career change. I went off to business called UNITAB or TAB Queensland back then joined on the day at iPod and, was there for about five, six years. Then went to Wotif.com, then, went from there to Tatts and then from Tatts to Tyro. So, it’s been a pretty random sort of, series of incidences that I led to my sort of where I am today.

Ed (04:39): I’m sure at the time it felt random, but looking back, I’m sure there were some dots that could be joined as to why that played out. From my own knowledge, it was sort of 2002, when, when you join UNITAB as head of strategy, that’s the first I’d sort of known of your career. And, and yet to hear the rest of it is fascinating and it probably explains why you have such a, diverse skillset, leading Tyro at the moment. So maybe that’s a good place to kind of segue into giving a brief corporate history of Tyro three ex Cisco employees in, in Peter Hagan, Andrew Rothwell and Paul Woods sort of started this business. And then the major shareholder, Jost Stollman became the CEO and ran it for probably close to 10 years. Then there was another CEO, Gerd, and then all of a sudden in 2017 you were primed and asked to take the job at, at Tyro. So, I’m sure I’ve missed some bits, and then you can fill in some blanks, but what I am really interested in is, at that point in time, what excited you about potentially leading Tyro as the CEO, both professionally and personally?

Robbie (05:47): Look, it was a fascinating period, my career, I suppose. And the backstory was that I’d been running Tatts and Tatts got involve in a merger, in adverted commas. It was really more a takeover with Tabcorp and, Tabcorp paid billion dollars to get control. And so, my job was, I was surplus the needs, and it was quite a long process, about a year and a half in the competition approval process. So, I had quite a bit of time to think about what I wanted to do next. And, and that was probably one of the few times in my, my life where I’d actually had a bit of time just to contemplate what I wanted to do. And I sort of did a list of the things I was looking for in my next role, and I definitely had another role in me or two.

Then I looked back at what I’d done in my career and the things that really excited me. The Purple Patch probably for me was my time at Wotif, which was a disruptor, a fantastic business four years old when I joined it. Three founders all in their sixties, which is very, you don’t think about that for a tech-based company, but I looked at that period and the team when I joined Wotif was about 120 team members. We were growing fast. So, in my mind it was a tech company that I wanted to go to fast growing, disruptive, taking on the incumbents, and mess messing around with the incumbents. I sort of liked that. I’d been sort of messed around when I was running Tatts, which we were an incumbent, so I’d been on both sides of the ledger.

So, I wanted something where we, where it was disruptive, and I wanted something where I could make a difference and it’s a lot easier to make a difference in a smaller organization. You can double, triple, quadruple market cap and companies the size of Tyro or, Wotif it’s very hard to do that in something with 6 billion like a Tatts. So that was sort of what I was thinking about and, it was sort of fortuitous, two of your founders approached me in the midst of all that and mentioned Tyro, and I’d never ever heard of Tyro. So, they, they sort of pitched me what the business was about. And it’s amazing once somebody had talked about it in the next couple of weeks was at a few restaurants and suddenly see the Tyro terminals everywhere. And the more I thought about it, and the more I thought about the payment space, and the more I thought about the position Tyro had in the Australia marketplace, is exactly what I was looking for. The only downside was the head office and the whole office was in Sydney, and I’m at Queensland are through and through. So that was a challenge, with, with the role that a fascinating space, in complex and really difficult in various verticals and payments. Yeah, health, particularly, very complicated space to play in. But that’s what really attracted me to the business. And so really from there I had a number of conversations and I ended up taking the gig.

Ed (08:30): And as you mentioned, at the time, Tyro really wasn’t, and still is one of the best growth companies in Australia. There, there aren’t many, but Tyro sort of at the top of the tree but had seen what you’d probably describe as a little bit of cultural unsettling with, you, two CEOs leaving within 24 months of each other. What, when you looked under the hood, did you see when you first started the job?

Robbie (08:55): Yeah, and look, it was interesting. Absolutely right. I think, after, Jost and Gerd, Rob Ferguson actually came in, one of the board members, amazing man, amazing track record and was in the chair for about six months as well. So, I was fourth CEO in two years. And when I was thinking about the job, and I’d seen the, quite a bit of change at the senior level, not only at the CEO, but the level below it did sort of intrigue me and sort of had this contradiction because the business was actually growing very strongly right through that period. But there’d been a lot of upheaval, which I did do a fair bit of digging into the organization. I did a, caught up with quite a few of the team before I came on, made my final decision.

