Business First Magazine - Jan/Feb 2015 by Associated Media Group Pty Ltd

BUSINESSFIRST for Business Leaders

Campbell Hanan

HOW HE HAS OPTIMISED INVESTAâ&#x20AC;&#x2122;S VALUE

Building an international business 10 things you need to know

January/February 2015

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Steven Chaur

Why iconic brands are great for business

The Audi A1 A sports car with the lot

BUSINESS FIRST MAGAZINE Vol 2 Issue 1

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SPECIAL FEATURE

Business First takes a crystal ball to 2015

9 772203 129000

INSIDE: Investment // Lifestyle // Marketing // Property // Tech COVERS3.indd 1

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PROFILE | BF

BF | CONTENTS

BUSINESS FIRST CONTENT 4 5

Editor’s Desk News

Special Feature 2015 for the CEO 8 Organisational health benchmarking 11 The CEO Infograph 12 Q&A: 2015 predictions 14 Risky business – know your insurance risks 16 Security in the hybrid cloud 18 Five technology trends for 2015

COVER STORY 20 The clear-cut plan to operational excellence Investa CEO Campbell Hannan speaks about the change to the commercial property market and how to operate within.

CONT 34

PEER TO PEER 28 Mixing business with pleasure by David Finn 34 Transparency and alignment in Business Partnerships by Mat Jacobsen 36 When it comes to business, what’s in a name? by Joanne

Oakley 42 The art of beautiful storytelling by Nicole Smith 48 Staying alert to market opportunities by Ric Spooner 54 Is it worth it by Patrick Bright 60 Things your boss won’t tell you and why by Stan Gordon 66 Unlocking new possibilities with by Steven and Chutisa Bowman 72 Should you trust the cloud for your business? by Stephane Ibos

LIFESTYLE

78 Style: Grooming tips for leading female professional 80 Health: Why your company needs to gamify health and wellbeing 84 Destination: Historic retreat in the scenic Southern Highlands 86 Fastlane: Audi’s Zip Line

88 Sport: The world’s top youth sailors are back in 2017

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CONTENTS | BF

ENTS

BUSINESS FIRST LOUNGE 30 Built on family roots For Hickinbotham – South Australia’s number one builder with a record 35,000 homes and more than 50 community estates relationship management is a reflection of its family heritage, and the basis of its incredible success. 38 Taking a customer centric approach In such a competitive industry as insurance, it is important to stand apart in product and service offering. Niran Peiris, Allianz CEO speaks with Business First about being a customer-centric organisation.

44 Small business making a big impact In the space of five years, Chobani yogurt transitioned from ‘new product’ to America’s number one selling brand. Its entry into Australia has been almost as impressive. 50 It all comes back to family Lance Deacon is a co-managing director at The Dyson Group; a family owned and operated bus company which has been in business since 1952.

56 The search for growth and community value Business First speaks with Peter Botten about the sudden growth of the business and why it’s important to play a role in community growth. 62 The pie’s the limit Patties Foods is now an ASX listed company owning a high quality portfolio of iconic Australian brands that include Four’N Twenty, Patties, Herbert Adams, Nanna’s, Creative Gourmet and Chefs Pride.

68 Top of the chain Grant Goodall has a long history in tourism and hospitality, so he was a natural fit for the position of CEO with the iconic Golden Chain. 74 A collaborative effort The floor covering industry is one of the most important and certainly very lucrative. Business First examines the rise of Newfurn and through them Choices Flooring.

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BF | EDITOR’S DESK

Family, respect and innovation

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Welcome to 2015. The expectations for the year are intriguing. The Australian dollar is falling, the global economy is facing subdued growth once again, alliances with China and Japan will open up opportunities for entrepreneurs and businesses while decreasing the costs of goods coming out of those regions. Meanwhile it looks like house prices will continue to rise along with the cost of living. This is a fairly simplistic one paragraph look at what we may expect, however our special feature this issue takes the crystal ball to 2015 as key experts look at what they believe will happen in property, investments, technology and business. There are some fascinating insights and we hope you get as much out of them as we have. Also featured in this issue are two iconic Australian brands that have each had an impact on the community in their own special ways. Patties’ Foods has given us Four’N Twenty Pies, Herbert Adams and Nanna’s Pies. I love a Nanna’s pie; sweet fruity and I know what I am getting every time I gobble one up. As for the meat pies, I have been burning my fingers on those since I was a kid going to the football watching St.Kilda play at Moorabbin. I have even worked out ways to eat them so no meat falls on my shirt. They really are as Australian as kangaroos and Holden cars. The difference is they won’t be going the way of Holden cars because the man in charge, Steven Chaur has conducted an organisational audit and brought this company, whose profit share was declining, back into a strong position. Patties Foods holds the top spot in market share for pies and it looks now as if they will continue to get stronger. It all comes down to innovation and creating unique experiences for customers. As for Golden Chain, again this is a case of knowing what the customers and members want and delivering a unique experience. This is also a case of growing the business using a mix of new and traditional media, which most organisations should now be doing. While traditional media still has impact, native advertising is where most media is now heading and where it will have the most reach. In this issue we also feature Campbell Hanan who discusses his plans for Investa and Peter Botten, whose Oil Search has had significant impact on the growth of the PNG community and economy. We have started the year with a bang and we hope you enjoy the read as much as we have enjoyed putting the magazine together. All the best for 2015.

Jonathan Jackson Editor, Business First Magazine

PUBLISHER Alan Hyman EDITOR Jonathan Jackson MEDIA DIRECTOR Bob Forshaw SUB-EDITOR Judy Hyman DESIGN Gino Hawkins Head Office: Suite 7, Level 1 174 Willoughby Road St Leonards NSW 2065 Australia Advertising enquiries: Phone: 02 9437 5155 Email: bfadvertising@amgroup.net.au Subscription enquiries: Phone: 02 9437 5155 Email: bfsubscriptions@amgroup.net.au Contributors: Michelle Allen, Steven & Chutisa Bowman, Patrick Bright, Sebastian Evans, David Finn, Stan Gordon, Stephane Ibos, David Jackman, Karen Jamal, Michael Kodari, Matt Lewis, Allan McKeown, Jon Michail, Fred Nucara, Joanna Oakley, Mark Pope, Ric Spooner Associated Media Group Pty Ltd ABN 68 123 058 926 Copyright ©2013 Associated Media Group

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DISCLAIMER Readers are advised that Business First Magazine and Associated Media Group (AMG) cannot be held responsible for the accuracy of statements made in the advertising. Opinions expressed throughout the publication are the contributors own and do not necessarily reflect views or policy of Business First Magazine or AMG. While every reasonable effort has been taken to ensure the accuracy of the information contained in this publication, AMG takes no responsibility for those relying on the information. AMG and Business First Magazine disclaim all responsibility for any loss or damage suffered by readers of third parties in connection with the information contained in this publication. WARRANTY AND INDEMNITY Advertisers and/or advertising agencies upon and by lodging material with AMG for publication or authorizing or approving of the publication of any material indemnify Business First Magazine and AMG, its servants and agents against all liability claims or proceedings whatsoever arising from the publication and without limiting the generality of the foregoing to indemnify each of them in relation to defamation, slander of title, breach of copyright, infringement of trademark or names of publication titles, unfair competition or trade practices, royalties or violation of rights or privacy regulations and that its publication will not give rise to any rights against or liabilities against AMG, its servants or agents and in particular, that nothing therein is capable of being misleading or deception or otherwise in breach of Part V of the Trade Practices Act 1974.

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NEWS | BF

The importance of Project Management The importance of well-managed and executed project management departments continue to be highlighted, with recent revelations at a Senate Estimate hearing showcasing actions taken by some of the biggest organisations in Australia to ensure projects are delivered to schedule. The Defence Materiel Organisation (DMO), which manages some 180 major projects and more than 75 minor projects with an annual budget of A$9 billion, has led the way in investing in the professionalism of project management over the past few years. At a Senate Estimate hearing on 23 September 2014, Mr Warren King CEO DMO said that “before the Kinnaird process we used to run about 70 percent late on projects. We have now pulled that down to about 35 percent”. The Kinnaird process refers to the Kinnaird Review, which covered the whole of the defence capability cycle, from initial strategic assessment to retirement of capability from service. Not delivering a project to schedule can result in the loss of large chunks of annual budgets and as was highlighted in the report, every project comes with its own set of

unique risks. The Australian Institute of Project Management (AIPM) CEO, Yvonne Butler, spoke to the developments recently when she said, “projects are not risk free there will always

be a proportion of your portfolio of projects that need attention. A maturing organisation will use lessons learned from these experiences, build their organisational capability and reduce problem projects.” BF

CAPITAL RAISE FOLLOWS REINVENTURE INVESTMENT SocietyOne, Australia’s first and largest Peer-to-Peer (P2P) lender, recently announced the successful completion of a Series B capital raise with a consortium of eminent Australian investors, made up of Consolidated Press Holdings (CPH), News Corp Australia and Australian Capital Equity. Matt Symons, Chief Executive Officer and co-founder with Greg Symons of SocietyOne said: “This investment marks a new and exciting chapter for SocietyOne and for the acceleration of P2P Lending in Australia. We are thrilled to partner with investors of this calibre with their unparalleled track record for building successful businesses in Australia and overseas.”    Regarded by some as the future of banking, P2P lending or marketplace lending as it is also known, is growing rapidly worldwide with considerable success in markets such as the United States and Europe. Investors have been particularly excited by the significantly increased www.businessfirstmagazine.com.au

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returns from removing the intermediary from the lending markets. The largest P2P lender in the US, Lending Club, is now originating over US$1 billion in personal loans per quarter. Speaking on behalf of the consortium of CPH, News Corp Australia and Australian Capital Equity, Mr James Packer said: “We have seen first-hand the power of technology in reshaping the media industry and I am excited about the potential of technology, led by the team at SocietyOne, to help reshape the financial services industry in Australia. We see enormous potential in delivering significant savings to borrowers as well as providing new innovative products that will also be attractive to the investor market. Peer-to-Peer lending is one of the global forces leading the transformation of banking by putting people, not intermediaries, at the centre of the borrowing and lending experience.”   The Westpac Group-backed venture

capital fund Reinventure has also agreed to participate in the latest capital raising following its initial investment in February 2014. “We continue to be impressed by the growth of the model and the execution of this team. This new round of investment brings together the best group of strategic investors in the country,” said Simon Cant, Co-founder and Managing Director of Reinventure. “This is consistent with our approach of backing experienced entrepreneurs, proven models and driving value to ensure they win their market.” SocietyOne uses a risk-based pricing approach and its proprietary ClearMatch technology platform to offer creditworthy borrowers a better deal and investors direct access to an attractive new fixed income investment option. Borrowers with good credit histories benefit from personalised rates that are generally much lower than standard credit cards and up to 5% lower than personal loans from the major banks. BF

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BF | NEWS

Murray Inquiry to save the poor $500m in bank fees UP to 10 million lower income Australians will save up to $500 million a year in unnecessary credit and debit card fees, under changes recommended by the Murray Financial Services Inquiry. A key finding of the Murray Inquiry is that a hidden practice of the country’s largest banks be banned, where poorer Australians subsidise cheaper air travel, holidays and fine wine for the rich. Analysis of the annual $230 billion credit and debit card spend shows Australia’s 10 million standard card users pay about $50 each to support the five million premium and platinum cards usually held by the rich. Premium credit cards attract a range of benefits such as air travel, overseas holidays and other lifestyle advantages. “About 10 million Australians have a standard credit or debit card, and they pay about $500 million per year, or $50 each, in extra fees to subsidise the lifestyles of five million richer Aussies with a premium card,” Tyro Payments CEO Jost Stollmann said. “This is because retailers typically charge customers a standard 1% rate irrespective of

what type of card is used. “But banks charge retailers much higher fees for premium and platinum credit cards than standard cards used by lower income people. Effectively, this means the poor are subsidising the rich. “This is unfair, unjustified and unAustralian. Credit cards are now the great divider in our society. Banks get away with it because most people don’t know it is happening. Their secret is out now.” The Murray Inquiry recommends that hard caps be placed on what banks can charge in credit card fees. According to a Reserve Bank of Australia (RBA) submission to the Financial System Inquiry, “individuals in the highest income quartile are six times more likely to have premium cards than low income individuals”. Mr Stollmann said hidden bank fees5 on credit and debit cards were up to 10 times higher for small businesses than big retailers and 6.7 times higher for low-income consumers than high net worth individuals. “Tyro estimates that small businesses7 have to pay $300 million more in hidden fees

for Visa and MasterCard purchases than the big retailers,” he said. “This is a dramatic injustice and it is getting worse. “Why should lower income Australians and small businesses fund the generous reward programs of platinum and super premium cards for the wealthy?” “Australia’s 390,000 small and medium sized businesses (SMEs) employ more than seven million Australians and are the engine of jobs growth in this country, yet they are having to compete with financial lead in their saddle bags, courtesy of our major banks. “These charges are essentially invisible to the average customer. They are unfair. The best option is to ban these interchange fees altogether.” New Zealand and Canada have mandated that zero interchange fees should apply to their entire EFTPOS network for all debit cards. Likewise, the European Commission lowered cross-border interchange fees to 0.2 percent for debit transactions and 0.3 percent of credit transactions. BF

Regional Banks welcome Financial System Inquiry Report Four of Australia’s leading Regional Banks have today welcomed the Final Report of the Financial System Inquiry, which acknowledges the need to level the playing field in banking. The regional banks have called for key recommendations to be expedited for the benefit of Australian consumers. The four regional banks – Suncorp Bank, ME Bank, BOQ and Bendigo and Adelaide Bank – made a number of recommendations to the Inquiry aimed at delivering improved longterm competitive outcomes for consumers. Regional Banks particularly welcome the recommendation to reduce the gap in risk-weighting of mortgages, strong capital for systemically important banks, and the recommendation for mortgage brokers to disclose ownership structures. Developments since the Wallis Inquiry and Global Financial Crisis have re-shaped much of the competitive and regulatory environment resulting in market distortions, which provide significant advantage to Australia’s largest banks. The Regional Banks called for competitive neutrality to level the playing field for the benefit of consumers and this is reflected in the Report recommendations. The Regionals are encouraged by the recommendations and will take some time to fully analyse the detail of the Report and its

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implications. Suncorp Bank CEO John Nesbitt said: “It is encouraging to see that Mr Murray and the Inquiry committee have acknowledged the need for action on competitive neutrality. The changes proposed on risk-weighted capital applied to major banks would narrow the gap. The Report recommends a 25% to 30% average mortgage risk weight be applied for those banks with advanced accreditation.” ME Bank CEO Jamie McPhee said: “Regional Banks provide a strong, competitive pressure in the market and a compelling alternative. Levelling the playing field – by removing funding and capital anomalies –

will further improve competitive tension to the benefit of consumers.” BOQ Acting CEO Jon Sutton said: “It is pleasing the Inquiry has acknowledged the competitive gap enjoyed by the majors needs to be closed and would like to see action taken quickly to address this issue, before the dominance of the Big Four is further entrenched. If that happens, Australian consumers will ultimately be the losers.” Bendigo and Adelaide Bank CEO Mike Hirst said: “The regional banking sector is a critical part of Australia’s banking system. The sector offers high levels of customer satisfaction and service particularly in regional and rural Australia.” BF www.businessfirstmagazine.com.au

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NEWS | BF

CLUBCEO’S REAL BUSINESS GROWTH “Those who think they are crazy enough to change the world, usually do” (Steve Jobs). Australian serial entrepreneur, Danny May has managed to secure the international rights to activate CLUBCEO, an International business phenomenon for the Australian business sector. This concept brings together decision makers, high-speed implementers and high net worth individuals into a unique consortium environment whereby new business and concepts are launched in a very

specialised way. This dynamic business-launching platform has proven success in its operating countries: the USA, the UK and on the African continent. CLUBCEO creates an environment whereby a group of accomplished business owners, who have succeeded in one or more businesses already, who with their buying/investing power and advice for or against your ideas, become part of a consortium where they join forces in new business ventures with the guidance of successful business

coaches, facilitators and a proven systematic growth program. “Australia is known for its tenacious business style and hard working entrepreneurs who are always looking for a better way to create revenue streams”, May said. Danny May has established multiple businesses across three industry sectors over the past eleven years throughout Southeast Asia and Oceania, building empires based on the philosophy ‘that there is always a way you just have to find it’. BF

WOMEN IN THE BOARDROOM

Teaching kids money smarts Australian parents believe home is the best place to teach children about money, by setting the right example and encouraging children to earn to learn. A survey by Australia’s largest life insurer TAL found just 4% of parents look to schools to teach children how to be smart with money. The majority surveyed (62%) believe in encouraging children to earn money outside of the home via part time work as the best way to increase their financial literacy. The next most popular choice (61%) was showing them by setting an example, followed by teaching children to be entrepreneurial (33%). Younger parents feel this most strongly with almost half (47%) saying children should be taught to be entrepreneurial. TAL Group CEO Jim Minto said: “The results show there is no single right way to teach children the value and importance of money. But what is clear and encouraging from the results is the majority of parents don’t believe in a hands-off approach.” www.businessfirstmagazine.com.au

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The survey found just 10% of parents believed financial literacy comes automatically with time. Almost double the number of males (13%) believed this compared to females (7%). “What is important is for Australians to receive the right information about money at the right time – whether it is saving for your first home, protecting your assets and income through life insurance or investing for the future.” “Building and protecting your financial wellbeing is not something to be left to chance.” Mr Minto said protecting wealth, including one’s future income and dreams, is just as important as building and growing it. “Many of us remember the golden rules we learned from our parents, such as ‘Save first. Spend Second’ or the power of compound interest,” he said. “We encourage parents to have the conversations and help their children take the steps necessary to become financially literate.” BF

What stops women from getting to the top in financial services firms? Global management consulting firm Oliver Wyman looked at the 150 largest financial services companies and interviewed over 60 senior women (and some men) from across the sector and surveyed over 1000 current and potential financial services employees internationally during the third quarter of 2014. The answers in their Women in Financial Services report are surprising. There has been progress in the boardroom: • Female representation at board level has increased by two thirds over the last 10 years • 20% of board members are now women But there’s a long way to go in the executive leadership ranks: • Over one third of leading financial institution executive committees are still entirely male • Female representation on executive committees stands at 13% and is increasing at a slower rate than board membership • Only 4% of Financial Services CEOs are women • There are still few women on the path to CEO: only 11% of women hold senior roles with profit and loss (P&L) responsibility; only 8% of Chief Financial Officers and 4% of Chief Risk Officers are women BF

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BF | FEATURE

ORGANISATIONAL PERFORMANCE

When we talk about organisational health, we are not discussing the pros and cons of an employee healthcare plan. Organisational health is about the performance and wellbeing of both the company and its people. And this is something that is vital the efficient running of all businesses. Mark Pope explains what your organisation should look like in 2015.

ccording to a recent article in McKinsey Quarterly, organisations displaying the signs of good health typically generate three times the total returns to shareholders of companies operating in a state of discomfort or, as Chase Performance defines it, ‘pain’. Additionally companies that manage both their health and performance double the probability of outperforming their competitors. What does a healthy organisation look like?

CEOs who focus equally on three pillars of optimal organisational health and performance health are the ones driving balanced, healthy and sustainable businesses. These three pillars are People, Process and Purpose. A critical pillar is that of people and focuses on culture, empowerment and engagement. Process revolves around standardised work, knowledge management and structured problem solving. Purpose is about defining organisation and leadership structure, customer and market focus, strategy and performance metrics. When simultaneously harnessed and optimised, they deliver: • Enhanced efficiencies • Quality products and services • Improved productivity • Growing profitability • Increased business valuation Our goal as business leaders should be to apply what we know about organisational health to build resilient businesses, capable of withstanding change and thriving in fluctuating environments. As best-selling author, Andrew Winston, so eloquently put it: “We live in a fundamentally changed world. It’s time for your approach to strategy to change, too.”

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Organisational Health Benchmarking PROCESS Standarised work Knowledge management Structured [problem solving

MARK OUT OF 30

+ PEOPLE Values & Culture Engagement & ownership Accountability

MARK OUT OF 30

+ PURPOSE Organisation & leadership Customer and market focus Strategic KPIs

MARK OUT OF 30

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FEATURE| BF

How effective is your business? Only 1% of senior executives rate business performance above a benchmark of 60 of a possible 90. Obvious problems appeared to be in the Process and Purpose areas of the organisation, which achieved a ‘fail’ score against business benchmarks, while only a marginal pass score was given across the People category. There is also an important consideration that the executives who rated their businesses are too far from the coalface and may have a tendency to overrate their own performance. Given that these are the fundamentals for business efficiency and sustainability, this rating by senior management teams is extremely concerning.

19%

0-30:

19%

30-60:

80%

60-90:

Average Score for Businesses 40.9%

How effective is your investment in human capital? According to the results of our Organisational Health Benchmarking workshops, businesses rate the effectiveness of their investment in human capital as average and only 13% of senior executives gave scores in the highest band. This highlights that the areas of Values & Culture, Engagement & Ownership and Accountability need to be addressed to improve staff commitment, discretionary effort, engagement and productivity. Strong People scores generally lead to better performance in Process. When engagement and accountability is high, supported by a strong organisational culture, people care more about business rules, the customer and performance benchmarks which impacts on the organisation’s ability to satisfy customer expectations, and even exceed them.

31%

Standardised Work, Knowledge Management and Structured Problem Solving are three elements critical to businesses reliably meeting customer expectations of quality, cost and delivery time while meeting internal customer expectations for safety and morale (QCDMS). These elements comprise the Process issues within our 3Ps. Process consistently achieved the lowest outcome scores by senior management in rating their businesses with an average score for Process of only 39%. Their aim is to be able to measure efficiency and effectiveness in their business. Only 50% of businesses feel that they are half way there to achieving these goals.

PERFORMANCE % respondents per score band

80%

13%

How effective is your investment in operational capital?

42% 52%

31%

30-60:

56%

60-90:

13%

56%

Average PEOPLE SCORE for Businesses 52%

0-30:

42%

30-60:

52%

60-90:

Average PROCESS SCORE for Businesses 39%

How effective is your investment in organisational strategy and customer focus? The high level strategic planning of an organisation is a big discussion point as two thirds of business rate themselves in the mid score band, with only 8% believing that they perform well enough to be in the top band. This highlights the areas to improve the communication of their strategy to achieve sustainable performance and better decision- making. Organisation and Leadership ranked only 5th out of all 9 areas measured through the survey, which prompts recall of the old proverb that a fish rots from the head down.

