Strategic Leadership for Business Value Creation: Principles and Case Studies PDF by Don Argus, Danny Samson

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Strategic Leadership for Business Value Creation: Principles and Case Studies

By Don Argus, Danny Samson

Strategic Leadership for Business Value Creation_ Principles and Case Studies

Contents

Part I Key Elements of Strategic Leadership 1

1 Leadership 3

Introduction 3

Leadership and Its Impact 4

Leadership Axioms: What Works? 6

Leadership Characteristics 7

Leadership Characteristic: Vision and Strategy 7

Leadership Characteristic: Trust 16

Leadership Characteristic: Participation 22

Leadership Characteristic: Learning 30

Leadership Characteristic: Creating a Winning Attitude 32

Leadership Characteristic: Making the most of Diversity 34

Leadership Characteristic: Creativity 35

Leadership Characteristic: Integrity 39

Leadership Characteristic: Community—Caring Beyond

Yourself 40

Conclusion: Postscript on Leadership 44

Reference 46

2 Organisational (Business) Strategy 47

Introduction 47

The Ever-Changing World in Which We Must Create Value 48

The Centrality of Business Strategy 50

The ‘Grand Plan’ and Its Execution 52

BHPB: Our Charter 54

Our Values 55

Focus Versus Diversification 64

Generic Strategies for Business Competitiveness and Capabilities 67

Strategy Implementation 69

Commitment to the Strategy 70

Strategy Implementation as Change Management 70

Implementation Requires Alignment and Forcefulness: But

there Are no Guarantees 71

Accountability for Outcomes 72

Strategy Making in the New Global Context: 2020–2030 73

2020–2025 as an Opportunity to Review and Renew 77

Summary Comments on Strategic Futures: 2020–2030 79

Concluding Remarks on Strategy 80

Appendix: Operational Efficiency and ‘Excellence’: Production

and Change Management 81

Operational Effectiveness and Value Creation 82

Discipline of Implementation Actions: Project Management 86

References 88

3 Organisational Governance 89

Introduction: Effective Corporate Governance 89

Effective Governance Starts with Boardroom standards and

Activities 91

What Is an Exceptional Director | 10 ‘X-Factors’? 94

Directors and Board Performance 97

The Role of the Company Secretary 102

Concluding Remarks 105

4 Corporate Social Responsibility 107

Introduction: Important Things Well Beyond This Year’s Profits 107

The ‘Old School’ Sceptical View 108

The Modern Approach 109

Motivation for CSR / Sustainability Initiatives 110

The Core of CSR 111

CSR Concepts 115

Global Considerations 118

How About Government? 119

Taking CSR / Sustainability Forward 120

CSR: Win-win, an Illusion or Inherent in Business Values? 122

Conclusion 126

References 127

5 Leaders of the Future 129

Introduction: A Leadership Journey 129

Mentor and Be Mentored 130

Develop the Leader Within You 130

Learn How to See Both the Big Picture and the Details 131

Never Stop Learning 133

Become Globally Oriented 134

Never Compromise Your Integrity 135

Build a Network for the Long Term 135

Know Your Customers, Competitors and Marketplace 136

Develop a High-accountability Organisation 137

Always Apply the Common-Sense Test 138

Know Social Media and Technology 139

Be a Team Player 140

Lead Both Processes and Projects 141

Always Keep Your Feet on the Ground: Remain Humble 142

Be Sincere: Tell the Truth 143

Know the Numbers: and the ‘Competitive Advantage’