And the reason the business had continued to grow so strongly was there was a culture and a drive in the team to actually make a difference for the SME. And that’s our 98% of our merchants are SME. So, there was a passion around that SME base, which really got my skin tingling. And when you’ve got a cause that people are rallied around, and people hate me for saying this, but maybe it means that management doesn’t matter, right? When people actually know what it is they’re trying to do, they can, they can keep going after the prize and they know what the prize is. So, I think that’s where Tyro you really was, I think the DNA and the companies really built around that, around that SME pace and getting rid of friction, making payments easier, innovating in the payment sense. , when I talk about innovation, it’s not fundamentally changing the world, its innovation, a sense of actually just listening to your clients, your merchants, and actually hearing where their frustrations are and actually delivering something that solves for that.

So, it’s not transformational innovation is actually just innovation and delivering the customer desire and want. So that was really interesting when I did do a little bit more talking to the whole team, when I came on board, I spoke to everybody in the organization. We got about, back then, we had about 430 team members. The thing that came through though, and I think the thing that perhaps the business suffered from during that period of turbulence was the project pipeline for the next year, two years had less focus. And I think that was probably one of the casualties of the change at that senior level. But we quickly got onto that and worked out where we needed the head for the next few years.

Ed (11:13): Yeah, I think you touched on that, that product market fit, the company at this point in time was still growing very, very quickly despite what was happening behind the scenes. And I guess that part of the joy of being a private company at the time, you touched on the innovation piece and that being at the heart of, of Tyro, and I think still maybe half your employees are what I’d call technologists, but often when we think about innovation, we think about visionary founders, as you say, structurally innovating and changing the world, and yet Tyro is doing something different. But how do you foster a culture of innovation as a professional CEO that’s come in to provide this rigor and certainty culturally?

Robbie (11:57): Yeah, for me, I’ve been so fortunate in the three ASX roles I’ve had to work in businesses which have or had a very extensive tech element to them. I mean, they’ve all been found of businesses, and they’ve all had that DNA of innovation. Wotif was a great example, I joined four years in the three founders were still in the business very disruptive, took on the traditional travel agents and fundamentally changed the way people booked their hotels and then subsequently flights. And in that business, we went from when I joined, just providing a 14-day booking window for accommodation in Australia. We had inventory elsewhere beyond Australia, but we ended up providing flights. We ended up providing things to do. We ended up, expanding our footprint. We bought businesses across Asia.

Ed (12:48): Huge disruptor at the time,

Robbie (12:49): Huge disruptor, but innovation in that business, we could see where we wanted to go. But then you got, you got Tatts. I mean, Tatts was obviously around quite a bit longer than Tyro or Wotif, but George Adams, who was the founder of that business he was a very innovative disruptor as well. He created a lottery off the back of horse racing results and had to move jurisdiction a number of times because the governments in each the various jurisdictions tried to shut him down. So, he moved from New South Wales to Queensland to Tasmania. So again, very innovative disruptive business. And then to Tyro again, just fundamentally changing the way payments are done in the country, but 17, 18 years old, with three guys that came up with the idea of building a payment switch engine from scratch.

I mean, that is just, you think back in those days when the banks completely dominated things, just such an amazing courage in their convictions to do something differently. But for me, coming out of those businesses, as not the founder, but I’ve been in businesses which have disrupted enough or been disrupted as it was the case of Tatts, to know that you’ve got to keep that energy, you’ve got to keep that passion in the business. You’ve got to give people the power and authority to push good ideas and to let them percolate through the organization. And it doesn’t come from the top. I mean, you can create an environment that nurtures innovation, but, the great ideas, even in founder businesses where the founders are still involved the founders have done exceptionally well, are the ones that actually know when is the time that they haven’t got all the great ideas, and how do they make sure the ideas in their team can actually come up through the organization.

And Tyro’s a great example, right? Most of the really innovative ideas that Tyro has embraced and pushed through its platform have come from our merchants. And so, you look at us, hospitality is a big area for us. It’s one of our three key verticals. And Tyro was first in market we split the bill first in market with percentage-based tipping, first to market with bar tab. But all those innovations and all those ideas came from our merchants. And we’ve been exceptionally good with having our sales team. A lot of them have come out of the hospitality vertical. They can talk the talk with the merchants that have decided to trust us with their payments and the ideas come through those channels get fed into our engineering team, they get embraced and then push through the organization.

