Boardroom Confidential with Tim Trumper

BENNETT MASON

Hello and welcome to Boardroom Conversations, a podcast from the Australian Institute of Company Directors. My name is Bennett Mason. Thanks so much for listening to us. In each episode, we have candid conversations with some of Australia's top directors, leaders and experts. We delve into their background and discuss many of the key issues that boards are grappling with. I'm pleased to say our guest this time is Tim Trumper. He stepped down earlier this year as the chair of the NRMA after nearly 11 years on the board. Tim’s also an advisor and founding shareholder to AI and data analytics company Quantium. On top of that, he's enjoyed a lengthy career in the media. And Tim is also the author of a recent book called “AI: Game On”. Tim, thanks so much for joining us.

TIM TRUMPER

Thank you very much, Bennett. It’s lovely to be here.

BENNETT MASON

Let's start with the book. As I said, it's called “AI: Game On”. What made you write the book and how do some of its principles apply to today's boardroom?

TIM TRUMPER

Well, it was really two things that made me write the book. The first was actually a conversation with John Mullen, who's a very distinguished Australian director and chair. And John actually doesn't know this. So, if you're listening, John, stand by. But I had a conversation him when I first became chair of the NRMA. So, John was my chair a long time ago in another business, and I reached out and got some advice. And in that advice, he just said, “Look Tim, you've got this very unusual thing going on. you're a founding shareholder and advisor with Quantium, so you are at the front row of the technology change and what's coming with analytics and increasingly AI. You are chairing one of Australia's most trusted conglomerates, a 100-year-old mutual. Those two things are unusual combinations. Have you ever thought about writing some of that down for others to think about?” That was the first spark. And then equally as important, when internet first hit, I was right there, like in 1993. I was trying to bring Wired magazine to Australia, and I'd been obsessed with technology and how it impacts business my whole career. And I could see how the internet effectively extracted lots of value out of Australia and put a lot of that value overseas. A lot of Australian companies did not play the internet well. Some did, but some didn't. Many didn't. And with AI, I was really conscious that is going to happen again and it's already happening. So, I thought, well, make a contribution. And so, the book was really from written from a chair’s and directors’ perspective about what to do with the situation. The second part of your question, the subtitle of the book is “How to Decide Who or what Decides”. And when I walk into boardrooms and talk about AI, that is the conversation. How do we delegate to a machine? On what basis do we do that? What happens if we do it too much? What happens if we don't do it enough and how do we get that balance of delegation to a new entity right.

BENNETT MASON

AI, we know is in the headlines pretty much every day. There are enormous opportunities out there for Australian organisations, Australian businesses. How should boards ensure that their companies are in the right position to grab those AI opportunities?

TIM TRUMPER

Well, maybe I'll start by what you're not going to hear in a boardroom in the next five years. I don't think you're going to hear these words: “We had to let the CEO go because they were too good at using AI. “Those words, you won't hear them. What you are going to here is we had to let the CEO go because they couldn't get on the AI bus. To give you some sense of the speed of change here. I mean, here's a data point, which actually just blew my mind. in the same amount of time that Moore's Law did 32 X. So, Moore's Law, chips double in capability and halve in price every two years. In the same amount of time the chips go to 32 X, some of the AI models did a million X. So, the trajectory of change here is unimaginable quite frankly. So, what does that mean? That means that boards and management need to assess what does a 10 X capability look like. Because it's there if you know how to find it. So, open the aperture, learn, get curious and use the tools to discover what's available. So that's kind of, I think, table stakes. Needs guard rails, needs rules, needs governance, manage risk. But the greatest risk we are seeing is the risk of inaction or slow action.

BENNETT MASON

We'll get to that point around guardrails in a moment. But when boards and directors are talking to their management, talking to CEOs about AI, what sort of questions should they be asking to make sure their organisations are in position to grab those opportunities?

