Ed (00:49)
Today’s guest is Bruce Buchanan, and while unknown to many, Bruce is one of Australia’s great entrepreneurs. As CEO, he scaled Jetstar to Asia’s largest low-cost carrier, and then he co-founded Rokt a global marketing technology business with over a hundred million dollars in revenue that’s growing rapidly. Most importantly though, Bruce has seen it all, he’s seen very big and billions in revenue right down to startup land. And so he was a great person to chat to about the key issues and pain points that entrepreneurs face in their journey, like scaling teams across multiple offices and geographies, raising money, founder transition, and the need for pragmatic leadership. I must admit, at times this conversation went a little off script, but that’s what made it so fascinating to me. It was the twists and the turns. Bruce, he’s just so intellectually curious about so many issues. He’s a true high performer. I really loved my time with Bruce, and for me, this is an episode for those who find inspiration in hearing from someone who is currently at the absolute top of their game. Bruce Buchanan, welcome to Scaling Up. It’s an absolute pleasure to have you on this show. You’re a hard man to research. I must admit you’ve stayed out of the limelight, so thanks for coming in.
Bruce(02:07)
Thank you. Thanks for having me. It’s great to be here.
Ed (02:10)
The purpose of this podcast is to inspire entrepreneurs, but to be fair, once they hear your story, they might feel slightly insecure, intimidated. I’m going to give a quick sort of snapshot for context around your corporate career and how it’s led you to this point. Feel free to jump in, correct me, but I think it’s good to try and pull a few of these threads together. You started your career at Boston Consulting, running their consumer practice essentially worldwide, so weren’t just a consultant. You got pushed over to Qantas as a consultant, helped bring their frequent flyer program to life. One thing led to another, moved over to Jetstar essentially when it was a thought bubble and helped scale that business initially and then as CEO to the biggest low-cost carrier in Asia. Just a phenomenal story in itself, and we could have a whole podcast there.
You decide New Horizons beckon. Leave Jetstar when many are touting you maybe to take over Alan Joyce’s job as the CEO of Qantas to look for new opportunities and you’d always been an entrepreneur at heart and Rokt, which was in a different form, came to you and essentially founded that business. And I’m not going to do Rokt justice. This is a low-fi pitch and you can give the next layer, but Rokt is essentially a transaction marketing platform. And I think a great example is I was buying President’s Cup tickets for the golf in Melbourne last week. I was on Ticketmaster, bought my tickets, pumped up to see the golfers right at that transaction moment. I’ll buy my tickets up pops and offer for a hotel for parking at the golf. And that is your software that’s doing that?
Bruce (03:53)
Yep, that’s what we do. I mean that’s the visible part of what we do. So at the end of the transaction you see a lot of them marketplace or distributed commerce offers, but a lot of the secret sauce we do is actually helping those e-commerce companies actually power their own products and services as well.
Ed (04:09)
Of course we’ll get into more what Rokt does, but I think the common thread that is really interesting to follow upfront is you’ve basically dedicated your corporate career to understanding consumers and specifically the consumer psyche at that transaction moment. What have you learned over your 20, 25 years of looking into this psyche that you’ve applied to Rokt specifically?
Bruce(04:34)
Yeah, it’s a great question and I have never heard my career describe that way. So it’s actually interesting to reflect and think about that. I mean, I always thought of myself as someone that’s passionate about growing businesses and putting great teams of people around brands, and if I think about getting up, but you’re right, there’s a thread. There’s this intellectual thread that goes through it which is very much tied to brand, consumer and consumer behavior. And I find it fascinating. There’s so many concepts that you bring together around consumer behavior that is so not obvious when people are thinking through what actually makes a difference. And lots of people think about the basics of selling a product price and what the product is and they lose context of the emotional aspects of how and how important the emotional connection is with a product. And then there’s a whole lot of really bizarre things when you actually get into consumer behavior that are not at all obvious.
I find things like the paradox of choice in consumer behavior, fascinating that most businesses would naturally assume if they had a broader range of products or services, they would win in a category. But consumer behavior is such that the leading players typically often have to do the complete opposite. The most profitable grocery chain in the world is Trader Joe’s and it specializes in presenting one or two skus in every particular category rather than actually presenting 50 SKUs because they realized early on that 50 SKUs actually result in less purchase behavior than one or two. And that’s because consumers get overwhelmed. And so things like that with consumer behaviors I just find fascinating and these tentacles are going to so many different parts of the way we interact with brands and businesses today.
Ed (06:14)
And what was the genesis of that fascination?
