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McCombie, Helen --- "Trevor O'Hoy, CEO Foster's Group Ltd - Foster s Fortunato" [2005] MonashBusRw 9; (2005) 1(1) Monash Business Review 28

Trevor O’Hoy, CEO Foster’s Group Ltd
Foster’s Fortunato

Helen McCombie

Helen McCombie speaks with Trevor O’Hoy, a man who has risen from humble beginnings to discover humility at the top.

Shakespeare’s Henry V delivers to the Chief Executive Officer more than just lessons in organisational leadership or team motivation. The parallel between the Bard’s wisdom and the most senior corporate position is more than just about grasping some business principles – it’s also about mistakes, learning, humbleness and trust.

It’s not every CEO who is humble enough to admit that he has doubted himself. But Foster’s boss Trevor O’Hoy frankly admits he suffered some nervousness about his abilities in April last year when he was elevated to the top job, at a time when the company’s profitability had been hit by a global wine glut and the share price was languishing. O’Hoy immediately began a global restructuring of the Foster’s wine operations. He had been a Foster’s employee for 28 years, rising through the ranks to take the plum role, but nothing could have prepared him for what was to come.

“I think the first six months were a real struggle. There is no training for being CEO. You’re in a completely different space. You’re not quite inside the board and you’ve got a new management team. So it takes a little while, with everyone circling each another. I guess 12 months down the track we’re all a lot more comfortable with another. We know how things work and the board has been hugely supportive.

“There were hard times. I was used to running businesses and processes where it was really hands on and you pretty much controlled the leaders. But as CEO, you are two steps back. If you want something to happen, there is a delay and that can frustrate you a little. If you don’t think things are happening quickly enough, if you want to buy a bit of equipment for a brewery, it is not as easy from the position of CEO. It’s easier when you are on day-to-day operations. So that was difficult.

“Also, my strength is in being close to all the stakeholders, whether it be customers, employees, buyers. But again as CEO, you step back one step. I’ve missed that a little bit, but now have the opportunity to get back into it again.”

When times are tough, chief executives, just like the rest of us, need a bit of advice. But given that O’Hoy was now running the company, turning to colleagues inside Foster’s was no longer appropriate.

“There were a number of CEO’s in related companies in our broader industry that provided counsel. I didn’t look within, which is probably a good thing, because people within may have agendas. There are a number of people that I have known over many years as I have grown in the company and the industry who would take me out for lunch and it was terrific to talk to another CEO who was non-threatening and not into the politics. It makes you feel good that people will do that,” he says.

“I even had a number of discussions with people like James Sutherland, the CEO of Cricket Australia. Nothing to do with our business, (Carlton & United Beverages is a sponsor) but terrific to be able to bounce ideas off a CEO where there’s nothing in it for him. Those sorts of things have been more than helpful,” he said.

Trevor O’Hoy came from humble beginnings, his father was a draughtsman at the old PMG, now Australia Post, and he had two brothers and two sisters. “Dad didn’t have a lot of money, but every dollar he had went to giving us the best education we could get.” But even with the focus on education, it wasn’t clear at high school that O’Hoy would become managing director material. “No, I was a very average student. What I actually excelled at was sport. I was in secondary school in the mid 60’s to early 70’s and this was a really interesting time, because people then weren’t as racially tolerant as they are today. Therefore, with my background, I copped a lot of grief. My way out was to gain respect by doing what I was good at – playing sport. I was actually captain in three different sports teams. I never thought I was going to be a business person or clearly the CEO of Foster’s. It wasn’t even thought of.”

It wasn’t until after he had been to Monash University for an Economics Degree and joined CUB as a cadet executive that he harboured thoughts of having his own business and even then his ambitions were modest. “I think during those first five years I probably developed ideas of having my own business. I didn’t know what kind of business, but I always had this aspiration of having a news agency. I wasn’t really a corporate animal. But you change.”

O’Hoy has certainly changed. He now has a reputation as a workaholic. His excuse for the long hours is that he is passionate about the business.

“Our industry is not a good one for that, because you never stop. Even socially you are out and about among your product and your consumers. If I had to put hours on it, I would say I work 10 to 12 hours a day, seven days a week,” he says. So many of our friends and family just think that I have got nothing else, they don’t understand how much I love the business and the people and the product and the customers – that it’s actually not work.”

When it comes to managing the stress of a high-pressure job, he finds exercise is the best release valve. “I exercise, jog, row or ride a bike 30 to 35 minutes every day of the year.”

The Foster’s chief realises that he can’t continue at this pace forever, but his views on the likely length of his tenure may come as a surprise. “I will bring it to an end, which is a really hard thing to do, because you cannot keep going at this rate. I have always believed that you have to give 150 per cent. But this is particularly demanding because I have never seen so many stakeholders with different views, needs and wants. So I am sitting in the middle trying to pull everything into line and it’s tough,” O’Hoy says.

“I actually don’t think that you can do that job to the best of your ability for more than five years. I know that my board will probably die, but I think it is probably a three to five year thing. I think you need a minimum three years to see results, but I don’t think it is much more than five years. I don’t know how I would re-energise myself.

“But having said that, I have been in industry and one company for nearly 30 years, and have constantly re-energised myself. So it may be when you get to that stage, you become re-energised by another phase of the company or another acquisition or something. But as I sit here now, I don’t see beyond three to five years which is really interesting.”

Just over a year after taking the job as managing director, with the wine business improving and the takeover of Southcorp a done deal, he’s enjoying the job and thinks he has made an impact. “There’s one big difference and you can talk to anyone internally or anyone externally who has been watching the company. We have one team today and I hope I take some credit for that. For many years we ran the company in independent business units and independent processes, so there were four business units who hardly ever talked to one another. And there were process units who didn’t talk to the businesses. Now we do things as a team here.”

Trevor O’Hoy cites the Southcorp deal as a perfect example. “We would not be doing Southcorp unless John Murphy from CUB and Jamie O’Dell from Global Wine came to the table and said this is a great deal for both businesses. I would have to say probably in the past, if one came to us with a deal the other would be trying to work against it.”

“So think how much more powerful the business is if you can harness those ideas to work for the good of Foster’s, rather than CUB or group finance or Beringer Blass. Now we are all working towards what is good for Foster’s and that is going to be my lasting legacy. We are now getting our people saying they wanted to be labelled as Foster’s people. Eighteen months ago they didn’t.”

Trevor O’Hoy has a big job ahead. The integration of Southcorp will make or break his career. But at this point he considers himself a fortunate man, heading a company which he aims to make the No. 1 premium wine company in the world. “If we get there, we will be the only Australian company that’s number one in the world in a consumer product category.”

He says it’s the job that most people dream about. “I don’t think I ever consciously went for this job and it wasn’t until I got there that I realised this is the dream industry and I have the dream job.”

Foster’s Facts:

Gross profit (2004): $1,887,200 (consolidated)

Net profit (2004): $1,887,200 (FGL)

Basic earning per share (2004): 38.6 cents

Trevor O’Hoy:

Time at Foster’s: 29 years (from 1976)

Time as CEO: 1 year (from April 2004)

Education: B. Economics, Monash UniversitySource: www.fosters.com.au;

www.monash.edu.au/alumni/prominent--alumni/trevor-ohoy

Cite this article as

McCombie, Helen. 'Trevor O’Hoy, CEO Foster’s Group Ltd'. Monash Business Review. 2005.; Monash University ePress: Victoria, Australia. http://www.epress.monash.edu.au/. : 28–31. DOI:10.2104/mbr050006


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