TIM TRUMPER

I mean, the number one question is: “Are we using it? And are you as an individual using it?” Because it's hard to talk about what's available if you're not using the tools. that make sense. It's hard to be expansive in your thinking if you've never seen what it can do. Harvard Business Review, I quoted in the book, they call it HIPPOs. Highest paid person’s opinion. Highest paid person opinion matters. So, if the CEO is not cognisant of what's happening here, it'll be really hard for board to drive the change It needs. Conversely, if the CEO is, and we were talking about Adam Driussi, the founder of Quantium, before. So, Adam, he's running that business through the lens of AI first. So, the adoption there's no way to hide because Adam's all over it. And he's pushing that to the team. So, I think it's an example of how, if CEO's there and the board are with the CEO supporting them, you'll see the adoption. the younger executives, people are just graduating. they graduated using these tools pretty much. And they're looking for leadership actually about how to deploy it, how to scale it, and how to make sure their company is future facing to meet its customers’ needs.

BENNETT MASON

We're all excited about the opportunities and the positive sides to AI, but there is also another side. There are risks. There are potential dangers. How do you think boards can ensure they've got the right safeguards in place in their organisations, but without stifling innovation, without stifling growth?

TIM TRUMPER

Yeah, it's a completely valid and fair question. So, I mentioned the book. It's a line actually from Greg Schneider at Quantium, who said: “Create a data AI Hippocratic oath. And so, the Hippocratic Oath is thousands of years old, and it says two things: do no harm to the patient in the medical sense and keep the patient's information sacrosanct. As a North Star for your AI strategy, if you can think about first, second and third order consequences of what you're building and be sure it's not causing harm to your customers or society. and then you keep the information sacrosanct. The chances of being on the wrong side of this have just come down a lot. Now, that doesn't mean that's your policy. You're going to have to have policies. You're going to have, ISO compliance if you can get it. They're all good things to have. what is the data used for? What is the use case? Can you put your hand in hand. Say the customer's winning here? there's a story which, I just can't get over this story, It's a true story about my wife. So, she went into the Apple Store and bought an iPad. She brought the iPad board home. It wasn't working. And then she said, “What should I do?” And I said, “Ring Apple.” She said, “I can’t ring Apple.” I said, “Yes. you can ring Apple. I call Apple and I’ve done it regularly.” So, you ring Apple. And this is the biggest company in the world by market value, plus or minus a bit. The phone answers. It will answer your call in two minutes, 38. “Do you want to listen to classical, jazz, blues or silence?” Silence. Two minutes 38. “Hi, this is Marianne. That's Elizabeth, isn't it? You bought an iPad this afternoon in the George Street store. The Apple Store in Sydney this afternoon. Is this call relating to that?” Yes. Solve, solve, solve. 30 seconds later Everything is fixed. and I make the challenge to directors listening to this. If you ring your company's call centre, if you have one. Or any interaction, if you’re B2B, it doesn't matter. You're not off the hook there. can the company solve the problem like Apple did for Elizabeth? they're not using the data to reprice her or gouge her or sell the information for some nefarious guy, and they're not doing that at all. They are doing it to optimise for her. And that's what good looks like. And the irony of this moment is everyone listening to this podcast, and every one of our customers knows what good looks like. That's why this imperative is so real.

BENNETT MASON

We talked a bit about the board as a collective and the board's role in oversight. But what about you personally, as a chair and as a board member? How have you used AI to make you a better director?

TIM TRUMPER

So, I certainly have, and I'll explain what I've done there. So, at the NRMA, I built a chair advisory tool for me. And this was through Claude. And I extracted some of the learnings that I'm aware of via Quantium and others. Anyway, this my advisory data repository. It has 2000 pages in it. It's got enormous amount of information on the NRMA. I would take myself for a walk with a dog, and I would, dictate --

BENNETT MASON

Just to stop you there. What sort of information?

