Tag: Club Structure

The Governance Model

Part 46 of 70 — Original Chapter: Chapter 13: Amalgamations Not Takeovers

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

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As the number of amalgamated clubs grew, a question that had been largely theoretical at the beginning of the strategy became increasingly important: how should a club spread across so many communities ultimately be governed?

In October 2001, when the Penrith Board asked management to suggest a structure of governance for the entire group, Cowan approached it from the point of view that Panthers had evolved into one club – one business – spread over many sites. On 23 October, he presented a paper to the Board setting out his views, and his recommendations.

I believed that any nine people – normal, reasonable, dedicated people – who could be elected to govern such a club would act in its best interest.  I did not see any reason to believe that a director appointed from Bathurst would be of any lesser quality than one appointed from Penrith.  My approach, therefore, was to have as much representation as possible from outside Penrith in the governing body, without making a Board that was cumbersome by its size. 

Having a spread of representation from all sites would display a commitment to the principle of amalgamation rather than takeover. In addition, it would ensure that every decision was argued from the point of view of benefiting the entire group rather than one of its sites.  My recommendation was therefore to have a nine-person board, to include three representatives from the Penrith club and a maximum of two from any other club. That would have ensured input to group policy by at least four out of the 14 sites, and possibly as many as seven.

All sites including Penrith would elect their own governing bodies to handle the local issues.

To my way of thinking Panthers was no longer a Penrith club. It was a NSW club with its largest branch and most of its administration at a Penrith headquarters, and other important branches in other areas of the state.

When Cowan put his group board model to the Board, it was met by hostility. He was accused of trying to ‘sell off’ Panthers to outside interests. John Bateman told the Inquiry the paper ‘set alarm bells ringing’. He said,

It was something that I didn’t agree with. We made it clear to management if we were going to go into amalgamation with other clubs, it was essential that the Penrith entity maintain control of the whole organisation.

But was that consistent with the Board’s earlier decisions?

This was moving the goalposts in the middle of the game.

Bateman was legally trained, and he had been party to all the discussions about the parameters within which management could pursue amalgamations.1 The Board had approved parameters that did not discriminate between members, no matter where they lived. The memoranda of understanding offered full membership rights to members of amalgamating clubs.

Evidence to the Inquiry revealed the viewpoint of some members of the Board. Asked what he saw as the threats in the amalgamation with ClubNova in Newcastle, Bateman admitted that some directors feared losing control of the organisation. When asked if that included the possibility that he could be voted off, he said yes, that that was the case.

Throughout the Inquiry, the Footy Five directors spoke of their desire to look after the interests of Club members.

On further questioning, however, they admit that the members they refer to were Penrith members. Evans even said that he did not believe that it was right that members of the amalgamating clubs should have the same rights as the Penrith members.2

But the Board set the policies, and all amalgamations were completed within those policies.3

Cowan saw the notion that he was ‘selling off’ Panthers as just another red herring. In his model, Penrith would still have had its own advisory board. It would retain its identity and its importance as the headquarters of the group.

Management had pursued the concept of amalgamations with great success. But it was such a success that those directors opposed to Cowan’s governance model came to a different view of what the amalgamation structure should be.

What they wanted was takeovers.

But by then the Club had agreed to amalgamations on terms agreed by the Board.

After the Board rejected Cowan’s group board model, he put a modified version to a subsequent meeting.

I still believed that the Board would be more productive if it had less Penrith people and more representation from the entire group. I thought the modified version might be seen as a suitable compromise although the principle was the same. 

Craig Terry became quite agitated and said something to the effect, “How dare you keep raising a suggestion that you know the board does not want to hear”. 

Imagine if the Board of Telstra or Microsoft decided to opt for a situation in which their CEO was restricted from telling them anything they didn’t want to hear.

We were back on the diving tower again.4

As the Club continued along the amalgamation path, the divide between management and some directors grew.

In Macquarie St in Sydney, Panthers’ amalgamation strategy was attracting attention.

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  1. Moreover, , as noted earlier, the Board required management to submit each individual amalgamation to the Board for approval.
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  2. The Temby Report subsequently found that concerns about the growing membership of amalgamated clubs included concerns among at least some existing directors about protecting their own positions. Temby also found that Cowan had been authorised by the Board to represent to members of amalgamating clubs that they would have the same entitlement as existing Penrith members, but that subsequent Board actions resulted in those promises being broken. See Inquiry In Relation To Penrith Rugby League Club Ltd — conducted by Ian Temby QC —Report, Chapter 4, Amalgamations, and Chapter 7, Voting Rights — Promises Made, Then Broken?.
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  3. The original manuscript continued here with a broader reflection on the different perspectives Cowan believed business people and politicians brought to decision-making. That section has been removed from the main narrative and is available in Beyond the Book: Politics, Business and Two Different Visions of Panthers.
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  4. The “diving tower” was introduce in Part 37 — The Myth of the Footy Five. ↩︎

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Commentary and Contributions

A Return to Two CEOs?

Part 41 of 70 — Original Chapter: Chapter 12: The Anti-Football Myth

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

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Cowan’s ‘hands on’ approach to rugby league saw him step into the role of rugby league CEO a number of times. He was involved in some monumental rugby league decisions in the club’s history, including engaging some very successful coaches.

Strangely though, he says his passion about rugby league resulted in him sometimes being less tolerant of people than he should have been. This brought him into conflict with people,

I should have been able to handle the rugby league issues better than I did. The number of people who think I was anti-rugby-league is an indication that I was not communicating well. There is plenty of evidence to show that I was passionate about having a successful team. But I resented seeing waste arising from irresponsible decisions.

I could also never cope with people who kept prattling on about the Club not putting enough money into rugby league to make it successful. To my way of thinking they were just ratbags who did not have the common sense to see that if we put unlimited money into rugby league it would only last a few years and then there would be none. To me all this was obvious. The most important thing was good management of the resources that we had, rather than having to spend our way out of trouble because of poor management. It frustrated me that some people just couldn’t see it, and there were probably many times I showed how I felt — which is not the way to win friends and influence…

But when people suggested initiatives that presented a chance to build success, I was never opposed to spending the money. On one occasion I had a call from rugby league commentator Frank Hyde, suggesting we consider getting players from South Africa. His rationale seemed very logical, and the idea looked promising. The Board agreed to my recommendation to try it, despite the expense.

FROM THE ARCHIVES
Looking Further Afield — Penrith’s South African Recruitment Mission
In 1972, a four-man Panthers delegation travelled to South Africa looking for players who might strengthen the struggling first-grade team. The venture became a rather more unusual recruitment story than that simple description suggests.
Read the original account

Another time Alan Clarkson told me of a terrific English player who would probably come to Australia if invited. His name was Bill Ashurst. I reached an agreement with Bill, and we agreed to pay a very large transfer fee to his club. When another club tried to get under our guard, we sent two directors to England to make sure we clinched the deal. The two directors rang from England saying that we could also get the English captain, Mick Stephenson, if we were willing to pay another large transfer fee. We paid record money for those players, and I supported it all the way. The success of those two choices is part of Panthers’ folklore.1

The fact is that I cannot recall one occasion when a request for money to fund a well-thought-out rugby league initiative was refused by the board or opposed by me. In addition to that, the criticism that I would not give rugby league enough money shows an ignorance of the procedure. The football club would present a budget to the board of the licensed club at the beginning of each season. On most occasions it was approved. But sometimes – and particularly in the Cartwright era – we would be confronted with a huge deficit at the end of the season, and that’s when I would go off my brain.

After ‘one board, one CEO’ became reality in 1984, Cowan led or participated in most of the important plans and decisions for coaching the Panthers.

The change was followed by a much more deliberate approach to football development. Among the initiatives was the Five-by-Five Plan, which set the ambitious goal of having five locally developed players representing Australia within five years. Within six years of the structural change, Penrith reached its first Grand Final; a year later, the Panthers won their first premiership.2

Those decisions also included included the eventual decision to replace Royce Simmons and the contract Cowan negotiated with John Lang, who would take the club to its second premiership. At this time Cowan had once again taken over responsibility for rugby league after a major restructure that saw most of the club’s rugby football staff depart, including rugby league CEO Mark Levy.

Although there had been a number of dramatic rugby league upheavals over the years, Cowan says that, until the Simmons episode, major changes had generally been made with minimal adverse publicity. He attributed much of that to the club’s participative approach to decision-making.

It all seemed to operate quite smoothly, and a lot of that could be attributed to our participative style of management. Any changes were thoroughly discussed and explored before they were made. For example, the final meeting with Ron Willey was preceded by a meeting of the rugby league chief executive and about six other managers. Their brief was to help me analyse the problem, and decide what should be done about it, and how adverse publicity could be avoided. The Board Executive was also brought in before any action was taken.

