BFM Apr/May 2016 by Associated Media Group Pty Ltd

BUSINESSFIRST for Business Leaders

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JAMES OSBORN PUTTING PURITY BACK IN THE GOLF SWING

GET QUALIFIED Australia’s Newest MBA Pathway

Vik Bansal

MAKE THE MOST OF YOUR OPPORTUNITIES IN CHINA

Taking Cleanaway from good to great

THE IMPORTANCE OF PUBLIC SERVICE

CHRISTOPHER PYNE

The Innovation Nation

And how Serco is delivering community-minded programs

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BFM | CONTENTS

CONTENTS

18 COVER STORY

REGULARS

Swinging into action If there is a company in Australia whose directors are the embodiment of its catchphrase “No Limits”, it is PureForm Golf. James Osborn talks about a “No Limits” attitude and how to change your golf swing.

4 Editor’s Desk 5 News

SPECIAL FEATURE: 8 Taxing time for small business in 2016 10 The Super objective and taxes 12 The tax plight on Australian employers 13 Infographic: Household tax costs

FEATURES

65 It’s time to scrap annual employee performance reviews by Mike Irving

14 The art of deal making 30 Can Australia become the innovation nation: an interview with Christopher Pyne

66 Why the Internet of Things matters to your business by Chad Gates

38 How does entrepreneurship lend itself to space exploration?

71 Understanding the renovation property formula by Patrick Bright

60 Speed costs: how far do you want to go? 83 Australian companies struggle with social media content creation

PEER TO PEER

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79 Why time matters in a disaster by Gregory Medwell

LIFESTYLE 92 Health – Apps to keep your health in check

44 Driving a business from good to great by Roger Mendelson

75 Venture capital partnerships reform by Sarah Bartholomeusz

91 The evolution of share trading by Andy Rogers

33 Opportunities in China for Australian SMEs by Andrew Watson

54 How can you become a more authentic leader? by Simon Hayward

59 Golden rules for customer service on social media by Catriona Pollard

94 Destination – Rolling through the Rockies 96 Fast lane – Audi innovation

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CONTENTS | BFM

BUSINESS FIRST LOUNGE 24 The man with the Midas touch When Bob Vassie took over the leadership position at St Barbara he proved that mining wasn’t dead. 34 Taking care of business Serco delivers innovative public services in government and private sectors through commercial and industrial markets. 40 Gavin Scholes: How one man’s vision built an industry For Gavin Scholes, money is just a by-product of hard work. What really gets him excited is being able to help businesses benefit from his words.

40 72 Blamey Saunders: The hear and now Dr Elaine Saunders and Professor Peter Blamey speak about their work with Dr Graeme Clark and how they themselves have made great strides in the field of hearing.

46 Driving a business from good to great Cleanaway’s Vik Bansal talks about how to bring brand identity to the fore. 50 Everyone is talking about getting a board appointment but you need to ‘dare them not to appoint you’ Increasingly people are seeking Non Executive Directorships to complement their executive careers or are considering transitioning from an executive role to a portfolio of board directorships. 56 Team Fault Lines Why inclusiveness is key for effective workplace diversity. 62 An MBA where you don’t have to put your life on hold Australian MBA enrolments have surged 42% in the last 3 years, fuelled primarily by online and fast tracked modes of study. 68 ECI: Beyond the master apprentice relationship Improving executive performance and building outstanding teams is a sometimes difficult, but always a rewarding prospect

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76 The blueprint for emotional success Business First speaks with accelerated behavioural consultant and founder of EPS – Eclat People Solutions, John LaneSmith about how leaders can use emotional intelligence to get the best out of their people.

80 Chris Smedley: Finding health and wellbeing in the workplace Business First spoke with CEO Chris Smedley about workplace psychology and the need for such an organisation.

84 Come fly with me It has been a good few years for Corporate Travel Management and its CEO Laura Ruffles.

88 Margaret Harrison: Lead with your story Business First speaks with Our HR Company Managing Director Margaret Harrison about how to put strategy into action.

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BF | EDITOR’S DESK

Innovation for inspiration Steve Jobs once said, “Innovation distinguishes between a leader and a follower.” William Pollard takes a more indepth approach, he said, “Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable.” Australia is undergoing inevitable change. The country has endured more political upheaval than we care to remember – all in the space of just a few short years. However what has come of it is a current Prime Minister who espouses the good virtues of innovation. Whose key platform is to drive the country forward by instigating an innovation boom. While we wait for the possibility of an early election and the probability of a double dissolution, we hope the government hasn’t taken its eye off its innovation initiative. Speaking with Minister Christopher Pyne, it would seem that this platform is still high on the agenda. In our exclusive interview, Mr Pyne explains the intricacies and drivers surrounding this current government’s National Innovation and Science Agenda. His views go hand in hand with several of this issue’s innovators. Many are currently enjoying success in the tech sector. They include the subject of today’s cover story, James Osborn, whose team of technicians has perfected the golf swing. What’s that you say? Yes, you read it correctly, the perfect golf swing. Then there is Laura Ruffles who has implemented technologies at Corporate Travel Management (CTM) that have perfected the corporate travel experience. Imagine a seamless trip from flight, to airport pick up, hotel stay and meetings. All managed to the point where you don’t even realise you are being managed. Gavin Scholes is the CEO of Telstra Phonewords. The lobbying he did to bring his innovation to bear would have the most reasonable of men tearing their hair out. However, the years Scholes spent pushing for government support, has led to many businesses benefitting from a simple, yet effective phone technology. At Blamey Saunders bioscience is front and centre and could have enormous medical benefits. Of course, it is not just in technology where innovation is occurring. At Serco, they are coming up with innovative public services for government and private sector institutions. At EPI, a high-level innovation is occurring in the field of emotional intelligence. At Assure, they are helping businesses by offering unique support to employees. Our HR Company is passionate about success through people and focus on working with companies to help them connect people to the business journey and turn corporate strategy into action. And at Executive Coaching International they are finding ways to inspire relationships. As you will see, innovation has inspiring effects and we hope they inspire you. Finally, if you thought the mining boom was over, think again. While it is too soon to say that mining will once again be the economic driver it once was, there are companies such as the Bob Vassie led gold miner St Barbara that is proving critics of the industry wrong. St Barbara was close to the wall but managed to dig itself out of a hole, by digging a little deeper into itself and its capabilities. This is a jam-packed issue of Business First, so grab a cup of coffee, put your feet up and come with us for the ride.

Jonathan Jackson

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www.businessfirstmagazine.com.au EDITOR Jonathan Jackson SUB-EDITOR Judy Hyman MEDIA & Khan Izaac COMMUNICATION Jake O’Donnell WRITER Daniel G Taylor DESIGN Gino Hawkins PRODUCTION Danise Li Head Office Level 1, 33-35 Atchison St St Leonards NSW 2065 Advertising enquiries Phone: 02 8416 5294 Email: bfadvertising@amgroup.net.au Subscription enquiries Phone: 02 8416 5294 Email: bfsubscriptions@amgroup.net.au Contributors Sarah Barthlomeuz, Patrick Bright, Stefan Crisp, Chad Gates, Stan Gordon, Simon Hayward, Mike Irving, Gregory Medwell, Catriona Pollard, Andy Rogers, Andrew Watson Associated Media Group Pty Ltd ABN 68 123 058 926 Copyright ©2016 Associated Media Group amgroup.net.au 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 ONLINE MARKETPLACE IS A GAME-CHANGER FOR WOMEN

SMEtv launches in Australia

New research shows that while women may struggle to keep up with their male counterparts when it comes to jobs and financing, they come out ahead with crowdfunding. The Berkeley-Haas School of Business research takes the position that women are better at telling a story and because of that they resonate with potential investors in the crowdfunding arena. Behavioural specialist Sean Redmond says he’s not surprised by the research, adding that in the online environment women are able to bypass traditional power structures. “It’s a more even playing field without the gender bias,” says Mr Redmond. “Women can have a greater impact than ever before – using the traits they naturally excel at – without having to lose site of who they are, or join in the old boys club,” he says. “In traditional workplaces there are

A new dedicated online business channel, SMEtv, has launched supporting Australian small and medium sized enterprises (SMEs). SMEtv delivers useful, straightforward and no nonsense educational video content for SMEs. The platform is available across all devices and membership is free. SMEs account for just under half of all private sector industry employment and one third of private sector industry value. SMEtv offers an entire perspective on business – from marketing, finance, human resources, digital, to business management, success stories, business travel and so much more. SMEtv provides an opportunity to learn from successful SME owners, industry and business experts and gain insight into products and services that can make a genuine difference. SMEtv was founded by video content specialist Nigel Abbott, and investment banker Steve McLean who saw a gap in the market for SMEs struggling with the pressures of running a business. Steve McLean says, “SMEs are the fastest growing business segment in Australia, contributing significantly to economy, employment and innovation. “It is about time that SMEs in Australia got access to great advice without having to pay for it. “When developing SMEtv we spoke with over 2000 business owners to find out what SMEs need most – from guidance on cash flow, to marketing, digital and more. We then set out to create targeted content which is highly relevant and useful for members.” BFM

unwritten ground rules and certain explicit and implicit requirements to achieve success – it’s expected you change who you are to ensure you fit into the existing culture, norms and leadership style.” “When free to do so, women enjoy connecting emotionally, are better story tellers and are more willing to share. “When they master the art of story telling, women can effortlessly step beyond the common sales objections and speak heart to heart with the person listening. “Through platforms like Facebook, Twitter, Instagram and Pinterest women are successfully using story telling to grow their businesses instead of conforming to the outdated ‘hard sell’ approach. It’s actually about developing a love for your client and connecting with them honestly and authentically. “They are biologically wired for social networking and do this naturally.” BFM

SME digital engagement According to recent research, only 16 per cent of Australian businesses are fully digitally engaged. This means that financially small businesses could be earning up to $350,000 more per annum if they had an online presence and were actively using tools that are within easy reach such as SEO techniques, social media channels and robust email marketing strategy says company Netstripes. Dinesh De Silva, CEO of Netstripes is passionate about changing the status

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quo and has set his company on a mission to get 30 per cent more small businesses harnessing the power of digital engagement by 2020. By creating more sustainable companies which are easier to find by their ideal clients, he says that the economy can only benefit and estimates that 700,000 jobs could be created, fuelling economic growth in our country. “Small businesses that are fully digitally engaged are earning over $350k per annum more and are growing 20

per cent faster than their competitors,” says De Silva. De Silva believes there are five elements which are fundamentally important for a business to concentrate on in order to be digitally engaged; a robust strategy, a world class website, social media engagement, search rankings and strategic email engagement. “87 per cent of buyers say online content has a major or moderate impact on vendor preference and selection,” says De Silva. BFM

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BFM | NEWS

Alternative lending to become mainstream Australia’s alternative lending sector is set to go mainstream as early as 2020, according to the US’s leading online small business lender OnDeck, Inc. OnDeck CEO Noah Breslow said Australia’s rapidly evolving alternative finance market, had the potential to outpace the US market in its shift towards mainstream. According to Breslow, Australian market drivers fuelling the speed of this shift include the heightened challenge SMEs face in accessing funding through traditional sources, faster technology adoption, greater relative investment and the more concentrated nature of the market. Research on the sector shows new approaches to lending could tap into unmet demand for Australian SME finance worth up to AUD $70 billion. Research also estimates the total addressable market for new SME lenders is likely to grow to AUD $95 billion by 2020. “The small business credit problem is global in nature. Small businesses need working capital to buy inventory, or expand, or hire more staff, yet traditional lenders are not equipped to meet their financing needs,” Mr Breslow said.  BFM

From startup to scale-up: Consumer fintech firm, MoneyMe, has announced a $30 million capital raise after just two years in operation, signaling increasing confidence by the investment community in fintechs who demonstrate an ability to achieve their growth projections and deliver true consumer value. The funds came from a ultra high net worth Australian family office, whose investment portfolio otherwise mostly comprises large scale property on the eastern seaboard, indicating growing confidence in fintech as a newly credible asset class for investors who may not have previously considered it an option. “Valuations in the fintech sector have largely been based on forward-looking growth projections until quite recently, rendering it a somewhat risky and most-

ly untested investment class for many high net worth Australian investors,” said Clayton Howes, CEO of MoneyMe. “Now that the fintech movement in Australia is reaching the two year mark, however, a number of investors who were previously sitting on the fence when it came to investing in fast-growing, tech-based startups are now finding the confidence to put their money behind those firms who have now demonstrated an ability to generate real returns. “This is great news for innovation in Australia nation-wide, as it means we may begin to see Australian fintechs given the type of support and funding opportunities needed to finally compete on a global level.” BFM

Traditional Employment Models Near Sell-By Date Deloitte research has identified some major shifts in the way we work. New technology, an ageing workforce, a new generation of leaders, globalisation and greater mobility will have a significant impact on the way we work. Ironically, as the workplace becomes increasingly digital and automated, people and their skills will matter more than ever, as those without the right people or skills will find it increasingly difficult to compete. “We are seeing a shift towards a skills-based on-demand economy. To innovate, compete and survive, businesses will need access to the right skills at the right time. This is why we have seen the emergence of service marketplaces for global freelancers for off-site, small-project virtual work. These platforms provide a global network of contractors offering businesses the opportunity to outsource work, often at a lower cost, without the costly overheads of permanently hiring that person for specific tasks,” says Wawrick Kirby of Nvoi. “This model is also increasingly gaining favour amongst employees, as the

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nature of work arrangements steadily transition away from permanent work. In addition, Deloitte’s research suggests employees are expecting to move around more, with 60 per cent expecting to change to a different industry, different role or both in the next 10 years. These platforms enable employees to meet their need to ‘move around’ more, albeit virtually. “However, while there has been significant growth in the off-site virtual workforce, the on-site workplace has become increasingly important to businesses, but with a different mix between permanent and contingent onsite workers, even as we move towards a more digital and automated labour force. “In Australia, research already suggests those businesses that foster collaboration in their workplace are 70 per cent more innovative than those that do not. This is due to the fact productivity, creativity and innovation are all stimulated and increased at an exponential rate when employees are in close proximity with one another.

“The ideal solution for businesses looking to succeed in this shifting landscape is to have an on-demand, on-site, skills-based workforce. Businesses are now reimagining how to find, attract, contract and manage the mix of permanent and contingent workers. “Success in this new age demands new ways of thinking, especially when it comes to Australian talent. Traditional employment models are nearing their sell-by date, confirmed by the growth of the disruptive, new marketplaces for contingent talent and management systems, like Nvoi. Nvoi has gone beyond the virtual workforce and brought the on-demand marketplace model to the massive contingent on-site workforce “To future proof our workforce, businesses should look towards a more flexible, agile and innovative on-demand, on-site skills based workforce, where people will showcase their skills to those that need them, and create a competency-based, personalised, lifelong learning model – one that can rapidly evolve to the changing needs of business.” BFM

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NEWS | BFM

Gold shines amidst global volatility Amidst global share market volatility and uncertainty, investors are turning to gold to diversify their portfolios, according to exchange traded fund manage BetaShares. Gold has reemerged as an in-demand commodity, significantly increasing in value in the past few months. According to BetaShares Managing Director, Alex Vynokur, gold’s recent growth trajectory is driven by a number of key economic factors which may continue to impact markets throughout 2016.   “Widening credit spreads across a broad range of sectors, including US oil and gas, are pushing investors to seek alternative asset classes like gold,” said Mr Vynokur.  “In addition, central banks behind traditionally ‘safe haven’ sovereign issuers such as Bank of Japan, Swiss National Bank and European Central Bank have moved to negative interest rates.   “In this climate, gold tends to represent a ‘safe haven’ asset that does not have a negative real return. Gold is widely regarded as a reliable store of value, and has been for centuries. In uncertain markets like today’s, investors are once again turning to a traditional refuge, and gold has become an in-demand investment.”   BetaShares is seeing the impact of investor appetite for gold first hand with increased inflows to the BetaShares

Gold Bullion ETF – Currency Hedged (ASX: QAU).   Since the beginning of the year QAU has almost doubled in size while gaining approximately 14%, significantly outperforming the S&P/ASX 200 which is down almost 7%*.  Backed by physical

gold, QAU tracks the performance of the price of gold bullion. QAU is currency hedged, to help protect investors from currency risk, thus providing more pure exposure to the price of gold.  *Past performance is not an indication of future performance. BFM

DON’T PLAY WITH NEGATIVE GEARING The Property Council recently released TV, radio, newspaper and digital advertisements promoting the benefits of negative gearing to the Australian economy. “Almost two million Australians own an investment property and almost 1.2 million negative gear,” said Ken Morrison, Chief Executive of the Property Council. “This is an industry that is vital to our economy. 1.1 million Australians rely on property for their jobs and property generates one ninth of Australia’s GDP. “Sudden lurches in policy are risky to an industry that is contributing so much to jobs and growth. “Negative gearing is a vital part of the means by which Australians, from all walks of life, secure their financial future.

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“Our message to both sides of politics is: don’t play with negative gearing. Mr Morrison said the advertisements are focused on facts and not politics. “Tax is always a legitimate area of debate and we are happy to put the case for our industry and the millions of Australians who rely on it. “But this is not a campaign, nor is it a multi-million dollar blitz of the airwaves. “Frankly, we intend to win this debate on the strength of our arguments, rather than through a large advertising spend. “Some will want to equate what we are doing with the mining industry campaign – and they would be wrong. “The tradies, bricklayers, plumbers, carpenters, landscapers, surveyors, real

estate agents and investors who make up this industry can be found in every community throughout the country. That is who we will be talking to. “Starting a conversation with the grassroots of our industry is the first step in communicating the importance of negative gearing to the community. “Our ads are a reminder that Australians from all walks of life depend on the property industry – and seismic shifts in policy put this at risk. Mr Morrison said that both sides of politics have put changes to negative gearing on the table. “Playing with negative gearing is a risk to our industry and the economy. We would be negligent as the advocates of the industry not to say so. Mr Morrison said the advertisements will run over a month. BFM

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BFM | FEATURE

TAXING TIME FOR SMALL BUSINESS IN 2016 Many of Australiaâ&#x20AC;&#x2122;s three million small businesses, which employ 5.1 million people, are now finalising their 2014-2015 accounts in advance of impending tax filing deadlines in May writes Mark Chapman.

usinesses need to watch out for tax traps as they prepare their returns. There are important new rules to be aware of which could save you tax but can add an extra element of complexity to the task. Small businesses, defined by the Australian Taxation Office as those with an annual turnover of less than $2 million, are eligible for a range of tax breaks which can be explored during the current tax season.

Instant asset write off Between now and 30 June 2017, small businesses can

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immediately write off any asset purchase costing less than $20,000, but caution needs to be taken when claiming the write-off. To minimise your chances of having the ATO challenge the deduction, here are some key tips to be aware of: 1. Only small businesses qualify. This might seem obvious but you actually have to be in business to be a small business, not just a holder of an ABN number. 2. Understand what the tax break is. It is not a cash hand-out but a deduction from your 2014-2015 profit. If you spend $20,000 from on a capital purchase, you will

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FEATURE| BFM

receive a 30 per cent deduction (28.5% from 1 July 2015) which equates to a $6000 reduction in your tax and means you will still be out by $14,000 on the purchase. If it’s something you were going to purchase anyway, good luck and enjoy the benefit but if you’ve acquired something, or are planning to acquire something, purely to save tax, you might want to think again. What you gain in the year of purchase will gradually be clawed back through reduced deductions in future years. 3. The amount you can claim is GST exclusive. This is relevant if your business is registered for GST and can claim an input tax credit on the purchase. The amount you can claim is the GST exclusive price. 4. The asset must have been installed and ready for use. This is particularly important if you purchased the asset before the end of the 2014-2015 financial year. If you’d purchased it before 30 June 2015 but didn’t have it available for use until July 2015, you can only claim the deduction against your 2015-2016 results. 5. Second-hand assets. You can claim a deduction for second hand assets. 6. Beware private use. To claim the full deduction, the asset has to be used in the business and if there has been personal use, the deduction needs to be pro-rated to reflect this.

Trading stock The Tax Act provides a set of simplified trading stock rules whereby if your trading stock did not change in value over the tax year by more than $5000, you can include the same stock value at year-end as at the start of the year. Obviously, if you needed to do one, you’d have done a stocktake by now but this might be something to be aware of for next year.

Pre-paid expenses A small business can also receive an immediate tax deduction for certain pre-paid business expenses that were made before the end of 2014-2015. If a payment covered an expense that has gone into the new financial year (like insurance premiums, rent or membership of a trade or professional body) you can claim that deduction in the last financial year. Check your payments for the period before 30 June 2015 to see if anything qualifies.

Help for capital gains tax (CGT) The special small business CGT concessions are in addition to the 50% general CGT discount applying to individuals, trusts and super funds (but not companies). There are four CGT concessions that may be available to eliminate or reduce capital gains made by a small business or its owners where it disposes of ‘active’ assets, like a trade or business premises but do not extend to passive assets such as an investment portfolio.

Don’t blur lines between yours and the company’s money Many small businesses get caught out by the so-called ‘deemed dividend’ rules. Under tax law, loans and advances to private company shareholders or their associates are deemed to be taxable unfranked dividends

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for the shareholders. The intention of these rules is to stop the profits of private companies being distributed to shareholders as tax-free ‘loans’. So, if you find yourself borrowing money out of the company of which you’re a shareholder, try to ensure those borrowings are repaid by the time the company’s tax return for the year is due. If that isn’t possible, declare a dividend and treat the amount as income, in which case, the dividend would be franked if applicable. The Golden Rule - Keep Records! Good record keeping is your best friend for efficient business management and will also make life easier if the Tax Office ask you questions.

Tax law requires that records be kept for five years, and they should include: • • • • • • • •

sales receipts expense invoices credit card statements bank statements employee records (wages, super, tax declarations). vehicle records lists of debtors and creditors asset purchases. Records can be kept on paper or electronically, but should be easily retrieved. In our experience, businesses often stumble when asked by the Tax Office to verify transactions by providing supporting records, with the consequence that even ‘innocent’ businesses can find themselves stung by the tax man where they are unable to provide the requested evidence.

