As one of Australia’s most experienced and respected directors, the services of Dean Wills predictably remain in strong demand. Geoffrey Stackhouse lifts the bonnet to see what drives the self-made man behind Coca-Cola Amatil.
A passion for high performance cars seems a little incongruous for one of Australia's leading businessmen. But Dean Wills, eminent board member and former chairman and managing director of Coca-Cola Amatil is anything but conventional. Wills' eclectic car collection ranges from a Mclaren F1 (one of only 64 in the world) through to the latest model Mini Cooper S. What he admires about high performance cars is the engineering and design which turns an everyday object into something quite extraordinary. To perform properly, every element in the car's complex system must be finely tuned and in balance. As Wills reflects on his 46-year business career, it's clear that the elements he admires in a thoroughbred car have a lot in common with what he admires in an outstanding company. Wills isn't overly comfortable with the analogy, arguing that his passion for cars is highly emotive, verging on the illogical. But he does concede that his desire for top performance and proper form and substance are common factors.
His perspective has been shaped by having worked his way up through the ranks. A career path that he now admits makes him "a bit of a dinosaur". Wills started at WD&HO Wills as a clerk and worked in just about every job eventually becoming MD and chairman. He describes it as "a hell of a university", and acknowledges that today there is very little prospect of advancement to the top level from a such a modest beginning. He claims the key lessons learned are resilience, persistence and determination. Not surprisingly, he considers his greatest business achievement to have been the restructure of Coca-Coca Amatil to create a high performance vehicle and set it on a new and successful path. Wills and his management team transformed what was then Amatil, a large domestic conglomerate covering five different industries, into a focused international player in the beverage business. As chairman and managing director of Coca-Cola Amatil, he presided over a remarkable period of prosperity for the company. Wills' focus on shareholder value resulted in outstanding wealth creation for all investors. Under his leadership, from 1984 to 1994 the company's worth increased from around $400 million to just over $8 billion.
For Wills, the increase in market cap alone is not the achievement. He derives great satisfaction from having created a powerful and focused vehicle with the fundamentals in place to succeed. Wills stepped down as MD of Coca-Cola Amatil in 1994, and retired as non-executive chairman in 1999. In retirement he appears to be even busier than when he was running CCA. He is still chairman of the Coca-Cola Australia Foundation and holds board positions with Westfield and Fairfax. He is also chairman of Transfield Services, a company which was spun out of the Belgiorno-Nettis Transfield Holdings empire. Wills is widely accredited with resolving the bitter family dispute which paved the way for Transfield Services share market listing. Wills' focus on the fundamentals and "balance" may have been unfashionable in the blue sky dot-com frenzy of the late 90s, But in this era of high-profile corporate collapses, his commonsense logic and focus on shareholder value are back in vogue. "The primary objective of each company is to improve the value of each individual shareholder's investment in that company", says Wills. "If that is not their overriding principle, they've got it wrong."
A high performing company has these fundamentals in balance. Fundamentals which include company management, systems and procedures, observable prowess in supplying goods and services and its board. But for Wills the most critical part is achieving the balance between short-term performance and achieving the long-term potential of the business. He is concerned that the current round of corporate failures came about partly due to a focus on rewarding short-term performance at the expense of creating a sustainable enterprise over the long term. Wills argues that while it is essential to reward senior management for performance, it's up to the board to ensure that appropriate criteria are used to evaluate performance. If the criteria are ill-chosen, or poorly policed, hype can take over from reality and increase the temptation for management to paint a better picture than really exists. "I am amazed that in this day and age a criterion for a large cash bonus could be based on the degree to which you could increase market cap," he says. "Increasing market cap must be real and sustainable and the only way it should be rewarded is through the same instrument that rewards other shareholders – shares. A very large cash bonus had to be inappropriate because the temptation had to be there to inflate the share price quickly and artificially."
