Danielle Wood Explains the Importance of Good Leadership

The economist and new chair of the Productivity Commission knows her assertions won’t win her any popularity contests – but she is just fine with that.

Current role: Chair, Productivity Commission Tenure, Five months

Previous roles: Chief executive officer, Grattan Institute; program director, budget policy and institutional reform, Grattan Institute; principal economist, ACCC; senior consultant, NERA Economic Consulting; senior research economist, Productivity Commission.

How do you define good leadership?

It’s the art of balancing the magic with the mundane. Making decisions is hard but executing them well is even harder so being able to inspire people and bring them along is absolutely critical. It’s that sweet spot between charisma and confidence that makes a leader great.

There’s a lot of talk about productivity at the moment and it’s a huge concern for business. What’s driving that?

It’s the single most important driver of long-term living standards, which is not just about people having more money. It’s about a better health system, a stronger environmental policy – every aspect of our lives is touched by how efficiently we can produce goods and services. I think at this point in the cycle we’re seeing that the economy is stagnating. People are worried about the pressure created by wages growth on inflation and the only way you square the circle on that is by getting productivity moving again. It’s critical for business but it’s critical for every person in the country as well.

Productivity growth is at a 60-year low. What’s gone wrong?

This is not just an Australian phenomenon; we see this right around the developed world. As our economy has shifted, we’ve had more jobs and economic activity moving to the services sectors. Those areas have traditionally been lower productivity so that’s brought it down. There are other theories around how the ageing population might be playing a role and there’s a slower or smaller contribution from new technologies. We can’t necessarily do much about those things but what can happen within business or in terms of government policy that can make a difference?

So what levers are you hoping government will pull?

There’s a huge number of different areas. How do you improve outcomes in the school education system? How do you make sure that we empower people to engage in lifelong learning as new opportunities develop? How do we ensure that our skilled migration system is bringing in the people that are going to add the most value to the Australian economy? How do we make sure we’re building houses close to where people want to live and work, which is really important for unlocking the productivity benefits in cities? How do we get the right policies to support the transition to net zero without creating unnecessary cost? How do we make sure we reap the benefits of the AI revolution? There’s no silver bullet in productivity; it’s a game of inches.

You’ve signed on for a five-year term. Do you approach that by thinking about what you can get done in that time?

It’s a very powerful investment in independence because it means I can’t be sacked unless I do something outrageously crazy [laughs]. The idea is that it allows me to say things that are hard and challenging for government without worrying about my job but that fixed amount of time also means I’m able to think really clearly about how I want to make changes and my prioritisation within that time frame. Ultimately, we’re here to make a difference to policy so there’s a whole range of those policy areas that I just touched on where we are going to be spending time and energy.

In 2022, the ACTU called for the Commission to be abolished. Why do people have such strong feelings about it?

We’re a unique institution. Not many countries have a body that is dedicated to providing independent rigorous advice to government on different areas of policy. I think the emotions come about when people disagree with things that we’ve said or they don’t think we’re going about things the right way. Obviously it’s not great to hear anyone calling for your abolition but I hope people will put their faith in the fact that we’re doing high-quality work, we’re bringing evidence to bear and we’re putting it out into the public domain.

You’ve described the Commission as being the angel on the government’s shoulder. What does that look like?

The hallmark of our independence is that we look a t the evidence, we consult very broadly, we analyse and then we say what we think the answer is. Sometimes – not always – that will not be politically convenient. Having a government body that is sometimes critical can be a hard pill to swallow but successive governments have recognised the benefits of having a straight shooter that can, to some degree, hold them to account for the big changes that our country needs – even ones that aren’t always popular.

How do you approach those difficult conversations?

My approach in all my jobs has been the same, which is to be calm, stick to the facts, not let emotion override the conversation, try and find the points of agreement and be clear about where and why it is that we may differ.

In your first week in the role, the shadow treasurer questioned whether you believe in productivity. How do you deal with that level of scrutiny?

It comes with the terrain. When you have the opportunity to speak freely and with authority on policy matters, you have to expect that there will be people who disagree. It can be hard when you’re in the media being criticised but it’s not personal. It’s the cut and thrust of the policy world.

You’ve been talking a lot about AI. What role do you think it could play in increasing productivity?

