The longest-serving CEO in CSIRO’s history is now a director at Fortescue. So what does one of Australia’s best-known scientists have to offer boards? Fresh thinking and innovation, for starters.
You left CSIRO in June, after eight years. How did it feel?
I worked right up until the last day. The next day I felt like I was missing an arm. I woke up with two feelings — one of relief, the second, what do I do now? I was so used to waking up thinking about things. When you’re running an organisation like CSIRO [6237 people across 50 sites in Australia and three overseas], I would wake up every day worrying about whether someone had hurt themselves or something. You need time to disconnect.
I literally got on a plane — my wife, Maria, and I flew to Indonesia. We rented out a small island off the coast, which sounds more luxurious than it was. We stayed there and had a bunch of friends fly in and I went surfing — I love surfing. You have to let it go, but people still call you up for advice.
What’s next for you?
The honest answer is, I don’t know. There was a time in my life when I was 40 and stopped for a bit. I had made a lot of money and was not doing anything. Maria said, “How are you enjoying your retirement? You’re working harder than you were before.” It feels like I’m on that trajectory now.
David Thodey AO FAICD [chair of Xero, Great Barrier Reef Foundation and Tyro] said to me, “When you finish don’t do anything for six months.” I haven’t done a real good job taking that advice.
I joined the board of Fortescue Metals Group, which has a massive job to decarbonise. The company announced its decarbonisation strategy in 2022, aiming to eliminate fossil fuel use and achieve real zero terrestrial emissions [scope 1 and 2] across its iron ore operations by 2030. We went through a massive decarbonisation at CSIRO, so there are things I can help with. Plus, I have a couple of startups, so I’m pretty much working full-time. I have said no to a couple of ASX-listed CEO roles. CSIRO is a hard act to follow.
What other board roles have you taken on?
I chair AmCham, the American Chamber of Commerce in Australia. I joined the Nanosonics board and I’m a member of the federal government’s Circular Economy Ministerial Advisory Group.
I’m also on the Australian National University board. Universities are very different models to a company in terms of governance. Professors don’t report to the vice-chancellors, no matter what’s on the organisational chart. It’s fascinating — you have all the same governance and risks, but not the same level of control.
What I’ve noticed, regardless of size, is that the work is very engaging. None of the boards are the kind where you sit and read board papers — it’s far more involved. I do like to get involved where I can help. For each company, there are areas of my particular expertise that are quite useful, even for a company like Fortescue. I find that board really exciting — it’s like being part of a team. You have an important governance role, but I can also bring my innovation expertise to bear [see breakout, right].
How have you found adjusting from being a CEO to being a non-executive director?
Being a CEO makes you super-sensitive to respecting the CEO as a non-executive director. Sometimes, directors give the impression they don’t. The great thing about having ex-CEOs on the board is that they feel your pain. It’s a lonely job. They know the things that keep you up at night — people hurting themselves, the chase for revenue, bottom line. Having ex-CEOS is generally good, as long as they don’t forget that they’re not running the company. In terms of my engagement on boards, the CEO will say, “We want to invest in X.” I’ll say, “Here’s someone who can help.” Running startups is a pretty unique experience and the people around the board table need that experience in the mix.
What are you learning from the different things you’re involved in?
I’m always interested in competitive strategy. As organisations, we have a big shift in strategy upon us. The world has woken up to getting to net zero emissions, which means [components] that were easier to get before are going to get quite hard as more countries make the shift. Companies have to think about when these things get scarce, what are we going to do? How much do you do yourself versus buy in, and what are the risks of either path? How does your company change in a net zero world? Is your company going to be doing the same things or does it have to fundamentally change? Fortescue is a good example. It’s good at materials and logistics, but then you get to [thinking] maybe you’re an energy company or maybe you’re a technology company. The core elements that make technology of the future — much of it comes out of the ground in the Pilbara. So how much more could we do to make those elements here? That’s a great example of how a company can fundamentally change. Nanosonics [chaired by former GE Australia CEO Steven Sargent FAICD] is on the way to being the next Cochlear. It’s a listed Australian infection- prevention company that has developed a unique automated disinfection technology. It’s on a really interesting growth path on the global trend in medicine — moving from traditional surgery to minimally invasive surgery and intervention that stimulates the body’s healing process. It’s interesting where that company could go.