Bruce (06:17)
Look, I’ve always been where science meets art I think is a really interesting intersection point and there’s only so much you can actually understand through the numbers. You’ve actually got to step back and actually start to think about things in a slightly different way. And so the most powerful businesses typically are where you’ve got a combination of fantastic physical features and product and then also a fantastic presentation of brand and emotional connection. And so art meets science is really what you’re typically looking to achieve. And that doesn’t matter whether there’s an airline or a technology business or anything that we do. iPhone’s a classic example. All of Steve Jobs sort of innovation around Apple is largely around those sorts of same concepts, but I think where those things intersect, you get some really magical outcomes in terms of products and consumer behavior.
Ed (07:07)
As I sit here in my Allbirds shoes, I know exactly what you mean art meeting science and that resonance that I have with that brand because of the narrow focus. Following that thread on, you’ve had two extraordinary successes. One at Jetstar now at Rokt, which is a hundred million in revenue growing at 55% a year. You must be doing something right in this secret sauce, but there are a lot of pain points that you would’ve come across in your time at Jetstar. Just some of the general pain points of scaling in your two experiences, have you sort of applied again to Rokt.
Bruce (07:49)
Yeah, the two really interesting questions, Ed, I mean on one side you’ve got what are the pain points and the other side of the coin you’ve got this capital efficiency and how do you actually think about raising funds and capital efficiency
Ed (08:01)
Maybe we’ll come back to that
Bruce (08:02)
I think the two are somewhat intertwined in the way I think about businesses and the way you drive success I think because it’s hard to have the time and the ability to actually get a business proposition and that might be right from a product market field or right from a team perspective or right from lots of different perspectives. But if you don’t have the time to get that right, you can often get forced into a situation where it’s scaling something that’s inefficient. So I’ll come back to that, but I think the major pain points for me are typically always around people. So to build any business you need great people. And I think most problems you face in business typically stem from leadership issues and most people will try and jump in and solve them from a technical perspective. They’ll try and get in and find the answer to the problem.
But I always like the idea of stepping back and asking the five why’s? Actually step back and say, look, what is it that’s driving this particular problem? And inevitably the problem always comes back to people and leadership. You can’t scale a business and you can’t scale a business rapidly without the right team and people and it sounds obvious, but if you think about it, it’s very hard thing to do for an entrepreneur. You build a group of people around a brand, those people take you to point A, then the business starts to take off and it starts to scale at 50, 60, a hundred percent, whatever that particular growth rate is. Suddenly that team of people are now you’re asking them to do 2, 3, 4 x every couple of years and there’s groups of people that will scale with that, but there’s a lot of people that won’t scale at that sort of pace.
So it’s about how do you actually build a leadership team capable of taking a business from X to four x to 10 x to 20 x? And ultimately you can spend a lot of time solving problems in the business, but if you devote more time and energy towards the people and leadership issues, you’ll ultimately be able to continue scaling the business. And they’re the things that people tend to do incorrectly I think when they’re, they get stuck at a business and you see a business level out or stop growing. And the primary reason that typically is a management team or the capability within the leadership ranks more broadly is not able to keep pace with the growth of the business. And that requires you to almost be able to see around corners. So you almost have to be able to say, look, I can, I know where I am today and I know this person’s capable of running this team as it sits today, but also know in six months and 12 months this business needs to be doing something different and recruiting people and training people and bringing people into a business takes a long time.
So if you’re not thinking about that ahead of the curve, you can hit these big road bumps where you actually, the business just stops growing for quite a considerable amount of time.
Ed (10:46)
And are you finding yourself coaching these people or do you think people obviously you are predicting talent and the ability of people to scale with you, but some people don’t have that capability and will you still invest your time to see where their limit is?
Bruce (11:03)
I think yeah, there’s two aspects of that, one of which is you definitely want to invest in people so they can get the most out of that. The other thing you want to do is have very transparent open conversations with those people because there’s one path that I see entrepreneurs do which is they just move people out of the business or they get to a point where they can’t have the conversation with the individual and then they get to a breaking point and they say, this is not working, sorry, I need to bring someone in. The actual right way to do it is to have a collaborative discussion with the individual and say, look, when we get to a certain point, this business is going to need someone capable of running an engineering team of 50 or a hundred and we think you have a fantastic role in this business and we want to keep you engaged building capability and building talent in the business.