And what about your deductions? We all know you’ve got to spend money to make money and if you spend it to produce ‘assessable’ income, then your business will usually be entitled to a tax deduction. Many businesses trip up by inflating their deductions or claiming for something they shouldn’t but a surprising number also miss out on deductions they could have claimed. In reality there are legitimate, not-to-be-forgotten deductions. The basic rule of course, to avoid the attention of the ATO, is that you need to show you are actually ‘out-ofpocket’, and that the expense has been incurred to run your business. Here then are some tax deductions you may be able to claim: • Advertising and sponsorship • Bad debts • Expenses in Borrowed money • Business travel • Car expense deductions • Fringe benefits • Home work claims • Insurance • Plant and equipment (depreciating assets) • Repairs, replacement, maintenance • Superannuation contributions • Salary and wages • Tax agent management expenses • Telephones – calls and rental • Losses from theft. BFM

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BFM | FEATURE

The super objective and taxes

Cbus Chair and former Victorian Premier Steve Bracks recently called on the Federal Government to move as quickly as possible to increase the Superannuation Guarantee (SG) to 12% and to reinstate the Low Income Superannuation Contribution (LISC), funded by reducing tax concessions for high income earners.

here has been a lot of debate about Malcolm Turnbull’s tax policies, or lack of them at this stage, but one thing we do know is that tax on super is on the table. The government is considering four options for reducing the current tax concessions that apply to superannuation. • Lower the income threshold to $180,000 (down from $300,000 now) where the contributions tax rises from 15 per cent to 30 per cent; • Limit annual concessionally capped contributions to super to $20,000 (down from $30,000 at present • Halve the capital gains tax discount for super funds (from 30 per cent to 15 per cent);

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• Abolish the transition to retirement strategy. Many groups have weighed into the debate and it isn’t just tax that is facing change. Following the Superannuation Legislation Amendment (Choice of Fund) Bill 2016 introduced into the House of Representatives by Assistant Treasurer Kelly O’Dwyer on 17 March 2016, AMMA executive director, policy and public affairs, Scott Barklamb weighed into the debate welcoming the proposed legislation to ensure unions cannot use enterprise agreements to stop Australian employees choosing which fund they want to direct their superannuation into. “Unions regularly insist that enterprise bargaining agreements (EBAs) covering wages, leave and hours

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FEATURE| BFM

also compel employers to direct all employee superannuation contributions into an industry superannuation fund nominated by the union,” Barklamb said. “Employees covered by these enterprise agreements are denied superannuation choice. This means they cannot choose where to direct their retirement incomes, and are denied the full range of competing superannuation products. It also stops employees consolidating their superannuation into a single account to reduce fees. “This includes employees who did not vote for the agreement and are not members of the union. “This is unacceptable. Union bosses, enjoying the support of just 11% of private sector employees, should not be able to decide where the superannuation of working Australians is directed and remove their right of choice – particularly not to force contributions into funds with union officials sitting on the board.” But back to the issue of tax, Terry McCrann wrote in his Herald Sun column on 20 March that superannuation is too tempting for Malcolm Turnbull and Treasurer Scott Morrison. Here’s an extract from McCrann’s column: “The government has abandoned the idea of increasing the GST and switched instead to targeting superannuation. “We will find out in the May Budget precisely who it is going to tax and how. “Increasing the GST from 10 to 15 per cent would have tapped the pot called ‘consumption spending’. “Every year consumers spend around $1 trillion. After excluding those things that are not taxed, like fresh food and health, the existing 10 per cent GST adds around $55 billion to the cost and takes that extra money to Canberra. “The superannuation pot is nearly double that, at around $2 trillion, and of course growing every year, thanks to the mandatory inflows and, hopefully, investment returns.” Meanwhile, Mr Bracks was responding to both the consultation paper released by Kelly O’Dwyer into establishing a legislated objective for Superannuation and reports the Federal Government is considering increasing taxes on superannuation as part of the 2016 Federal Budget. “Cbus supports a single objective, not just for the superannuation system but the whole of retirement policy that moves beyond budget and electoral cycle tinkering and kite-flying. “Cbus will be making a submission to the Government which will argue that the objective should be “To deliver a comfortable retirement to all Australians”. “The objective measure for this could draw from the well-established Australian Superannuation Funds Association (ASFA) comfortable retirement income standard. “The ASFA standard is to reach savings on retirement of $640,000 for a couple and for a single person of $545,000.[1] “At the moment less than 6% of Cbus members aged 60 or over have reached this standard. Based on retirement income estimates, we project less than 20% of all of our members will reach this standard when they retire.[2]

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“INCREASING THE GST FROM 10 TO 15 PER CENT WOULD HAVE TAPPED THE POT CALLED ‘CONSUMPTION SPENDING’ “This makes the decision by the Government to push back the move to a 12% SG to 2025 short-sighted. It is also likely to increase pressure on the Federal Government’s budget as retirees will need to rely even more heavily on the Age Pension. “Similarly the decision to remove the LISC for low income workers will put a comfortable retirement further from reach, especially for women. This important contribution should be reinstated in the 2016 Federal Budget. “The Government should also put more resources into ensuring compliance with the current SG legislation. Non-compliance to SG is estimated to be as high as $2.6 billion a year. The effect of non-payment on workers retirement can be dramatic with Tria Investments estimating that an average 25 year old impacted by non-compliance for 5 years loses 14% of their retirement savings. “These measures should be funded through a redirection of superannuation tax concessions that are currently skewed towards the wealthiest Australians. “To reach the objective of our superannuation and retirement system, government policy and concessions in superannuation should be targeted to benefit low and middle income earners who continue to struggle to reach a comfortable retirement income.” Mr Bracks said the first priority for any increased revenue from superannuation taxes should go to improving the superannuation of low to middle income earners. “Extra revenue from tax increases on superannuation should be used to restore the Low Income Superannuation Contribution before any cuts to personal income taxes are considered. This would improve retirement incomes and reduce pressure on the Federal Budget, especially given Australia’s ageing population,” Mr Bracks said. BFM Established in 1984, Cbus is the industry superannuation fund for the construction, building and allied industries. Cbus recently received recognition for its 10 years as a platinum rated fund by independent ratings agency SuperRatings. Cbus is run only to benefit members, and doesn’t pay commissions to sales agents or financial advisers. [1] The lump sums required for a comfortable retirement assume that the retiree/s will draw down all their capital and receive a part Age Pension. [2] Based on ASIC RIE Guidance, estimates as at 2015, assuming 50% of ASFA couples figure

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The tax plight on Australian employers UHY, the international accounting and consultancy network, has found that Australia risks losing its competitive advantage in the Asian region if employment taxes (or on-costs) are not kept in check.

he UHY conducted a global study in which it examined data from 29 countries across its international network, calculating the value of compulsory payments business makes on top of wages. These on-costs to employers in Australia include state-based payroll taxes, superannuation and workers compensation premiums. UHY Haines Norton (Australia) Chairman, Michael Coughtrey said the study highlighted global differences as well as those within our own region, citing employers in New Zealand now paying US$1,341 (4.5% of gross salary) compared to US$4,485 (15% of gross salary) in Australia on a comparative employee salary. Mr Coughtrey said global companies will always choose to locate regional business centres where the cost of doing business is most attractive. “High employment costs to business, including on-costs like payroll taxes, put job creation, and global competitiveness at risk.

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“While employers in New Zealand are only required to pay 3% to superannuation compared to our 9.5%, they are still very competitive as they have no payroll taxes, no capital gains taxes and lower company tax rates – all largely funded by a broad-based GST at 15%. By comparison, Australian businesses are paying more than triple in additional wage on-costs per employee.” According to UHY G7 nations – notably Canada, the US and the UK – have comparatively low employment on-costs (ranging from 7-9% for low earners) while France and Italy’s costs remain high (at 43% and 39% respectively). This is despite Italy seeing one of the biggest falls of more than 25% since 2012. Mr Coughtrey said any tax reforms put on the table in the lead up to the next Federal election need to take into account existing pressures on employers. “The government must weigh up mandatory employment costs against the economic benefits they hope to achieve.” BFM

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THE ART OF DEAL MAKING With a clear sense of déjà vu the global markets commenced 2016 with a return to extreme volatility. By Nicholas Assef

hilst we of course hope that this negative environment is short lived, the CEO and Board of Directors always need to live by the old adage of ‘hope for the best, plan for the worst’. As such it is useful to reflect on a number of the factors that took place during the GFC, and, with the benefit of hindsight, how best to position for the maintenance of shareholder value if this volatility continues.

Valuations Become Irrational The media love a bad news story, and turbulent markets bring amplified ‘alarmist’ media comment. Companies see their valuations trade in wide ranges, which often make traditional valuation approaches difficult. For Research Analysts covering sectors the task is difficult as the base input assumptions many use for their DCF models are often ‘fluid’. For the CEO & Board it is difficult to ignore share price action – often feeling as a helpless passenger on rough seas. As noted below – the CEO must become an evangelist at these times with all stakeholders – internal and external. Stressing the positive differentiators as to why their company is the ‘investment of choice’ within its sector. Increased time and care needs to be taken on the development of investor presentations and various stock market releases— quality over quantity.

Board & Management Paralysis During the GFC many public company Boards decided that no action was the best action. Unfortunately this ‘no action’ position is actually a decision of paralysis. Comparisons such as “we are doing the same as our competitors” do not win the applause of institutional investors or the investing community at large. Conservatism should be replaced with flexibility and the ongoing search for innovation and excellence.

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Ongoing positive communication with stakeholders of meaningful developments is mandatory. More shoe leather will be worn out in the process. Explore all options to generate positive shareholder value. Astute Boards and CEOs also know that now is the time to opportunistically strike – when valuations are low and the alternatives for that interesting acquisition target are few. Strong and decisive leadership will not make the markets settle, but it will ensure that the CEO’s company, its employees and stakeholders are confident that their Board and Senior Management are committed to finding a way through—and not being the proverbial feather blowing in the wind.

Higher Offshore Led M & A Activity Currency fluctuation amplifies the valuation advantages often enjoyed by Bidders that operate in larger, more liquid capital markets. Those Bidders often have higher trading valuation metrics for a variety of reasons. Suffice to say they have a real strategic advantage. We have seen a material increase in offshore inquiry as the Australian dollar has fallen. We expect this trend to continue – and the advantage of those Bidders to be amplified by the volatility. For the CEO / Board under pressure it is important to ensure that they can market to international suitors who may look for established beachheads in countries such as Australia to launch into Asia. Astute Boards are proactively encouraging international strategic alliances to not only gain access to new markets at trying times (and hopefully generate foreign currency cashflows) but also to keep wired in to regions from where a Bidder may emerge.

Balance Sheet Health Can Change Quickly CEOs and their Boards need to be acutely aware of the debt covenants inside their debt facility agreements, and how market volatility might affect them. Many facility agreements are not linked to things such as share price and market capitalisation – but some are. There is nothing more problematic for the CEO/ Board to discover suddenly that there is a technical problem with existing debt packages – and any clarifying announcement to the stock market of a problem will likely be met with extreme negativity. Additionally, with increased counterparty risk a sensible assumption, cashflow can be placed under pressure with little notice. Although it is not what CEOs and Boards want to hear, non core asset divestments, equity placements and debt refinancings early can ensure healthy Balance Sheets are maintained through this turbulence – and can even allow expansion opportunities to be moved upon when they undoubtedly present I recall one CFO during the GFC noting to me that he was ‘spoilt for choice’ for deals as they had positioned well, and positioned early. With a lowly geared Balance Sheet and cash in the bank many beat a path to his door looking for a rescue deal.

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The longer the volatility the more difficult it is for small and middle market companies to effect equity initiatives at decent valuations (discounts to attract capital become deeper). Prioritising the health of the Balance Sheet is always a safe option to navigate through volatility.

Cashflow King—Counterparty Risk Up CEOs and CFOs need to be on guard about the stability of both their cashflows and counterparties (clients) with whom they deal. During the GFC many good companies quickly found themselves under pressure when it became clear that parties with whom they dealt were themselves stumbling. With soft commodity prices and stretched project financing, the Resources sector in particular becomes one where vigilance needs to be lifted even further on counterparty relationships. An eagle eye on debtors needs to be maintained during volatility to ensure that cashflow stability is maintained. It can be prudent to refine various operational aspects of the Company such as refining credit terms to ensure the risk profile of inbound cashflows does not increase.

Innovative financing and refinancing Commercial banks often become more conservative in dealing with both existing clients and new loans. For those public companies with loan maturing across 2016 and early 2017 getting started on the refinancing early is critical. M & A financing can become effectively more expensive as a result of lower loan valuation metrics being imposed – with the equity to be provided by the Bidder increasing, and often as a result making the prospect of an acceptable financial return more difficult to achieve. Offshore lenders, foreign bond issuers, mezzanine debt funds and multi-faceted lenders (including hedge funds) entered the market during the GFC, and we expect to see this trend lift again. There are multiple alternate sources of financing to the traditional banks, and the CEO and CFO need to understand the flexibility of alternatives to properly advise their Board.

Liquidity In Trading Volumes For Mid Market and Small Cap public companies volatility can lead to rapid illiquidity in their share trading activity. An incredibly frustrating situation for the CEO and Board. The ‘flight to liquidity’ often means that both institutional and retail shareholders rotate their portfolios to Index rated companies where liquidity continues during turbulent trading conditions. This shift in focus also can have a knock on effect for market participants such as stockbrokers, who change the focus in the way they change the servicing of their clients from speculative to conservative. CEOs need to be innovative in their approaches to ensure existing shareholder support is maintained, and for potential new shareholders that the Company is highlighted as being an ‘opportunity of choice’ despite irrational valuations and low liquidity.

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Placements and other equity capital markets initiatives should be considered where strong appetite from a party is expressed. Dilution should be a secondary consideration to Balance Sheet health and attracting new investment before it is needed. It is not difficult to reflect on the share prices of quality players during the GFC and to see the impressive returns made by those that supported quality management teams during those times.

Sellers & Private Equity Declining valuations and illiquidity are ideal market conditions for Short Seller Funds, Activists and PIPE players (Public Investment By Private Equity). The majority of Board Members and CEOs of public companies have not had experience in dealing with these market participants – and turbulent markets can be a tough time for the first lesson PIPE players have the opportunity to take public companies private at heavily discounted valuations to those in normal trading conditions. Activists and short sellers can also take the shape of ‘wolf packs’ and informally (not forming legal ‘associations’) gang up on CEOs and Boards to attempt to force change. Responding to such disruptors is time consuming, expensive and distracting – reducing the time the CEO and Board have for optimising efforts to manage and grow shareholder value. Board and CEO paralysis are the ideal conditions for ‘disruptors’ to flourish. If one of these players turns up get experienced advice—quickly... The good news is that if the CEO and Board are flexible, innovative and pro active in navigating the turbulent market the likelihood of a disruptor arriving will be dramatically reduced – they will look for other easier targets. Experienced advce in handling these players is invaluable.

Mergers of necessity In this environment merger for necessity can be a rational outcome and for the CEO and Board flexibility in thinking in this area can pay dividends. The longer the volatility the more difficult it is for small and middle market companies to effect equity initiatives at decent valuations (discounts to attract capital become deeper). Being the initiator as opposed to the respondent to a Merger Proposal is preferential. It is not difficult to reflect on the share prices of quality players during the GFC and to see the impressive returns made by those that supported quality management teams and Companies during those times.

Higher quality deal making Warren Buffett is famous for his saying in his 2004 Berkshire Hathaway Chairman’s letter: “Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be

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FEATURE| BFM

‘Prioritising the health of the Balance Sheet is always a safe option to navigate through volatility.’

fearful when others are greedy and greedy only when others are fearful”. Turbulent markets are a rich hunting ground for astute Bidders, and savvy management teams that see the opportunity of Public to Private transactions. Paralysis should be replaced with that sense of opportunity to drive shareholder value with a compelling transaction or transactions.

Key Take Away For CEOs & Boards of Directors Volatile market conditions pass. For the astute CEO and Board the opportunity is to understand how to both maintain and maximise shareholder value in trying market conditions that are trying for all companies. Three key learnings from the GFC period that should be front of mind are: • Balance Sheet gearing can have a direct impact on the equity valuation of the Company. Equity value can be driven down irrationally where it is perceived that there is either too much or poorly structured debt (including near term refinancing requirements). • Certain market participants flourish in these conditions. CEOs and Boards need to have specific strategic plans to deal with Activists, Short Sellers and opportunistic Takeover Proposals— in particular where presented by Private Equity players who are on the whole both patient and sophisticated • Opportunity knocks. Maintaining flexibility and being pro active pays dividends. The deal that may be a ‘company maker’ is likely within reach at a compelling valuation and attractive terms. Expansion

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with strategic alliances (both domestically and cross border) should be considered and pursued. Be on the front foot. Plan how to grow stronger and execute those plans. Hopefully these market conditions will settle in the coming months, but in the event they don’t then for the CEO and Board understanding both the challenges that will come and having decisive positive action plans to deal with those potential challenges is a prudent and logical investment of time. Start today. Get a jump on your competitors that will likely assume the position of paralysis. BFM About the author Nicholas Assef LLB (Hons) LLM MBA Nicholas’ career has spanned the legal profession, academia and the corporate world for over 25 years Formerly an attorney with Allen Allen & Hemsley’s corporate practice in Sydney, Australia his career evolved to investment banking after completion of his MBA at the world ranked Simon Business School at the University of Rochester (New York). Whilst in the USA Nicholas also had the opportunity to undertake study at Harvard Business School. In academia Nicholas has been on staff at both Macquarie University’s Applied Finance Centre and Bond University’s Law School. Nicholas works across the Australian and South East Asian markets, specialising in M & A, shareholder value driven initiatives, corporate performance and complex commercial negotiations. He has also had extensive specific experience dealing with Activist investors (acting both for them, and against them). He is the founder of Lincoln Crowne.

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Paul Jenner (left) and James Osborn (right)

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PROFILE| BFM

Swinging into action If there is a company in Australia whose directors are the embodiment of its catchphrase “No Limits”, it is PureForm Golf. Jonathan Jackson speaks with director and co-founder James Osborn about how a “No Limits” attitude can bring out the best in everyone.

here is an entrepreneurial pedigree in the offices of PureForm Golf. Its four directors have vastly different experiences, but each is brought together by their will to achieve success at the highest levels. First there is Rugby League legend Steve Menzies, who was known as one of the NRL’s most fearsome defenders. Then there is Paul Jenner, a talented junior golfer in Australia with over 30 junior and amateur tournament wins between 1991- 1997 and a qualified PGA professional. Personally experiencing the difference that custom built clubs bring to the game, Paul was drawn to the world of equipment testing and custom club building, and is one of the only qualified PGA Professionals in Australia offering tour quality fittings and club building to golfers at all levels. Cris Chen is the owner of the successful chain of Phoenix Restaurants in Sydney. And then there is James Osborn, who comes from a long line of successful businessmen – his grandfather was one of Australia’s most successful businessman and rubbed shoulders with the late Kerry Packer and a number of former Prime Ministers. The four have vastly different backgrounds, but they were brought together via a love for golf, a shared entrepreneurial passion and a vision to fill a gap in the global market, where there was a need for high-quality club fitting and building. PureForm was conceptualised after Osborn, spurred by a love for golf but frustrated by rushed fittings and incorrect specs for his clubs, sought the expertise of PGA Pro and club fitter to the professionals, Paul Jenner. From here the idea for a new business was born.

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What does PureForm do? PureForm tailors golf clubs to suit each player’s game. Using the “TRACKMAN” system, comprising NASA developed advanced doppler radar imaging and tracking system, Pureform converts over two dozen readings on a player’s swing and resulting ball flight data using its proprietary ‘PureFit’ system and the expertise of its fitters to generate optimal heads and shaft combinations for each player. The recommendations allow the player and fitter to test a handful of filtered options from potentially hundreds of options for each club, with dramatic improvements immediately visible for low and high handicappers alike. The idea was a winner, as you’d expect from four people who are driven to succeed. Looking back at Osborn’s history, it is no surprise that PureForm has come to the position it is in today. In part this success stems from lessons learnt from his grandfather. “He (Osborn’s grandfather) was one of Australia’s most successful businessman,” Osborn says. “He was on the board of Crown, Westpac, Qantas and was Chairman at Rothmans International, Wormald and BP. I guess growing up, he was the dominant influence in my life and his success inspired me to get into business.” Of course different eras parlay into different attitudes and James Osborn had his own ideas about the way he would conduct his business life. It was more entrepreneurial than his grandfather, but has been no less effective. Osborn’s business-building career effectively began in 2005 with mintshop.com.au, an online clothing store selling well known

Australian Fashion Labels including Ksubi, Sass & Bide & Nudie Jeans. He later sold this business in 2010. It was here that he learnt about systemisation. “It really showed me the importance of having procedures and leveraging technology to systemise a business. Plus I gained great skills in e-commerce and digital marketing platforms, albeit only a few where around back in 2005.” Osborn is matter of fact about business. He says Mint was “simply an opportunity in fashion that presented itself.” When he received an offer to sell, he did so because as he says, every business should have an exit strategy. “Whether you are in business for one year or 40 years, you have to have an exit strategy.” Little Rascals was next, an online start up delivering ‘’best for baby, best for you’’ baby products to the doors of busy, time poor Mums and Dads and then Oz Services Group, an online handyman and home services company. Osborn built this into a threestates operation with over 50 employees and contractors. Again, this was another business that exploded with digital marketing. “We increased turnover 5 fold in one financial year by thinking outside the square and conceptualizing a strategy that we executed through digital marketing platforms to drive leads.” By the time he received an offer for Oz Services, Osborn was a young family man with a mortgage and all the associated pressures that brings. He wanted a new challenge: one that was grounded. “The digital space was too hit and miss, I wanted some bricks

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and mortar business that provided more stable cash flow,” Osborn says. Osborn then went and started two businesses within as many months. Cov Hair Bar in Sydney’s upmarket suburb of Mosman and Kingswood Coffee in Sydney’s CBD. During that time, Osborn, a keen golfer, had approached Paul Jenner to fit his clubs. Jenner simply changed the shafts in Osborn’s clubs and built them using a process called ‘Flat Line Oscillation’ (FLO) to rotate each individual shaft into the most stable position, thus dramatically increasing distance and decreasing dispersion. The effect was immediate, with Osborn dropping 7 strokes off his handicap. “I called him and said you have a phenomenal product and asked him if he wanted to take his business to the next level? “Months later I received a phone call from Jenner and the next thing we were on a plane to America.” Prior to their US departure, Osborn put together a concept proposal and along with Jenner, pitched the idea to a number of reps from the major brands. Osborn says, “The common response was ‘build your facility and we will decide then if we are to supply you’.” As it was not an option for the directors to invest $500k on a state of the art facility without local supply, they were forced to enter a supply agreement with a US counterpart. However, that presented its own problems. “We grew too quickly. After a few golf blogs published our entry into the market, we were booked out six weeks in advance before our doors even opened. Then the supply company couldn’t keep up with our orders and hence our lead times of customers receiving their golf clubs blew out and so we had to pivot and form relationships locally so we could keep control of the manufacturing.” The business shifted its supply local along with its manufacturing to its HQ in Sydney and the boys haven’t looked back. “PureForm is a beast all of its own and I have never been more excited about a business,” Osborn says.