So I think it’s just your approach. I think in, in running a business, I think you can be a founder and actually be too tight and too controlling, or you can be a founder that embraces great ideas and lets them happen through the organization. And I suppose I’ve as a non-founder of it, coming into businesses, I’ve always had that fascination with tech. I’ve always had the fascination with how you can make things better and how you can change things. I’ve always had the fascination with branding and how brands work in the market as well. So, it’s about just how you engage with your team more than anything, and how you let people get on with things.

Ed (16:03): Part of the scaling pain points that founders do find is they get to, let’s say 50 or a hundred million dollars in revenue, and they, they do run out of ideas and they, they actually need to completely turn the culture of the business on its head. So, it’s really interesting to hear you just create some color around someone to come into that business and do that. One thing that I am really interested around innovation is Tyro obviously has a bank license. And so, there are a whole range of what I’d call railroads around ARA regulation. And so, finding pockets of innovation within these railroads must be trick at times.

Robbie (16:40): Yeah. Look, it is funny, right? When I came on board to Tyro and, we’re in ADI, so we’re full bank, and people said it’s a really heavily regulated industry and it’s going to be really tough to do things. Look, it is a regulated industry, and I think the rigor that comes from that regulation is actually very good because it doesn’t put some disciplines around your business. But I’ve got to say banking is nowhere near or as regulated as a gambling space. So, at Tatts we had lottery licenses in every jurisdiction in Australia, other than WA we had wagering licenses in Northern Territory, South Australia, Queensland and Tasmania. And then we have monitoring licenses for slot machines in, in Queensland and, New South Wales, every one of those businesses were regulated. Every state had one or two regulators that governed our business. None of the regulators really communicated with each other. Any code change we wanted to make had to be approved by our regulator. So, you think if you are op operating in a fast-moving business where you’ve got a whole bunch of digital only businesses out of the Northern Territory, we’re making changes on the minute. And we were in a scenario where we had to get our code changes approved, and you’re trying to respond, That’s tough, right?

Ed (17:58): That’s regulated

Robbie (17:59): That’s regulated. So, so I’ve actually, maybe it’s just the relativity for me. I haven’t found it, that difficult. But look, I’ve got to say you, I think it isn’t unique to, financial services. I think organizations can get to a size and scale where they lose touch with their customers, they lose touch with what’s acceptable. And, and I think that’s the banking inquiry really brought that into the spotlight. And I don’t think the banking world is unique in this respect. I think there’s a lot of other big corporates around Australia, which probably would, in that same situation, would, find a lot of things that weren’t right. But that again goes back to, the culture in your organization. If you’re committed to doing the right thing, being good focusing on your customer, you won’t you’ll make some mistakes along the way, but you won’t get into the situations some of those larger organizations have. So, I think that’s important. I think regulation, though, in banking, as I sort of said, for us, it, provides controls and systems and assurances, which at the end of the day are for the greater good of the business, the greater good of the customer, and the greater good of the community. And so, I don’t have any issue with being in a regulated space

Ed (19:07): While we’re talking about the payments industry. At, at the time when Tyro started, it was highly innovative creating this kind of frictionless payment experience. But payments is a fast moving universe and fast forward 20 years, and now how quickly, it’s accelerating, that rate of change provides a whole range of threats and, opportunities. But there is a world, and I think it’s coming quickly where payments are probably commoditized. And so, Tyro’s key competitive advantage is probably going to be whittled away, even though the penetration compared to the banks is, small and there’s still a lot of opportunity. How do you think about innovations that are coming down the pipe might be horizon to strategic insights that you think you can really execute to really make Tyro at the forefront of the payments industry?

Robbie (19:56): Yeah, and look, I, think all businesses are vulnerable to disruption, right? And I think at the end of the day, it’s the moment that you get comfortable, it’s the moment you get complacent about where you sit in the ecosystem is the day you probably die, right? Or to start a year slow death. So, you’ve got to be looking over the horizon. You’ve got to be thinking about, okay, if I was thinking about my business, how would I disrupt myself? So that’s critically important. It’s also though, I think really important. I think one of the unique opportunities that remains for Tyro is there is a regional flavor to payments, right? It’s, there are global players, and they’ll provide a homogenous solution across the world. But Tyro’s been very successful by staying focused on certain verticals. So, three core verticals, health, hospitality in retail.

