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The business of decency

Alan Joyce

Qantas CEO argues the business case of decency. Alan Joyce on corporate responsibility

Alan Joyce is dedicated to business success, diversity and old-fashioned decency.

Addressing his audience of University of Sydney Business School alumni at the 2017 Annual Alumni Dinner, these values became the common thread as he discussed the aviation business, corporate social responsibility, corporate leadership and LGBTI rights.

Qantas today is one of the world’s few profitable airlines. In his time as CEO, Joyce has overseen the biggest transformation of Qantas since it was privatised in 1995, including the turnaround and renewed growth of Qantas International, the expansion of Qantas and Jetstar throughout Asia, the diversification of the Qantas Loyalty business with new ventures, the renewal of the Group’s fleet with more than 150 new aircraft, and ongoing investment in lounges, technology and training.

This transformation spurred Qantas to its best financial performance in the airline’s 96- year history in 2016, together with record customer satisfaction and employee engagement.

Joyce was named ‘Airline CEO of the Year’ by CAPA Centre for Aviation in 2015 and has been recognised as one of the world’s most influential gay business leaders for two years running in the OUTstanding/ Financial Times list of Top 100 Leading LGBT Executives.

He begins his address by telling his alumni audience, including many recent graduates just starting to make their way in the corporate world, that he has four “principles of leadership”. The first, he says, is think big. To explain this principle, he quotes Henry Ford, who once said that if he had asked his customers what they wanted, they would have replied: a faster horse, without giving a thought to the motor car.

“The great example of this for us was the creation of Jetstar. The faster horse for us would have been to just create Qantas Light, which we tried to do, and a lot of airlines around the globe did something similar and it typically failed. The bold move was try and create a low cost carrier and make it work within a full service carrier.”

Joyce’s second principle is “navigating complexity”. Sometimes you never get perfect information and it’s impossible to predict the consequences of your actions,” he explains. “It’s better to make a decision on the information you have. If it doesn’t work, move on, admit it doesn’t work and try something new.”

“We’ve set up these airlines in Asia very successfully – like Japan, Singapore and Vietnam. But we’ve failed a few times, like in Hong Kong. We tried, but it didn’t work and events went against us, so we moved on and tried something new.”

Joyce calls his third principle, “operate at the right level”. “It’s impossible for you to control everything and to be among all of the detail,” he says. “You have to get good people around you and trust them and allow them to get on and do the job. Command and control is no longer a way big organisations work.”

CEOs, he continues, need to operate at 35 thousand feet for 90 percent of the time, but have the ability to get down among the details at five feet when it’s necessary.

His last piece of advice – be humble. “The best leaders I’ve seen around the world are very humble. They are comfortable with being challenged and are open to changing their minds if they’ve got it wrong,” he says. “They get great people around them and don’t feel threatened by them.”

Alan Joyce

On the topic of diversity, Joyce says that businesses that embrace diversity and inclusion perform better. “My senior management team, including myself, has three gay guys on it, four women, and half of our operating divisions are run by women.”

“It’s important to take a stance on marriage equality, on indigenous recognition and gender equality because a lot of shareholders now invest in companies that have a social responsibility,” he says, and points out that 30 percent of travellers are LGBTI, indigenous, female or disabled. These people, he says, “are four times more likely to pick a company they believe represents their values.”

Joyce goes on to discuss four megatrends capable of impacting on Qantas’ 97-year-old global business – the rise of Asia, new technology, including digital and big data; changing demographics and climate change.

Technology, according to Joyce, had forced Qantas to reinvent itself every decade and it will continue to do so. “The ability of aircraft to fly from Perth to London is a game changer. Believe it or not, Australia and Europe are the only two continents that don’t have a regular passenger service. It is one of the last frontiers that exists,” he said.

“The technology is going to get even better”, he continues. “In 2021-22, there will be an aircraft that can do Sydney and Melbourne, we believe, to potentially London; 21 hours in the air. And maybe Sydney to New York, absolutely; 19 hours in the air.”

He then revealed that new technology, particularly big data, was already allowing Qantas to look at business opportunities beyond the airline sector.

“We have 11 million frequent fliers and the information we know about you means we can launch new products, whether it’s health insurance, credit cards or businesses that analyse and place advertising. And those businesses allow us to diversify away from aviation and make money disrupting other businesses because of our access to big data and information that we’ve been collecting for 30 years.”

During his wide-ranging address, the Qantas CEO referred often to his company’s “proud” history, its successes, its failures and its future. He also mentioned the ground-breaking research Qantas has undertaken with the University of Sydney to improve the health and wellbeing of passengers and crew on long-haul flights.

The evening ended with anecdote which seemed to sit well with Joyce’s commitment to diversity and inclusion and what he sees as Australia’s belief in a ‘fair go’. “I was asked once by a young Indigenous woman whether she could ever become the leader of Qantas. I said, well, if a gay Irishman can become the CEO of Qantas then an Indigenous lady can, absolutely.”