Susan Reisbord is almost one year into the role of CEO and managing director at Cardno, the Brisbane-headquartered global infrastructure, environmental and social development services firm; and what a year! Environment Analyst’s Liz Trew finds out about the highs and lows to date, as well as Philadelphia-based Ms Reisbord’s aspirations for Cardno to be regarded as a progressive company in the round.
This is also a firm in the midst of transforming itself into a pure-play consulting entity - having demerged its c2,000-person quality, testing and measurement business Intega last year and more recently divesting the Haynes Whaley structural engineering outfit in the US - with its latest financial results for the year ending 30 June starting to bear the fruits of this strategy.
There are other exciting developments on the near horizon for the c4,000-strong, US$467m revenue firm, particularly in the areas of environmental, social & governance (ESG) and diversity, equity & inclusion (DEI), as Environment Analyst discovers.
EA: Just over six months into the global pandemic, how are you feeling now about the business - its people, prospects and resilience - compared to the first few weeks in lockdown?
SR: In the early days of the crisis it was like being a pilot flying on instruments. There was so much uncertainty yet the goal was to bring as much certainty as you could in the business continuity plan and management plan. We were fortunate to have a very strong management team, and with internal expertise in epidemiology this also helped inform every decision we made about our people, safety and clients. Cardno was in a good position based on the markets we are in and given those which were more impacted; part of that is luck, but also we’d designed and positioned ourselves for resilience since I've been at the company [from 2015].
Over the last five years, we've really worked hard to gain balance - geographically, market sector wise and certainly in client types. It’s a key thing I’ve learned through my career - working at firms such as MWH and GHD - and experiencing other recessions is to make sure that your company has the right balance to weather economic downturns on a global basis, and even within certain country markets.
I wouldn't say there’s necessarily more certainty now than six months ago, but there is less uncertainty. We know what's worked well and what hasn't. I’ve certainly become more mindful about a few things which stand out. Firstly, most business leaders in this industry would be rightfully praising their people for being highly resilient and adaptable - and yes of course they're absolutely ingenious - but this is really going to be tested and retested again. So the question is now will that adaptation continue because the situation is going to remain challenging for a year or more?
The second thing I’ve come to realise is that you can't go wrong if you make every decision through the lens of your company’s values. And Cardno’s are: safety, people, excellence, integrity. When you're flying on instruments so to speak making decisions through the lens of values gives you confidence.
Thirdly, what is really important is having that strong financial discipline. This is critical whenever you face any challenge and will separate out some of the companies within the industry that make it through this and those that won’t.
EA: What else have you learned about your leadership style in the last six months, a time of unparalleled social unrest, unemployment levels, notwithstanding the health and mental well-being aspects of the pandemic? (In government, some female leaders have been widely praised for their crisis management and communication skills, why do you think women have risen to this particular challenge, and are there any parallels with the management in this industry that you can draw?)
SR: I have come to realise that what has really worked for me through all this is that I am optimistic and resilient - and I think those qualities come in handy in any crisis. When you look at resilience, I see it like an equation where the numerator is the problem and the denominator is the resources you bring, so a lot depends on marshaling the right resources to the appropriate problem. And then when I think of some of the current lauded female leaders in government - such as Germany’s Angela Merkel, New Zealand’s Jacinda Ardern or Scotland’s Nicola Sturgeon - I’m not so sure it’s just about certain qualities unique to women (as I see men with these attributes too), but it's more about the journey and qualities required of them to get to that successful leadership position in the first place.
The other thing that I think is going to be true for any person - male or female - to be a successful leader at the current time is that you don't stop everything else because there's a crisis. Six weeks in, when everyone had been working crazy hours and being on call 24 hours a day, it was really important to regroup and bring back a sense of normalcy as soon as possible - with staff and clients - and to keep all our initiatives rolling. So at Cardno we continued our acquisition and divestiture strategy. We also continued to work in the ESG space, where we intend to play in a big way. We've been working hard on ‘packaging up’ what we do here to highlight our unique platform to be impactful.
Prior to COVID we changed tack on diversity, equity and inclusion, and our efforts only strengthened through the pandemic. I want people to be able to bring their whole selves to work, be open about who they are and to be treated equitably whatever their race, gender or disability. When I came to the executive leadership team as CEO my message was clear that we’re not giving this to someone in a designated role as DEI leader because my fear is that would make DEI ‘somebody else’s job’. Rather each of us own a slice of this pie and each of us are going to do the hard work to make change happen. I passionately believe in doing the ‘stuff’ that matters - it’s not about ticking boxes, but making changes we can measure and be accountable for in a tangible and measurable way.
EA: What has come out of this crisis which Cardno will take forward post-pandemic, which you could label as silver linings?
SR: One is certainly work from home [WFH]. Our industry has been quite conservative on this in the past. But now you can say we’ve done the ultimate experiment in WFH, it’s been proven. So that’s really good news for people who need the flexibility not to always do the daily commute. The added benefit is this gives us the opportunity to review our office footprint given the high occupancy costs typical in our industry. I can't imagine that any of our competitors are looking at their strategy for the other side of COVID and saying ‘wow, going 100% virtual will completely serve our needs’. In the longer term, there will be a ‘happy medium’ flexible working model that has a lower cost of occupancy.