So, understanding them deeply, actually thinking about what’s coming next in those verticals. And I think there’s a whole world of opportunities still for us in those verticals that do things differently. And we’ve got a smorgasbord of things that we can do in those verticals. So, I’m still really excited. I think we can keep innovating and changing, but the other bit was staying regionally focused. So, the Australian market, maybe one day we go wider, maybe New Zealand comes into the fold. Maybe some other markets that’s down the road. But I think by being regionally focused, I think that’s also enabled us to play to the quirks, the nuances, which are really important, and a homogenous solution went necessarily solve for.

Ed (21:27): Couldn’t agree with that view more. And, and you touched on these potential horizon one strategic initiatives on a Tyro Connect and the platform solution is coming down the pipe. How do you think that will create a greater moat for, for Tyro and the Australian market?

Robbie (21:46): Yeah, look, when we sort of look at our business, I mean, payments is at the core, and as you sort of, as we talked about, we’ve got a banking license, which provides some unique opportunities for us and add on products. And we never want to fully bank the SME, but the banking license enables us to provide solutions which they might not be able to get from their major bank. So, whoever they might have their mortgage from or whatever. So, we can provide very, tactical product solutions using the banking license. Tyro connects another element to that sort of armory, which is trying to reinforce our position in the environment our SMEs are working in. And so, Tyro Connect for those that don’t know, is really a one-to-many hub for the apps that want to interact with the point-of-sale system.

We are integrated with 306 plus point-of-sale system, so we’re experts at that integration piece, which actually is quite something quite unique by having that integration to the point-of-sale systems, if there’s a multitude of apps that want to connect to the point-of-sale systems rather than trying to do one to many, they can just build to the Tyro Connect platform. And then we, build to the point-of-sale systems, now that creates a really interesting opportunity and our position with to connect is really to have it there as a value add. We’re not looking to monetize it, we’re not looking to charge merchant or apps at this point in time for being a part of the ecosystem, but, it becomes a really, interesting place because all of a sudden you get more visibility, more data, more insights about businesses, sectors, regions, which we’re hoping over time, and this is still very nascent, but we’re hoping over time that we can use that information to the benefit of our SMEs and we can help them improve their businesses. So that’s a good way where we can continue to add value to, to our merchants. So that’s something that really excites the team and myself. It’s, something where we think we can make a difference.

Ed (23:39): And, and of course the two-sided network effects to that can be incrementally game changing for Tyro moving forward. Just to change tac briefly and zooming out, I guess let’s talk about the IPO process. Tyro obviously almost did a year to the day listed on the ASX. I think, the ASX second biggest technology listing of all time, fantastic result for everyone involved, but it speaks to the preparation that didn’t just happen for six, eight weeks, before the IPO. It was a an 18-month, two-year journey to that point in time. And a lot of people don’t realize that. So, let’s just pull back the curtains, so to speak, and maybe you can give some color as to the key points that you thought were really important to the success of the Tyro IPO. And maybe I think it will help shape some advice for other CEOs and founders that are thinking about a listing.

Robbie (24:55): Yeah, no, a really interesting case study and it was an IPO that was done in quite an accelerated period of time. So, we kicked off the process post a strategy session, which we ran in probably June of last year. We went out to seven investment banks to do their pitches. And from the day we appointed our advisors to when we IPO’d, it was sort of three months, I think it was actually breakneck speed. Now, the reason we were able to do the IPO in the timeframe we did was because an enormous amount of prep work had been number four. And that was number one. Number two, we kept the team that was involved in the IPO very tight cause we didn’t want to distract the business by the IPO process, which again is something that I strongly encourage people to think about it though embarking on this path because you can get very distracted and a lot of people want to get involved because it’s exciting as soon as a shiny thing, but it’s actually hard work and is actually a major distraction potentially for a business if you let that happen.