PEOPLE % respondents per score band 0-30:

PROCESS % respondents per score band

PURPOSE % respondents per score band

28% 64%

0-30:

28%

30-60:

64%

60-90:

Average PURPOSE SCORE for Businesses 46%

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BF | BUSINESS

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To SUCCESSFULLY DEAL with a broader remit, Australian financial leaders must combine STRATEGIC THINKING with excellent SKILLS IN FINANCIAL MANAGEMENT, communication and change leadership

BUSINESS| BF

Changes planned over the next 12 months

Global: GLOBAL INSIGHTS 48.9%

Software implementation(s)

47.0%

CFO & FINANCIAL LEADERSHIP BAROMETER 44.4%

GLOBAL INSIGHTS Implementation of new policies

CFOShared&service FINANCIAL LEADERSHIP centers 32.2% BAROMETER Centralisation 28.9%

50.0%

AUSTRALIA

25.5%

As priorities return to core value creation, what’s top of mind for AUSTRALIAN CFOs & FINANCIAL LEADERS?

23.9%

Top priorities over the next 12 months

14.4%

Outsourcing

AUSTRALIA

57.8%

61.1%

Cash & liquidity management

13.6%

56.7%

48.2%

6.4%

59.6%

7.4%

23.3%

18.8%

12.7%

53.3%

Process optimisation

10.0%

Insourcing

Global:

Cost optimisation

34.4%

Financial risk management 23.3%

ERP implementation

Mergers & acquisitions 23.3% As 3.3% priorities return to core value creation, Transfer pricing 8.9% what’s top of mind for AUSTRALIAN CFOs & FINANCIAL LEADERS? No significant changes 22.2%

Decentralisation

Global:

Today’s Australian CFO unites in-depth financial expertise with additional capabilities in IT, legal, HR and procurement – DO YOU HAVE THE TALENT YOU NEED?

57.8%

Cost optimisation

their roles become CFO & FINANCIAL LEADERSHIP Cash & and liquidity management broader more strategic, BAROMETER AUSTRALIAN FINANCIAL Process optimisation LEADERS are GENERALLY AUSTRALIA HAPPY in their position

34.4% 23.3%

ERP implementation

Top priorities over the next 12 months

Process optimisation

Legal

58.8%

55.9%

38.2%

Global: 100%

Global: 57.6%

Global: 41.1%

Global: 36.5%

61.1%

56.7%

48.2%

Implementation of new policies

59.6%

Shared service centers

30.8%

Centralisation

8.9%

34.4%

23.3% 48.9%

Software implementation(s)

23.3% =

44.4% 32.2%

54.4% 22.1% 1.5% Please, note that figures marked in orange or green are significantly below / above the global average. Insourcing 10.0% 23.3%

Mergers & acquisitions

21.4% 12.7%

28.9% 14.4%

Outsourcing

23.3%

Global: 33.7%

Procurement & Supply chain 29.4% Global: 23.6%

30.8%

Changes planned over the next 12 months

Global:

Global: 23.3% 75.0%

ERP implementation

Human Resources

59.6% 30.9%

To SUCCESSFULLY DEAL with a broader remit, Australian financial leaders must combine STRATEGIC THINKING with excellent SKILLS IN FINANCIAL MANAGEMENT, communication and change leadership

57.8%

53.3%

Transfer pricing

Financial risk management

Administration

100%

Where do Australian CFOs see themselves in two years’ time?

Financial risk management

HAPPY 77.8%

Finance

53.3%

As priorities return to core value creation, what’s top of mind for AUSTRALIAN CFOs & FINANCIAL LEADERS?

Mergers & acquisitions

61.1%

In the current scope of Australian CFOs

Once regarded as a stepping-stone to CEO, 48.2% the CFO role is now A56.7% CAREER AMBITION in its own right

GLOBAL INSIGHTS As

Cash & liquidity management

21.4%

Please, note that figures marked in orange or green are significantly below / above the global average.

Top priorities over the next 12 months

Cost optimisation

30.8%

0.0%

21.4%

3.3%

Decentralisation

Global: 47.0% 50.0% 25.5% 23.9% 13.6% 6.4% 7.4%

No significant changes 22.2% Same CEO or 18.8% UNHAPPY Please, note that figures marked in orange or green are significantly below / above the global average. Samewith additional Interim Today’s Australian CFO unites in-depth financial capabilities in IT, position with expertise Managing position manager 22.2% Once regarded as a stepping-stone to CEO, As their roles become a larger remit Director Today’s Australian CFO unites in-depthlegal, financial expertise with additional capabilities in IT, HR and procurement – DO YOU HAVE THE TALENT YOU NEED? broader and more strategic,

8.9%

Transfer pricing

12.7%

Global: 25.0% legal, HR and procurement – DO YOU HAVE THE TALENT YOU NEED?

In the current scope of Australian CFOs

AUSTRALIAN FINANCIAL LEADERS are GENERALLY Global: HAPPY in24.0% their position

Global: 43.1%

the CFO role is now A CAREER AMBITION in its own right

Where do2.7% Australian CFOs see themselves in two years’ time? Global: Global: 1.7%

HAPPY

Global: 43.1%

Global: 24.0%

Procurement IT Legal Human Resources Supply chain AsAdministration their own role diversifies, almost 1 &out of 2 Australian 77.8% 58.8% 55.9% 38.2% 30.9% financial leaders are ACTIVELY looking TO 29.4% RECRUIT experts to take on core finance functions UNHAPPY

Finance 100% Global: 100%

Global: 57.6%

Global: 41.1%

Global: 36.5%

Global: 33.7%

More than 2 out of 5 54.4% 22.1% 1.5% Australian companies find 0.0% it position difficult to hire the right Same CEO or Same Procurement Interim with Managing position manager Legal 22.2% Human aResources larger remit talent financial ARE YOU Director & –Supply chain RECRUITING THE29.4% TALENT 38.2% 30.9% YOUR BUSINESS NEEDS? Global: 23.6% Global: 36.5% Global: 33.7% As their own role diversifies, almost 1 out of 2 Australian More than 2 out of 5 Global: 75.0%

Global: 23.6%

Finance Administration To SUCCESSFULLY DEAL with a broader remit, Australian financial leaders must combineIT STRATEGIC THINKING with excellent SKILLS IN FINANCIAL MANAGEMENT, communication and change leadership

Australian financial leaders are mostly recruiting for… 100%

58.8%

55.9%

Global: 100%

Global: 57.6%

Global:Global: 41.1%

Changes planned over the next 12 months

48.9%

Software implementation(s)

44.4%

Implementation of new policies

Global: 25.0%

47.0%

financial leaders are ACTIVELY looking TO RECRUIT experts to take on core finance functions

50.0%

Australian financial leaders are mostly recruiting for…

Global: 2.7%

Global: 1.7%

Australian companies find it difficult to hire the right financial talent – ARE YOU RECRUITING THE TALENT YOUR BUSINESS NEEDS?

NOT EASY 43.3%43.3%

To SUCCESSFULLY DEAL with a broader remit, Australian financial leaders must combine STRATEGIC 28.9% 23.9% Financial Financial THINKING with excellent SKILLSplanning IN FINANCIAL MANAGEMENT, communication and change leadership Accounting NOT EASY 32.2%

Shared service centers

25.5%

Centralisation

& analysis 14.4%

14.4%

Outsourcing

16.7%

Insourcing Decentralisation

10.0%

management Accounting 16.7% 8.9% Global: 23.0%

13.6% 6.4%

Changes planned over theGlobal: next19.8% 12 months7.4% Global: 23.0% 3.3%

No significant changes

22.2%

48.9% Global: 6.3%

Software implementation(s) Once regarded as a stepping-stone to CEO, As their roles become broader and more strategic, thenew CFO role is now A CAREER AMBITION in its own right Implementation policies Riskofmanagement Project finance AUSTRALIAN FINANCIAL LEADERS are GENERALLY Where do Australian CFOs see themselves in two years’ time? HAPPY in their position

6.7%

Global: 6.7%

Centralisation = = HAPPY 77.8% The figures on this infographic are based on responses from 90 Australian financial leaders. Outsourcing

Global: 75.0%

UNHAPPY Insourcing 22.2% Global: 25.0%

14.4%0.0%

22.1%

1.5%

Same position with a larger remit

Same position

Interim manager

CEO or Managing Director

Global: 2.7%

Global: 1.7%

Global: 43.1% www.businessfirstmagazine.com.au Decentralisation

Global: 24.0%

As their own role diversifies, almost 1 out of 2 Australian financial leaders are looking changes TO RECRUIT experts to NoACTIVELY significant take on core finance functions Australian financial leaders are mostly recruiting for… Infographic.indd 11

3.3%

Global: 7.7%

Global: 65.9%

44.4%

More than 2 out of 5 Australian companies find 22.2% it difficult to hire the right financial talent – ARE YOU RECRUITING THE TALENT YOUR BUSINESS NEEDS?

Project finance 6.7% Global: 6.7%

The figures on this infographic are based on responses from 90 Australian financial leaders.

32.2%

28.9%

54.4%

10.0%

Global: 19.8%

Risk management 8.9%

Global: 6.3%

Financial management 8.9%

Global: 7.7%

18.8%

8.9% Shared service centers

Financial planning & analysis 14.4%

Global: 47.0%

EASY 50.0% 56.7%

Global: 65.9%

EASY 56.7% Global: 34.1%

Global: 34.1% 25.5%

23.9% 13.6% 6.4%

BUSINESSFIRST 7.4% MAGAZINE

18.8% 30/12/2014 7:40 am

BF | FEATURE

Q&A

WHAT TRENDS CAN WE EXPECT FOR 2015?

Fred Nucara

is Director of Beller Property

Michael Kodari Managing Director of KOSEC – Kodari Securities, Investments

In 2015 we expect to see a continual surge of investor demand and developer demand, driven by a low interest rate environment. The reserve bank announced in December that the cash rate is going to remain at 2.5%, which means we’re heading into 2015 with still the lowest finance and funding available to investors – whether they’re mum and dad investors or major developers. As a result of that we feel that this momentum and strong demand in commercial property and com-

mercial development sites will continue into 2015 with enormous aggression at all price points. There is no reason the market momentum will change.

The start of 2015 is likely to see a continuation of the issues that plagued markets during the second half of 2014.

performance of these economies is likely to remain a significant point of interest for 2015. Amid these concerns rising geopolitical issues such as ISAS, Ukraine and the Ebola virus will also remain a source of volatility for global markets in 2015.

Over the past year markets experienced a return to significant volatility after what was an extended period of eerie quietness. As things stand there are numerous factors globally culminating in a tug-of-war across financial markets, likely to continue into 2015. On the positive side of the ledger, the US economy appears to be on a sustained path to recovery with a continual fall in unemployment sustaining improvements in investor and consumer confidence. Improvements in investment spending as well as a renewed gusto in fiscal spending are both likely to provide further imputes to US GDP growth for 2015. Concerns of an economic slowdown from the likes Europe, China and Japan has been a real cause for investor concern and the

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The other reason we believe this to be true is that there is still a lot of superannuation money looking for an investment under $3 million. In addition, we still have a strong influx of overseas money coming into Australia plus an established local developer/ builder market keen to acquire sites due to

The recent rapid decline in the oil price should eventually flow through to help stimulate the global economy, particularly the energy importing economies. Oil is obviously a key input for most businesses as well as the average consumer. The Brent crude price this year has fallen by more than 35% to sit below $70 USD/BBL. Lower oil prices naturally lead to lower prices at the petrol bowser, boosting the disposable incomes of lower income workers, and leading to a welcome boost in consumer spending around the world. Looking more specifically at our local market a falling AUD and declining commodity prices will add to the already temperamen-

the lowest interest rates in 50 years. These factors all add to the momentum of buyer activity. While there may be signs that the business community and economy may be unstable in certain areas such as mining, here in Victoria we have seen a relatively stable economy, good fundamentals, and as a result we expect to see confidence continue through in to next year.

tal global framework. Inherently, simultaneous falls in the prices of Iron ore, oil, coal and gold has placed significant downward pressure on the ASX given to the overwhelming index weight of the mining sector. Although falling commodity prices should lead to a lower Australian dollar in due course, the risk remains that the AUD doesn’t depreciate by enough, and fast enough to assist with the rebalancing of the economy. The sustained decline in commodity price also poses challenges to the Federal government budge. Lower tax receipts creates an environment comparable to a fiscal tightening, so its unsurprising to see the RBA meeting minutes state the view that “growth is still expected to be below trend over 2014-15, before gradually picking up.” Perhaps now more than in past decades investors need to be very cautious when selecting economic sectors and businesses to invest in.

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FEATURE | BF

Sebastian Evans

Naos Asset Management, Fund Manager Finance

Jon Michail

is the founder and CEO of Image Group International.

Interest rates and inflation will be the two key issues in 2015. Interest rates will be cut – perhaps even twice – before starting on an increasing trajectory at the end of 2015. Interest rates will most likely be cut before we see inflation pressures rise (inflation could be a late 2015/early 2016 phenomenon). The Aussie dollar will drop as low as 75c against the $US. Gains will be made in GDP (ex mining) as household income increases marginally – although this will depend on employment figures. Investment opportunities for mining and

resources will remain thin, while retailers will benefit from falling interest rates. The US market will remain strong, while Europe will remain tenuous and the bottom will fall out of the property market in Beijing, having a ripple effect over China.

There is much to look forward to in Asian markets, particularly in China, where sport and brand will collide with the running of the Asian Cup Australia 2015.

speak about China, luxury goods and products that have status will be at the forefront of any potential successes.

The Cup will provide the perfect opportunity for Asian businesses to capitalise in Asian markets, promoting their brands and products in this very luctative environment. The event will act to forge closer business ties with our Asian neighbours.

imagegroup.com.au When you consider seven of Australia’s top 10 trading partners could qualify for the event, which is contested by 16 Asian nations and is considered the most important football tournament in the region outside of the World Cup, it’s a great opportunity to showcase Australian businesses. Smart organisations and entrepreneurs will find ways to capture market share. When we

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The positive news in 2015 is a prediction in further gains in GDP (excluding mining) as household income increases marginally. Employment security will remain a key factor for predicting consumer confidence and consumption trends into anything positively

Western businesses can go to China and capitalise on their growing obsession with status. For instance businesses such as Paspaley Pearls could have a major impact. Other industries that will surely capitalise include the fresh food industry, personal services, brand name products, FMCG and high level accessory businesses. You may also consider unique beauty products and wines and spirits. Any product based around quality and luxury would do well. The key to doing well, however, is to understand the culture and to find the right partners.

significant for the domestic economy over the longer term. In order for significant gains to be made, both here and other global developed markets, we would need to see meaningful movement in employment figures and wage growth metrics, particularly given that wage inflation has remained relatively unchanged for the last 3-4 years.

is easier to break into markets and create success. The right partners will give you leverage. Choosing the wrong partners, however, will lead to exploitation. This is a highly competitive market and you should be ready to face competition, the like of which you have never faced before. The Asian market is opening up, particularly with the free trade agreement further facilitating Australian businesses. The potential to do well in this market is thus limitless. And the Asian Cup in Australia, will only serve to highlight how much opportunity exists.

When you find the right partners you gain instant respect and with respect in Asia, it

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BF | FEATURE

RISKY BUSINESS

Despite efforts in the mid 2000s to clean up unethical remuneration practices within the insurance industry, some brokers are still acting in their own best interests and the interests of the insurers rather than their client. This is something all CEOs, CFOs and Risk Managers should be aware and take steps against. Jonathan Jackson spoke with The Lion Partnership’s Ken Armstrong and Peter Sellwood about risk management and protection against contingent commissions and broker advocacy.

aving made contingency fees illegal, Eliot Spitzer forced these players to recompense complainants to a tune exceeding $1 billion, with investigations leading to further lawsuits. It was a wake up call for the industry with many other countries, including Australia, following suit, banning contingency fees and making brokers accountable to their clients. Yet a recent decision by Regulators to reverse the ban on contingency fees could once again open the floodgates to

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contingent hungry brokers. Ken Armstrong is the Lion Partnership’s Chairman. The Lion Partnership specialises in risk management and insurance advisory services. During the initial crackdown in 2004 while running an expense consulting business, Ken gained a reputation for independent auditing advice and his business morphed into a risk management insurance company. “I would get 30 to 40 clients a year and 99% did not have a broker service level agreement. If you don’t have an agreewww.businessfirstmagazine.com.au

30/12/2014 7:41 am

FEATURE| BF ment that says your broker is working for you he is likely to be working for the insurance company and has no obligation to correctly insure or identify your risks.” Insurance is a major expenditure. It is a non-core expense but is high up in the Company Secretary or CFO’s mind. They don’t have much control over insurance and therefore must put their trust in their broker. The problem then becomes attaining the best coverage if no one is conducting a legitimate governance review (audit). The Lion Partnership was borne of this conundrum. Ken was contacted by major financial institutions to audit their relationship with their broker, find out whether they were paying the correct fees and ensure they had the best coverage and premiums. This is a process all businesses should take; seek out an independent auditor and have them conduct client risk identification or risk profiling. “My job has been to look at a client’s relationship with the broker, benchmark what is being paid to the broker, examine what else the broker is earning and ensure that insurable risk has been identified. The first thing a broker must do is identify the risk to be insured otherwise he can’t buy you a policy.” The Lion Partnership is one of a few organisations that audit the broker to ensure that thorough risk profiling is conducted and that any policy bought is for the client’s benefit. Another question businesses should ask of their broker is the type of remarketing being done. “I would ask when was the last time your broker remarketed?” Ken says. “You should do it every time the market changes. If you remarket every three years, your broker is showing you what is available in the global marketplace. That means they should have identified your risk and told you the differences between available policies. “If a client tells me my broker has remarketed and shows me a report where 70% of insurers have declined to quote, then the broker isn’t doing his job. He shouldn’t be taking the policy to an insurer who doesn’t want it or is too lazy to give a quote.” By conducting a full risk assessment and remarketing correctly, the client comes away with three benefits. 1. They receive the best coverage. 2. They develop the right relationship with the broker. 3. Their premiums reduce. Ken says if you get the coverage and the relationship with the broker right, the premiums take care of themselves. Know your risks

To make sure you receive the correct coverage, you need to know your risks. The Lion partnership uses an in house actuarial wording team who make sure that policy wording has no tricks and every word and comma is correct and benchmarked against other policies to fix any deficiencies. The problem for many companies is that they do not have a risk register. They know they have risks, but they do not know all the risks. To create efficient policy you need to look at all insurable risks. Which is where businesses such as The Lion Partnership are valuable. Peter Sellwood was a broker with global insurance giant Willis before he joined Ken. Willis was one of the organisations Spitzer had in his sights back in 2000. Peter says, “Brokers would rather we aren’t here, but one thing that global brokers know is that we are independent, impartial and unbiased. If the broker is doing a good job www.businessfirstmagazine.com.au

Feature2.indd 15

in service, process and fees, then 70% of all reviews remain with the holding broker but the client ends up with better cover, tailored to risk exposure, greater advocacy around broking service and lower premiums.” Risks are internal and external. One major risk is that your broker has become complacent and just rolls over your policy. “There may not be any premium increases, but if you are a good risk your broker should be coming back to you with premium reductions,” Peter says. The other thing a good broker will do is sign off on the wording. “Brokers will write to you and say here is your policy, have a look and get back to us. However, it is the broker who should be looking at technical aspects of the document and the policy wording reviews and making sure that what you eventually sign is watertight. You should be able to trust your broker to provide you with the tailored insurance you need.” Ken cites ANZ Stadium as an example. ANZ Stadium had a policy in place that insured them for “lasts”, the wording, which was taken from a generic policy, should have been “casts”. “Imagine if there was a $50 million claim,” Ken says. There can be recourse if the wording is wrong. However this is a grey area. “If there is a large claim, department heads are instructed to find reasons not to pay,” Peter continues. “It is standard practice. If there is a claim and the insurers repudiate the claim because of wording and you believe your broker should cover that risk, the broker will produce the policy and say you signed this after I asked you to check it. Redress will then be lengthy and costly.” You then need to prove your broker is your broker; he probably isn’t, he is most likely the agent of an insurance company. Businesses should audit their broker and coverage every three years. They should ask their broker to restate their credentials and have two others look at their policy and risk with a fresh pair of eyes. A good CFO or COO will also run conceptual tender and set benchmarks. While corporate counsel may look at policy wording, what they won’t do is compare the wording to three other global insurers to ensure the cover has the best wording. Even the biggest company benefits from benchmarking. A company may be able to identify and manage its risks, but they are putting money into risks they don’t need. “We had a major client with a half a billion dollars per event policy on their collective properties,” Ken says. “Their biggest property was worth $400 million, so we changed the policy to $400 million per location, and not$650m per event. This meant if more than one property is lost in a single event there is no longer a $650m cap of the cover. This simple change closed a $1b gap in coverage for the client and significantly reduced the annual cost of their property insurance. The Lion Partnership takes a no savings, no fee approach and saves clients on average in excess of 30 per cent on their insurance costs. Yet it goes deeper than that. Their governance approach ensures that brokers provide a written service level agreement to clients, build in KPIs to ensure the broker will deliver on the client’s requirements and a provide an agreed transparent fee for service. In this day and age, where contingency fees are back in vogue, businesses must ensure their brokers are working in their best interests. Failure to do so can be costly. BF

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BF | FEATURE

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FEATURE| BF

SECURITY IN THE HYBRID CLOUD As businesses migrate to a hybrid cloud, it is essential to put in place security controls that protect their data and reputation, writes Frank Richmond, MD Cirrus Networks.

n 2013, the Federal Government published their National Cloud Computing Strategy. The strategy placed a spotlight on organisational risk when using the cloud. While private clouds minimise risk and privacy issues remain in house, the public cloud offers capacity and scale. The question for businesses is which cloud model they wish to adopt and which best suits their security parameters. In a best-of-both worlds scenario, a hybrid model will provide secure, on-demand access to IT resources while also giving companies the flexibility to move work onsite or offsite to meet specific needs. The hybrid model gives you security in your private cloud with the scalability of a public cloud. Most businesses today are navigating towards the hybrid model, keeping the most sensitive resources internal and under organisational control. Barriers to cloud adoption are typically security based; however, complacency is also a problem. Companies rely too heavily on their existing security arrangements when really they should be in a continual process of auditing those arrangements when business process or organisational behaviours change. Remember, Hybrid Cloud provides great flexibility, but with that flexibility comes a security responsibility – we can’t just assume tomorrow will be the same as today or yesterday in this fast paced digital world. A hybrid cloud may allay those concerns, although businesses must still wrap their heads around legislation surrounding data security. The Australia data breach notification law finds that an organisation that stores customer data in an offshore provider’s infrastructure remains the custodian of that data, no matter what happens to it. Therefore to ensure your hybrid cloud is secure, you need to adopt non-traditional IT security approaches. For instance, a provider such as VMware Service Providers incorporate VMware vSphere’s multilevel, auditable security, as well as a comprehensive security framework designed for compliance with an internal IT environment. VMware sets stringent standards for security, scale and production

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readiness to validate that vCloud service provider partners address these standards. For businesses it is then about choosing the right solution and integrating a workable, securitised hybrid To do this, the first step is to adopt a comprehensive governance model. This will ensure that the lifecycle of specific work is controlled and appropriate access given and taken away. Further to this, activity must be monitored to ensure visibility across private and public platforms. Visibility refers to information in context that is easily identifiable and actionable. Scalability is another important factor. Centrally managed access controls are critical if information is flowing between internal and external environments. Organisations must also take a shift in thinking from old world ‘ports’ and ‘protocols’ to a more business process focused paradigm. Understanding that the connection between users, assets and applications and how they interact then associate this with acceptable business risk is essential. This thinking enables quick and easy scalability and ensures that security policies are directly linked to governance, enabling the advantages of Hybrid cloud technologies. Organisations must retain responsibility for their security, even when they do not have full control over their cloud functions. Platforms such as VMware allow you to do this in several ways: • Secure your hardware. • Ensure clearly defined service agreements are put in place. • Understand what will happen if your data is lost and the cost of that on your business. • Isolate data or infrastructure to prevent multi-tenanted environments gaining access. • Build relevant security and look outside of what you have in place. Security in the hybrid can be fashioned to avoid costly breaches and thus avoid damage to infrastructure and reputational damage to the enterprise. BF

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BF | TECHNOLOGY

FIVE

TECHNOLOGY TRENDS FOR 2015

Digital saturation

David Jackman is the managing director of Pronto Software. pronto.net

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We used to talk about standard business practices. But today, there’s almost nothing standard about the way individual businesses operate. Except for one critical factor: the proliferation of digital disruption. We live in a world where every staff member rightly expects to be able to access the information they need to do their job from the device of their choice, when and where they want. This is the first year your staff will take this functionality for granted. If you’re not able to provide this to staff, your business could find it difficult to compete in your market, attract and maintain great talent, as well as take advantage of opportunities to grow.