And if that conversation goes well, that person will stay in the business, help you recruit the next person that organizational knowledge be lost. If that conversation doesn’t go well or you don’t have that conversation, that person’s gone and you lose all that organizational knowledge. And that’s a hard thing for most people to do because they tend to be these conversations they find very uncomfortable. They treat it like a boyfriend girlfriend or couple type situation like we’re having a breakup when actually it’s not like that at all. It’s about actually we’re all a team, we’re a sporting team, we’re putting a bunch of people on the field and we’ve moved up a division and suddenly we need three new players on the team. And if you talk to the people in the organization like that, everyone gets in a mental map where they go. Of course we want to keep winning as a group of people and if we want to keep winning as a group of people, we need to continue to increase the bench strength.
Ed (12:34)
I think it’s a great sort of analogy to apply to your staff. I mean the key is that people are effectively creating a culture within your business that you can control. But how do you think about your organizational culture? Have you had any significant influences in how you think about creating these cultures? But also I imagine there’s this huge pain point of scaling these cultures across offices Rokt started in Sydney. You are now based in New York time zones, you’ve got offices around the world. It can become very tricky, I imagine.
Bruce (13:09)
It’s incredibly tricky. Managing tyranny of distance between office s is really hard and getting the balance is an enormous investment in time and energy and increases the risk of failure dramatically. So the challenge you’ve got as an Australian business is do you want to be a success in the Australian stage and you can keep everyone co-located and your chance of success goes up dramatically or do you want to take on the global opportunity and then you need to spread yourself into other markets. You can’t successfully build a business in the US from Australia. So as a founder, that means you need to spend a lot of time in that other market or a CEO or as a senior leader that has a cost. And so there’s a lots of questions and they get thrown up. First of all, do you want the business to be here or here? Do you want the global business or the local business? If you want the global business is that you are prepared to make that sacrifice or do you need someone else to be able to make that sacrifice
Ed (14:00)
And you’ve moved your family to New York, five kids, a wife who’s a corporate beast in her own right. It’s a big move. It’s not something that you can choose lightly to uproot your entire family and move from Sydney to New York City.
Bruce (14:16)
It’s really tough and they’re the sorts of decisions that you need to spend a lot of time with your partner, family talking about. And it’s becomes a choice where ultimately sometimes that choice is one that is not made by you, it’s made collectively by the family. And so that’s an important journey as well. So when I moved to New York, I commuted for two years and the family wanted to make sure I was absolutely sure this is what we wanted to do. And so there was a bit of a testing period and that has a cost as well because you are constantly jet lagged while you’re traveling. But it also demonstrates to family, this is actually something you’re really serious about. You’ve built the foundations, the risk profile of them all moving over is a lot less. So there are ways that you can do it, but it does require a massive commitment both personally, physically in every sort of dimension. And it’s not just you individually, you’re all in. You’ve got to be all in. If you want to make something like that work at that level.
Ed (15:11)
And you touched on the jet lag, I know you’re a man that likes to fly economy class around the world and you’re a big man, you’d be six ft six. So imagine your jet lag is an issue.
Bruce(15:22)
Well I think that’s not so much, I don’t like to fly economy class around the world. I must prefer to fly first class around the world, but I’m a firm believer I don’t ask my team to do something I wouldn’t do myself. And we had a long conversation as a group of people in Rokt and said, look, one of the things we think culturally so important in our organization is bringing people together as often as we can. And we just realized that we wanted to be a lot more liberal into quarters and training events and global induction and product people and product marketing and different people coming together all the time. And to be able to do that, we said it’s not going to be feasibly economically to do that with a level we want to do in the organization if everyone’s flying business class or first class.
And so we just had a discussion about it, we put in place a bunch of things and everyone said yes, we prefer to have the connection and the opportunity to meet these other people more often than to fly in a more premium class of travel. And then once you’ve got that alignment in the organization, it’s an easy discussion but you can’t then turn around and say, thanks everyone. That’s great, I’m going to fly business class. You guys can all fly economy. It doesn’t really in inspire that we’re all in it together. It creates this us and them divide, which I don’t think is healthy in a culture. I don’t think it’s healthy in a startup at all
Ed (16:34)
Couldn’t agree them. What? I don’t think it’s healthy in any organization, any sports team to see leaders that separate themselves for whatever reason is never a good sign. It shows your lieutenants that you are in, you’re in for this, you believe in the values of the business and you want to make it everything.
