Leyland Conversations
Video Interview with Simon McKeon, Melbourne, 22 June 2022
Charles Leyland: Hello and welcome to the third of the Leyland conversations in which we speak with leaders in Australian business life. Today I’m with Simon McKeon, who’s had a stellar career. He had a stint as a lawyer with Blake Dawson Waldron. He’s a founding Chairman of MS Australia. He is the Chairman of MYOB. Chairman of CSIRO. Executive Chairman of Macquarie Bank. He is Chancellor of Monash University. And in 2011 he was Australian of the Year.
Charles Leyland: Welcome, Simon.
Simon McKeon: Good to be here, Charles.
Charles Leyland: Now, you’ve had a wide range of experience. Just those few platitudes, I I mentioned, and I know there are many more. Charlie Munger speaks about this latticework concept in mental models whereby knowledge from different areas complements other areas and actually helps to make better decision making in investment and other areas of life.
Given your experience in all those areas, sports, medicine, business, etc., have you found that concept works for you?
Simon McKeon: Absolutely. And thanks for telling me that. Charles, I know a few things about him, but I didn’t actually know that. But you know, Charles, that’s actually been without me really thinking about it over the years. Really fundamental to what I do. I don’t think I’m a deep expert at much at all. I’m happy to be a simple generalist.
Simon McKeon: But, you know, I have unwittingly taken lessons I’ve learned from elite sport and apply them to business because I’ve often thought here in Australia that we do elite sport seriously well. Not always in business. I’ve taken things I’ve learned from the health and medical sector and I’m of course, no medical scientist, that’s for sure. But nonetheless, things I’ve seen there that we do at world’s best.
I can apply that elsewhere. I’ve seen the passion of the non-for-profit sector, you know, people actually doing amazing things on the smell of an oily rag and trying to introduce a little bit of that sometimes into a business environment that has all the capital that it needs, but sometimes lacks a little bit of the purpose. So look, I know I’m with Charlie on that.
I can, you know, I use the term cross-pollinate and I try and use that all the time.
Charles Leyland: It’s terrific. We were supposed to have this interview two years ago, and obviously the world’s very a very different place now. Do you think that’s it’s been a fundamental change or just a superficial?
Simon McKeon: We all can answer that from our own little perspectives. My perspective is big change, fundamental. I think the change would have happened anyway, but it’s happened very quickly and most of it is permanent.
So you know, I still love spending time with some of the younger people at Macquarie and three or four of them have said to me the flexibility that they’re now experiencing, you know, freedom or certainly more freedom than they had before as to where they’re going to work and at what times to certain degrees, they would say, we think that was going to happen anyway over a, say, ten or 15 year timeframe, perhaps a bit sooner.
But it happened like that. Like it happened, as we all know, two or three years ago in literally a matter of days. I thought it was remarkable. I still pinch myself thinking, how did we do it so quickly and so effectively? But now I think it’s fundamental, as I said, mostly permanent. Oh, put it this way, we’re picking out the good things from it.
And we all know physical meetings are important, but we just don’t need as many of them anymore.
Charles Leyland: It makes sense. You obviously you’ve had a stellar career with Macquarie as a cornerstone, I suppose, of that career. I remember a few years ago you told me you were very early employee, a double or triple digit employee number?
Simon McKeon: …well nowadays 2022 and you know Macquarie’s look everyone has been privileged to fall into it. Most of us come out thinking, well, weren’t we just lucky to be there. Look, it’s not a perfect organisation. It’s got all sorts of things that it continually needs to improve upon. But by the same token, it’s nonetheless pretty special for those, as I said, that have been privileged to be part of it.
Yep, I was one of the very early ones. The wonderful thing for me is that I still have an opportunity to be a very small part of it. And, you know, for me it’s been a very flexible place. It’s operated with me with all my nuances. And I mean, I haven’t worked full time there for more than well over 20 years.
But, you know, when I first went part time, it was kind of like a 50/50 arrangement, very unusual for an investment banker, but the really good people there made that work. I’ve become much less and less and less. And then, you know, nowadays not much at all. But, you know, I’ve been able to just see from the inside how I truly remarkable organisation works.
Charles Leyland: In one generation. It’s gone from a small hill Samuel, to really a global powerhouse in investment banking.
Simon McKeon: With deep expertise in a handful of areas that work for it. You know, it’s got a lot of unusual aspects to it. I can’t think of another commercial certainly listed organisation that comes close to having produced the number of people that have done their five or ten years in Macquarie and perhaps, you know, made some money so that the mortgage is no longer an issue.
But Charles, they’ve ended up dedicating their lives to somewhere completely different, the non-for-profit sector. And it’s not just one or two names. A lot of people know of Michael trial and, you know, one or two others it’s dozens and dozens. It’s not you know, it is the millionaire’s factory for obvious reasons. It’s commercially very successful. But there are many, many other fascinating aspects to it.