Similarly, the decision to join Super League followed months of analysis and discussion involving key staff and the Board.

Cowan strongly rejected claims that he ran the Club as a dictatorship.

He maintained that the five directors who later complained about his management had themselves participated for years in the Club’s consultative decision-making processes. His involvement in the departure of some high-profile rugby league personalities nevertheless provided further ammunition for his critics.

Around 1999, the Board began to become more directly involved in the management of rugby league — a development Cowan regarded as a backward step.

It started with a very simple request from the board that Simmons and Levy should attend the start of every second meeting to deliver a football report.

The Simmons/Levy visits soon moved beyond their rugby league reports. What had begun as a straightforward reporting arrangement gradually altered the decision-making structure. In Cowan’s view, it was a step back towards the arrangement of the Charlie Gibson years: one Board dealing directly with separate executives responsible for the registered club and rugby league.

It was a subtle shift away from the model of discussion and analysis that had operated for about fifteen years, towards more direct decision-making structure by the Board.

Cowan cites an example:

At one meeting, Simmons proposed a payment of $100,000 to a player who was exempted from the salary cap.  It took all of one minute for the Board to agree, despite a couple of strong dissenters.  Previously, something like this would have been analysed carefully by a team. Only then would it have been referred to the board. It was a very poor decision, and fortunately – because of other reasons – it did not happen.

A decision by the Board early in 2001 had massive repercussions.

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  1. More details on the Ashurst and Stephenson signings can be found in Beyond the Book: Looking Abroad — Bringing Stephenson and Ashurst To Penrith. ↩︎
  2. For more details on this see Beyond the Book — The 1983 Strategic Reset and its companiion post The 1983 Strategic Reset — Did it Work? ↩︎

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Commentary and Contributions

Education by Experience

A removed section from the original Chapter 9: An Urgent Need for Research and Change.

IN THE COURSE of more than a year and a half of research and writing for this book, I conducted a large number of interviews. For obvious reasons, more than one of those was with Roger Cowan. Many of our discussions focused on the way things were done at Panthers.

On one occasion, I asked a very specific question. How did that little club evolve into the half billion dollar enterprise that is Panthers today? What made the difference, what did he see as the most important parts of the management philosophy during his 40 years at the helm?

It was an important question, and he wanted plenty of time to consider. Eventually, we decided that it would work better if Roger answered it in his own words.

It is difficult to answer this question because 40 years is such a long time. Many changes have occurred along the way — in knowledge, attitudes, technology, even the way the industry is regulated. In the earlier days  I used a calculator for payroll.

To multiply by seven, for example, we turned a handle seven times. Accounting and stock control were all done manually. The management tools available today demand a much different approach to the use of management time and the expectations of administrative productivity. In many ways, management change has been driven by the changing environment.

The other difficulty I have in answering the question is that I was always inclined to try something new if it looked good. Some things were effective for a while, and made a significant difference at the time, but failed to see the long distance. Some became permanent influences and some failed completely. Some seem too small to mention, yet they held a lot of significance for me.

Applying a very strong filter, I came up with what I considered to be the three most important influences. I am sure it would be an interest­ing debate if members of our management teams were asked the same question. But there is a common thread that runs through the three I have chosen. Each one has quite a lot to do with the need to manage evolu­tionary change rather than merely cope with it. We tend to cope with the results of evolution in our private lives, but business requires a different level of thinking.

Thinking in Outcomes. The success of the human race has depended on the ability to take in information and make rapid decisions. Imagine if our hunter and gatherer forefathers had held meetings to evaluate the knowledge they had gleaned from their observations and then debated what action should be taken. They would have died of starvation or been eaten, and we would not be here to write about it. The natural decision making process for humans is still the same. Our senses collect informa­tion, feed it into our brains in an amazingly short time, and this central processor quickly decides on the options and tells us what to do. Just as well we have that power. You see a car hurtling towards you, out of control, and there is no time to hold a brain storming session to work out how to survive.

Quick thinking is important to us as individuals. My theory, though, is that when it becomes the predominant thinking style used in business, it is often inappropriate and can be downright dangerous. Looking back, I think I harped and nagged about this principle more than anything else in management meetings and training sessions. I was never better than partially successful. It is actually quite difficult to break out of the natural thinking style. It requires discipline and technique. And as soon as you relax the discipline, the natural way of thinking takes over again.

The difference between quick thinking and thinking in outcomes is demonstrated in the following example. The Security Manager puts a proposal to a meeting: there has been an increase in behaviour problems in the club, and the security staff should be increased to deal with the situation. Others in the meeting, respecting the expertise of the Security Manager and seeing the logic of his suggestion, support the proposal. The Finance Manager agrees that the extra cost is affordable. A quick vote and it is all done.

But someone skilled in Outcome Thinking says, “Hold up there. Let’s first agree on what we are trying to achieve. Is it just to cope with increased behaviour problems, or is there more to it?”

The best way to answer that question is by imagining another meeting, some point in the future -say three months ahead. You sit in that meeting, and ask, “What evidence can we find today that proves we made a great decision three months ago? Not just a good decision, but a great one?”

One person might say there are more people visiting the club now than there were three months ago. That proves it was a good decision. Another might suggest that the cost of security has decreased. Others might add that there are fewer incidents of bad behaviour now, the people causing the problems three months ago have gone, there have been no negative stories in the newspapers, and so on.

The challenge is now much different. It is no longer about coping with increased behaviour problems by increasing costs. A great decision would achieve fewer problems, less cost and increased patronage.

The most important debate is about what outcomes the group is willing to support, and what it believes it can achieve. They will usually be much more challenging than expected. When there is an agreed set of outcomes, the next challenge is to find every possible idea for achieving them. That then brings out the creativity in management and usually achieves a better result.

The number -and quality-of ideas might be surprising. In this case it might mean changing the entertainment mix, increasing public relations, zero tolerance in some issues, a different marketing approach, or any number of bright ideas that would never be raised in the quick decision scenario.

The point is that the natural process of quick decision making is the killer of creativity, and often provides solutions to the wrong problems.

Thinking in outcomes ensures that the best goals are set and that they will be creatively pursued. It also encourages creative opposition, and avoids the dangers of ‘groupthink’, where people tend to go along with each other because of respect for expertise or position.

In this situation, you are able to manage the thinking processes, rather than going along with nature.

Values, Beliefs and Culture. Our deep-seated beliefs and values are mostly developed in the very early years. Culture develops from experi­ences, and dictates how people treat each other and expect to be treated. The behaviour in an organisation is a reflection of its culture. The combined beliefs and values of the staff, managers, board, and custom­ers form a rich cultural soup that has to meet the needs of everybody. We see examples every day, and in every part of the world, of the enormous problems caused by clashes of culture, most of which can be traced back to differences in beliefs and values.

Beliefs and values are not impossible to manage. We cannot ask people to change what they believe or how they feel, but we can structure an organisation around the differences. Being aware of the differences allows us to manage them, and achieve a positive culture without the clashes.

Recognition and understanding of values was one of the topics of man­agement training at Panthers. There are many ways of finding out what drives people. When there is better understanding, people work together more harmoniously. There are some good programs and tests available, and most of them are interesting and non-threatening.

One important advantage of setting agreed outcomes is that they define what the group wants to own and achieve in working together. Where there are opposite values, the list will be more limited, but there will still be common purpose.

There is another element in play in the club industry – one that is much less likely to affect other businesses of similar sizes. There is a much stronger board influence on culture, varying significantly from one club to another. Some directors in some clubs enjoy socialising with staff, talking to them during breaks and even – in ways ranging from very subtle to quite demanding – interfering in the way they work. The impact on culture can be profound. Even worse, the influence can be difficult to see until it is entrenched and starts to show up in behaviour.

That is one of the good reasons for clearly separating the responsibili­ties of management from those of directors. A good culture is built on consistency —what is said and done has to be within consistent patterns and plans, and everyone has to be singing the same tune. A good management plan can easily be undermined, quite unknowingly, by directors getting too close to staff and not knowing what the tune is.

The cultures and sub-cultures throughout an organisation will affect the behaviour of people, their satisfaction and productivity. One important subculture is the relationship between board and management. It is the one most difficult to manage. Some of the chapters in this book spell out the type of problems that can arise when it is not well managed.