Bruce (16:54)
And values alignment sounds so contrite today, but actually values alignment is all about those sorts of things. The rubber hits the road when you know what the values of an organization are. When you pick up something like the travel policy, to me that’s like you can see the values of an organization very clearly when you read a document like that. People can plaster all these sorts of things on the wall but actually go and pick up the way that they actually operate, find the policy for expenses and find the policy for travel. And then you’ll get a real sense of how that organization actually how that business works, how do they hire people? This values thing is one of those things you know mentioned this concept. Can you train people or can you coach people? If you don’t have people aligned on the core things that you believe in, that’s not something that can be coached in. That’s something that’s either yes or no.
Ed (17:44)
Absolutely. And I’ve read that you personally interview at some point every single employee that comes into Rokt and that I imagine is part of that process to make sure that values piece is holding firm.
Bruce (17:56)
I don’t do anymore. So once we got to 180 or something, we trained up a bunch of people in the business that do what we call bar raises and they answer three key questions. It’s a relatively, sounds like a simple process. The bar raises are from some other part of the business. So there’s two key things when we hire people. One’s a two up process, which is we just fundamentally believe that people decisions are better made by separating from a couple of other people and get other views around those things. The second one is a bar raiser process. And the bar raises a process is three questions. Is this person aligned with our values which is a yes or no? Where does this person spike in competencies? We believe that competencies are something like tools in a toolbox. People either have them or don’t have them. And we in shorthand look at only three things, which is competencies for us are IQ, AQ and eq, which is problem solving capabilities, adversity.
Ed (18:50)
How would you rank those as in of the belief that EQ probably should be one, but some founders don’t necessarily
Bruce (18:57)
Believe that. Yeah, so look, there’s two ways to answer that question. My belief is actually you want a mix of capabilities in any team and this is where the values question is alignment. The competency question is diversity. The reason we ask the question is where do they spike is we’re actually not after the same thing. We’re actually after a mixture of capabilities in some roles like my engineers, I want to be good problem solvers in some roles like sales. I want them to have great tenacity and adversity skills and for some people in our people leadership areas, I want them to be really good developers and have good emotional skills. If you say what is the most skill that drives the highest degree of success? Actually the interesting one when you read the research is AQ is the most highly correlated with long-term success, which is kind of interesting. Those were the greatest degree of tenacity and never say die. Yeah. Are the ones that typically more
Ed (19:52)
Likely the grit and the hustle
Bruce (19:53)
The grit and the hustle. And the last question we ask people is will this person raise the bar of the team they’re going in and they’re the three questions. And if a bar raiser can’t answer a yes to all three questions, this person doesn’t come into our business.
Ed (20:06)
I love the framework and you mentioned the importance of your engineers to be great problem solvers. You’ve got a hundred engineers in Sydney. It’s not a shallow pool of talent, it’s a growing pool of talent in Australia, but you are competing with Atlassian, you’re competing with Canva, you’re competing with Google has a big engineering team in Australia. How do you think about recruiting that talent, incentivising that talent and specifically in the engineering realm and I guess aligning that talent as well?
Bruce(20:35)
Yeah, it’s a great question. I actually think that the competition in Sydney has driven a positive thing, which is we’ve created this magnet which is attracts great engineers because there is definitely this interesting thing that happens where you’ve got successful businesses on the same ecosystem and it’s a little bit of the Silicon Valley thing that’s happening in Sydney now, which is you’ve got a lot of successful businesses using very modern engineering practices and they can all help each other. And part of that is talent. When they come into this market, no it’s not a single option. So they can move across lots of different businesses, the businesses can learn from each other. So you can actually pick up modern engineering, modern agile development practices, best in class tools. All of those sorts of things are things you can learn from each other. So I don’t see it as directly competitive just like Silicon Valley is not the reason there’s so many great businesses in Silicon Valley will come from Silicon Valley.
A bunch of positive correlated things that happen when you bring great businesses together as well as competitive issues on the talent side, the balance of that is probably 50/50. You’re probably competing a bit for talent, you’ll probably helping each other build talent and those two things happen together. Also, when you get a great group of businesses that have a huge demand for talent, there’s a whole industry behind you of universities and training and immigration policies and stuff that actually start to feed you talent. So there’s a natural response to market need which is an education or skill sets is met with lots of different ways. So I think, I think actually having all those businesses in Sydney is a real positive for us.
Ed (22:39)
Do you think Australia could be doing more to attract better engineering talent?
Bruce (22:44)
Absolutely. I mean we could always do more. I think what they’ve done unskilled, the skilled visa migration program more recently has been a positive. I think what we’re trying to do in our education system is a positive. Could we do more? Yeah, I think there’s great opportunities to give people greater opportunity after they’ve done advanced mathematics or advanced computer science degrees to stay here longer. I think if we can more easily get younger talent that’s probably not at the really senior skilled visa level now and attract them from different countries, that would be a great influx way for us as well. I mean I think companies that are paying very high salaries are naturally pretty good at working out who the right talent is to bring in to their company. And the best thing about software companies and innovating businesses is those people are probably very good for the country.