TIM TRUMPER

Five years of annual reports, the constitution and the dictation of how I wanted to think and act and try to make it reflective of me, my tone of style, what matters most, what are we really trying to achieve. Detailed thoughts, really. So that now exists. And then I could call on that for advice, which I did. And that concept, you hear people talking about a thought partner. It really is a thought partner, a real time thought partner. So, the example, which I found this to be phenomenal. So, in December of last year, the night before the board meeting, there was an acquisition, IAG launched an acquisition on RACQ’s insurance business, perfectly entitled to do that. They did that. We turn up for the board meeting. It is breaking news. And of course, the board's agitated. What does it mean? What are we going to do about this? it means a lot. There's a lot in the back of that for the NRMA to ponder. So we’re talking to the CEO, answering question, rapid fire. It's not on the agenda item. So, everyone listening to this knows what that like. It is not on the agenda. And now you have to deal with it in real time. So, I took a photo of the AFR article announcing the deal. I asked Claude if Warren Buffett and Michael Porter were here with the 2,000 pages of knowledge and the breaking news, what's the three best questions they would each ask the CEO. the questions were so powerful, so thoughtful. So, I asked the question. I told the board, I said this is what I'm doing. And then I digested some of the response and said, “Well, could you craft me the action arising.” Which it did. And it was really, really thoughtful, which I read out to everybody. So, what's going on there? Like we're accelerating our thinking. We are moving fast. We're not blindly following its advice. it's back to how to decide who or what decides. You're not saying I'm accepting all of that. Youve just got an addition to your existing line of thinking. Very powerful. I got a lot of examples, but that one, if I only had one example, I’d play that one.

BENNETT MASON

You've been an early adopter of AI and you're an enthusiastic adopter of AI. Some of your director peers might be a bit slower. They might be a bit nervous; they might be a bit hesitant. What's the best way for them to get up to speed with AI and start to militarise themselves with the technology?

TIM TRUMPER

I think the more things change, the more we have to learn. So, I think it's on all of us to learn. That's why I wrote the book. But there's lots of ways to learn. We just talked before.  Podcast, there’s wonderful podcasts out there about all of this. Quantum itself has its own bridge course, which many people are doing. there's learning tools everywhere. I've done a couple of courses in America. Some of them are online and they're very good. So, you learn, and get on the tools. That's the first. put your own oxygen mask on first is my advice. Get experts to come and talk, learn. There's lots of smart people around who can give you a hand, and there's companies who can help you get this Right. it's all about understanding. Because if you don't understand it, it will be a barrier. It will be a barrier, I think, particularly to people in the organisation who are keen to watch the organisation adopt and grow.

BENNETT MASON

You mentioned experts, moment ago. Do you think some organisations will need to look at the composition of their boards, and do they have the right skills mix? There might be some cases, for example, it's appropriate for an organisation to have an AI expert on the board. Is that something you think could be useful?

TIM TRUMPER

I mean it certainly could be useful. It would be situational. I think it's going to be better to have everybody learn. And if I go back to that internet experience, The risk here is people think they can effectively delegate this need to one person or department.  I think it's too large to be something that's delegated. So, I think it's a whole of org adoption and it's a whole of board learning.

BENNETT MASON

Let's bring together AI and your time as chair at NRMA. You were on the board there for a long time. You were the chair for a long time. And the organisation has changed quite a lot during that period. So how did you use AI, data and analytics to help transform the NRMA?

TIM TRUMPER

Thank you for the question. I guess maybe just take a little step back. So, the NRMA, a 104-year-old mutual was in a bit of a hard spot. The core business was being challenged. This is the roadside business, being challenged. And so, we were really conscious of how do we find our future. it was the idea of sunset, sunrise. How do you spawn sunrise businesses effectively? So how do you use information from the customer to better predict their needs? And how do you create an ecosystem that feeds insight back to the C-suite, the whole organisation and the board? That's kind of the mission, and that's my favourite thing in the world to think about. And Rohan Lund, the CEO, comes from a digital world. He was at Yahoo. So, it's you pushing on an open door with Rowan about how to set that ecosystem up. And so, we found ways to better predict customer needs. And what was really satisfying about this, we boiled the ocean on the customer data effectively, and we could see that loyalty, the definition of loyalty, was actually coming from when members use a service, not just roadside, but something else. So, you stay in a holiday park, as well as being a roadside customer, you need to table stakes, look after them, treat them well. But if you tick those two things off, loyalty goes up in the core business. That was a killer inside. and off the back of that we moved a lot of the balance sheet over to travel and tourism. And the net result of that, which I'm so delighted about, so in the last 24 months, So the last two full fin years, their revenue is up 40%. So, it's 104-year-old mutual growing like a tech company. And I think that's evidence that if you could stay close to the customer, and as long as you're serving, the customer will stay close to them and you're not stretching the brand to places where it doesn't belong, you're going to be able to leverage information in powerful ways.