What’s exciting you about trends in VC funding for 2024?
If I go back to the tech wreck of 2000 — when dot com became the dot bomb — the first wave of clean tech investing was happening. By 2002, the big bets on clean tech were happening. When the GFC blew up, the wave of investing in AI was happening. There’s a slowdown now, but investors never stop investing, they just invest in different areas.
I have a hunch that from an Australian perspective, it’s semiconductors. I’m talking about startups that don’t normally go together because of geopolitical issues — Chinese Taipei and the CHiPS and Science Act in the US [the legislation provides US$52.7b for American semiconductor research, development, manufacturing, and workforce development]. Australia has a lot of latent semiconductor capability — there are some niche technology areas we’re really good at. Then there’s food. Alternate proteins, alternate plant-based protein, fermented food products — rather than getting milk from a cow, it’s fermented from a plant. You can engineer unique food products. Australia has traditionally been the food bowl for Asia. I think we’re going to become the delicatessen for other nations.
Then there’s AI, of course. But it’s such a competitive, intense space.
Your most useful career lesson?
You have those times in your work life when you feel like it’s the worst possible moment. For example, it’s a startup and the deal falls through. Or it’s the GFC, you’re about to run out of capital and you feel done for.
But it’s those moments when all looks lost that are the catalysing moments. At the time, it’s devastating and you think you’re dead, but they are the moments that make success possible.
My lesson is: no matter how bad things get, this will be the catalyst for success — and so what can I learn from that?
It’s one of the reasons Israel is so successful. They’re in the pressure cooker. Conversely, Australia has had 30 years of economic growth and we’re [ranked] 72 for innovation.
What’s your go-to for relaxation?
One of my chill-out things is doing brainstorm sessions. But a lot of relaxing things turn into work. Andrew Forrest at Fortescue asked me to do a brainstorm session and I did a couple with the team. Then he said, “You should join the board”. I was fascinated to learn about that industry. In a way, solving someone else’s problems is always better.
I love surfing. When I’m in Sydney, I paddleboard every morning on the harbour. At a certain time of year, the sun comes up between the heads and you can see the glow coming over the horizon. It’s magical.
How Australian science can develop successful innovations that grow our economy — and what boards can do better.
A physicist who worked for 25 years in Silicon Valley, Dr Larry Marshall FAICD holds 20 patents, led six tech and venture capital companies and was CEO of CSIRO from 2015–23.
In Invention to Innovation: How scientists can drive our economy, released in June 2023, he and CSIRO leadership/strategy communications manager Jenna Daroczy outline innovation strategies.
They write that Australia has three “valleys of death” (caused by our culture, capital and customers), which compound to create the nation’s peculiar innovation dilemma — its world-class research doesn’t result in commercialisation-ready inventions.
Marshall says the solution is to stop replicating innovation systems of other nations and instead leverage our own strengths. We need a strong, diverse, complex innovation ecosystem that can lead science to the other side. He adds that the capital market has matured and if he was running a digital startup in Australia, “I’d absolutely raise capital here.”
On innovation, he says, “I know a lot of boards are going on junkets to Silicon Valley and Israel. It’s great to see what others are doing, but don’t get suckered into it. Australia is very different. The best innovation comes from your people, provided you know how to listen to them. You’ve got to do it from within.”
He says startup experience is invaluable. “When you have a board member with experience in startups, the conversation goes, ‘I hear it’s impossible, but what if we invented this? What if we did this to change the market?’ I call it market vision.”
This article first appeared under the headline 'Dr Larry Marshall FAICD’ in the November 2023 issue of Company Director magazine.
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