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Osborn believes that through PureForm’s level of service and technology it has changed the retail offering in the golf industry and he believes there are endless opportunities ahead. As the business has grown he has integrated all the skills he has learned in business. He has called on his professional network and they have become key people within the business. These key people, from various fields, are an integral part of the management team and are huge factors in their rapid growth and execution to date. As if to test the theory of the technology behind the fitting, Osborn himself has taken his handicap from 13 to 6. He says that is all due to the equipment. “What people don’t understand is that not only can we get every customer hitting it longer and straighter, we can also fix common swing faults, like a slice, just through equipment. By simply changing the weight of a club we can change the swing path and hence ball flight of the chosen golfer, it is remarkable to see this happen. Our offering is simply exceptional. The gains we give clients can’t be questioned. There is no golf retailer in the world you can walk into and get the results we give. We sell the best head and shaft combination at PureForm utilising heads from the major brands and Tour Quality aftermarket shafts facilitating hundreds of fitting options. This combined with our production turnaround times. Customers can get fit for a custom driver in the morning and be on the golf course with it by the afternoon. I think this is a major factor in our rapid growth.”

So how does a fitting at PureForm actually work? Customers book an appointment from 30mins to 4 hours (depending on what club/s the golfer is looking to improve). The customer will hit balls on Trackman with their current golf clubs, taking the best 6 shots to help set a baseline for improvement. Once the customer’s baseline is set the information gathered from Trackman and the PureFit system will lead the fitters to 4-5 specific aftermarket shaft options and 4-5 major branded heads. The PGA Member carrying out the fitting will then recommend the best head and shaft combinations from this data to basically blow your old clubs out of the water! From that analysis, they then have their clubs either re-shafted (golfer keeps existing heads in his clubs and has new shafts installed) or have a brand new set built from scratch to suit their style of play. The reasons that PureForm Golf delivers a more refined product than stock offerings is because we have the data from over 10,000 fits, the best head and shaft combinations utilising heads from the major brands and Tour Quality aftermarket and our hand built, detailed assembly process. “Buying off the rack is like getting dressed in the dark from a pile of clothes on the floor that are all different sizes.”

High Handicappers, Low High Handicappers At PureForm Golf a golfer of any skill level, age or gender is made to feel comfortable, with the same attention to detail as if they were a PGA tour player. The club fitters share the same great love of golf

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and want to ensure the best results and enjoyment from each fitting, no matter if you are a PGATour Player or a Weekend Warrior playing off 25! “Most people have a favourite club in the bag…the reason they hit that one club better than all the rest is the shaft happens to be aligned properly and the flex of the shaft comes closest to suiting their timing and tempo. When you buy a set of clubs from PureForm Golf, every club in the bag will be your favourite club!” “We are here to support golfers enjoy the game of golf,” Osborn says. The business was built with agility. Because it started small, it has allowed PureForm to quickly pivot and identify procedures in their business that need to be made less reliant on training, development and labour. This business is built around giving its customers quantifiable results through technology. There is no guessing in what they do, it is all science. As Osborn says “If you hit the ball 30m further and 25% straighter in your fitting, this will 100% translate to the course. It is undeniable. The doppler radar technology we use was created by NASA. The numbers simply don’t lie.” “If we can’t improve your game, take up lawn bowls!” It is no surprise PureForm has even attracted PGA tour players including Peter Lonard and Robert Allenby, who have sung PureForm’s praises.

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“We don’t pay golf professionals. PureForm is a brand. They come to us because we are the best at what we do. We look at so much data around ball flight including landing angles, peak heights, spin rates and distance. We gain quantifiable results for all our customers. Every single golfer walks out hitting it longer and straighter, every time. It doesn’t matter if you are just taking up the game or a PGA Pro, we get undeniable results” Osborn says there is no other business in the world that delivers the results they do. PureForm has 30,000 hitting combinations. “Our proprietary fitting system is unsurpassed. Every time a customer hits a ball in any of our facilities, we keep 28 parameters of data about that swing. So you can imagine we have millions of pieces of data to analyse to help our fitting system evolve. From this data we have disproved a lot of old club fitting theory. We data mine to develop learnings that no one else can know (without this mass of data) and then track that to a certain shaft and head characteristic. Hence the results we give to customers are unlike anyone has seen in this industry. No company or person can change someone’s game in such short space of time like we can, it’s really incredible to see this day in day out” Despite there being 30,000 combinations, there is generally only one or two combinations that actually work for each customer. Osborn says “When you un-

derstand this you, A, understand how we get our clients such huge gains and, B, how it is a statistical impossibility to walk into any other retailer and buy golf clubs that actually suit your unique swing. Its real needle in a haystack stuff.” However as the data keeps growing, so do PureForm’s learnings and recommendations. And in regards to the equipment PureForm sells, “we only deal with the big brands that supply the best product. We can fit to every major brand in the market. Companies like Callaway, TaylorMade, Nike, Cobra and Mizuno are our lifeblood and we use their product within our fitting system to achieve outstanding results.” “We are leading the way. No one can compete with our tech.” PureForm has created a whole new market in golf. “Every day we give golfers better gains; they hit their driver 30 metres further and straighter and their irons 20m further and straighter. All of a sudden they are playing an approach 50 metres closer to the hole. That is how we measure ourselves. People hit it longer and straighter and they enjoy their game more.” With an entrepreneurial glint in their eye and that attitude that has driven their careers to consistent successes no matter what they have turned their attention, the PureForm directors are now turning their attention to becoming a global leader in golf equipment. Currently they have Sydney and Melbourne locations, with the expansion into the Hong Kong operation also just months away. There is also their mobile fitting van, which can service Golf Courses and Driving Ranges. Osborn is in the final stages of developing franchise documents and is seeking partners domestically along with expressions of interest from potential partners around the world. After just two and a half years, PureForm has achieved its goals because the boys’ attitude of you ‘have to start the way you want to finish’ has never wavered. It is that attitude that determines what the limits are, but for the guys at PureForm it is clear that they really do live by the mantra of ‘No Limits’. BFM

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THE MAN WITH THE MIDAS TOUCH

As recently as last year, St Barbara’s fortunes were hanging by a thread. In a climate where mining and downturn were often used in the same sentence, its PNG mine was operating at a significant loss, its Solomon Islands mine had not operated since being flooded in April 2014, and ratings agency Moody’s had declared St Barbara the miner most likely to default on debt.

nter Bob Vassie, a man who you could say has somewhat of a Midas touch. A turnaround was certainly needed at St Barbara and Vassie has delivered. He came on board this almost sinking ship in July 2014 when the market capitalisation was $50 million and the share price 10.5 cents. The numbers give you an indication of just how successful Vassie has been in this turnaround. Today the market cap is $1 billion and the share price a touch over $2. “The share price had been heavily discounted as a result of the company’s debt profile and underperformance of the Pacific assets (Simberi in PNG and Gold Ridge in the Solomon Islands),” Vassie says. “The company was generating cash from the Gwalia mine in Western Australia, but it was all going into the loss making Pacific Island mines. The company had borrowed heavily to fund the acquisition of the Pacific assets and the market was losing confidence in the company’s ability to repay its debts.

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“It was obvious the financial situation needed to be stabilised quickly,” Vassie says. “We needed to improve cash flow which would enable the company to begin to pay down its debt.” As Vassie told The Australian early in 2016, “The turnaround, anchored by Gwalia, allowed the company to pay off $US100m in debt which, in turn, prompted a move back into the S&P/ASX 300 and analysts slapping buy recommendations on the stock.” The company increased cash flows from operations by over A$90m in FY15 and has repaid A$159 million in debt since May 2015. There were four key factors in starting this turnaround: getting more out of the Gwalia Mine; the sale of Gold Ridge in the Solomon Islands; the turnaround at the Simberi mine in Papua New Guinea; and reducing corporate overhead costs. Let’s start with Gwalia. Production at the Gwalia mine in Western Australia was ramped up. While the mine was already a

strong performer, the local team stepped up productivity to record production in financial year 2015 of 248,142 ounces of gold, up from 214,319 ounces the prior year. “Gwalia is one of the best performing gold mines in Australia and the whole team is focused on getting the best possible performance now and well into the future. They introduced new mining methods and also benefitted from a slightly higher ore grade,” Vassie says. Costs at Gwalia were tightly controlled, but prudent investment in infrastructure continued to support mining well into the future. This included an innovative absorption chiller plant that uses waste heat from the power station which was estimated to save over $2.5 million running costs per annum, and a 1400 metre vertical high voltage cable drop (the longest in the southern hemisphere), to duplicate the power supply deep into the mine. At the same time the Gold Ridge mine in the Solomon Islands had been in stasis since April 2014.

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PROFILE| BFM

Bob Vassie

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Extreme flooding from torrential rain associated with Cyclone Ita, had put a stop to most operations in the region and St Barbara was no different. The mine was also overrun by hundreds of illegal miners. “It was consuming cash and although the company had tried for some time, it had not been possible to deliver a way forward in the short to medium term that would work for the company, local communities and the Solomon Island government,” Vassie says. “Following appropriate due diligence, the Gold Ridge mine was divested in May 2015 to a Solomon Islands company associated with local landowners, and we are confident it was the right decision for everyone involved,” he says. Next on the agenda was St Barbara’s Simberi mine in Papua New Guinea. The Simberi mine and plant was part way through an expansion when it was acquired by St Barbara, but the expansion took longer and cost more than anticipated, and it had never achieved its planned production rate of 100,000 ounces of gold per annum. As a result this operation was consuming rather than generating cash. Vassie spent a lot of time in PNG (and still does). He set about delivering new resources to the local team to give them the support and backing they needed to bring their plan together.

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“This team thrived under the increased focus and knowing how important it was to the overall company that this project start making money.” It took until the end of the March 2015 quarter to achieve its planned rate of 100,000 ounces of gold per annum. The plant has been operating at that rate or above ever since and produced 107,553 ounces of gold in calendar 2015. Simberi has been one of St Barbara’s success stories. It was losing money but started to make cash in December 2014 and St Barbara is now working on a study looking at extending the mine life. One thing of note in the turnaround in performance of these mines is the company’s environmental record. It works hard to steer a clean ship and as such has been awarded two environmental awards: Golden Gecko Award and Water Wise business award. What has also had an impact is Vassie’s commitment to workplace diversity. He is one of 32 CEO Ambassadors of the Workplace Gender Equality Agency pay equity campaign and St Barbara was certified by WGEA as an Employer of Choice for Gender Equality in 2014 and 2015, only one of 3 mining companies to gain that certification. Finally, the St Barbara turnaround was due in part to a considered cost reduction program. Vassie’s experience with Rio

Tinto, with whom he spent over 18 years in various executive management roles had a significant impact in St Barbara. These roles put him in a strong position to tackle the problems St Barbara faced and ensured that the company moved in a forward direction from the onset of his tenure – which was vital to its survival. In FY15 corporate costs were reduced by $6m, or 24% on the prior year. At the same time, exploration expenditure was halved from $16m in FY14 to $8m in FY15. “We have flattened our corporate structure and given people more responsibility. This has reduced corporate staff numbers by just over 50%. We had to let a lot of talented people go, but it’s given the people who remain room to grow.” Sometimes in business hard decisions have to be made, but Vassie has the experience to manage ‘right-sizing’, while galvanising those who remain. By giving people responsibility and ownership of their roles and by making them accountable, future success becomes more of a set proposition than a pipedream. The price of gold has also played its part. Vassie says gold is generally viewed as a ‘safe haven in a time of crisis’. However, like the price of any commodity it fluctuates meaning you have to build in safeguards. Gold prices increased for 10

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straight years from 2001-2011 and peaked at US$1882 per ounce on 2 September 2011 in the lead up to its crash to US$1200 per ounce late in 2013. The blow was softened by the Australian dollar. Last year the declining dollar helped protect the Australian gold price, and it is currently sitting at around A$1600 per ounce. That’s good news for gold miners such as St Barbara, who are proving that there is life yet in the Australian mining sector. Improving prices and strong management make the world of difference. St Barbara’s stocks have risen sharply since 7 cents in late 2014 – it posted the largest share price gain of its peers on the ASX in 2015, rising over 1200%. St Barbara had fallen out of the ASX all ordinaries index in March 2015, but was returned to the ASX 300 in September 2015, and admitted to the ASX 200 in March 2016. And its strong results have continued. “The company has had a strong half year result with record pro-

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PROFILE| BFM

duction from both the Gwalia mine and Simberi mine,” Vassie says. “Production forecasts have been upgraded for the full year to 354,000 to 379,000 ounces. “Costs are under control and the company is continuing to pay down debt.” Meanwhile Vassie has an eye on the future. St Barbara aims to extend the Gwalia mine deeper. This is a mine with a rich history. It was discovered in 1896 and over the course of time has produced over 5 million ounces of gold, making it the largest producing mine in Western Australian history outside of the Golden Mile. “Current ore reserves extend down to 1800 metres below surface and indicate that we can mine for at least the next seven years,” Vassie says. “Exploration drilling shows that we still haven’t reached the bottom

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of the ore body.” That means exciting times ahead for St Barbara as further drilling will increase the understanding of the ore body as it gets deeper to add more ounces into reserves and extend the mine life. “We understand that we are currently the deepest trucking gold mine in Australia and possibly the world (i.e. to use trucks to haul ore up to the surface from an underground decline road).” Gwalia is also one of the most cost effective gold mines in Australia. “The current focus is on getting more information about the ore body at depth through more drilling to assess the most cost effective mining method going forward. Options include continuing to truck the ore up, or installing some kind of system to process the ore underground before it is lifted through some form of shaft

or even a slurry pipe. We expect to be able to make a decision on the best way forward before the end of the calendar year and we expect many more years of production from the Gwalia mine.” Furthermore St Barbara is also exploring opportunities to extend the mine life at Simberi. Current mining is focused on the oxide resource, which sits over the top of a significant sulphide deposit. The study explores the economic feasibility of mining the sulphide deposit which could add significantly to the mine life of this operation also. “We have exploration opportunities around the Gwalia mine and in PNG that we are continuing to work on.” There is no rest for St Barbara. With Vassie on board, the company turned a big corner in 2015 and it is now expected to capitalise on all of its hard work. BFM

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BFM | FEATURE

CAN AUSTRALIA BECOME THE INNOVATION NATION? Although Malcolm Turnbull’s innovation nation initiative has given way – for the time being – to an impending double dissolution, there is still the need to discuss just how such a new initiative could benefit the country. Business First spoke with Minister for Industry, Innovation and Science, Christopher Pyne about the intricacies of the federal innovation initiatives.

irst, let’s set the scene: with mining in a downturn, commodities slumping and the country being supported by real estate, Australia must look to other sectors to ensure its future. Entrepreneurship and small business must carry some of that weight and to do so, it requires support. Geoff Green MD of GRG Momentum and author of The Smart Business Exit says, “A key point made in the Innovation Statement is that Australians are renowned for their smart ideas, but often fail to commercialise them. In other words, we are very inventive but not so innovative,” Green says. “As the Innovation Statement goes on to highlight – you have to move past inventive and become innovative. It’s innovative companies that go on to build and sell products and services, create jobs and drive wealth creation. “Many of our established businesses, both public and private, have under developed innovation or good ideas capable of innovation. The Innovation Statement will provide a strong foundation for further initiatives to encourage greater levels of innovation in established businesses. The emphasis on much better collaboration between industry, the investment community, academia, our research facilities, particularly CSIRO, and government is really encouraging as it’s a key to achieving these outcomes.” So what level of support does government intend to bring? The National Innovation and Science Agenda (Agenda) comprises 24 measures under the four themed pillars of:

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• Culture and capital, to help businesses embrace risk, be ambitious and experiment to find solutions. An important component of these initiatives is the changes to the tax system to remove bias against risk taking and innovative businesses. • Collaboration, to increase the level of engagement between businesses, universities and the research sector to commercialise ideas and solve problems. Measures under this theme will change incentives to encourage universities and industry to work together. • Talent and skills, these measures will train Australian students for the jobs of the future and attract the world’s most innovative and entrepreneurial talent to Australia. • Government as an exemplar, to lead by example in the way Government invests in and uses technology and data to deliver better quality services. The Australian Government will make it easier for innovative SMEs to deliver technology services to government, and lead by example by being more innovative in how services are delivered and how data is shared with the public. “The Agenda provides greater incentives for investors – through personal angel investments and via registered venture capital vehicles – to support new startup businesses,” says Minister Pyne. “It also makes it easier for businesses to raise capital for growth through employee share schemes and crowdsourced equity funding.” In fact, new funding will support entrepreneurial investments in biomedical discoveries with the $250m Biomedical Translation Fund. The CSIRO In-

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FEATURE| BFM

novation Fund will provide a further $200m towards commercialising new and novel ideas that are sourced from the CSIRO and other public funded research organisations. “Measures under the Agenda also provide greater flexibility for early stage businesses in relation to their intellectual property and access to company losses allowing early stage businesses to be more flexible with their direction as they secure new opportunities and fine tune their direction.” The Global Innovation Strategy (GIS) component has been specifically designed to give new and startup businesses improved access via ‘landing pads’ in key markets across the globe including in San Francisco, Shanghai and Tel Aviv. Today, these cities are the hubs of innovation from which we must learn and grow. The Global Innovation Linkages component of the GIS will provide seed funding to assist Australian businesses collaborate with international partnerships. The innovation initiative doesn’t just cater to startups, existing businesses can also access many of the programmes under the Agenda. “The Innovation Connections component of the Entrepreneurs’ Programme will facilitate greater connections between the business sector and researchers,” Minister Pyne says. The Entrepreneurs’ Programme has a range of other components, including the Accelerating Commercialisation component, which provides facilitation services by Commercialisation Advisers, and grants to allow innovative businesses to successfully grow their new ideas. Then there is the Incubator Support Programme – also a component of the Entrepreneurs’ programme – that will improve access to, and capability of, existing and new incubators across Australia. “Businesses that are seeking new markets in the US, Europe, the Middle East and Asia will be encour-

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aged to utilise the services offered at the new landing pad sites. “Business Programmes under the Agenda will be detailed – including guidelines and application processes – on business.gov.au once they become open for applications, which for many is from July 1 this year. “AusIndustry State and Regional offices have a role of engaging with their local business communities in order to connect their businesses to the programmes – including from the current suite of AusIndustry programmes - that are most appropriate to needs.” What are the economic benefits that will come from these? “A greater investment in new, innovative startup businesses will create increased employment and economic opportunity for the future,” says Minister Pyne. “Companies that embrace innovation, that are agile and prepared to approach change confidently, are more competitive, more able to grow market share and more likely to increase their employment. “With the support of the Global Innovation Strategy, we will grow exports and increase related employment.” According to the government, The National Innovation and Science Agenda will create more innovative businesses. And compared to businesses that do not innovate, innovative businesses report[1] that they are: • around 60 per cent more likely to report increases in income from sales and increased profitability; • four times more likely to increase the number of export markets targeted; • about twice as likely to increase productivity and employment; • around three times more likely to report increases in investment in training and IT expenditure; and • around five times more likely to increase the range of goods and services offered. “The Agenda supports innovative businesses, which in turn creates a stronger, more vibrant economy with exciting new employment opportunities.” There are also tax and financial incentives. Under the ‘Culture and capital’ pillar there are measures providing financial incentives for early stage investors (angels and registered venture capital limited partnerships), to invest in new startup businesses seeking to commercialise new products, services and ideas. “Amendments to tax laws are being made to make it easier for young agile companies to access company losses, and there are changes to rules that currently limit depreciation deductions for some intangible assets.” There is a range of granting programmes available under the Agenda, but providing grants to stimulate business innovation and growth, is only one part of the equation. Other measures seek to change the cultural mindset, and make it easier for new and innovative businesses to commercialise their new ideas, to access financing and funding support from investors, and to have improved access to overseas markets. When asked about changing workforce demographics and how they will influence the rise of the Australian innovator, Mr Pyne says, “the government recognises that to maintain Australia’s status as a first-world, high standard of living economy in the 21st century, it needs to focus on high value, well paid employment opportunities for young people.

