And the Burberry story fits into the learning organization philosophy.

Stephen Pitt-Walker

Absolutely. Because in order to reframe, we must learn, we must know, and in order to maintain and continuously renew, continue it, a process of continual renewal. Uh, and, and we all need to do that in, in, in a VUCA world, you know, on a very rugged business landscape that has lots of pressures. These are P&L pressures too. And in order to service all of that P&L model that I spoke of earlier, then what we need to do is learn. And we need, we need to learn from our context, work from our industry, from our partners. We need to learn from our stakeholders today. Very important to learn from the stakeholders. And we need to learn from, I think, also global society. We need to learn in, in all of these ways, economically, socially, politically, without getting, I hope to say, not getting too entwined in the political partisan, these, these ideological things. But, you know, we can't avoid that either. We, we, you know, to, to avoid or not to discuss these issues. Political issues and and stakeholder concerns with respect to political issues, social issues would be to to miss a whole raft of opportunity and create a lot of risk. So we have to do that as well, but in a balanced way. So the organization has to have a sensing system. It has to have a screening system. It has to be learning from its environment as well as internally. Our capabilities will change based on our learnings internally. Our competencies will too, but our products and our projects that we initiate will change on the basis of our external or extrinsic learnings. And we need it. We need that as a, as a set of intelligence features for the corporation or the venture, whatever it happens to be. And that's from all sources of information that we create intelligence, intelligence being market or our own business analytics, it's, it's an all source function too. So all sources of learning from our people, from people who come from different spaces, from other countries, from, uh, from our, our industry context, from our competitors and, and from probably the renewable and renewing markets.

So changes over time in terms of social context and social imperative, the needs and the demands of stakeholders. One of which clearly is our customer base and our investor base too, to an extent, not wanting to get tied up into debates about whether ESG is the right form of understanding of that. But it is there. And it did come about because corporate social responsibility and self regulation had had largely failed. Yes. investor community space where investors want to invest in values aligned products and services companies.

Maureen Farmer

 Before we move on to that topic and others, what I would like to ask you is this is a question that comes up a lot in my professional networks in, in the work that I do.

So I've had the question posed to me dozens of times. Maureen, I'm a CFO. I don't hold P&L. I'm a CTO. I don't hold P&L. My vision is to move into a CEO role. Are there ways of measuring effectiveness aside from P&L that's going to give the board confidence that I can move into a CEO role and be successful?

Stephen Pitt-Walker

Yes, it's a, it's a very good question. And I don't know that there's a cookie cutter answer or a, an answer that is general. You can't throw a blanket over this, but what I would say is it depends. It depends on the requirements and, and probably to some extent, the space, the business, the team.

Maureen Farmer

I'll give you an example of, of someone I know who was the very first, and I've said this, I've mentioned this story before, the very first non CPA, CFO in a very large company who was promoted into the CEO role and was very successful.

Stephen Pitt-Walker

Yeah, well, and it can be. Because one of the things that I would say very first about this in relation to this question is that leadership is more important than anything else. the ability to lead. Now, your analytical skills are absolutely important.

You will have gained those. Whether you've held P&L or not, everyone, everyone has gained, uh, technocratic skills, analytical technocratic skills, technical skills, and everyone's been around the business and the business imperatives are always inclusive of the bottom line. So, Bottom line management doesn't just come through pure P&L ownership or holding, you know, I, I think it comes through owning parts of the P&L at times, whether that's in project spaces or in negotiation spaces as well, transition or transformational spaces, because we're all looking at performance measuring and what performance comes out of the delivery of projects, product or service related when they deliver to the business that then delivers to the customers. So I think leadership and the ability to lead these processes is really important. Actual P&L experience, business management, GM, gross margin, ownership and accountability. Yeah, it's a really, it's a really good thing to have. But I don't think it's, it's not an immutable requirement.