The rise and rise of 3D printers Research by Gartner shows worldwide shipments of digital printers will rise by an incredible 98 per cent this year, with shipments expected to double in 2016. That means this technology is very quickly becoming commoditised and, therefore, extremely affordable. 3D printers are about to become a standard business tool in the same way laptops are. As a manager, you have to question whether your business is really ready for this incredible innovation. If it’s not, now is the time to put steps in place so you can take advantage of the 3D printing opportunity. This year, expect to see an explosion of applications for 3D printers across the industrial, biomedical and consumer spaces. Digital industries will be transformed as a result, especially those that rely on design as a critical business function. 3D printers are making it far easier to create prototypes and enable short-run manufacturing. This is going to translate into a far superior supply chain, allowing businesses to bring products to market faster and cheaper, enhancing the overall customer experience. Undoubtedly, 3D printing will transform the manufacturing industry, with engineer-to-order business structures more and more pervasive among the sector.

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TECHNOLOGY| BF

Technology has always been an enabler. But so evolved has technology become, most won’t even be aware of the incredible power it is now delivering businesses, allowing them to operate better, faster and smarter writes David Jackman, Managing Director, Pronto Software. This is technology’s year. To demonstrate this, below are the five top trends that will pervade in 2015.

Insights come of age There’s a lot of talk about data, especially big data. But it’s important to remember that data is simply the fuel for the big engine that is Business Intelligence. The major shift this year is that although business insights will be pervasive, for the most part it will be invisible: it really will become the powerhouse in the background that’s embedded everywhere, delivering all the intelligence businesses need to make the right commercial decisions to propel their competitive position. Because they have already identified the information individual employees need to excel in their roles, staff will routinely draw on this knowledge in real-time. But the real value extension in 2015 is that information systems will be able to suggest next steps to staff, based on the information they have accessed. It really is the next frontier in business intelligence.

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More mid-market businesses get on board the cloud There are very few businesses that are not using the cloud in some way or shape - either to manage emails, store data or host their web sites, to name a few. But the big shift this year will be at the mid-market level. This part of the market will use 2015 to accelerate their adoption of cloud-based technologies. With the option of a cloud-based delivery, it’s now easier than ever before to access the full benefits of an integrated solution with a lower upfront investment. Whether it’s a hosted or software as a service (SaaS) model, these platforms allow for rapid integration of new technologies, removing the need for inhouse resources to monitor, maintain and manage your IT systems. The result will be better access to data by all employees, improved secure storage of critical information and enhanced organisation-wide productivity, all via a cost-effective solution.

The bespoke software revolution It wasn’t so long ago that software developers took a one-size fits all approach, offering their customers basically the same functionality, no matter what industry the business operated in, its size or level of technological maturity, and without considering legacy issues. That’s all changed. In 2015, your software developer should be able to build a solution that genuinely fits your enterprise’s unique circumstances. And, it must have the flexibility to seamlessly scale as the businesses expand and grow. This year, the more intuitive software developers are hungry to showcase how they are able to tailor their solutions to fit their client’s specific circumstances. There’s no doubt that 2015 will be a landmark year for technology. It will be the force empowering Australia’s top and mid-market enterprises, quietly supporting business decisions, helping executives make better choices about strategy. Importantly, it will steer the adoption of increasing efficiencies and in turn, drive improved productivity. It’s an incredibly exciting time. BF

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BF | PROFILE

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PROFILE | BF

The clear-cut plan to operational excellence At just 44 years of age Campbell Hanan is one of the youngest CEOs of a major Australian business. He speaks with Bob Forshaw about the commercial property market.

t was a difficult time to find work in Australia in the early 1990s. It was the time of the ‘recession we had to have’ and like many trying to forge a career back then, Campbell Hanan wasn’t immune to doing the hard yards just to get a foot in the door. However it is that characteristic, the one in which people shed blood, sweat and tears to make an impact that allows you to break into your chosen field and build a respected career. Campbell displayed these characteristics early on and finally found his place with Colliers, where he began his career in commercial property. “Back in those days AMP was the big institutional real estate client. I wanted to be seconded to them.” Campbell is a man who knows his mind. He spent six years on the AMP secondment and worked on major projects including the Angel Place develop-

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ment and NRMA building. In 2001, Campbell joined UBS and worked his way into the position of Director Equity Sales, before landing at Investa. He worked his way through leadership roles before becoming CEO of Investa Office in July 2013. “I have always been a person with a clear cut plan. I was lucky that I met a guy early in my career who was an ex Harvard MBA graduate who spent months with me to help me figure out what my life’s game plan would be.” To further that ambitious streak he also completed an MBA. “I did an Executive MBA on the way through,” Campbell says. “That was a real game changer because it rounded out things for me. I had on the ground experience, but hadn’t fully realised how the management piece of the puzzle could better come in to play.” He says everything that he has done

in his career to date was to get to this point. “Now I feel refreshed that I am here. The next steps are the harder ones, but I was lucky to have the variety in the jobs that I have held, especially at Investa where my role changed every two years as I was given added responsibilities.” He says role diversification is crucial to an organisation’s wellbeing. “It is the concept of creating personal development plans for people

“Frank Ross & Associates are proud of our long association with Investa and to have provided quality flooring solutions to a forward thinking and dynamic group seeking advanced environmentally sustainable technology whilst insisting on conventional customer service and value for their clients.” Bruce Bedwell, Director

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BF | PROFILE

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to continue to grow in the roles they are in and more broadly within the organisation so they don’t become so socialised and embedded in the role that they become key risks if they leave.” Campbell is responsible for the strategic direction and leadership of the Investa Office group, controlling assets of over $8.5 billion. He has ultimate responsibility for all of Investa’s managed funds, including Investa’s balance sheet portfolio and oversees the performance of the office assets through ensuring the effective operation of the office management platform. Investa is one of the largest office Springmount Services is proud of our long term professional relationship with the Investa Group, and also of our close working relationship with Investa’s Property and Facility Management personnel. We have been providing commercial cleaning services to their Brisbane CBD office portfolio for the last 10 years. Springmount Services

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real estate companies in Australia. It is an interesting time for commercial property management. “I think we are in a new paradigm,” Campbell says. “We are coming to terms with the fact that we are in a low growth, low interest rate, low inflation environment and we will have to accept lower returns. Currently we are paying more for the same income stream than we did a year ago and meanwhile the cost of capital is becoming cheaper. There is an abundance of capital, so there is disconnect between what operating markets and capital markets are doing. Asset valuations are going up for the wrong reasons; as rents grow, capital values go up, but right now rents aren’t moving but capital markets are.” Another change in the market is the globalisation of commercial real estate. “With the exception of major global players such as Goodman and Westfield, most Australian real estate companies that ventured into offshore markets have brought their money home and are now specialising in both activity and location. What globalisation has done is force businesses to decide what they are really good at and stick to it. Attracting the growing pool

“WHS obligations, a safe work environment, and protecting the community are priorities for Investa, so using Independent Monitoring Consultants expertise to monitor the cooling tower and building environments is one less headache and confidence that these obligations are met”. Richard Mumberson – Managing Director, Independent Monitoring Consultants

of unlisted capital requires investment performance that often comes from specialisation. Seven years ago most institutional real estate was controlled by domestic Listed Real Estate Trusts, today the landscape has changed dramatically with ownership spread between private, domestic wholesale unlisted capital, foreign institutional investors and sovereign investors. The growth continues to come from unlisted capital Campbell sites Investa as an example of one company that refocused. “In 2007, Investa had too much leverage and had to think long and hard about what we would specialise in. We focused on two activities rather than four or five.” Investa Office is also a specialist and people who work within the

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Environmental Services/OHS

Indoor Environmental Quality

Microbiology Laboratory

Occupational Hygiene Assessments

IMC

Legionella Sampling & Testing

Environs

Workplace Health , Safety & Environment Compliance Occupational Noise Measurements & Assessments

Occupational Inhalalable & Respirable Dust

IMC Environs

(Div. of Independent Monitoring Consultants)

Australia – Malaysia – Thailand Office: 23-25 Daking Street North Parramatta NSW 2151 Australia 24Head BUSINESSFIRST www.businessfirstmagazine.com.au Tel: +612 9890 5067 | Email: environs@imc1.net www.imcenvirons.com/www.imclive.com MAGAZINE

PROFILE | BF

organisation understand how their role is aligned to the company’s vision. According to Campbell this means everyone feels relevant; and everyone understands how their day to day activity can be directly measured against the business goals. Everything we do is about alignment to our vision. “The people who succeed in this business and any other are those who understand what they can do every day to make a difference. They are custodians of someone else’s assets; they are

We have been working with Investa for nearly twenty years and really enjoy the Team’s professionalism, spirit, good laughs, support and respect that has been shown to me both personally and to all my Team Members. We are a professional company and like being associated with our professional clients. Hazel Parsissons, Managing Director - Plant Management Horticultural Services www pmhort.com.au

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a service provider. And young people, in particular need to remember that personal behaviour reflects the business brand. In the end we should all take the time to listen to what stakeholders want because you have far more power when listening than talking.” Investa has a range of stakeholders to whom they listen. And they are in very diverse segments: Phytek is very different from Independent Monitoring Consultants, who is different again from Frank Ross and Associates and Springmount Services. Then there is The Plant Management Company, Posh Services and Ultra Clean Services. That’s everything from cleaning to landscaping, engineering and sampling and testing water systems. Each has a unique function and it is imperative that relationships with these businesses are built on the ability to listen to their needs. They are as important as staff and customers in the full and successful operation of Investa’s services. Another message Campbell has, and one he learnt at UBS, was that it is important to create value for stakeholders. That means creating value in what you do every day. At Investa it is to understand how the income stream comes together and creates value. “What UBS did was taught me how

“Posh Services would like to congratulate The Investa Property Group on their continued growth and success, Posh Services has provided a complete range of Horticultural Services to the Investa Group since 1996 and we look forward to continuing our business relationship.” Posh Services

to optimise value. Once you understand the income stream, you understand how to bring debt and equity together to create value.” That is no mean feat when you are managing more than $8 billion in assets. However what drives the group is its vision to be the first choice for ten-

“

What UBS did was taught me how to optimize value. Once you understand the income stream, you understand how to bring debt and equity together to create value.”

BUSINESSFIRST MAGAZINE

INFRA RED IMAGING HEAT MADE VISIBLE

Infra Red Thermography is used in detecting faults in electrical, mechanical and many other engineering applications. Thus, facilitating planned maintenance which will avoid costly unscheduled shut-downs.

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Early detection and repair of bad connections will avoid a costly replacement of components

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26 BUSINESSFIRST www.businessfirstmagazine.com.au COMMERCIAL WINDOW CLEANING & BUILDING MAINTENANCE MAGAZINE

PROFILE | BF

ants, investors and staff. It is to provide a unique customer experience. This may mean there is a little more rent paid, but that delivers more investment and therefore better returns. “If investors see us outperforming the market, they give us more capital to invest and we buy more real estate. The business then generates more fees and we can pay our staff more. It is a circular alignment to our vision. This whole concept of how to successfully manage a business is to keep the business aligned to the vision and then the business continues its strong performance.” Good businesses deliver on a vision that is reflected in KPIs, job descriptions, hiring policy, IT systems and how you tell your story through marketing. When that is set, growth comes naturally through the “best business model that is designed around relevance to the customer. “We have been through this massive customer-centric journey. Businesses will ignore customers at their peril. Everything we do around our tenants and our investors revolves around un-

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derstanding what it is they really want. We appreciate that we are custodians. It is amazing how many businesses forget that. Even our suppliers are a facilitator of our brand. They have a big flow on impact. Therefore we have a lot of communication, do a lot of listening and delivering all of those things that form stable partnerships.” The thing Campbell is most proud of is the way the business has moved to a customer centric approach. “We figured what excellence looks like and then asked ourselves whether we were structured as a business to reflect this. We weren’t, so we organised business around tenants and their corporate needs rather than our own corporate needs.” There is still room for improvement though and Campbell feels it comes down to understanding the difference between a tenant and an occupant. “The tenant is the CEO or CFO who make the decisions, the occupants are those who influence the decision makers. So it is about what we can we do for them and how we can make their

Application of Thermography has been part of Investa’s successful maintenance program for many years. Faults in electrical facilities can be identified and repaired before failure occurs, thus preventing unscheduled and disruptive shut downs. Our interaction with middle management at each property has enabled us to appreciate the professionalism and quality of Investa’s competence in the area of property management. John Podolak, Director Phytek

lives easier, more enjoyable and how we become more relevant to their day to day business life. It is a different way to look at the property industry. When we consider this industry we usually only see the sale of a property or the service of a building. Yet, as Campbell has explained this is a very customer centric service and it is imperative that to deliver the best service, it is important to understand what the business stands for and how this reflects on the client’s requirements. BF

BUSINESSFIRST MAGAZINE

BF | ASIA FOCUS

MIXING BUSINESS WITH PLEASURE The role of socialising in Japanese business culture has a very special significance, and focusing your efforts on social occasions can be the difference between establishing successful business relationships.

he Japanese workplace is a very structured environment and there’s not much room for fun or comradery in the office. This is namely down to the hierarchical business structure, which places very strict guidelines on who is able to speak to whom, and ultimately the job titles that define relationships within a company. However, Japan has one of the most animated after-work cultures of any that I’ve experienced, and I believe being a part of this is a key element for successful business negotiations.

After-work culture

The after-work culture in Japan doesn’t mean the same thing as it does to us, it’s not necessarily a relationship building exercise between employees – it’s actually quite the opposite! Employees on every level tend to use it as an opportunity to unwind after work and vent any frustrations. What’s interesting is once you’ve entered the social environment no-one has any badges and all of the corporate titles are washed away. This allows for completely open interaction between the hierarchical levels and social occasions can become quite animated. However, once you step back into the office the walls go straight up again. Japanese employees are surgically capable of differentiating between work and social hours – it’s quite a remarkable thing!

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Dinner not lunch

One of the first differences in Japanese social culture I noticed was that informal business meetings tend to be held over dinner – not lunch as we’re used to. A dinner invitation indicates that the relationship is going to be built on a less formal, more friendly foundation. I am currently in the process of building a new relationship with a Japanese company and was introduced to my new contact at a social event. In these social circumstances I was able to speak directly with the Managing Di-

rector and talk openly about business, which in normal working circumstances would be frowned upon. From this introduction, we scheduled a dinner which opened the gates for business negotiations. Not for me personally however, rather the occasion gave my team the seal of approval to start negotiations from the bottom up. Once talks reach the key decision makers at the top they are already familiar with me and my company and we have an established relationship that was formed over dinner. www.businessfirstmagazine.com.au

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ASIA FOCUS | BF

Social etiquette

There are certain social etiquettes to bear in mind if you’re being entertained by Japanese business contacts. Japanese are renowned for being the perfect hosts, and the first trap you need to avoid is filling up your own drink – it is polite to fill up the other person’s glass who in turn will fill yours. It’s also considered bad form to complain and your host may take this very personally. In my experiences, Japanese hosts have always been extremely attentive and will usually make sure you’re www.businessfirstmagazine.com.au

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happy with the meal and the service. If your host offers you a drink – or even buys you a turn in a karaoke bar which is a very common gesture – it would also be considered rude to decline! I believe it’s very important to immerse yourself in the after-work culture in Japan. If you choose to distance yourself from it, it can be quite damaging to your relationship and hurt negotiations later on. To build strong partnerships with Japanese companies, you need to be seen as successful socially as well as in business.

There is a saying in Japan that I often refer to when discussing the social aspect of Japanese business relations and that is ‘a nail that sticks out gets hammered down’. The key to successful corporate socialising is to mix in with everyone else and take your lead from your host. BF David Finn, Managing Director of Kyocera Document Solutions, began his career in the IT Industry in 1984 with IBM. David spent 10 years as General Manager at Epson before commencing his 17 year career with Kyocera in 1997.

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BF | PROFILE

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PROFILE | BF

Built on family roots Building a house is meant to the one of the greatest tests of relationship management. After all, any form of construction takes many differently skilled individuals, all united under the talent of a good project manager. Story by Jonathan Green

or Hickinbotham – South Australia’s number one builder with a record 35,000 homes and more than 50 community estates – this relationship management is a reflection of its family heritage, and the basis of its incredible success. The company was founded by Chairman Alan Hickinbotham, with his father Alan R. Hickinbotham in 1954. Even at those earliest of days, there were defined roles that played to individual strengths, with Alan holding the finance and sales responsibilities while his father organised the construction side of the business. Fundamental values were also established in the early days, which have carried through the ages. Roughly 20 years ago, Alan’s son, Michael, left the Melbourne office of law firm Blake Dawson Waldron, where he was practicing corporate law, to join the family business. He is now the managing director of Hickinbotham, ensuring that the family lines continue. Through that time, Michael has overseen massive growth in the company, building on the solid foundations of the generations before him – and always respecting the family ideals. “I really see it as a privilege to have the opportunity to build on the work of those who’ve come before me,” explains Michael. “I look to continue the good work my father, grandfather and brother have done and improve the lives of those people and businesses that we touch and engage with.” His background in law is something that Michael firmly believes has helped

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his understanding and drive. He credits his mentor in commercial law with imbuing a respect for knowledge along with a strong work ethic – both of which he carries with him today. “That was a terrific experience, and it gave me a fantastic grounding for the world of business. The partners I worked for were very demanding and had high standards – but that was because they cared enough to demand it.” The decision to come on board the family business was at a delicate time. With the collapse of the state bank, the housing market was in trouble and Hickinbotham was not in the best shape. “It took my brother and me almost a decade of really hard work, with a huge amount of stress and personal sacrifice, to turn the whole thing around,” says Michael. “At the time we had operations in Queensland that needed to be shut down. We sold assets and repaid the debt. The whole period really knocked the wind out of the South Australian economy.” While many businesses may focus on survival mode in that sort of time, Michael also kept an eye on improving products and innovation to remain competitive in the marketplace. “I believe that innovation has been in the company’s DNA for the last 60 years. In that time we’ve pioneered a whole lot of firsts, such as the invention of the Grillage Raft Footing System which is now an industry standard nationwide. Equally, we were the first builder in South Australia to utilise un-

derground power and telephone cables for a housing estate in the 1960s.” This innovation extends beyond the physical construction, with strong sustainable practices now a cornerstone of the company values. Again, Michael says it is a philosophy that runs back through the generations. “This way of thinking was something that my father was very passionate about,” he says. “We look at these sort of structural challenges as opportunities to learn how we can improve the way things are done, and to create a more attractive living environment.” These are core values that have been passed through the generations, even as business grew from small builder to large scale land developer. “At the moment we’re experimenting. We’re taking a residential community off the power grid using solar PV cells, and micro gas generators. So if we’re able to do that, it would be a complete revolution in the way development occurs and the way people live – and it will substantially reduce the cost of living of the home owners. At the same time, we’ll be reclaiming and reusing all the storm water. It’s our path towards a For over twenty years, Routleys Bathroom Kitchen Laundry has enjoyed the privilege providing the Hickinbotham Group with their plumbing fixture requirements. We thank Michael and his team for their professionalism in our day to day dealings. Trevor Routley Managing Director Routleys Bathroom Kitchen Laundry Pty Ltd.

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BF | PROFILE

Top fashion designer Camilla Franks has built a reputation on creating clothes people just love to wear. As she says, “style is to be lived in, not just looked at.” At Austral Bricks, that’s something we believe in too and why everything we create starts with 100% natural materials.

Whether it’s the finest Indian cotton, or the very best Australian clay, when you start with the best materials, style and substance go together naturally. Find out more about Camilla Franks and Austral Bricks at mybrickstory.com.au

And just like Camilla, we use them to create colours, textures and patterns you’ll love to live in, and look at.