Panthers workshops involving both management and board always centred on strategic issues. If I had the time over, I would try to interest the directors in joining other workshops that focused on values and culture. In learning to recognise values and understand their impact, everyone could work together to build a shared vision about the cultural objectives of the business. It would not be an easy task, considering that directors often have many other commitments, and the difficulties in getting all the key players together for the time required, but it would be worthwhile.

Evolution and Revolution. Larry Greiner wrote of his theory in 1971, and it was almost 20 years before I discovered it. I wish I had studied it much earlier. It would have helped my understanding of periods of stag­nation and other difficulties.

When a business only has a few employees, the style of management is not as important. The entrepreneurial manager with one assistant and lots of subcontractors can be autocratic and successful. As a business grows and matures, it requires adjustment. Autocracy will not be as effec­tive in a business employing 3,000 people, where the best results come from communication, delegation, participation and good controls. That is not to deny that some successful larger companies are run in a very autocratic fashion. It simply says that Greiner’s research influenced his theory that growth should be handled differently.

There are several stages in the path from small to large, and from young to mature. The needs change through the range of creativity, direction, delegation,  co-ordination and collaboration, each one building on the previous phase. As the business evolves naturally through one stage, pressures start to build almost to bursting point. This causes its own crisis. It is a case of success creating its own problems.

Had I understood the principles much earlier, it would have allowed a smoother transition between the Club’s evolutionary phases. It would probably also have meant a quicker and more effective pathway to what I eventually hoped to achieve — on the democratic ideals of an organisation driven by principles of collaboration. In our case, it was probably more spectacularly noticeable because of the rapid growth of the business over a relatively short period.

Those three principles stand out in my mind because of the impact they had on my thinking. I was influenced about outcomes by reading a great little book on outcomes and performances in my first few years at the Club. I read a lot about culture and did some courses on values and beliefs. In everything you read, you will probably find some gem of wisdom that can improve how you do things. A chance meeting, a brief conversation, a quick word of advice – can plant the tiny seeds that grow into the ideas and concepts that become part of your life.

In my first year at the club I met a director of the City Tattersalls Club in Sydney. One of the things he said that struck a chord in me was that each of us is a totally different person in the eyes of every person who knows us. This had quite an impact on me. It changed not only the way I saw others, but also how I saw myself. We are many, many people living inside the same skin.

In my first year at the Club, I also received some advice from a man named Ken Charlton.

Ken had been a big name in rugby league in the 50s. Around the same time that I started with the Club, he was, if I remember correctly, working as a representative for one of the breweries. He seemed genuinely inter­ested in seeing me make a success of my radical move from teaching to club management. I came to respect him, and when we talked I listened carefully. He told me one day that it is much more effective to ask ques­tions than to make statements. It was simple advice that sounds no more than good common sense. I don’t think that either of us knew just how profound it was at the time. I had an amusing example of its power some years later.

The Club was in the middle of one if its extensions, and I was walking through the work area. We had employed a very clever air conditioning expert, and I wandered up and stood beside him – basically just for a chat. I had no idea at all of what he was doing. I have never been mechanically or technically intelligent. He was explaining some of the work, and I said, purely to show him that I was interested in what he was saying, “Why do we do it like that?”

He stopped for a minute, looked back at the job, and looked at me again. After a pause he said, “You know what? You’re right. That’s not the best way to do it. It would be better if I …

I had asked a dumb question, he mistakenly thought it was an intelligent observation and took it as a challenge to find a better way. Meanwhile, I stood there trying to look as if I really was intelligent. His final disillusionment might come if he reads this book.

But over the years I found that asking questions was important to culture as well as results. Imagine an assistant in the marketing depart­ment prepares a corporate design and presents it to the CEO for approval. The CEO could say, ‘No, I don’t like that. Change the red to purple and make the yellow stronger. Use upper case in the title.’ After the time and effort that has been put into that design, how does the assistant feel about that reaction?

What if the CEO asked questions instead? “Do YOU think the red sends out the message WE want? What if WE tried a bit of purple? How do YOU think that would go?” Plenty of YOU clarifies who still owns the project. Plenty of WE says we are here to work together and help each other.

Questions involving YOU and WE raise the odds in favour of a more motivated assistant, a higher degree of ownership of the design job – and a better design. It is the cultural difference between the organisation being driven autocratically from the top and people collaborating for a better result.

The three main issues I chose are closely linked. They are all about people. Setting outcomes before deciding what to do smooths out values and cultural differences. Some of the essential components of a good, productive culture are well constructed forward plans, logical decisions, and ownership of the plans by all who participated in their making. Outcomes thinking is an important tool.

In some ways the three concepts are a little idealistic. Despite the efforts of a committed management team, we never really reached our own measure of satisfactory. Some sections at Panthers were always closer than others, but we never stopped having to remind people to think in Outcomes. Culture was constantly on the agenda for testing, meas­uring and improvement. And having an organisation fully embrace the Greiner concept of Collaboration is a really challenging dream. Culture and decision-making work in a similar way to systems in a business. Without constant review and discipline, they gradually revert to chaos. What is certain, though, is that we were much closer to those ideals than we would have been had we not been conscious of them, and committed as a team to their pursuit.

Related Topics

Related Themes

Club Structure · Culture

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The System is the Solution

Part 28 of 70 — Original Chapter: Chapter 9: An Urgent Need for Research and Change

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

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In 1991, Glenn Matthews decided that he wanted one day to be CEO of Panthers. He says that while he was never promised the job, he was always given enormous encouragement and support in his growth with the company. ‘There’s always been an atmosphere of “anything’s possible” at Panthers’, he says. ‘It’s an environment that nurtures self- belief.’

When Roger Cowan retired in 2005, Glenn Matthews was able to step comfortably into the position of CEO.

The flat structure replaced the ‘us and them’ culture that still existed in some sections of the Club, with an atmosphere of co-operation — both within each business unit and between team leaders. Glenn Matthews says,

‘Teamwork is important and you need to be comfortable with ambiguity. You need to be able to say to yourself, this is my role, but it might work better if someone else comes to assist me with this. Also, if you see something that needs to be done, and it’s not in your area, do it. But the people in that department also need to accept that and not feel threatened.

The leaders of the new small business groups had stepped into a whole new world, according to Bob Adamson.

We’d taken a bunch of young, enthusiastic, energetic supervisors who were now leading a team. We then had to start training those people, to give them some business acumen, and the skills to run a business. So we framed a scheme called Business Unit Development. We ran that for eight or nine months, took every group through it. There were regular sessions, and each of the team leaders brought along different members of their teams each time.

But it was much more complicated than that. There always seemed to be another step to take. We were never satisfied. The overall structure had to support what we were doing. We regularly held one or two day workshops to go over it all and do some fine tuning or make changes. If we brought another book into our management library we would discuss how it might add improvements. For example, The Empty Raincoat by Charles Handy inspired some change in our attitudes, so we looked at other books he had written.

Panthers was probably the first registered club to embrace official quality assurance, moving towards ISO 9000 accreditation with Standards Australia. The incentive increased when the NSW government’s purchasing arm let it be known that the Government would only deal with companies that had qualified through ISO 9000.

Since the move to Mulgoa Road, with its new space and improved facilities, the conference and banquet business had become a lucrative part of club activity. Panthers’ thinking was that there would be very few others in the conference business that would go to the trouble and expense involved in quality accreditation, so there would be significant commercial benefit in taking it forward. Eventually, after management compared the annual expense of Standards Australia re-auditing to the commercial return, it decided not to proceed with the accreditation. However, they elected to retain the stringent quality control measures and systems that were part of the process.

We removed a few items that were there to make it easy for Standards Australia to audit a company, but left the rest in place. We felt we were in a good position to take advantage of the valuable tools in such a system, but without spending the money.

People have asked, what’s the point of having all these systems when we’re a service industry? Much of what we sell is intangible — so how can we monitor the quality? Basically, the general idea of all that documentation is that we can look at our customer — whether it’s an internal or external customer — and ask ourselves, what does this customer want from us? Is it good entertainment? A comfortable environment? Good food? Or just excellent service? Having identified that, then in the preparation of that product, we have to ask “what does ‘good’ look like?” And if we can define what good looks like, we have to write it down so that everybody knows. When a keg of beer is delivered to the dock, how do we guarantee its quality from the time it arrives till the time it’s poured into a glass? There has to be a system in place to ensure the quality through all the stages. The same applies to a leg of lamb. Who ordered it, was it from the right supplier, what did we do with it when it got here, did we store it properly, did we cook it properly, serve it properly — slice it, put it on a plate, present it to the customer?

Adamson recalls that some people, particularly those who saw themselves in creative roles, found it hard to embrace the concept of systems written down to do everything. He gave an experience with a chef as an example.