Well, it’s hugely exciting. We’re already seeing research about how it can improve efficiency of call centres, lawyers and doctors – parts of the system where it’s been hard to drive productivity improvements can use AI in a way that improves task-specific efficiency. That’s the first way. The second way is more that AI is a tool for speeding up the pace of innovation itself. If you think about the potential for AI in terms of scientific discovery and fundamental changes in the way we work and structure our economy, it could be a game changer. It could drive waves of productivity growth over time. Whether we can realise that will depend on how fast and good we are at adopting the technology and making sure that we don’t throttle the benefits with badly targeted bans or regulation.

Do you worry about the skills shortage in Australia?

We have lagged somewhat in this area. I am very positive about some of the changes that have been announced to the migration system, which will make it easier for migrants with very high skills to come into the country. But of course, over time, we want to train people locally and we can be doing more to ensure our training system is delivering the right skills.

A lot of business leaders are sceptical about remote and hybrid working, worrying that productivity isn’t at its peak in these circumstances. What’s your take on that?

Like everything, I go to the data. My reading of the literature to date suggests that there isn’t a productivity hit from hybrid – it’s either maintained or even slightly enhanced. Studies on fully remote work do show some productivity impact and I think what that’s picking up is that you are losing those benefits of face-to-face interactions and learning.

You started your career at the Productivity Commission. Could you ever have imagined that you’d come back to run it?

Certainly not! It’s quite surreal in some ways and there are people here who remember me as a graduate [laughs]. But it’s a huge advantage to understand what it is to do the job on the ground. I had lots of ideas about how the place was run as a young person so I’ve made an effort to talk with the staff and get their thoughts on how we can do things better. That was an incredibly insightful experience.

Last year, a report revealed discrimination and harassment at the Commission, with the Canberra office described as “blokey” and “hyper-masculine”. Is there still a lot of work to do?

There had been a lot of steps taken before I started but as you can imagine, it’s not the sort of thing where we just tick the box and say it’s done. We’re making a whole range of organisational changes but more than that, of course, it’s the culture of the place. Ultimately, the important thing is to make it a safe and enjoyable place for every one of our employees. We are less than 200 people so I can literally know every person in the organisation and I’m trying to set the tone of the way we work, which is not blokey or masculine. It’s inclusive and curious and really focused on delivering better policy for all Australians.

What’s your greatest strength as a leader?

I like people. I have capacity to listen and learn from every person in the organisation.

And what would you say is your biggest gap?

I’m impatient. I’m really conscious of this in this new role. You can’t be a bull in a china shop and try to do too much too quickly because it’s overwhelming. You’re better off sequencing and doing things well and getting the execution right. My natural tendency is to go, “I’m excited – I want to do this, this, this and this.” So I have to try and pull myself back.

Has there ever been a time in your career where you’ve genuinely felt scared?

The hardest time – a combination of fear and exhaustion – was when I took over as CEO of the Grattan Institute. It was a big step for me and for the organisation, which had had one CEO in its then-11 year history. Stepping in as the second CEO is always a hard gig. To make it harder, it was the start of a very long COVID lockdown in Melbourne. I was dealing with transitioning the whole organisation to fully remote work, trying to manage a situation as a not-for-profit organisation with financial supporters pulling out. And I had a four-year-old daughter at home with both parents working full-time. Gosh, it was a very tough period. There were moments I wondered why I was doing it and if I could do it.

Your X [Twitter] profile discloses that you’re a table tennis enthusiast. Is that one way you wind down?

That’s how I wind down in the office, although it probably hypes me up more than winds me down. I’m very competitive. There’s an annual Grattan/Productivity Commission Table Tennis Tournament and I’ve had to jump sides. I’m trying to get my new team members excited and trained up in time so we can take back the trophy.

Finally, what advice would you give to someone who wants to be a CEO?

Be curious. Don’t think it will be a linear path. Be willing to take different steps along the way and be clear about why. What is your why? Stay true to that.

On the fly

Personal motto?

Less a motto and more a life philosophy: be grateful.

Email approach?

I try to batch a little bit each day and then do a whole lot on Sunday. The key is to not let it dominate your time and drive your agenda.

Motivation tactic?

I literally jog on the spot. I do a lot of speaking so making sure you’re bringing the energy is really important.

Business book or podcast?

The How I Work podcast by Dr Amantha Imber. She’s great on strategies for using your time well.

Productivity hack?

I keep Mondays free of meetings and work from home that day. Carving out that space for deep thinking is critically important.

Hard-and-fast rule you don’t ever break?

Anything that compromises integrity or would lead anyone to perceive a lack of independence on my part is absolutely a no-go zone for me.

Favourite piece of advice?

Stop at 80 per cent. We can all spin our wheels and go for that last 20 per cent but generally it’s not worth it. You are a busy person; you have to stop at 80.

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