October 27, 2014
Listed among Australia’s 100 wealthiest individuals
, Andrew Abercrombie was a commercial lawyer in the 1980s but quit when he turned 30, did an MBA at IMD
and then won and lost a great job on Wall Street. He returned to Australia and gained control of a group of insolvent companies including a startup, but broke, leasing company. It was the genesis of a business that now, two decades later, is listed on the Australian Stock Exchange and has a market capitalization of A$1.26 billion. Abercrombie also serves on a number of boards and is active in Australian politics.
IMD caught up with Abercrombie to discuss his career path.
IMD: How did your career take off?
I completed my MBA at IMD in 1988. I was offered a fantastic job on Wall Street, but unluckily for me 1989 was the last time the wheels fell off the global economy and I was retrenched before I started.
I was shattered at the time but it was a blessing a disguise in the sense that I returned to Australia and stumbled across a group of bankrupt companies including a failed startup finance company.
It is a long and complex story but I saw an opportunity, negotiated with the major creditor using my skills and my time – not cash – and took control of the group in January of 1992. It had a negative net worth of A$5 million.
I bought out a co-shareholder with private equity in 2002. I fired and replaced myself as CEO in 2003. In 2005 I bought back the private equity stake from the 2002 transaction. I continued as Executive Chairman until the IPO in December 2006, which listed the business on the Australian Stock Exchange with a market cap of A$440M. It continued to grow and peaked with a market cap of A$1.5 billion. It currently sits in the top 150 companies on the ASX. I am a non-executive director and the largest shareholder.
Whilst I remain engaged and intrigued with the business, I am now able to spend time doing other things. It is for that reason I became involved in politics in Australia. I contested a seat for the Federal Parliament as a matter of principle. I did not expect to win and I didn’t win, but it catapulted me into various offices in one of Australia’s two governing parties.
What prompted you to do an MBA at IMD?
I had a successful law practice in Australia, becoming a partner in my own firm at the age of 25. As I approached 30, I realized I didn’t want to spend a lifetime in law and regarded a good MBA as the best way to learn more and transition into investment banking.
IMD was a standout for me given that I was in the older cohort of applicants and the course was global and intense. I was so committed to IMD I didn’t apply for any other school.
Did you enjoy your time at IMD?
It was probably the best year of my life! It combined intense learning with meeting fantastic friends and partaking in serious partying all over Europe. We enjoy our reunions to this day; it was a very cohesive year.
How did your MBA shape your career path?
I learned new concepts that were fundamentally important to strengthen my foundation of commercial skills. I believe that the knowledge and experience I acquired at IMD gave me a subconscious sense of self-confidence that probably enhanced my inclination to take some risks based on my own ability.
There is no doubt that as the business grew and became more complex I would often have flashbacks to ideas or principles that I had learned at IMD - which all of a sudden became incredibly relevant and gave me a clue as to how I could address a challenge or problem. One of my IMD colleagues from Canada acted as my personal advisor when I transacted the IPO.
What are some valuable lessons that you have learned during your career and what advice would you give current MBA students?
The most important advice has to be when you get knocked down get up again. Lead from behind and surround yourself with people who are smarter than you – at least most of the time.
One of my criticisms of the MBA program when I completed it 25 years ago was insufficient focus on entrepreneurship. I gather that this has since been addressed and I encourage all graduates of IMD to recognize how fortunate they are in terms of the high standard of learning and intensity of experience they have had at IMD. This places IMD graduates head and shoulders above the crowd. Use your privilege with wisdom and humility carefully blended with ambition.