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February 27, 2024
Ask any CEO and most will agree that it can be lonely at the top – that sole mountaineer nestled at the summit, exposed to the elements.
Only you have been afforded the privilege of climbing to the peak, taking in a view that is exclusive to observe. As each sun rises and each sun sets however, no one below can truly understand the day-to-day considerations of the commander-in-chief.
“It’s a very singular role,” shared Laurence Baynham, drawing on almost a decade of high-performance as a publicly-listed CEO in Australia.
Enough market research and executive anecdotes exist to support that theory – just ask Tim Cook in business or even King Carl XVI Gustaf of Sweden.
Baynham speaks with authority on this subject having held the position of CEO and Managing Director at Data#3 – a Brisbane-based IT services and solutions provider – for almost 10 years.
“When things go great as a CEO, it’s the best job in the world,” he acknowledged. “But when things don’t go so well, you quickly become the focal point and have to work your way through it.”
In Baynham’s previous position as Group General Manager, he shared a lot of input as part of the executive team – a relied upon voice to help drive strategic decision making.
“All of that was a fantastic experience but ultimately, the buck didn’t stop with me,” he accepted. “As a team member, I had my input and I felt great about it but I wasn’t the single point of focus if something succeeded or failed.”
In transitioning out of the business on 1 March 2024 – handing over the baton to seasoned executive Brad Colledge during a long-standing succession plan – Baynham has called time on 29 years of company service.
For the record, the financial achievements of Baynham as CEO are outstanding. During his tenure…
Armed with three decades of experience at the apex – this is a lesson in leadership from one of Australia’s most successful CEOs:
Learn the CEO language – body, tone, market…
Baynham’s first day as CEO in 2014 offered a mixture of emotions. Daunting because it was an Annual General Meeting (AGM) but manageable because it was a transition – an introduction to the executive who would replace John Grant as leader.
“It was a big day but strangely enough, I didn’t have a role in it,” Baynham said. “I was taking over with big shoes to fill but obviously, it was very well planned.”
Having spent the previous 10 years running either the revenue or profit divisions of Data#3 – in addition to attending every board meeting – Baynham referred to this as his “10-year apprenticeship” for the role.
“Tongue in cheek, of course,” he qualified, with a smile.
When Baynham took over as CEO, Grant remained as Managing Director for 12 months as part of a lengthly transition period designed to minimise impact. The message was “business as usual” to shareholders, employees and customers with the change initiated as seamlessly as possible.
“There was a gap between what I thought it was going to be and then what it actually was,” Baynham added. “Because of my apprenticeship, I expected it to be almost more of the same. Not in the sense of ‘I know it all’ but I’d already done the operational aspects and run the business.”
To borrow a phrase from Biz Stone as one of the co-creators of Twitter, “timing, perseverance and 10 years of trying will eventually make you look like an overnight success.”
Baynham had dutifully, methodically and successfully earned his stripes in a measured transition built upon concrete foundations. Despite the preparation however, this aspiring executive rapidly understood that the requirements of CEO were “very different”.
“There was a range of new skills that I needed to acquire to become a CEO,” he said.
One such skill was body language.
“It’s visible in many different ways,” he observed. “Not just in terms of what you’re doing but how you phrase things and the context in which you address an issue. Then it was body language with the investment market – what you’re saying, how you’re saying it, the terminology you’re using.”
Whether reporting a good or a bad result to the market, body language was mission-critical. CEOs can ill afford to portray the wrong information or message through conscious or unconscious movements and postures.
When analysing popular TED Talks for ‘leadership signals’, Carole Railton – a renowned body language expert – cited the performances of successful leaders such as Bill Gates, Jeff Bezos and Tony Robbins as examples of best practice.
They all use non-verbal cues – including hand gestures and facial expressions – to their advantage. But is simply pointing, gesturing, smiling and leaning enough?
“A lot of people say that it’s down to presentation skills but it’s actually much more than that,” Baynham clarified.
Although most presentation skills that executives excel at are focused on providing a service or a solution to a customer, with personnel at Data#3 no different to industry norms.
“That’s effectively a sales type presentation,” Baynham explained. “But as CEO, you get seen through very quickly if you’re providing sales type presentations.”
