Finding passion in leadership: Sydney Airport CEO Scott Charlton
Scott Charlton shares insights from his leadership career on passion, authenticity, and the importance of taking calculated risks
Sydney Airport is a cornerstone of Australia’s commercial aviation industry. As an international gateway and essential part of the country's transport network, it connects to more than 90 destinations around the world. Last calendar year, more than 38 million passengers passed through the airport’s terminals (just 13% shy of the annual pre-COVID record of 44.4 million passengers set in 2019).
Sydney Airport is also one of Australia’s most important infrastructure assets and generates more than $38 billion in economic activity every year for NSW and Australia. It also generates or facilitates more than 30,900 jobs at the airport and 338,500 full-time equivalent jobs across NSW and Australia.
As the CEO of Sydney Airport, Scott Charlton has applied many of the key lessons learned from a career that spans executive, financial and operational leadership roles in companies including Lendlease, Transurban and Deutsche Bank. At UNSW Business School’s recent Meet the CEO event at the Museum of Contemporary Art Australia, Mr Charlton said the main drivers of his leadership journey have been the calculated risks he took, as well as a continual focus on “knowing what gives you passion”.
“You have to learn these lessons, and it took me a while,” he said. “One of the things that I think makes me an okay CEO is that I have that passion, and people see that and the authenticity of who I am; you can’t fake that. You can get a lot of high-paying jobs without being CEO, and CEO can be a very lonely place. But it can also be incredibly rewarding.”
In a conversation with Ellen Derrick, Manager Partner Consulting at Deloitte Australia and an AGSM MBA alumna, Mr Charlton emphasised how this learning process – including the importance of passion, authenticity and being oneself – is essential in the evolution of a good CEO. However, he said he never set out to become a CEO; being a numbers person, he’d always imagined chief financial officer would be the pinnacle of his career.
But each time he found himself losing his passion for what he was doing, and taking a calculated risk led to the next challenge and opportunity for the next step in his career. “Take the risk, because you can always go back to doing what you were doing before, if you’re good at it,” he advised the audience. “That’s been one of the foundations of my career.”
Risky business
Mr Charlton recounted his journey from an electrical engineering student in Texas (who wanted to be an architect but “can’t draw”), through his early engineering career, MBA studies and move to investment banking.
Working to reshape bank portfolios after the savings and loan crisis in the US, he experienced burnout after three years and decided to spend a year backpacking. These travels saw him visit China and Tibet before they were open and go behind the Iron Curtain. “I did all these things you weren’t supposed to do, which was quite exciting. But I fell in love with Australia,” he said.
This move to Australia in 1993 was one of the pivotal calculated risks that shaped Mr Charlton’s career. He was involved in the 1990s privatisations of airports and power and spent time in Hong Kong learning and running Deutsche Bank’s transport practice for Asia. But, eventually, he realised it was time to take another risk and a new opportunity.
Meet The CEO with Scott Charlton, CEO of Sydney Airport
“I lost my passion because I’d progressed so high up the investment banking chain that I was just doing client management, and that’s not my favourite thing to do,” he explained. “My favourite thing isn’t wining and dining – it’s actually doing. I had got so high up that I’d stopped doing.”
At this point, Mr Charlton took a two-thirds salary cut to join one of his then-clients, Leighton Holdings, as Chief Financial Officer as the company embarked on a growth phase. The same sort of calculated risk-taking in search of the right role would also guide his moves to Lendlease and then Transurban, he said.
Transforming Transurban
After serving as Chief Operating Officer at Lendlease, Mr Charlton began an 11-year stint as CEO of Transurban, during which he oversaw high growth and profitability, not to mention an organisational transformation. “It’s interesting – everyone says I was greatly successful at Transurban, but I can tell you that during the first two years, nobody thought it was successful,” he said. This was after he got the CEO role by telling the board it should wind up the company and sell its assets because they weren’t creating value.
“To the board’s credit and the chairman’s credit, they backed me 100% and really changed the team, and we changed the focus. And we had some really tough times,” he said. “There was a lot of trust with our shareholders. The first big transaction we did, we raised one-third of our market cap. My biggest shareholder called me into his office on a Saturday and gave me an absolute grilling. I said, ‘Just trust me; I’ve got this.’ I’m proud that we delivered on what we said we’d do, because these people took on a lot of risk, and there was a lot of trust in me and our team.”
After the challenging beginning, the team “got a couple of wins, and then it just kept growing”, he said. “We were doing what we said we’d do. We reset the relationships. We got lucky. We won a $7 billion transaction by less than 1%. Once I got that momentum going, with a solid board behind me and a really good team and stakeholders that backed me for a long time, it was quite fun. But it was a tough start.”