So I think that again, I say it depends on the individual and it depends on the organization and business that you're going into and the team that's around you. Because I think good leaders, as we know, are capable of extracting great value from people by good management and leadership. And decision making. Yeah. I think that, that that's fundamentally the differentiator in the space is to be able to lead and make decisions about. What the people who are supporting you say, making decisions about the people who are supporting you too, recognizing people who you can rely on. And the skills that you can rely on the experience and the knowledge you can rely on delegation delegation, but in being informed the willingness to be informed as well in order to make a good decision, you know, so it's not an any any CEO or board. Or C suite that thinks it's got all the information to make decisions on their own. Today let's talk just the CEO because that's the question you posed. Anyone who thinks they've got all the information or enough information in an information asymmetric and poor world, I think is hallucinating. We need to recognize that I had a conversation with a young man just a few days ago, an extremely impressive young man at a conference. And what I was saying to him was that we don't need to do everything ourselves. He recognized this as well. And that P&L is a part of a team process. So P&L management is about the team and how you manage the team. And so I think that the product. and whether or not the product is, is what we're after. The result is what we're after in business. So it doesn't mean that you have to have managed a P& L. For example, as I said to this young man who was considering starting his own fund in the venture capital space, it doesn't mean that you have to have managed P& L before. He's a real estate broker. A very ethical one, extremely bright one. And he wanted to go into a tech venture and establish his own fund. And I think he'll do exceptionally well in that space because he is a leader and he's a young man. He's a leader and he knows that he doesn't know everything. And I, and my comment to him was that we each, when we're educated, experienced and knowledgeable and qualified, have a great deal of knowledge. I do. You do. Many of us do. And so Differentiated as a comparator to another unit of an individual. Yes, we might have great knowledge, but the fact is that my knowledge pales into insignificance when, when considered against the knowledge that surrounds it. That is, that we have available to us and can make available to us to make better decisions.

I mean, this is one of the premises of Optima Board Services Group is that we help fill gaps in knowledge to support decisions at the board level, because there is no board today in existence that has all the knowledge and experience or expertise available to it to make decisions in a very short timeframe. That other optimal decision. So we need to consider how we source decision support. And that's the same for P&L and a CEO. Does it matter that you have not been a direct P&L holder? Maybe, maybe not. Individual, context, and organization. But I think what we can say is that, as you said quite correctly, Maureen, decision making is the most important skill. And it doesn't require necessarily that you have or have not had a particular experience anywhere. Because once we're in a position where we're being considered for these roles, a board role, a CEO, C suite role, we have experience enough. We have leadership enough. And to use your term, this is about optimizing leadership to manage P&L. Given the way that I defined it earlier, it's a much more multidimensional. Uh, and cross sectional and interdisciplinary activity than simply looking at a balance sheet and knowing exactly what the numbers mean from a numbers point of view.

Maureen Farmer

When I think of this person I spoke about earlier, what it, what I see it coming down to is the ability to make good decisions, balanced decisions, and following through on promises or following through on commitments. And when I asked him, why were you appointed as the first non CPA CFO, and then subsequently to the CEO role in a very, very large organization, he said, because the board trusted me.

Stephen Pitt-Walker

And I think that is beautiful. Trust. The problem comes though, doesn't it, when we're not dealing with becoming a CEO by promotion inside, but rather externally. Approaching organizations for CEO roles. How do you, how do you build that trust or that understanding that you have the capability and the capacity to do, to perform in the role without having proven P& L management experience, leadership and management experience. And so I think that the way that we tell our stories and you talk about signature stories is really important in this regard, because people I think can tell from your signature stories, oftentimes, if they contain relationship to numbers and outcomes, which they all do in the business context, or should, I think that that we can tell a story and position for that.

There'll be organizations and boards that in their selection and success and planning are very biased towards certain things. And that's just the way it will be. But it doesn't mean that, That can't change and perhaps ought to change to an extent over time as well. And again, it depends on the industry because you want somebody in a very high tech, laboratory, experimentational environment, innovation environment. You want somebody who understands that as well. Now that might come from a technologist. Who's been in big technology spaces, but is coming to a smaller, much more nimble and agile firm doing high tech innovation that's never, and that person may never have had pure P& L responsibility, but they might understand very, very well what that means. In fact, better than some who may have had that experience elsewhere in other contexts.

Maureen Farmer

So, when I think of rising stars, high performing leaders, they can't. possibly have every competency that's required that's impossible. So if we look at the senior management team, the composition of the senior management team, what have you seen in industry that, that is, a differentiator for a CEO? And it may sound like an obvious question, but it's around leadership, decision making. What other competencies have you seen that are critically important?

Stephen Pitt-Walker

Well, I want to go back to the word you used a moment ago when we discussed trust. I've worked for CEOs, big organizations that I didn't trust. And in the end, I think probably I didn't end up staying at those organizations very long, uh, particularly where there was a more active distrust. And I think also those that interestingly enough, my decisions in that respect and my sensing of that. Lack of trust or the lack of trust that I simply had has been borne out since those Since those experiences since those times I think when trust exists teamwork team relationships real team relationships exist That's when a CEO performs aside from anything else.

