Thought of the day
Build the reserves in the good years, so you can spend them on the hard call. Leaders who keep “fat on the bones” can afford to be brave, everyone else can only stand still.
Last night I had the privilege of sitting in on a fireside chat with the Hon. John Howard, one of Australia’s longest-serving Prime Ministers, and one of its most consequential. I went as a business owner, not a political tragic, and I came away with a notebook full of lessons that have almost nothing to do with politics and everything to do with leading anything that matters. Here are the ones that stayed with me.
Watch the full conversation
CUB Fireside with the Hon. John Howard OM AC · Approximately 64 minutes
1. Courage needs capital
The line I keep coming back to is his idea of having “fat on the bones.” His point was that the ability to make a hard, unpopular decision isn’t there when you reach for it, you build it in the good years, in trust and credibility and a strong balance sheet, and then you spend it on the call that counts. A leader with no reserve can’t afford a single mistake, so they attempt nothing. And, as he put it, they lose anyway, because people move on from those who do nothing.
“If you have fat on your bones in politics, you’ll lose it either by trying something that involves some casualties along the way, but you can still hope to win and fight another day, or if you don’t do anything, you’ll lose it anyway, because people will throw you out because you’re not doing anything.”, John Howard
Every business owner I work with faces a version of this: a new pricing model, a restructure, a system change, bringing on a partner. The instinct is to wait until it feels safe. But standing still isn’t safe, it’s just a slower way to lose ground.
2. Honesty is a strategy, not a virtue
He took the GST to an election rather than hiding it, a reform that could have cost him government. What struck me was how deliberate the honesty was. He didn’t sell a tax; he named a problem people already felt, that the old system was letting them down. He never put it as a straight yes or no, because people would simply have said no. Instead he made the case, and he paired the hard change with real protection for those who’d carry the cost.
“We were able to persuade people that, in the end, the GST was a price worth paying for a better tax system.”, John Howard
The lesson for any leader is the sequence: level with people before the hard decision, argue it relentlessly, and cushion whoever bears the burden. That’s what earns you the right to do the difficult thing.
3. Prosperity is encouraged, not commanded
Asked how the country recovers and builds wealth again, his answer was refreshingly plain: spend less, and change the settings so private capital is encouraged into productive activity. He’s wary of government picking winners, trusting instead that money finds a worthwhile home when you let it.
“The solution is to encourage private money into business activity … money will be attracted to a good-looking investment.”, John Howard
Get the settings right, keep the state’s borrowing from soaking up the capital pool, and the investment follows. His housing point was the same idea in miniature: the more money you encourage into building, the more building you get.
There’s a personal read here too. Tax settings drive behaviour, so they belong in your plan, not the footnotes. The owners who compound wealth are the ones who put money to work, in their business, in well-chosen assets, and structure it so the settings work for them.
4. Leadership is a “sensible mix”
On what makes a leader, he resisted the easy binary of principle versus popularity. You need both, in the right order: be honest even when it costs you, prosecute your case every day, and never mistake being liked for being trusted.
“Politics in the end is a battle of ideas and a battle of values. It’s not a point-scoring beauty parade.”, John Howard
His test for integrity was a simple one: people forgave him for disagreeing with them because they always knew what he believed. As he put it, you’ve got to “know what you stand for and what you believe in”, and “tell them frequently, tell them every day.”
Popularity, in his telling, isn’t where you start; it’s what you earn by doing the other things well. He was pointed about relationships, too, noting that the most important relationship a leader has is with the people they lead, and that those who neglect it tend to be dealt with by those very people at the worst possible moment.
Later in the evening, asked for the single greatest lesson of his leadership, he put it even more bluntly:
“You’ve got to know what you believe in and you’ve got to go out and argue it. If you don’t, you’re hopeless … How can you expect somebody to follow you if you don’t know where you’re going?”, John Howard
5. The things that hold it together
The most human moment of the evening had nothing to do with policy. Asked what to instil in the next generation, he spoke about family, and about what he and his wife have always told their own children.
“One of the things that we have regularly said to our children is: look after each other, because Mum and Dad are not going to be around forever.”, John Howard
For all the talk of tax and trade and leadership, that was the takeaway that landed hardest. Look after each other. It applies to a family, and it applies to a team. He also captured something true about our national character, a healthy scepticism, a respect for the rule of law, and a preference for substance over show. And he summed up our approach to culture in a single line:
“I’ve never met a multicultural person. I’ve met plenty of bicultural people.”
