The Business Of Creative Leadership

Alexandra Smart  00:09

My sister and I decided to launch Ginger & Smart when I was in my early 30s. And we'd always worked for other people, we didn't come from a family where you ran out and started your own business and forged your own path.

Dr Juliet Bourke  00:22

This is Alexandra Smart. You probably know her as the co-founder and former managing director of one of Australia's most beloved luxury brands, Ginger & Smart.

Alexandra Smart  00:33

The reason I started my own business was multifactorial, it always is. I wanted to strike out on my own and do something for myself where I could have more control, more opportunity for legacy, and the thought of being able to start something from scratch and build it was really exciting.

Dr Juliet Bourke  00:53

Since selling Ginger & Smart to private equity in 2019, Alexandra has co-founded Cirkl-Tek, which aims to divert organic waste into biodegradable textiles. With ECI partners, Alexandra also coaches executives and other leaders to find the balance between their creative and commercial imperatives. 

This is The Business Of a podcast from the University of New South Wales Business School. I'm Dr. Juliet Burke, a professor of practice in the School of Management and Governance. 

Alexandra, entrepreneurial thinking and there's desire to do it better is everywhere today, but it hasn't always been that way. You learned that firsthand when you were studying for your MBA...

Alexandra Smart  01:39

Yes. So back in 2002, you really were being taught when you're doing an MBA to run a large organisation – a Telstra, a Qantas. I decided in my final six months to do my final project on how to build Ginger & Smart the startup. So we wrote the business plan and when I presented it, I was marked down pretty dramatically because I had, frankly, missed the brief. I was taking the concepts of how you run a big organisation and applying them to a startup and at the time academically that just didn't compute. But two years later, I was asked to come back and speak to the graduating class – of 2004 it must have been – and I was asked to speak about entrepreneurialism. What does that mean? And how does that set you apart? And why organisations should think like that and why, individually, the audience should think like that. So in a very short period of time that thinking changed. And then, of course, it became a subject within the MBA, and then you could major in it. So, you know, that was fairly fundamental. I was thinking like that but organisations around me had to kind of catch up a bit.

Dr Juliet Bourke  02:55

So there wasn't much time given to creativity or to entrepreneurial startup thinking. But do you think there are lessons big business can teach the startup world too?

Alexandra Smart  03:05

Yes, definitely, there are things that I learned working for large organisations that absolutely informed how I ran a small startup. And doing the MBA at the time really taught me how to compartmentalise departments within a small operation, but also how they worked together and how you could get the best out of a small team doing a lot of things. And equally to your point, large organisations can learn a lot from how nimble and agile startups and small organisations need to be. I think large organisations now not only require but desire leaders who can think creatively, think quickly, think in a dynamic way with an element of risk to get things done. They require leaders like that. But often, it's just not the culture or not the way things are done.

Dr Juliet Bourke  04:01

What does that requirement look like when you're in a larger organisation? It seems that much more of the emphasis is just on commercial reality and there's a whole lot of infrastructure around you, and there's a whole lot of ways of doing things. And that's so different from the startup culture.

Alexandra Smart  04:19

There's three parts of it, I call it the three C's. You've got the creative thinking on the one side, which is all about openness and moving fast and dynamism and making quick decisions and having a short and long-term vision and being able to, you know, conserve cash, but also spend where you need to and thinking out of the square. And then you've got the commercial reality of business, which is you've got to be good at budgeting, you've got to be good at risk and governance and requirements and tax and all the sort of smart things that you need in a business, because if you don't have those aspects then you don't often have a business. Or you're out of business pretty fast right? But underscoring those two aspects, you need a culture that supports both. That supports the commercial reality, but also the capacity to be creative, to think innovatively, to think big, to think outside the square that allows innovation. What I see typically in organisations is that they lean too far to the right. They're all about the series side, the risks, the finance, the processes, the systems. In fact, that's proven that 95% of what we think about in business is on the right-hand side of commerciality and most organisations don't give space for what's required around let's call it innovation, let's call it entrepreneurialism, let's call it creativity. So the culture required underneath that needs to celebrate both, needs to give time for both sides of the business and when that happens – when space is given for both sides of that ways of thinking – that's when businesses find an edge, that's when they move forward. That's when they succeed. That's when they attract the right people. That's when they attract the right consumer. That's when they widen their scope and they start and continue on a trajectory to being winners to being high performing organisations. But we stay where we're safe, often, and creativities a bit messy. It's not linear. It's a little bit all over the shop. And often people don't cope that well with that way of thinking, it's safer to be on the commercial side of the business and so that's where people stay and so they're a bit rusted on. But the culture underneath it needs to support both. 