Authenticity is everything when presenting to shareholders as a publicly listed business on the Australian Securities Exchange (ASX). For most executives, this requires a different mindset to show genuine balance… ‘if we do this, there’s advantages here but downsides there’.
“Coming from a sales background, I would have to curb some of my enthusiasm and look at what I’m presenting more objectively to provide a balanced assessment,” Baynham said. “That’s a skill I had to not only learn but continually hone.”
As CEO of the largest homegrown technology provider in Australia, Baynham is well-versed in the jargon that fills day-to-day conversations within the IT sector. Whether it be three-letter acronyms or buzzword bingo detailing the latest technologies, vocabulary changes rapidly and the industry adapts accordingly.
Not so much in investor relations.
“It’s almost like learning a new language,” Baynham accepted. “Our language in IT is very different, equally when we talk to our customers and partners.”
Instead – under intense shareholder spotlight – the CEO of a public company must shine in a discussion based on P/E ratios, payout ratios and market capitalisation.
An obvious statement on the surface but know this, more than an understanding is required to command the room of an AGM. How does this all work together? What does it mean for shareholders?
“Most know the terminology but it’s a different language when you’re dealing with brokers and analysts that are covering the business,” Baynham said. “They are usually trying to understand the IT sector on the other side.”
Naturally, as the business grows so does its stature. Under the ASX code of ‘DTL’, the company was added to the S&P/ASX 200 Index in September 2023.
“It’s like going up a league table,” explained Baynham, a keen football fan and supporter of West Ham United.
Such a promotion opens up access to super funds and index funds, plus a range of compliance such as ESG (environmental, social and governance) obligations. But what isn’t often considered is the increased exposure on the business and by association, the CEO.
In the case of Data#3, the amount of interest has morphed from coverage by one or two analysts during the past decade to as many as 10 today. Whether this be Morgan Stanley, JP Morgan or UBS, all are now providing extensive coverage to gain competitive advantage and better understand the business.
“None of that is known to the IT market,” Baynham outlined. “Those skills need to be acquired and then once you’re at the ASX 200 level, you need a different set of skills again.”
Leverage a solid support structure – strong leaders, good board
For Baynham, having good people around you as a CEO is both important and fortunate. But it’s more than offering blind support, nor should it be at the extreme.
“If you’ve got a board that either doesn’t understand the business well or understands the business too well and becomes overly demanding, then both can become difficult,” he expanded.
The sweet spot is a board that is supportive but also capable of assisting the business with expert skills and guidance.
“I’m fortunate that my board has been able to achieve that,” said Baynham, who will be taking a clean break from Data#3 to pursue non-executive roles in the future. “The CEO doesn’t always have all the skills to be able to deal with everything, yet everything comes to the CEO.”
Whether financial, legal or related to industrial relations – calling on trusted and knowledgeable figures of advice can be invaluable, usually in the form of non-executive directors on the board.
This level of support also extended to Grant during the apprenticeship and transition periods, alongside Brem Hill as long-time CFO. Hill – who retired after 32 years of service at the end of 2023 – had been with the business since the company listed in 1997.
“I was reliant on his knowledge of investor relations,” Baynham noted. “During investor briefings at the end of each half, it was more than doing one presentation and sharing the information.
“We’d have around 30 meetings over a three-day period with an audience of usually 200-300, physically and virtually. It was a reasonable deal every six months and in doing that with Brem, I was able to pick it up quickly.”
There’s nothing better than learning on the job, which also extended into Baynham’s evolving view of risk management.
“Being CEO is ‘risk reward’ at its highest level,” he shared. “The business makes decisions each day in terms of what is good business and at what level of profit and risk profile. All of that perspective shifts when you become CEO.”
You don’t own the culture, everyone does
Spanning 12 locations across Australia and Fiji, Data#3 houses more than 1,400 employees. This is a business that has evolved from a “relatively small” Brisbane-based company into an IT services giant in the local market.
Powering that is a “unique culture”.
“As we’ve grown into a natural business, part of the challenge was keeping the right elements of our culture,” Baynham said. “We always avoided being fragmented to ensure we ran the same businesses in Melbourne, Perth or Hobart. We’ve been able to keep our common values.”
The Data#3 culture is based on five core principles:
“Take three in particular… honesty, respect and teamwork,” Baynham noted.
