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International Leadership Interview – Kathryn Baker
Category: AmCham News
“There are several aspects to good leadership. One of the most important of which, is picking a very good team. I think great managers excel at finding good people, as well as composing a good team and bringing out the best of everybody on the team.
– Kathryn Baker, Investor and Board Professional
Kathryn Baker is the first ever non-Norwegian to sit on the board of the Central Bank of Norway. Throughout a career, that has taken her from Wall Street and Morgan Stanley to various board positions in Norway – including a seat at the AmCham Board, she has gained substantial international leader experience. AmCham sat down with Baker to pick her brain, discussing all things international and leadership related aspects.
Where did you start? How did you get to where you are today?
I was born and raised outside of Philadelphia. My career began on Wall Street with Morgan Stanley in their Corporate Finance department in the late 80s. It was a great experience, but not quite my cup of tea. After one year of travelling, I returned to New York and worked for an investor relations firm until 1991 when I left to get my MBA at Dartmouth. That’s where I met a Norwegian who convinced me to marry him and move to Norway.
I was lucky; I was offered a job with McKinsey Norway while doing my MBA in the US. McKinsey was a fantastic springboard to interesting networks and experiences. Among the many projects and industries I worked with, one fascinated me the most. It was with a Swedish private equity firm that was reviewing their ownership strategy. I developed a real understand of this industry, and I was just so fascinated. I knew that I wanted to work with buying companies and working with them to create value, but the private equity buyout industry didn’t exist in Norway in the mid 90’s. Not long after, the industry started to emerge in this country and I was quick to join it.
In 1999, I left McKinsey and joined a young private equity firm, Reiten & Co, as a partner. At the time, a lot of people thought I was nuts to be leaping into the unknown, but I joined and bought an ownership stake, thus beginning my 15 years in private equity. In connection with that, I started sitting on my first board in 2000, and after that, during my time at Reiten, I sat on eight or nine different boards. It was just one aspect of how we worked with the companies, but it was a very important one.
We worked very closely with our portfolio companies to create value through active ownership. The range of experiences I accumulated during those 15 years was enormous. I worked on strategy, business development, deal structuring, financing, acquisitions, organizational issues, governance issues, and a lot, lot more. I also served as Chairman of the board of several of the companies.
I decided to leave Reiten a few years ago, and strike out on my own. With all the work I had done on boards up to that point, I knew it was something I liked to do. It offered me the opportunity to have real impact, but maintain a higher degree of flexibility. In addition to sitting on boards after I left Reiten, I started to do some seed/angel investing. I had invested in several companies before I left Reiten and that is something I wanted to spend more time doing. I now have a portfolio of eight investments in a range of exciting young companies.
Do you get involved with the start-up companies on a decision-making basis or is it advisory?
I went in as chairperson for the first start-up I invested in, and helped them set it up. It was a great company, but I realized I needed to keep that on the side of my professional career. I currently sit on the board of just one of the eight companies in which I invest, however I follow them closely and will always provide input and advice if needed. .
Tell me about the board roles you have today.
Today, along with the Central Bank of Norway Executive Board position, I am chairman of two listed companies and board member of three more. I also work with a few charities and, as mentioned, the one start-up company.
I have been on the board of the Central Bank of Norway for almost two years. I’m pretty sure I am the only non-Norwegian to ever sit on that board. It is a challenging and fascinating role and it requires a lot of time and dedication, but I’m happy to be able to do it.
I just recently took on the role as chairperson of Navamedic, which is listed on the Oslo exchange. I am on the board of Catena Media for the second consecutive year and am now the chairperson of that. Catena is listed on the First North exchange In Stockholm, and we are working to move it to the main exchange. Additionally, I sit on the board of Akastor, DOF, and Sevan Marine, which are all listed in Oslo.
What are the important decisions you make in various board positions and how do they impact global presence?
One of the most important things a board does is set the strategy, ensure that the company has the resources it needs to execute the strategy, both short-term and long-term and then to ensure that management executes effectively.
I think one of the most important decisions a company makes, especially a Norwegian company, relates to internationalization. It depends on the industry of course; however, if you are selling a product, you are going to have a limited size market if restricted to the domestic market.
How do you help to build morale and creativity in a diverse team when you sit on a board and how do you influence/impact that at all?
Morale and creativity are elements of a company’s culture. The board influences culture by putting in place the CEO and top management that will be the bearers of that culture. It is also influenced by the company’s policies and its ambition level, which the board is a part of creating. In some larger companies, we use different tools to measure morale and satisfaction along a number of parameters. This can be a useful tool for a board that naturally has a certain distance from the organization’s everyday activities.
Would you use the same leadership style in a different organization? In a different country? How important is it to tailor your leadership style to your team and environment?
I think the question about the international organization is a good question because there are huge differences. In Scandinavia, we might appreciate one certain type of leader, but if you go to Belgrade or even the UK, there are significant differences that you must be aware of and make sure your CEO is too. Everything comes down to making sure you have the right management in place. In companies where I am chairman, I spend a lot of time in dialogue with the CEO. One of the main topics we usually talk about is the organization and the different issues he or she is facing.
Do you change your leadership style depending on which company you are on the board of and how do you do that? Do you adapt according to what the company needs?