Dr Juliet Bourke  06:44

Yeah, I get what you're saying. I mean you had your own business and you were very successful, and so you were living and breathing this blend of commerciality and creativity, innovation... You know, where does it fit in across the value chain? Are there moments where you might prioritise that creativity and moments where you might prioritise the commercial reality? Or does it always blend together?

Alexandra Smart  07:11

No, I think it is about being conscious of where you are and where you're spending your time. So as Managing Director of Ginger & Smart, my role really was to make sure that as an organisation, we didn't lean too far to the left or right. So if we went too far into commerciality, we were focusing on inventory and spreadsheets and budgets and numbers and production. We're required to do that, but if we went too far in that direction, spent too much time with that, then we lost our point of difference, we lost our quality of brand. And similarly, if we went too far into the creative side of the business, and we spent all our time designing dresses and prints and, you know, all of that good, creative stuff, then we started to miss the mark on the commercial side. So my job really was to make sure that we stayed centered around that. And, you know, I'd say a really good tangible example of that is every year we do Australian Fashion Week or we show the collection internationally. And that was a confluence right there of where creativity and commerciality met, because we had beautiful collections of designs and styles up on the runway but we were there to sell the collection and we were there to invite the PR fraternity and buyers and people that would support the brand moving forward but ultimately stock up products in their stores. Like David Jones, for example, or Saks Fifth Avenue. So that was a really good example of where creativity and commercial reality meets in the middle. And then the success of that is what you make of it.

Dr Juliet Bourke  08:50

The landscape of creative work is changing faster than ever, thank to the increasing sophistication of artificial intelligence. 

‘For fashion, creativity has to almost be reproduced at scale.’ 

This is Barney Tan. He's the Head of School and a Professor at the School of Information Management Systems and Technology Management at the UNSW Business School. Barney's team are conducting research on how AI tools can support creative work. And the problems these tools might present.

Professor Barney Tan 09:23

It's incredibly difficult because we can prime someone to be creative, but we cannot actually teach a person to be creative. It's a bit like teaching someone to be an artist, right? We can teach you how to hold a brush, how to mix paints, we can teach you all the fundamentals of how to create art. Likewise in fashion, you know, we can give you a sense of, you know, what fabrics that you have access to how to, you know, shape them into the apparel items that can be sold in a shop, but we've can't really tell you how to design it.

The creativity, the expression of your creativity and outcome of that creative process is really innate to the person. It's very nebulous. But also at the same time, creativity can perhaps be supported with data and the help of AI. And while most creative professionals are very against the use of AI, because they see AI as an existential threat to their profession, AI does streamline the efficiency of the creative process. So think about this as a hypothetical scenario, you know, let's pick a very fashion forward company, maybe Zara. If you are able to run realtime analysis on Zara's web page, for example, you could study the pictures that have been uploaded to sort of get a sense of what their latest designs are about, you can actually use that as a proxy for identifying what products are well received by the market, which then has implications for how much time you have if you're the original innovator to benefit from your original creation.

So in the School of Information Systems here at UNSW Business School, we have a number of colleagues who are involved right now in actually looking at how AI supports the creative process in certain creative industries. So there's a lot of efficiencies, a lot of, I guess, economies of scale with AI that allows them to scale creativity. But at the same time, the tension then is that if the market perceives this to be created by technology, perhaps they will not be so positively disposed towards those products. So in that sense, there are efficiencies to be gained with the use of technology but perhaps the outcome will not be as you intend.