So, you got to be pretty disciplined. We kept a very tight team, great advice. We’d done a very deep, strategy reset and planning process the first half of calendar last calendar year. So that really did provide a lot of the thinking, a lot of the content which you need for the prospectus, and you need for the verification. So that was sort of just part of our planning process, and we wanted the reset, the strap process. So great strap team at Tyro and fantastic job. And we pulled together what is the most intense Strat. document I’ve ever been involved in, which is a lot of fun. So, we had that as the sort of starting point. We had a board that was very supportive. But the other thing where Tyro was a bit unique, and I think people shouldn’t overlook this, we were a disclosing entity.

We were public company disclosing entity. So, we were doing a lot of things that you would do as a listed company and having, worked in the listed environment coming on board to Tyro, it was actually operating to a very large extent, like you’d expect a listed company to do. And I think that’s a great discipline. If you were embarking on a listing process, I’d actually try and any business I was involved in, I’d actually, even if it wasn’t a public company, I’d actually say, Okay, let’s pretend for the next 12 months that we’re a listed entity, let’s do audit accounts. Let’s actually do an annual report because Tyro did an annual report. Let’s run an annual general meeting like you run a listed company annual general meeting, which is what Tyro did. Let’s do ASX releases mock ones for any time we’ve got something that’s announce-able, let’s actually think about ourselves in the context as being a disclosing entity. So, I think if you do that in the year before you actually think about going to market, you will be in such a better place. And the transition from non-listed to listed, we’ll be so much easier, but nobody ever tells you to do that, right? And that’s only because I’ve sort of lived the different environments. If I were do it again, I’d a hundred percent would actually set that structure up in place before, kicking off a listing process.

Ed (27:55): That coming from someone who’s just been through the process is like absolute gold dust for people listening because as you say, that is not what people hear often, it’s a rush process. But to take the time to create the rigor to ensure that you are public market ready is so important to ensure that not only the listing goes smoothly, but it’s more about the year, two years after that you list so that the investors can understand your business, that your investor relations is spot on and you end up trading at a price and multiple that is deserving of the quality of the business. Has anything changed post listing? I mean, you talk that the business was ready, but ultimately you only find that out once it hits the boards. And so, is there anything upon reflection that you thought, oh, maybe I could have changed or has anything changed from your own personal relationship with the business?

Robbie (28:47): One of the things people often don’t think about, but I did not even pass lives, is when you listed you have an obligation to your shareholders. There’s a lot of communications, there’s a lot of talking, there’s a lot about talking to people about where you, where the business is currently, where you looking to go. There’s a transparency, which I enjoy. I’ve actually really enjoyed that market facing piece. And there’s an honesty in those communications, which is critical as well because it’s a trust game. At the end of the day people invest in the business because they trust the management. And the moment you lose that trust. So, the moment your CERs, but look, I wouldn’t say anything played out differently, to how we were expecting other than, we went from the highs in December of in what was a tough market.

We got up, in one of the few IPOs away for the year, then March hits and we’re in Covid and all of a sudden, all the rocks that you were sort of banking on just disintegrated and our merchants and the hardship that they all went through. And then, when you’re passionate about SMEs and you see businesses you’re going, these businesses are going to be destroyed. I mean that’s, you think back in March when Scomo was saying that we were going to be closed down until December and hard lockdown and sitting there going, My God, what’s going to happen? How’s this going to play out? What’s this mean for our merchants? What does, what’s this mean for the team? What’s this mean for the business? It was actually awful. And I’ve never in a 30 plus year career experienced anything like it was actually gut wrenching.

Ed (30:21): I have in my notes to talk about the impact of covid later on. But I think let’s fast forward that now. Cause I think that’s, this is a perfect time to, to bring it in. You touched on that transparency piece and one thing that stood out from Tyro’s Covid response, aside from, and we’ll get to it, looking after your merchants, which are so key, and that level of care. You took it upon yourself to release to the market weekly, the transaction volumes and that investor relations and transparency is something that you kind of alluded to in your previous answer, but how important do you think that was to step up and actually be completely open and honest with what was happening?

Robbie (31:03): Yeah look, hugely, and I got to say I appreciate my board support in doing something, which is pretty radical, right? But the thing that got me thinking about doing it was in that environment in early March, mid-March, end of March, yeah, the market was volatile as I’ve never seen anything like that. The she price would move, and we listed at two bucks, 75, we got to four bucks 30 40, and we went down to 97 cents. So, this is a roller coaster ride in a five-month period. But our share price was moving around very randomly, and people were hearing news they might have heard something about After pay, they might’ve heard something about Zip, or they might have heard something about another business. And all the share prices were moving, even though there was not the connectivity between, the news here to the news there when I thought about it.