They’re not just good for Rokt or Canva or Atlassian. They’re good for us as a community and us as Australia. And I think the more we can do there, the better. I mean there’s lots of challenges in that area. I mean we challenges with the Australian policy around innovation as things like IP Australia, some of our tax policies, some of our immigration policies aren’t great, but generally we’ve got a good combination of things working in our favor in Sydney. We’ve got a great climate, a very attractive place to come and work and live with your family. Good education, good healthcare, it’s safe. It’s a place people want to be. And so when we’re competing, we’re competing with businesses in New York and Silicon Valley and London and all sorts of other great cities and Sydney stacks up pretty well as a offering
Ed (24:19)
Best city in the world. You sound a little homesick.
I think the next thread and we touched on it is around this idea of capital allocation and not in the traditional sense, but you guys are growing quickly. Rokt makes money, which is so rare in this day and age for fast growing software business would be spitting out money and it was the same at Jetstar when you were running that business. So as you touched on it, it could be a great product market fit, but my gut feel is it has something to do with your execution, how you view allocating capital, whether it being financial, human capital, what are you going to chase next? How you’re going to stage out the next phase of growth and doing it a really efficient manner.
Bruce (25:01)
Yeah, look, I’m a real believer of the concepts around lean and there’s a bunch of books written on this. Lean Startup’s a great book but to me I think if you can prove out a concept in an efficient way so you can be hungry about the problem you’re trying to solve or not over invest in it early on, you create a very good discipline around checking in regularly limiting the amount of resources, creating clear alignment, clear expectation and goals and you scale things when you get success rather than scaling things when you’re trying to still work out what the right answer should be. And so I love the concept of small batch size, rapid experimentation and work out what works and keeping people hungry and efficient is a really positive. If an organization gets too fat or people don’t feel like they’ve got the right career development opportunities or there’s not enough for them to do, you encourage a whole bunch of negative behaviors in a business and you tend to attract people that you’re probably not going to be the ones that set you up for rapid growth and rapid success. So there’s alignment I think around efficiency and leanness that actually is, that helps you attract the right people, that also helps you continue to scale up the business
Ed (26:11)
And that discipline and rigor that you bring in from day one is so important. I imagine in these businesses are growing quickly.
Bruce (26:18)
You’ve got to be careful there’s a balance here. And look, sometimes I’m definitely guilty of going too far to the lean and I look at businesses in the US and some of these guys that are scaling business incredibly fast and there’s examples like the WeWork one at the moment that you probably look at.
Ed (26:34)
Glad you’re at the other end of the spectrum.
Bruce (26:35)
I’m at the very much other end of the spectrum, but there’s probably examples of decisions that I’ve made that have been wrong as well because mean too far the other way. So when I think about how quickly I invested in a people or finance team in my business I probably delayed that too long and that’s because I was focused on efficiency and leanness in putting all my energy and all our resource into building the best thing we possibly could. And so the lateness in investing in some of those functions impacts scalability and impacts stress on the rest of the management team. So there is a balance here and you got to know, okay, my natural bias is this way and I can see other people’s natural bias is the other way. Getting the balance rights important.
Ed (27:17)
Also easy to sit back retrospectively and say, I might have done that six months, 12 months too late. But at the time I’m sure it felt like the natural thing to do.
Bruce (27:28)
It did. I mean I’m also a believer that you probably want to bias towards over-investing in talent and leadership and sometimes if you’re very focused on the cost and the dollars you tend to do small micro decisions and the opportunity cost of spending six months recruiting someone and then needing to recruit someone again and six months after that means that you, that’s time that you’re not spending on other parts of the business. So the balance is important. You’ve got to be careful about where you invest your time and what the return is and how quickly you’re going to have to reinvest that time again and something that otherwise you could have done once for two years or four years and then potentially spent your time on something else.
Ed (28:08)
Rokt is making money but that doesn’t mean that you haven’t taken on funding partners. I think you’ve taken on maybe 40 million in funding over the course of six or seven years. So you have had this experience of raising money, what it takes out of you as a founder. On the top of the mind of a lot of CEOs, how do you think about bringing equity partners in and that funding problem so to speak?