Alexandra Smart  11:59

You know, Australia's very, very... punches above its weight, shall we say, in terms of designer fashion. There’s more Australian designers in this country at that sort of mid to luxury end, than there are in Paris, London, Milan, anywhere around the world. 

Juliet Bourke  12:15

Why is that? 

Alexandra Smart  12:17

Because there's a lot of creative spirit here, there's a lot of creativity and there's an audience that, you know, perhaps it's becoming very difficult in the retail market right now, but there's been an audience here in Australia and a consumer who's been prepared to support the Australian designer industry. Not to say it's not tough, but it's a really interesting case study when you look at this country versus other fashion capitals, shall we say, around the world, where what tends to happen is brands go into the luxury end of the market, you know, alla Gucci and brands at that level, versus the sort of bottom end of the market. Here we support a really fairly vibrant mid part of the market. And I sit on the board of the Melbourne Fashion Festival, so I see that in action, where the consumer comes to see those fashion designers on runway, and they're just so welcoming and so responsive to designer fashion. There's a really interesting dynamic here in this country. I can only explain it that the consumer here is willing to support and interested. 

Dr Juliet Bourke  13:23

So when you tell me that – which I didn't know, that we're punching above weight in relation to our designer leanness in Australia – it makes me think that there's a wellspring of talent and creativity that businesses could tap into that potentially they're not.

Alexandra Smart  13:41

I think that this country has a huge talent pool in creative industries, whether it be fashion or theatre or dance or whatever. I think organisations do, businesses do, corporates do have the opportunity to tap into that creativity and way of thinking and bring that process of creativity through into a corporate environment. And that's what I talk a lot about to organisations now – how can they shift the way they're thinking? How can they shift the focus of where they spend their time? How can they bring creative people into their organisations and value them the same way as they value the corporate, commercial side, and it comes from the top. The tone comes from the top in terms of celebrating both ways of being and thinking. And research now shows that we are not human beings that are either creative or scientific or mathematical. That kind of thinking has been well thrown out the window now. We as human beings have the capacity to think in both ways, we just haven't necessarily learned it. An example of that is that when I went through school, a long time ago now, the timetable told me that I could do three unit maths, but I couldn't do three unit art at the same time. So I either had to choose one or the other. In other words, I was either artistic or I was mathmatic, and I think a lot of us have been brought up that way. And that's a furfy. We are quite capable as human beings of either developing our creative side, or developing our more, let's call it mathematical way of thinking or scientific way of thinking. And the two absolutely can converge. 

Dr Juliet Bourke  15:17 

Is there a person, a team, an organisation that you've worked with where you've seen this beautiful blend of commerciality and creativity? 

Alexandra Smart  15:26

What I see working with teams and leadership teams now is when we start to reframe the way they are spending their time and their focus, they very much can see the benefit of putting more time and effort and diary time and people time into, as an example, having meetings where they're talking about strategy, big picture, having meetings where they're talking about how are they people and what are we doing to support them, having meetings about how we're operating and the ways that we're working and the behaviors that we're showing. When I work with teams and we start to work into that side it's uncomfortable for them, because it's not necessarily the way they've operated before. So when we work with teams like that, we take them along the journey of re-strategising their working week even, or the way they're doing meetings, or what their agendas look like, or how they're interacting and how they're building an underlying culture, you see really big shifts. The trick about at all is to make it consistent, and to keep it going. It's a bit like going to the gym and then giving up after three months. That's the easy way. The hard part is embedding these behaviors within the organisation so you actually see difference.

Dr Juliet Bourke  16:43

Do you have a rule of thumb as to how much time on a meeting agenda should be devoted to the commercials, the operational, the people? Is it a third, a third, a third? 

Alexandra Smart  16:53

Well, I tend to say make it half and half because that's demonstrative, that’s saying ‘We value as a leadership team or a board, or an organisation - we value the hard stuff and some of the softer stuff’. And when you start to build the agenda around that you're prioritising, both in a way that makes difference.

Dr Juliet Bourke  17:13

Do you think the people should come first in that half and half? Or the commercial should come first?