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BFM | FEATURE

Christopher Pyne

“Increasingly, these jobs are found in knowledge-based service industries, including those that result from the commercialisation of new ideas. Australia has a tremendous track record of invention, but a less than stellar one of commercialisation – and this is where the focus of our innovation agenda lies. “We need to continue to export what we produce, but increasingly what we produce will be ideas, inventions, innovations and services. The focus in the Agenda on supporting STEM and digital literacy for students will go a long way to ensuring a future generation well equipped to compete in a global environment. “The Australian workforce has always been highly adaptable – but economic globalisation and competition means we need to work harder at ensuring they have the skills needed for the jobs of the future.” Despite some commentary that puts Australia behind other nations in ten innovation stakes, Australia does fare quite well, particularly in the field of science. Internationally, Australia’s innovation and science ecosystem performs very well in some areas, like the quality of research: • In 2013 Australia produced 3.7 per cent of the world’s research publications from only 0.3 per cent of the world’s population, ranking 10th in the OECD.[2] • From 2005 to 2014, Australia significantly improved its share of the top 1 per cent of highly cited publications, going from 3.4 per cent to 6.9 per cent.[3] However, Australia performs poorly by international standards in translating publicly funded research into commercial outcomes. “We risk slipping further down the innovation ladder,” Mr Pyne says. • In 2012-13, only 5.7 per cent of Australian businesses generated any new-to-market innovations. This compares with up to 26 per cent in the top five OECD countries and a 14.5 per cent average across the EU in 2010.[4] • Australia ranks 29th and 30th among 30 OECD countries on the proportion of large businesses and SMEs which collaborate with research organisations on innovation.[5] Additionally, Australia ranks 17th out of 141 coun-

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tries on the 2015 Global Innovation Index, well behind world-leaders like Switzerland, the United Kingdom, Sweden, the Netherlands and the United States.[6] “That is why a focus for the National Innovation and Science Agenda is measured to convert more of our research into commercial opportunity, so that we don’t miss out on economic and employment growth.” The question is how can Australia become a world leader in the innovation stakes. “Australia’s economy has enjoyed an unprecedented 24 years of uninterrupted growth. However, we are coming to the end of the mining investment boom and new sources of growth are needed. “Rapid developments in technology and science are disrupting traditional jobs and industries around the world. They are changing the way we live, the way we work and the way we do business. “The opportunities offered by these changes and by the new global economy are vast. If we are to make the most of them, we cannot rely on the old ways of doing things. We are on the doorstep of Asia – the world’s economic engine room – with our new trade agreements further opening doors to Asia and beyond. “The digital revolution means we are now part of a truly global marketplace of ideas, products and services. We must embrace an entrepreneurial and innovative mindset to build an agile economy and create the jobs and industries of the future. “We must see technological disruption for what it is, a massive opportunity. We must embrace, not fear it. We need not just to have the ideas, but to develop a hunger to pursue them, to take a risk, to learn from failure and to profit from our high quality research.” Mr Pyne believes that several industries will rise through this initiative, but he says that the initiative is designed to boost the overall state of Australian business. “The National Innovation and Science Agenda is a non-industry specific policy setting. And whilst it does not target specific industries, it does support new, innovative and agile businesses. Businesses that will thrive in the 21st century, take full advantage of Australia’s assets and can build on the past experience of our science and innovation sector. “Australia’s proximity to Asia will require us to deliver products and services that the Asian market demands in the 21st century. “To remain globally competitive, we must seek to develop new industries and ‘new to the world’ innovations. We must also ensure that the financial benefits of our successes remain in Australia and benefit all Australians.” BFM Australian Innovation System Report 2015 – Department of Industry, Innovation and Science [2] (Source: Australian Innovation System Report 2015, Table A9 p. 127 and World bank Database) [3] (Source: Australian Innovation System Report 2015, Table A9 p. 127) [4] (Source: Australian Innovation System Report 2014, Figure 2.7, p. 51 and p.3) [5] (OK) Source: OECD (2013) Science, Technology and Industry Scoreboard. P 127 [6] (Source: Cornell University, INSEAD, WIPO (2011-2015) Global Innovation Index, GII 2015, URL: http://www. globalinnovationindex.org [1]

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ASIA| BFM

Opportunities in China for Australian SMEs Despite the well-publicised economic slowdown that continues in China, the market still presents significant opportunities for Australian SMEs considering growth into Asia writes Andrew Watson. billion to our agricultural sector in 2014. Strong population growth and rising per capita incomes will mean demand for agricultural products will likely continue. Dairy in particular is expected to become an increasingly important market segment, offering high returns to Australian farmers. In the services sector, a burgeoning Chinese middle class means a growing demand for services such as education, for which Australia is in a strong position to deliver. An ageing population is also creating an attractive market for aged care services.

rowing an export business can be daunting but there are a number of steps that SME exporters can take to ensure their transition into the Chinese market is as smooth as possible.

Identify the opportunities China is Australia’s largest export market and now buys almost a third of Australia’s exports. Australia exported A$90 billion of goods and $8 billion in services to China in 2014, a huge volume that was met by Australian businesses in a wide range of industries. While China’s economy has slowed over the last 18 months, the outlook for private consumption remains solid, with the country’s growing middle class continuing to offer significant new export opportunities for Australian businesses. Mining, agriculture and services are three of our most important export markets to China. With a growing population and strong demand from the manufacturing and construction sectors, China cannot meet its growing domestic demands for energy. Iron ore and concentrates, coal and gold are our biggest exports to China, and Australia is also one of China’s largest suppliers for bauxite. China is the largest importer of Australian agricultural produce, a relationship that was worth $8.5

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Assess the risks As with any foreign market, there are some unique challenges to doing business in China. Australia’s International Business Survey 2015, sponsored by Efic, asked over 1200 Australian international businesses what they believe are the most difficult barriers to doing business in China. One of the key challenges identified was the local language, which can be an inhibiting factor for Australian businesses seeking to establish relationships. Employing the services of a local translator can be a huge help for Australian SMEs looking to do business in China. Understanding local regulations was also identified as a challenge when entering the Chinese market. The World Bank’s ease of doing business gauge – which attempts to measure local regulation relevant to SMEs – ranks China 96th out of 189 economies around the world. China ranks the lowest on ease of registering property and enforcing contracts, so these are important considerations for any SME entering into a contract or commercial operation in China.

Plan and prepare For these and any other potential risks identified in the Chinese market, there are steps SMEs can take to prepare and set themselves up for success. Establishing strong networks is

crucial for all SME exporters – when exporting to China, they are a particularly important method of accessing valuable information and support. One great way to do this is through established forums and networking groups. The Australia China Business Council provides information, programs and opportunities for the Australian business community to network on China business activities, as well as hosting events with senior contacts within the Chinese government. Another important step is taking the time to understand the local business culture in China. For example, establishing strong relationships and trust is crucial before closing any deal – often this takes place over a series of lunches and dinners. Another tip SMEs often overlook is that it is really useful to have business cards printed in Chinese. Finally, seek advice. As with any business venture, receiving good quality legal, tax and professional advice is critical before making important decisions; use a legal firm with a local presence to ensure you comply with local regulations and laws. They can also highlight any contract issues and be able to help if you are concerned about protecting your intellectual property.

Enjoy export success China offers excellent opportunities for Australian SME exporters across a range of sectors. As with all export decisions, getting the right information and making the right connections can be difficult. However, following the steps outlined here should help your business overcome the export barriers and establish a secure export business in China. For more information on exporting to China and further information about export-related finance, please visit Efic’s website to download a free eBook for SMEs on this topic, Exporting to China. BFM Andrew Watson is Executive Director, Export Finance, Efic.

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BFM | PROFILE

TAKING CARE OF BUSINESSES A production of Shakespeare’s, A Mid Summer Night’s Dream isn’t the kind of play you’d expect to see in an Australian prison, but for the inmates at Acacia prison – a privately managed facility in Western Australia – the production has become one piece of a rehabilitation puzzle intended to help inmates re-integrate into society.

erco Asia Pacific is contracted by the WA Government to manage Acacia Prison and deliver justice programs that help to make communities safer by holding prisoners securely and working to reduce reoffending. Led by Chief Executive Officer Mark Irwin, Serco challenges itself to improve the lives of those in their care. “The program developed self-confidence and pro-social life

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skills increasing the chances of offenders gaining employment and successful reintegration into the community upon release,” Mark says. “Acacia has a range of education activities and vocational programs to give prisoners opportunities to positively engage and to assist with rehabilitation and prepare for a positive, law-abiding lifestyle after release.

“It may seem like a luxury to do this sort of educational activity; however, it is a way to engage some prisoners with learning for the first time. It’s then the gateway to dealing with issues of numeracy and literacy. It’s also a great way of building up self-confidence. Every bit assists with reducing reoffending.” Management of prisons is only one facet of Serco’s business. The

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PROFILE| BFM

Mark Irwin at Fiona Stanley Hospital in Perth where Serco provides 25 non-clinical services

company works across several sectors including Defence, Citizen Services, Immigration, Health, Facility Services and Transport. It has worked in areas as diverse as Facilities Management for BlueScope Steel, Traffic Camera Services helping Victoria Police and delivery of 26 non-clinical services at Fiona Stanley Hospital. You may be wondering what these services actually entail, so if you haven’t heard of Serco and the good work it does across communities here’s a quick rundown. Serco is an international business founded in the 1920s as a UK subsidiary of Radio Corporation of America. It initially provided technical support for the country’s growing cinema industry. 30 years later, Serco won a maintenance contract for the UK Ballistic

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Missile Early Warning System at the Royal Air Force base at Fylingdales expanded into the operation of its technical facilities. Today it delivers innovative public services in partnership with governments. Mark Irwin’s own history is just as diverse as the company he runs. It was with GE through the late 1990s when Mark cut his teeth in business. “I worked in the advanced materials business of GE in Australia,” Mark says. “I was promoted to lead the southeast Asian business during the Asian financial crisis from 1997 through to 1999 and on the basis of what I did with my team during that period I had the opportunity to move to Japan to work in a joint venture that GE had with Toshiba before heading across to the US.” Mark spent eight years in the US and after a series of mergers and acquisitions found himself in China as the chief operating officer of China National BlueStar, a subsidiary of China National Chemical Corporation – the largest non-oil operator in the chemicals and advanced materials sector in China. When he left at the end of 2012, BlueStar had gone from a 3.6-billion-dollar enterprise to one in excess of $8 billion. By this time Mark had been out of the country for 17 years, but had seen a changing trend in business. “I recognised that even though my early years were in manufacturing or manufacturing related industries, the economy had clearly moved to one where the service sector was predominant in future economic outcomes. I wanted to come back and make a contribution in my home country,” Mark says. However, Mark had never heard of Serco. It took an hour long phone call with then Advisory Board Chairman Adrian Kloeden about Serco’s philosophy to convince him that the move would be a good one; an opportunity to work in an LSE listed company whose ethos was based around social and public service. “It was an opportunity where there was a very direct line of sight

to the work that the company did and the impact that it had on the various communities that we served; whether it was a government agency or the personnel of a government department or the broader public who are recipients of government services. “It was a unique intersection for me: an enterprise model that delivers public services with the same expectations around financial performance and shareholder return. There is an absolute need to be responsible in your thinking around how you make that economic model work so that it doesn’t lead to undue compromise. Mark describes Serco as the working at interface between government and the public. “The services that we provide on behalf of government, that we bring innovation to or design around, or delivery of, are all services that affect people in quite critical ways. At Fiona Stanley Hospital, we are part of a broader team partnering with the clinicians from the State to deliver patient-centered care. We have a fundamental responsibility around patient outcomes that are very direct and very personal. Equally, in the work that we do in defence, we provide logistics and base support for the Australian Defence Force deployed in the Middle East. These are people that rely critically on base support, on getting the materials and equipment that they need, and sometimes rely on quite basic things such as food, medical, dental supplies and so on.” This is what Mark means by being at the critical interface; Serco delivers critical services on which people are completely dependent. “It’s real. It’s very tangible and it’s actually not a marketing slogan. It’s the reality of what we do.” And what Serco does requires adherence to a basic set of philosophical ideas that enables the company to be a public company, working in a social arena. Serco’s values are based around four key areas: pride, care, innovation and trust. “Despite the challenges of what

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Image courtesy of Department of Defence/ADF.

Bringing service to life

Global scale, local expertise Serco is a trusted partner of governments around the globe, delivering complex and sensitive public services that matter to millions of people.

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We deliver at scale, utilising our expertise and diversification across four geographic regions – Asia Pacific, UK & Europe, North America and the Middle East – employing more than 70,000 people worldwide.

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Delivering better community outcomes

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our people do, there is a real pride that they can make a difference. That’s a huge motivator for us. When we have people in our care whether they are working in a defence environment, or held in a prison, or immigration detention centre. They can be on a naval vessel or in transport. We care for them. We work to ensure they are safe and secure and we understand the human impact of what we do to provide the utmost care.” To continue to provide high levels of care requires innovative thinking. “We understand that we can’t stand still. This is a competitive environment and our customers are more and more demanding of better outcomes and higher value for money. We have to continue to challenge our own convention. We talk off and on about the fact that we can reference our past, but we need to benchmark the future, and innovation is critical to that.” The final value is trust, which is the embodiment of the three previous values. Without trust nothing can happen.

“We don’t get to do what we do unless over time we can earn the trust of government and government agencies, and the public,” Marks says. “Our primary contracting relationship is with a government agency. Ultimately if we fail in delivery, we have huge accountability to the public and that trust that is quickly lost and hard earned to get back. That’s a really important part of what we do. We understand the need to earn and preserve their trust.” From a business that Mark says began as a simplified outsourcing model, Serco is now a business focused on effectively managing risk in partnership with its government clients.. He says that one of Serco’s biggest shifts has been from input specification to outcome-based contracting. “When we look at an asset, our customers increasingly are looking for the best outcomes from those assets. The asset life cycle management, the productivity of the asset while it’s in use, concern and care for main-

tenance and maintenance costs which are a big part of delivering value. There’s more sophistication around all of those elements, so that it’s a total economic view of asset management and facilities management associated with that. I think it’s much broader than it was before.” This broader scope has brought on bigger challenges, but all of the challenges come back to the way Serco manages its people and the assets on behalf of its customers. Where Serco stands out is in its ability to bring subject matter expertise in each of the sectors, so the sectors are clearly defined and the responses relevant to specific needs of the customers in those sectors. It also stands out in its ability to be adaptable to client needs and customise programs for them, much like they have done with Acacia, because let’s face it, who would ever have thought that a production of A Mid Summer Night’s Dream would have benefits in a prison setting that could flow into the wider community. BFM

Mark Irwin and Director Wendy Sinclair at the front of Wandoo Reintegration Facility

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HOW DOES

ENTREPRENEURSHIP LEND ITSELF TO SPACE EXPLORATION?

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FEATURE| BFM

I’ve always been fascinated about space exploration, and science fiction movies like 2001: A Space Odyssey, Star Trek, and even the original Star Wars trilogy. As a child, travelling into distant space, discovering new planets, exploring new frontiers and extraterrestrial possibilities, and never returning back to Earth was a vision that has always inspired me writes Federico Re.

T Federico Re

is an Entrepreneurial Coach and founder of

creativeentrepreneur.com.au

hese memories were brought back to life just recently when I had the exclusive opportunity to meet two Aussie astronaut candidates for the ‘Mars One’ mission, on a Google Hangout. I was joined by Dianne McGrath and Josh Richards, and together we explored the definition of ‘Astropreneurship’, and how this new-age term is applicable to the space industry and to entrepreneurship.

The Space Entrepreneurs Mars One is now planning to take the first four humans to Mars in 2026, on a non-return flight. Dianne and Josh were shortlisted as favourites amongst over 200,000 applicants worldwide, as a result of their distinct skillset, philosophy to life, and entrepreneurial pursuits. The global space industry is currently experiencing accelerated growth and has expanded by more than 50% over the past 10 years, according to Space Foundation in Colorado Springs. The majority of such growth hinges around commercial endeavours from the private sector, led by serial ‘space’ entrepreneurs like Richard Branson (Virgin Galactic), Elon Musk (SpaceX), Robert Bigelow (Bigelow Aerospace), Bob Richards (Moon Express), and Paul Allen (Vulcan Aerospace). Essentially, more people are desiring to go to space, and has so far attracted celebrities like Leonardo DiCaprio and Lady Gaga, each willing to fork out $250,000 for a ticket into space for just 2 hours! Gone are the days, where space exploration is solely reliant on NASA and government funding. Entrepreneurs are now in charge, and private investors are joining the ‘space race’, and exploring new commercial ventures like zero-gravity tourism, satellite and software development, and space exploration on a scale never seen before.

Astronaut or Astropreneur? During my Google Hangout interview, I was curious to understand Dianne’s perspective on the term ‘astropreneur’ and its relevance in her profession. Dianne is an adventurist, with a strong philosophy in sustainability, and is currently undertaking a PhD in food waste. According to Dianne, the common denominator between an astronaut and astropreneur is ‘risk taking’, ‘exploring possibilities’, ‘agility’, ‘problem solving’, and ‘trust’. Putting this into a business context within the space industry, Dianne firmly believes that commercial enterprises entering the space market, need to be more agile, take greater risks, and collaborate with other 3rd party organisations to secure new opportunities and remain highly competitive. On the other hand Josh, a futurist and engineer, believes that an astronaut or astropreneur carries distinct traits like ‘flexibility’, ‘resilience’, ‘having a larger perspective’, and possessing a ‘strong vision’. Josh’s philosophy to achieving success as an aspiring

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astronaut hinges around ‘the rule of thirds’. Essentially, one third of people will be sceptic, one third will be indifferent, and one-third will love what you are striving towards and will support you no matter what. The key is to collaborate with the ‘right’ type of people who share the same vision.

Technology and Innovation: The common thread between entrepreneurship and space exploration is technology and innovation. There is no doubt that success in either industry or profession hinges around these two critical ingredients. Easy access to technology is allowing the industry to accelerate with regards to research, innovation, and collaboration, and has been fuelled by the ‘start-up’ risk-taking culture of Silicon Valley. Space entrepreneurship requires a lot of improvisation and movement. For this reason, Space Tango was developed to encourage humanity to think differently about space. It provides entrepreneurs, scientists and engineers effective ways of working together and collaborating on the same space project, whether it’s about launching a new satellite, creating a new food waste management system for astronauts, or building the next rocket to Mars. A mix of passion, entrepreneurialism, and outside the square thinking, enabled Aussie entrepreneur Briam Lim to develop DeltaV Spacehub and Think N’ Tinker. His entrepreneurial ventures are space industry accelerators, and collaborate with start-ups within the space industry in Australia. Brian’s ultimate goal is to further advance Australia’s involvement in the space industry.

A fancy new word? Coming back to the word ‘astropreneurship’, I believe this new-age term deserves the recognition and acknowledgement from within the business and space sectors, as well as from linguists or scholars. A solution to this simple problem, would be to include this new word in the dictionary and acknowledging that such a profession or industry actually exists. I am perplexed that the Oxford dictionary has still not taken this step. In the final chapter of my interview with Dianne and Josh, what was revealed is that the use of the acronym ‘preneur’ might actually signify or imply something that is ‘exciting’, ‘innovative’, and ‘technologically advanced’. When it comes to establishing a human settlement on Mars, I cannot think of anything more relevant or critical. There is no doubt that entrepreneurship and space exploration is here to stay. The continued infusion of these two sectors will provide humanity endless possibilities, making classic movies like Star Trek no longer science fiction but a new reality for human civilisation. BFM

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BFM | PROFILE

Gavin Scholes

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PROFILE| BFM

HOLD THE PHONE:HOW ONE MAN’S VISION’S BUILT AN INDUSTRY For Gavin Scholes, money is just a by-product of hard work. What really gets him excited is being able to help businesses benefit from his words – his Telstra Phonewords. The CEO of Telstra Phonewords speaks with Business First about life, business and loving what you do.

“

There is a pleasure when you are driving with your kids from 2005 and they say, ‘There’s one of Dad’s Phonewords’,” says Gavin Scholes as he explains the joy he gets from the work he does. “No one will ever understand how much enjoyment I get when I see a company using a Phoneword. You’re helping their business. For me, it’s never been about the money. It’s never been anything like that. I get a lot of enjoyment out of seeing businesses benefit from using a Phoneword properly.” Way before there was Phonewords, Scholes was a pastry chef and had the same attitude to making people happy – as you’d expect from a pastry chef who cooks from the heart, for the heart. After completing his apprenticeship in Altona, Victoria he decided to travel around Australia. After 18 months away, on his return to make ends meet Scholes took a job as a Storeman in a small office supplies company in West Melbourne

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and that is when his interest in sales and marketing piqued. It had 12 employees at the time and grew to around 100. In his ten years there, Scholes had worked his way up to Sales and Marketing Manager, but eventually it was bought out by Corporate Express who came into Australia to consolidate the industry. As part of the Corporate Express industry rationalisation, Scholes moved to Sydney to take up the role of Marketing Director. However, he was unhappy with the business ethics of the company, especially having been part of a small family business before the takeover. He left after two years, but learnt a valuable lesson: “It doesn’t matter how well the business is going, if you don’t look after your staff, if you don’t look after your suppliers and especially your customers, you don’t end up with a great business, and most importantly it’s not enjoyable.” Positive relationship management is a business ethic that

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Scholes was determined to implement into his own business. That business was Telstra Phonewords and it came about after he responded to a ‘for sale’ advertisement in 1996 posted in The Age newspaper. “There was a guy that had a couple of phone numbers to sell. I met him at a pub in South Melbourne. I was looking for something to do at the time and he had three numbers: 1300 Realestate and 1300 Petcare. Scholes can’t remember what the third number was, but it didn’t matter. He had an idea this would set the course for his business life to date. “I went about implementing a shared Postcode model experience for real estate agents around the 1300 Realestate number. Agents could have the number pointed to them exclusively in their postcode, only one agent per Postcode.” It took Scholes three years to roll that business out, but he was able to sign up 800 estate agents, which enabled him to hire his first staff members. In the background, Scholes was trying to get Phonewords up and running. Just to clarify, Phonewords are the words used in a phone number. For instance 13 Cabs, 1300 Rental,

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1800 Holiday. As the Telstra.com website states: a Phoneword works as a consistent brand identity throughout multiple branding channels (advertisements) leading to increased brand awareness, customer engagement, sales opportunities and ultimately increased revenue. The problem back in Phonewords’ formative years was the Australian keypad had no standardisation. “Australia never actually standardised the international key pad. To give you an example, A B C is now on the letter 2 on your phone. Back then, it could have been on zero, it could have been on 1. Ultimately you couldn’t use Phonewords, because really only about 40% of the phones were compatible.” Scholes began to lobby the government for change. He had success, however he says it was a four-year process for people to turn their phones over. The next step in the process was lobbying the government to make all of the numbers available. The government was still in charge of number allocation. In the United States Phonewords have been used for 35 years with amazing success, it was time for Australia to catch up.

This was in 2002 and after discussions with the ACMA (Australian Communications and Media Authority), the laws were changed which allowed Scholes in 2004 access to buy numbers from the Government. At the same time from 2002 Scholes had been trying to convince Telstra to become a Joint Venture Partner and lend the capital required to buy the numbers. Seven meetings over nearly two years saw him turned away on every occasion until eventually Telstra Employee Hayden Kelly introduced him to Senior Executive Ted Pretty. From there the tide turned. “Ted got the idea and supporting business model in 15 minutes, and asked me how much money I needed. I said I needed $10 million dollars, and he said, ‘Done’. That started the joint venture between 1300Marketing and Telstra back in 2004.” Today, Australia is the only country in the world where businesses own their phone numbers. Everywhere else in the world, phone numbers are leased just like mobile numbers. Scholes says some Senior Telstra Executives initially underestimated the power of such a simple concept in terms of people being able to use Phonewords to market their business.