BENNETT MASON

Let's keep talking about your time as chair. We said at the top, you've somewhat recently stepped down, but you held that chair position for seven years. What did you learn about the chair role during that time period?

TIM TRUMPER

A lot. I think it's a really deeply intellectual process. at the end of a board meeting, you're tired. You work really hard, even though may not look like you're working that hard, but it's intellectually fascinating. And I was really lucky. And along the way, I've had some unbelievable people cross my path. So, I've been part of this charity business Bestest. And Bob Hawke was the founding chair of that. And watching Bob Hawke chair a meeting is a masterclass. So, learning from someone like Bob Hawke, you just couldn't believe your luck. I was a much younger man at the time. I worked at Time Warner, and Dick Parsons was the chair of Time Warner. He was a chair of Citibank. He was a chair of Estee Lauder. One of the most incredible, he recently passed away unfortunately. But an amazing man. He had three days in Sydney, and I remember just being glued to every word he said. And he had this sense of - it was curiosity, empathy. He was always trying to learn. He was never forceful, often really funny. But you could tell there was a mind. There. he told me this, it was pretty incredible. Time Warner at the time, had I think 450,000 people, something like that. And he said, if you emailed him, he’ll answer it every time. Just this discipline to be grassroots. And the other thing, which I think is just a fabulous piece of advice. this idea of the is a silent voice of the customer in every board meeting. And how do you hear that? And how do you make sure that that voice, because they're not in the room, how do you actually make sure you hear it?

BENNETT MASON

You said that before you became chair of NRMA, you spoke to John Mullen and got some advice. Some of our listeners, might just be beginning their own time as chair. if someone approached you and ask for advice on how to be a really effective chair, what would you tell them?

TIM TRUMPER

that's a great compliment. I hope you're right. I would tell them; you bring out you bring curiosity and empathy first. make sure your conversational skills in and out of the boardroom are respectful as possible. Ask yourself, who's the quietest voice in the room? And how do you make sure they're heard? Because the extroverts and the loud voices, that's they're always going to be heard. But there's often another voice that needs to be heard. Develop a really good relationship with the CEO. kind of, everyone knows this, but we really tried to adhere to it. Zero surprise. I should not be reacting in any way that surprises the CEO. And there should be nothing that's coming out in a meeting from the CEO that I'm not expecting. And they’re kind of table stakes things. Agendas matter. Where is the attention of the board? And that's the battle. That's a real battle. particularly in this complicated world we have. But they would be some of the things.  and get advice. find your own mentor and learn.  I've done the AICD’s chairs course here, I did a Harvard course. I mean, just keep learning.

BENNETT MASON

The NRMA, is more than 100 years old. But it can be, I imagine, quite a complex organisation. It's got more than 3 million members. That's an enormous figure. I imagine that can be quite a difficult stakeholder group to manage sometimes and varied within those 3 million people. So, what did you learn about, I guess, stakeholder management, as the chair of the NRMA?

TIM TRUMPER

So much the information of the NRMA and most organisations there is, you can go back to the source documents. You can actually go back to what was the founder’s intent? Which we did. and that alignment back to the founders’ intent is, I think, sometimes a really powerful thing to do. So, what really matters is three things that really matter: cost of motoring, how you serve the customer, and what are you doing for them outside of that? Like lobbying for better petrol prices and those sorts of things. And if you are pure to those things, the big buckets are going to be fine. But everything you said is completely true. Also, now there's 3 million members and a world where when you show on Netflix, there's a personalisation engine that's discrete for each individual. So, you have to do that as well. So, you have to have a “segment of one” mentality and treat everybody individually because they are. But the engine of the machine of the organisation has got to be nailing the three things that they are most cognisant of.

BENNETT MASON

We've talked about the beginning of your time as chair. Let's talk about the end. You left the organisation on good terms. What insights do you have on a successful transition from one chair to another?