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PROFILE | BF truly sustainable development.” Within a short time of talking to Michael, you begin to see a consistent pattern. While each generation has the opportunity to stamp their legacy on the business, there are fundamental beliefs and ethics that run through the family and underpin the direction and approach of the company. At the heart of it all, he says, is “relationships built on trust”. “We’re very lucky because we have terrific relationships with our suppliers and with our clients, many of whom are now in their second generation. These people and their families have been with us for a long time. I think people are really proud of that within the organisation too; it’s the spirit of partnership.” Naturally, it can be very hard managing a large number of suppliers and contractors, particularly in an industry, which is known for peaks and troughs. However suppliers such as Routley’s Bathroom Kitchen Laundry and Austral Brick Company have remained steadfast in their support. While Michael is quick to add that Hickinbotham has remained very consistent in work flow and so has an enviable name in the industry, he also

notes that they make every effort to keep regular communication with all their partners, including staff. “Communication is the absolute key. We have catch ups; we send information out on a regular basis; and we have a really good system to keep our staff informed about what’s going on. We’re also rolling out that process to all of our subcontractors, so they are better informed about what new projects are coming up, what the company is doing, and how they can be involved.” Arguably, the greatest work in relationship building has been through Hickinbotham’s well-known community engagement. Early in 2014, to celebrate the company’s 60th anniversary, Hickinbotham joined forces with Nova 919 Radio Station to create the 60 Random Acts of Kindness campaign, offering help and kind gestures to individuals who were having a bad time, or deserved recognition for services to the community. It was a campaign that genuinely resonated with the local community. This form of community engagement – utilising a media partner – helps spread the goodwill to more people. However – as you would expect – it is

not a new concept for the company, but rather a value that has carried through the generations. For example, when the cash strapped South Australian government of the early 1980s could not provide a much-needed school for the community at Woodend, to the south of Adelaide, Hickinbotham built a school and leased it back to the government. This desire to embrace the community into the business model is important to Michael. While he freely acknowledges that it existed well before he took on his current role, he knows that he can put his own stamp on how it evolves – a perfect symbolism of the company’s evolution as a whole. “I’d like to keep making a contribution to my community,” he says. “I really love this notion of family, and families being involved in the business, because for me, it makes us a solid business. It creates a new and better way of doing things, with the warmth and the heart of family. For me that’s a fantastic combination.” It is a rarity to see a company evolve and develop with the times, yet remain so fundamentally true to its beliefs. Perhaps it is the strength of family, but Hickinbotham is managing it perfectly. BF

caroma.com.au

Be inspired Caroma continues to inspire with the new Urbane Collection. Designed around the principles of form and functionality, this versatile collection combines contemporary Australian style with quality you can trust. Caroma and Routleys are proud to be associated with Hickinbotham Homes.

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BF | BUSINESS

TRANSPARENCY AND ALIGNMENT IN BUSINESS PARTNERSHIPS

Transparency is a broad term that can cover various aspects of business, from ethics to regulatory environment to governance. But transparency is also crucial in order to build successful partnerships. Mat Jacobson is the founder and executive director of Ducere.

e’ve heard the saying ‘never do business with friends or family’. Is this a fair statement? Well in my experience working with various partners across a range of businesses, I have had great joy and success working with friends and family, in some cases for most of my career. On the other hand I have had terrible partnerships with friends, family and business colleagues. So what is the common factor here? The first reality is that people are complex and no matter how we try to develop transparency, this won’t always be the case, and therefore our starting point should be to enter partnerships with extreme caution. A person once told me they spent about three years identifying the right business partner and worked on multiple projects for lengthy periods with different people until they could identify the right partner. My first reaction was, that is an extreme perspective, on the other hand

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I thought, ‘wow, that is really smart’, because I have seen the detrimental effects of poor business partnerships. Let’s start by looking at some of the factors that contribute to poor partnerships and then what are the common traits of great partnerships. Poor business partners fit into two categories, rogues and misalignment. The rogue element is seemingly very simple: don’t work with a rogue, ever. But I fell into a trap early in my career as a 20-something year old start-up business owner, so I can share a lesson on what NOT to do. The first time I ever raised private investment for a start up business, I worked with a small individual investor. He was a conman in every sense of the term, confident, charismatic and persuasive, as well as being an expert scammer. Incredibly, multiple people at the time I was negotiating the investment, warned me: ‘he has a bad reputation’, ‘he will screw you’ etc.

Well I wasn’t having a bar of it for two reasons. Firstly, we didn’t exactly have a waiting list of investors lined up, and desperation is a powerful motivator. Secondly, I was a trained lawyer, I had a legal agreement drafted that spelled out rights and responsibilities, so I was too smart to allow any attempt at roguish behaviour. Right? How wrong I was. A rogue personality is like a flood of water, it’s virtually impossible to stop and it will find a million small ways to screw you that you would never have thought about: from charging expenses to an unrelated entity, to getting friendly client kickbacks. The effect is disastrous because instead of focusing, together, on the objectives of the business, you’re investing a lot of time and energy into looking over your shoulder, trying to double check there is nothing untoward going on. In the end, after spending less than a year in partnership and becoming concerned about my own possible legal implications with www.businessfirstmagazine.com.au

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BUSINESS| BF this person’s activities, I just sold out of the entity for less than what it was worth. Luckily the key staff and clients could also see what was going on and moved with me, so the transition to starting on my own again was smooth. A good lesson in the opposite trait, operating with integrity and trust may cause short-term pain but will always pay off in the long term. That business I went on to start on my own was an incredible success and sold after five years to a global public company. And the conman? He is still starting new ventures that run just long enough for people to catch onto the scams before he is forced to exit and move onto something else. The more common problem I have witnessed with partnerships first hand and in advising others, is simply misalignment. We can be misaligned in: - our objectives for the business (for example one partner wants to reinvest all working capital into longer term growth while the other has short-term requirements to take out cash now, for example to pay private school fees) - with our personal styles of doing business (aggressive and bold in getting as many clients as possible vs. taking the time and sacrificing income in order to only do the right work with the right clients), focus on business growth versus a focus on building brand equity - misalignment of physical input (one partner is full-time operations, another may be more strategic, bringing investment or relationships but spending less time on the business). Which of the contrasting views above are correct and which ones are wrong? Well that is part of the problem. There is no right or wrong answer, just a misalignment of perspective. Of course it’s fair and reasonable for a partner to want to provide a good school for their kids, but an inability to satisfy the capital investment for a business is also a big problem. So what do you do? Some of these issues are harder to reconcile than others. The first is a fundamental difference in the ability to grow a business; the last is more about personal resentment that can develop when there is a sense of greater effort on the part of one party. However any misalignment runs the risk akin to diplomacy, that of escalation. One party has a relatively minor issue and reacts negatively, the other party responds with an equally negative reaction, and www.businessfirstmagazine.com.au

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before long the matter has escalated into something way out of proportion. Not that different to a married couple who keep getting on each other’s nerves, and then can’t really remember what they were even fighting about. So let’s look at that old saying about doing business with friends and family. One of the reasons I believe that working with friends and family has potential dangers, is about a difference in philosophy. With friends and family we are generous, we always try to be fair and reasonable and look after our friends irrespective of whether this is time consuming, financial costly etc. We don’t run a ledger; we just do it ‘because.’ You could think of this like a socialist system. Business relationships are more like a capitalist regime, we want to know what return we will get from our investment, that agreements and responsibilities are clear and we want productivity and efficiency. So friends and business is like trying to mix socialism and capitalism. Not an easy thing to do. One of Australia’s wealthiest billionaires said that the people who dislike him the most, are the ones he tries to help the most. It may sound strange at first, but I fully appreciate the psychology, no matter how much you help some people, if they are coming from a socialist perspective, unless they have an equal amount to you, they will harbor resentment. Successful partnerships

The most successful business relationships are where the parties are perfectly aligned. Everyone is totally transparent on the business objectives, their personal objectives, the input that is expected and their share of the return. Even more important I believe is an alignment of philosophy on their ethics and morality in business. This takes time to develop and foster to really get a sense of true alignment, however, once this is achieved, it is very easy to then discuss and negotiate the million challenges and hurdles that come up on the road to business success. Currently I have three commercial partners I work with across two businesses and one additional partner in our philanthropic business. I have known all four for about 15 years. Two are close family members and the other two are great friends. We all share a great commonality of the balance between commercial and sustainable business outcomes, and the wider role of business in the community. I’m not saying that one should always wait 15

years before going into partnership, however the longer you take to really assess the thinking, values and philosophy that someone else has, the greater the chances of partnership success. You can observe this easily over time, how have people conducted themselves, do they have a strong community reputation, are their prior ventures successful, do they have long term staff and clients? Conversely meeting a potential partner cold and having a few weeks or even months to assess a partnership is fraught with danger. Like interviewing for a job, everyone will impress in an interview, you won’t ever hear a potential partner say: “I stole money from my last partner but let’s jump into bed together anyway.” Instead they will present professionally, give you referrals that will always speak highly of them, and until there has been some water under the bridge you won’t really be able to separate the truths from the myths. Conversely, time allows you to develop one partnership ingredient I would place above all others, which is simply impossible to obtain in a short time – trust. The polar opposite of my early experience of having to constantly look over my shoulder, is being able to spend extensive periods working on the other side of the world and having the trust in your partners to take care of everything they need to. It is also very rewarding to know your partners have the same trust in you. We often hear of the war stories, but partnerships can be very exciting and rewarding. Not only financially, but personally. Another Australian selfmade billionaire and Ducere faculty member, Lindsay Fox believes that real business relationships are also real friendships. I enjoy the work we do far more because the partners I work with are also family and friends. We don’t always agree, nor do you want to. The diversity of views is critical. What we do always agree on is acting in the best interests of all stakeholders, not one’s personal position. In the end the principles in finding a business partner are similar to those you might consider in finding a spouse. There are no guarantees in life, but a shotgun Vegas wedding after knowing someone for a few weeks is likely to end in tears. Investing the time to really get to know someone, building trust and confidence and ensuring your vision and values are aligned, will at least allow you to give it the best possible shot. BF

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BF | LEGAL

When it comes to business, what’s in a name? The differences between business names, company names, domain names, and trademarks explained.

Joanna Oakey is the Director of Aspect Legal.

id you know business names, company names, domain names and trademarks all have very different roles and provide very different levels of protection? In this article, we’ll look at the differences between each of these identifiers, and lay to rest some common misconceptions. Neither business, company, nor domain names grant any ownership

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rights like those granted by a trademark registration. This also means that they don’t offer any form of protection against action for infringement of a registered trademark. To put it simply, having a registered business name or company name, will not by itself provide protection from being sued for infringing someone else’s trademark (even if you don’t

know of their existence). So if business, company and domain names don’t actually provide ownership in the use of a name, what purpose do they serve? Let’s take a look at each, along with some of the related requirements you need to be aware of. Company Names

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LEGAL| BF

Business Names

with ASIC, merely to provide a legal identity for a company – on a national basis. In order to register a company name, it must not be identical to any other name registered on the ASIC database (or other relevant databases). However, if a name is similar to another registered business name or company name, it will not be restricted from being registered. This means that if you have received a company name registration, you will be the only business holding that exact name. However, there may be many other businesses holding similar names. In disputes where two names are very similar to each other, and the goods or services provided by the feuding businesses are similar, trademark ownership will determine which party has the right to keep the name ... and which party will end up with a large bill on their hands. www.businessfirstmagazine.com.au

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A business name is a name under which a business operates in a particular state. The purpose of registering a business name is to ensure that consumers and businesses you deal with are able to identify who it is that is running that business. The legislation of each state requires that if you trade under a particular name, that name must be registered as a business name in that state (if it isn’t already registered as a company name – which is national, as discussed above). Registering a business name is mandatory, and it must be completed before the business starts trading. The business name, as it is registered, must appear on all letterheads, invoices, and other collateral of the business. If a business operates in more than one state, the name must be registered in each of those states. As with company names above, whilst business names cannot be identical to other business names registered in that state, or to company names, they may be similar to business names in that state, and they can even be identical to business names in other states. As with the warning about company names, registration of a business name does not provide any legal rights in the use of that name. Business name registrations don’t provide any immunity from legal action against you for the use of that name. Domain Names

A domain name is an address for a location on the Internet. Domain name allocation rules recently changed, and in the national and international arena, you may now be eligible to obtain a domain name matching your own trademark (registered, or in the process of a registration application) even if it is not your registered business name or company name. In the reverse, you can also potentially register your domain name as a trademark. Merely holding a domain name will

not provide you with any rights in relation to stopping other people from using a similar name. There are varying restrictions on the right to hold domain names. However, whilst you may have taken steps to ensure that you hold the .com or .com.au domain names for your business, it can be very difficult to stop your competitor down the road from registering a .net by the same name. Navigating disputes in the domain name area can become quite complex. Trademarks

A trademark is a mark that distinguishes the goods or services of one trader from those of another. Trademarks can be many things – logo, picture, word, phrase, letter, number, sound, scent, or shape. Trademark registration is a national registration, lasts indefinitely (as long as the renewal fees are paid every 10 years), and protection can commence even before you actually begin trading. Having a trademark registration can make it much easier, cheaper and quicker for you to pursue others who are using your mark for similar goods or services. Also, simply holding a trademark gives you much greater protection against the possibility of being sued by someone else for using that mark. Unlike all the other identifiers we discussed above, trademark registration is the only option that gives you, as the registered owner, exclusive rights in the use of that mark throughout Australia (in relation to the goods and services for which it is registered) – to use, licence and sell that mark. The benefits from a trademark registration are the exclusive ownership rights that are provided to you – that neither business name, company name, nor domain name registrations provide. BF Joanna Oakey is the Director of Aspect Legal, a progressive legal company focused on providing a proactive and

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BF | PROFILE

TAKING A CUSTOMER CENTRIC APPROACH

In such a competitive industry as insurance, it is important to stand apart in product and service offering. Niran Peiris, Allianz CEO speaks with Business First about being a customercentric organisation. Story by Jonathan Jackson.

iran Peiris’ predecessor Terry Towell was one of the longest serving CEOs in the country when he finally decided to hand over the Allianz reins. His influence on the organisation was immense and he left an indelible impression as well as a great track record. Niran, who had worked his way through the organisation from General Manager of Finance in 2000 to CFO in 2001 and Head of Retail and CEO of Allianz Life in 2009, sat at the executive table with Terry through most of those years and during that time learnt that the most important aspect of the organisation was its customer-centricity. Another important lesson was the value of diversification. “We had just purchased HIH and that brought in several streams of business. However Terry’s focus was on customers.” Customer focus has been the company’s raison d’etre ever since and that focus is backed by systems within the organisation that facilitate the service to them. “Terry was a stickler for efficiencies and embedded them in the overall culture. There was a relentless focus on efficiency and using that to create competitive advantage.” There is a third factor in the success equation and that is that insurance is about cycles; to have your eggs in one basket equates to danger for the business. “We embarked on a diversification program away from pure underwritten business, so that that we had a fee-style business that could buffer the underwriting business. Our non underwriting business includes workers compensation claims that we manage for State governments and our

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premium funding business, which are vital elements that can help sustain us in more difficult times.” Having been a key member of the management team for more than a decade, when Niran took over as CEO he was comfortable with the strategy and no major changes were required. What he did do however, was look at generational change and focus on the incorporation of data analytics into all levels of the organisation. “Technology is rapidly changing and how we deliver and execute analytics is an important driver. I changed management in IT through claims and operations because that is where the customer touch comes. Claims is the service we sell and we want to make that as efficient as it can be; it needs to be customer focused. We work out what the customer wants and then work our way backwards.” The second change Niran implemented was based around professional development. “We needed to acknowledge the rapid change in the world in terms of technology and encourage a learning agility to try to stay ahead of the game as well as look at diversity and inclusion.” Allianz has grown substantially since Niran first joined the organisation. When he first started they had less than $2bn in premiums. Today they are around $4bn. They also had about half the number of staff that exists today. Niran says the growth was achieved through a systematic rebuild of everything. “When we first merged with HIH, there were five underwriting divisions and five different cultures and we had to get them all engaged. We worked to create engagement and to integrate

our underwriting capability, sales and distribution into one. The evolution of Allianz was an evolution from a medium sized insurer to a one of the top 5. The challenge now is to be better, with a focus on making it real for customers and better reflect their risk profiles.” Part of the growth was based around Niran’s roles as CFO as he injected a philosophy of when you have a bottom line you need to get something out of it. Everyone in sales knew what they had to achieve and this gave Allianz stable margins and good results. As the head of retail distribution, he embedded the importance of great working relationships with business partners. “A lot of our business comes through our significant relationships with partners, we have a multi-channel, multi approach to the market. People will do business with people they want to do business with. We rely on partners to promote our business. Those relationships are paramount.” Partners include as diverse organisations as motor dealers, banks and credit unions, who sell hundreds of thousands of policy on behalf of Allianz every year. That’s a lot of insurance. Then there is CSC Australia, one of the country’s leading technology solutions One of the key successes of Pickles is the way we build and maintain internal and external relationships. Our values of integrity, excellence, innovation and teamwork are real and are driven through the organisation. They set the benchmark for behaviour when we are at work. Bruce Maclennan Chief Executive Officer Pickles Auctions

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PROFILE | BF

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BF | PROFILE suppliers and Pickles Auctions, who sell unrepairable vehicles for Alianz. In fact diversity in many different areas is the key to Allianz’s success. Through suppliers, clients and service offering. “We distribute through a number of different ways: through insurance brokers, we have a strong segmentation of our broking business and our aim is to get the lion’s share of attention and service. We sell a lot of product through motor dealers. When you buy an insurance policy when you buy a car, it will likely be one of ours. We own specialist insurance businesses such as Club Marine, Australia’s largest pleasure craft insurers. We guard the independence for them and they have a significant market share. We are also in the heavy motor insurance sector through our Global Transport business. We engage with the industry through a multi-channel approach with multi products.” There are many business elements to control and 3800 staff within the organisation, yet Niran is in charge of a disciplined organisation, in which each staff member knows the role they play. It is an organisation with 125 years of global history to live up to.

The way to do this is to be forward thinking. Which is why technology and communication is so important to the organisation. “My biggest challenge is our data journey,” Niran says. “If you go back to the beginning of my tenure two years ago, we sat down and said we need to engage with our customers. We built a CRM to get a single view of customers even though they may have different types of insurance policies with us purchased through a range of distribution channels. This project kicked off in the middle of 2013 and finished at the beginning of 2014 and we can now engage individually with customers and meet their unique needs. The whole data journey is one where you can get lost and not produce meaningful results. With our system, I can try and deliver better results for our customers and use this research to the benefit of both the customers and Allianz.” Technology has changed the industry, especially with online sales. “It has simplified the customer experience. We developed a leading mobile product that is optimised for our clients so they can facilitate their

insurance needs on their mobile devices, wherever they are. That is the way of the future. Sales through that channel has sky rocketed, 10% of direct new business is conducted through mobile devices. It has also improved risk data and analytics. We can set prices for individual risks such as bushfire or flood risk. We have a level of granular information around risk that we never had before and we will continue to refine our risk pool.” The insurance industry is a highly competitive one, and there is no silver bullet to staying ahead of the competition. Niran says the trick to doing well in this sector is to do the basics well and stick to your promise. “If we continue to focus on our customers by treating them with respect, respond to their needs and do it with integrity we can’t go too far wrong. That is what we have built our success on,” Niran says. In the end success comes down to taking a long-term view about the future. Niran says he is a temporary custodian of a long existing company which he can shape in his own way, while leaving it in as good or better a shape than he inherited it. BF

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www.CSC.com/LET_IT_IN/CLOUD

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BF | MARKETING

THE ART OF BEAUTIFUL STORY TELLING And why it’s time you got better at it If I asked you to name your favourite speech in history, what would it be?

M Nicole Smith is the founder of Tin Shed Marketing.

artin Luther King’s ‘I had a dream’? Obama’s presidential election campaign speech ‘Yes we can’? Or perhaps it’s something from Churchill’s ‘we shall fight on the beaches’ or JFK’s ‘ask not what your country can do for you…’. The list of possibilities goes on. What amazes me about these speeches is that, in this age of information overload, we can still recite, or at least recognise these words. We know who said them, and what they meant, years, if not decades, after they were spoken. This is the power and the art of good storytelling. To say something that resonates with people, evokes emotion and becomes a story which be retold for years to come. In business, we need to get better at the art of storytelling – now more so than ever. So, what is it about these speeches that made them compelling? For me, great speeches, and great storytelling involves a few key ingredients: • Making the complex simple: great speeches often deal with complex, difficult issues – things like war and racism – yet the language is simple and concrete, giving clear guidance and inspiring hope. • Engaging: a good story or speech must be engaging – people should hang on every word and feel like they are a part of the narrative; that this speech is really their speech. • Emotion: one of the most powerful elements of language is its ability to tap into human emotions. When people feel an emotional connection, they will go a long way to support a cause or change their behaviour. • Clear and concise: people switch off

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MARKETING| BF

from stories that are verbose. Great stories get to the point and are easy to understand. • Timing: great speeches, and great storytelling works when they capture the essence of the age. Why is this relevant for your business?

In the business world we are all orators. We are all out there, standing on our soapboxes, sharing our points of view and spruiking our wares. That’s what marketing and sales is all about. That’s why we have websites (our new digital shopfronts), engage in social media, advertise and participate in exhibitions and trade shows.