Charles Leyland: It sounds like a wonderful place. And, and some stage during your career there, you reached a fork in the road, if you like, where you had to decide whether to commit to a sort of a leadership role or take another direction.
Simon McKeon: Yeah. Look, in fact, a number of forks in the road and, you know, one decision that I could never, ever make was to leave Melbourne. I had personal family reasons which kept me here. Now, you know, today Macquarie’s a true multinational, makes more of its money overseas than it does here by quite a margin. And so, you know, there are many people in Macquarie that have, you know, lived and breathed the air that it is now, you know, living in all around the world.
That was never open to me, no big deal. But, you know, that was one thing. But look, all I would say is that, gosh, Macquarie gave me every opportunity and I’m just grateful to have seen some of them.
Charles Leyland: I understand that fork in the road was when you decided to move down the philanthropic sort of path
Simon McKeon: Yeah, I did. But there was a reason for that. I mean, a selfish reason, if you like, because you know, it came at a time, 20, 25 years ago when I actually got, you know, hit by a number of multiple sclerosis episodes. In fact, I didn’t know where my life was going. You know, it was really knocked sideways by, you know, two or three things.
I went blind for a while. I was paralyzed from the hip down. Now, you know, I’m one of the incredibly lucky ones. Look at me. You wouldn’t know. I’ve got M.S. and, you know, it treated me really, really kindly. But it was a time where I thought, I’m having such a wonderful time at Macquarie. I kind of was leading the Melbourne office, but it was a time of deep reflection and knowing that we only live once on this earth.
And it was time for me to allow myself to do a whole lot of other things which I had been thinking about for a long time.
Charles Leyland: So was your M.S diagnosis the seed?
Simon McKeon: It was one of a number of seeds, but it was probably, you know, without that diagnosis or without experiencing what it was like to be incapacitated, I think I would have dilly dallied for a while longer. So, you know, I needed a bit of a boot up the ass to say, look, you’ve sort of been thinking about these things for a while.
Why not? And it, you know, led quite quickly to that question.
Charles Leyland: It’s been a wonderful career, I guess, in philanthropy for you as well. One of your boats was called Macquarie Innovation.
Simon McKeon: Yeah.
Charles Leyland: And you’ve spoken a lot about innovation. Are we innovative in Australia?
Simon McKeon: I think we have fabulously deep pockets here and there where we are without any shadow of doubt world’s best. I mean we invented wi-fi. Yeah. Wow. And a whole lot of other things. You know, I could go on and on. But it is another thing to say that as a nation we have a culture of innovation. And I have been to places that I think can say they do have a culture.
I mean, I’ve been privileged to go to Israel and lead one of these wonderful Australian delegations to Israel. And we look deep into their, you know, their innovation sector. And I remember going somewhere, a taxi driver was taking me there to this, you know, wonderful boulevard, and that was Microsoft building on the left and Apple, someone on the right.
And, you know, these big companies had gone there because the place oozes, not notwithstanding the troubled area of the world that it’s in and tension and all this sort of stuff. There is this culture there and, you know, look, I love this country. I’m never, ever going to be disloyal to it. But on the other hand, it’s you know, I think we’ve got an amazing sporting culture.
I don’t really think we have a culture of innovation.
Charles Leyland: And is that led, do you think, to us losing some of our better brains? There’s this term brain drain, which was going around a few years ago. Have we lost a lot of talent overseas due to that, or due to other reasons?
Simon McKeon: Yeah. Look, I’m probably not the world’s expert on that because I’ve seen drain and I’ve seen the tide come back in, you know? I mean, this is an amazing place to live. An unbelievably, good place in the world. And as the world gets a little bit smaller with, you know, more effective communication and, you know, you can increasingly choose where to live and still do what you want to do.
So, you know, you’re absolutely right. We lose even during COVID, you know, amazing people overseas. But we also get in interesting people. I don’t think for me, that’s the biggest point. The biggest point is, are we known around the world or do we, in fact, talk among ourselves broadly that we’re a place that not only can innovate brilliantly,
You know, I mentioned wi-fi before. I mean, the polymer banknotes we have, we just take them for granted, we’ve exported that technology all around the world. Uncle Sam hasn’t taken it up yet, but, you know, many other countries have, and the list goes on and on and on. But as far as it being a national part of our psyche, I honestly just don’t think it is.
And I’m sad about that because, you know, you don’t have to be Einstein to be part of the innovation movement. I forgot to say before this taxi driver said to me as he took me into this part of Tel Aviv with you know, these impressive tech names, he kind of looked around and he was proud. He was an Israeli and he said, I love coming down here.