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PROFILE| BFM

However, it is a simple concept and it is based on a great deal of research conducted with Roy Morgan in Australia and backed by 35 years of research from the United States. “People don’t remember numbers. It’s a fact,” Scholes says. “It’s actually a medical fact that people don’t remember numbers, but we do remember words. Our research has shown that someone is five times more likely to remember a Phoneword over a phone number. If you’re a customer advertising on radio and your ad said, ‘Call us on 1300 275 826’, people listening in the car won’t recall that number. If I said that phone number was 1300 Australia, and you heard that a few times on radio, you’d actually remember the number.” Interestingly, Scholes also points out that a Phoneword can also take Google out of the equation. “When you can’t remember a number or business, what do you do these days? You go to Google. The problem is when your customers go to Google, they see all of your competitors. By having a memorable Phoneword, it actually captures your customer base where they don’t have to go to Google.” The concept has grown so big that today 43 of the top 50 advertisers in Australia use Phonewords. If you look at companies like Pizza Hut, you see how effective Phonewords are. “Pizza Hut went away and did all of their own research. Pizza Hut’s number is now 1300 Pizza Hut. They basically threw away a number that they’d invested 20 years in, they did their own research and went and got 1300 Pizzahut. Domino’s has done the same. These companies are serious businesses with very intelligent marketing people. When they’re shelving numbers they’ve invested 10 to 20 years in to go to a Phoneword, I guess the proof is in the pudding.” While Phonewords runs autonomously to Telstra, Scholes says they are the perfect joint venture partner and have helped build the uptake and profile of the business. “Once we actually got the deal across the line, Telstra has been amazing. They leave us alone. That’s the key to the business model. They haven’t tried to ‘Telstraize’ it. We run our own

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systems. We’re in charge of every single thing. The only thing we do is report to the Board.” Which brings us back to those early years and the ‘treat your people’ well ethic. It has stuck fat all of these years. “The key to our business success is quite simply the way that we treat our people. That’s my entire philosophy in life. If I look after our staff, they’re going to look after the business, customers and each other. “The first thing I tell my staff is that Phonewords is a safe place, no matter what’s happening in their lives. It’s somewhere you can come and be respected and be rewarded. We have a great product and we’ve done a lot of work marketing it. We’ve probably spent $50 million dollars operating the business since 2004. It’s a fairly big investment in a growing an industry that wasn’t around in 2004. Yet, the reason it’s been so successful is that we treat our people extremely well. We don’t have hierarchy. Everybody has input. We only have 30 staff, but annualised this year we’ll probably do about $18 million dollars.” Scholes says although it took three to four years to build a business from scratch, to educate the market and then consistently build sales, the last 18 months have been a tipping point. “Phonewords suit any business of any size that advertisers from the local Plumber to a large Corporate, it’s common sense if you’re going to advertise at least give your customers a chance to remember how to contact you” “If you look at our business. Our business model can sustain the growth. We grew 21% last year. Half of our sales come through Telstra and Telstra Business Centres and the other half come online.” To facilitate further growth, Telstra Phonewords recently acquired an Australian company, www.calln.com a cloud based call recording product that operates in 40 countries around the world. The acquisition now provides customers with core recording operations, but more importantly sophisticated simple to use business analytics. “There’s a lot of industries now have to record their phone calls, for some it’s law. What we’re saying to customers

is you’ve got all these calls coming in, what are you doing with them? What’s happening? How do you know if your staff are on the phone and doing the job they’re supposed to be doing? You can pull their call recordings. You can use them for training, customer disputes, anything that will help you’re business. It’s more about delivering businesses accurate actionable analytics at the back end. We can now tell customers everything that is going on in their business and they can use this information on a daily basis to improve sales.” Calln.com allows you to understand your business, your staff and most importantly allows you to know what your customers are saying, we see the product as a natural progression for Telstra Phonewords. This feature will be rolled out globally and Telstra Phonewords is in discussions with Telstra Global. “We’re really focusing hard on Asia: from Hong Kong, Malaysia, Thailand and Indonesia. We’re leveraging Telstra’s global operation, and working to build relationships with all those Telco’s in all of those countries.” Back in 2003, Scholes was broke. “I was borrowing money off my mates to buy new shoes (which he now has framed) and a new suit for my Ted Pretty meeting. “In late 2003, my wife and I had about $2.85 to our name and we had a new baby. When we started the journey in 1996 we were pretty well set up, but eight years of lobbying and trying to create an industry and a Joint Venture sent us broke, amazingly my wife Trish strapped in for the ride and never complained. “The moral of that story is when you come out the other side and look back, you think to yourself, ‘was I crazy or was that just par for the course’. “In the end you realise it was a necessary experience you had to go through. “Too many people sit around and say ‘IF’ we decided... it’s better to say ‘I had a crack’ whether it worked or not rather. And that attitide and the ensuing success certainly makes moments such as those in the car with your kids all the more profound. BFM

BUSINESSFIRST MAGAZINE

BFM | FINANCE

Do you know what to expect from a recession? It’s been almost 25 years since Australia last experienced an economic recession. Since that time, a whole generation of business leaders have risen through the ranks, only to experience economic growth writes Roger Mendelson.

ecessions, by their very nature, are unpredictable. There has been much speculation from commentators in recent months predicting a recession, but in reality, only few can accurately predict when one will hit. If one is forecast, society as a whole prepares for the impact, and as a result the effect is typically less severe or can be avoided all together. For example, Australia and the 2008 Global Financial Crisis in which the government at the time pre-empted the impending disaster and managed to steer us through it relatively unscathed. I’m certainly not predicting a recession but, given current economic conditions, it is wise for business owners to be prepared and know what to expect should one hit.

What does a recession look like? Invariably a whole lot of bad things happen almost simultaneously, regardless of what triggers them. Once a recession mentality sets in businesses tend to respond swiftly, moving into survival mode and shifting focus away from long-term growth. As a significant expense in every business, wages are usually the first things that will

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be cut to ease the pressure on a company’s cash flow. There is a real domino effect that hits almost all businesses, particularly those providing ‘non essential’ services, as consumers tighten their purse strings and stop spending on all but necessities. Consumer-facing businesses will be forced to reduce orders from suppliers and defer capital spending, further hurting B2B companies who are forced to put pressure on their clients for payment. Banks will also start calling in business loans, and credit card issuers will reduce their available credit, insisting on higher repayments. If this is sounding gloomy, it’s because it is. This feeling of negativity really seeps into the economy and only serves to further downturn.

How can you be prepared? It is a frightening experience and occurs rapidly. Recessions are like a tsunami; you can’t predict one and by the time you see the warning signs it’s too late. Unfortunately, this means it’s difficult for companies to be properly prepare for the sudden change in business conditions.

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FINANCE| BFM

There are however, some steps all businesses should take that can provide a solid foundation to see you through any tough times. 1. Make a plan Set up a ‘survival team’ of senior staff to create a game plan for a severe recession; it’s better to hope for the best but prepare for the worst in this situation. This team should include an external advisor or accountant to provide independent advice and help you make any tough calls. 2. Brace yourself now There’s no doubt that economic conditions will deteriorate this year. Even if a recession isn’t on the cards, it would be wise to start moving into survival mode and put any plans for growth on hold. Consider cutting unprofitable areas of the business as these will only become a bigger burden when times get tough. 3. Assess your current situation Now is the time to examine your current debt levels and focus on reducing this as quickly as possible as this can be a real area of exposure in a storm. You should already be planning for the bank to reduce their assistance and don’t rely on them providing any help through the tough times. 4. Improve your processes You need to ensure your billing and collection functions are running efficiently to ensure you maintain a strong cash flow. This needs to be done today, don’t wait until the cash crunch hits and you need the money quickly. A recession can collapse many businesses. While you typically won’t see the signs until you are in it, ensuring you have solid processes in place will go a long way to helping you survive if one hits. And if not, at the very least, you’re prepared for the very worst. BFM Roger Mendelson is CEO of Prushka Fast Debt Recovery and principal of Mendelsons National Debt Collection Lawyers. Roger is also author of The Ten Mistakes Businesses Make and How to Avoid Them and Business Survival Guide, both published by New Holland Publishers.

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BFM | PROFILE

Vik Bansal

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PROFILE| BFM

Driving a business from good to great When Vik Bansal took on the role of CEO at waste management company Cleanaway, there were several areas where he felt the company had lost its edge. Excited by the potential for growth, he instigated a plan to take the company from good to great. Business First speaks with Vik about the journey.

ik Bansal saw great potential when he moved back home to Australia after a successful stint as President & COO of a US listed entity to take on the leadership role at Cleanaway. The industrial nature of the business and its room for growth proved to be a lure that he couldn’t resist. His first challenge was to understand how to meet stakeholder needs, while at the same time reshaping the company to ensure it realises its full potential. To meet the challenge, he set out to unite the solid waste services, and liquids and industrial services under a single, refreshed and reinvigorated Cleanaway brand. This new brand and a clearer underlying operating model became effective from February 1, 2016, under the new company name Cleanaway Waste Management Limited. The importance of the change of company name and refreshed brand is driven by a focus on stakeholder management. “We have to meet the needs and expectations of our investors, our customers, our employees and society. I am a big believer in our responsibility as a social citizen. So to me, those are the four key stakeholders that we should be looking at.”

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Yet, balancing stakeholder requirements can be tricky. “There is no use making clear plans if your stakeholders don’t understand the why, how and what of your plans or agenda you are trying to achieve. “I spend a fair amount of time communicating our plans up and down the stakeholder chain”. However, he says a good leader should be careful to not focus on one stakeholder over another. “What I find sometimes is if you are not careful, you could end up focusing on one stakeholder more than another and that imbalance always causes an issue. As a leader, providing clarity and ensuring alignment is your job and a key deliverable.” Vik’s philosophy comes from years of working in management positions both in Australia and overseas. Over that time he has developed the skill set that he feels all managers require: having empathy towards the people who count on you. “Having empathy and accountability is not mutually exclusive, which is something leaders quite often get confused with,” Vik says. Furthermore, during this time he has continued to grow as a leader and to learn from others. In business that is an important message. “You must learn from people. It’s about watching them. I am a keen observer of humans in general and a consistent student of leadership. I enjoy watching people do amazing things everyday with passion and

selflessness. I enjoy watching leaders in action – how they think, how they interact and why they do what they do. It doesn’t matter what level one is – everybody provides leadership at some level, every day.” His ability to watch people and learn from them has been one of the keys to his success in improving Cleanaway’s business model. However, he recognises that to fulfil the goals he has set for himself in driving the business forward, he must run this race as if it is a marathon and take a long-term, holistic view of the business, while achieving short-term objectives. One short-term objective that has long-term ramifications is to make the Cleanaway brand iconic once again. “Cleanaway has always been a strong brand. We have very good people. We have a very good footprint with prized assets across the country. And we have good market share. The next phase of the business for us is to connect those points of strength and leverage them to grow the business.” Hence the change in name. “In doing so (changing the name), we have refreshed the brand which has been very well received by all stakeholders. There are some iconic brands in the country and for many years, Cleanaway had been one of those brands, but it had lost some of its strength. It should be the first brand you think of when you think about waste management.” Cleanaway has a long history,

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beginning more than 50 years ago. In 2005 the company was acquired by Transpacific, and was almost lost under their umbrella and the financial issues the company faced following the GFC. Over the past few years it has had to rebuild itself as the premier solid waste management company in the country. “We were considered best in class by far. Now we are bringing that pride and that heritage back. This is a very powerful message for us and for the market. Our team, our employees are pretty happy about that.” The pride and passion of Cleanaway’s employees has played a big part in Cleanaway’s history. “I give credit to all our past and present leaders at different levels. They have an understanding of what good looks like. We need to believe our own story and deliver with passion. I travel a lot and there are people in numerous places across Australia who have been working for the company since the 1970s and ’80s and still have a picture on the wall of the first truck they drove or the first run they

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worked on. It is that passion which makes our company very, very special. And what is pleasing is, that in spite of some of our peaks and troughs, we never lost that passion. We are now just bringing it back to the surface.” Vik is developing a clear strategic path, allocating resources, creating accountability and aligning all his stakeholders, which, he insists again, is one of the key deliverables for any leader. Although Vik says elements of his predecessors’ vision was ‘spot on’, he feels the execution was off. It is now Vik’s job to lay a new foundation, allowing the business to realise its potential for greatness – and it is this opportunity that energises him. The next phase of growth is more externally focused in terms of how the industry, and Cleanaway as part of that, works and performs. “What are the big problems the industry faces? Is the industry stagnated or in consolidation? And then of course there is a focus on technology and innovation, which I think we need to address,” Vik says.

“Our entire sector needs to drive the technology agenda. This is an industrial services business and there is a lot of good to be done using technology: in transport and systems. We need to bring back a culture of innovation to the business. Cleanaway always had a strong culture of innovation, but it is an area where we need to be stronger if we are to be best in class and lead the industry.” For Vik, like most things in the business, it is about taking what already exists and bringing the best elements to the surface. It is about getting the team to recognise that a best in class culture focused on innovation has existed across Cleanaway’s history and that the business needs to fully leverage that strength and that heritage in order to continue to lead the market. And it will be through the harnessing of the company’s people, experience and heritage, coupled with a reinvigorated focus on technology and innovation, that will see the business successfully build on good to achieve great, and maybe reclaim an icon along the way. BFM

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David Schwarz

Everyone is talking about getting a board appointment but you need to ‘dare them not to appoint you’ Increasingly people are seeking Non Executive Directorships to complement their executive careers or are considering transitioning from an executive role to a portfolio of board directorships. Whilst many recognise the personal and professional benefits of gaining a board appointment they often underestimate the competitive nature of such aspirations and are unclear about what it takes to gain a board directorship.

avid Schwarz is an ex-international non-executive recruiter and board career coach who has interviewed thousands of non-executives and helped place hundreds into some of the most significant public, private and NFP board roles in the world. He is the Founder & CEO of Board Direction (Putting People on Boards) - Australia’s leading Non Executive Director consultancy – focused entirely on getting members a board appointment through a wide variety practical

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services & training courses as well as advertising Australia’s largest & most diverse list of Non Executive vacancies. David took the time to speak with Business First about: what it takes to gain a board appointment, how to recruit non executive directors and importantly, how you can ‘dare them not to appoint you’. Business First: David, can you give is a run down of Board Direction and the success it has had? David Schwarz: Board Direc-

tion launched in 2013 and in just over three years has generated a following of over 35,000 people and has helped thousands develop board careers or transition from an executive to a non-executive . Additionally, on average, each year we advertise the board vacancies of almost 1000 organisations and over 1500 individual NED vacancies – all of which are available to our members. The reason for our success is largely that we offer a genuinely unique service – one that is entirely

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PROFILE| BFM dedicated to helping current and aspiring non-executive directors achieve their board aspirations. It would be accurate to say that no one in the world offers the services we do or can articulate the success we have had in this field. BF: What are the personal and professional benefits of gaining a board appointment? DS: The benefits of holding a non executive board directorship, in addition to a executive career, have been widely reported. Those who do have, on average, better career opportunities, broader professional connections, are more strategic, earn more and are considered more valuable employees. Further, board roles provide an opportunity to ‘give back’ or pivot your career from ‘executive’ to a portfolio career of paid board directorships – the latter being a very attractive option for many. BF: ‘Dare them not to appoint you’ is your motto – tell us more. DS: This is a quote I borrowed and modified from a previous Chairman – though his version was a little more strongly worded! Essentially, gaining a board appointment is a highly competitive exercise so people need to be really clear about what it is that they offer a board and why they should be appointed. I think this phrase sums it up nicely. BF: Is it difficult to gain a board appointment? DS: Gaining a non executive directorship (whether in the Not for Profit, Government or Private Sector) is a highly competitive with both executives and non executives tussling for the same board opportunities. In fact, many say that finding their first board appointment was extremely challenging but even experienced non executives describe finding their subsequent board appointments as just as difficult. That is why the services of Board Direction are so valuable. BF: What is the typical time commitment and remuneration for a non executive director? DS: Half day meetings and travel time, committee meetings and reading of board papers equate to

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about one day a month. However, you should also expect to spend another day a month for unexpected board business. However, for many this commitment can be managed out side of office hours. BF: What does a board look for in a successful non executive candidate? DS: A Chairperson wants to see five (5) things in a successful candidate 1. Prior governance experience – that is experience working with or on boards, or at the very least senior experience. 2. Executive skills - skills that the board requires to effectively govern the organisation. 3. Connections - personal or professional networks that can be leveraged by the board for the good of the organisation. 4. Demonstrable passion – passion for what the organisation does, the industry or for governance. 5. Cultural fit – someone who can work effectively with the rest of the board. There are of course others like: governance training, diversity and industry experience but regardless of the scope or scale of an organisation the five elements above are central to a successful appointment. BF: What do you need need to prepare for a board directorship? DS: A prospective board member must understand the journey ahead, what works and what the pitfalls are – there are marked differences between an executive job hunting exercise and the board appointment process. However, people can prepare themselves by adhering to the following: 1. Manage your expectations Many experienced executives, but aspiring board directors, expect their first board role to be remunerated. Remunerated board roles are highly sort after and often involve competitive recruitment processes. Without demonstrable board experience getting this type of role can be challenging. 2. Know what do you have to offer You should know and practice your ‘elevator pitch’ and be clear on the successes you have had and the experience you bring. Boards want not just your professional experience but access to your networks

developed through your existing non executive or executive career so, be clear about what you bring to a board in this regard. 3. Develop your personal connections The appointment process for board or advisory panel roles in many cases is not dissimilar to that of an executive appointment process. Many find that the majority of opportunities are never advertised and are filled by word of mouth or through existing relationships. So, developing ‘personal connections’ is vital and should form the basis of any search process. 4. Use executive recruiters Executive recruiters or ‘headhunters’ are a great source of information and often have access to opportunities that are never advertised. 5. Get a ‘Board Ready’ CV/Resume Many people assume that their executive CV is appropriate for board applications. In most cases it is not. A number key changes need to take place to make it ‘board ready’ including: 1. Clearly addressing the five things a Chair looks for in a new board appointment. 2. Listing non-executive, panel or committee experience and 3. Demonstrating your success in strategic and governance environments. If this all seems like too much work then contact us and we can help you write one. 6. Write a great cover letter Chair’s read cover letters, so any applications for non-executive roles must include one. Well- researched and written cover letters also separate you from your competitors and in a highly competitive application process this is essential. A strong cover letter articulates: Your passion for the role; what you would bring to the role (governance experience, skills and networks) and: Your passion for the company/organisation is a great way to begin any application. BF: How do people get appointed to a board? DS: There are four (4) ways people gain a board appointment. The vast majority are appointed via a personal connection though not necessarily through people who know them well. Then there are a large proportion who are appointed by: directly approaching organi-

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DARE them

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sations themselves; responding to advertisements or; working with recruiters. BF: How can Board Direction help recruit Non Executive Board Directors? DS: We offer three ways for companies in the public, private or not for profit sectors to recruit board members. 1. Advertising: A completely free service for organisations to advertise their board or advisory board vacancies. 2. Non Executive Directory: A unique and, again, entirely free service where recruiting organisations can search, view and contact our NED members - think of it as a LinkedIn for Board Directors. 3. Non Executive Recruitment: Another unique service that is disrupting the board recruitment sector which has been static for generations. Here, we leverage Australia’s largest Non Executive Director database to not only generate for you board candidates that you want to appoint but also brand your organisation to over 35,000 NEDs – an amazing byproduct.

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BF: How can help individuals develop a board career or gain their first board directorship? DS: We tailor a broad range of really practical services for both experienced and aspirational board directors. Essentially, we help our members to understand the journey ahead, to look better – both on paper and in an interview, and give them the practical tools and templates they need to ‘dare them not to be appointed’. Most, if not all, of the services we provide are unique and have been develop by myself from over a decade of putting people on boards. The most common services we provide include: Access to the board vacancies we advertise, Board CV writing, Board Search Master Classes, a Training & Accountability Course and Personal Board Career Coaching. BF: Board CV writing? Is there really a difference between a Board CV and an Executive CV? DS: There is! A Board Ready CV is different both in terms of tone, content and structure and can make the difference between a

successful application and an unsuccessful one. Regardless of how much weight you think a board CV might carry (and they carry a lot) it is a good investment to get one professionally written at the beginning of your board search. BF: Are you successful in getting people board appointments? DS: We are. We couldn’t reference the success we have had with out being good at what we do. We measure our success in a number of ways: the number of board vacancies we advertise (up over 50% in the last 12months); our member satisfaction and how many of our members get onto boards. For those interested in gaining a non executive board appointment or developing a portfolio career, Board Direction is offering a complimentary ‘Board Appointments’ E-book and a 10% discount on all of its products and services to Business First readers who use the ‘businessfirst’ code at checkout and look forward to having you on board! Just visit: https:// boarddirection.com.au/ for more information. BFM

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EDITORIAL| BF

MBA helps pilot soar to new heights Q. What does an international long-haul pilot do at 3am in the morning after a 15-hour flight, awake from jet-lag?

Study his Master of Business Administration (MBA).

For Jeremy Sutherland, an international long-haul pilot, dealing with multiple time zones and hours spent in the air has become second-nature after more than 20 years in the industry. What wasn’t so second-nature was taking on the challenge of studying a MBA, a decision he made for the opportunities it would give him to rise to senior positions in his career. Having previously studied an Advanced Diploma of Aviation, Jeremy knew he would need a flexible and fast-tracked programme that

would support his variable hours and allow him to study from anywhere around the world. “I chose to study the 12 Month MBA with the Australian Institute of Business because it’s an accredited programme that’s recognised internationally, and because I’m studying by Distance Learning, I have the flexibility to study at anytime, anywhere around the world,” he said. “While jet-lag is a challenge for me, I manage to fit study in whenever I have the time, even if it’s just in 30-minute blocks. Since I’m often working nights and have little control over my roster, I can also defer a subject or two in the

busy times at work, so having that flexibility really pays off.” Despite being only part-way through his MBA, Jeremy said he could already see how each subject is benefitting him both inside and out of work. “My MBA is helping me to analyse the strategies the company is using, their success, and whether there are ways to improve efficiency in this very complex environment,” Jeremy said. “Because I’ve been able to tailor the programme around my interests and career, I can already see how the skills will be useful both in my career and outside of it.” BFM

Studying the AIB MBA by distance allows me to study anytime, anywhere, while flying around the world. Jeremy Sutherland First Officer AIB MBA Student

Let your career take flight. Complete an accredited and internationally recognised 12 Month MBA with the Australian Institute of Business via Distance Learning, while you work. www.businessfirstmagazine.com.au

1300 304 820 aib.edu.au

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BFM | LEADERSHIP

How can you become a more authentic leader? Authenticity is becoming more and more of a prized attribute in business today. The global economic crisis resulted in a breakdown in trust in many large organisations. Both employees and customers now expect more transparency. We want leaders who are open, honest and authentic writes Dr Simon Hayward, CEO, Cirrus.