Bruce (28:33)
It’s a great question. I mean I’m flabbergasted a little bit when I see people raising huge sums of money without a real clear indication of what the payback or what the likelihood of success can be much lower and they still raise huge amounts of money. I mean I find the emotional energy is one thing and the effort you put into raising money. But the other thing that I do myself and I see lots of other founders do is when you bring investors into your business, it’s like a personal weight. You’ve actually got people backing you and backing, giving you the hard-earned dollars into your idea and your baby and your business. And there’s an emotional cost to that which is you’ve actually carrying an additional load as you’re going through and your decision making. And it’s not just about your dollars and your return and the decisions you make for yourself. Now you’re carrying other people’s money and that carries with it a sense of obligation. Like anything when you’ve someone backs you and I find that emotionally is much tougher than actually the emotional lens of how do I actually raise money? The raising money for me has never been a massive struggle. Its been, here’s my business and I want to be transparent and honest
Ed (29:43)
You’re running a bloody good business that’s spitting out money on the other side, people are queuing up.
Bruce (29:47)
It does help about with that. But it’s also this you’ve got to be completely honest, I think when you go to a group of investors, and I always think it’s better to undersell where you’re sitting today and let people have a little surprise on the up, it’s the emotional cost you carry as a founder anyway. It takes a whole burden off if people feel like they’re getting a great deal and they get something out of it and there’s going to be ups and downs and there’s always going to be things that aren’t going to go all the way you think they’re going to go. So banking that into your plan and making sure that you are thinking about that as you go out and make promises to investors is important.
Ed (30:24)
Can I imagine bringing the right partner in is as important. It’s like a marriage and you’ve had some great investment partners, Square Peg who are best in class venture capitalists, John Ho who I think you met day one at BCG has been a great support of your business as well. How do you think about, or do you have any advice for founders as to the type of partner they bring in?
Bruce (30:47)
What I find super important is surround yourself with people you respect and people that you think are going to help you create better outcomes and decisions. If you can get yourself surrounded by people like John Ho and Paul Basset and these sorts of individuals, you’ve got such a head start because when you’ve got that difficult decision and you want someone to bounce it off, you’ve got someone that is super smart, high integrity and the ability then to connect with them and get a different point of view in the heat and emotion of a big decision or a key hire. Having someone that gives you a completely different perspective and is thinking about it and backing you from what you’re trying to achieve is so valuable. And entrepreneurship is an incredibly lonely thing. If you’re a leader or a founder and you’re trying to build a business, you’re often making lots of decisions every day and your team looks to you as this invincible leader that is going to make every decision in the right way. But often you don’t have experience in making a particular decision or you don’t exactly know you have an intuition, you have some data, you got your people around you, but sometimes decisions actually it’s very helpful to get outside advice and often it’s just the process of talking through something that can be very valuable. Sometimes it’s getting their perspective, sometimes it’s actually talking through a problem that can be incredibly valuable.
Ed (32:09)
You were the effective founder of Rokt, but there were two other co-founders, but they have essentially transitioned out of the business. And I’m interested in your experience of founder transition because there, I’m sure there are a lot of entrepreneurs out there where this is the case and things don’t go as expected or other founders moved on from the business. What are your sort of experiences, reflections, and lessons you’ve learned about managing founder transition?
Bruce (32:37)
Yeah, well founder transition was an interesting one to me, cause I hadn’t actually experienced this. All my businesses previously been sole businesses that I’d started and then starting Jetstar, I was a hired gun, Jeff Dixon and Alan Joyce and the Qantas board. So getting into a business where I was actually making acquisition and two other people were coming into the business was an interesting journey for me. And I think in hindsight they definitely made some mistakes along that journey as we all do and they can be the most costly and the most difficult ones to actually navigate. They’re the hardest emotional ones to navigate. But I was fortunate, one of the other founders has been with me on and off through this journey all the way through and a lot of what Rokt is has his fingerprints all over it. He’s a very creative guy, ex-Google and has a natural sense of design and what’s going to work from a consumer standpoint and is a very good business development guy and brought in the first key partners with Rokt.
So he brought in Ticketek and eBay. So I look at what Rokt is today and I look at Justin’s contribution, I think he’s absolutely a hundred percent been there on that journey. He’s not the executor in day-to-day bringing the leadership team and knowing how to scale a business globally and all those sorts of things. But he’s played an important role as a founder and it’s important to recognize that I think and step back and say look, with founders and with people that have key roles like that, are there people that add a lot of value in that process? And look, the other person he had in his business early on didn’t add a lot of value into where the Rokt business actually ultimately went to. And that was a tough conversation but having that in a very frank way based on his skill set and where the business was going ultimately gave him a better outcome in the long run because the business became a lot more successful and financially he reaped a huge amount of reward out of that.