TIM TRUMPER

First thing I'll say is it's much harder than I thought it would be. I thought it'd be hard, but it was harder, and it takes time. So, if you're listening to this and your pondering it, if you think you need X amount of time, it's probably 2 and maybe 3 X. I made my intention to the board, clear as early as possible, and we took a lot of external advice too. We had great search firms working for you, great external advisors, and then ultimately dialogue  with each individual board member about what are their intentions? Who might want to be chair, who would be the best fit for chair? I think the word “fit” is the key word.  to be in the boardroom this stage, you have to have skills, but the fit is the ultimate test of how well it's going to work. So, we were running it all through skills matrix,, future need. But it took time, and we landed a great place. I mean, Derek Stanwell is a fantastic new chairman at the NRMA. Natalie Walker, who replaced me on the board, is a brilliant director, so I couldn't be happier of how it ended up. And I hope it works really well for the NRMA.

BENNETT MASON

We've spoken quite a bit about the NRMA, but let's shift now to some of your other roles. as we said, you've been a founding shareholder of Quantium, and you're also an advisor there. You've invested in a lot of other tech companies as well. So, you've been around these big, large, established organisations like the NRMA. And then at the other end, you've been around smaller, newer organisations, Start-Ups, scale ups. What do you think those two groups can learn from each other?

TIM TRUMPER

Yeah, that is a great question. I think the answer is a lot. So, what's great about working with founders and early-stage companies is, Warren Buffett's “arrogance, bureaucracy, complacency” doesn't exist. Well, if it exists, you don't even walk in the room. so, they're in a hurry. The aim is clear, but the chances of them having to change direction is extremely high. So, they're going to be good at handling VUCA. In fact, they're going to be great at handling, they need to be great at handling ambiguity. And if I just talk about the Quantium founders for a minute. Adam and Greg, incredibly good at handling ambiguity. And I look for that as a trait in entrepreneurs. How good are they going to be at handling ambiguity? Because there's going to be plenty of it. And I think increasingly I was only just reflecting on this the other day. The boardroom of today and tomorrow is full of VUCA and ambiguity is growing everywhere. Complexity is growing everywhere, uncertainty is growing everywhere, and volatility is growing everywhere. So those two, those two worlds of what was essential for an entrepreneur, I think, is now becoming essential for business. He's a prediction, always dangerous to make predictions. 2025, we'll probably look back and say that was the calmest year we ever saw, as the speed of change accelerates in every direction. So, strap yourself in, because volatility and ambiguity are here to stay.

BENNETT MASON

What does that mean for directors? What a what a board to do in these extraordinarily uncertain times? Especially if, as you think, the volatility is just going to increase and increase.

TIM TRUMPER

We're all going to have to be more adaptive, more flexible, more creative and there's no way around that. And what was set in stone, nothing is constant. Everything's reinventing itself the whole time. So just having the mental processes to be thinking, what might our customers be doing?  What is the future of our customers’ need? we used to start our off sites and every time I'd ask that question, how are we going to predict the future customer need? That, I think, is the essence of strategy. Increasingly, how do we know what that might be? Some of it's impossible to predict, of course, but some things remain really constant. and you can think about them if you go back to the NRMA example of they are going to always want lower cost motoring. They are going to want great service. Those things don't change. So how are you going to use the new world order or the new world technologies to apply to things that you know are not going to change. And then how are you going to capture some of the things that are going to change in your favour?

BENNETT MASON

I wanted to ask you also about your career before entering the boardroom. You've been a director for a long time, but you had a lengthy executive career before then. You worked in the media for a long time. What made you want to become a board member, though?

TIM TRUMPER

Yeah. It was actually watching other boards. As the more as you grow up through the ranks in corporate life, you end up presenting to boards. And yeah, sometimes that experience was fantastic and sometimes it was a deep learning experience. But you watch what was good and what was bad and start to open your mind to that. And when I did my MBA, I remember I paid great attention to the section they had on boards, which I found fascinating. And I think it twigged my mind to, one day I really would like to do that. And it's somewhere you can really help organisations, I think. And if you get the right board, you can help society as well. And if you can do both together, well that's a just a joy. So, I've been very fortunate how that's played out. and I've really enjoyed it and it's intellectually stimulating, working with other people.