That Drives Them 143

Help Others to Succeed 144

Deliver! 145

Deeply Understand Both Risk and Return 145

Strive to Achieve Work-Life Balance 146

Never Forget the Shareholder 147

In Conclusion: Consider the Costs and Benefits 147

Part II Introduction to the Case Studies 151

6 NAB (A): Banking and Financial Services, 1960–2020 155

Banking Deregulation 155

Change Was in the Air: Non-banks and Superannuation 157

Financial Services and the 1979–81 Campbell Committee

Report 160

Banks and the Campbell Committee 160

Process of Deregulation 161

The Entry of Foreign Banks 162

Effects of Deregulation on the Domestic Financial Scene 165

Leadership and Management of Banks 168

National Australia Bank 169

NAB Vision and Strategy 173

Internationalisation of Australian Banking 173

From NBA to NAB: The CBC/NBA Merger 177

The Internal Analyses 180

Formation of the Credit Bureau 181

The Real Risk in Banking 184

A Model Solution 185

Financial Industry Changing Plus a Royal Commission 190

Summary and Forward Projections 196

Appendix 201

Upheaval and Uncertainty in the Financial Services Sector 201

Regulation 2016/2017 204

7 NAB (B): NAB’s Acquisition Strategy 209

The Context of NAB’s International Activities 209

Going Offshore 211

Preparing to Go Offshore: Financial Structuring and Choice

of Target 213

Earlier Attempts to Move Offshore 215

Rainier Bank 215

Royal Bank of Scotland (RBS) 215

The Strategic Journey Continued 217

Due Diligence 218

UK/Irish Bank Boards/People/and the Quest for High

Performance 222

Purchase of Yorkshire Bank—1990 225

Yorkshire Bank—Post Acquisition 225

Withdrawal ‘Back to Australia’ 227

Bank of New Zealand 228

Broadbank 231

Entering the US: Michigan National 232

Great Western Bank 235

HomeSide Purchase 235

Valuing MSRs 236

Managing Risk at HomeSide 238

Hedging MSRs 238

US Interest Rate Environment 239

Extensive Due Diligence was Performed on HomeSide 240

HomeSide Summary 241

Failure to Detect Modelling Error 242

HomeSide Lessons in Leadership and Strategy 243

Concluding Comments on Overseas Expansion and Acquisition 244

8 NAB (C): Banking in Australia, NAB’s Track Record

and Trajectory 247

Descriptive Introduction of NAB’s Australian Operations 247

NAB’s Approach to Lending and Credit Management in

Australia 248

John Spalvins 252

Technology 253

Finance and Life Insurance Subsidiaries 256

Life Insurance and Investment Products 256

Acquisition of MLC 257

Merchant and Investment Banking 258

Specialised Subsidiaries 259

Savings Bank 259

NAB Post 2000: Leadership, Governance and Strategy 261

9 BHP (A): ‘The Big Australian’ Overview and Strategic

Roots 267

Introduction and Background Context 267

Mining to Steel 267

Challenging Years 269

Foster’s Brewing Group Ltd 272

Governance 272

Essington Lewis 276

10 BHP (B): Steel 281

Introduction: A History of Vertical Integration 281

Breaking the Frame 285

Steel Operations 286

Merger / DLC 289

11 BHP (C): Minerals 291

BHP Minerals Strategy 291

BHP Minerals Portfolio 292

Mt Newman 294

Mt Goldsworthy Mines 297

Yandi Mine 298

Port Hedland Hot Briquetted Iron (HBI) Plant 299

BHP’s Performance 301

Goldfields Transmission Pipeline 305

Whyalla Mines 305

Samarco 306

Ok Tedi Mine 307

Escondida Copper Mine 309

San Manuel Mining Operations 311

Pinto Valley Mining Operations 312

Miami Unit 312

Robinson Mining Limited Partnership 313

BHP Tintaya SA 314

BHP Smelting and Refining 315

Smelting 315

Refining 315

Other Minerals 315

BHP Titanium Minerals Pty Ltd 315

Hartley Platinum 316

Cannington 317

Diamonds 318

Market Conditions 319

Export Controls 320

Commodity Hedging 320

Coal 321

Potash 323

12 BHP (D): Petroleum 325

Introduction and Context 325

Northwest Shelf 326

13 BHP(E): Rejuvenation and Renovation Towards

a New Century 331

Introduction: The Context of Strategic Change 331

Executive Remuneration and Its Governance 333

Strategy and Markets 335

Increased Demand from China and Impact on Supply 336

BHPs Uniqueness 339

What Influences the Demand for Product? 341

Major Producing Countries 341

Where to Compete 347

‘Not for BHP Billiton’: A Key Element of Strategy 348

What Were the Government’s Regulations? 349

14 BHP(F): Mergers and Acquisitions 353

Introduction: Merger Processes 353

Vision 356

Leadership 356

Growth 357

Early Wins 357

Culture 357

Risk Management 358

BHP’s Context in the New Century 358

The Genesis of the DLC (Dual Listed Company) 362

Nothing is Forever? 365

Operational Focus and Efficiency 368

Strategic Flexibility 368

Optimised Release and Monetisation of Franking Credits 368

Generating an Enhanced Yield for Australian Shareholders 369

Enhanced Market Value 369

Maximising Index Inclusion 370

Board Visit to China—June 2005 378

Western Mining Resources (WMC) Acquisition 381

Rio Tinto 384

M&A Lessons Learned 391

Focused Diversification 396

Brownfield Growth 397

BHP Operating Model 400

Further M&A Activities 404

15 BHP(G): Global Strategy and the Foreign Investment

Review Board (FIRB) 409

Introduction: A Challenging Context Post 2020 409

FIRB Conditions 411

Board Composition as at 2007 414

Background: The Rio Tinto Arrangements 415

Undertakings by Chinalco 415

Any Future Proposals 416

But Who is Chinalco? 418

The Rio Tinto/Chinalco Transaction 420

16 BHP(H): Industrial Relations 423

Industrial Progress? 423

BHP Progression: A Journey from Difficulty to Success 428

17 BHP(I): Environment 431

Environmental Challenges and Some History 431

Mozal Project Profile 432

The Challenges 432

Mitigating Financial Risk 433

Health and Safety Initiatives 434

Mozal—Focusing on Sustainability, for the Business

and the Community 440

18 Attachment 1: BHP DLC 443

Transaction Information 443

Australian Foreign Investment Review Board (FIRB)

Conditions 444

Management 446

Equalisation of Economic and Voting Rights 446

Rights to Assets on Insolvency 448

Dividends 448

Voting 449

Matching Actions 453

Cross Guarantees 455

Takeover Provisions 455

Bonus Issue 457

19 Brambles: Dual Listed Company Structures 459

Introduction 459

Brambles: A Growth Future Divided 461

An Old Idea Made New 463

The Devil in the Detail 463

A Bumpy Ride, and the Story that Got Away from us 465

A Complex Beast, but Not Without Some Lighter Moments 468

A Means to an End 469

Brambles Unification 470

Background 471

Unification Terms and Details 472

Cost of Brambles Unification 473

Chairman’s Office (DLC Letter) 474

Commentary on Summary and Overview Paper 479

References 489

Index 491

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