What it means for the rest of us
Strip away the politics and the thread is clear: leadership is the discipline of building trust before you need it, telling people the truth, and having the courage to act while everyone else waits for certainty. That’s as true of running a business as running a country.
It’s the kind of thinking we bring to our clients every day, helping ambitious owners read the settings, weigh the hard calls, and back themselves at the right moment. If you’re weighing something major in your business, that’s the conversation worth having before the decision, not after.
A note on the quotes: the highlighted quotations are John Howard’s own words, checked against the event recording, with only minor clarifications for readability shown in [brackets]. The commentary and interpretation between them are my own. Press any ▶ Watch button to hear the quote in context from the full recording.
Going deeper
Three themes from the conversation are worth exploring in more detail.
Migration, integration and the “new Australians”
Some of the most interesting remarks of the evening were about migration, and they weren’t about numbers or borders, but about belonging. Mr Howard’s frame is integration: welcome people wholeheartedly, and expect in return a shared commitment to the country they’ve joined. He was fond of an older piece of language for exactly that idea.
“We used to welcome people [and] call them new Australians … [then] we introduced this notion of multiculturalism.”, John Howard
His discomfort with “multicultural” wasn’t about closing the door, it was about what the word implies. He drew a distinction I hadn’t heard put so plainly:
“I’ve never met a multicultural person. I’ve met plenty of bicultural people.”, John Howard
The point being that a person carries one heritage and adopts another, proud of where they came from, and fully at home here. He pointed to Australians of Greek descent who settled parts of Sydney, and to our record with refugees, as evidence that the model works when it’s done with genuine welcome.
“We [took] more refugees from Vietnam, on a per capita basis, than any other country.”, John Howard
What holds it together, in his telling, is a common set of expectations, mutual respect, and a shared civic foundation:
“Provided you sign up to Australian values, and provided you [treat] each other with respect and recognise that we have fundamentally a Judeo-Christian ethic overlay, then you [belong].”, John Howard
He was equally firm that an open society has no room for prejudice, that you never make derogatory remarks about sections of the community based on race or religion, because “we are an open, free society” that respects difference. For a business owner, the through-line is familiar: bring good people in, make them genuinely welcome, hold everyone to the same shared standards, and let contribution do the rest. It’s how you build a team, and, he’d say, how you build a country.
Rebuilding prosperity, spend less, encourage investment
Asked how the country builds wealth again after running up serious debt, Mr Howard didn’t reach for a program. He reached for a posture: government has spent beyond its means, so the recovery has to come from private capital, and the lever that moves private capital is the tax setting.
“There is no solution other than … spending less, encouraging more investment through the tax system.”, John Howard
Encourage, don’t direct
He is wary of government picking winners, his instinct is to set the conditions and let capital find its own way to the best return.
“… money will be attracted to a good-looking investment.”
Housing follows capital
He applied the same logic to the cost-of-living pressure people feel most sharply: you don’t legislate homes into existence, you make it worth funding them.
“The more money you can get into building new housing, the more likely you are to have new houses.”, John Howard
There’s a personal read here for anyone building wealth. Tax settings drive behaviour, so they belong in your plan, not the footnotes, where you hold an asset, in which entity, and for how long can be the difference between a good result and a great one. The owners who compound wealth put money to work in productive activity, and structure it so the settings work for them.
Leadership and major change, the GST playbook
The GST could have cost Mr Howard government. How he carried it is a clean model for pushing through anything major and unpopular, a restructure, a new pricing model, a system change. It starts with having something in reserve.
“If you have fat on your bones in politics … you can still hope to win and fight another day.”
You build that reserve, trust, credibility, a strong balance sheet, in the good years, so you can spend it on the hard call. Then you win the argument rather than assuming it: name the problem people already feel, refuse the straight yes-or-no, and cushion whoever carries the cost.
“… the GST was a price worth paying for a better tax system.”
And he was honest about the compromises, which is its own kind of leadership.
“It’s not as good as it might have been, because we had to abandon certain things to get it through.”, John Howard
The sequence for any leader is the same: get the substance right, build trust before you need it, tell people the truth, and have the courage to act while everyone else waits for certainty.
