Leading the Pack
Lexus Australia Chief Executive John Roca knows what it is like to face an economic downturn; he's been there before. By Richard Jones
Despite a contracting economy and tough competitive market, John Roca, the Chief Executive of prestige car maker Lexus Australia, is quietly optimistic about the future.
A key reason for Roca's understated optimism this time round is based upon his long-term relationship with Lexus that began with the launch of the premium brand into Australia in the early 1990s.
"When you look back on that history you will see that we launched a $120,000 car (which the press referred to as a V8 Camry), in the middle of what the then-Treasurer said was the 'recession that we had to have', with just two dealers in Sydney and five nationally," he says.
"We can look back at that launch environment and think, 'well, it's not a walk in the park at the moment, but knowing what we achieved in the past, we're confident we'll get through any new challenges today'."
From a leadership perspective, Roca says that it is his people that give him the energy to get out of bed every day. Plus, he admits to being passionate about the Lexus brand.
"Apart from our product range, we have innovative processes such as the Dealer Standards Program, which is a template for how we want things done. And while it can be a little fluffy when you talk about it, we've got some hard-nosed non-negotiables in there as well, which I think you need.
"In business you have to have the courage to say 'no'. In some cases, you get more done with 'no' than you do with 'yes'."
People and relationships
Roca believes there is a strong focus on the development of personnel within his organisation: "Being smaller, we put a bit more of a focus on reviewing performance, good and bad.
"Typically, in a large organisation, getting rid of people isn't an easy thing to do, nor is it popular. I expect my people to deliver on their promise; otherwise they haven't stayed with us, which is quite unusual for some large organisations."
Roca says that when it comes to management style, the feedback from his staff is that he has a very open approach, and he fosters this.
"I'd say that my door is always open and I actually encourage two things. First, I can be challenged, because I've been wrong before, and second, I seek speed within the role."
When it comes to working relationships, according to Roca, "Regardless of who it is, whether it's a dealership technician or the owner of the business, I want them to know that I'm interested in what they do. I like to motivate people, because I think that a pat on the shoulder is something that people look for.
"On the other hand, sometimes you've got to make the call as the head honcho. The buck stops here and I'm willing to take the fall, but I'm also willing to make the decision and sometimes the answer is 'no'."
Roca comes to his current position with a 17-year history in the retail car market and he believes this gives him a valuable perspective on the business.
"When I talk to distributors from Lexus Global, when I speak to people within corporate head office, or a dealer or customer, I always tend to think, 'how would that affect the retail?'.
"If we make a decision in the tower, I ask myself, 'how does that flow on to the customer? Are we asking our dealers to do something that I would not have done in retail?'. I see my role as not only coming up with new initiatives, but also blocking some of the initiatives proposed that aren't realistic."
Roca admits that he sees himself as more of a leader than a manager, and he leans towards the people side of the business more than the process side.
"As the leader I set the tone, and everybody is aware of that tone because I communicate with everybody. I like getting everybody in a huddle; when we've got something to say it's important everybody hears it from me.
"Every six months I sit down with all of my staff individually and I have a 'one hour with JR'; it's frank, it's confidential and it's amazing. At first, it was 15 minutes with JR and it turned out to be an hour, so we just made it 60 minutes. I've had people walk out a different person; it can be quite emotional."
Roca believes that when times are tough management tends to bunker down, and at present there is too much reflection on what is happening and why, rather than working out how to overcome.
As to the future, Roca is not one for moping around. He says Lexus saw the dark clouds looming last year, a little earlier than other businesses, and put its house firmly in order. Lexus has experienced growth of 211 per cent a year over the past seven years before the crunch came in July 2008, first, in the form of the luxury car tax, and then the economic downturn started to bite.
According to Roca, a major advantage for Lexus is that, while it is a division of the vast Toyota Motor Corporation, it is agile and fast on its feet.
"We are small enough to make changes quickly and revise our strategies on the move when storm clouds are looming," says Roca. "People in my position are put there to get organisations operating the way they should during times like these. This is when you're really worth your quid.
"Anybody can sell a lot of motor vehicles in good times, but I think what gets me out of bed, now more so than before, is the challenge. We've been growing at 211 per cent a year over the past seven years, and now the challenge is to rethink our strategies."
Roca believes what Lexus does very well as an organisation is what he calls 'lowering the waterline'.
"It's an expression that we use here to explain that it is not a bad thing to look for problems 'below the waterline' because we want to see them coming, and work out what we are going to do about them, as opposed to 'damn, what's happened?'.
"We want to come out of this stronger than when we went in and, at the moment, we're in a pretty good position because we've looked at our business from a realistic point of view. We're not going to break any records in the next 12 months but there's an opportunity there to find a little bit of gold in this depressed market."