I asked him, ‘What goes wrong most in the kitchen?’ ‘Well, we don’t get the right information from the people in the functions department.’

So, if we could fix that by putting a system in place that ensured that you did get the right information, that would give you more time, less stress, to get on with being creative in the kitchen? Once we identified the quality control that was most important to the chef, it was simple to get his commitment.

If you have all the basic mechanisms in place, that leaves the creative person free to be creative.

Peter Sheridan is Panthers’ Group Internal Auditor.1 He began work in the early 90s, and was very impressed with the systems that were in place when he arrived.

There was a quality system that documented all the policies and procedures for the majority of operational areas. This is very important from an auditor’s perspective, because you have something to audit against — that’s the standard. You can easily see how a department is performing against that standard. It was a very different environment, and a different culture from other places that I’d worked. Most of my experience had been with large corporations or government departments which were much more regimented. I hadn’t worked in a flattened organisation before, but there were still policies and procedures in place to temper that and make it easy to adapt to.

I came to the club soon after the structural changes, into what was now a decentralised organisation. When an organisation goes flat, a lot of the normal controls can get a bit wishy-washy. I believe that Roger foresaw this and decided to put something in place to temper any falling down in controls. It would give them a way of monitoring the functions to see that the business controls remained in place, allow them to keep an eye on things.

Cowan’s motives in appointing an internal auditor were exactly as Sheridan said.

I was concerned about the tendency for good systems to degenerate into chaos if not constantly checked. People look for short cuts and sometimes they even think they are making improvements, but they are not seeing the full picture.

A small change by one person, then another one by a different person, a bit later a slight improvement by someone else, and after a few months the system is nothing like what was intended.

We were still working to overcome some significant problems brought about through rapid growth and I could not afford to have systems deviating from the plan.

When I appointed Peter Sheridan, he was given authority to look into every nook and cranny.

Panthers was probably the first club to appoint an auditor as a permanent member of staff. The internal auditor had the authority to investigate any matter that came to his attention except one. There was an agreement that all management salaries would be confidential, known only to the executive of the Board and the external auditors.2 On Cowan’s recommendation, the Club also implemented a Board Audit Committee in 1997, although there is no regulation under corporate law requiring it.

It was also the first club to implement total quality management systems. The results are evident in the recognition it receives through awards and government subsidies in such areas as energy and risk management.

Over the ten years leading up to the interview with Glenn Matthews for this publication, the Club has been looking at the possibility of having its own property trust. Management had presented a number of papers to the Board advocating such a move, but a company needs to have substantial financial resources to pursue the concept.

The timing is now right for us. The experts tell us that the critical mass is a total property value of $200 million, so at more than $500 million, we’re now in a great position. Our assets grew as a result of strict governance policies over the years, and our very successful amalgamation strategy. Major companies like Woolworths and Bunnings all invest in property trusts.

In 2006, the Board and the members approved a proposal for the management to begin pursuing such a venture. Matthews says the Club will always retain at least 51 per cent interest in any trust, but it will open up enormous opportunities for the company and its 14 properties. It will enable Panthers to convert part of its equity in property into working capital.

It’s another transition for the small business that Roger Cowan took on in 1965, and left forty years later, which is now positioned to take its place as one of Australia’s leading property trusts.

It almost lost that chance. At one stage the Club was on the brink of losing half the potential of the property trust. The amalgamation story involves allegations of management lies, broken promises, back door takeover fears and preservation of power bases. The ensuing conflict could have put a very large part of that future value at risk.

In a way, the ailment began with the fiery difference of opinion discussed in the next chapter – the possibility of a rugby league merger between Parramatta and Penrith.

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  1. Peter Sheridan left Panthers in the early 2010s.
    ↩︎
  2. The exception that prevented the Internal Auditor from having access to management salaries was driven by the same respect for confidentiality that would become significant in later controversy. ↩︎

← Part 27 · All Parts · Part 29→

Commentary and Contributions

From Left Field

Part 27 of 70 — Original Chapter: Chapter 9: An Urgent Need for Research and Change

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

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Norm Bowers1 had been a close friend of Cowan’s for twenty years. He ran a small but extremely successful coaching school in Sydney. The results he has achieved for students in the Higher School Certificate have been extraordinary. He also coached university students.

Cowan phoned him.

Norm, I need help to put some concepts together, research the latest information on management and communicate it to all the key staff so that I can implement change. Do you have two tutors you could lend me for six months? I think I can finish it in that time and you can have them back again. They don’t need to know anything at all about club management. In fact, it would be an advantage if they didn’t. I want fresh minds and fresh approaches. But they have to be quick learners and good, logical thinkers who can analyse concepts.

Norm’s reply was that he had two very good tutors he was prepared to lend. One of his suggestions was Max Cowan, Roger’s son, who was coaching university students in statistics. Cowan had no doubt about Max’s ability to do the job but was reluctant. He had always avoided employing family in the club. But the need was greater than the principle and Max started2 with Joel Dehe, another tutor with academic research experience and a creative bent.

Behind this seemingly straightforward appointment lay a series of private events that profoundly shaped 1991 for Roger Cowan and his family. See: Reflections — Shadows Behind the Story.

The collation of information, theories and ideas propagated by the gurus of the day was one part of the job. Testing the best parts of them against what Cowan believed would fit into the Panthers environment was the more difficult part.

In 1991, he came across The E-Myth by Michael E Gerber. It was primarily aimed at small business, but as it turned out, it was what was needed.

W Edwards Deming, the author of Out of the Crisis, was another big influence on the developing picture. His major focus was on quality, change and the ability to embrace a new philosophy.

Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment.

He said that a business must ‘cease dependence on inspection to achieve quality’. It must be built into the product in the first place. The system of production and service needs to be constantly improved to ensure quality.

Both books talked about systems, but from a different perspective. And both became a part of the Panthers ethos in the early 90s.

The theories of Charles Handy who wrote The Empty Raincoat seemed to be an excellent fit for the next stage of evolution according to Greiner and had a significant influence on modifications to the cultural objectives.

When interviewed, Bob Adamson was the CEO of Panthers ClubNova in Newcastle. In 1991, he arrived at Panthers – newly out of the military – in the midst of a period of great change. The frenzy for seeking change was in full swing, and Adamson says it was a very stimulating environment.

Adamson began with the club in a middle management role as maintenance manager. But he had skills and experience that would be needed in the transformation of the business, and his role would soon grow.

We were doing a lot of work on the evolution, revolution thinking at the time, and what came out of that was that we were not one big business. We were a collection of small businesses, and we had a hierarchical structure that may not have been working for us. It had become too bureaucratic and had lost that fast moving dynamism of small businesses with just a few employees. Greiner talked about finding the solutions to each of those revolutions, and we began to start thinking about having someone to lead each of those sections. The emphasis was on leadership and the leaders would be responsible for their own small business – say, a bar or a restaurant. They would be like a number of little shops in one big shopping centre

Such a dramatic restructure meant the elimination of whole levels of middle management, including Adamson’s own position. He says that this group was largely redeployed into other areas.

Steve Van Zwieten is another Panthers CEO who came up through the ranks. He started in 1988 as what was then a ‘bouncer’, but he came with some innovative ideas about what the role of security personnel should be. Within the nurturing Panthers environment he was quickly able to move into the position of security manager. He is now the chief executive of the Penrith site.3 He recalls the restructuring period:

It was a shock to some people. We certainly had a hierarchy there, and there were too many layers of management. I think that one of Roger’s strengths is that he can see things before others see them. So he was always out in front, looking at the business and saying, “now’s the time for change“.

Panthers Group General Manager, Glenn Matthews, agrees.4 He started as an assistant accountant in 1984 and says that some people thrived under the new flattened structure, while others did not.

Matthews came to Penrith Rugby League Club with a personal belief that an employee shouldn’t stay in the one place for more than five years. ‘That belief hasn’t changed,’ he says. ‘But every time I thought about that, there was another opportunity.’

I’ve been really lucky over the years, seeing the organisation grow, and having the opportunity to venture anywhere that you wanted to have a go at. While I was financial controller, I also managed the ski park for a period. I spent a year in marketing at another time. All this gave me an opportunity to see all the facets of the business. So while I’ve been here a long time, it doesn’t seem that long because the role changed and evolved so much.

The period in marketing was typical of the entrepreneurial spirit in the club at that time. Roger wanted a strong focus on creativity and he selected a team to work together closely and do whatever they thought appropriate to come up with ideas and strategies to grow the business and to make recommendations to the full management team. The team had a good balance. I came from the financial side, Peter Morath had a catering background, and Tony Lackey was a creative thinker.  Max Cowan was a good mathematician and had been involved in all the research for restructure of the business and change implementation. We worked really well together.