The question to ask yourself, then, is simple: “is anyone listening?” Or are they more attracted to the guy at the other side of the park with the big crowd and the captivating story? How good is your business story? The three key ingredients So, time to take a good hard look at your own business story. How good is it? And how well does it measure up to the elements of great story telling? In my view there are three key ingredients you need to review:

1. What is the story?

What is your business story? Do you have one? How are you different? Can you weave a narrative around what you do and why people should come on the

journey with you? Take a look at TOMS Shoes for inspiration. TOMS has a simple message: ‘with every product you purchase, TOMS will help a person in need. One for One’. It’s compelling, it is values based, and it’s super easy to understand. The beauty of TOMS story is that it turns buying shoes into an emotional, values-based decision. 2. Website

Does your website tell a compelling story? Is it engaging? Or, let’s be frank, is it just filled with salesy, corporate speak, that could have been written about any one of your competitors? There are many ways to capture your customers’ attention but one of the most powerful is with video. This can range from documentary-style storytelling (one of my absolute favourites is Caring for Giants, a documentary about an arborist) tosuper simple educational pieces (check out how American lawyer Richard Hsu takes complex legal issues and makes them simple). 3. The spoken word

RESOURCES TO CHECK OUT • TOMS Shoes: toms.com • Caring for Giants: vimeo.com/86136784 • Hsutube: hsutube.com/

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If you were standing in the pub, and someone asked you “what do you do?”, what would you say? And what would your staff members say? Would they come out with the stilted corporate spiel, or would they respond with emotion, passion and clarity? I spent a few days with Alexander Collot d’Escury, the Chief Executive Officer of Desso earlier this year. When people asked him what Desso did he would say: “We’re a global carpets and sports pitches company. Our business is about three things: people, planet, profits”. This was never what people expected to hear from a carpet salesman – and he had them hooked every time. In the same vein, if you ask Jock Gammon, the Managing Director of Australian business Junglefy what he does, he will say: “We create green walls and roofs. Our aim is to Junglefy our cities.” More than sparking a conversation, it also sparks ideas and inspiration, opening our minds to new possibilities – which is what good storytelling is all about. BF Nicole Smith has spent nearly two decades helping professional services firms to grow their businesses. A strategic marketing expert, Nicole established the Tin Shed marketing co-op in 2010. See: www.tinshed.co

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BF | PROFILE

Small business making a big impact In the space of five years, Chobani yogurt transitioned from ‘new product’ to America’s number one selling brand. Its entry into Australia has been almost as impressive. Story by Jonathan Green

hen the Chobani yogurt founder and global CEO, Hamdi Ulukaya, saw an opportunity to enter the Australian market in 2011, the hunt began for a local head. As a well-respected and senior figure in the Australian dairy industry, Peter Meek was approached for names and dutifully handed over a few. A couple of months later, Peter was made redundant, and got back in touch with the recruiters to say he had one more name for the list – and after a very thorough process, he was eventually offered the role. “I went through quite a protracted process which was good,” explains Peter. “They got to know me and I got to know the organisation. Most importantly, I got to try the product and once I’d tried the product and saw how different it was, and the nutrition that it delivers, I was pretty much sold then. “I’m attracted to people that have got a purpose, and Hamdi – the owner of the company – has got a purpose. When I looked at it all… great product, leader with a purpose, and an opportunity to reshape the category – those were irresistible elements to have a crack at this business. I certainly haven’t had any regrets since day one.” The growth of Chobani in Austra-

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lia has been extraordinary. In a little over two years since its launch, it has attracted 8% of the market and now offers the biggest flavour range of any brand in the category. This immediately demonstrates two key elements to the business: strong consumer loyalty and a willingness to innovate. “I think it definitely starts with a quality product,” says Peter. “If you don’t have the best product then it’s going to be a long uphill battle. I have always held a belief that if you’re going to do it, you might as well do it well, as opposed to just going through the motions.” The process used to make Chobani is more complex and uses more base milk than most competitors, and so it sells at a premium price. However Peter believes that the final product is understood and appreciated by the consumer, and so there is still perceived value. The process is actually a very old method of producing yogurt; however the ability to manufacture it in large commercial quantities is definitely innovative. It is an innovation that Peter says runs right through the company. “The thing about innovation is you’ve got to believe that it’s going to be the lifeblood of your business. There’s always new ways, new business models,

new approaches that you can create that unlock value. Innovation is much, much more than just product innovation; it is process innovation, system innovation and it is business model innovation. You have to be looking at all of these things.” It is a very comprehensive approach, and one that has clearly been important in the growth of the brand. “The most important thing is you have to be listening and observing all the time,” Peter explains. “Innovation extends to not just what consumers want in the product, but also how they use it. We are talking to consumers all the time. We’re getting a lot of feedback about what they like and what they don’t like. You’ve got to be very inquisitive. “Innovation is always going to be key because you’ve always got to find new ways for consumers to consume your product, for whatever category you’re

“Visy is proud to be a long term packaging partner to Chobani. We look forward to continuing to support its growth through corrugated and plastics packaging, supply chain optimisation & packaging design. We wish Peter Meek & the Chobani team full success leading into 2015.” Visy

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CHOBANI WAS FOUNDED ON THE BELIEF THAT PEOPLE HAVE GREAT TASTE. THEY JUST NEED GREAT OPTIONS.

BF | PROFILE

SCOTT’S IS CHOBANI’S TRUSTED REFRIGERATED TRANSPORT OPTION.

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in. The yogurt market in Australia is predominantly breakfast (42%). We’ve got to win into the occasion but we also have to find ways to get consumers eating yogurt outside of breakfast.” This requires the right processes and procedures and good people to push the objective. These are processes Peter brought him with from Nestle and into this small business. He actually found implementing procedures easier within the small business. “The great thing about small businesses is you provide the experience that you learn at larger organisations such as Nestle around processes, systems, steps and procedures to create outcomes. In a smaller business you could put those systems and processes in place, but they really do speed up the decision making process because in a small business it’s easier to make your decision. The systems and processes enable change, as opposed to bigger businesses where the processes overtake the outcome.

In a small business that’s never the case. The process unlocks the outcome. That to me has been one of the wonderful things about working in a smaller business where we’re clear around the outcome.” In a smaller business relationships are also easier. These include relationships with staff and suppliers, who are also pushing to help Chobani reach their intended goals. “Some of our organic milk suppliers have been with the business for ten years. We’ve got some very long established relationships. With Chobani, because it’s a new product, we certainly were able to go to suppliers with quite an exciting proposition saying, ‘Look, we think it’s going to be this big’. “There are always people who will say, ‘You’re a bit optimistic there’, but the reality is we know the extent of the growth in the market. As such, the people that have been with us have done very well and we have some

gained some really good partnerships like packaging, and also fruit and milk supply. We’re quite lucky that Australia has a very broad base of support in industry for our category. We’ve been able to source pretty much everything locally now.” Two suppliers that have made a big impact are Scott’s Refrigerated Freightways and Visy Board, who both saw the potential Chobani has in the market and acted on it. That potential is backed by numbers. Chobani has 165 staff, up from fewer than 90 three years ago. There aren’t many manufacturing businesses growing at that rate in Australia. They have 16 percent of the market and its a billion dollar market at retail. The business has doubled in growth and ship 25,000 cases of Chobani yogurt per day, not including their Gippsland Dairy products. This is a small business success story, making a big impact in the FMCG and manufacturing sectors. BF

Peter Meek

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BF | INVESTMENT

STAYING ALERT TO MARKET OPPORTUNITIES

The start of a New Year is traditionally the time for planning ahead, setting goals and establishing a clutch of positive new habits that will create a new improved you. Itâ&#x20AC;&#x2122;s also the time to strategise how best to optimise your financial health and assess new investment opportunities that can help you achieve your long and short term goals.

conomies and markets are always on the move and it usually pays to plan in advance how you will respond to these ever changing dynamics. Many long term investors are happy to hold a steady course through medium term economic cycles, responding only to long term trends in economies or the industries and companies in which they invest. At the other end of the spectrum, more active investors and traders will be constantly looking for opportunities to profit from the ever changing landscape. Where you fit in this spectrum will have a lot to do with your interests, risk tolerance and financial situation. Throughout much of the last year,

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valuations in risk assets like shares have been cushioned by very low interest rates and quantitative easing by major central banks. In recent months however, markets have also responded to increasing supplies of commodities like iron ore and oil. At the same time, investors are again becoming nervous about weak growth in Europe, Japan and China. The US economy has been a bright spot managing to get on with the job of gradually recovering from the GFC and reducing unemployment. Whatever lies before us in next year, itâ&#x20AC;&#x2122;s likely that these themes will create opportunity for active investors and traders. Where fluctuations exist, so do trad-

ing opportunities and many investors are looking for alternative investment options or seeking greater diversification by looking to CFDs (contracts for difference), a derivative product, to complement their portfolio, and gain access to instruments not available on the stock market. The very nature of CFDs enables traders to profit from both rising and falling markets, meaning both bullish or the most bearish of traders can gain advantages from using them. Investors prepared to educate themselves in CFDs can access more than 5000 CFDs over financial instruments including global indices like the German Dax or US Dow Jones, bonds, US www.businessfirstmagazine.com.au

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shares, gold, oil and more than 320 currencies from G10 countries to exotics. They can use this investment tool to re-shape their portfolios and gain greater diversity, while building in a buffer to be able to take advantage when economic or market conditions change. So are they right for you? Should you use CFDs for trading?

CFDs are actually quite a simple concept. They allow you to trade on whether the price of a financial instrument like a share will go up or down. The difference between the buy price and the sell price determines if you make a profit or a loss. CFD stands for ‘contracts for difference’. They are called contracts because that’s what they are: A contract between you and the service provider to pay or receive that price difference depending on which way the market moves. So why use CFDs and not just trade the financial instrument itself? Here are some of the things to be aware of in deciding if CFDs might be right for you: Trading markets both ways

While the basic concept of CFDs is simple, the underlying instruments are usually not. CFDs aim to replicate the underlying financial instrument such as shares or foreign exchange. You should always have a good understanding of how these underlying markets and the CFDs over them work. Trading is not the same as investing

Cross market opportunities and trading tools

Not for everyone

Leverage and money management

With CFDs you don’t pay for the underlying instrument because you are

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There’s a lot to know

One of the potential advantages of CFDs is that you can trade both long and short. This is not always easy with some underlying instruments like shares. Shorting allows you to make money out of falling markets. Your initial transaction is to sell. If the price falls you make money but if it rises you lose.

Many CFD platforms give you easy access to trade thousands of different instruments across the globe via your computer or mobile phone. There are CFDs over stocks on all the leading international exchanges, share indices, foreign exchange and commodities. CFD platforms also provide trading tools like streaming news, charting and account monitoring.

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not taking ownership of it. Instead you are required to set aside an amount in your account to provide some security for payment of the loss if the price moves against you. This is known as margin. The margin needed is often only a small fraction of the overall value of what you are trading. Using leverage can magnify your returns. A 1% market move on an instrument with a 1% margin requirement means a return that’s 100% of the margin you put up. This can be good if you make profits but bad if you make losses. Risk management becomes essential and most successful traders have a lot more than the minimum margin requirement in their trading account.

CFDs are normally used for trading. This involves different skills to investing. For example trading is often much more short term and traders usually need to be prepared to cut losses quickly. Whether they use CFDs or trade the underlying instrument, successful traders need to develop skills.

Trading inevitably has its ups and downs. While it can be profitable, it’s not for everyone. At the end of the day a CFD position is not always the same as owning the underlying instrument. It may for example have different tax consequences. Whether trading CFDs is right for you will depend on what you want to achieve as well as on your circumstances and tolerance for risk. BF Ric Spooner, chief market analyst at CMC Markets blogs about markets, currencies and stocks to watch here http:// blog.cmcmarkets.com.au/

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BF | PROFILE

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It all comes back to family Family businesses are generally thought to be small operations with modest turnover; something that can be ‘managed’ within the family framework. If that is the case, then someone forgot to tell The Dyson Group – or perhaps they have found the secret ingredient where others seem to falter. Story by Jonathan Green

ance Deacon is a co-managing director at The Dyson Group; a family owned and operated bus company which has been in business since 1952. Lance also happens to be a third generation member of the family business, with a fourth generation making their way through the ranks. It is a remarkable achievement, and one that was formally recognised when The Dyson Group was inducted into the Australian Family Business Hall of Fame. It is a long journey from the small enterprise Laurence Dyson began to shape in 1952 after he bought four buses from an old boss who had recently passed away. With a fleet now of some 420 buses and approximately 700 staff servicing Melbourne and large parts of regional Victoria, it is truly a family business success story. While it is remarkable growth, Lance is quick to point out that it has been gradual, with critical success attributed throughout the journey. He notes that it was the second generation who took the business from a small entity to a large one, before adding with a smile that “the tax office now clearly defines us a very large company”. “The key to that success is the transition of generation to generation,” says Lance. “My grandfather obviously started the business, and by the second generation there were four family members involved. Now, in the third generation, there are 15 family employees, and we have many fourth generation members employed in different areas.” Importantly, each member of the family brings different skills that help develop and grow the business through all its elements. “I worked for an accounting firm

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for 10 years before starting here. Neil Dyson, my co-managing director, came through the ranks as a mechanic and our other co-managing director, Shane Dyson had his own path in operations. We all bring skills, expertise and understanding from our previous work. There are many different angles and we have all come from different paths and we have brought those attributes to the company. “It is a wide operation and everybody has got a key role that contributes to the success of the business. It is not just an individual; it is a group of individuals. Like they say in sports: a champion team versus a team of champions.” When asked how many members of the family currently work at The Dyson Group, Lance does a quick calculation in the head. “My grandfather has passed – however there are still three from the second generation, 15 in the third generation, and there are 13 from the fourth generation.” It would be fair to assume that having so many members from the one family could lead to issues; however there is a solid family constitution that provides guidance for the family. It directs the structure of ownership for the business currently and in the future. It works to protect family assets and provides a clear understanding of structure to ensure that all family members are on the same page. “We stick to our constitution,” says Lance. “We have a family executive (Shane’s sister Jenny) that runs the actual family part of the operation. She is an accountant and runs all of the investments. Jen looks after all the family investments and share holdings

and does all the tax returns through that family constitution. It is basically our bible – and through that that we keep everything in check. “It should be noted though, that there is no special treatment. Your entry into the business is no different to if you are coming off the street. There is no family preference to obtaining a position within the business so everybody comes through the ranks of their own accord.” Having structure for the family to work together and progress is one Dyson’s Bus Service has a proud history of growth and achievement. We at Associated Cold Tread Tyres have enjoyed working with the Dyson’s team and have developed a healthy and successful relationship over the past 30 years. We congratulate Dyson’s for their vision and success. David Bowles, Director Associated Cold Tread Tyres

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BF | PROFILE

MULTISPARES MULTISPARES Quality Quality Parts Parts Managed Services Managed Services and and proud proud to to be be supplying supplying Dyson’s Dyson’s Bus Bus Services. Services.

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thing; however there has clearly been a strong business model in order to keep the business developing. According to Lance; the two work hand in hand. “Longevity comes from focus – collective focus of the family,” he says. “It is an unsaid strength: our family orientation creates a culture that is engrained in our mission and vision and all of our values of the business. “That contributes to the longevity because we carry that through to our relationships. We have very long standing relationships with the government because they are our ultimately number one client. We have long standing relationships with both customers and suppliers and then that flows into our people. We have purchased our buses from the same supplier for 30 years. Relationship building is very important. One of my grandfather’s mottos was ‘don’t bite the hand that feeds you’ and longevity comes from respecting those

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relationships.” This solid philosophy and dedication to core values has clearly been fundamental to business growth. It is an infrastructure that Lance says allows evolutional growth. In some cases, opportunities have been identified and achieved, in other cases, the opportunity has been presented. “A lot of bus operations are family businesses – it’s something that runs in the blood. We have had competitors approach us to take over their operation as they did not have family coming through – and knew that we did – and wanted their business to remain in that personal family model.” While Lance still has many more years left in the business, there is still an eye on succession planning, and a passing thought to his legacy. “I would like to have a legacy of someone who has contributed as a stakeholder in the business. I am nearly 30 years of service now – at the time I come to retirement I will be 40

plus years – and I want to be able to say that I was a contributor to taking the business from a small operator to one that reflects our vision to be the leading bus and tour operator in the Australian market. ‘Delivering safe, innovative, competitive, exceptional services’; that’s the vision. That is the company vision but when I bring it into a personal vision they become aligned. I would like to be able to have the legacy that I contributed to achieving that vision.” Many would suggest that Lance – along with Neil and Shane – is well on their way to that legacy. Many family businesses that experience initial success can lose their way or struggle to share the responsibility. It is a credit to all generations that they have been able to recognise individual strengths and put faith in others to carry responsibility and develop the company. Ultimately, it is textbook corporate growth – it just so happens to have stayed in the family. BF

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BF | PROPERTY

IS IT WORTH IT? As a buyer’s agent, one of the most common questions my clients ask me is “How much should I pay?”

It’s only natural to want to get the best deal when you purchase a property, but how do you decide what a good deal is? What tools do you use to determine fair market value? Before you can determine whether you’re overpaying or getting a bargain, you need to take the time and do some detailed research. This comparative market analysis is extremely powerful when you’re trying to negotiate the best possible price. Knowledge is power

The old adage, knowledge is power, rings loud and true in the property search and negation process. As a former selling agent, the best advice I was given about establishing market value was right at the start of my career, and it was to ‘Go out and really learn what the market value is’ and that is what is needed if you want to buy a quality property at a great price. Short of hiring a buyer’s agent, the best way to do this is to do the legwork yourself and physically inspect around 100 comparable properties over an 8 to 10 week period, document all relevant features and follow up on the final sale price. The tighter the search area, the better. As part of this process, make sure you’re comparing apples with apples. A comparative market analysis is most useful when it compares homes similar in size, configuration, condition and location. There’s no point looking at $1,600,000 homes if your price range is only up to $1,200,000. If a three bedroom townhouse is on your wish list, that’s what you’re looking for. Not two bedroom apartments or four bedroom houses.

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Don’t rely on data reports

Data reports can assist and complement your research but they are not something I, or anyone in the know, relies upon. These reports do not take into account things like views and privacy, proximity to a main road, the shape of the block or the slope of the block. If the house is at the front, back or middle of the block. They also don’t state whether the property is on the high side or low side of the street and how much natural light it gets. Other unanswered questions include: what does the floor plan look like? How about the size of the bedrooms, bathrooms, lounge, dining or kitchen? All of these details will have a significant impact on value. They also fail to take into consideration the internal condition of the property. Is the property unrenovated, renovated or partly renovated? If renovated, has it been done properly or has it been renovated by a DIY weekend warrior? Selling agents are experts in negotiation not valuation

Many people falsely assume real estate agents are experts in valuation; they’re not. Agents are what I call ‘price guide generalists’. That’s one of the reasons why many of them want to auction properties as they don’t know what the property is really worth. Generally speaking agents know the values in their particular service area but that doesn’t necessarily mean they know prices in every surrounding suburb area that they sometimes sell in. Where a property is up for auction, an agent will often give a price guide on

the conservative side simply to encourage more bidders and make the auction appear successful. In turn, would-be buyers waste valuable time and money on unnecessary building and pest inspections. This practice is known as underquoting and it’s an unscrupulous practice that I am campaigning to have abolished. Personally I believe reserve prices should be published seven days prior to auction to encourage more transparency and make the auction process fairer for buyers and sellers. Regardless, by doing your own detailed research and by inspecting 100 comparable properties and following up on their sale price you will be much better positioned to be able to determine the current market value for a property and in turn your maximum purchase price – be it at auction or via a private treaty sale.

Patrick Bright is the Director of EPS Property Search

Persistence pays

There’s no denying that inspecting 100 properties is a lot of work. If you make a concerted effort you can probably complete it in around two months and by the end of it you will know as much, if not more, than most selling agents in the area on your preferred type of property at that time. You need to persevere to ensure you make a solid, if not enviable purchase. Do the research thoroughly because in real estate there are no cheap mistakes, just very expensive lessons. BF Patrick Bright is the Director of EPS Property Search. As a buyer’s agent he has purchased over 500 million dollars worth of real estate. and is a best-selling author of four Real Estate books. www.businessfirstmagazine.com.au

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BF | PROFILE

The search for growth and community value Oil Search Limited is an oil and gas exploration and development company that has been operating in Papua New Guinea since 1929. However it is only recently that the company has had a revenue stream. Business First speaks with Peter Botten about the sudden growth of the business and why itâ&#x20AC;&#x2122;s important to play a role in community growth.

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eter Botten has an interesting history: born in London, he worked for the French government in 13 oil development countries around the world in various senior technical and managerial positions, before settling in Australia as a French ex-pat. He joined Oil Search in 1992 and was appointed Managing Director in 1994. He divides his time between PNG and Australia, commuting back to Australia on weekends when he can just to see his family. It would seem like a hard knock life in that regard, however the value that Oil Search

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brings to the PNG community is well worth it. “I started with Oil Search to look into how they were going to build the company based on a newfound revenue stream,” Peter says. That was the Kutubu field development, in which Oil Search has a 60% stake and is partnered with ExxonMobil, Merlin Pacific Oil Company (14.52%), Merlin Petroleum Company (18.69%) and Petroleum Resources (Kutubu) Ltd (6.75%). “It was the first time in 70 years the business had a revenue stream, and

they needed to work out what to do with that revenue.” Building a revenue stream was difficult and related to challenges in operating in PNG. There was the remoteness to consider and the logistics of moving equipment and drilling. A lot of early discoveries in the region centred on gas, but it was only with development of PNGLG, with its substantive amounts of resource, that the business was commercialised. “Oil Search had been in the oil fields since 1985. Seven years later production started in Kutubu and we have been operating there since 2003 and done well out of that exercise,” Peter says. There were seven people back in those days. Today there are 1300 working directly for the company, with 2000 from local communities and contractors to support operations. The company has also grown from market capitalisation of $250 million to $134 billion. And while the growth is impressive, it is the community benefits that have been delivered through these projects that Peter finds most satisfying. “The company’s impact on PNG and the ability to develop the country, contribute to the social fabric and provide development opportunities is enormously satisfying. “We are PNG’s biggest single investor and we’ve been able to deliver roads school and hospitals. Whilst the PNG government pays for these projects Oil Search manage them. The development of PNGLG has doubled the GDP of the country and given us other opportunities to develop the country’s infrastructure. All of which have a positive impact in the communities.” Oil Search has been able to stick around in PNG while other companies have come and gone because they have integrated themselves into PNG life. “We have been tenacious where others haven’t,” Peter says. “We have a long heritage in PNG. It is quite an intimidating place and if you don’t have good partners or partner with a local specialist with core responsibilities you will struggle. We have been effective and efficient and our local knowledge base is a key part of our success.” Many of Oil Search’s contractors have also been in the region for a long time and understand the challenges, particularly those relating to social cohesion in trying to manage a $19

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Trans Wonderland Limited (TWL)

is a major transportation and logistics company that provides a complete transport and logistics solution to operations in Papua New Guinea. We currently provide services for oil project operated by Oil Search Limited as well as the PNG LNG Project operated by Exxon Mobil Corporation. TWL has a broad shareholding base, covering landowners affected by oil and gas developments in the Southern Highlands, Hela, and Western Provinces of Papua New Guinea. We have a fleet of more than 388 pieces of equipment, including 133 highway prime movers, heavy haulage trucks, heavy equipment, light vehicles and trailers necessary to fulfil transportation needs and requirements of our diverse customers. The prime movers and most of the equipment are fitted with state of the art tracking systems that monitor their movement and performance. The business is well supported by fully maintained workshop facilities, loading and unloading services, as well as technical and support staff at our operational branches in Lae, Mt Hagen, Moro and Hides. TWL has over 500 employees including expatriates. Additional services provided by TWL include (but are not limited to) infield rig moves, aircraft refuelling, diesel and aviation fuel cartage, and general cargoâ&#x20AC;&#x201D;highway. We have a proven determination to deliver the best services and transport solutions, and we pride ourselves in overcoming challenges and delivering superior services, reliability, and innovative solutions.