But it’s an emotional transition and saying it any other way is denying the difficulty you end up having to face when you have all those conversations. And that’s where it’s really helpful having people like a Paul Basset or a John Ho or other people that are highly respected because they can also come in and have a conversation with these people that are going through this transition and be a bit of a sounding board for them and say, look, I’ve seen this and is it more important for you to be financially successful? You are really good at doing X, Y and Z, and understanding where that goes is super important for them.
Ed (35:09)
And how would you describe your leadership style and how’s that evolved over the years?
Bruce (35:15)
Yeah, I think it’s one of those things as you get older and wiser, as they say, you learn that you definitely have lots to learn every time you get a year older, you realize how much more you’ve got to learn
Ed (35:29)
The more learn the more you realize you don’t know
Bruce (35:31)
And the more you experience in leadership, the more you realize how much you need to learn with leadership. So I think as much as I’ve learnt with leadership, I realize my leadership style early on was probably lacking a lot of finesse.
Ed (35:49)
Between the lines, you were a hard taskmaster
Bruce (35:52)
I was a tough person to work for. People describe me as incredibly tough to work for, but very rewarding from a career perspective. They got challenged, they got supported, but they learned a lot and it was a rapid ride, so it was tough for some people.
Ed (36:10)
They call it old school leadership.
Bruce (36:12)
Yeah, I think mean for me, I’m happy to be in the trenches, I’m happy to give people the rope. I’m happy to be there as an sounding board. So I wouldn’t say I’ve got a set leadership style and it depends on the individual. You get hugely competent people and you need to give them the space to actually get on and they come to you in their own way. I think what’s super important is you have discussions with the individual about their development and you have discussions about where they’re doing really well and you have those in a way that’s creates trust and creates a framework where they feel like they’re personally growing. But I think in terms of broad-based decision making, I think it’s important to be able to step back and say what’s the right leadership style for a particular situation? And sometimes that’s pushing the organization and saying, look, I want to get to two x or I want to get to X, so I’m going to paint a vision of two x and we’ll get to X.
Sometimes it’s been supportive, sometimes it’s been conciliatory, sometimes it’s different styles work in different situations and I think probably the greatest lesson as I’ve gotten older them somewhat wiser is I tend to step back a little bit more and tend to give people a bit more time and tend to let people understand that there’s many different ways to get to a particular destination and sometimes it’s important to let other people make the choice and they might take a longer path to get there, but that sense of ownership and pride that they have in the execution and the sense of achievement is so important in scaling up a broader business.
Ed (37:37)
I love that sort of mental model of knowing that in certain situation things are required, but generally speaking, I will apply whatever is needed to make sure this works and to maintain that high expectation of outcome is important in that as well. You’re not slackening off in any sense, you you’re still going to run hard, but there there’s different ways to skin a cat depending on the situation. I love that
Bruce (37:59)
And I think it’s hugely important to have other people in the business that behave differently. So it’s really important that you’ve got people in your business that are much more focused on people and softer skills and they’re the connectors. You’ve got other people that are pushing the organization even harder and they’re all about outcome. And as a team, as you come together you get these wonderful combinations of personalities and a group of very different thinkers and very different personalities in terms of the way they tackle a problem will achieve a much better outcome than everyone being exactly aligned exactly the same way.
Ed (38:37)
A personal fascination for me is around people’s high performance routines. I haven’t mentioned you run marathons, you’ve got five kids. As I said, your wife’s a highly successful business person on her own. Just talking about it makes me tired actually to think work. How do you ensure that you’re getting enough sleep? How do you consume information quickly? How do you have some Bruce time so to speak, to ensure that you are at your best the whole time?
Bruce (39:03)
Yeah, I think it’s so important to have switch off mechanics and some people that’s a glass of wine, some people that’s doing X, y and z. I have lots of things that I do that are really my passions and hobbies and sometimes that’s family. Sometimes it’s simple as reading the book, watching a TV show, but it’s about having those things that you love and I tend to do things, I pick an activity depending on the level of stress, depending on what mode I’m in at that particular point in time, the level of activity will drive the switch off. So I love playing bridge for instance. It’s a game where my mental mind has to be completely focused on the game of bridge, so it forces you to switch off. I like flying planes, I like running. I do a whole bunch of those sorts of things and they are ways that force me to switch off. Running is a great exercise for me and hiking I love as well and skiing a whole bunch of those fitness things because the exercise is a surprising way to actually process problems. You go for an hour long run and you come back and everything feels like you’ve solved the world’s problems.