And you just look at the business we’re a fairly simple business to report on transaction value, that’s our, what we’re processing it’s not a number that’s really derived from anything other than pulling out some data out of the back office. So, it’s a pretty transparent and relatively easy number to access. So thought process was, well, let’s just publish our transaction value weekly, let the market actually know what’s really happening minute to minute, and let people make informed decisions rather than waiting for 3, 4, 5 months for half year or full year results to come out. And we originally were going to do it for a three, four-month period. We extended it for another six months. So, we’ve committed to keep doing it till the end of this, this calendar year. But I’m very hopeful that we’ve continued doing it in the new year as well because it’s just provided a line of sight that makes it really easy for people to understand where we’re at. It just gives that openness, which Tyro is a business, has always been about. It’s just we’ve had that in our culture, just being very transparent, very open.

Ed (33:01): That’s the best-in-class IR case study. And, the share price has stabilized because of it, but what these transaction values became was almost a proxy for the economy and people would start looking to these releases to understand what was happening around Australia in SME land.

Robbie (33:18): Yeah, look, a hundred percent. And I think, also it gave people some confidence just generally what was happening in the economy. And you could see things like when Job Keeper and, some of the stimulus that the government was putting into the market, just that that actually was working, and it was actually holding things together. So yeah, look, in hindsight it’s something that was a step out. It was not normal people saying, well, if you do that or you’re potentially not giving the full picture because you’re only saying the transaction value. You’re not going down to, gross profit or profit or whatever. But look, I think it, the market’s savvy enough to actually understand what that represents in the context of the business. I think it was, yeah, truly one of the best things we did in that period in a reporting sense.

Ed (34:04): Yeah you should be commended highly. Just to, to change tac quickly, you’ve been involved in a range of mergers, acquisitions, partnerships, whole gambit, right from UNITAB and Wotif, and recently with, with Bendigo and Tyro, I’m really keen to understand what you look for in regards to an acquisition and assessing targets specifically around the importance of cultural fit, how you deal with things like the technical merger at the back end that people don’t necessarily see and maybe reflecting on some mistakes over the years.

Robbie (34:40): Yeah, and look, I have been involved in a lot of transactional activity over the years and I think, the first one for me and probably the one that actually opened my eyes is just the combination of businesses with a shared technology background and backbone and just the efficiencies you could bring from them. And I was very fortunate. I always say I was the apprentice and I worked for the sourcer and my boss back in the UNITAB Queensland days. A guy called Dick Macel Wayne, who I know a lot of people in Sydney have mentors, but Queensland mentoring isn’t really a thing.

Ed (35:15): Happens down the surf that’s where people do their mentoring about the back of the waves.

Robbie (35:18):Dick Macel Wayne actually really was probably one of the number of people that really did support me in my career and taught me a hell of a lot. And he and I worked on the acquisition of the Northern Territory TAB, and we were in there against, at the day, Tab Limited, which was a big listed New South Wales equivalent, which subsequently got brought out by Tabcorp, Tabcorp and ourselves. They all had teams of bankers, and all went up to the Northern Territory in dark suits and people in the territory look at them very strangely. Macel and myself went up there and were in shorts and very casual, no bankers. I did the modeling and the legal, so we didn’t have an external firm. And it was, it was a deal where the two big guys overcooked it and then ended up saying, well, they’re our synergy, so we’re not going to pay for them.

You, need us more than the other way around. And Dick and I went there, and we just looked at the business and said, wow, this is a great little business and if we bolted onto ours, we can dismantle a whole lot of technical costs and keep the team on the ground and the territory. A guy in the business running, the business guy called Tony Flanigan who stayed with the combination right through to the Tatts days. So, we bought that in, we got the efficiencies out, we kept the team together that was in the business, and we integrated them in the sense that we had a relationship with Tony, and he kept running the team. And it all worked wonderfully, but we learnt so much from that. So then when the next opportunity came, which was the South Australian TAB, we knew all the secrets, we knew how they actually make these things work, and we were able to outplay the big guys again.

