Communication is king when it comes to ensuring you get your correct meaning across in business. It sounds simple but can be difficult to do. When views and opinions are not expressed and debated to the satisfaction of both parties, it has major ramifications.

Reinsurance and insurance specialist Cobalt Solutions Australia is a wholly-owned subsidiary of AMP. Following a re-structure at AMP’s Group level, Cobalt’s, managing director Peter Clarke began reporting to AMP’s General Manager, HR and Strategy, Peter Hodgett. Within three months it became apparent there were major communication issues that needed to be addressed.

One of the problems resulted from the offices of Cobalt being located at a different location to AMP.

“There was the physical distance and when the reporting roles changed a number of issues arose,” Clarke says. “Not being able to pop in and see people easily to resolve them didn’t help.”

Clarke says when he was told he had to report to the head of HR and Group Strategy, he had no idea why, as he couldn’t understand what HR had to do with his business.

“It was also the fear of the unknown I suppose,” Clarke says. “I wasn’t sure if this person would know what he was doing. Our division was non-core to AMP and to that extent we were feeling isolated.”

Peter Hodgett says that at the time he didn’t appreciate quite how much mistrust in AMP had been generated by Cobalt’s past experiences, including a failed attempt to sell the business. He now realises Cobalt was feeling unloved. “They were feeling like a diseased limb that couldn’t be cut off, although those feelings weren’t being communicated quite so clearly at the time,” he says. “My management style is built around support and empowerment but in retrospect I realise I wasn’t explicit enough in explaining how I was helping to build support for Cobalt within AMP. I should also have been clearer about my previous experiences in insurance, as an actuary. This may have given them more confidence that I knew about their business.”

The issue between the two men involved building trust and a rapport so the businesses could support each other.

“It was clear Cobalt was not embracing the opportunities that being part of a larger group could bring them,” Hodgett says. “Although the business was not going to fall apart, strategically they were missing out on opportunities to improve the business and the external understanding, and perceived value, of the business.”

After it was realised there were issues, Clarke spoke with VogelPercy who were working with Cobalt in another area. They worked with him to better articulate his concerns and improve relations.

“I needed to learn to ask Peter [Hodgett] what he wanted and how he wanted it,” Clarke says. “I needed to put my perspective on the table and to see his.”

Hodgett says Vogel Percy helped him be more explicit in explaining what he was doing and why.

“Vogel Percy effectively helped me in how to approach Peter [Clarke] and to broach issues with him,” Hodgett says. “It wasn’t as if we were not talking, but we were just missing the real meaning of what we were each saying.”

And having these discussions informally and sometimes out of theoffice also helped, they said.

“For other CEOs and Chairmen in the same position, you should not be afraid to get your view across but do it in a way that explains what you are trying to achieve,” Clarke says. “You need to develop the relationship so there is trust coming from both directions.”

Hodgett adds that what is obvious to one party may not be obvious to the other.

“Sometimes you need a third party as we did,” he says. “VogelPercy did a great job so don’t be afraid to use a third party if you need to. Fortunately VogelPercy were there for us at an early stage of our relationship. As a result we have been able to work together to build a robust business with a great culture and a focused strategy that’s ready for its next phase.”

VogelPercy e-news contains ideas from Australia’s foremost CEOs for navigating tough business terrains. It provides snapshots of authentic leadership experiences and succeeding in contemporary business. VogelPercy e-news is privately available to key members of the global business community. Contact Barbara Zarco at VogelPercy if you’d like your story featured.

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