“They make a difference when you join Data#3 – no person works as an individual, you work as part of a team. You do things in the most ethical way possible and from a long-term perspective of doing right by customers.”
When asked if culture is difficult to control, enforce and police, Baynham’s response was unequivocal… “it’s not even mine to own.”
Keeping the heart of the business beating is aligned to Baynham’s strongly held belief that everyone owns company culture. This isn’t allocated to some individual, nor is it the responsibility of the CEO or board.
“There seems to be a movement currently to have a Chief Culture Officer but I’d hesitate to use the word culture in a role,” he explained. “Everyone should have the responsibility of culture embedded into their role.”
On occasions however, culture can be negatively impacted by the CEO or the board – despite the best of intentions.
While companies desperately attempt to avoid making the same mistake twice, this scenario is all too common in the technology sector. An IT services provider on-boards a new technology and over invests, before realising that market demand isn’t as strong as first anticipated – usually due to macro events.
“Then we’ve had to let go of good people within our business, which was very tough,” Baynham recalled.
While Data#3 hasn’t gone down such a path in recent years, in the past, market forces have conspired against the company which in turn, triggered staff lay-offs.
“We do everything with the best of intent,” Baynham added. “People make career and life-changing decisions to join our business and for whatever reason – usually market related – if we’re unable to keep that role open, I would take that personally.
“I know I shouldn’t but I do because it affects people’s lives. It’s always a low and you just need to ensure you don’t do that again.”
Prior to Data#3, Baynham worked for multinationals in the US and UK. His observation is that they also have their own cultures, hire great people and want to do the right things. But then a spreadsheet decision made in New York, Silicon Valley, London or Tokyo filters down to Australia…
“Then people leave the organisation,” he sighed. “It happens nearly every year and runs in a cycle in terms of multinationals suddenly ramping up hiring and then very quickly, ramping down as well.”
For Baynham, that’s where Data#3’s competitive advantage lies from a talent perspective.
“It’s not great for our industry and I don’t know what we should do or can do to stop that continuing,” he cautioned. “But agility is one of our core values which allows us to compete as a small and nimble business capable of making decisions quickly.”
Build on your successor, leave a great business behind
The official appointment of Colledge as new CEO and Managing Director followed a planned four-month transition period.
With the business for 28 years, Colledge is a company success story having joined as an Account Executive in 1995 before creating and leading the Licensing Solutions division two years later – a position he held for 17 years before widening his scope to take control of the broader Software Solutions business in 2013.
Expansion continued in 2014 to include the Infrastructure Solutions business and most recently Services. At the time of his appointment as new leader, Colledge held the position of Executive General Manager of Software Solutions, Infrastructure Solutions and Services.
“The level of certainty that we had as a business when I took over is exactly the same with Brad,” Baynham said. “Brad has been essentially running the vast majority of the business for a good deal of time and he has all the skills necessary to succeed.”
Learnings exist on a daily basis for CEOs, most of which are honing and doing small things a little differently to achieve a better outcome. Baynham has no regrets on the large decisions ultimately made under his stewardship and remained guided by his one over-arching ambition.
“There’s only been three CEOs / Managing Directors in the last 30 years,” Baynham reminded. “The three of us very much view it as a time when you have the privilege to lead the business for a certain period.
“Then you hand over something which is a lot better than when you found it. But the timing has to be good also. The last thing I would want to do is to hand over the reins if things were on the slide or a crisis was approaching. That is very important.”
Coming from a non-technical background, Baynham has always felt more comfortable focusing on the outcomes provided to customers. Technology changes but that core focus of Data#3 hasn’t changed in decades.
For example, every visit to Western Australia is filled with an injection of pride looking back on the work achieved at Fiona Stanley Hospital.
“It was a new build and the first digital hospital in Australia,” he recited. “It was built with technology in mind with the latest cloud, collaboration and networking solutions – from the ground up rather than retrofitted. That technology helped clinicians access the best clinical applications possible which hopefully saved a lot of lives.”
Baynham’s final comment is a confirmation that Data#3 exists to offer more than equipment installation or service delivery – a connection must exist all the way through.
“Whether it’s hospitals, campuses or stadiums, hopefully our work is actually improving people’s lives,” he added.
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