And in that instance, it was a bigger team. We put one of our key guys from our Queensland operation into the South Australian operation. So, he became the conduit for making sure the communication flows happen. And when people had issues or challenges with head office, he could sort it out. So, we worked out how to make the organizations that we bought work within our system. We learnt how to get the technical efficiencies in the greater organization, but keeping the customer facing a bit exactly as it was. So, punters hate change, right? So, the way we integrated these different businesses, we didn’t strip out the terminals and change the way people filled in their betting slips. We kept exactly the customer facing bit identical. We did the clever stuff and the way we actually made the network of terminals in South Australia talk to the central host in Queensland, we did the same thing in the territory.

So that was one learning. The other one in the Wotif days we bought, couple of businesses, we took over the listed travel.com au business. So Webjet had a bid in, we outgunned them and got that business and that gave us a flights capability, which was hugely important. We spent a lot of time getting the travel.com team was in Sydney but making sure that team worked really well with the Wotif team and Wotif provided the accommodation back in for them and they provided the flight send back in for us. So that was, that worked really well. But then we had some bad ones. So, we took over a business which was a gifting business, which had an earn out, which didn’t work really well, so I didn’t connect and there was a bit of friction in that transaction. So, it was a bit disappointing.

I bought another business, Asia Web Direct, which gave us a really good footprint in, in Asia and that was a lot more complicated, bringing the cultural differences. And Asia Web Direct had offices in Bangkok, KL, Singapore. So, we had very mixed cultural backgrounds in those offices and then we were blending it in with our teams. So that one was more challenging and wasn’t perfect than how we brought the different teams together, but ultimately, we got there. So, look, I had a lot of opportunities to work on combinations and they’re all different. They all require a different approach, but at the end of it’s actually the human piece. It’s actually how you communicate. It’s actually how you make sure people understand what you’re trying to do. Often there’s a fear factor when there’s combinations, people get worried about their jobs and their roles and the positions. So, it’s actually, how do you bring that all together, make people comfortable, feel safe, how do you actually get the communications working? And then how do you make sure those communications work over a longer period of time when you’ve got different cultures in play?

Ed (39:27): I was going to try and elicit that last little response. Cause it hearing you talk about the successes and the failures, it seemed as though that that was the underlying determining factor of success, was that cultural fit at the end of the day. And managing that actively. People talk of synergies and investment makers love that word, but when you’re on the ground, that’s not actually what you got to make the difference.

Robbie (39:50): You got to make them work. Right? And I’ve seen some other ones where there’s been wonderful opportunities, extract synergies, but the cultural piece was marked up and the synergies weren’t realized.

Ed (40:04): One last theme that I’d love to, to get your take on and the reason why I asked this is here at tdm we’ve done some content production around what does great look like and around boards and CEOs and CFOs, but that’s just our views as investors at a high level, 20,000 feet from what we see around the world. I’d love to get your view on the ground, what to you makes for a great board or a great non-executive director and specifically with the interaction with the CEO.

Robbie (40:35): Okay. It’s a really great question. And I’ve had the benefit of seeing the TAB Queensland board. I wasn’t the CEO, but I was involved at the sort of board level quite a bit with the acquisition. So, I got to see the UNITAB board, obviously the Wotif board, the TAB board, and the Tyro board. And I mean, a couple of observations. One it’s not so much the individuals on the board, it’s the way the individuals on the boards interact and work as a team. So, the best way of looking at a board, it’s a team-based activity. So that’s, you’ve got to have the right players and that means not everybody’s a rock star or sometimes not anybody’s a rock star. It’s actually the individual talents that they bring in combination and boards change.

Like I’ve worked with some boards that were absolutely fantastic and then certain pressures come into play and that pressure can cause just like in a sporting team, can cause people’s behaviors to change or people’s perspectives to change, or people who have fundamentally different opinions about things. And that gets really hard, right? And so a board can be perfect one day not so perfect. The next that that happens, I think in terms of a, CEO, and the interaction with the board, and I’m probably a little bit old school in some respects, and Tyro, when I joined the board actually had to step in into the weeds, because of some of the changes that had happened. So, probably stepped into an area where the board really needs to back out of and there’s a need for the communication in board and management.

There needs to be a rigor around it. That’s not to say it all has to flow through one individual, but there needs to be some disciplines around the way those communications happens because you are CEO, you’re sort of leading a team and if all of a sudden you don’t know what’s conversations are going on, it makes it roll harder, right? So really good boards understand the board role and what the board’s trying to do. They understand the challenges for a CEO and running a large team and understand the ways and where they can add value. So, it’s really super important. The other relationship that is critical is it’s the CEO to chair role and that’s also one where you never want to see, a chairman and CEO’s best buddies because that’s sort of not what needs to happen.