Look at these names. And he said, I might not quite have the ability to be in one of those buildings, but I’m taking you here. I am part of the system. And he was proud.
Charles Leyland: And from your role at Monash, do you think much of the innovation here is driven by the universities or is it in the corporate world?
Simon McKeon: Yeah, we have, you know, almost 40 great universities. Our university sector is, you know, right up there with the world’s best. We have very large universities on a global scale as well. Monash has 80,000 students. That’s very rare and the research that goes with that is very deep. We have CSIRO – world’s best, but having said all that, for example, the connectivity between our university sector and the corporate sector, which say the US takes for granted, we still don’t have that as developed enough as we should.
The blame is on both sides. Don’t get me wrong, I live on both sides and I just see it as a little tribal sometimes. In fact, the academic world and the commercial world just doesn’t know itself well. Know each other well enough. There’s not enough. I used the word cross-pollination before. It’s not enough people that have spent time in each sector and then just gone back.
Charles Leyland: On that point, perhaps because of this lack of connectivity between universities and the corporate world, do we have a problem with commercialising our innovations?
Simon McKeon: It is one of the, you know, difficult issues we have to confront. We don’t have the best track record at all. You know, after something is created, invented, we have what we call this deep valley of death, where it’s damn hard to actually get at having impact, whether through commercialisation or indeed just usage, because governments pick it up and say, that’s a great idea.
Wi-fi is unfortunately such a celebrated example here because CSIRO discovered it, there was a clear human need to connect these, you know, increasing number of devices that were all around the world and against the odds. But using its extraordinary capability in science, interestingly enough, radio astronomy that was where the secret sauce emanated from. CSIRO created wi-fi and tried very hard to provide it to the Australian corporate scene, just didn’t happen.
Ultimately was licensed overseas.
Charles Leyland: It’s an infamous story really.
Simon McKeon: And there are many others.
Charles Leyland: Given your experience over the various disciplines, do you have one measure of success which you go by?
Simon McKeon: Wow, that’s a very hard question. Look, I don’t have one measure of success, but I guess another way of I mean, I’ll ask a slightly different question. I mean, what’s important, if you like? Well, you know, I think, say in the corporate world, we used to answer that question two or three decades ago by saying, oh, we have found the importance of, you know, shareholder return or being in the interests of shareholders.
And we were relieved to find that out because apparently, you know, in decades before we got a bit lost there. But that is very tired thinking nowadays because, you know, if you’re privileged enough to be part of a corporation producing goods or services or whatever the community needs, sure, you’ve got to serve the shareholders and make sure their interests are absolute, be respected.
But there’s a stack of other stakeholders who are very, very relevant. You know, we’re in an era where respecting the environment, ensuring that we’re doing our bit to deal with climate change, behaviours. You know, community sentiment is constantly changing, and it’s not good enough to say we pay shareholders a decent return. Oh of course, you know, we obey the law as well.
No, the expectations are way, way, way, way beyond that. And I think that, you know, many people find that a challenge. But at the end of the day, you know, you say, is there a measure of success? I kind of ducked and weaved on that because if it’s a corporation, I think there are many measures that you all have to take into account for corporate to be successful. Briefly in the non-for-profit space.
It’s all about impact. You know, you don’t have a bottom line. We made a lot of money. It’s all about, you know, we’re passionate about a particular cause. The thing that needs to change, what’s the impact that we’ve had? It might be mouths fed, it might be laws changed, people housed. Whatever it is, but that will be that impact.
Government, I want to even go there. I have a few government roles, but you know, that’s probably, I think…
Charles Leyland: And on a personal basis I think I’ve heard you use that term relevance which you brought up just before as well as being important. This yardstick?
Simon McKeon: Yeah, I think, you know, relevance for me is, is an important word. I mean, you often hear the term relevance deprivation and, you know, particularly older people who have been on a certain pathway and all of a sudden they come to the end of that pathway and they’re not sure what follows. They feel not relevant. And it doesn’t matter what material success you’ve had or, you know, whatever markers of success you’ve chosen, how high up the totem pole you got.
If suddenly you wake up one day and you don’t feel relevant to this world, it can be pretty confronting. And that doesn’t mean we all need to be, you know, running the United Nations or something, but we can be relevant, in fact, to be relevant in small groups, in small places, in small areas is often more important than, you know, being relevant up on some big high stage.
But yeah, relevance. Really important.
Charles Leyland: Would you be willing to share any major mistakes you’ve made over your career?
Simon McKeon: Look, the first thing is to acknowledge, I mean, I’ve never met anyone who hasn’t made mistakes. I have misjudged people. I thought I still do in a way, sort of think I’m a reasonable judge of people. But every now and then I’ve, you know, really, I’ve been annoyed with myself because I could have found something out and and and I didn’t. I’ve been disappointed with lots of decisions that I’ve made.