BENNETT MASON

was it Challenging in first shifting from that executive mindset to then being a board member?

TIM TRUMPER

Yeah, it was. the advice I got, and it's part of the advice a lot of others have had too is you can cut your teeth in a not for profit, where you've got a passion. So, I'm asthmatic. And I joined the Asthma Foundation board a long time ago. A very long time ago. But it was great.  I felt like I'm here to try and help and you learn, and it opens the door of what This world with board starts to look like.

BENNETT MASON

Another not for profit you were involved in was the Bestest Foundation. You mentioned that a little bit earlier, but you founded that with the late and great Bob Hawke. How did that foundation come about?

TIM TRUMPER

So, look, I'm a co-founder, along with many other wonderful people, and it's a long list. I won't read them all out, but if you're listening, congratulations. It's a great team of people. Fabulous people. Yeah, we were a fund-raising arm of another charity, which I'm not going to name. And we got a little bit frustrated, actually, that we raised a lot of money. And a lot of the money ends up going through a machine that is buying software, paying rent, got salaries, doing great work. But if you say of every dollar we raised, the top line, what percent went to disadvantaged child? Often that is diluted. So, we said how do we start a virtual charity where every dollar of the top line drops straight through to the disadvantaged child? And that was our aim. So, we created a model that could do that. So, it's virtual, and we the board, we underwrite the costs. So, we have an event. we've got fabulous chefs who, donate their time. It's been a wonderful journey of great food, Bestest chefs actually. But the board underwrites the cost of the event. So, every dollar comes and flows straight through to the children. And it's been really rewarding, and it's been fantastic initiative.

BENNETT MASON

We said that Bob Hawke was one of the co-founders there. What were some of the leadership lessons you took from Bob Hawke?

TIM TRUMPER

Well, he had this technique. So, I'm going out there now. So, if you listen to this, use this sparingly. But it was incredible. when something was complicated, Bob had this technique and he would say, “I’m going to go around the room, I'm going to ask you for your opinion of the glass. You have 60s to talk about the glass and give this room your best advice on the glass. If you mention anything up in the glass, I will cut you off. And that's the end of your contribution to the meeting.” And talk about intensity. So, he’d go around the room and everyone, you’d just give it your best shot, and it was powerful. Now I'm not advocating that for regular use in boardrooms, I’m not doing that. But he had techniques like that. The other thing he used to do, which was just fabulous, and I was a young executive, just in awe of this incredible guy. But sometimes you have a meeting or sometimes you’re just a bit off your game or you a bit quiet or whatever, and at the end of the meeting you'd walk out and he'd sometimes just grab me in the lift or he'd ring you later and say, “You've been a bit quiet in the meeting today. Is everything okay?” Kind of help you. And he was just he just opening up how he could help me in anything. Like just a giver. I think they're just great traits. It's empathy ultimately. So, yeah, he could ring anybody, ask for anything, and sometimes he'd do that when he needed it for the charity. But he was collegiate, kind and smart.

BENNETT MASON

Bob Hawke's not the only prominent Australian you've been around. You also worked at, PBL for a long time. Any Kerry Packer stories you can share with us?

TIM TRUMPER

Kerry was incredible. I worked with James and Kerry, and I loved my time there. It was like being on a rocket ship. Everything moved fast. In the military, they talk about commander's intent. The commander's intent is clear, and you understood it. And it's often quite a good guiding. When I first joined PBL, I had a meeting with Kerry and he said to me, “Do you know the rules, Tim?” I said, “No, what are the rules?” I was running a division. He goes, “You have to make that division perform really highly. You cannot break any law in the performance of your job or the department. And that's it. Go.” That was the briefing. Quite a good briefing, actually. And he was also, as was James, they could talk about strategy. They could talk about global affairs, strategy, or they could talk about micro, tiny things in the business that they'd noticed. So, they still had that founders - if there was an era in the magazine or something. They would go from macro to micro and all over the detail in between. Incredible Experience, actually.

BENNETT MASON

Tim, you've been very generous with your time, so thank you. It's great to have you on Boardroom Confidential.

TIM TRUMPER

Thank you very much, Bennett. Enjoyed the conversation.