There needs to be a healthy respect between both, both ways. There needs to be a better distance because the chair’s role is to make sure the CEOs on track and hold to the strategy or her of the strategy that’s in place. And sometimes, you need to have fairly robust conversations and similarly as a CEO you need to not be afraid to take your view up with the board and up with the chairman because if you don’t, you’re pretty much not doing your role. So that’s something which I think people sometimes don’t appreciate. At the end of the day, it’s a people game and there needs to be respect, there needs to be listening, there needs to be a healthy debate, but it needs to be done in a way which is constructive, not destructive. And also, not in any board I’ve been involved in, but ones that I have observed, there needs to be not a culture fear.

Like nobody should go to a board meeting like a team member to present feeling scared or feeling like they’re going to get belted up. That’s not the culture you want an organization. Cause where you’ve got that, where people feel like the boards there isn’t as a disciplinary body that creates an environment where people tend to not want to be open or they hide things or they’re fearful about outcomes. And I’ve seen that in other organizations and that culture then permeates right through the organization. So, boards can play a huge role in being positive, encouraging, holding management to plan, being tough where they need to be tough, but doing it in a way which doesn’t create fear.

Ed (44:37): I love what I heard then in regards to culturally the impact a board can have. And often the saying that a fish rots from its head is so relevant when it comes to corporate culture as well. If the board is, has that antagonism as you suggested to management or management, fear the board, you’re never going to have a highly cooperative company that that can grow collaboratively. The other thing that I love taking out of that is that sports analogy and it was almost role playing a sports team going through the Tyro board. , that’s a wonderful kind of visual last thread. When you’re looking to other CEOs and great CEOs of which you are one of them, there’s no doubt, what are the qualities that you see in others that you wish that you might be able to bring into your own leadership style?

Robbie (45:27):Yeah look, it’s, again, a really good question. And I think everybody’s got their own way, right? In their own manner. And I’m not a ra ra CEO, I’m not a I ran a mile from doing this podcast.

Ed (45:42): I mean months to pin you down.

Robbie (45:43): But I really enjoy people. I really enjoy the interaction. I really love just seeing an organization in full flight and achieving what it can do. So that’s where I get my buzz from. But there’s other CEOs in this role that are, do it completely differently, right? They’d have a different style, different approach. So, I’ve always been in the view, and it’s interesting, right? Particularly when I was involved in the Taps Tabcorp merger where there was a lot of analysis done on my leadership team, the Tabcorp leadership team, trying to work out who should be in certain roles. And I think of all those processes there’s a designated leadership style that people say you need to have these attributes to be a leader. And I saw some people in my team that were, were not considered for roles because they didn’t have these criteria that somebody had predetermined is what you needed. And one of the roles, and I won’t say specifically which, but it was leading a team, which was a technical area. The person on my side that was leading it was absolutely probably the best, the best technician ran the best team, and I’m going to say what the team is in a minute but ran it superbly in a way I’ve never seen anywhere before. And she was overlooked twice through a two review processes because the view was she didn’t have leadership and it was bogus, right?

Ed (47:09): Comes in many forms, leadership.

Robbie (47:10): Yeah, it comes in many forms and different styles of leaderships for different teams and different moments in time as well. So, look, I’ve ducked your question, in a way there’s a huge amount of CEOs out there. I think are amazing. But would I change my style to be like them? No, because it wouldn’t be authentic. And I think that’s probably the thing, if you’re going to run an organization, don’t try and be somebody you’re not. Don’t try and change your stripes because it doesn’t work. People see through that. I am by far not perfect in my role. I’ve got lots of things. I can get better and every time I do a role, there’s things you learn about just your style, your approach that internally you’d know you could run better. But I don’t sort of say, I want to be like that person or that person. It’s just the right style for the right time and the right way you interact with people’s the most important thing.

Ed (48:06): That was the answer I was hoping you were going to give because you’re such a humble person. I didn’t know if, if that’s where you were going to take it, but a wonderful response. Robbie, Thank you so much. I’m glad I could pin you down. This has been a wonderful hour. Thank you.

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