Trans Wonderland Limited Head Office

Main Forward Base P.O. Box 4270, Lae 411 Papua New Guinea Phone: +675 472 1907 Fax: +675 472 5309 Email: info@twl.com.pg Website: www.twl.com.pg Branches: Hagen Phone: 545 1902 Hides Phone: 276 1607 Moro Phone: 278 6249/6613

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l as

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PROFILE | BF

billion project. When Peter says tenacious, he means it. When he joined Oil Search they were a small company. They invested in the business by acquiring assets and buying companies such as BP out of PNG. “We bought out BP from PNG assets which gave us a large oil and gas business. We spent $450 million, but that set up the core business. We then took over Chevron’s oil fields in 2003, which gave us higher returns and has driven the company to become a top quartile shareholder with 750% return and compound return of 30% per annum.” The PNGLNG project has had a large financial impact on Oil Search. Between 2013 and 2015 the business will move production from 7 million barrels to 27 million barrels. That will provide a substantial uplift in cash flow. “There is still generous gas resources

remaining in the area and potential growth in the next five years. We will undergo dramatic transformation and build our business through further gas development creating much higher dividends and capital return for shareholders.” Oil Search is currently conducting a strategic review and how it can best utilise existing assets primarily in PNG. “The opportunities here in PNG remain large and because we know the operating environment and the politics, we will be able to more than double our business to 2021.” Oil Search is also looking at Kurdistan and further international expansion. They are currently appraising the Kurdistan oil field which could produce half a billion barrels of oil. This will shore up their involvement in oil production and international ventures. The larger Oil Search grows the more

capital they intend to put back into community development. “There is a range of social issues for which we have had impact that we are particularly proud of. The establishment of the health foundation to look into malaria and HIV management; the provision of power to transform lives and create agricultural projects; our involvement in a piggery and stockfeed project which has the ability to be an enormous social project. These projects are important to our community involvement in PNG. It is very rewarding.” There is no doubt Oil Search has had a major impact on the PNG community and because they have been there so long and thrived they have become a part of the social fabric. Yet the company is just getting started in what it can deliver to shareholders and the community at large. BF

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BF | FRANCHISE

THINGS YOUR BOSS WON’T TELL YOU AND WHY One in four workers say they dislike their boss. So how can you ensure you’re not another number in the statistic?

Stan Gordon is CEO, Franchised Food Company.

transparent culture is a positive thing to strive for in any workplace. Whether you’re managing a café crew, overseeing a marketing agency or looking after a sporting team, transparency is a key component for creating and maintaining trust and in turn, forming a team environment that fosters a productive workplace. However, despite the level of intent to attain this idealistic work scenario, there are still many things that your manager won’t tell you; because they trust you’ll use your initiative to do your job properly… and there are just some things only a “boss needs to know”. Any manager worth their salt is good at both observing and also offering productive feedback at the appropriate time, and keeping in check information that doesn’t need to be broadcast. It is important to realise the untapped value that exists in having an appreciation and understanding of what your manager is thinking and looking out for, for both promotion and also the overall benefit of your workplace. We want you to understand the workplace from the perspective of management (just a little bit). Sometimes it’s hard for your team to realise things from the perspective of management. (Sales turnover does not equal profit). It’s true that the further up the rank you are, the more accountable you are too. This is something to keep in mind when receiving feedback you might not like. It’s a difficult perspective to understand until you’re in a position of senior leadership – but it’s when you begin to really realise the im-

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portance of communication, initiative and keeping things ticking over. Understanding how you can help your manager, rather than hinder them, will give you key insights on how to be of better service to your team and overall, the business. We are observing how you interact with your team

Teamwork is the pinnacle of the modern workplace. There are very few instances nowadays where people operate alone in isolation and away from a collaborative style of work. Even if your activity is predominantly working solo, you’re likely delivering work to another person or adding value to another team, supplier or contractor... who might play a similar role to a senior team leader. Naturally, you don’t want to let them down. You may not realise, but managers and leaders are very good at being a ‘fly-on-the-wall’. Team members prepared to contribute to a positive environment supporting their team, rather than only looking out for numero uno is something that definitely doesn’t go unnoticed by the boss. Despite the obvious reasons for cultivating a collaborative and inspiring team environment such as a positive working culture and a happy team, achieving this from a management perspective, ensures projects run smoothly without personal conflicts and office politics getting in the way. No-one wants to be the subject of office gossip. Your attitude, quality of work and managing your workload counts

The person you bring to work sets

a powerful precedent for how other people interact with you and also how your team leader works with you. Your attitude, the quality of work you bring to the table and your ability to stay on top of your workload, are key things your manager is observing, but not knocking you on the shoulder about every five minutes. I believe one of the most powerful assets you can bring to the workplace is your attitude – it’s what probably landed you the gig in the first place! Having a supportive and team-focused outlook is something that us managers are constantly on the lookout for, and a quality fellow team member’s relish. If you’ve got the ability to rise above small setbacks and continue to thrive in the workplace and get things done, your www.businessfirstmagazine.com.au

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FRANCHISE| PROPERTY| BF

leaders want to see but don’t necessarily want to ask for. After all, we’re all grown-ups and there’s a reason your boss can’t keep reminding you to do your job… because it’s your job! Ask for your help when you need it

It’s not your team leader’s job to tell you this… And whilst it can take courage to ask for help when you’re feeling overwhelmed, you do have a team and leaders to call on for a reason. Keeping everything on track isn’t always reality... that’s just life. But open lines of communication can help you and the business. We work in teams for a reason, so the load is lighter, jobs are delegated to the most appropriate person and more effective ways of approaching things are explored. www.businessfirstmagazine.com.au

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Communication is essential

For your boss, manager or team leader… you likely have little idea about all the things they’ve got going on. With multiple projects running at the same time and many team members to look after – some managers are responsible for hundreds of people – it’s likely that there are certainly things your manager isn’t going to tell you they do. And whilst you don’t need the minor details, understanding their plate is full, means you are in better position to ensure balls don’t get dropped. So whose responsibility is it? Check in with your team leader so you know when work needs to be approved, projects can keep ticking over and nothing is forgotten along the way. Bosses are busy! Their time and ex-

pertise is in demand, that’s why they’re in the role they’re in. Keeping this in mind will ensure you can give full warning of future activities and news that they need to be aware of. No-one appreciates ‘surprises’ of extra work. At the end of the day, remember your boss is a human being too. Yes, they need to be tough at times but you must remember bosses, leaders and managers are the masters of juggling – gauging team situations, workloads, and keeping it all on track. And that deserves respect. BF Stan Gordon is the CEO of Franchised Food Company, the umbrella organisation encompassing the brands Cold Rock, Trampoline, Pretzel World, Nutshack and Mr Whippy.

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BF | PROFILE

The pie’s the limit The Four’N Twenty Pie is an Australian icon. It is what you ate at the footy at half time, along with your hot jam donuts. And after the footy, if you were lucky, your mum would put a Nanna’s or Herbert Adams pie (if she wasn’t baking her own) in the oven for a weekend dessert treat. Business First looks at the current transformation of this very Australian business.

hat was the perfect Saturday for most Australians: sport, pies and the family dinner at home. And Patties Foods Limited, the manufacturer of those pies, has played a major part in it. Patties has a long history. In 1966, having worked at the local bakery, Peter and Annie Rijs bought Patties Cake Shop in Lakes Entrance. Over time, Peter and Annie’s six sons came to work for the business, which prospered and grew. Today, Patties Foods is now an ASX listed company owning a high quality portfolio of iconic Australian brands that include Four’N Twenty, Patties, Herbert Adams, Nanna’s, Creative Gourmet and Chefs Pride.

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These brands have strong market shares and are supported by considerable brand investment by the company. Specifically, Patties Foods has a number one market share in the retail frozen savoury segment (which includes pies, sausage rolls, pasties and party goods) and a number two market share in the retail frozen dessert segment (which includes fruit pies, cold desserts, danishes/crumbles, berries, snacks and cakes). At the helm of Patties Foods is Steven Chaur, who has only been CEO since April 2014, but has already made a huge impact. Steven’s previous positions include executive general manager of Tip Top Bakeries (Southern region), general manager of Findus Australasia and general manager of National Foods Tasmania. Prior to this Steven held senior marketing director roles on brands such as Pura Milk and Birds Eye. His most recent job was MD, Pacific, for the French publicly listed Saint-Gobain, one of the world’s top 100 industrial companies engaged in manufacturing, marketing and distributing innovative products for the construction, automotive, industrial and retail consumer markets. “I’ve been very fortunate to have gained some good exposure to branded food businesses over my 20 plus years experience in FMCG, working with some big consumer brands in high volume food manufacturing and distribution environments, so I was delighted when I joined Patties Foods as it was a good fit in terms of drawing on that experience,” Steven says. For the last four years Steven’s MD Pacific position with Saint-Gobain brought about a different perspective. In the Pacific region, Saint-Gobain’s products are technical in nature and

are sold extensively through the B2B, end user and consumer channels via Industrial distributors. Steven’s mix of business experience in B2B and B2C has been invaluable. “What I learnt from the industrial sector is how to deal with the complexity of the industrial market, technical application of products and driving innovation,” Steven says. “That means in a Business to Business environment, you focus on building deep relationships with customers and dovetail that into your business and distribution strategy. I was dealing with companies like Bunnings, through to Bluescope Steel, through to Holden to small distributors. It’s definitely not a one size fits all strategy if you want to win business and beat your competition. You have to be nimble and differentiation is the key. Sometimes in the FMCG sector, it’s easy to fall into the trap of only producing a product that everyone takes. Customers in FMCG are all driving hard for differentiation beyond price, that’s probably the biggest change I’ve noticed in my four years out of the food sector... In the industrial sector you are always developing tailored solutions, it’s less about price and more about partnerships, product quality, product application and our service levels. So I have strived to bring that thought mindset and high customer engagement to Patties Foods, to make it our competitive advantage. We now look uniquely at all customers across many channels to work closely with them where we can both succeed, grow and differentiate offers.” Steven was brought into Patties Foods to bring a new drive and responsiveness to the organisation, which to the beginning of 2014 had suffered a string of profit downgrades over a few years as price competition in the www.businessfirstmagazine.com.au

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supermarket channel affected earnings. Shares in Patties had also fallen 16 per cent in the 12 months prior to his appointment. Despite this, Steven says Patties has always been a successful Australian company and indeed figures have improved in the right direction of late. “Patties have always been a successful company. I have just tried to add value through a different set of perspectives and experiences to lead the business forward, with the support of our Board. We have focused on getting the operational basics right, with a mandate on improving operational performance, removing decision barriers, driving employee empowerment and; focusing on our brand support and product development strategy with speed to market. In the past we had tried to do a lot too quickly and sometimes we didn’t do a lot of it well. It was clear we had to create a new baseline. So we went back to what it is we did well for over 40 years: focus on making the best quality pies and sausage rolls in Australia, invest in our icon brands and make sure our products were sold everywhere they could be in every channels – that is, profitably win all the business we could. This helped drive efficiency and made us focus on growing our sales channels and launching new products that met consumer needs within these channels. We’ve stripped back layers of management with a clear focus as to who we are as a business, created simpler decision processes, instilled a deeper category focus and adopted a ‘fewer-bigger-better’ approach to new innovation.” Backing what Steven says and despite profit downgrades, Patties Foods has maintained market share leadership in all its categories with its icon Four’N Twenty brand remaining as the market-leading brand in savoury pastry products nationally. Nanna’s frozen fruit saw branded growth of +92 percent due to new “As a small family business, it is refreshing to work with such a large business that will give you the opportunity to achieve common strategic goals. We have established an atmosphere of trust, teamwork, and cooperation. It is a privilege to be part of their journey of continuous improvement.” Costa Christou, Global Food Group

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product launches with high customer penetration whilst the frozen fruit category grew by +36 percent. Oatties Foods also launched the Four’N Twenty Real Chunky Pies, Herbert Adams 8-hour Slow Cooked premium pies and Patties Pie Bites. Innovation is the key to maintaining and building market share. “There are a number of companies struggling with lack of innovation in the fresh food categories, especially in frozen foods. There is high pressure on those businesses to catch up to some of the growth segments like chilled meals and fresh dairy products... It is exciting what is going on in the food sector and at Patties we’re recalibrating to adapt to and drive it.” Steven says Patties Foods is privileged to preside over a stable of iconic Australian brands. However, as new competition in fast food choices increases that wasn’t around 20 years ago, Patties has needed to look at different strategies to grow market share, especially in the out of home consumption channels. People have so many more choices today for on the go food offers and our challenge is to make our pies appealing against those choices. Speak to most people and they will tell you they love a good pie or pasty, but it’s often not first to mind when that hunger needs to be satisfied. “We have a great tradition of eating pies in Australia, it’s our national dish, and the awareness among consumers of our Four’N Twenty brand is virtually 100% nationally. So we have every opportunity to get pies back top of mind against the larger budget marketing of the fast food giants by driving new marketing initiatives, product distribution, promotional flavours and new products to capitalise on that and entice people to have a pie.” Over the last six months, we’ve really put a high focus on driving ‘step change’ innovation to rebuild our company growth and market share position. Steven says the iconic Four’N Twenty brand has such massive growth potential, so Patties has implemented a strong marketing plan to reengage consumer with the brand. We have a strong brand that people know and love and we are reconnecting them with the brand. Over the past 6 months we’ve been strongly activating the brand through convenience stores, major sporting venues and the general trade through promotions, new TV

campaigns, locating more pie warmers, eye catching point of sale material and new products, like Four’N Twenty Real Chunky slow cooked beef pies and new Four’N Twenty ‘Slams’ party pie bites – tiny snack sized pies aimed at the competing with the snack food market. We’ve already seen a strong positive growth recovery in the brand sales over the past 6 months. Having an association with Aussie Rules Football has also been critical for the brand and forms an important part of the brand strategy. We’ve been selling Four’N Twenty pies to the MCG in Melbourne since 1958, and our bright yellow attired pie boys are a tradition at the ‘G’. We’re now looking at how we drive the brand harder over summer months as savoury pastry sales don’t tend to be seasonal and while footy’s taking a break, there are many opportunities that consumers have to engage with our brand over summer. Our 105 year old Herbert Adams Bakery brand also led the innovation charge with three new to market varieties of 8-hour slow cooked chunky beef pies into supermarkets, cafes and convenience stores. These pies are a first in the market and I’m not aware of any other major pie maker to have tender, slow cooked beef in a pie. It is literally the ‘best pie’ you will ever eat and sales have been successful. It really has been a game changer for us as a business and our innovation focus capitalising on the consumer trend for flavoursome and premium quality products. With our Patties brand, which is the market leader in Party Pies and savoury entertaining products, we also stepped up our innovation with major capital investment to produce miniature party pies – or Patties Pie Bites - as we call them. The innovative, tiny 15g pies are designed to be a one bite occasion and have been really well received in the finger foods segment in food service and catering, as well as the grocery channel. Until this innovation, we found it difficult to compete on serving platters with our normal 40g party pie against cocktail spring rolls, chicken wings and meat balls due to the higher cost per serve. Pie Bites have been a great hit with caterers – same pie, just cuter, cheaper per serve and more fun to eat.” With Nanna’s we have recently relaunched our frozen fruit pie range to contemporise the brand and attract new consumers to the category. We

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spoke with younger consumers and examined the market shift and category growth in that segment. Over recent years we have been able to also lead the frozen fruit category development in supermarkets, which is showing very strong growth, through our Nanna’s and premium Creative Gourmet brands. Fresh fruit is often expensive due to seasonality and frozen fruit is both convenient and cost competitive. There frozen fruit category is now growing at +30% pa and Nanna’s frozen fruit products have grown +90% with new innovations, such as frozen mango and more recently, frozen Hass avocado chunks. We need to ensure that innovation is on trend and that we can respond quickly to launch products that consumers want.” To further drive innovation as a competitive advantage, Patties Foods has invested heavily in production automation at their Bairnsdale bakery, located in east Gippsland Victoria to improve efficiencies, drive quality and increase line capability. “We invested heavily into a robotic pick and place system to pack our pies. It initially had a few teething problems, as most major projects do, but its settled now and can pick and pack pies into trays, through a vision system, at a fantastic pace of around 18-20,000 pies an hour. It’s incredible to watch it in action... It so exciting to think that the more than ¼ billion high quality pies we make each year get consumed and consumers are still demanding more each year,” Steven says. Steven has conducted a lot of www.businessfirstmagazine.com.au

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groundwork in his first eight months undertaking a comprehensive strategic review. The review looked at engaging customers, looking at line-by-line manufacturing opportunities, reviewing ingredients and product formulation. He spent a lot of time with customers, suppliers and on the bakery floor with employees to understand his business deeply. The idea was simply to identify bottlenecks, immediate risk areas and to take complexity out of the production and remove the decision making bureaucracy to help innovation move faster. His focus was also very heavy on driving a strong safety and product quality culture, especially through continuous improvement philosophies and a simple ‘make right first time’ production culture, which has dramatically changed the operational results and driven up employee engagement. “Patties has been through a process of ‘restoring its basic operating conditions’, as a part of a defined three stage company growth program. We are well on track to delivering our first phase of getting the business right which will enable us to deliver on growth and acquisitions in the future stages. Much of the hard work and restructuring will come to bear in the next 12-18 months,” Steven says. With only an 18% share of an estimated $1.4 billion sales value market for savoury pastry products in Australia (Patties data 2014), the Patties Foods strategy is to continue to develop beyond its traditional purchase points and further into the out of home segment, which includes bakeries, cafes, aged care facilities, food service, major

venues and schools. “We have a huge opportunity to grow in what is a very competitive market. There is no shortage of bakeries and pie shops in Australia. At one end of the spectrum, we enjoy a very strong relationship with all our supermarket customers in both branded and private label products, but supermarkets only represent 20% of the total potential market sales. So there is also good growth potential for Patties Foods by creating new distribution points, developing new markets and launching new premium, innovative savoury products in the out-of-home space where consumers spend more time eating. That is exciting and it’s certainly one of the competitive strengths of our company, in that our products touch many customers and channels, so we are not limited to sales in only one market.” As for suppliers and partners, an important element of Patties’ strength comes in its commitment to Australian business and this has been the case since the company’s foundation. For instance, Peerless Foods is Australia’s largest privately owned manufacturer of premium edible oils, fats and margarines and the 100% Australian, family owned Global Foods. “We have a strong community profile in Bairnsdale and we proudly source a lot of raw materials from this region. We source 100% Australian beef from all over country and we are one of the largest users of beef in the country, which many people would not know. Many of our suppliers of raw materials have been with us since the business started. They have grown with the business. We are also proud of the fact that we source beef, RSPCA approved chicken and mutton from many family owned processors around the country. It is an Aussie brand supporting Aussie companies.” While change is never easy, Steven engaged staff from the get-go, enticing them to give feedback, which he has listened to and implemented. There is a new energy at Patties. It is the market leader in its category with an annual sales turnover of $300 million. They have market leading and iconic brands and an innovation pipeline that is strong, with a presence in many distribution channels. Should they continue to innovate and market in their current manner, this iconic Australian company will remain at the top of its game. BF

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BF | PSYCHOLOGY

UNLOCKING

NEW POSSIBILITIES

Have you ever wondered why some people live in poverty and some in enormous wealth? Why some people seem to generate money easily, while others seems destined for a life of financial lack? These questions have always intrigued us, which set us on the journey to explore what it would take to be truly prosperous.