It is important to find the balance between understanding how any board is run, how you will find your own role in that setting and how you will influence that setting. Being a very fact-based person, one of the things I often do when I join a board, is ask to see analysis that helps me to understand what is really happening in a company and the industry. This can often be missing for smaller companies and I might need to push a little harder to get it.
At the opposite end of the scale, institution like Norges Bank – which plays a central role in the workings of the country and that, has a long rich history – it is quite different. You are there to contribute, which is the most important thing, but there is a certain formality and protocol to the way things are done and it’s important to take the time to learn that and find the balance.
There is a good culture of corporate governance in Norway and in Europe as well. A good chairperson is extremely important. The chairperson has to make sure that he or she is bringing out the best in both the management and the rest of the board. A chair who is good at talking is not necessarily a very good chair; you need someone who is going to make sure everyone contributes.
Where do new ideas and exciting proposals come from in your organization? Has your international experience helped you ‘think outside the box’ in your organization?
I think there is experience and there is culture. The American culture can be a little “let’s go for it,” but to a certain degree so is the Norwegian culture and more so than say, the Swedish. From my previous experience, I have brought with me the willingness to set ambitious goals. You cannot do it irresponsibly, you need to have the facts and plan well, but that idea of “Hey, this could be great- let’s do It,” I think that is something I have brought into several situations.
How do you ensure that your team and your company’s services are aligned to your company’s core vision?
Firstly, the company needs a good core vision and a good strategy. What I like to see when I work with a company, is that once we have set our strategy, we say “what are the four or five things we need to be focusing on all the time?”, and then we really do focus on those things.
I like to encourage the top management to bring their teams into the board room, and even use individual board members less formally outside the board room. I sit on a board with a fantastic person who is a venture capitalist and software expert. He has been harping on this company about automation and digitalization for a year and a half. The CEO finally sat down and had a cup of coffee with him one day and afterwards said to me, “You know, I can really learn a lot from him.” Not all knowledge is best transferred across a meeting room table.
What do you believe are shared traits among leaders? Are there any common mistakes?
There are several aspects to good leadership. One of the most important of which, is picking a very good team. I think great managers excel at finding good people, as well as composing a good team and bringing out the best of everybody on the team.
I think a good CEO, from the perspective of board member, embraces the input of their board and really tries to use it. A good board can be a great resource and buffer for management. A good CEO and his or her team uses that resource for everything they can.
A common mistake is waiting too long to make needed changes. It is human nature to try to fix things, and some things can be fixed. Unfortunately, these problems can suck the energy out of a company and its management and take focus away from value creation. A good leader knows when to make the hard choices.
Do you think there is anything unique to being a leader or chairperson of the board in Norway compared to other countries where you have served or worked?
In Norway, like Sweden, there is a lot of focus on good corporate governance, which is excellent. For example, in Norway, we do not have the CEO and chairperson as the same person, which has been common in the US – which I think is very bad governance – the world has something to learn there.
How would you say technology is affecting your day-to-day life and helping to develop your leadership style?
On a personal level, I have finally managed to become almost paperless. All of my board documents are now electronic and there are some great portals that let you manage documents and keep notes.
With regards to the companies I work with, embracing and utilizing new technologies and digitalization are key value drivers, and could become existential threats if they are ignored. It is no secret that Scandinavia is an extremely expensive place to have employees, consequently, pushing to use technology to make people more productive and reduce the need for more employees is essential. Companies also need to embrace technology to improve the customer experience. It is truly a competitive factor.
How do you continue to grow and develop as a leader?
I have been resisting falling into one box. For instance, I sit on the board of three companies that are related to the oil and gas industry and, for me, that is probably enough. I prefer not be too boxed in.
I think that allows me to bring different aspects into the work. I want to keep developing by working with a diverse set of companies.
What are some of your recent projects and developments that you are excited to share?
I recently took on the role of chairman at Navamedic, which is a marketing company for pharmaceuticals and medical devices. It is in an industry that is new to me and it is with a great team and board.
On a general note, I do not shy away from problems. I mean, you do not want to go into something that is spiraling badly downward, but I think working with challenges is a lot of fun. I have been through a lot of tough situations over the past 17 years of working on boards, and I think that experience can be valuable.
I am working with a diverse set companies in terms of size, industry and strategy that all have different needs and goals, strengths and weaknesses. I have several fun things going on really. It is a privilege to be able to work like this.
Where do you see yourself or any of the companies you work with within five years’ time?
I do not know how things will be in five years, but I think that I have found a model that, as long as I keep performing, can go on for a long time.
As far as the companies I work with, the sky is the limit, really. In almost all of them, we have created quite a bit of value in 2016. We have strategies in place, and we just need to keep working towards those.
What do you see in the next generation of leaders aspiring to run an organization? Any advice to the next generation?
I think one important aspect, is people really need to understand technology. They need to understand not just what it is, but how it works, like coding for example.
Whether we go to a robot to get our haircut or not, there is going to be more digitalization, there is going to be more technology. Understand it. Embrace it.
At the same time, you cannot forget there are still people in your organization. I think that if you want to run an organization, you have to have people skills as well as technology skills. It will still be about people.
What was the time you last answered your last email yesterday or last night?
Generally, I really like to work at night and I try to do other non-work things for a couple of hours during the day. I can often be found exchanging emails at one or two o’clock in the morning. It surprises me how many people are actually up when I send night emails. It varies, which is what I like. Every day is different.
Published: June 23, 2018