Dr Simon Hayward CEO, Cirrus

n authentic leader can be trusted to behave consistently and in line with what they say is important. They also recruit and recognise people who demonstrate positive values in order to build a values-based culture. This culture is often reflected in the character of the senior leaders and the principles on which they make decisions, as well as the degree to which they foster open and transparent relationships. Authenticity enables you to create trust. It is most effective when organisations insist on values-based leadership across the business. Leaders at the top are influential role models. How they behave influences other leaders and managers at all levels. The characteristics of an authentic and connected organisation: • Leaders at all levels build open and trusting relationships with all colleagues. • Leaders and colleagues have strong self-awareness and emotional intelligence. • Leaders act, and encourage others to act, with an awareness of what is happening now. • Leaders and colleagues always act in the best interests of the whole organisation. The characteristics of an authentic leader: • Genuine role model: the leader’s behaviour demonstrates the values every day. These leaders are intolerant of behaviour that demonstrates the opposite of the values. They have a strong moral compass and understand that actions speak more loudly than words.

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• Self-awareness: the leader is in tune with his or her own emotions and is able to manage them effectively so that their emotional reactions to events don’t interrupt positive behaviours involuntarily. • Open and transparent relationships: the leader encourages a high degree of honesty based on mutual respect with others. • Balanced processing of information: the leader seeks an objective perspective and to make sense of each situation in an unbiased way so that they can encourage balanced decision making and action.

Purpose and direction A clear sense of purpose and direction is important. It helps to engage employees and to align everyone. Purpose and direction go together because they are about what the organisation does and why it is significant. They define and give emphasis to its meaning in the world, which in turn gives the people who work there a shared sense of doing something worthwhile, of making a difference. Authenticity is more about how the business operates. It relates more to the values and the culture.

Values and behaviour If senior leaders talk about particular values but do not live them in practice, those values will never become ingrained across the business. Any disconnect will be highlighted in the everyday way leaders make decisions, manage performance, promote people and

carry out other responsibilities. The difference between what the leaders say and what they do discourages trust among colleagues. A common feature among many businesses I meet in my work is this lack of trust among colleagues in the senior leaders of their organisation. If people hear one thing and see another played out in practice, they are unlikely to believe the words or the underlying intentions of the leaders involved. Trust matters, and is a foundation stone for effective distributed leadership. Making this explicit is both important and very helpful. Unless you communicate effectively with people across the business to develop and sustain a good level of understanding about what values you share and what behaviours are therefore valued or not wanted, colleagues have no reference point. In one client I work with, the CEO replaced two successful Board members over a two-year period because they were not living the values of the organisation. Despite repeated challenges from the CEO, the two executives chose to continue to behave in ways that demonstrated a moral pragmatism that the CEO found unacceptable. The signal to everyone else in the business was clear: we take our values seriously and they are non negotiable, even if you are performing well in other ways.

Building open relationships Open, transparent and trusting relationships are the fundamental enabler for a successful, connected organisation. When these rela-

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LEADERSHIP| BFM

tionships are in place, leaders can give authority to others to take decisions and make things happen. Others feel comfortable and confident to take that authority and its associated risks. Personal and collective authenticity is a pre-requisite for the quality of trust that is required for connected relationships to work in practice. Authentic leadership suggests that leaders need to have high levels of self-awareness, a strong moral compass, the ability to make sense of information in a balanced way, and have open and transparent relationships. Leaders who build relationships of trust and respect engender stronger commitment among the people they lead than those who do not. Leadership based on balanced judgement and fairness of decision-making engages colleagues and encourages them to develop effective, connected relationships

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across the organisation. It offers a behavioural framework to guide people to achieve the purpose and direction in a principled and satisfying way.

Connected Leadership My own research has found that authenticity is a key factor of ‘connected’ leadership. I combined this research with my experience of working with may global client in my recently-published book, Connected Leadership: How to build a more agile, customer-driven business. Today’s most successful leaders connect people across the organisation to strategic goals and to customers by developing a shared agenda through purpose, direction and values. They devolve decision-making responsibility and encourage a culture of collaboration and teamwork. They stimulate a high degree of empowerment and trust

that each person and team will perform to the best of their ability. They increase agility through developing a learning culture that drives innovation and ruthless prioritisation. Becoming a more authentic, connected leader often involves letting go of ingrained, hierarchical ways of working. This can be quite daunting for leaders who are more used to a command-and-control style of management. The rewards, however, are significant. BFM Dr Simon Hayward is founder and CEO of Cirrus, a leadership consultancy, and has a wealth of strategic leadership experience gained over 30 years. He has developed leadership strategy and leadership development programmes across Europe, Asia and North America. Simon’s book, Connected Leadership: How to Build a More Agile, Customer-Driven Business, was published by FT Publishing in December 2015.

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BFM | PROFILE

Team Fault Lines Why inclusiveness is key for effective workplace diversity Biological law tells us that diverse systems are the most adaptive, because complex organisms are more likely to evolve and survive. So how does that play out in the modern workplace, and can HR play a more strategic role in nurturing diversity?

rofessor Robert Wood, Director of Centre for Ethical Leadership, cautions that diversity in the workplace must go hand in hand with inclusiveness. “Diversity brings different perspectives to problems,” he explains. “But without inclusiveness, it is like having all these assets without using them properly, and it can cause a fault line within teams.” Diversity is more than the difference of physical attributes such as gender, age or ethnicity. It also reflects differences in attitudes, behaviours and experiences. “Organisational cultures often get trapped in homogenous groups, because our unconscious affinity biases means we are attracted to people like us,” Robert says. “The question is, how do we extract value from our experience of diversity? Do we learn from it, or do we retreat into established position?”

The case for diversity Research evidence suggests diversity certainly has a positive impact on business performance. McKinsey’s 2015 study, Why Diversity Matters, found companies in the top quartile for racial and ethnic diversity are 35 per cent more likely to have higher financial returns, and while this research is correlational it reflects other research finding diverse firms are more successful.

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According to The Bottom Line: Corporate Performance and Women’s Representation on Boards, Fortune 500 companies with the highest representation of female board directors achieved significantly higher financial performance – outperforming return on invested capital by at least 66 per cent. It’s no wonder many organisations are encouraging more women onto their boards and senior leadership. But it has also has a clear effect on team performance. “At a group level, diverse teams are more effective, more creative and adaptable, and provide better assessment of risk,” says Robert. They may also respond better in a fast-moving market – for example, younger employees have fewer established patterns of work, making them more ready for change. Roadblocks to diversity So why do some teams push back and defend their position, instead of absorbing diversity and learning from it? Robert explains four challenges to watch out for. First, if your company has a high status differential, for example a management dominated by older men, it may only pay lip service to diversity, because their knowledge is too grounded in past behaviours. Performance pressures will also have an impact. “You may have policies for flexibility and job sharing, but if the reality is the 24/7 demand of a competitive market,

those policies will be ineffective,” Robert says. “Thirdly, reward structures need to encourage diversity, not just hard indicators like KPIs, budgets and revenue,” says Robert. “Otherwise, anything seen not contributing directly to that will be rejected – which is short sighted.” Finally, a lack of strategic imagination can be a hindrance when you give someone a challenging goal – such as building a more diverse workforce. “If they just try what has been done before, it might not work. Then they’ll reject the goal – rather than come up with new ways to achieve it.” He says this ‘either or’ thinking has been overcome before with quality and safety goals. “People thought quality and productivity were mutually exclusive, but of course we now know it has to be part of the culture.” Overcoming unconscious bias And then there’s the villain in this story: unconscious bias. The unspoken stereotypes we bring to every decision. Biases can be short cuts – ways of dealing with the world efficiently – but they also develop mindsets for situations that may blind us to the best solution. “A lot of our interactions play out at unconscious level. It’s automatic – we add to our conscious thoughts with what we’ve already discovered.”

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PROFILE| BFM

Robert says the “mother of all biases” is confirmatory bias. “We are more receptive to information that confirms what we already believe or know.” This validation explains why our natural instinct is to form homogenous groups. Can you stop your unconscious thinking? The short answer is, no. “So, when we consult with firms, we explain the need to look for bias hotspots – times where it might be an issue.” Examples include team meetings, selection panels and performance appraisals. When you operate in these ‘bias hotspots’, you need ‘bias reminders’ to make the process more conscious. This may openly asking questions such as “Is there evidence for the other point of view?” Organisations are auditing their systems and processes to remove the risk of bias when looking at data. For example, a de-identified selection process, with no name or gender on a CV, minimises the activation of stereotypes in recruitment.

Developing inclusive leadership For diversity and inclusiveness to be effective, people need to feel their uniqueness is respected, so they can share ideas without fearing ridicule. But you also need to foster a sense of belonging. The problem is, many people in HR focus solely on creating a sense of belonging. And that makes the group more homogenous, rather than extracting the value of its diversity. “At its extreme, belonging becomes like a ‘group think’,” says Robert. So to ensure team members feel unique and belonging, inclusive leaders need to build a sense of psychological safety (‘I can be who I am and I don’t feel like I’ll be judged for it’) and a sense of team efficacy (‘we can get things done together’). Together, these two things will make teams more creative and productive.

HR needs to take the strategic lead Robert suggests HR can support diversity in five ways: 1. Set a strategic framework Diversity and inclusion need to

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Professor Robert Wood

be integrated into the operational model, not as a bolt-on. “Look at how we integrated safety as part of leadership and management culture,” says Robert. “You need to keep the strategy discussion alive at a senior leadership level.” 2. Put the policy framework in place This creates the conditions to enable diversity. For example, flexibility gives people more freedom to be adaptive, return to work policies make sure they feel a sense of fitting in. 3. Foster inclusive skills Leaders and managers need the skills to foster inclusiveness. They also need to understand how to effectively implement those policies, and how to develop strategic imagination to meet diversity goals. 4. Structure rewards Ensure pay, incentive and promotion policies reward and reinforce diversity and inclusion. 5. Evaluate Look beyond implementation to evaluate and constantly evolve your

strategy and policies. Robert believes that this combination of skills, policies and strategy will be essential in the future workplace. “Being an inclusive leader in a workplace that is more like a distributed network of people is more challenging. It requires new skills, such as trust and technological savvy, and you need to be very clear about accountability and expectations.” BFM This article appears in the March edition of AGSM’s thought-leadership publication The Leader. Professor Robert Wood is an AGSM Fellow, Director of The Centre for Ethical Leadership and faculty member at AGSM Short Courses. AGSM Short Courses provide unique solutions to business challenges being faced by leaders in their careers and organisations at the points in time it’s needed most. For information about AGSM Short Courses and to subscribe to The Leader visit www.agsm.edu.au/shortcourses

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ACTIVATE YOUR MOMENT AGSM SHORT COURSES

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PR| BFM

Golden rules for customer service on social media Social media engagement is vital for businesses. Not only can it provide valuable feedback, it can also build a solid reputation for the business, increase an existing customer’s trust and attract new potential customers through word-of-mouth marketing writes Catriona Pollard.

ngagement is all about sparking conversations and encouraging your customers to interact with your business in order to build a relationship with them. According to Convince&Convert, research has shown that out of those who attempt to contact a brand, product, or company through social media for customer support, 32 per cent expect a response within 30 minutes. A further 42 per cent expect a response within 60 minutes. Businesses are now forced to improve their time management

and the quality of their content to engage customers and compete with other brands on social media platforms. Here are six golden rules to help you maximise your engagement and build a lasting reputation on social media.

Stick to what you know Make sure the majority of your posts relate to your business and industry. Research conducted by Facebook found that speaking about subjects related to your brand is the best way to generate engagement. When people ‘like’ your page, they are obviously interested in your business and want to receive information on your area of expertise. If you start posting content on other topics, your followers will lose interest and unfollow you.

One way to measure engagement is by how many times your content has been shared by other users. This means you need to create interesting content that is easy for people to share. For example, pictures are great shareable content because they are easy to consume and are eye catching.

Ask questions Questions are a great way to start conversations online and allow many users to express their opinions.

Be active on social media

Customer service

You can’t just sit and wait for people to comment on your social media platform if you haven’t bothered to comment on anyone else’s. Get active on social media and interact with other users by commenting on their posts and sharing their content. The more you communicate with others, the more likely they are to communicate with you. By engaging with your customers on social media, you can create a mutually beneficial relationship with them. Customers will feel valued by your business and you can gain important customer feedback to help you grow the business. BFM

People will be more likely to engage with a business if the business is friendly and responsive on social media. If your business comes across as negative or rude it could turn into a potential crisis and you could lose customers. It is therefore important to maintain great customer service at all times to encourage customers to build a lasting business relationship.

Catriona Pollard founded CP Communications in 2001 and has built it into one of Australia’s leading PR and social media agencies. In 2015 Catriona was named as one of the top 50 most influential women entrepreneurs in Australia as part of the Inspiring Rare Birds project and is the author of ‘From Unknown To Expert’.

Respond to questions and complaints The best way to maintain engagement with customers is by always responding to comments, questions and complaints on social media. If a customer comments on your profile and you ignore it, they may never comment again, or even unfollow you.

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Make it easy to share your content

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BFM | FEATURE

SPEED COSTS: HOW FAST DO YOU WANT TO GO? There’s so much more to motor racing than just being the world’s fastest billboard writes David Hardman, Team Director – Liam Talbot Racing.

here is also no doubt that speed costs, but there is true value to be found in the seduction of motorsport. It brings together motivated and passionate individuals working towards a common goal and with that in mind, it brings together the underlying success in a strong team. It is these partnerships forged together at the track that create such a strong commercial advantage, linking motorsport and industry in such a unique manner. It is this value that sees so many major international companies tied to motorsport to enhance their brand. It’s a multi-billion dollar global industry that unites man and machine. It’s a place where deals are struck and partnerships are developed. It’s also one of the last true gladiatorial sports, built on a business model with a very clear performance outcome, an outcome that gets tested every time you hit the track. Let me clear something up right from the start; I personally hate the word ‘sponsorship’ especially when it’s associated with the business of motorsport. We never deal in sponsorship’s; sponsorship by definition is a ‘gift in kind’. Our business is not a charity; it’s a powerful and highly creative marketing and branding tool. Here at Team LTR we always work hand in hand with all our team partners, it’s a fundamental philosophy! We co-create branding strategies

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as a creditable way to win more business and market share for them. We work incredibly hard at creating excellence throughout all facets of our business and developing powerful partnerships both at and away from the track. There’s any number of reasons why companies initially decide to get involved in motorsport. It could be to create a product or market distinction or to enhance brand development or recognition (there’s a good reason we’re racing with Ferrari for example – one of the most iconic brands in history!). There are few better ways to leverage relationships and introductions. Whenever you step inside a professional race teams garage you enter another world. There’s an energy about it; a buzz; the sights, the sounds, the smells, the passion, the technology, it’s pure theatre on wheels and once you’re on the inside you’re taken to a place that few people outside the sport can truly understand. It’s both addictive and thrilling at the same time and it becomes a part of your DNA! Motorsport is about creating optimal performance at the limit and it’s also about building a competitive advantage over the competition. But performance costs money and depending on the level of competition that cost could run anything from tens of thousands of dollars right up into the hundreds of millions at the

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FEATURE| BFM pinnacle of the sport in Formula One. There’s a number of different revenue streams that the teams use these days to create their overall racing budgets for the season. As an example here at Team LTR we’ll be racing the Kessel Ferrari in the 2016 Blancpain Endurance Series in Europe in addition to select blue chip endurance races in Australia and New Zealand. To maximize our investment we’ve created a 360 degree holistic approach to the business at hand; from introducing new partners to the sport to working with strategic media outlets worldwide to ensure regular team coverage right through to tailoring unique behind the scenes ‘money can’t buy’ experiences as a part of our investment package which will ensure our off track buy-in is just as important to us as our on track performance. After all what team partner wouldn’t like the opportunity to drive a Ferrari racecar on one of our drive days or enjoy a plate of our famous pasta cooked by our Italian chefs and served in our dedicated Kessel Ferrari hospitality suite over a race weekend given the chance? How often do you get to experience a field of the world’s most exotic supercars from Aston’s to Bentley’s, Lamborghini’s to Ferrari’s all battling it out head to head for ultimate on-track supremacy firsthand!

Below: Liam Talbot

As mentioned, investors get involved in motorsport for a variety of reasons however some of the more common ones I’ve noticed over the years • to enhance brand development and recognition • to leverage relationships • to leverage introductions. Let’s look at these in a little more detail. To enhance brand development and recognition It’s human nature to want to be recognised as the very best in your field at what you do whether as an individual or as a brand. A correctly executed motorsport partnership offers you an exciting high-end avenue allowing you to step out from the crowd and to create a unique point of distinction. To leverage relationships Sporting events are known to be fantastic neutralisers when it comes to relationship building. Motorsport is a perfect environment in which to cultivate partnerships and broker deals whilst enjoying being a part of a high-octane adventure. To leverage introductions Motorsport oozes power not just on the track but off it as well. In the last 12 months alone I’ve personally met Hollywood A- list actors, supermodels, musicians, politicians, world champions, sportsmen and any number of business luminaries from a wide cross section of industry. If it’s introductions you’re after it’s hard to go past an industry that thrives on the power of networking. Motorsport is an incredibly powerful and creative tool, if used correctly it can help you win more business and improve your market share. A race team is the platform that can be used to create a compelling brand story. Focus, teamwork, leadership, dedication, innovation, attention to detail, trust, excellence! What’s your brand story? BFM David has spent the better part of 20 years in the motorsport world. Under his guidance as a Team Director his teams have raced and won with manufacturers including Aston Martin, Audi, Ferrari, Lamborghini and Porsche including winning numerous international GT championship titles; they’ve also scored over 100 outright race wins in addition to countless podium finishes along the way. However it’s away from the track on the partnership side of the business where David truly shines. One of his core skills is helping new brands to leverage their investment in the world of professional motorsport. David set up Liam Talbot Racing (LTR) in partnership with Liam Talbot in early 2013. He’s always looking for ways to challenge and push the boundaries with his team both on and off the track.

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BFM | PROFILE

AN MBA WHERE YOU DON’T HAVE TO PUT YOUR LIFE ON HOLD

Adam Wadl

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PROFILE| BFM

Australian MBA enrolments have surged 42% in the last three years, fuelled primarily by online and fast tracked modes of study - and with good reason. Today’s professionals are busier than ever, with 670,000 Australians working more than 60 hours a week, significantly above the national average of 34 hours. This leaves little time for education and training, let alone one’s MBA aspirations, which can often take two years to achieve.

ne man who knows all about increasingly busy lifestyles and the challenges they pose to ongoing education is Adam Wadi, founder and CEO of Get Qualified Australia, the country’s leading provider of skills recognition and RPL. In fact, he is so acquainted with the world of fast tracked qualifications that, having personally experienced the process himself, he decided to build an entire business model around it. “Professional Australians are so preoccupied with establishing their work/life balance, that achieving their MBA becomes something they immediately place on the backburner,” Wadi says. “What they don’t know is that it’s now possible to literally cut the cost, time and effort of studying a leading Australian MBA in half.” The little known concept he refers to is Recognition of Prior Learning, or as it’s more commonly known in the industry, RPL. Established by the Australian Government in the early 1990s, the initiative works to formally recognise the existing skills and experience of individuals who have worked in their nominated profession for years. The end result? A nationally recognised qualification that enables its customers to save thousands of dollars and valuable years of study. Although it has existed within the education sector for well over three decades, RPL has remained relatively unheard of, a fact Wadi attributes to the lack of true industry focus and marketing afforded to the initiative. “Colleges and universities don’t promote RPL because, frankly, it’s not in their best commercial interests. Without having the specialist knowledge and resources required to properly facilitate a full range of RPL services, they’d rather have students pay and undergo the full course. That’s simply the truth of it.” Wadi’s first brush with RPL occurred in 2005 when he decided

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to move from a career in the hotel industry to one in education, utilising RPL to achieve a qualification in Training and Assessment. “I felt that RPL was such a beneficial concept, that I wanted all Australians to know about it.” And that’s exactly what he did, launching what would quickly become Australia’s largest RPL company. Now, in its fourth year of operation with over one hundred staff and 40 partner Registered Training Organisations (RTOs), Get Qualified Australia offers skills recognition for over 400 nationally recognised qualifications across 29 different industries, with one of its flagship qualifications being the recently launched Accelerated MBA pathway. “We understood the concerns senior executives and managers had when considering an MBA, and therefore decided to target this group and offset the challenges they face by offering a truly unique MBA solution, utilising the RPL framework.” In January 2016, Get Qualified Australia launched its Accelerated MBA Pathway in partnership with the prestigious Australian Institute of Management (AIM), presenting a truly fast-tracked pathway that enabled students to achieve maximum unit exemptions towards their MBA dream, while also walking away with two postgraduate qualifications. “I call it my signature dish. It’s something that I’m very proud of and have worked very hard to develop,” explains Wadi. “There is simply nothing like it in the market today. “Most senior level managers and executives are already competent at the graduate certificate/diploma level, and they don’t even know it. They certainly don’t have the formal certification to prove it, and that’s where we come in. By getting their skills and experience recognised through RPL, they can attain their Graduate Diploma in Strategic Leadership in as little as one month, and then use this

qualification to seek a guaranteed exemption of up to 6 units of their 12 unit MBA with AIM.” Yet as Wadi states, this is only one third of the total benefit. “Getting an exemption on half of your units means that you automatically save half the cost and effort of studying your MBA.” The average (median) cost of undertaking an MBA in 2016 is approximately $45,000. While this price can range from anywhere between $22,000 and $82,000, the vast majority of providers charge around $30,000 over 1.5 to 2 years of study. “The Accelerated MBA Program allows you to save, at the very least, $15,000 on your MBA fees, while taking an amazing 6 units worth of study off your plate,” explains Wadi. This, he says, presents a truly achievable way for critically time-poor professionals to complete the remaining 6 units of their MBA in their own time and at their own pace. To date, Get Qualified Australia has helped qualify over 10,000 Australians, and Wadi is certain that this number will only continue to grow. “There are so many skilled and experienced people out there who are eligible for a qualification and don’t realise it.” It is for this reason that Wadi says he is motivated day in, day out to make RPL his passion and work, his number one hobby. “It’s no longer work for me. It’s something I enjoy doing because I get to see the ways in which people benefit from it every day.” And how is the future looking? “Bright. Very bright, and I can’t wait to help an increasing number of professionals access the same opportunities thousands of others have in fast-tracking their studies with this revolutionised MBA”. To find out more about GQA and its Accelerated MBA Pathway visit: www.gqaustralia.com.au/fasttrack-your-mba BFM

BUSINESSFIRST MAGAZINE

Fast Fast track track Fast Fast track track your your your your

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HR| BFM

IT’S TIME TO SCRAP ANNUAL EMPLOYEE PERFORMANCE REVIEWS Multi national companies right down to smaller businesses are still wasting their time with yearly or six monthly employee reviews. This work practice is outdated and ineffective and can actually stunt business growth and drive down profits writes Mike Irving.

ealistically these 6 and 12 month staff reviews have simply become a tick in the box exercise that can be a burden to both parties involved. It lacks clear objectives and can often leave staff second guessing themselves while they wait to hear if they’re performed well at work or not. The whole process can be de-motivating for staff and often supervisors can feel compelled to give higher appraisal ratings, which employees may not deserve, in the hope of keeping staff loyal rather than defensive. Let’s not forget the hours spent conducting these meetings and writing reports, which equates to a large financial cost to the business without a demonstrated return. Some global companies like Deloitte are starting to realise how pointless annual staff reviews are and instead are giving ongoing feedback with a weekly ten minute check in which staff have embraced. Regular communication between staff and their supervisors, with no forms being filled out, is one of the best ways to improve performance amongst workers. It’s common sense really. If a boss is available to hear staff concerns or even new ideas on a regular basis then it’s more likely immediate action could be taken rather than 12 months down the track. Any concerns a worker may have won’t end up becoming bigger problems because they will be dealt with in the early stages. There is a lot of talk about ways businesses can improve employee engagement. In fact, it’s quite the buzzword/topic at the moment. The real problem is not employee engagement. It’s employer (or supervisor) engagement. Employees respond well to engaging supervisors and business owners. Annual

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reviews are an example of a lack of regular and consistent engagement from supervisors. One action I strongly recommend business owners and supervisors take is regular check-ins. I’m talking about a brief one on one informal meeting between a supervisor and employee. The regularity of these meetings will build stronger relationships. It will also improve morale as employees will know what they think is valued. Smart business owners hire people that are better than they are in specific areas so they can solve problems the business doesn’t know how to solve. This relationship is vital for both parties to engage in consistently to get the desired result. It’s the fundamentals of cooperation - a shared brightness of future, frequency of interaction and provokability (which is good quality communication even in the tough conversations). Consistent team meetings will create a culture where feedback and opinions are shared increasing engagement between everyone involved. Everyone on the team will start to look forward to these meetings and feel comfortable contributing with new ideas. This empowers everyone on the team to take ownership of and help to provide solutions to problems the team is facing. It also reduces the likelihood of separation and ‘us versus them’ mentality between different divisions of a business. It helps everyone to see that they are working towards the same objective and to solve problems as a whole. Personal Development is key in getting the most out of your existing staff. Training programs tailored to individual staff members on a one on one basis will improve skills and confidence. It will also boost morale as staff

will be excited by learning new concepts and work. They will feel challenged and valued. People who choose employment want more than just money out of the deal. They want to feel valued, be part of a team and they want to contribute. Developing people goes a long way in supporting that to happen. Acknowledging staff and their contributions are important. Staff likes to hear regularly how well they are performing at work and will often strive harder to achieve positive feedback. Creating a culture where each individual acknowledges themselves for what they get done will improve performance far more than any performance review ever will. A person’s perception of their own value and therefore their confidence, is either determined by acknowledgements from others, and / or acknowledgements from themselves. If your team is always waiting for acknowledgements from you (or their supervisor) their confidence is being affected and so is their performance. It’s far better for the source of that confidence to come from themselves and that is a cultural thing within a team. BFM Founder of Advanced Business Abilities, Mike Irving specialises in leadership and performance coaching.