This is about character not talent and you know You have to have experience. You have to have expertise. You know, these are all hygiene factors. You have to have understandings. You have to have knowledge and qualification, but the character test is in trust. And I think when, interestingly, another story from the last few days where I was talking to a young man, another young man who's just out of the, the U.S. military. He was in the special forces, spent time in the special forces. So did I, as a commander. He was an officer, so was I. That was my earliest career. And his comment was that he didn't see in people in the C suite necessarily that they understood loyalty. I will use my words now, not his. I see this sometimes. And loyalty in the military was. to your superior. It was up. It was across to your colleagues and it was down to your subordinates as well. And so the story that came out was, as I said to him, what you, what you're probably witnessing is where I will sit and have sat in meetings as a leader manager and where I've seen other people drop their staff in it by saying he didn't do this, they didn't do that, she did this.

What the military taught me was that you don't do that. What you do do is you wear that accountability and you say that's my team, we're accountable for that, nobody but me is responsible. Take it on the chin, I did that, that's me, won't happen again. Go back and have a word with your team to make sure it doesn't happen again, for sure. But I don't think there's need for any dressing down in it either. There's simply a recognition and imparting an understanding and then saying, but don't worry about it because I've got you. There it is. It's mine. That's leadership in my, in my view. It's about loyalty. It's loyal up because you're saying it won't happen again. It's loyal to your colleagues. because you're accepting accountability and responsibility and you're not trying to make yourself look better or worse than anybody else. You're simply doing what is right. And what is your role? Performing a role. It's loyal below because you're protecting and you're accepting. Ensuring that your team know that whatever they do, that you've got their back, that you're flying high cover. I think that engenders trust, and I rarely see, I have rarely seen that, even though I've sat in meetings at the board table and said it. I've rarely seen it in others. And I think that that's something that we can all learn from and learn to do. And clearly that young man had that as well. And we were discussing that in terms of learnings from the military that can be translated into the corporate space. And they certainly can because leadership is leadership. In my view, the context may change, but the principles are the same. So keep people informed of the overall and changing situation. Don't hold information secretly. Don't hold it as power. Give your relationships away. Extend those relationships. Empower people through relationships. That builds trust. Accept accountability. Don't apportion blame. All of that's empowering and it's, it's trust building. And that's something I think that we can aim to do. And the better it's done, the better the organization functions, the better results are achieved, not just financial others as well.

Maureen Farmer

So are you saying that this is part of the learning organization when it's done this way?

Stephen Pitt-Walker

Look, I think that's strategic leadership. I don't know if it's a part of the learning organization. Sure, because there are, I think there are character elements to the learning organization as I conceive it. An organization that learns will listen. It will respect. It will have courage.

Maureen Farmer

Can we talk a little bit about what the learning organization looks like at the micro level? Let's say we're working on a project and Well, I know you have lots of these signature stories, but let's think of one that's relevant to the agile approach. Uh, what is it you say? Fail fast, fail forward.

Stephen Pitt-Walker

Well, the agile approach. in terms of a learning organization or a capability to learn. It's probably more tactical than strategic, though the strategic learning space, the learning organization space will play into decision making at the project. I just want to give just as a, as a parenthetical remark here, I just want to show it in action to bring some granularity to it. Yeah, so I think you, I think probably the project manager or the, you know, if you're using scrums, then the scrum space is a space to learn. Yeah, that's where we bring learning. I think that the other, you know, when we're in execution, when we're in the doing. It's to do and do well. That's a discipline. That's about project management, good project management, but risk management to the project is ongoing. Q& A to the project is ongoing and learning that informs decisions about go, no go, are about learning, certainly, or can be in part, they're also about strategic fit, so an alignment, so alignment to the strategic objectives, because any project needs to needs that it needs an outcome, a performance outcome, that relates to strategic outcomes. But I think at the tactical level of project management in an agile way, as I said, scrums and other meetings, I think the steering committees ought to be a place to learn, not just governor for gateways, go, no go, these sorts of things. But I think that the people need, uh, that the people working on projects who have relationships with other people inside the organization and outside the organization need to be, need to be heard and where there's the ability to do something better. I think that, that should happen. You know, that should We don't want to get into a locked in view of a project plan. Because any plan today, whether it's strategic or project or negotiation or any other, relies on assumptions and those assumptions may well change. So I think the learning organization is about testing hypotheses and those hypotheses are assumptions. In this instance, our assumption that the market requires this product, for example, continually testing that is a very good idea other than simply expending the resources and the investment. in producing a product that is no longer relevant or has been superseded or won't capture the, to use an assumption, won't capture the same market share because there's a competitive product that just came on the market. I think these, you know, all of these things are really important to, to the tactical. And so we get that from, we get that information fed top down or through a learning, a learning management office. a learning, a learning office through a chief learning officer, perhaps.