F Chutisa & Steven Bowman

are global business advisors.

rom our exploration we uncovered an astonishing number of myths, false assumptions and misconceptions about wealth and money. So much drivel and idiocy has been conditioned into us relating to monetary values that it is no wonder so many people fail financially. Most of what we know about money is based on false assumptions. These false assumptions about money cause financial and emotional grief in most people’s life. Over the years, we have had many opportunities to work with a number of influential, successful, and resource-rich people. We are frequently amazed by how many of these powerful people struggle to find solutions to what they think of as their money problems. It’s obvious that they struggle not because of the actual conditions and circumstances of their lives but because of their points of view about money that are based on false assumptions, and their dysfunctional relationships with money. Many feel they are victims of money. They believe that if they can acquire more money they will become truly prosperous and their money problems will be over. Little do they know that their point of view about money problems is the problem. Their false assumption creates their money problems. Time and again, we have found that people who have points of view that are based on false assumptions tend to play out beliefs from their viewpoint about worthiness, value, and money. Unfortunately, they cling to the false assumption: That’s just the way life is. There’s no way out. There are no other choices. The world is full of people who cling to false assumptions about money. We have heard of professional athletes and rock stars who are multimillionaires and then are deeply in debt or become

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homeless a few years later. There has been much discussion based on the precepts of prosperity consciousness that if all the wealth on the planet were divided up and redistributed equally among everyone on Earth tomorrow, and no one changed their conscious-

ness about money, all the money and resources would be back in the hands of the original owners within a few years. The originally wealthy people would be wealthy again, and the poor people would be poor again. Money alone does not make you prosperous and wealthy. www.businessfirstmagazine.com.au

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PSYCHOLOGY| BF A follow-up study of million-dollar lottery sweepstakes winners in Canada illustrates this point. The study found that the vast majority of sweepstakes winners were broke within five years of receiving their prizes. Their money consciousness had not developed to the point where they could benefit from their winnings for very long. Most of these winners believed that as soon as they won the lottery, they would be free of their poverty way of being. They believed that when they won the lottery, they would do everything they had always wanted to do. The truth is, they did not need to wait for their conditions to change in order to be conscious of abundance. Right now is the time. Because those lottery winners didn’t change their essential relationships with money, they had the same degree of limitation and financial mess after they won the lottery as they had before. The only difference was that the mess was larger. Your points of view always determine your conditions and circumstances. They have a profound influence on how you see the world and on the way you live your life. If you are experiencing a limitation or difficulty around anything such as relationship, health, wellbeing or money, there must be some kind of limitation and restriction in your mindset and points of view. Would you be willing to see that fixed points of view and rigidly held assumptions can be dangerous to your wealth? The key to harnessing unlimited wealth involves a shift in the way you function in the world and the way you perceive and create your reality. In times of economic uncertainty, you have to be creative and innovative when it comes to creating your financial reality. These new times will bring with them a tremendous groundbreaking inspiration and an insurgence of new ideas. The ability to harness these inspirations and innovative ideas is critical to your ability to generate unlimited wealth and to thrive and flourish. The single most important quality you need in order to generate a truly prosperous life is prosperity consciousness. From our experience ‘prosperity consciousness’ is at the heart of living a prosperous life and generating a prosperous business. If you don’t have prosperity consciousness, then you will struggle to push through the inevitable tough times ahead, and fail to perceive and receive new and different possibilities. Prosperity consciousness is where www.businessfirstmagazine.com.au

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it all starts. To have a truly prosperous life and generate unlimited wealth you must deliberately work to expand prosperity consciousness for yourself and your family. Prosperity consciousness is a state of being. Your prosperity does not occur by divine intervention, chance, luck, coincidence, or outside influence. Aspiring to be rich, wealthy, or prosperous is not enough. Your prosperity will not happen if you do not chosen to claim, own, and acknowledge prosperity consciousness. If you want to make some moderate and judicious changes in your life, then you could focus on altering your behaviour, approach, and conduct. However, if you would like to create a momentous quantum transformation, then you have to totally shift out of your old paradigm and into a new one. Please recognise that until you begin to acknowledge prosperity consciousness and to choose to become engaged in your own wealth and success, you will never be successful financially. People who don’t have prosperity consciousness have a chronic sense of insufficiency about life. This is the fundamental mode from which they think, act, and function in the world. They often choose to stay in careers that have them joylessly working twenty-four hours a day, seven days a week. They spend their days doing jobs they don’t really want to do, just to make more money. Even when they have lots of money, they still aren’t happy or relaxed about it. They always mull over the negative what-ifs: What if I lose my money on this transaction? What if I fail? What if I can’t come up with the money for ___? What if I am unable to come up to scratch? They are besieged by a hundred fears and judgments that make them despondent. Time and again, we have found that people who don’t have prosperity consciousness tend to play out beliefs from their upbringing about worthiness, value, and money. Unfortunately, they cling to their old thoughts: That’s just the way life is. There’s no way out. There are no other choices. They have a tendency to get ensnared in restricted thinking such as “I always have enough to survive. I don’t really need any more than this to make it. I may not be rich, but I’m happy.” This prevents them from seeing opportunities. We discovered that, contrary to what a lot of people think, prosperity is not about having massive amounts of wealth and possessions. It’s not just

about money, resources, and assets we can collect along the way. Prosperity consciousness is not directly related to the amount of money people have. Rather, it is the communion they have with money, material wealth, themselves, others, and all things. It’s about the way they treat themselves and others and about the abundance they are willing to perceive, know, be, and receive in the world. Those who choose to develop their prosperity consciousness and are prepared to embark on their own adventure have a life of true abundance and infinite choices in store for them. Absolutely anybody can take this journey, but only those who are willing to invest in themselves and make the conscious choice to develop their prosperity consciousness will actually achieve true wealth and financial freedom. If you function from prosperity consciousness you will do well no matter what the economy around you is doing. Prosperity consciousness will draw to you ways to generate infinite possibilities for you and the world at large; ways you have not even perceived of yet that go beyond this contextual reality Abundance, prosperity, and wealth are always available to you, but you have to choose to make yourself available to them. Are you willing to receive and to claim, own, and acknowledge that you are worthy of abundance, prosperity, and wealth? To choose prosperity consciousness, you have to pay no heed to what you find objectionable about your financial situation. Instead, you have to focus on the unlimited alternative possibilities and what you would like to create. When you start to do this, you will begin to perceive and receive many new opportunities. You will be able to act on them regardless of what your reality concerning your financial situation had been up to this point. Get a sense of what it would be like to be conscious and to have prosperity consciousness. Ask yourself this question: What is it going to take for you to make a choice to be greater than your present situation? What’s it going to take for you to expand your prosperity consciousness? Prosperity consciousness is not just about possessions and money. It is about a joyful expression of life, a sense of expansiveness, a joy of being, and a sense of abundance in all things. www.nomorebusinessasusual.com. BF

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BF | PROFILE

TOP OF THE CHAIN Grant Goodall has a long history in tourism and hospitality, so he was a natural fit for the position of CEO with the iconic Golden Chain. Jonathan Jackson looks at the impact Grant has had on the tourist industry.

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PROFILE | BF

rant Goodall’s CV reads almost a love letter to the hospitality and sports industries. He has had equal impact in both. In addition to his most recent career history including his position as CEO with Golden Chain and the South Australian Amateur Football League, he has also been an Executive Director for the Western Australian Tourism Commission; CEO of Travel Marvel and NZTP Travel wholesalers and retailers; Regional Director for Tourism Victoria and General Manager of the Smith Family and e-Channel Online Search a national advertising company. “I’ve been a CEO and Executive Director for 27 years in private and public sector organisations,” Grant says. I’ve worked in several states, in overseas offices, two tourism commissions including Victoria and WA and I have a background in sport and the not for profit sector. All of these positions tie into the moves I’ve made in my career over the last 30 years.” When the position at Golden Chain became available, Grant had been out of tourism and hospitality for a while. He had been leading the largest Australian Rules football competition in Australia with 14,000 players, 12,000 officials, 222 teams, 660 umpires and 67 member clubs. There are some serious logistics and challenges that come with a role like that, but he is an experienced man and one who thrives on challenges. So when the position at Golden Chain became available, the attraction to the role and the challenges that leading Australia’s largest motelier would bring was a large one. The strength of Grant’s experience in the private and public sectors has meant that he has learnt to adapt his management style to any organisation. “When I had been in government roles I took with me an understanding of how to deal with government rules, but I also took a business ethos. I am someone who looks for business outcomes and while you have to adapt to different requirements, the business attitude is the same.” Grant’s ability to adapt to changing environments is exactly what Golden Chain required. He has been in charge since May. Golden Chain Motor Inns Ltd. is Australia’s largest accommodation group, which comprises nearly 300 properties. The majority of properties are spread across Australian States and Territories, with properties also in the

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Pacific and Asia region. The group comprises predominantly of three to four and a half star motel listings but Golden Chain also offers Resort, Apartment, B&B and Cabin style accommodation. “It is a powerful brand,” Grant says. “It is Australian owned and celebrates its 30th birthday in 2015, so it has longevity. The Board is looking to change and move with the times. And these were good signals for me. There are enormous challenges in this. We need to embrace online and mix up new media and marketing with traditional elements. We have already undertaken this strategy and we’ve had good early results for this mix of new and traditional advertising.” Communication is key to the growth of Golden Chain. It will be used to increase membership in the next

18 months to five years and build a bigger footprint in regional Australia. The organisation also has reach in New Zealand, Vanuatu, Bali and Java, however Grant says they aren’t looking aggressively overseas. We will monitor the Pacific and Asia regions, but growth will be primarily in Australia. We have growth potential in Queensland and WA. This is due in part to the retraction of the mining sector. Grant says during the boom, the hotel sector in mining areas was dominated by workers associated with mining; motels in these areas were full so very little marketing was required. With mining off the boil, there is a resurgence in interest in properties looking to join Golden Chain as our support and marketing is required to address dropping reservation numbers.”

BUSINESSFIRST MAGAZINE

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BF | PROFILE

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And in those areas in particular, an iconic Australian owned business is always a welcome introduction, particularly one with strong values. “One of the things I like about Golden Chain is that we have good traditional values. Loyalties are important to us. Our longevity means we can provide benefits to members and to support suppliers, so that everyone is happy with the partnership. We offer good old-fashioned service as well. People are looking for a quality

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product, value for money and good old-fashioned service. So we have set a high standard within the group and the feedback is fantastic.” Communication of these values and what Golden Chain stands for is important in this growth phase. Under Grant’s guidance communication creates brand recognition, which is particularly important as they diversify into apartments and cabins from caravan parks. Despite these new areas of interest our bread and butter has and will

remain traditional 3 to 4 star motels. These are sectors that recognise the power of the Golden Chain brand and the fundamental difference that they are Australian owned. So it is important to communicate with these groups and create loyalty amongst them. It is also important to communicate with members about strategic direction, so they understand that Golden Chain is working for them. To do this, Grant has implemented a series of marketing campaigns. The most recent is the Happy Road-Tripping advertising campaign with a positioning statement that Golden Chain is ‘Australia’s most accommodating’. “We are active with our communication to members. We have an annual conference and newsletter updates. Our sales team hits the road to visit members. As the CEO, I am constantly talking with members. And the Board is also very active as go to people for members. All of our Board own and operate properties, so they are members themselves. We create forums and assist each other with businesses. We are constantly reviewing strategies and plans and looking at ways to lift standards and quality assurance.” www.businessfirstmagazine.com.au

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PROFILE | BF

The vast majority of members are regionally located but our city and metropolitan locations are growing. Our properties are all Australian owned which means the money spent in our motels stays in Australia and their membership fees go into marketing and quality assurance programmes. “We are always promoting our suppliers. Continuous support requires work by both parties. Mums and dads own these motels and it is their life, they enjoy it and we are one big family and that is how we treat our partners.” Suppliers supply all the in room products including towels, pillows, laundry equipment, light bulbs and energy saving programs. They also include printers, signage suppliers and software solutions specialists such as Centrum Software, who also provide their online booking capabilities. All members are also encouraged to join organisations like the Accommodation Association of Australia, which Grant sees as another partner. “We carefully select our suppliers. For in room product we only have one or two at the most because we want to support them properly. If you have hundreds of suppliers you can’t support them. We always look to local suppliers, but we are also mindful that manufacturing is declining in Australia. So that is a value proposition we make as required. If we can get an Australian product of the same quality at the same www.businessfirstmagazine.com.au

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price and quality then we will always look at that.” Grant hopes to achieve solid growth in membership over the next few years and maintain and grow the brand to be recognised as the best motel regional chain with the best quality service. “We are certainly looking at setting our own path, blazing our own trail and introducing some different strategies to set Golden Chain apart from everyone else. We are only one of two in this space that is advertising on television. We are also doing a lot with new media. A lot of people who are interested in becoming Golden Chain members are coming to us to gain credibility in the marketplace and to benefit from our marketing strategies and campaigns driving the consumer to their doors.” Although Grant has only been on-board since May 2014, he is proud of what has already been achieved, particularly in creating a new media and marketing direction. Golden Chain is back in traditional media but is mixing it up with online and social media with aggressive national and international campaigns. Because the membership group is unique, they have had a jingle written specifically for them. The transition from traditional to social media and online marketing has seen an increase in member enquiries and existing members are reporting increased bookings as a direct result of the latest

Centium Software are a technology partner for Golden Chain and their members. GuestPoint provides small to midsized accommodation providers with the tools to advertise their property online, adjust rates, increase bookings and contact their guest 24/7 and it’s all automated. Centium Software

“

We are certainly looking at setting our own path, blazing our own trail and introducing some diﬀerent strategies to set Golden Chain apart from everyone else.”

campaign. Meanwhile Golden Chain has moved from Ballina to Sydney where Grant and the Board can drive the business forward. These are exciting times for this iconic Australian motel brand as it expands its footprint and offers members and customers a unique travel experience. It has also launched a premium end brand called Platinum with 31 existing members meeting the required criteria to offer a higher end market product. BF

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BF | TECHNOLOGY

Should you trust the Cloud for your business? You have heard about the Cloud. Maybe in your personal life, because you synchronise your phone files through iCloud, or maybe in your professional life because you are looking into Cloud technology for your business, or maybe in the News as you are regularly updated with the leaking of celebrity pictures.

E Stephane Ibos is CEO and co-founder of Maestrano.

ither way, chances are you are familiar with the name Cloud. The Cloud is that trendy Internet technology lots of people are talking about. To summarise and simplify, the Cloud replaces the servers and other IT equipment companies used to have in the past. All your data is stored online and accessed through web browsers. Why is the cloud beneficial? It saves money. Instead of buying IT equipment that needs to be managed, maintained and replaced you get access to the services you need and generally for a monthly subscription. The Cloud also helps with mobility –all your data, soft-

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ware and services are available on the Web, you can access them anywhere, at any time, from any device that’s connected to the Internet. So in short – the Cloud makes businesses’ lives much simpler and cheaper. From time to time you’ve probably heard about security issues. Data leaks, hackers who accessed proprietary information, security breaches and so on. In light of this, you will ask yourself whether the Cloud is secure enough for your business and if you should rely on the Cloud to run your business? These are excellent questions that deserve attention.

Is the Cloud reliable?

Because the Cloud is by nature online, it is a perfectly legitimate question. What could be wrong with relying on the Cloud? First – problems of access. If the servers your files are stored onto are down, you will not be able to access your data. There is nothing you can do about it as the servers are managed for you by your Cloud provider and you can only wait for them to fix the issue. Secondly, you may simply have a poor Internet connection, which would prevent you from accessing your data, since everything is stored online. In www.businessfirstmagazine.com.au

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TECHNOLOGY| BF

this case, you are obviously in a delicate situation again, and either your Internet Service Provider fixes your Internet connection problem, or you would have to switch for a better service. Let’s now look into the likelihood of occurrence and the mitigations implemented by your various providers. First, let’s look into the issue of servers being down. You have to know that your Cloud provider is very aware of this risk – that is, for serious, quality-driven cloud providers. It is very common for them to implement what is called ‘redundancy’, which means that your data is stored on multiple servers. It is as if your computer has many hard drives, and your files are replicated on each of them. This way, if one of the servers is down, chances are you will not even notice it and will be able to access your files as usual. There is no disruption to your business and your operations. On top of this, most Cloud Providers commit to delivering a good SLA, which is a Standard Level Agreement. In this, they commit to deliver a service available 99.9% of the time for instance, which ensures that your data is accessible virtually all the time. If you want to know which SLA your Cloud Provider is committing to, simply check the www.businessfirstmagazine.com.au

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Terms & Conditions section of their website. Generally speaking, your Cloud Provider has as much to lose if you cannot access your data or if this kind of incident happens frequently. First, they are at risk of losing your patronage, but they are also at risk of losing their reputation, which could lead to their ultimate failure. So you can rely on this to be sure that Could Providers are actively working on preventing any access issues. Let’s now look into the Internet Access issue. First, the SLA system applies to all Internet Access Providers, with the same negative consequences if their service is not reliable. You can actually safeguard yourself against these issues. For instance, by ensuring that your files can be accessed even when you are offline. Systems like Google Drive for Desktop allow you to access all your files offline. You just need to download it and all your files can be accessed on any device you have this system on. It will hold your files long enough until the next time you are actually connected and all your files will refresh. So in short, yes, the Cloud is reliable and you have ways to check to what extent your Cloud Provider is. You can also take simple actions to mitigate potential issues. Is the Cloud secure?

This is THE big question. First, let’s clarify that we are talking about the Cloud for professionals here. Like any services, the professional Clouds are much more advanced in terms of security and more robustly tested. But like any services as well, there are Cloud Providers out there who do not have the required security credentials or cannot guarantee the security of your data. It is actually quite simple to find out if the provider you are looking into is secure or has taken all the ‘good practice’ measures to be: just look at their website. Usually their security facts will be stated right on the homepage. Look at what they claim, testimonials and so on. Also look at their PCI compliance: the most secured clouds are ‘PCI Level 1 compliant’, which means that your data is securely stored and measures are implemented to prevent hackers from accessing it. Similarly to the reliability concerns we discussed previously, also remember that Cloud Providers struggle to maintain or rebuild their reputation once a security breach has occurred. As a result, all of them take great care

of securing your data and regularly test their infrastructure against the most recent sorts of attacks. There is a myth that states that servers in an office room are more secure for a business than the Cloud. Although this may have been true in the past when the Cloud was still maturing, it is not anymore. Keeping your own server secure implies keeping efficient firewalls in place, updated antivirus and regular breach tests. This is at the same time costly, difficult and time consuming. Chances are you will not apply the required due diligence and commitment to this. This may result in critical breaches that hackers can use to their benefit. Remember that even a private server can be accessed through the Internet, like any other connected object. The Cloud Providers on the other hand are professionals, usually surrounded by security experts whose primary role consists of ensuring your data is always safe. So, yes, the Cloud is secure for your business. It’s all about the choice of providers you make. Can you trust yourself?

This is the last and probably second-most important question. Can you trust yourself? At the end of the day, the Cloud is yet another tool or system for your business. Like any other tool or system, you will have to make the right choice. You will have to look into how you can best use the Cloud and the opportunities it offers, and you will also have to look examine the Security features of the Cloud that you are interested in. But most importantly, once implemented for your business, you will have to manage your part of the Cloud security. For instance, you will have to ensure that you use different passwords for different services, so that if one of them is compromised, it does not affect all your accounts. You will also have to ensure that you change your passwords regularly and that they are complex enough to be difficult to identify. The best way to manage those aspects is to create simple procedures for your business and best practices that your staff can follow. It will require a bit of self-discipline at the beginning, but you will soon realise it is simply a new part of your routine. In summary, the Cloud is like anything else, if you apply caution and you remain vigilant, then yes, you can definitely trust the Cloud for your business. BF

BUSINESSFIRST MAGAZINE

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BF | PROFILE

A COLLABORATIVE

EFFORT

Floor coverings arenâ&#x20AC;&#x2122;t something that is front of mind for most consumers unless they are replacing, renovating or cleaning. Yet the floor covering industry is one of the most important and certainly very lucrative. Business First examines the rise of Newfurn and through them Choices Flooring.

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PROFILE | BF

he power of the collective is no more evident than in the story of the rise of Choices Flooring. This is a proudly Australian business that is the brainchild of a number of Australian businesses that found power in collaboration. The Choices Flooring story begins in in 1959, when a small group of independent Victorian furniture retailers met to discuss the possibility of forming an association to maximise the effectiveness of their business in the face of increased competition from large, franchised organisations. By 1993, when Newfurn launched the Carpet Choice brand, they launched with 17 stores in Victoria and since then, after a further brand update, Choices Flooring has rapidly grown to include more than 140 stores across Australia. Since those early days, Choices Flooring has arguably become Australia’s most progressive retail floor coverings group and a major force in

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the Australian retail sector. In 2011, Newfurn acquired a collection of premium retail stores specialising in wool carpets. Collectively known as Woolset, these 20 independent stores are located throughout Victoria, Western Australia, New South Wales and Tasmania. It is this progressive attitude that attracted managing director Andrew Lewis to the role in 2012. Aside from being franchisor, Newfurn provides group buying, merchandising, promotional services, and administrative support for the franchisees. It is a strong model that has seen Newfurn survive some tough economic times. However, Andrew saw the strength of the model and knew he could work with it. “What I could see in Newfurn was that as retailers they were able to adopt the best ideas, gain the support of quality people and display ambition to

succeed. “There is a determination about the Choice Flooring franchisees that has contributed to their success and that of the company’s.” Andrew brought with him a wealth of experience, having been in the industry since 1995, when he was the WA Sales Manager for Australian Safety Flooring. From there he moved to Polyflor Australia in 1998 and worked his way though the organisation from State Manager to Managing Director Australasia. During that time he was also the President of the ARFA. The Australian Resilient Flooring Association (ARFA) is the peak industry body for resilient flooring. ARFA is represented by all the major manufacturers operating within the Australian market place and oversees the industry standards for manufacturing, environmental ratings and installation methods. So the collaborative nature of Choice Flooring and the power of the franchise model was something he was familiar

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with. In fact as President of the ARFA, he was in charge when flooring manufacturers came together to rewrite the flooring standard. He said at the time, “the most pleasing aspect of this is seeing competing manufacturers get together and create a document to benefit the whole industry. It is a sign that industry is maturing when senior management can work together to create something so important. “The next step is to create a single national floorcovering association, which can then look at not just standards, but uniformity in training,

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apprenticeships and even cadetships in project management within the floor covering industry.” This attitude was the perfect fit for Newfurn, especially at a time when the industry was struggling through slow growth. According to IBISWorld industry analyst Claudia Burgio-Ficca, “global instability and the ensuing lull in retail sales created a difficult trading environment for operators.” Despite growth in residential building construction, the performance of industry operators was affected by increasing competition from hardware and building supplies retailers, which continued to offer competitive pricing across a range of floor covering options. The operating landscape for players has also been affected by trends in real household discretionary income, consumer sentiment and interest rates. Industry revenue is forecast to rise by 3.7% to $2.6 billion in 2014-15. Growth in the residential building market over the past five years provided opportunities for operators to generate revenue. However, mounting uncertainty regarding the stability of

“Choices Floorings’ commitment to be progressive by treating their consumer approach in a holistic way, along with their member support, has made them one of the leading carpet retailers in Australia. Cavalier Bremworth is proud to support them as an Alliance Partner providing them with exclusive ranges” Cavalier Bremworth

domestic markets led consumers to cut discretionary spending, which caused a slowdown in retail sales. Revenue prospects for the industry were hampered by increasing competition from hardware and building supplier retailers, which are expected to become a real threat to the industry. “The increasingly competitive retail business environment has led to widespread rationalisation throughout the floor covering industry, with fewer suppliers seeking strategic alliances within retail groups,” Andrew says. “Consumer buying patterns have also changed.” Which is why Newfurn has taken a progressive stance to their service and product offering. “In the burgeoning arena of internet www.businessfirstmagazine.com.au

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PROFILE | BF

marketing, media related design DIY mediums and a heavy reliance with online services, the industry has struggled to adapt, change and evolve. At Newfurn we have embraced this change and continue to push the boundaries in order to meet our consumer and commercial demands. “The strength, solidarity and respect of Newfurn provides the foundation for our retailers to succeed in the face of a diminishing supplier base, new and growing threats to the industry and a more volatile economic environment. “Our greater goal, is to build an even more cohesive and supportive relationships between our member retailers, suppliers, commercial partners and most importantly our customers.” Another focus was to maintain consumer focus. “A lot has been written in retail about if you don’t adapt to market changes, then there is a good chance www.businessfirstmagazine.com.au

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your business will die,” Andrew says. “It’s a little melodramatic; however, businesses who have failed to adapt to change can find retailing difficult in the future. As technology and consumer buying behaviours change, we have changed with them in order to keep ahead of our competitors and continue striving to be the best flooring retailer in Australia.” Part of the strength of Newfurn and Choice Flooring is its dedication to customers and their ability to offer every type of floor covering from carpet to timber, design tips and floor maintenance advice. It is a holistic approach to floor covering and it has worked well for the organisation. This commitment and the strength of collaboration has also attracted partners and suppliers such as Embelton another long-standing (established 1925) Australian organisation which operates in two main industries; timber flooring and noise & vibration isolation, with further

manufacturing operations in cork, rubber and metals fabrication and Cavalier Bremworth. The story of Cavalier Bremworth began in 1959 when Doug Bremner founded the Bremworth Carpet Company and set up a small factory in Papatoetoe, South Auckland. Within a few years, Bremworth began exporting its wool carpets to Australia. Andrew knows there is strength in numbers: through its franchise network, to its suppliers and ultimately to its customers and this is why the organisation has survived tough times and is thriving today. BF Choices Flooring has become one of Australia’s premier ‘speciality’ retailers. With their consistent store design, service platform and product offering, it has become easier for customers to choose floor coverings, whether they be timber, carpet, vinyl, tiles or rugs. James Embelton, Managing Director Embelton Flooring

BUSINESSFIRST MAGAZINE

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BF | STYLE

Grooming tips for the leading female professional

rofessional grooming is a subject we all know is important, but many women neglect to give it attention, or know how to address it with other female staff. Professional stylists at Dress for Success believe job applicants have around 15 seconds to make a good impression during the interview process, and this is no doubt the same for executives entering the boardroom, management meetings or addressing staff at a presentation. Here are a few tips we give our clients to make sure those first 15seconds are well received.