BUSINESSFIRST MAGAZINE

BFM | TECHNOLOGY

Why the Internet of Things matters to your business One of the most significant trends that will shape business over the coming decade is the Internet of Things (IoT) writes Chad Gates.

ou might already be familiar with this term. But if you’re not, it refers to the ability of ‘things’ such as cars, devices and machines to connect to the Internet. By giving objects the ability to link to the web, we’ll be able to gather rich information about how they are used and work, so we can use them more effectively. According to research from IBM, nine billion devices are currently connected to the Internet; in 10 years time this is predicted to explode to 1 trillion devices. And, by the year

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2020 the IoT market is expected to be valued at $7.1 trillion. Examples include a vending machine that sends information back to a central office that lets managers know when it’s running low on an item so it can be refilled. In Dublin, IoT has been applied on a large scale to improve the public transport system. Buses and traffic lights are constantly connected to control the flow of bus traffic and ensure the shortest possible travel time for passengers. Such innovations mark the

evolution of intuitive technology, whereby the next phase of business technology involves providing workers with unique identifiers and the ability to transfer data over a network, without requiring human-to-human or human-to-computer interaction. Although the IoT is still very much in an embryonic stage, its applications are evolving rapidly into new areas and business models. For example, allowing people to “share” their internet tagged hardware with other people such

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TECHNOLOGY| BFM

as the bikeshare system offered by BITLOCK, or taking home automation to a whole new level via an innovation such as WEMO which allows you to control your home electronics from your mobile . No matter how you look at it, the IoT is going to be an important tool of the future and business can leverage the benefits. So it’s essential for organisations to start thinking now about how to integrate it into planning practices to take full advantage of its potential. Considering this now will also ensure the business stays abreast of emerging management trends. This will be important in assisting the organisation to maintain its commercial edge. So let us take a look at the five steps every business needs to take to start building an IoT strategy into operations. 1. Map the potential The first stage is to brainstorm possible ways the IoT could be used in to assist with business management. Let’s take a women’s clothing franchise as an example. The idea is to sit down and figure out how the business could operate more effectively if certain parts of it regularly sent information back to a central hub in real time. This might include data about stock levels at the warehouse and in-store. It might also include information about sales sent back to head office from the point of sale system. It also covers information about which staff made sales and the time of each sale. Imagine a scenario where a customer virtually picks, packs and ships their own purchases via the supplier’s intelligent backend software solution. This would be supported by the concept of an automated supply chain that is blended with elements of human intelligence to process and deliver orders. 2. Collection is the key The next stage is to assess how this information is going to be collected. Existing software might be able to gather some of this information, while it will also be necessary to invest in new software to close the gaps in terms of information that’s not yet being collected. For instance, large hardware rental vendors face substantial challenges monitoring and managing fleets of

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customer devices. Without a transparent way to keep track of faults in customer hardware and document service history for each unit, organisations often struggle to meet customer expectations and improve service efficiency. By embedding intelligent sensors in devices, businesses can monitor and document hardware faults and performance in more detail. This would help service providers of all sizes to greatly reduce unplanned maintenance activity and improve efficiency with more accurate information about customers’ hardware issues.

‘Big data is playing a central role in the growth of IoT, through its ability to tap into vast amounts of data generated by technology users.’ 3. Central collation It’s easy to assume the job is almost done once the business has completed steps one and two. But in fact, it’s really just begun. Because it’s not enough to simply collect this information. The subsequent part is to ensure the information is collated in a central place in a meaningful way, so it can be used to make better management decisions. At this point, choices need to be made about who receives access to the information, where and how it’s housed within the business’s IT system and how it’s organised. 4. Who’s responsible? The penultimate step involves making assessments about whose responsibility it is to examine this information and make decisions around it. Using the clothing chain as an example, someone in the business

needs to be given responsibility for analysing stock and sales information and calibrating the system to automate stock orders. For instance, weather analysis can now be embedded in certain business management systems that can alert the business to a predicted heat wave coming that means t-shirts and shorts will be hot items, or potentially a large amount of rainfall is predicted so the business can ensure sufficient orders of gumboots are in stock. Big data is playing a central role in the growth of IoT, through its ability to tap into vast amounts of data generated by technology users. As we begin to understand people’s activities, behaviours and preferences, a level of intelligent personalisation can be applied. Thanks to IoT, we now have the ability to transform generic interactions into more intelligent conversations based around smart information regarding the subject’s needs and desires. 5. Regular reviews necessary Finally, there needs to be a process in the business to regularly review systems to ensure the Internet of Things is always considered in new initiatives. For example, how will new staff be added to the system? How will former staff be removed? It’s an idea to include the IoT as a line item in management meeting agendas to ensure it is given top priority. The IoT has the potential to substantially ramp up automation in businesses so managers and staff can spend more time on income-producing activities, ultimately leading to higher income and profits. The businesses that will benefit the most will be those that pay close attention to the areas of the enterprise where this exciting new development has the ability to deliver the most benefits. So next time you’re planning for a management meeting, why not add the IoT to the list of actions that require discussion? If you start now, you’ll almost certainly be ahead of the competition, which will translate to a more successful business in the future. BFM Chad Gates is Chief Operating Officer, Pronto Software.

BUSINESSFIRST MAGAZINE

BFM | PROFILE

Beyond the master apprentice relationship Improving executive performance and building outstanding teams is a sometimes difficult, but always a rewarding prospect, Business First speaks with Executive Coaching International’s (ECI) founder David Gwynne and Chris Corneil about the best way to tackle business challenges.

ci founders David Gwynne and Chris Corneil have different backgrounds, but complementary skills. Gwynne began his working life as an industrial psychologist before taking a role as head of strategy implementation for a major international consulting firm and subsequently establishing his own management consulting business. He has worked for one of Australia’s largest privately owned conglomerates as an Executive Director, driving a business improvement program. He has also led a financial services business. Corneil was most recently the Australasian CEO of a large financial organisation comprising a $25 billion asset management business and in his 30 years in business has come to understand the value in balancing EQ, with IQ and management expertise to get the best out of businesses and their leaders. “I’ve spent about 25 years in the investment management industry,” Corneil says. “I’ve had a series of executive roles, including as CEO of a large financial firm for a number of years. I’ve been fortunate to have worked with two executive coaches during my career so I’ve actually drunk the KoolAid and been on the other side of the table. In fact, that’s where I first met David – he was my first executive coach more than ten years ago.” Today they work with a range of very experienced coaches who have helped forge eci’s reputation. As per the eci website, eci approaches its executive coaching

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practice by understanding the vast array of cultural and business challenges that executives face, we establish bespoke coaching programs and goals around: Leadership development, effectiveness and achieving business outcomes Personal and professional development during periods of disruption

“Clients leave meetings with their coaches more focussed on the high impact things they can do to deliver better business results.” Executive coaching has become an enormously saturated market. So how does a company in this sector stand out? It is a question eci posed to its clients last year. “The answers they gave were that we were highly personalised, that we conveyed, demonstrated and maintained high levels of trust and that our approach and our people showed the utmost integrity,” Gwynne says. “We build rapport quickly, and more importantly, we produce the results

that the organisations want to see and what they’re paying for.” The key really is to demonstrate a track record of successful results. Of being able to develop a program of significant progress within an organisation. “At the end of the day we expect to see that organisations are making significant progress having invested in executive coaching. The benefits are both tangible and intangible,” Corneil says. Eci believe the tangible benefits of coaching are the business results – more effective business outcomes. The intangible are the way people feel. “Clients regularly say to our coaches, ‘listen I’m really under the pump, I’m so incredibly busy, but I’m really glad I came here for this meeting today’. Or they finish the meeting and say, ‘that was a great meeting’. Clients leave meetings with their coaches more focussed on the high impact things they can do to deliver better business results. “These are the sorts of intangible benefits people experience after they’ve been working through our coaching process. That gives all of us an enormous sense of fulfilment in what we are doing and indicates we are having a positive impact.” A bespoke coaching program is developed for each client eci works with. Gwynne says these programs are developed with a number of dimensions in mind. “I like to start with the macro-dimension: where the world is and where organisations and

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PROFILE| BFM

their leaders find themselves. As executive coaches we have to come in with a good world-view around the forces of change, and how that impacts on organizations and the people in them. “An organisation faces all sorts of strategic challenges that you need to understand. You need to understand where the organisation sits and what the dynamic environment it’s in, whether it be government or private sector. The other dimension is to understand the culture of that organisation and where it has changed. So we spend time working with the organization to understand its culture. We then use a tailored, customised feedback process to get very granular about what change is necessary for that individual or that part of the organization. You have to get through a lot of backstory and you need to get down to the very specifics: what we need to do in next three months, six months, and so on. This early work ensures we are coaching in the areas that will help the executive to have the greatest impact within their organisation.” The problem is every leader is different and each one see the cultural development and business growth differently, but Corneil reiterates Gwynne’s point that no matter what the differences are, coaching success comes down to understanding the issues facing a business. The value of eci is the diversity and range of professional experience of its coaches who have lived these issues themselves. “It’s incredibly important to us that our coaches have sat in the hot seats of our clients, whatever level that is. So they know from first hand experience what it’s like: the pressures, the ambiguities that exist, and the speed with which business moves today.” Eci coaches work with leaders to help them pause and reflect on things that aren’t working well and things that can be done better. “That forced reflection which leads to a plan, which leads to action, is incredibly powerful for all

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Chris Corneil (left) and David Gwynne (right)

BUSINESSFIRST MAGAZINE

Rise and shine Wherever you sit on the corporate ladder, you have business goals. Whether you’re a team leader or a CEO, eci is here to help you achieve them. Our extensive corporate experience and proven track record can help you rise through the ranks and shine as a leader.

eci. Inspiring relationships.

eci.net.au

executives, and especially senior executives. That’s where we see executives really moving the dial and moving their organisations forward,” Corneil says. The backgrounds of the eci coaches means they have the content and the horsepower to deal with the issues, the ambiguities, the pressures, and the macro-dynamics of their clients. “More subtly, I think best practice in coaching is to be highly adaptable, highly contextual and to be able to deal with whatever shows up on the day,” Gwynne says. “The executive could arrive with a business problem, a personal problem or both; it can change intra-meeting. So the coach needs to be able to be adaptable and flexible and deal with the context in the market, the organisation, the speed of business, the flattening of the world. There are forces coming from all different directions and coaches need to be able to adapt and work with their clients to work through all that, and not be rigid and dogmatic. Corneil adds, “The other point about this is that the coach is there

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to help executives find solutions for their problems not tell them what to do in a master/pupil relationship. Learning at the foot of the master is really not the point of coaching, it’s to help executives learn, discover and be more effective along the way. Nor is it the purpose to sit and have a cup of tea and listen to the executive’s ongoing narrative. I think the final part of best practice is that it’s active and it’s focused on achieving real business outcomes.” It is that approach that has delivered so much success for eci. One of its achievements was realised just last week when a client received the biggest bonus of her life. “So we put the client on notice that we expected that from her again next year,” Gwynne says. “Our achievements are the successes of our clients. It’s when they get a promotion or when they successfully take on a very major challenge in a business and exceed expectations.” Eci strives to help across people’s entire lives. “It’s seeing our clients have better lives. Their well-being is improved, their engagement with

people is improved, their self-regard is in a good space and their resilience is better. Success can be measured organisationally, it can be measured financially, it can be measured emotionally, and we’re looking at all those as metrics when we are working with our clients.” For the eci partners, success is also measured by how quickly their own business is growing. “We’re nine plus years in, working across a breadth of industries and getting strong referrals and recommendations from our existing clients. Strong client advocacy and seeing people genuinely experiencing success are things that indicate that as a business we are on the right track.” Gwynne and Corneil are determined to continue to look over the horizon and with their coaches, continue to help executives successfully navigate and thrive in an increasingly complex and fast paced business environment. “As in professional sports, executives are realising 21st century business requires peak performance and this requires the support of a professional coach”. BFM

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PROPERTY| BFM

UNDERSTANDING THE RENOVATION PROFIT FORMULA When renovating there are literally hundreds of improvements, big and small, that people can make to increase the value of their property. The trick is to add more value than the actual cost of the improvements writes Patrick Bright.

he biggest mistake I see renovators make is failing to consider the needs and wants of their prospective tenants or buyers. When renovating for profit, it’s important to create a property that tenants want to rent and buyers want to buy. You have to begin with the end in mind. Renovating is more than marble finishes, soft lighting and designer furnishings; it’s a people business, not a property business. You can do a first-class renovation but if the property backs onto a rail line you’ll have trouble renting and selling it. That’s one of the reasons why property selection is so critical.

The Renovation Profit Formula The theory behind renovating for profit is what I call ‘the profit formula’. The formula is like the filter through which you view a property, so it’s important you understand it thoroughly BEFORE you start looking for properties to buy. It helps you to determine the potential profits in a property and thus set a maximum buy price. When you’re assessing a property renovation deal, always try to calculate what the value of the property will be once you’ve renovated it. Then subtract your total renovation costs which are all the costs of taking the property to that finished state from where it is today. Now work out your purchasing costs and subtract them. This is your break square figure. If you purchased the property at this price you make no money. But every dollar you purchase below this figure is potential profit in your pocket. In a nutshell the renovation profit formula is: End value, less renovation costs, less purchasing costs is your breakeven. Every dollar below that breakeven point is potential profit. It’s important to note that the total renovation costs include the holding costs and the buying and selling costs if you decide to sell the property.

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Here’s my 7-step plan for renovating property for profit:

STEP 1: UNDERSTAND THE RENOVATION PROFIT FORMULA: Whilst the renovation profit formula is a simple equation, determining the figures that you put into this equation is critical and takes skill and experience. You must be accurate when assessing the value of a property post renovation and itemise all renovation costs.

STEP 2: WORK OUT HOW MUCH YOU CAN AFFORD You need to have enough saved to cover the three major costs of renovating: the cost of buying the property, the cost of renovating the property and the selling costs or the ongoing costs to hold the property.

STEP 3: TARGET THE RIGHT PROPERTY TYPE

STEP 6: PAY THE RIGHT PRICE

Match your risk profile and ability to the right type of property. Before buying a property to renovate it is important to consider your risk profile carefully, including how comfortable you are with the possibility of losing money, or that the return may not be as high as you had hoped for.

Work out the maximum you can afford to pay and still make a healthy profit. One of the fundamentals of renovating for profit is that you buy well. If you’re not skilled in negotiation it would be a good investment to hire some help from a buyer’s agent.

STEP 4: MARKET RESEARCH AND PREPARATION

STEP 7: GET THE WORK DONE ON TIME AND BUDGET

This involves identifying suburbs and the types of properties within those suburbs with the greatest profit potential, researching property values, brushing up on design and decorating, and selecting a team of quality tradespeople.

STEP 5: SELECT THE RIGHT PROPERTY TO BUY

Avoid profit-shrinking cost overruns and delays. Make sure you use a spreadsheet to schedule the works. You need to ensure all the tradespeople do their work in the right sequence. Always add a buffer of a day or so around each tradesperson. This gives you wiggle room if there are delays. BFM

Look for a property with profit potential. Your first consideration here should be the condition of the property. As I explain in great detail in my Renovating for Profit book you’re better off searching for something rundown, but not totally derelict.

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 for clients and is the best-selling author of four Real Estate books in his “Insider’s Guide” series’.

BUSINESSFIRST MAGAZINE

BFM | PROFILE

Dr Elaine Saunders

BLAMEY SAUNDERS: THE HEAR AND NOW

We hear a great deal about the very important work conducted by Dr Graeme Clark in the field of cochlear implants and hearing. We hear less about the people on the research team with Graeme. In this issue of Business First we talk to Dr Elaine Saunders and Professor Peter Blamey about their work with Dr Clark and how they themselves have made great strides in this field through their own business Blamey Saunders.

hen he speaks of this time, you can sense the freedom Professor Blamey felt when he was able to break the shackles of public funding. That is not to put down the importance of the work many researchers do, but it does highlight some of the challenges they are faced with. When Professor Blamey started Blamey Saunders with Dr Elaine Saunders, who was also a member of Dr Clark’s research team, those challenges disappeared to be replaced by a different set of private business conundrums. We’ll get to those shortly, but first let’s have a quick look at how Blamey Saunders was founded and what it actually does. It began with an interest in issues of hearing loss. “I became part of Graeme’s re-

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search team and thus interested in the issues of hearing loss and how best to help people with different types of hearing difficulty at different ages and so on,” says Professor Blamey. “It was fantastic to be a part of that team, and Elaine was part of that team as well. When we get to around about the year 2000, which is 20 years after I first started working with Graeme, we decided that we wanted to concentrate on hearing aids and technology for hearing aids. That’s when Elaine and I started the first business, Dynamic Hearing which progressed well, and then Blamey Saunders came along with it later.” The foundation of Dynamic Hearing and Blamey Saunders paralleled the advent of new technologies in digital hearing aids in the late 1990s. According to Professor Blamey, since that time there has

been an explosion of new technologies and new algorithms. “The industry has responded to that in lots of different ways. The most recent things are providing new options for consumers in terms of tele-audiology and people being able to do things for themselves, where they previously relied on audiologists and professionals to do the work for them.” This brings us to the purpose of Blamey Saunders which develops industry leading hearing aids, and sells them direct to people for around half the regular price. Dr Saunders and Professor Blamey wanted to do something about the high prices commonly charged to people with hearing loss. This culminated in the award-winning IHearYou® system which enables people to tune their own aids via their computer or mobile phone.