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  1. Norm Bowers passed away in 2013, aged 84. He was a unique character – he and Roger were very close. Norm is the father of Steve Bowers who plays a critical role in this history. ↩︎
  2. This engagement was considerably more complex than appears here. One of the complexities came from Cowan’s principle about not employing relations. In an unusual step for an unusual circumstance he sought Board approval for Max’s appointment – approval was unanimous. For more on the events surrounding this move see Beyond the Book — Reflections — Shadows Behind the Story. ↩︎
  3. Steve Van Zwieten left Panthers in 2006. He is now Managing Director of Exact Security, a successful security services company started by him and Roger Cowan in 2009. ↩︎
  4. Glenn Matthews left Panthers in 2010. He is now CEO of the Australian Racing Drivers’ Club. ↩︎

← Part 26 · All Parts · Part 28→

Commentary and Contributions

Evolution Then Revolution … And Repeat.

Part 26 of 70 — Original Chapter: Chapter 9: An Urgent Need for Research and Change

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

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Growth is not always smooth. There are so many roads that must be paved and most of them start as rough tracks. A good management team seeks improvements continually, every day. Some aspects of the business are given priority; others are set aside until there is time. It is never finished, and it is never perfect. 

One of the biggest milestones in the history of the Penrith Leagues Club was the relocation to its new site on Mulgoa Road in 1984. In the years immediately following the move, the club experienced phenomenal growth.

The growth rate had been consistent from the time that Cowan started as manager in 1965. There were some flat spots, and a few years of concern about lower-than-expected profit levels, but they had always been able to overcome them.

In the years after the purchase of the property in 1971, they had spent vast amounts of time planning the transfer from Station St to Mulgoa Rd. When they left the old Station Street premises in April 1984, Panthers had about 200 employees and annual sales income of around $12 million.

The success of the intensive preparation for the move was certainly reflected in the sales. In the first year, sales increased to $16 million, and staff numbers jumped to 300. Most of the systems that had been in place in Station Street
were easily transferred. Despite the issues raised due to Mulgoa Rd being a much bigger building, by and large, the transfer went smoothly.

What they had not anticipated in all the forward planning was the rate of growth.

Within four years, annual sales more than quadrupled, to $65 million. The Club now had 850 staff. Cowan remembers it was an exciting time.

Everyone was highly motivated. It was one of the most enjoyable periods I remember. The new location was successful beyond our hopes. For years we had listened to the knockers saying what a bad move it was, and that our Station Street customers would not follow us that far out of town. 1984 was also a year of significant personal satisfaction. It was the first year of a new administration system for rugby league.1 We narrowly missed the final series that year but made it in ‘85.

Amidst the euphoria there were problems behind the scenes. Apart from a split in the Board and the stress of the misguided police investigation, there was something the matter with the business.

The fact was that while sales were going up, profit was going down. So, something was wrong. It should have been basic maths. Increasing sales, if managed properly, should lead to more profit, but that was just not happening. For more than twenty years we had been managing growth successfully, so what was different now?

In 1990, a chance discussion, a painful back and the Panther’s first grand final combined in a way that would lead to a dramatic change in the management style at Panthers. It would also lay the foundations that have allowed the company to move well beyond what most people ever envisaged.

David O’Keeffe was CEO of the Penrith Lakes Development and a very experienced administrator. He and Cowan were attending a function and their conversation got around to the club. O’Keeffe talked about its growth and asked about the number of employees. When told the staff had grown to 850, he said to Cowan, ‘I’ll bet you are having trouble keeping your thumbs on all of that.’ ‘Unbelievable difficulty’, was Cowan’s response.

‘I’ll send you something that will explain why you are having difficulties’, O’Keeffe promised.

The next day Cowan received an article entitled Evolution and Revolution as Organisations Grow, published by Harvard University and written by Larry E Greiner in 1972.

1990 was our first year in a rugby league grand final. We were to play Canberra on the Sunday afternoon, and coach Phil Gould decided to take the players to Sydney on Saturday and stay overnight. It was one of the times when I was CEO of both organisations and Phil asked me to join them.

For several weeks I had been suffering from a back problem that was giving me pain right down one arm. I had been having physiotherapy, but nothing was working. On Saturday afternoon the pain was driving me crazy. Instead of joining the players for dinner, I decided to go to bed and see if rest would help. I had brought a copy of the Greiner article with me and it was a good chance to read it carefully.

The article explains five evolutionary phases in the growth of an organisation. Greiner says that moving from one phase into the next is never smooth. Each transition is a revolutionary stage with periods of crisis that must be managed and overcome.

Cowan realised that Panthers had already been through some of those evolutionary phases, and had been able to solve some of the revolution crises as they arose. He found himself remembering periods when growth seemed to stall, followed by a struggle to find solutions. Then the feeling that there was a sudden breaking of the chains that were holding the club down, followed by another period of smooth growth.

Somehow the management team had made the right cultural and structural adjustments to get over each hurdle.

Greiner advises that the critical task for management in each revolutionary period is to find a new set of practices. They must then become the basis for managing the next period of evolutionary growth. He warns that many companies fail during the periods of crisis. Companies that are unable to abandon past practices and effect major organisational changes will either level off in their growth rates, or fold.

Reading the article was one of those ‘Aha!’ experiences for Cowan. He was now understanding things that he had never even considered before.

Readers interested in the management theory that produced this moment of insight can explore it further in the accompanying Beyond the Book article, The Article That Changed Panthers’ Thinking.

I suddenly began to see that the Panthers business employing 850 people with sales of $65 million was not a bigger business than the Panthers with 300 employees and sales of $16 million. It was a different business. Systems and management styles that worked for one would not necessarily work for the other. We had to change. We were in one of Greiner’s periods of crisis. Methodologies that had achieved growth in the past had to be re-examined, to see if they would continue to be effective.

That article had more effect on my attitudes towards management than anything else I ever read. It made me realise that I did not know enough to get Panthers through its crisis. I had been operating on the false premise that what we had done in the past would be suitable for the future. It set me off on a discovery path. I read voraciously until I had a picture in my mind of the new direction.

Introducing change is difficult and takes a long time. It causes tension in the organisation. Some find it difficult, even impossible, to adapt. But from that point we were a different organisation, constantly looking for change. We became students of authors on management, and devoted students of a few of them.

It all started with a rugby league grand final and that casual conversation. Strange to say, there was a medical lesson in it for me, too.

We returned to Panthers as losers of our first grand final, but to a heroes’ welcome. The club was packed to the rafters.  The celebrations continued right through the night and I probably had a bit too much to drink. By the time I got to bed, the sun was way up and the pain in my arm and shoulder was gone. It did not return. It seems that I was tensing my back to compensate for the pain, which just made it worse. The total relaxation of that celebration let muscles, tendons, and everything else slip into their rightful places and I was cured. That’s my theory anyway! Had I listened to earlier advice to take painkillers, I might have been fixed much sooner.

The Greiner theory placed Panthers in the revolutionary stage he called “Red Tape”, when bureaucratic needs start to take precedence, dominating decision making and slowing down progress. The next evolutionary stage should be growth through collaboration requiring a high level of democratic management, combining teams across functions, flexibility of teams, frequent conferences of key personnel, educational programs, and more. Moving from one stage to the next was the challenge.

The Greiner article was just the tip of the iceberg for Cowan. Now he was on a mission of discovery.

He had always been a reader of books and articles on management theory, but it was done as an interest without any pressure other than to absorb any good ideas he found. Now he felt it was a matter of urgency. He was missing something, and he had to find it.

At that time, he was President of the Registered Clubs of NSW and Chairman of the Licensed Clubs of Australia. Once a month he had to attend meetings on the mornings of three consecutive days and stayed in a self-contained unit in Sydney. He remembers having books spread all over the floor of the living room, cross referencing notes on what might be applicable in a restructure of Panthers.

As the big picture started to take shape, Cowan saw another obstacle. The ideas had to be compiled into a coherent form, communicated to managers, and then filtered through the staff. Implementing change was no small order, even if the changes themselves had been simple. And the big picture in Cowan’s mind was far from simple. He needed help of an unusual kind.

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  1. The change to rugby league management structure is covered in Part 21 — The Right Structure. Finally! ↩︎

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Commentary and Contributions

The First Shot at Phyro

Part 23 of 70 — Original Chapter: Chapter 8: A Taste of Injustice

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

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The first few questions of the interview, led by Detective-sergeant Mick Howe, implied that Phyro Holdings1 was acting fraudulently, secretly, and without the knowledge of the Board. This complaint seemed of great interest to the fraud squad officer.