The Dean's Reception @ Meet The CEO with Sydney Airport CEO Scott Charlton
Pursuing a passion
The next challenge for Mr Charlton involved where his next career step would be following Transurban. “There’ve been a lot of very successful CEOs in Australia who stayed for too long,” he said. “Once you get to the 10-year mark, you’re such a subject matter expert, but you’re also such a dominant you – a personality in the company that’s been successful. It’s hard not to have people around you just agreeing with everything you say and not challenging you.”
He knew he wanted another leadership position but didn’t know where. “But when the most iconic asset comes up in Australia – I was pretty excited to have that opportunity,” he said.
A key difference in his transition to CEO of Sydney Airport involved what happened before he took the role, in contrast with Transurban, where he said it took him several years to set the strategy, culture and team he wanted.
“When I got to Sydney Airport, I knew what I needed to do, so most of the hard work was done before I got the job,” he said. “I was being extensively interviewed by the investors, but I was also extensively interviewing them. The biggest thing was that I needed them to be aligned.
“The interview process went both ways this time so that when I got the job, we were able to do in a very short time what had taken me probably two or three years at Transurban,” he added. And the changes the airport needed were less drastic. “It was consolidating a lot of work that had been done and setting Sydney Airport on a more ambitious growth path,” according to Mr Charlton.
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This affinity for growth is a theme in his career, illustrating why “knowing what gives you passion and what you enjoy is so important”, he said. “Every company I’ve been involved with has been about growth and ambition, because that’s what I enjoy. It’s a lot more fun to hire people than it is to fire people.”
A culture of ambition
Turning to Sydney Airport’s outlook, Mr Charlton said there are “huge challenges” in operations, given the complexity of the aviation industry, which operates in an intense regulatory environment.
“These are all pieces of the puzzle, and that’s one of the things I really love about the airport: it’s so complicated. But getting the airlines actually competing now, finding what drives them, doing the data analysis we now do on each city, airline, reason for travel, origin and destination – it’s extremely complex, which I find really exciting and a giant puzzle.”
He reflected on how he adds the most value as a leader and said the three factors that a CEO has a significant impact on, especially in a larger company, are strategy, culture and people. In his experience, there are multiple ways of challenging that culture and of motivating and inspiring a team, he said.
“Everyone’s there for a different reason, so it’s having to understand each person on the leadership team and what’s going to appeal to them,” he said. “Some people just want to create a better passenger experience; some people want to see the operations run smoother; some people want to get the financial returns. You’ve got to bring everyone along.
“It’s creating the momentum so that they understand they can do more as a team than they ever thought. Once you start building that momentum, it’s amazing how it changes the attitude; you start thinking, ‘We can do much more than we thought; let’s just keep going’,” Mr Charlton said. “It’s about not criticising people for trying and failing, but instead trying to create opportunities and understanding what is a very complex motivation.”
The importance of learning to lead
One of the most challenging aspects of becoming a CEO is moving to a listening mindset rather than seeking to have one’s voice heard. It’s another aspect of the evolution that Mr Charlton considers a prerequisite for being a good CEO, hinging on learning and growing from experience.
“It was easy to listen when I was taking over the CEO job at Sydney Airport because I didn’t know anything about aviation,” he said. “I knew a lot about the construction and the stakeholders and the finance, but I had to listen. I’m still learning, and that’s exciting – that learning and that interest. And I don’t come in with a biased view, so I can use dumb questions in how we might go about solving things. It’s hard to step back and listen, but, particularly as CEO, you’ve got to be so careful that everyone in the room is heard.
“Half of your executives are extroverts, and half are introverts. The extroverts always get the attention, and the boards always think they’re the better executives. Actually, the introverts are often the better executives; they just don’t present well to the board. You have to balance all of that out.”
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This emphasis on valuing experience is why Mr Charlton worries when someone says they want to be a CEO. “I don’t think people understand, a lot of the time, what it really means to be a CEO,” he said. “You have to have a broad depth of operations, finance and people to even be able to consider if you’re right for that role before you think, ‘How do I get there?’
“I always think it’s good to know a little about a lot, rather than a lot about a little, if you want to be a CEO – it’s getting that broad experience and then really thinking about if that’s what you want, because it’s not for everyone,” he added.
This is why Mr Charlton sees authenticity, passion and humility as the most important qualities he looks for in aspiring leaders. “So many leaders today lose that humility when they become successful, and I think that’s a trait that maybe could work in the past, but not in today’s world. It’s about having that passion, that authenticity, and levels of humility in not thinking that you know all the answers,” he concluded.
Hosted by UNSW Business School, the flagship Meet the CEO series offers insights from extraordinary business and public leaders. Previous guests include UNSW alumni such as Anna Lee, CEO, Flybuys; Alexis George, CEO, AMP Limited; Christian Sutherland-Wong, CEO, Glassdoor; Moses Lo, CEO, Xendit; Shemara Wikramanayake, CEO, Macquarie Group; and Matt Comyn, CEO and MD, Commonwealth Bank of Australia.