But while public attention is focused on corporate failures, this doesn't provide an accurate reflection of Australian business. "In general, Australian boards are very good and there are lots of very successful companies. The sky is not falling in," he says. "Both management and boards need to step back right now and take a very good look at their corporate governance. They need to ensure that they are not doing anything – even inadvertently – that could put the organisation out of balance and ultimately give rise to one of these breakdowns." Wills doesn't believe there has been a general drop in the level of trust between board and management. But he does stress the need for a strong working relationship. "If board and management, particularly chairman and CEO, see each other only at board meetings, you don't have a working relationship," says Wills. "Each individual director must gain knowledge of the company and its intricacies at first hand and cannot depend on board meetings alone for his education," he said.
"A new member takes some time to become effective and develop a sound understanding of the fundamentals of the business and a solid relationship with senior management," he said. He points to the trend to invite directors to serve for only two terms – and believes this is long enough for their colleagues, and shareholders, to make judgments about their ability and decide whether or not to re-elect them. Wills himself is approaching the statutory retirement age for directors, after which he will be up for re-election every year. But as one of Australia's most experienced and respected directors, his services are in strong demand. He intends to continue his board duties for as long as he feels he is making a useful contribution, that his opinion on that score is shared by his colleagues and that he has a sound relationship with top management.
Sports grounding for the serious hard yards
Compared to today's business school-trained executives, Dean Wills has an unconventional background for a CEO. Understanding his classic rags-to-riches story goes a long way to explaining his tremendous drive, charisma and commitment to success through putting in the hard yards. Born in Adelaide in 1933, he attended Marist Brothers school on a scholarship but left just prior to matriculation as he needed to earn a living. He was a keen tennis player and had played football with the Sturt Colts. His first job was with the SA Gas Company on the princely salary of 37 shillings and sixpence a week. He threw it in to take up a professional football career in the grape growing township of Barmera. The club offered him a hefty 150 pounds to play for the season. He also had the opportunity to supplement his income with seasonal work as a fruit picker. National Service prevented Wills from ever playing a professional game for Barmera. Returning to Adelaide he "lived by his wits" for a number of years. He was buying cars and fixing them up to sell when he noticed an arbitrage opportunity. Cars were cheaper in Melbourne than Adelaide, so he would travel to Melbourne to buy cars, and drive them back to Adelaide to sell. Becoming a father helped Wills realise this was no long-term profession.
By chance, his wife Margaret, a former model, read some of his old school reports and discovered that he was academically quite bright. She encouraged him to give up reading "penny dreadfuls" and go to night school to make something of himself. Wills studied accounting at the SA School of Mines (now the SA institute of Technology). In 1957, he joined WD&HO Wills as a clerk and began by assembling orders in the packing room. Within a fortnight Wills had realised his career lay in administration, not production. Moving to marketing, he became a sales rep and even took up smoking so he could understand the product better. He moved to Sydney in 1964 and worked through the ranks in a variety of positions, being appointed director of marketing in 1974. He was invited to join the Amatil board a year later and became MD of WD&HO Wills in 1977, managing Amatil's tobacco operations for the next six years. Appointed chairman and MD of Amatil in 1984, he oversaw the transformation of Amatil from a large conglomerate to a highly focused beverage leader competing internationally. He increased Amatil's market cap from $400 million in 1984 to more than $8 billion in 1994 when he stepped down as MD. Wills retired as non-executive chairman of Coca-Cola Amatil in 1999.
Wills remains chairman of the Coca-Cola Australia foundation and he is also chairman of Transfield Services Limited. He is a director of John Fairfax Holdings Limited and of Westfield Holdings Limited. Wife Margaret, a talented artist, was once commissioned by the Duke of Edinburgh, to paint a series of the outback. They have three children, eight grandchildren and one great-grandchild. Wills says his ambition has always been to make whatever he is employed in better, rather than focusing on putting himself forward. His definition of personal success is waking up in the morning and realising you don't want to be anybody other than who you are.
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