Cowan explained that Phyro was his family company, and it had a contract to provide certain services to the club. He reached into his desk drawer and handed over a contract. Some minutes passed as they went through the document. The fraud squad detective paused and drew Howe’s attention to one specific part on the last page of the contract. They both seemed surprised, and a quick look passed between them.

The fraud squad officer asked Cowan a few more questions, then made to leave. He said to Cowan,

I’ve heard enough. Mick might want to ask a few questions about some other matters, but I don’t need to be involved any further.

And he left the office.

Cowan says it took him a while to catch on to what had happened to cause the quick exit by the fraud squad officer.

That night I was lying in bed still trying to figure it out. What was in the contract that was such a surprise? They had not reacted until they reached the end of it. What was on the last page? Suddenly it hit me. The only thing on that page was the signatures of the parties to the agreement! Why would those signatures surprise them? Certainly, there was no surprise in mine being there, so it must have been one of the others.

It could only mean that the person who signed the letter of complaint to the Assistant Commissioner must have been the same person who had signed the Phyro contract. The person who wrote that the Board knew nothing of Phyro had actually signed the Phyro contract. No wonder the fraud squad detective signed himself off the case so quickly.2

The detectives had also told him that the informant was someone who was seen by the police as highly credible. A director who was a long-standing ex-chairman would certainly fill that description.

The letter of complaint has never been seen by any officer of the club, so its contents — and its signatory — can only be assumed. Whatever was in it, however, had brought large numbers of police and government officers on the Club. To prompt such strong action, the allegations must have led them to suspect dishonesty and breaches of the Registered Clubs Act.

What really bothers me about this affair is that the first part of the complaint had been discredited in the first half hour of the interview. The fraud squad officer acted accordingly. He was not wasting any more time once he saw that the complaint was flawed. 

But Mick Howe was not so easily satisfied.

Current group chairman Barry Walsh3 was a director in 1985. He says it was the big topic of conversation around Penrith that the detective was after Cowan, and he was a very determined man.

‘But Phyro was no secret anyway’, says Walsh. It just wasn’t a big deal for anybody.’

Phil Bennett agrees with Barry Walsh that Phyro’s role and ownership were no secret. He says the investigative accountants went through everything at the time of the investigations.

I think one of them stayed on after the rest of us left. At that time Phyro Holdings was common knowledge. You would always read in the annual report, stuff about Phyro owning certain property.

Bennett points out that the name is “obviously compounded from Phyllis and Roger”.

Cowan remembers the several months of continuous inquiry as one of the most stressful periods he has ever experienced. The investigation itself was not a problem, he says, it was the rumours of Howe’s determination to ‘get him’.

The rumours were strong that Mick Howe had stated that he did not like Panthers, did not like me, and was confident he would find incriminating evidence. At that stage we were already a big organisation, with 850 employees.  It is easy to make mistakes running a business that size. We had good systems in place, but there was always the fear that there might be something wrong that I knew nothing about, and it would be used against me.

I had that constant feeling of being in deadly competition with a well-armed predator and I was the defenceless prey. The hunter had all the time and resources he wanted, and he could attack from any angle. I had two choices, stand out in the open and let him see every side of the target, or go into defence mode by employing a good legal advisor.

I had chosen to stand out in the open. With the benefit of hindsight, it was a dumb move on my part.4

Barry Hubbard was also a director at the time of the police raid. He says everybody was feeling the pressures of Howe’s campaign.

Roger wondered if someone in the club was ‘talking’ to the police and giving them information. He went to each of the directors and asked us.

‘I told him “no”’, says Hubbard. But he was upset by the question.

I said, “Roger, if I knew of anything illegal that was going on in this club, I would first take it to the Board, and if nothing was done, only then would I go to the police”.

Hubbard says that around the time of the licensing raid, he was also questioned by a Penrith detective about a house he had bought from the club. The detective suggested that he had bought the house for nothing, or at a token fee. It was a ridiculous claim, says Hubbard, and he was easily able to prove that he’d paid the right amount for the house.

The same policeman later got in touch with him, asking did he know of anything dishonest that was going on in the club, and suggesting that he keep his eyes open. Hubbard assured him there was nothing, but the calls continued over the next couple of months, asking the same questions.

I wrote to the detective, telling him what I had told Roger. If I knew of anything untoward in the club, it would go straight to the board. If they did nothing, I would take it to the police. I also asked him to stop calling me.

For directors such as Hubbard, the repeated approaches from Howe and his colleagues reinforced the impression that the investigation was not winding down, despite the failure of the original allegations.

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  1. Phyro Holdings Pty Ltd is the family company of Roger & Phyllis Cowan contracted to Penrith Rugby League Club Ltd to supply various services including the publications of The Panthers Magazine.
    ↩︎
  2. Some 20 years later this scenario was replicated. Directors or former directors publicly asserting they had no knowledge of Phyro Holdings and the slipping on their story, showing they must have had knowledge. The final “slip-up” was during the Temby Inquiry when testimony by a former director in one session was recanted the next morning for fear of being in contempt.
    ↩︎
  3. Barry Walsh was appointed Chairman when Leo Armstrong retired, and he held that position until 2009 when Don Feltis took the Chair.
    ↩︎
  4. This approach was not unusual for Cowan, his belief that it was besst to be very open with investigators was considered naive by many colleagues and supporters of Cowan’s. Many saw it as a weakness that made him vulnerable to being ambushed. ↩︎

← Part 22 · All Parts · Part 24→

Commentary and Contributions

The Right Structure. Finally!

Part 21 of 70 — Original Chapter: Chapter 7: The 16 Year Struggle to Streamline Rugby League

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

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The structural compromise — two CEOs answering to a single board — had not resolved the underlying problems. If anything, it had deepened them. By the early 1980s, the consequences were becoming impossible to ignore — both on and off the field.

The Gibson years saw the Penrith football team continue its sad record of recent times. The club was putting major resources into building the new premises, and there was criticism that the team’s rugby league performance was a direct reflection of that spending.

In their 1992 book Bound for Glory, Greg Pritchard and Gary Lester tell of that period. They quote 1980-81 coach, Len Stacker, as saying that rugby league funds had been frozen before the 1981 season, although this has been disputed by Roger Cowan. Stacker also said he had been forced to bring in some ‘blokes from the bush’ to prop up the numbers. One of these bush blokes turned out to be Royce Simmons, the hero of Penrith’s first premiership and the city’s favourite son.

Also playing for Penrith at the time was Tim Sheens. He had finished 1982 with the club record for the number of games played (166) and was looking forward to the season. Gibson went off on his Kangaroo tour, telling Sheens he would talk to him when he came back.

When Gibson returned, Sheens went to his office to see him. Gibson told him that there was no point in even sitting down. The club had overspent and there was no room for Sheens, who was dropped from the team. Instead, they had signed Tony D’Arcy, a rugby union international, at almost twice the salary of Penrith’s highest paid player. D’Arcy was never to play a first-grade game for Penrith.

By the end of 1983, the football club reached its lowest level yet. It finished close to the bottom of the competition, it had only two players on contract for the following year, and it had no coach.

Even Royce Simmons has said he seriously considered leaving the club at the end of 1983. Community support had dropped along with the team’s performance, resulting in an income shortfall. An injection of funds was urgently needed, but the club was being held on a tight budget. The club under construction over on the Mulgoa Road property incurred significant cost  increases, causing anxious moments in management and at the bank.

The dismal prospects now facing the football team were enough to convince the Board. It finally voted to put rugby league back under the control of Roger Cowan. Gibson left soon after and successfully sued the club for wrongful dismissal. Keith Rhind, when he took the chairman’s seat, had formed a close friendship with Gibson but he would ultimately be instrumental in Gibson’s departure from the club.

 ‘It was one of the worst periods in my life’, he says, ‘and it still upsets me to think about it.’ 

When it came to the vote that would ultimately oust Charlie, it was four all and I had the casting vote. But I had been put in an impossible position. Whichever way I went, I was going to lose friends, but I knew that things couldn’t continue the way they were. I did what I believed was best for the club and voted to move the responsibility for rugby league to the licensed club management.

When it came to the vote that would ultimately oust Charlie, it was four all and I had the casting vote. But I had been put in an impossible position. Whichever way I went, I was going to lose friends, but I knew that things couldn’t continue the way they were. I did what I believed was best for the club and voted to move the responsibility for rugby league to the licensed club management.