Make up is a must

Even the bare minimum makes a difference. If you are not a fan of make-up ensure you apply a base of moisturiser to ensure your skin doesn’t look dry. Try adding some mascara to open up the eye, and consider using concealer for any redness, or shadows under the eyes or to cover blemishes. This takes two minutes and gives the impression you care about how you look and that you have high standards. Choose eyes or lips for emphasis, not both. Light make-up in the office is acceptable, but be careful not to overdo it. If you choose to wear a bright lipstick, then keep eye make-up light and neutral. Similarly, if you decide to wear eyeliner try neutral toned eye-shadow (browns work best for the office), and be sure to keep the lips very neutral with a clear or lightly tinted gloss. Prime your skin in warm weather. In warm weather, make-up can start to slide off halfway during the day. To make sure it lasts, think about using a primer before applying (this is especially useful for the eyes). Another alternative is to use a light foundation with a built in primer. A number of beauty brands are also doing all-day wear make-up, which tend to work well as an alternative option. Body maintenance is critical

Enhance your look with a Summer

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glow. Summer is a great time to get a lovely summer glow, and the safest way to do this is with self-tanning products. If you don’t have the time or budget to get a professionally applied tan that looks natural, you can use a home self-tanning product, but only use the very light ones like oils, or ones that gradually build up colour so that you don’t overdo it. The idea is for it to be a light glow that looks very natural. Don’t forget to maintain the tan once it starts to fade to ensure it is evenly removed. Keep your hands and feet wellmanicured

Pedicures are a must with open toed shoes. More relaxed and creative professional environments allow slingback and open-toe shoes to be worn in warmer months, which means your feet are also on show. Whether at a salon or at home, pedicures are vital – dry skin patches should be sloughed off and feet should be well moisturised so there are no cracked heels on show. Nail polish colours should be conservative or neutral, such as a French polish, shell pinks, and light beiges. Save the electric blue or bright fuchsia for holidays. If you are not a fan of nail polish, just moisturise feet well and ensure nails are short and clean. Keep your hands looking and feeling their best. The same nail colour rules apply for hands, with colours kept to classic (reds) or neutral (pale pinks and beiges). Chanel’s latest jade green is only acceptable if you work in fashion or another similarly creative or very casual industry. Once nail polish is chipped, either touch it up immediately (keep a bottle of polish in your make-up bag in your handbag) or remove all the polish – chipped nail polish is never acceptable. Ensure your garments are officeappropriate

Transparency should be fixed with appropriate undergarments. Summer dressing

often means lighter colours and lighter fabrics, which can create the problem of transparency. Before leaving the house make sure you can see your outfit in the mirror in a well-lit room, preferably with light directly behind you, and make sure your dress or outfit is not see-through. If it is, you need a slip underneath. The same thing goes for blouses and other tops – sheerness means you need a plain camisole underneath. Overly lacy lingerie that is visible through your clothes is also to be avoided. When shopping, select dresses that are already lined or are made from heavy enough material that you can’t see through. Bra straps should never be seen – if you can see them you’re not wearing appropriate attire for the office. Take the time to mend your clothes and shoes. Make sure you set aside time to trim loose threads, re-attach loose buttons, and re-stitch fallen hems, or ask your dry-cleaner or repair person to take care of them. A garment that is not in 100% working order will not give a great impression. The same goes for shoes. When shoe soles start to wear unevenly or scratches and scrapes are visible, it’s time to take them to the shoe-repairer to restore their condition. Consider the cost of repair versus buying something new as sometimes repairs can come in cheaper. First impressions last. Through getting your executive grooming right, you will not only look and feel great you’ll make a memorable, lasting impression. BF Dress for Success Sydney is a registered charity that outfits women in need free of charge, in high quality professional attire and provides practical advice in preparation for job interviews. Through its innovative, volunteer operated programs, Dress for Success Sydney improves the employability of women by increasing confidence and restoring dignity. For more information visit dressforsuccess.org/Sydney. www.businessfirstmagazine.com.au

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STYLE| BF

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BUSINESSFIRST MAGAZINE

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BF | HEALTH

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HEALTH| BF

WHY YOUR COMPANY NEEDS TO GAMIFY HEALTH & WELLBEING The start of a New Year is traditionally the time for planning ahead, setting goals and establishing a clutch of positive new habits that will create a new improved you. It’s also the time to strategise how best to optimise your financial health and assess new investment opportunities that can help you achieve your long and short term goals.

ave you ever enjoyed playing tip or dodgeball? Do you now enjoy a game of solitare on your phone? Perhaps a crossword? Or do you spend time on the PlayStation or Xbox? Then you will understand the power of game mechanics. Innovative CEOs and HR Managers do too, and when applied to wellbeing they are reaping the benefits for their business. Why? Because, the Gamification of Health and Wellbeing is proven to help companies increase productivity and engagement and reduce company health risk profiles. Innovative HR leaders and wellbeing managers are taking the lead by introducing game play throughout their wellbeing initiatives. In fact, the whole corporate sector is quickly jumping on board. A recent survey predicted that over 70% of the world’s largest 2000 companies had deployed at least one gamified application by the end of 2014.

What is Gamification?

“Gamification is the buzzword that has been developed to describe the action of using game mechanics to encourage engagement in activities that might otherwise seem routine or boring,” says Gamification expert Stacey Edmonds. Take for example the blight of sedentary behaviour. Employers across the globe are struggling with this problem. Nilofer Merchant argues ‘sitting is the smoking of our generation’ [www.ted.com/talks/nilofer_merchant_got_a_meeting_take_a_walk] – and gamification is a solution to the behaviour you wish to change. For example, you can use gamification to get employees to move more by enabling them to have walking meetings, getting them to stand for phone calls and encouraging them to have lunch breaks outside of the office. Give employees the opportunity to be the ‘most improved’ or the ‘top stepper of the week,’ and leverage the power of the leaderwww.businessfirstmagazine.com.au

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board to increase positive competitive spirit. Create a little healthy competition between departments and fire up senior management by giving them the kudos they wish to receive for being the department that moves the most. We can gamify entire wellbeing experiences, from encouraging volunteering and corporate social responsibility to learning and development – even creating a safety culture. This can all be brought to life with game mechanics integrated into a customised technology platform that can be accessed on any device, recording data from wearable tech, and integrated with existing internal systems. Everyone can participate

Gamification engages employees across all demographics. At first blush that may seem a bold statement, especially considering your stereotypical gamer is a geeky guy who never leaves his basement. However, the advent of social games, mobile games and inclusive game consoles such as the Wii means this stereotype couldn’t be further from reality. Statistics from Bond University tell us the average Aussie gamer is 32 years old, and that 47% of game players are women. A huge 83% of parents play games, and 47% of us regularly use our mobiles to game. It’s hardly a niche market, and considering two thirds of Australians use a smartphone these statistics are only going to rise. Do employees like it? In short, yes. A study from World at Work captured the enjoyment employees draw from mobile tech at work – gamification is ‘viewed as fun, easy, competitive and creative’. However it’s not just about having fun. Gamification of Wellbeing is effective because it turns activities that might otherwise seem routine or boring into real achievable measurable goals, whilst creating a social and inclusive

wellbeing environment; awesome news for CEOs and HR departments. Gamification and health are the perfect match

WorldatWork and Buck Consultants carried out a study asking employers whether they think gamification is effective, and for the most part, they do. Respondents rated gamification as either ‘very effective’ or ‘somewhat effective’ at achieving the following: • Improving specific health/lifestyle behaviours – 61% • Improving workforce health – 49% • Enhancing the organisation’s image – 49% Employees become healthier, and the company enjoys the benefits of a more energetic engaged workforce. Tech talk

We are in the age of wearable tech. Not only can we track our physical progress on our laptop, mobile, tablet or phablet… we can actually track and record real time from our Jawbones [https:// jawbone.com/up], iPhone watches, or the futuristic-looking Misfit Shine [http://misfit.com]. Try it out!

Designed by Springday’s resident Wellness and Gamification expert Stacey Edmonds, Springday offers far more than a nod to the addition of a few random game mechanics. Players are rewarded for all behaviours and activities – this means pedometer challenges to weight loss programs, flu shots and yoga classes, participation in Mindfulness in May [http://www.mindfulinmay.org/], RUOK Day [https://www. ruok.org.au] and even Movember [http:// au.movember.com]. There is something for everyone and the game play is real, authentic and motivational. Employees can access it anytime and anywhere, and by leveraging the power of fitness trackers it aspires to provide an innovative and easy solution for clients. BF

BUSINESSFIRST MAGAZINE

30/12/2014 8:06 am

BF | READING NOOK

The Leader’s Bookshelf

7 Simple Strategies of Highly Eﬀective Traders Winning technical analysis strategies you can put into practice right now By Alpesh B. Patel & Paresh H. Kiri. $50.00. Trading is best kept simple and focused that is the way to win. The most successful traders will tell you that they use only a small number of strategies, applying them time after time. A common mistake of losing traders, however, is to overly complicate what they do, using many different strategies at one time, or leading a never-ending search for new strategies. In 7 Simple Strategies of Highly Effective Traders, Alpesh and Paresh provide a practical guide to seven technical analysis trading approaches that are simple, effective and easy to put into practice. These are the kind of strategies professional traders use to manage their trading. Throughout, readers will benefit from the trading insight and expert chart commentary of two vastly experienced traders. Included are strategies for breakout with volume, event trading, mean reversion, moving averages, short-term day trading, and more. The strategies can be used on a wide range of instruments, from equities to forex, bonds and commodities. Most of the approaches can also be used equally on UK, US or international markets. Don’t waste money cycling through strategies, pursuing the Holy Grail – follow the winning approach of the pros and keep things simple.

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7 Business Habits That Drive High Performance. By Nicholas S Barnett. Major Street Publishing, 2014. $29.99. Your first question about the 7 Business Habits That Drive High Performance may be… are they the famous 7 habits? The ones Dr Stephen Covey introduced to theworld in The 7 Habits of Highly Effective People? The answer to that is no. Covey’s habits focused on individual effectiveness. Barnett’s habits focus on growing a high performance organisation. Another difference… Covey’s habits stemmed from his reflections on 200 years of success literature. Barnett’s habits come from his 35 years as a business leader, and research he carried out with more than 100,000 employees across 200 organisations. Here are the 7 Business Habits: 1) Live an inspiring vision. 2) Communicate clear strategies and goals. 3) Develop your people. 4) Go out of your way to recognise your people. 5) Genuinely care for your people. 6) Listen and adapt to your customers’ needs. 7) Continually improve your systems. Barnett’s research and experience give him such authority, that it’s difficult to fault his core idea. These are the longterm habits common to high-performing businesses. 7 Business Habits targets CEOs and board-level business leaders. If you’re at this level, then make sure you’ve adopted these habits in your organisation. – DGT www.businessfirstmagazine.com.au

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READING NOOK | BF

The One-Page Financial Plan: Everything You Need to Successfully Manage Your Money and Invest for Wealth Creation. By Sam Henderson. Wrightbooks, 2013. $29.95. Most personal finance books bog you down with details of different investment types - this one is unique as it gives you a big picture view. Everyone is at a different place in their financial journey, so this book starts with helping you work out where you are and shows you how to get to where you want to be. With your starting point and your end point in mind, you can do a gap analysis to work out what you need to do to get you there. Then you put together this information into a one-page financial plan that allows you to instantly see your current situation and your goals, and what you need to do to achieve them. Apart from the big picture view of your finances, The One-Page Financial Plan is: • Comprehensive: It gives you everything you need to start making smarter money management choices. • Customised: It helps you work out a plan for what you want to achieve. • Actionable: It gets you to break down your goals into action steps so you can change dreams into reality. Few personal finance books are geared toward you no matter what your current financial situation is – and even fewer give you the entire roadmap to your dreams. www.businessfirstmagazine.com.au

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The Undercover Economist Strikes Back: How to Run – or Ruin – an Economy. By Tim Harford. Little, Brown, 2013. $32.99.

Seven Elements that have changed the World. By John Browne. Weidenfeld & Nicolson, 2013. $29.99.

In his latest Undercover Economist book, Tim Harford puts you – the reader – in charge of an economy and shows you how to make it work. Harford is a microeconomist, meaning he looks at the impact of individuals and firms on an economy. This time round he tackles macroeconomics, which looks at the broader issues in an economy and their possible causes. He introduces problems one after the other that affect an economy, and just as you think you’ve got his point and the required solution; he introduces a twist that reveals more complexity than you first thought. The book is written as a conversation between Harford and you. You ask a question and he answers it, which prompts further questions from you, until you’ve mastered the topic. For investors, this book will help you understand the problems within economies and how those problems affect your investments. When you know what the problems are, you’ll be able to understand what responses are needed from governments to run the economy well. This book will appeal to smart investors who want a guide to macroeconomics in everyday language.

John Browne has come up with a subjective list for the seven elements that have changed the world. But given he’s former CEO of BP, it’s worth understanding his choices. His chosen elements are: iron, mainly because of its influential role in military history; carbon, because of its use as a fuel source; gold, as the most coveted element of all time; silver, because of its use in photography; uranium, because of its role in ending a war and as a power source; titanium, for its wartime applications but more so for its ubiquitous presence as a whitening agent in a society where white equals purity; and silicon, because of its use as glass and in technology. As Browne devotes a chapter to each element, he blends science, politics and history in a well-written story that combines his personal experience with solid research. You don’t need to agree with his choices to appreciate his reasoning and enjoy the book. From an investment point of view, this book helps you see how markets using natural resources are created – and how quickly those markets can vanish. If you invest in natural resources, or your business is dependent on them, this book will give you indispensable background knowledge.. – DGT

BUSINESSFIRST MAGAZINE

30/12/2014 8:06 am

BF | DESTINATION

HISTORIC RETREAT IN THE SCENIC SOUTHERN HIGHLANDS

The start of a New Year is traditionally the time for planning ahead, setting goals and establishing a clutch of positive new habits that will create a new improved you. It’s also the time to strategise how best to optimise your financial health and assess new investment opportunities that can help you achieve your long and short term goals.

he Fitzroy Inn has cemented its title as the finest country inn in the scenic Southern Highlands with an exciting re-launch of its dining areas, café menus and accommodation upgrades. The infamous estate’s new owners have unveiled an exciting transformation defined by traditional country style and modern comfort. Originally built in 1836, the charming Victorian colonial retreat is set amidst

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five acres of tranquil, terraced gardens located just an easy one hour from the centre of Sydney by car, and two hours by train. The estate’s rich and storied history is unmistakable, from the convict cell in the Inn’s dungeon that retains the original iron shackles used to restrain its hapless guests, to the original kitchen in the cellars, which has been described by some historians as ‘the finest example’

of a convict-era built kitchen remaining in Australia. The Fitzroy Inn is also home to the first ever tennis court in Australia, built in the grounds of the then, Oakland’s School by R W Fletcher in 1875. Continuing in the vein of historical luxury is the revamped Fitzroy Inn Cafe | Wine Bar and its seasonal menu featuring delicious country cuisine. Head Chef Yoshifumi Tanimoto crafts www.businessfirstmagazine.com.au

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DESTINATION| BF

delectable dishes using produce sourced from local growers and from the Inn’s very own veggie garden. The Cafe | Wine Bar’s Spring Charcuterie features pâtés, cured meats and antipasto, which can also be taken to enjoy throughout any of the Inn’s 5-acre gardens. The Wine Bar’s handpicked local wine and beer list is specially tailored to the seasons, painting a vivid picture of everything the Southern Highlands has to offer. In the true style of a traditional country inn, the estate features traditional courtyards, picturesque gardens and a lavender-lined driveway; as well as 11 uniquely furnished bedrooms. Guests can enjoy modern comfort in a cozy attic room boasting picturesque garden views, or soak up a little bit of history in the luxurious and newly restored School Master’s Cottage. Beyond its quaint, rustic charm and astounding natural beauty, it is the regions wineries, cafés, and restaurants that have been at the centre of the transformation that has seen the Highlands become a true food and wine lovers destination. BF

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BUSINESSFIRST MAGAZINE

30/12/2014 8:06 am

BF | FAST LANE

AUDI’S ZIP LINE

A clear sign of the popularity of the Audi A1 and A1 Sportback is the over 500,000 cars sold since its market launch in 2010. The Audi compact models are now being made even more attractive with benefits to both interior and exterior design. Fresh decors and paints give them an even more attractive appearance. The small compacts exhibit handling that is like that of a mid-class car. The rigid car body and short wheelbase make them agile and maneuverable.

ix engines – gasoline and diesel – are new or have been intensively further developed. For the first time, Audi is offering completely new three‑cylinder engines, the 1.0 TFSI and the 1.4 TDI – they are eﬃcient without neglecting driving fun. Fuel economy has been improved through‑ out the engine lineup by as much as ten percent, and power output ranges from 66 kW (90 hp) to 141 kW (192 hp). The seven‑speed S tronic is available for all engines. The electromechanical power steer‑ ing system for the A1 is entirely new.

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It reduces power assist as vehicle speed increases. Its operation can also be modified by the new Audi drive select system. The driver can operate equip‑ ment modules such as the adjustable shock absorbers over several modes. Wheels are available in sizes up to 18 inches. The program of optional features has been restructured. Customers can con‑ figure their Audi A1 to be even more customized by choosing one of the new lines: design or sport. Other lines and packages are offered as well. Brand new is the active kit, which highlights

the urban character of the Audi A1 distinctively. The MMI navigation plus and the Audi connect module including car phone brings the online services of Audi connect into the vehicle and provides a WiFi hotspot. The Audi S1 and S1 Sportback with 170 kW (231 hp) and quattro perma‑ nent all‑wheel drive still represent the sporty vanguard of the model series. It completes the sprint from 0 to 100 km/h (62.1 mph) in just 5.8 seconds (S1 Sportback in 5.9). Its sporty chassis tuning makes it even more agile, and www.businessfirstmagazine.com.au

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FAST LANE| BF

the power of the two compacts is visualised at first glance by modified spoilers – front and rear – and four tailpipes. The interior of the new Audi A1 and A1 Sportback is spacious and sophisticated. The layout of its controls is clean, and fine chrome trim strips make its design even more elegant. The program of optional features has been restructured. The A1 can be custom‑ ised by choosing either the design or sport line. Other options include the design selection and the S line sport

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package as well as many other custo‑ misation options – from colored air vents to decorative decals for the body. Audi Genuine Accessories offers other options, including a comprehensive equipment package that is being offered for the first time. The active kit includes customised add‑on parts and wheel designs. The six engines of the redesigned Audi A1 and A1 Sportback – four TFSI and two TDI engines – have an output of between 66 kW (90 hp) and 141 kW (192 hp). All engines are entirely new

or have undergone extensive advanced development. Power output has been increased in most engines, while fuel economy has been reduced by as much as ten percent. The seven-speed S tronic is available for all engines, either optional or standard (with the 1.8 TFSI). The driver can have the dual clutch transmission make shifts at lightning speed either automatically or by manual control. If you are looking for a small sporty, car, there is a reason this one has sold so well. BF

BUSINESSFIRST MAGAZINE

30/12/2014 8:07 am

BF | SPORT

THE WORLD’S TOP YOUTH SAILORS ARE BACK IN 2017 It’s sailing season and as we glow in the aftermath of another Sydney to Hobart phenomenon, let’s look forward to who may dominate the next America’s Cup. It may actually be our New Zealand rivals.

n 2013, the first Red Bull Youth America’s Cup took place just before the first races of the America’s Cup. Featuring 10 national teams comprised of sailors aged 19-23, the event was an instant success. The next Red Bull Youth America´s Cup will take place in Bermuda, which will also be the home of the 2017 America’s Cup. Double Olympic Gold medalists Roman Hagara and Hans-Peter Steinacher, from Austria, will return as the Sports Directors for the Series, identifying talent, coaching and assisting the young teams, and making selections for the final regatta, which will take place in 2017. “Last time in San Francisco we didn’t really know what to expect,” said Haga-

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ra, thinking back to some of his first meetings with the young teams. “How good would they be? Could they handle racing at high-speed on the AC45 catamarans? These are difficult boats to handle, even for the pros.” “But we saw very quickly that although the learning curve was very, very steep it was also very quick,” said Steinacher. “When it came time for the final races, I thought, ‘some of these guys are probably good enough to join a Cup team’. I was right!” In fact, members of the winning crew, Peter Burling and Blair Tuke, were quickly offered jobs at Emirates Team New Zealand, where they now represent an infusion of young talent into the experienced team. “This is exactly what I hoped would

happen when we first started talking about the Red Bull Youth America’s Cup,” said ORACLE TEAM USA skipper Jimmy Spithill, who was instrumental in driving the project into existence. “There are so many good young sailors out there, who just need to know there is a way forward, a path to get into the America’s Cup. Now with the Red Bull Youth America’s Cup, it’s clear that there is.” The stakes are raised for the next edition – not only will the young crews be racing on AC45 wing-sailed catamarans. This time in Bermuda, they’ll be on the foiling version, taking flight above the water, just like the America’s Cup crews they hope to join. BF www.businessfirstmagazine.com.au

30/12/2014 8:07 am

BUSINESSFIRST for Business Leaders

September/October 2014

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How a League legend took over the boardroom

Growth Hacking

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It’s never too late to invest

Buying property in your 50s is a sound financial decision

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Why iconic brands are great for business

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