Alexandra Smart  17:18

Definitely the people. By putting people at the top of the agenda, it sends a very strong message about what's important to the organisation and what can often happen is the really interesting dynamic questions and decisions come out at that level and then flow into the more commercial reality agenda items. The better organisations can combine the two so that they're thinking from both perspectives at the same time, but it requires from boards, from senior leaders, it requires those decisions that the culture supports that, that people know that, you know, if they're thinking innovatively or they're thinking commercially, both ways of thinking are supported. And good feedback is supported. And those conversations are allowed to happen. 

Dr Juliet Bourke  18:07

Do you have some other practical tips you can give us as to how you infuse creativity and commerciality together?

Alexandra Smart  18:14

I can give you a really simple way to set this idea up and that's what we call round or rectangular meetings. And this is what leads to creativity coming to the table. That is that when you sit at a rectangular table, you often have someone at the top of the table, it's often the boss and you're just reporting in ‘We've done this, we've hit those KPIs, you know, we're ticking our action items’. And that's great, and you need those meetings. But creativity comes out is more at roundtable meetings where there's less hierarchy, there's conversations across the table, there's multiple items to discuss and there's a sense of camaraderie around the table, because no one is pulling the leadership or the hierarchy card and all ideas are good ideas. To assume that organisations are set up to do that is to miss the point, because they're not. They 95% spend their time on the smart side of the business. So organisations actually have to set themselves up to bring this way of thinking out.

Dr Juliet Bourke  19:18

You sold Ginger & Smart to PE in 2019 – congratulations – and you're now an executive coach with ECI partners. What drew you to coaching?

Alexandra Smart  19:27

Well, the reason I'm doing what I'm doing now is because I'm really passionate about good leadership. And through my career, I got thrown into being a leader very early on and I kind of winged it. And I look back now and I think, gosh, we should spend a day thinking about what good leadership was or what kind of leader I'd like to be and how I'd like to kind of strategise that forward and you know what support would be good and finding mentors and doing all the things right? I didn't do any of it, because I had my head down, running an organisation. And so I now look at myself as the person I wish I'd had in my business, or in my career and I'm really passionate about how I can do that well for other people.

Dr Juliet Bourke  20:15

I think you're right. I think that at the beginning, when people start businesses, they're not actually thinking about themselves as a leader of the business, in the sense of people leading, right? They're thinking about it more in terms of the product or the service that they're delivering. Is that how you saw yourself then too? 

Alexandra Smart  20:32

Absolutely, yeah. It was just getting things done. In our case designing product and getting it to market and I was there for 20 years. It probably took the first five years to kind of get that in place and then you start thinking about, ‘Oh, wait, there's a consumer in here’. And so we turned very quickly to focusing on our consumer and I think that when I look back on it was really, probably the key to the success of the business was that we were very consumer focused, very focused on our retail business, giving the customer what she needed before she even realised she needed it. We moved to a sustainability model very early on way before the industry kind of caught up with us. In fact, we started that process in 2012, when we started trading ethically and that led us on our sustainability journey so that when I left, we were 100%, sustainably sourced. And so, the consumer and what she wanted really drove the business. So I have a very keen interest in businesses that really deliver for the consumer. 

Dr Juliet Bourke  21:35

And what are you sensing, now you're in all these different places. Now you're on a couple of boards, and you're doing your coaching, and you've got this great history – what's the tip you can leave our audience with this is where things are going, this is what the consumer wants next?

Alexandra Smart  21:48

I think we're in a very difficult retail environment right now, across the board, but especially in designer fashion. Cost of living is real and often that sector is hit hard and hit first. And I think the key now is to get really good from a niche perspective, to really understand who your core customer is, and to talk to her and to be on top of what it is that she's looking for. Because it's incredibly hard to break through often, there's a lot of noise, and unless you're singular about what it is that you stand for and how you're different, and why you're different, and how you're going to talk to her, then you just get lost in a sea of at all. I think injecting creative ways of thinking is super important. Thinking and finding that midway between how your business functions at a higher level where the creative thinking and the commercial reality converges, and not getting too caught up in either side of that but making sure that you're focused on both and you got the right people around you to allow you to focus on both, is where you really need to be focusing now.

Dr Juliet Bourke  23:08

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