Ed (40:09)
The endorphins are pumping. You haven’t pushed yourself hard enough that you can’t actually think it’s your time to process.
Bruce (40:15)
I think there’s something about the subconscious also that kicks in when the body is actually exercising, that’s super powerful and it has a way of dealing with problems that are in a very different way than if you just sit and stew and stress on something.
Ed (40:27)
In my own experience tapping into that subconscious and finding a way of tapping into that subconscious consistently is the key to high performance and distracting your conscious mind is how you get the best out of yourself
Bruce (40:42)
And you need balance. The other thing is it’s great to have a life partner, kids and other things that create balance. So when I go on leave and I go on holiday and we sit on a beach, I completely switch off and that’s such an important skill because you go at 120%
Ed (41:00)
It is a skill to be clear. People think, oh, I’ll just go and lie on the beach and switch off, but they can’t switch off. They’re still thinking about their business because that is essentially their deepest passion. What they’re giving their whole working life to is their deepest passion. So to be able to switch off from that is a skill in itself.
Bruce (41:16)
And I think we’ve created a society a greater problem in amongst all what we do today in that I think kids are finding it hard and hard to switch off because this little device called the mobile phone, which we carry around with us now everywhere, has created this instantaneous sense of anxiety. People are constantly needing to feel like they check in on something and I think unfortunately that’s breeding into our children and our next generation. I think this inability to switch off. They don’t know how to disconnect from social media or from email, from text, from everything else that’s going on around them. And I think that’s not a healthy situation. I think if they need to find ways, get up in the mountains and actually be disconnected for a week, delete their Facebook account, do something radical because breaking that mental mode where they can actually disconnect will be ultimately I think set them up in a much stronger more successful stance.
Ed (42:09)
Could not agree with you more and with four daughters you’re going to be up against it at times. I can imagine. One last question because you’ve been so generous with your time, but is there any lesson that you would tell your 25 year old self that you’ve learned in the years post that really resonates with you?
Bruce (42:29)
Yeah, I think the most important lesson that I learned, and it took me a long time to learn this was your intuition about people is very, very powerful. And often we sit in a mental state when we are hiring and recruiting and leading and making decisions about people where we almost get locked in this sense of anxiety where we don’t want to make those tough decisions. I don’t want to have that tough conversation. The most important thing I learned is that intuition is 90% of the time right and facing into it doesn’t mean, and this person doesn’t have a role for me, but actually talking through that early on and actively with people gets you always a much better outcome than ignoring it or not facing up to it or pretending it doesn’t exist. So I think whether that’s bringing in a more senior person to fill a role or I, I’ve got something weird I think about this person, I can’t quite put my finger on it, but I’m not a hundred percent sure they’re the right person or this person’s not working out culturally for the business. Whenever you get those intuition, it’s better to act. And acting faster on anything people related typically has been the number one mistake. And having scaled very big businesses, those mistakes can be incredibly costly. And so if I was going back to my 25 year old self, I’d say no matter what you read, and no matter how aggressive you are on that, be more aggressive.
Ed (43:57)
I think it’s great advice and often that hard conversation is never as hard as what you think it’s going to be when two people actually get to the bones of the situation face-to-face.
Bruce (44:06)
That’s true. And I think one of the things people think about that is it’s always going to be a negative outcome. I always have this discussion now when I’m teaching people how to performance manage or lead people and you just go through this conversation, a different frame of reference and you say, do you think this person is actually enjoying it? And what do you think their life could be if you actually had a more frank conversation with them about where their skills and capabilities are. Ultimately it’s in their interest to know also how they’re performing and where they’re going and what their potential is. And ignoring that conversation is actually doing them a disservice. And when you shift the frame of reference where they think it’s all about themselves or think it’s all about the business, and you frame it as those over conversations are just about the other individual as it is about the business or about the rest of the team, it changes the whole frame of reference, then it puts the sense of teamwork. That sporting team analogy, it puts the sense of ownership on the individual to actually think about the welfare of everyone in the business.
Ed (45:01)
Fantastic answer. So grateful for your time. I’m super excited to watch Rokt grow in the years coming. You’re one of Australia’s great entrepreneurs, one of the great executives, and I hope I’ve done this story justice. But thank you Bruce Buchanan for your time.
Bruce (44:06)
Thanks a lot, Ed. Cheers.