You know, I don’t think I’ve sort of cut too many corners or been inappropriately motivated, but I have been annoyed with myself every now and then that I didn’t get priorities right, if that makes sense. You know, there was something just turned out to be a whole lot harder and I should have elevated up my list of things to get right.
To be perfectly honest, though, Charles, I don’t spend a lot of time. I mean, I want to learn from my lessons, but I don’t beat myself up. I’m a flawed individual like anybody. And I want to learn from those lessons. But I don’t want to hold myself back either by being overly tough on myself, you know?
I mean, I’m I don’t mind saying I’m flawed. No big deal. But, you know, it’s a matter of doing what we can every day. You know, a new day dawns.
Charles Leyland: Well, how do you manage to learn something new every day?
Simon McKeon: Well, Well, no, actually it’s a very good point. The Monash logo is, it’s actually in, in Italian but it means we never stop learning and it’s a handy thing, you know whenever I do a graduation there it is beaming at me and I often say something about it because it is important, you know, it’s important to feel like a 19 year old at uni.
I think for your whole life because you do keep on learning. For me it’s absolutely fundamental. There are technical things you’re learning all the time, especially in this IT age that we’re in with, you know, data, information just hitting us all the time. And, you know, but for me, the more fascinating thing is to, you know, to think that you know everything about human behaviour or even about yourself, to actually stumble across something that is an eye opener.
You know, just as I say, just behaviours. I will go to my grave with things not resolved, you know, issues. You know, we are presented on this earth with really tough issues. Yeah. And all I know is that the more time I spend, you know, with good people who haven’t spent a bit of time working through tough issues, tough ethical issues, the better I am.
Not that I might be all that good at all. But, you know, if anyone thinks that every issue can just be sorted out, well, then that’s not the world I know, there are some very tough issues.
Charles Leyland: It’s been terrific talking to you, Simon. You’ve held the five hundred metres sailing record, which is some 50, 50 knots, 50.30 knots I think. Was that the average speed? Some may call that an extreme sport. Is that an unusual occupation for an academic and a businessman?
Simon McKeon: Look you know life goes off in different directions. In my case, you know, one of the one of the very lucky aspects of it is that I just ended up in a group with which had this right combination of, you know, of R & D. You know, we had a fellow who was actually a very, very humble and quiet, introverted sort of fellow, but a complete genius.
Complete genius. And that particular I mean, I’ve done lots of different sailing and racing and all that sort of stuff, but that particular, you know, ambition we had to, to set the world sailing speed record. It’s all regulated by a UK based body. And a long time ago they said it’ll be 500 metres. That’s the designated speed and they had a few other rules about, you know, you can’t have a big tide helping you, that sort of thing, but it was otherwise completely open to what you wanted to do.
You choose the boat, you choose the wind you sail in and all that sort of stuff. And it was just a sprint. That’s pretty unusual in yachting because we normally get in slow boats and just all go round the same course together. But this thing was no holds barred. You choose how you’re going to do it and you hold a world record.
If you do that 500 metres in less time than anyone else. And for us, it was actually a 16 year program all over. We actually set the world record initially quite quickly after only 12 or 18 months in our original boat, which was supposed to be just, you know, a pilot, you know, it wasn’t supposed to work at all.
We just wanted to test a pretty radical concept, you know, and it was pretty flimsy hand, not terribly safe, but we actually just set a world record, not by much. And then we retired it immediately. I was too scared to keep selling it, but then we set about building the real boat. And that was interesting because we knew that the record we set, which was 46 knots, it was about 83 kilometres per hour.
We knew that shortly beyond that, we would actually hit a real hitch… It was a bit like the sound barrier. There was going to be a technical thing that prevented us going a whole lot faster. It’s quite complicated. It was all to do with our rudders under the water gasifying the water at high speed.
And then you lost steerage because you were trying to steer through air in the water and you go over the place. So we spent, 2003, 16 years trying to go another few knots just to get the boat to steer properly. And it was, it was really not a sport. It was a large-scale scientific project.
And all I can say is it was a complete privilege, you know, trying to do something that people had never done before, coming up against a barrier that was well known and 50 knots was fantastic because it’s a nice round number. And people had talked about trying to get through 50 knots for years and years and years. The real barrier was actually about 47 knots.
And that was this technological problem which our design team solved.
Charles Leyland: Well Simon, it’s been a fascinating chat and a fascinating career, so thanks for talking about what really has been an unconventional journey through a conventional landscape.
Simon McKeon: Well, it sounds right, Charles. Thanks for having us it’s been great.
Charles Leyland: Cheers, thanks.
Video Interview by Pixel3 Video Productions