The Commonwealth Bank's Chief Executive, Ralph Norris, has one of the most challenging jobs around. Jennifer Alexander asked him for his thoughts on management issues, and what it takes to inspire 35,000 staff.

Joining the Commonwealth Bank as Managing Director and Chief Executive Officer in September 2005, Ralph Norris, 56, started his working career with Mobil Oil New Zealand in 1967, before joining the Auckland Savings Bank (ASB) in 1969. He was appointed ASB Managing Director and CEO in 1991, leaving in 2001 to head up Air New Zealand Limited. In 2006, Norris was awarded a Distinguished Companion of the New Zealand Order of Merit for services to business.

Here, the head of the huge financial institition outlines his views on a range of business and management issues.

Views on management

Management is about managing things: managing a bottom line, managing a budget and managing people. I think that leadership is about moving people, it is about getting people to buy into a vision and convince them that vision is something worth achieving. It's leading people from one point to another point and creating a vision and a pathway.

I think that if we look at the Commonwealth Bank, it is an organisation that has gone through an accelerated rate of change, from being a government-owned entity to a fully publicly listed company in a very competitive market. It has had to undergo quite a metamorphosis. David (Murray, former CEO) did a very good job restructuring the bank, making sure it was strategically well positioned as a financial services industry participant in the wider sense, rather than purely a bank.

Certainly, from my perspective, customer service is an area where, compared to our competitors, we are not performing as well. When you have good quality customer engagement, you then have the opportunity to actually have a deeper penetration of your customer's wallet, and you can provide your customers with a broader range of services because you build a trust and a confidence in the relationship. In order to do that, you've got to make sure that your staff have a very clear understanding of what the objective is, and a very clear understanding of what their responsibilities are, and you must give them the appropriate tools to undertake their customer servicing requirements.

I don't know of any organisation that's been successful in engaging customers unless they've been successful in staff engagement. When you've got well-trained staff, who are confident, then they obviously provide a much better experience for the customer.

On skills and leadership

I think there's a combination of factors involved in developing leadership and management skills.

There's formal training, mentoring, and learning on the job as you go through what works and what doesn't. There are good and bad examples of management and leadership, and I think I've seen a reasonable mix of those in my career. It's not all out of a textbook, and it can't all be intuitive either.

I think as far as employing leaders is concerned, it's about looking for people that are talented, experienced and disciplined about themselves. It is very important from my perspective that they've good interpersonal skills, and can communicate and relate to people. Leadership credibility comes from the people that work for you. You have to be credible, be seen as confident and you have to be seen to be able to handle the tough things. This is about respect, not about popularity.

[Leadership] is about people being able to make good decisions based on an ability to analyse, and a good framework of integrity. I've seen a lot of talented people who haven't had the right integrity framework; people that have been for themselves rather than for their teams. So they lose respect and support quickly.

The Australia-New Zealand alliance

Obviously, businesses in Australia tend to be larger and more complex, so there is a significant difference between the two economies. That's not to say that there aren't complex businesses in New Zealand , but, on average, you're going to have more people, a broader scope to the business, here.

I've met a lot of Australian managers in New Zealand (and vice versa). So it seems that they're able to move across the Tasman, and the labour market is becoming more Australasian. There's a lot of commonality in the education systems and culture, and so yes, there's more in common than there are differences.

Australia has a different profile to its economy: it's obviously richer in its resource base and it's got a bigger population, so it's got a larger, more complex manufacturing sector than New Zealand . But I think if you look at the finance industry, for example, and a lot of the service industries, there are many similarities.

A personal journey

Every morning I exercise; and I use this time to think about what happened the previous day, and what's going to happen today. There might be some issues that I'm dealing with that I haven't got the answer to, so I tease them out. And that's a great opportunity; you are by yourself, you're in your own inner space, and I find that very useful. I also find that when I'm on holiday, even though I am on holiday, I'm in a much more relaxed environment and it's amazing, you start to think about a few things, and I find that very helpful as well. I don't think that you're doing yourself any good if you are working 100 hours a week, 52 weeks of the year, and not having a chance to be a bit reflective. I think reflection is very important.

The management journey

I was fortunate that I had some mentors along the way who gave me encouragement to lift the bar. One of my first bosses actually said to me: Look, you can go a long way, but you are going to have to believe in yourself and pull your finger out a bit. But it's also important that you can look in the mirror everyday and ask yourself the question, 'Is the face looking back at you somebody that you trust? Is it somebody who is honest?Is it somebody who is actually trying to do their best?'.

When I was in IT and as one of a group of equals, I had a senior manager who said I had the potential to run the IT operations of the bank. I didn't realise it was going to happen as quickly as it did - six months later.

I think that often people don't stretch themselves, and that they actually have to have somebody to encourage them to stretch. There is almost a fear of failure holding people back. You've got to realise that failure is always a possibility. But you can't eliminate it from happening, and there are going to be times when you make a decision that might not be, with the benefit of hindsight, the right decision. It's how you handle those situations that counts.

If I look back, what was formative for me was learning that being part of a team is important. Working in IT, it wasn't the individual that delivered, it was a group of people working together. If there wasn't a high degree of communication and understanding, then the outcome could be disastrous.

But specifically, can you give me an example of one of the less successful challenges in your career?

When it comes to difficulties in my career I faced some significant issues as an Air New Zealand board member in and around the demise of Ansett. At the time I came on to the board relatively late in the piece, the airline was already an owner of 50 per cent of shares in Ansett. And then I was at my first board meeting and there was a decision to acquire the second half. So you go through that process, you ask questions, but you are coming in with limited background knowledge. You are in a situation where you are relying on fellow directors and on management, and you end up where you could be held responsible for a pretty disastrous outcome. You have to look at yourself and you have to ask yourself what could I have done better, what am I going to learn from a situation where, potentially, you could be tried in the courts for negligence. That's a pretty tough experience.

I noticed this morning that you were being interviewed for your internal TV. Is this a key communications tool?

I turn up unannounced at places, and sometimes announced. I'm a great believer that people that work with you have to see you, have to hear you, have to understand that you are a human being and that you are not just some face that appears on the TV. I use a range of mediums to get a message across.

One of the issues that comes up a lot from our members is that of women in management. Do you think there are unique challenges for women in management?

I think women obviously have some unique issues, in and around their choice to have children and how much time they want to have out of the workforce etc. This is an issue where we've got to make sure that as an organisation we are addressing those needs. In a world where there's a war for talent, you can't afford to have around 50 per cent of the workforce being underutilised. So we have to understand what we need to do in order to achieve higher levels of participation, and the commitment to give women the opportunity to aspire to higher roles in the organisation.