Maureen Farmer

I like that. So how can the board of directors best support the new CEO is as they transition into the role?

Stephen Pitt-Walker

That's a great question. I think it starts with supporting the CEO to achieve very, very clear objectives and giving them a very clear mandate, but also requiring that they work closely. With the board.

Maureen Farmer

And how do they do that?

Stephen Pitt-Walker

It's difficult because, and it depends on the board and it, or it depends on the organization and the type of board. Now, uh, a VC board, a private equity board, a family office board will function differently to a publicly traded company board, or another board that's an advisory board to a privately held company as well. So horses for courses here, but nonetheless. I think that the board can, and I argue that the board must be two things. One, a prime agent for positive, sustainable change, transformation and effectiveness, as well as long term value creation. But the board must also seek to be a part of the performance engine of the corporation or the group. And so interactive collaboration, this is not to say that the board loses its arm's length, responsibility, accountability, or fiduciary in being the agent of stakeholders in particular shareholders, but rather that in terms of the non supervisory or monitoring requirement of the board, responsibility of the board, that in terms of the strategic guidance An innovation capability development guiding value creation value preservation on one side value creation on the other.

So in guiding value creation, they can be very involved and bring expertise to the table and probably help to drive value by rolling their sleeves up and providing advice, providing not just advice, but collaborating on the development of strategy. And timely advice, timely advice. Which means, which means not just your, your four board meetings and annual general meeting per year, but rather being available as an advisor, not just as an arm's length company director that ticks boxes and makes decisions or approves decisions, but assists in the creation of questions to which you can answer in a strategic sense.

Maureen Farmer

I'm going to ask you this question before we round out the call. Do you feel it's important for the CEO to establish relationships with everyone on the board?

Stephen Pitt-Walker

There's a few things that spring to mind. And my initial reaction is yes, absolutely. And I believe that is the case. There's perhaps a couple of caveats. One is that that's developing relationships and a rapport, a respect with the board members and ensuring that those board members are not co opted by the CEO. I don't think the CEO should necessarily seek to co opt. or ingratiate themselves with the board members. That doesn't mean being unfriendly. It simply means to recognize that the board has a responsibility and accountability to be independent. And we see oftentimes poor board dynamics leading to biases that are born of relationships, friendships, and rubber stamping because of that.

Maureen Farmer

So, in an ideal Pollyanna world, which I sometimes come from, looking at these models, the way I see it, and this is my bias, I suppose, maybe my naïveté, is using the board as a resource, using each board member as a resource, Because after all, is that not what they're bringing to the table for the CEO?

Stephen Pitt-Walker

Absolutely. But in an, and in an independent way, I want to give one example. It's a, it's perhaps a mini signature story is that I had recently after advising a company, a regenerative economics company, a technology company in Europe that is called Circular Unity. Uh, which provides, has developed and provides a unique product to measure and report on greenhouse gas emissions, uh, for events and sports teams and organizations, but has great capability and capacity well beyond those markets, uh, that company and that the CEO who invited me onto the board had discussions with the investors and the investors agreed with the point of view that although they were not entirely comfortable with a complete clearly entirely comfortable with a completely independent board that it was right from the point of view of objectivity to have an independent director somebody who was not an investor and somebody who was not in the executive on that board. And that's a part of their sustainability alignment and values. So I, I think this is where we can, we can look at the actions and decisions of, of the powers that be to appoint board members as indicating what The values of the company are, as well as what they, what markets they serve and what, and what products they provide.

Maureen Farmer

So Steven, thank you very much for your time today. I really enjoyed the conversation and I would like to ask you a question. What is your favorite restaurant so far this trip to New York city?

Stephen Pitt-Walker

That's, that's a tough one to answer. I've been to a few, but I want to pick a restaurant that was introduced by a colleague of ours Morris Stemp, who's also on the board of your company, Westgate. And that was The Shed, and it's on Long Island, and it's a beach shack, but the food was fantastic, the atmosphere was very relaxed.

Maureen Farmer

We'll make sure that we add that to the list of trusted restaurants for world travelers. Thank you very much for your time today, Stephen.

Stephen Pitt-Walker

Thanks, Maureen. It's been a pleasure.