Another initiative we will certainly take forward is the way we take care of our people and their extended families. Within the first week of lockdown our marketing and communications team created online communities and chat rooms to fulfill different needs - from regular storybook reading sessions for people’s kids whilst they work, to a coffee lounge for singles quarantining, to cookery classes and virtual museum trips. This has enabled us to get to know staff in a whole new dimension and created an amazing connection across the entire organisation; and it’s something I really want to continue.
One major area this global experiment has proven is that we can do something about climate, air quality and reducing our carbon footprint on the planet. Would we ever have done something so dramatic if not for the pandemic? There can be no turning back in terms of positive environmental impact.
EA: What has evolved about Cardno’s strategic priorities through this crisis - have new focus areas emerged or have you doubled down on existing priorities?
SR: Priorities laid out in the last strategic review have certainly become more sharp in focus. We're now seeing the results of what we planned out in November 2018 - which was all about resiliency, balance and key clients - and we have been executing since then. We see a lot of opportunities to grow in the Americas market, so we are an active buyer there.
Nothing has really changed on that front due to the pandemic. We’d previously identified the Haynes Whaley business as one that did not align to the strategic plan, and found a new owner that was a much better fit for them long-term, under which I am sure they will flourish. The transaction happened to be finalized in the midst of COVID but it wasn’t driven by the crisis.
EA: Have you yet had the confidence to roll back any of the initial cost-cutting measures employed in the early stages of the crisis?
SR: In the early stage of the pandemic - in March/April - we put in place some broad measures, mostly to take care of people and their safety, but also to protect the business with a focus on cash management. The senior leadership team - and some specific business units where we were seeing project delays - agreed to take a pay cut or reduced hours with the goal that we wanted Cardno to be Cardno on the other side of COVID. We didn't want to be in a position of laying off lots of people, and hoping they would still be around later. That said we did have to furlough some staff. By May/June time, we could see we were going to hit our goals as our people were doing a phenomenal job working from home and staying productive, so we have been able to restore salaries, schedules, and bring most back from furlough. We’re proud of how many people we’ve kept on and how we’ve been able to minimise furloughs and layoffs.
There were some pockets of the business where layoffs were required due to market dynamics - and COVID accelerated some of that - but nothing which would be out of the ordinary for a company of our size in the course of eight or nine months in normal circumstances.
EA: How do you see FY21 comparing with FY20 for Cardno? What will be management priorities this new financial year in a broad sense?
SR: In the short term we’re really focused on staying close to our clients because that's the best way to bring more certainty to an uncertain environment. From a business continuity standpoint, the thing I will be monitoring closely to reduce uncertainty is backlog.
Undoubtedly the US election will cause short-term disruption, but the one thing we need as an industry is certainty from the outcome, whether it’s ‘red’ or ‘blue’. If it is blue, I think we can expect a robust stimulus package around infrastructure, so there would be big programs of work in transport and water in particular. But we also have a government services division that does a great deal of work for the Department of Defense, so if that stimulus did happen it could mean some money comes out of defense. But on the whole I think we're in good markets and we have a balanced portfolio.
Notwithstanding the election and COVID uncertainty, I feel very good about our position following on from our FY20 annual results and looking towards next year (FY21) - which for Cardno I think will be totally comparable on profitability or up slightly. Some parts of our business will grow and some will contract, but overall I'm very optimistic because we are well positioned. I’m OK that this projection is slightly more aggressive than some of the industry predictions.
EA: How do you see this pandemic as impacting the sustainability, climate and ESG agenda going forward? What global opportunities do you see for Cardno as a result?
SR: One of the major silver linings to come from the crisis is that we now know parts of the economy can absolutely work in an environment where we have reduced our carbon footprint significantly. COVID has certainly helped raise the issue of human health vulnerability, but also it has raised more awareness around the environment. And because of other issues like Black Lives Matter rising to prominence we are seeing that the world is moving forward to recognise and embrace environmental justice, social justice and vulnerability within the ESG space.
All this means businesses are recognising it's not OK anymore to just make a profit, you need to make profit the right way. I think it's an interesting, exciting, but also challenging time where we are going to seek to do better ourselves whilst also helping our clients to address these issues in a meaningful way.
I see all these changes as drivers for our services around environmental justice, environmental vulnerability, human health risk assessment, human health equity, climate resilience services, asset management, modern day slavery eradication and community enablement. These are all significant issues right now, and Cardno is in a great position to meet the market demand on the human health, environment and social value sides given our core business, ChemRisk and international development capabilities.
EA: We’ve started to see players in the industry peer group - such as Worley - make interesting pledges around their ESG and net-zero commitments, so where is Cardno on this journey?
SJ: It’s one thing to lay your cards on that table, but quite another to actually walk the talk, and be held accountable. There have been some important developments in recent months with regard to ESG at Cardno; we created a new board committee with a board chair, so we now have a dedicated working group inside the company. And one of the first tasks was to undertake a benchmarking exercise, not just looking at what our industry competitors are doing, but also working with our key customers - which will help us to advance client ESG agendas too.
There are so many measures or metrics we could look at addressing, but we want to be sure we pick the ones which are most material to our business and to make a real difference. I'd rather do five things really well and make an impact, than try and do fifty things at once. So the working group is now at the stage of figuring out what pieces of the ESG puzzle in particular we're going to take forward - where we will put our stake in the ground. I will be very excited to make an announcement on this alongside our first half (FY21) results in February.