The board decided that Cowan’s role would be expanded to include both the licensed club and the rugby league club, and his contract was changed again by mutual agreement. There would be one board of directors and one chief executive of the entire organisation.1 It was the model that Cowan had been advocating for so many years.

After a decade of advocating change, Cowan now had the chance to prove the model that he had recommended. But he had a massive job ahead of him. Three years of compromise had put the club into a weak position. It had money problems, no coach and hardly any players.

He attacked the problem using a tactic that had proved successful within the licensed club. The think-tank-style brainstorming sessions had produced many good ideas for the business, so he decided to carry it through in his new role.

At the end of 1983, he invited a large number of key stakeholders to attend workshops at the Club. The objective was to bring together the people who had an interest, or who would benefit from a successful, competitive rugby league team. There were directors and players, club officials and some former players, representatives from the media and local businesses, even some politicians. The junior league and school rugby league were also well represented. He told them they had to take ownership of the problems, and find solutions they could all support.2

The workshops were facilitated by Cowan. Despite the gloomy outlook, there was a great deal of enthusiasm and a commitment to succeed irrespective of obstacles.

Again, the results would be positive – this time for rugby league in the district.

There had never been a state or Australian representative player from the Penrith Junior District. Arising from the workshop, the Five by Five Committee was formed. Its goal was to develop five representative players in five years – and it succeeded.

The schools and junior league forged closer relationships, and ideas came up for a stronger junior competition. Profiles of coaches were drawn up. But the most important outcome was a greater feeling of ownership and sharing of the problems throughout the community.

Tim Sheens attended the workshops, but he had a family commitment and left early. Cowan says he had been most impressed by Sheens’ contribution to the workshops and by his strong sense of loyalty to Penrith. Much of the discussion had centred on the type of coach they would need. Sheens had presented strong ideas about coaching and players – and about club management.

It became clear to Cowan that Sheens would be the ideal coach for Penrith. When he discussed his thoughts with some close associates, he found that they had been equally impressed.

When Cowan contacted Sheens, he discovered he was too late. He and wife Rhonda were moving to North Queensland. They had sold their furniture and were ready to leave within days. Further meetings followed, including a momentous dinner with the couple. By the end of the night, both could see the opportunity.

Rhonda Sheens encouraged her husband to take up the challenge. It was a big decision for her — she had been looking forward to a move back to Queensland to be closer to her family. Tim Sheens became the first grade coach, and agreed to also take on some management duties, including recruitment of players.

In his first year, Penrith missed the play-offs by a whisker.  In 1985 Sheens guided the club to its first ever semi-final appearance.

For the following 15 years, the model stood firm. The board set all policy for the entire club including rugby league, and achieving that policy was the responsibility of one person, the CEO of the group. At times Cowan would take on the role of rugby league chief executive. He would have a manager looking after day-to-day issues, but be personally responsible for higher level decisions.

I really enjoyed that role, but when someone was doing a good job – Don Feltis and Mark Levy for instance – I promoted them to the top football position.

The reform had gone beyond the CEO and board — it now meant one management team working in harmony for the betterment of every part of Panthers. The catering manager was now just as likely to have input into rugby league strategies, as the rugby league CEO might have into staff motivation principles for the bars.

But even though Cowan had achieved the goal of ‘one board, one CEO’ at the end of 1983, the Board remained precariously balanced.

A spur of the moment decision by Cowan and Armstrong after a football game at the end of the 1984 season was enough to tip the balance, and almost put Hewett back in the chair. More importantly, it would put some events in motion that led to two police raids on Panthers.

The record books also show that from the time the model was implemented in 1984, there was a marked improvement on the rugby league side. In 1985 the first grade side made the semi-finals and in 1988, they lost a play-off for fifth place. In 1989 they made the finals. In 1990 they were grand finalists and in 1991 the Panthers won the trophy.

The success was not only on the scoreboard. A new sponsorship scheme with the Penrith Star newspaper began to ease the financial burden on the registered club. As the performance of the team improved, crowds began to pick up, which also had an impact on the bottom line.

Tim Sheens stayed until 1987, to be replaced by veteran coach, Ron Willey. Willey’s unorthodox methods led to unresolvable problems with the players, and Cowan negotiated a resignation settlement with him. In late 1989, Cowan and football chief executive Ross Gigg were able to recruit Phil Gould. Gould, who had begun his playing career with Panthers, had coached Canterbury to a premiership in 1988. After losing the grand final to Canberra in 1990, Gould steered the Panthers to their first premiership a year later.

In 1984, the same year that the new management model for rugby league was implemented, the club was opened in Mulgoa Road amid a fanfare of free publicity. It was a brand new model for licensed clubs, and it set the bar higher for the club industry. Both events were turning points for Panthers.

Although the new club opened in a blaze of favourable publicity, it had not been completed. The long delays in getting approvals and other factors beyond the club’s control contributed to a blow-out in the costs of construction. The main entertainment room was an empty shell until profits could be used to complete it. A large part of the car park was left unfinished.

Although the new club opened in a blaze of favourable publicity, it had not been completed. The long delays in getting approvals and other factors beyond the club’s control contributed to a blow-out in the costs of construction. The main entertainment room was an empty shell until profits could be used to complete it. A large part of the car park was left unfinished.

In the planning phases of the new complex, the concept of motel accommodation came up. It would fit neatly into the club’s objectives, but the costs blow-out forced it into the “deferred ideas” drawer.

However, the builder could also see the potential.  He made an offer to build a motel adjoining the new complex, and it was accepted. The agreement was that the club would sell the builder the required area of land for one dollar. The builder would then use the equity in that land to finance construction. Panthers would lease the motel back and manage it until it had the funds to purchase it. The Club had an option to purchase the motel and the land for the cost of construction, plus an agreed profit for the builder. The land would be part of that package and would be put back in at a one dollar value. It was a brilliant scheme, and it worked well for all the parties involved.3

The 54 room Panthers Motor Inn was completed in 1986, with 115 more rooms approved by the Board in 1988. The Club sold it – now 216 rooms – in 2006, for $28.5 million.4

Panthers barrister Terrence Lynch says that this transaction was one that DGR counsel, David Staehli, seized upon in the 41X inquiry, sure that at last he finally ‘had’ Roger Cowan. His hopes were dashed when Cowan was able to show exactly what had happened throughout the entire process.

The new rugby league regime brought the football club the successes that had eluded it for its first 17 years, including two premierships and several finals appearances. The new Panthers licensed club brought significant changes in management and structure, unprecedented growth, and the completion of assets that would ensure the security and cash flow of the organisation through some very difficult times.

But behind the scenes it was not all beer and skittles. John Hewett still carried a badly wounded ego. Cowan’s erstwhile friend and supporter, club patron Ron Mulock, was showing early signs of disapproval about the dramatic growth of the Club.

The football team was finally making its mark, and the business was showing the potential that would take it into the top 300 private companies. In the midst of the successes, trouble was simmering that would eventually bring Panthers and Cowan into their darkest periods.

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  1. This decision fundamentally changed the governance structure of Panthers and helped resolve a decade of conflict over the management of rugby league. For a more detailed explanation of why the “one board, one CEO” model became so important see Beyond the Book — Why One Board, One CEO.
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  2. Beyond the Book — The 1983 Strategic Reset explains how governance reform, the appointment of Tim Sheens and the Five by Five Committee formed part of a broader change in Panthers’ approach to football.
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  3. The arrangement was designed to overcome the club’s immediate financial constraints. The builder funded construction and accepted the development risk, while Panthers retained the right to acquire the completed motel and land at a pre-agreed future price.
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  4. The financial transactions around this part of the Mulgoa Road development would later be examined during the Temby 41X Inquiry where the legitimacy of the arrangement was able to be demonstrated. ↩︎

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Why One Board, One CEO?

Readers of Parts 19–21 may wonder why Roger Cowan spent more than sixteen years arguing for what appeared to be a relatively simple administrative reform. Why did the issue matter so much to him? Why did he keep returning to it despite repeated setbacks, opposition and criticism?

The answer lies in a question that had troubled Panthers almost from the beginning:

How could the Club pursue a unified direction when rugby league and the licensed club were governed separately?

The issue was not new.

Readers familiar with the events of 1971 may recognise some familiar themes. The removal of football club secretary Merv Cartwright and treasurer Ron Partridge arose from concerns about the administration of rugby league affairs and accountability for financial decisions. Although the circumstances were different, the disputes that emerged again in the late 1970s centred on many of the same questions. Who should make decisions? Who should be accountable for those decisions? And what happened when agreements were not honoured?

