CEO Q&A: Christopher Luxon

Christopher LuxtonYou have an interest and passion for causes that go beyond business. Why are you so interested and where does it leave you long term? The thing for me is recognising that, as a business leader, you have a responsibility to lead a company for the future, leaving it in a better place in five, 10, 15, or 20 years' time. My job is to make sure that commercials are strong, the customer experience is great, the culture of the organisation is constantly improving. But actually, companies should be used for a bigger mission for the society that it's a part of.

I think Air NZ, through the unique attachment we have with the people of New Zealand, they want us to think about success in more than a one-dimensional way.

A lot of my thinking has been shaped by the fact that I've been overseas ... working at Unilever. I got to see what really well-run world-class corporates look like. What you find is that the companies doing well are also doing good. They've got their head around the space of sustainability and the best business leaders in the world should be thinking about these issues, not just the dollars and cents. They need to be much more strategic about these sort of things. That's where my motivations are coming from.

You've also announced a goal to supercharge New Zealand's success. That's a very challenging goal for a chief executive. Who will judge your success?

Everyone will end up judging it because they've all got a stake in it. People intuitively make a judgment as to whether Air New Zealand's success has been good for New Zealand.

We're being very clear with our targets. We'll publish a sustainability report every year. We'll be very clear where we are, and aren't, making progress. That's important because customers are very interested in the companies behind the brand and what their values are like, how they're running it.

Secondly, there's been a number of cases where we've made pitches for corporate travel arrangements and those partners we're selling to, big corporates, want to know what our sustainability practices are like before they take us on as a vendor.

And thirdly, even investors - they've got big pools of capital that you need to have on board - you need to demonstrate that you have good sustainability practices.

Frankly their view is that, if you're thinking about long-run supply chains and you're thinking about waste minimisation, that is the good-for-business stuff that makes sense from an investment point of view.

Sustainability has been a business buzzword for years. Why have you launched this initiative at this time?

I think in New Zealand you do feel sometimes that being a business person is a bad thing. But the reality of it is that business lifts billions of people out of poverty in the developing world and frankly, even in a place like New Zealand, business has driven growth and provided employment and supported our social system.

So we do have a role to play and we want to have liberties to run our businesses as we see fit. But we also need to have a responsibility to strengthen civil society.

We can't have strong business without a strong society, and we can't have a strong society without strong business. The two are linked and clearly we have a role to play in this conversation alongside Government and communities.

There are things we can do that are unique. We have more natural advantages over Government and communities by having less bureaucracy and arguably more global reach, global scale. That means we can make some things happen.

You had 450 business leaders at your launch breakfast. What do you expect from them?

There's a new generation of leaders coming through that are thinking of these issues beyond dollars and cents and making money. I can look at Fraser Whineray at Mighty River Power who is focused on electric vehicles, look at Alistair Davis at Toyota and their fleet of hybrid cars, even Mike Bennetts and Z Energy's 'Good in the Hood' campaign.

What I hope is that we start to collaborate on the challenges and work together in quite different ways than we have before. Air NZ needs to work with its own competitors to think about how to tackle things like biofuels and bring together the economic value of tourism. If people took one or two thoughts away from our session they can apply to their own businesses, then fantastic.

How will all this sustainability focus resonate with Air New Zealand's shareholders?

We announced a record result this year, which was a great outcome for our shareholders. At the same time I announced that we're doing a performance bonus for our unionised staff. And I could have arguably had shareholders say, 'Well Chris that was $12 million you didn't need to spend'. But I haven't had that at all. I've had the reverse - the shareholders have said that was a smart thing to do.

They understand it's just not about maximising dollars and cents relentlessly. It is constantly a balancing act and investors get that and understand we're being strategic about it.

The sustainability stuff is really good business. With the volatility of supply chains, when you know you've got a supply that is sustainable, is compelling, enduring, reliable, that's a really good business continuity practice.

Summing up, what was they key takeout you want to get across?

The key thing is that sustainability is not just about environmentalism. It's a bigger concept about how do we drive good impacts economically, socially and environmentally.

No one is going to deliver this objective or these challenges unless we work together in different ways. Business has a role to play.

Fran O'Sullivan

A columnist for the NZ Herald

Thursday, 17 September 2015