From the time Penrith entered first grade rugby league in 1967, the football club and licensed club operated under separate governance structures. The arrangement was common in rugby league, but Roger increasingly came to believe it created problems that could never be fully resolved.

It would be easy to assume the conflict was simply about money. Certainly finances played a part. Rugby league required increasing investment, while the licensed club was trying to strengthen its financial position and pursue long-term development projects. Yet Roger’s frustration was not that football sought resources. In his view, the licensed club had repeatedly demonstrated a willingness to support rugby league and invest heavily in its future.

The real problem arose after decisions had been made.

Budgets would be negotiated. Agreements would be reached. Plans would be approved. Yet time and again, football expenditure exceeded agreed limits or new commitments were entered into without the knowledge or approval of those responsible for managing the Club’s overall finances.

From Roger’s perspective, this was not simply a financial problem. It made long-term planning almost impossible.

A licensed club board could approve a football budget, commit to major development projects and make decisions based upon expected cash flows. If those assumptions later proved incorrect because spending commitments had changed, the consequences extended well beyond rugby league. The entire organisation could be affected.

By the late 1970s, these tensions had become increasingly public. In December 1979, the Sydney Morning Herald reported on financial difficulties and disagreements between the football and licensed club administrations. Around the same time, Panthers was preparing for the enormous financial challenge of constructing its new Mulgoa Road complex.

SMH 1979 Dec 9 – click image for full article.

Reports to members in 1980 revealed the extent of the concern. Directors reported that the football club had exceeded an agreed annual budget of $485,000 by more than $100,000 during 1979, while additional commitments had already been entered into for the following season. To the licensed club board, the issue was not simply the amount involved. It was that decisions affecting the future of the entire organisation had been made outside the framework that had previously been agreed.

These events helped bring the governance debate to a head, but they do not fully explain Roger’s determination.

For him, the issue was ultimately one of organisational unity.

He believed Panthers would never achieve its potential while parts of the organisation operated according to different priorities, different assumptions and different lines of accountability. A football club and licensed club could share the same colours, the same members and the same ambitions, yet still find themselves working against each other.

His solution was straightforward.

One board would determine policy and direction for the entire organisation. Management would then be responsible for implementing those decisions. Everyone would work towards the same agreed objectives and everyone would be accountable to the same governing body.

Not everyone agreed.

Some viewed Roger’s campaign as an attempt to centralise power. The perception is understandable. After all, he was advocating a structure that would eventually place responsibility for football and licensed club operations under a single administration. His persistence over sixteen years inevitably raised questions about motive.

Yet there is another interpretation.

Roger was not arguing that football should receive less support. Nor was he arguing that rugby league was less important than the licensed club. Rather, he believed the entire organisation should operate according to a common plan and that all parts of Panthers should be accountable to that plan.

Many years later, Panthers would use concepts such as “twin citizenship” to describe the idea that people belonged not only to their immediate team but also to the wider organisation. While that language did not exist in the 1970s, the philosophy behind it helps explain Roger’s thinking. He wanted rugby league, club management, directors and staff to see themselves as contributors to a single enterprise rather than separate interests competing for influence.

The first major breakthrough came in 1980 when a single board was finally established. Yet even then, the model remained incomplete. Rugby league and the licensed club continued under separate chief executives. As described in Parts 20 and 21, the compromise produced its own difficulties and did not resolve the underlying tensions.

It was not until the end of 1983 that the structure Roger had advocated for so long was fully implemented. One board and one chief executive became responsible for the entire organisation.

Whether that decision alone explains the improvements that followed is impossible to know. Organisations are rarely transformed by a single reform. Nevertheless, the years that followed saw a stronger emphasis on cooperation, planning and shared ownership. The workshops that led to the Five by Five program, closer relationships throughout the rugby league district and a more integrated approach to football and club operations all emerged during this period.

Reasonable people may still disagree about whether Roger was right. They may also disagree about the extent to which later successes flowed from the governance reforms he championed.

What is difficult to dispute is that he regarded the issue as fundamental. For more than sixteen years he returned to the same argument, often in the face of resistance and disappointment.

Ironically, that persistence contributed to one of the enduring myths about Roger Cowan — that he was somehow anti-rugby league.

The evidence suggests a more complex reality.

His long campaign for “One Board, One CEO” was not driven by a desire to diminish rugby league, but by a belief that Panthers could only achieve lasting success when every part of the organisation was working towards the same goals and operating under the same commitments.

Whether one agrees with that belief or not, it became one of the defining ideas in the history of Panthers.

Source Material*

The following documents are extracts of the relevant sections of larger reports:

Related Topics

Related Themes

Financial Management · Governance · Board Decisions · Culture · Club Structure

* Resource material courtesy of The Ausburn Collection

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Entertainment, Experience & Prestige

Part 11 of 70 — Original Chapter: Chapter 5: Building the Basics – Business Principles and Property

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

Start · Reader’s Guide · All Parts

With a broader audience now emerging, attention turned to what would bring people in — and keep them coming back.

Another early innovation was an in-house band, fully employed by the club. Rhind believes it was one of the first in the industry — and unheard of for such a small club. At the time, the Board was resisting putting poker machines in the upstairs auditorium area.

Roger persisted, finally convincing them to trial half a dozen machines upstairs for four hours on a Saturday night — between 6 and 10pm. He and a couple of the assistant managers would carry them upstairs and bring them back down again later.

The trial was successful; the figures increased, and the machines went upstairs permanently. 

Rhind says he and Cowan were both in their thirties but most of the Board at the time were older men who sometimes found it a bit more difficult to cope with all the change being promoted by management.

However, they all shared a quality that would help overcome obstacles. They had a strong sense of ownership of the club they had helped build, and they wanted it to be secure for the future.

There were no hidden agendas and no ambitions of personal gain. It was about loyalty to a common cause. It was their club, and they would do whatever was necessary to protect it.

In the early 1970s the club began to put on prawn nights, other special nights, Sunday afternoon concerts and talent quests. Max Connors recalls,

Mum and Dad would come in for whatever was on, and they would always put a few bucks in the pokies. Roger was doing surveys all the time. He told the board that we had to start to give a little back to people to encourage them to come to the club, even though we might lose a little money on the prawn nights.

Bringing in the couples meant that women were starting to come to the club. It was changing the whole social scene. Back then, there were not many places that women could go, especially if they were on their own. They could come in either with a partner, or a girlfriend, and enjoy a regular night out.

The final shift away from the club’s traditional male bastion came with the launch of what became known as the “purple passion pit”, one of the new extensions to the club. Kevin McGrath remembers,

The room was quite stunning, with beautiful décor, purple furniture and fittings and large fish-tanks along one wall. It had poker machines, comfortable lounges and a full bar and it very quickly became the most popular area in the club.

Also, to attract the mixed market, the club began to focus on entertainment. This was an extraordinary time for the Penrith Leagues Club, says Bryn Miller, who was part of the club’s entertainment team in the seventies.

The first auditorium only held 580 people, so by today’s standards, it was not a big room. Don Ellks was the entertainment manager at the time, and he and Cowan formed an association with an agent, John Hansen. The Board approved their recommendation that the club set up its own entertainment agency as a joint venture with Hansen.

Through the new company, Prestige Attractions1, the club set out to bring in major overseas acts — performers who were appearing at leading Sydney nightclubs such as Chequers2, as well as venues like St George Leagues and Souths Juniors — artists such as Roy Orbison, Rolf Harris, Jerry Lee Lewis, the Hollies, and the Mamas and the Papas.

But we would get them on Tuesday nights — traditionally a dead night in the entertainment industry. Most artists didn’t get bookings for Tuesdays, so we could get them at a good rate. We would put on prawn nights, and beef and burgundy nights, and still charge reasonable prices. These shows were every second Tuesday, and the response was phenomenal. People came from all over Sydney.

We needed to find a way to get more people in, and at the time, there was a fountain in the middle of the auditorium. We ripped that out, and the room was able to hold 800.

We started to advertise in Sydney newspapers, which was our first real exposure out of Penrith. Here we were, this little hick country town, and we were really getting known out there.

Miller adds,

Sundays were another big night. It was Australian rock night, with bands such as Skyhooks, Sherbert, the Little River Band and INXS appearing in the auditorium.

But the building of success inside the club was creating pressures that could not be resolved within its existing footprint.

1982 Advertisement for the week’s rock entertainment.

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  1. Prestige Attractions was a joint entertainment venture involving Penrith Leagues Club and entertainment promoter John Hansen during the 1970s.
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  2. Chequers was one of Sydney’s best-known nightclub venues during the 1960s and 1970s, regularly hosting major Australian and international entertainers ↩︎

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