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PROFILE| BFM “The technology that Graeme Clark invented back in the late 1970s for multichannel cochlear implants has developed into a very successful product for Cochlear, and that product includes inventions that came from my team and other research teams. Some of those same inventions are now used in the hearing aids that Blamey Saunders sells,” Professor Blamey says. The rise of the implant did cause some technological problems. “One of the problems we had in the late 1990s, was that there were a lot of people with a cochlear implant in one ear and a hearing aid in the other. This meant they tended to have a left ear audiologist and a right ear audiologist, because the technology was so different in the two ears. It doesn’t take a PhD to understand that that’s not the best for the customer.” “Plus you only have one brain to manage that,” Dr Saunders says. Following a conference in Lake Arrowhead California, Professor Blamey came back with an idea for a hearing aid that uses digital technology to amplify sound, keeping it audible and comfortable at the same time. Professor Blamey started to work with an engineer, Brett Swanson at Cochlear, and together they began to work on a solution with the digital sound processor. But the hearing aid side was totally different. Which is where the very well credentialed Dr Saunders comes in. Dr Saunders’ accolades include being awarded BioMelbourne Network’s inaugural Women in Leadership Award in 2015, Asia’s Leading Woman in Healthcare in 2011, the Victorian Pearcey Entrepreneur Award in 2011, and the American Academy of Audiology’s Award for Achievement in Industry in 2010. She was awarded the 2012 Melbourne Award for Contribution to Community by an Individual, and is one of Australia’s 100 most influential women (2015). She says with any innovation there is usually a reluctance to change. “When you make a big innovative change in an industry where there’s lots of trained people and clinicians, it’s actually quite difficult being an innovator. People don’t really want to change. You think of medicine as being the sharp edge of things, however there is too

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much training involved along the way, and it’s quite slow to get new technologies involved. We had a big challenge. “I think people talk about innovation as though it’s terribly easy. You innovate something and everyone wants it. The world doesn’t quite work like that for most things, especially in medicine.” Dr Saunders had a different role with Dr Clark. She was a biomedical engineer and an audiological scientist in the UK and was looking to re-enter the workforce after having four children. Dr Clark was looking for an audiological researcher and hired Dr Saunders to describe the clinical problems that we needed engineers and scientists to solve. “I used my skill, and indeed certainly developed a lot more skill around being able to frame clinical problems and clinical issues and express them in a way that enables engineers and scientists to use their abilities to solve problems. “It was really about defining what the clinical problem was, because engineers and scientists who are not dealing with clients don’t really know what the problem is, or how to lead the innovation.” Professor Blamey says that Elaine’s great strengths are that she’s a strategic thinker, but also a fantastic communicator. “Those two strengths are things that we make the most of together in the company. We overlap a lot. I’m a bit more numeric, I think about the numbers and a bit more about how we get from A to B. Together we decide what the destination is, where we want to get to. We both have a lot of experience of working with small teams, so managing people is a joint strength.” The pair is extraordinarily complementary and indeed complimentary of each other. “We have a very large degree of respect for each other, and we think quite differently, as Peter said. We do sometimes disagree, but that’s important, actually, because we have different perspectives. I think when we seriously disagree, it’s something that we both sit down and think about quite a lot, because we have high regard for each other’s thinking and rationale.” The first business as touched on before was Dynamic Hearing. That

is where the pair learnt how complementary their skills actually are. “I needed to learn a lot more about marketing and making good partnerships with potential business partners,” Professor Blamey says. “Elaine was, to a large extent, a mentor for me. We did a lot of traveling together around the world, and we visited probably every single hearing aid company in the world over the five years. We got to know them quite well, and that of course gave us the terrific experience base for running our own hearing aid company, which is what we’re doing now.” With Blamey Saunders the pair started by in-licensing the technology they had produced with Dynamic Hearing. Dynamic Hearing was a venture capital backed company that was owned initially by the University of Melbourne and venture capital. “We were the founders and we drove it, but didn’t own it,” Dr Saunders says. “We licensed hearing aid technologies and blue-tooth headset technologies all over the world.” Peter explains further, “One of the things that was very costly for the big hearing aid companies was that they were used to designing their own chips and electronics for their hearing aids. When digital technology came along, the price tag for developing a new digital chip was something in the order of ten to twenty million dollars. They were used to doing that every couple of years. The industry changed because there were open platform chip manufacturers, who would spend ten to twenty million dollars but make that open to small companies like Dynamic Hearing to use. So without us needing to

Professor Peter Blamey

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BFM | PROFILE spend any money on hardware development, we could put all of our cash into algorithm development and come up with world-leading ideas and world-leading hearing aids, with a very lean and mean cost effective business model.” That has translated to Blamey Saunders, which Elaine believes is Australia’s premier hearing aid company. Their ambition is to complement Cochlear’s success in cochlear implants with their success in hearing aids. It is a big goal, but Elaine believes there is nothing that has happened thus far that could deter them from that aim. Blamey Saunders is playing in the advancement of audio technology and has federal government support. “Blamey Saunders is providing leadership in three important areas: tele-audiology, clinical practice, and technology development,” Professor Blamey says. “We’ve just recently got a grant from the commonwealth government – Accelerating Commercialisation Grant. It’s for late-stage technology development and taking it to market. That’s a big

grant that will help us develop our manufacturing capability over the next 18 months or so. “What we want to do is develop strong hearing aid manufacturing capability here in Melbourne. We’re part way along that journey, with blue-tooth programmer device that we developed in Melbourne. That’s part of what we call the IHearYou system, which won the Social Innovation Award in the Good Design Australia awards in 2015. “We’re doing very innovative things with the technology itself, and that’s what’s enabling the big advances that we’re making in tele-audiology and in clinical practice. We’re taking the pain out of buying a hearing aid and doing all the things that make it easier for customers.” Now, with the technology moving forward, Blamey Saunders is concentrating more on commercialisation and the business model. This includes gaining the customers’ trust and confidence in the technology. “We can demonstrate to somebody within half an hour of getting started that the hearing aids will benefit them by improving their

speech perception in quiet, and we can demonstrate to them the advantages of wearing the hearing aids in a noisy environment,” Dr Saunders says. “So you know, the customer can see for themselves that the device works. We do this without requiring a lot of expensive equipment or highly trained staff. That means a cost effective business with those savings passed onto the customer without them having to go to a clinic.” Professor Blamey says Blamey Saunders is now at a point of transition. At the moment, the hearing aids they sell are actually manufactured in Thailand. “We’re changing that so that in the future most of our hearing aids will be made in Australia. But we’ll probably still work with partners from outside Australia as well, just to provide a bigger choice in the models that people can buy.” That is a pretty substantial business model and is a long way from hunting for grants as a researcher. As the evolution unfolds for Blamey Saunders, it is on a path to achieve its aim of becoming as well known and reported as Cochlear. BFM

Small in size Big on performance Blamey Saunders’ small, smart hearing aids contain powerful technology used in the bionic ear to make listening easier in any environment. They work with IHearYou®, an award-winning system that lets you easily adjust your hearing aid settings to your surroundings with your smartphone - wherever you are. And they come with free, unlimited expert support. Blamey Saunders make premium hearing aids more accessible; they provide them direct so you can save thousands.

To learn more, call 1300 443 279 or visit blameysaunders.com.au today.

LAW| BFM

VENTURE CAPITAL PARTNERSHIPS REFORM Venture Capital Partnerships are an instrumental source of funding, particularly for smaller start-ups without access to capital markets writes Sarah Bartholomeusz.

Sarah Bartholomeusz is the founder of You Legal.

enture Capital Partnerships are investment vehicles that provide tax breaks for investments in highly innovative and fledgling start-ups, making them valuable drivers of innovation within Australia. They are however somewhat limited by regulatory barriers and eligibility requirements making it difficult for investors and managers to engage in a broader range of activities. Following last year’s Senate Economics References Committee, the Government released an Innovation Statement outlining several significant initiatives with a view to creating a long term strategic framework to support innovation in Australia. One of these initiatives includes new arrangements for Venture Capital Limited Partnerships (VCLP) with a special focus on Early Stage Venture Capital Limited Partnerships (ESVCLP). From 1 July 2016, new ESVCLPs will be entitled to a 10% non-refundable

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tax offset on capital invested during the financial year. The maximum fund size will also be increased from $100 million to $200 million. Additionally, ESVCLPs will not have to divest of an investment once the investee’s value exceeds $250 million, instead allowing for a proportional tax concession once that value is exceeded. Further changes to both Venture Capital programmes include relaxing eligibility and investment requirements. Investee entities will now be able to acquire new businesses as ‘boltons’ enabling them to expand their investment activities. ESCVLPs and VCLPs will also be allowed to invest in a holding company which has existing interests in multiple subsidiaries. Regulatory restrictions will be removed to make it easier for ESVCLPs and VCLPs to access funding from managed investment trusts. Activities by managed investment trusts will still be subject to appro-

priate integrity measures but it is hoped that the new provisions will encourage them to participate in the venture capital market. One of the barriers identified by the Committee were the existing restrictions for foreign venture capital funds that prevent them from holding more than 30% capital. The new legislation will remove these restrictions for eligible foreign investors making VCLPS internationally competitive and attracting greater levels of venture capital investment. These new changes to the legislation are expected to take effect from the new financial year. BFM Sarah is the founder of You Legal. She has an active practice in corporate and commercial law, giving peace of mind to growing businesses at all stages of their lifecycle. She has over 10 years of experience as a lawyer including providing complex, high level legal & corporate governance support to ASX listed companies.

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BFM | PROFILE

THE BLUEPRINT FOR CORPORATE EMOTIONAL SUCCESS

Renowned psychologist and international best selling author Daniel Goleman says, “emotional intelligence accounts for 80 percent of career success.” Why is it then that many business leaders fail to embrace their emotional intelligence or even their empathy towards others, when it is the best way forward for their business? Business First speaks with accelerated behavioural consultant and founder of Eclat People Solutions (EPS), John Lane-Smith, about how leaders can use emotional intelligence to get the best out of their people.

John Lane-Smith

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If we can indulge in one more quote by Daniel Goleman, he says: “people’s emotions are rarely put into words, far more often they are expressed through other cues. The key to intuiting another’s feelings is in the ability to read nonverbal channels, tone of voice, gesture, facial expression and the like.” That doesn’t come easily, but it is a truism of today’s workplace that emotional intelligence is a vital part of successful leadership. Enter John Lane-Smith, a man who has spent his lifetime studying leaders and managers, but found a disturbing trend: “there are some seemingly brilliant people, academically and technically, who have little idea about motivating or bringing the best out of individuals or teams. In fact, in the worst cases, they can be the key reason why good people choose to leave.” Lane-Smith has spent the last 30 years analysing behaviour and using the world’s leading profiling systems to identify what makes people tick. He has studied over 13,0000 people to learn their uniqueness, and seek to make sense of their drivers. Yet, before you can start learning about other people, you have to discover your own drivers. “It’s often said it’s not until you lose, or nearly lose something, you start to appreciate it” Lane-Smith says.

Thirty-two years ago, LaneSmith almost lost his life. “I was striving to be the best executive I could be, but I nearly lost it all falling asleep whilst driving.” Lane-Smith careered into a power pole in excess of 100km/h, with no airbags. The pole drove the steering wheel into his face and the engine compacted his thigh into 5cm pieces. The seat belt then collapsed his lung. “A message delivered to my home from a policeman was that my deceased body had been taken to the local hospital. However, that was not the case as miraculously the rescuers, surgeons and nurses managed to save and rebuild me. “The experience was a major wake up call. It gave me an urgency to appreciate life and make every second count.” Following the accident, LaneSmith was asked to tell his story and share his newfound insights as a keynote speaker at major conferences and conventions around the world. His book, SOS Secrets of Success, promoting positive change that enhances personal and business success, became an international best seller. It drew on his nine-day recovery, defying the three to four months that had initially been predicted. Meanwhile, through word of mouth, EPS was building a reputation as the go-to counsel to create team cohesion.

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PROFILE| BFM

EPS advises businesses on everything from identifying the right senior professionals for strategic hires, to getting the best out of existing executive teams. So much of this work comes down to emotional intelligence (EI), an ability to recognise and be aware of ones emotions, and those of the people around you. By understanding these emotional drivers, one can guide thinking and behavior to best match these to motivate and engage with other people more effectively. EPS strives to identify these personal drivers and predict where people will be naturally disposed to EI and also know where their gaps lie. The business was founded on the back of Lane-Smith’s frustration with traditional management practices that lack an awareness and sensitivity of people’s emotions in a professional context. “Managers who lack emotional intelligence tend think the only way of achieving progress if their staff are underperforming, is to just bark louder. The difference between being a good manager or leader is the ability to generate what I often refer to as ‘follow-ability’.” According to Lane-Smith, ‘follow-ability’ is developed through learning how to communicate with empathy. The most powerful way of doing this is to identify the language that will cause people to quickly understand, want to cooperate and be influenced and motivated by. This is the unique advantage EPS achieves for its clients. EPS was founded to help managers find their own emotional intelligence, so that they can then help their staff be the best employees they can be and future leaders in the process. The programs employed by EPS “can predict, with certainty, what their drivers are going to be, and what their areas of enhancement should be.” The programs help organisations face their biggest challenges when it comes to finding the best talent to help build on their foundations. “A key challenge companies face is knowing how well a person is going to gel with the team and whether they will, as a manager,

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enhance the team’s productivity” Lane-Smith says. “Senior, well qualified candidates bring experience that can be identified and verified. However, how can you find out how they are going to perform after they start? Who’s going to actually turn up to do the job? How do you know they will be the best fit? And how do you know how to best engage with them to realise their full potential?” These are the most important questions a business can ask itself when searching for the right candidate. EPS takes businesses and their employees and works with them in a way that brings about these answers, identifying the right language that will attract the best people. “It’s not just about finding the right people, it’s knowing the best onboarding techniques that will work uniquely for that candidate. Most would find it difficult to tell the employer specifically how they would like to be treated. The best people are people who are confident and aware of their strengths. However, are also aware of their weaknesses and need for development and know the areas where they need to be supported.” “Obviously, experience is important, as are qualifications. However, when you can identify the key attributes that are needed, the correct wording will automatically discount the majority of candidates that are not driven in the way the company requires.” It is not just new hires that should hit the right emotional intelligence notes. Just as importantly, if not more importantly, senior management must be in a position to develop and utilise its own EI. “A great article I read the other day interviewed 40 CEOs and asked what was the one question they would always ask a candidate. Time and time again, it came down to trying to find out if they could demonstrate passion. Passion to research and show interest in the company they’re applying to; ultimately passion to contribute to the success of the company. Just passion, generally. So, you have to ask yourself, why is that important? And it’s often said it’s hard, if not impossible, to enthuse others if you, yourself, cannot demonstrate

enthusiasm and cannot inspire others to greatness, or at least lift from mediocrity. “The motivation to develop and succeed varies vastly from one person to the next. Some people continually ask themselves, ‘What am I doing here, what am I trying to achieve?’ And others seem to drift through life seemingly asleep, letting life happen to them. The

THE EPS TALENT MANAGEMENT MATRIX What does EPS do to help get the best out of people? The following tables shed some light.. Identify – Build a clear picture of what attitudes and motivations work best in a role. Model – Evidence based research of specifically what is/has worked and has not in a role. Attract – Use key words that the right potential applicant will be drawn to. Rank – Save time by instantly ranking multiple applicants for the best fit. Interview – Prove known internal drivers. Recruit – Know what you are getting from day one. Predict – Natural passion areas and where the person will need more energy to perform. Strengths and Gaps – Know specifically how & to what extent they will drive and avoid. Onboard – Understand how to treat and speak with them to have them in their zone. Engage – Quickly get their involvement and focus on what you want on their terms. Enthuse – Know how to state tasks and directions in a way that will lift and drive. Interface – Know potential pitfalls / differences that will cause issues before they do. Inter merge – Demonstrate value early of where the person will bring added value to peers. Talent Map for future leaders – Know who to look for & specifically what drivers to coach. Appraise – Identify data against actual performance to give key aspects to focus on. Develop - Have agreed measurable areas of development. Coach – Have a valid, stable matrix to guide talented coaching. Promote – Know what to look for & be prescriptive about the needs in new role. Know what to avoid/best fit for role when looking to cross-fertilise talent. Identify strengths & gaps in teams – Predict the pitfalls and drivers of herd mentality. Build high performance teams – Use the internal natural drivers to self ignite performance. Counsel leadership – Precise counsel on corporate behaviour to build ‘follow-ability’. Counsel senior management – SMT or individual counsel on how best to sell new strategies. Counsel on outplacement – Give the individual a legacy of value for the future.

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r g e o e s f d s a d o

t g p s n n s e e l g h d

“John Lane-Smith creates critical conversations that save your business money”

John Lane-Smith at Eclat People Solutions (EPS) helps hire the right executive staff and has helped some of the biggest companies build better, stronger management teams through his bespoke Corporate Counsellor service. He can help you, too.

EPS

The Ar t of Asser tiveness Jan Burnes – Februar y 24

Professional and Personal Life Management

John Lane-Smith – March 2

Éclat People Solutions Pty Ltd

Eclat!People!Solutions! ! ! !

How to Deliver an Impressive Presentation Jan Burnes – March 16

greater amount of people look for recognition that they are at least on track, that their input and ideas Feb/March 2005 are appreciated, and that • • • • • • • • • • • • • • •they’re ••• working on the right priorities. The The Boat House more enlightenedby people want the Lake , to know that their efforts are making Canberra a difference.” EPS focuses on leaders and educates them on precisely how to create critical conversation with their employees to help them understand how they are making a difference. A key benefit that well informed, critical conversations can achieve, is the answer to the conundrum ‘if only I could get Jacob to be more motivated’, ‘if only Sam would get on with Lucy’.” “There are many intelligences, however, EI would have to be one of the most powerful. Can you imagine taming a hurricane, directing a tsunami, controlling a volcano? “Emotional Intelligence is the most uniquely misunderstood, multifaceted powerhouse of the human system. Just like a raging, out of control bush fire that can be

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started by a smouldering cigarette butt, emotions can be generated from a mere smell, a facial expression, a misunderstood tonality. It sparks an emotive memory, or exquisite joy or deep despair, and can bring the emotion to life in the now.” Getting emotional intelligence right is the challenge. It can save time, build higher productivity and generate cohesive teams that harness human endeavour, creativity and innovation. “Gone are the days of piecework where something has been made time and time again. It’s not any more about building a skill and working on it for the rest of your life. It’s now all about what I call ‘intelligence farming’: identifying and harnessing the uniqueness of employees, and making them passionate about succeeding in their business. When people are working for their passion, they become extremely productive. Whatever they’re good at, not just what’s in their job description, not just

Contact EPS to increase performance, build superior team cohesion, drive innovation and profit. www.EPS-Aus.com

to make money, but using group intelligence to achieve a shared goal. “When an executive is able to harness their own intelligence and other people’s true potential, it’s like super charging their endeavours. And the more senior the executive, the more powerful the influence.” Lane-Smith says organisations gain value right across the board, from the lower levels of the organisation all the way up to CEO, by understanding how to successfully communicate and engage with each other in a unique way. Ergo, successful organisations are those that know in which capacity someone will be naturally motivated to work, how long an individual will be happy in a role before they need to change or how to position a work type to play to team member’s strengths. It all comes back to emotional intelligence and the ability to recognise signs for change by helping people understand their own unique strengths and abilities. BFM

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IT| BFM

WHY TIME MATTERS IN A DISASTER Natural disasters, cyber-attacks, human error or disrupted site access may impact your ability to conduct business. There is little doubt that disaster recovery, or business continuity as it is now known, is a requirement for almost all businesses. Our reliance on IT systems has made a solid, repeatable and tested business continuity plan even more critical to organisations writes Gregory Medwell.

o one doubts the importance; in fact many enterprise and government organisations will not transact with partners that do not have a business continuity service. Business continuity is not a single product, more a cyclical process – an organisation should review its business continuity plan whenever it introduces changes to the business or alters its business priorities. However one critical element to a business continuity plan is time. There are many questions pertaining to time when it comes to your business continuity plan. How long will it take for your business to be functioning? How long can you afford to be down? How long until your customers lose trust in your ability to deliver? The list is endless, and in reality we are just trying to limit the impact of unplanned downtime.

Business Impact Analysis The impact of downtime is crucial to understanding the time implications. Across an organisation these might be lost sales, increased expenses (such as outsourcing, contracting costs or overtime), regulatory fines, reduced customer satisfaction or brand damage. A Business Impact Analysis is a detailed questionnaire that identifies critical business processes, resources, and relationships across an organisation and can help in quantifying the potential impact if a disruptive event occurs. The goals of the Business Impact Analysis is to determine the most crucial business functions and systems, the staff and technology resources needed for operations to run optimally, and the time frame within which the functions need to

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be recovered for the organisation to restore operations to normal. Once these are known, the next stage is to design a business continuity plan that meets these objectives.

RTO and RPO There are two important acronyms that business continuity providers will talk about, RTO and RPO. They are the Recovery Time Objectives and Recovery Point Objectives. During a disaster, it is a fact that most organisations will lose some data. The Recovery Point Objective aims to address this by asking how much data you can afford to lose, or what your organisations tolerance to lost data is. Usually the data will need to be re-entered, and it can be compared with an author writing a long report on an old computer that is likely to crash. How often would they backup their data? Or better yet – what is the maximum time between backups that you would be comfortable with? Your answer here might be every two days, which would translate to an RPO of 48 hours. You may find that different processes and systems have different RPOs. An ERP system may have a premium 4-hour RPO, whereas a 36-hour RPO may be suitable for a development server. Custom RPOs can help your budget by only paying premium prices for the systems that matter most to your organisation’s operations. Recovery Time Objective is the target time you set for the recovery of your business activities after a disaster event has occurred. It is defined as the maximum period for which the business can be out of operation without significant risks or losses. Again using the author example, how long would they like

to wait until they can begin writing again? But before you answer this you need to consider the impact on your business, revenue, customer retention and brand. The objective of RTO is to calculate how quickly you need to recover, which then dictates the plan you need to implement and the overall budget you should assign. Again this really depends on what systems and processes are most important to your business. Typically most important systems to your business will be your sales and fulfilment systems, which typically have the best RPO you can afford. The major difference between RPO and RTO is their purpose. The RTO is usually large scale, and looks at your whole business and the systems involved whilst RPO focuses just on data and your company’s overall resilience to the loss of it. While they may be different, you should consider both metrics when looking to develop an effective continuity plan. A premium service may have an RPO of four hours but an RTO of 2 hours, meaning the IT recovery specialists having a two-hour window to restore data that’s no more than four hours old. But in the end it comes down to time. How long can you afford to not be doing business? How long your customers wait? What is the financial impact to the business? Analysing the impact and planning accordingly will improve the resilience of your business, instil trust in your business and overall take better care of your customers. BFM Gregory Medwell is Business Continuity and Data Centre Manager at Interactive.

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BFM | PROFILE

Finding health and wellbeing in the workplace Assure Programs was founded in Brisbane in 1991, and is now one of Australia’s leading providers of Employee Assistance Programs, Critical Incident Support and Organisational Development services, with a national network of nearly 700 psychologists. Business First spoke with CEO Chris Smedley about workplace psychology and the need for such an organisation. Business First (BF): Chris, what is the purpose of Assure Programs? Chris Smedley (CS): Our key focus is on improving the productivity of organisations and enabling employees and workplaces to thrive and excel – to be the best they can be. There is a proven correlation between these outcomes and clinical quality, which is why Assure Programs is the only national EAP provider that exclusively uses 5-years’ qualified psychologists. BF: Why do businesses now need to think about mental health and wellbeing more broadly? CS: According to independent research, 20% of Australians will experience a mental health condition in any given year, and these conditions tend to affect people during their prime working years. Contrast this with the current utilisation of traditional EAP services, which is typically around 5% of employees per year across all industry sectors. This suggests that many people are either unaware they or their colleagues may have an issue, or are not accessing their EAP services when they should. Research also suggests that an employee who is depressed or otherwise impacted by a mental health condition or stressful situation, costs their employer on average $10,000 per annum in reduced productivity or absenteeism, and that does not include the costs of resolving employee relations issues or replacing staff who leave. Indeed, for every $1 businesses invest in effective mental health and wellbeing programs, they generate an average return of $2.30. This underuse of traditional EAP and the financial costs to busi-

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nesses of unresolved issues are an alarm call to CEOs that they should be investing in mental health and wellbeing, and in particular in proactive organisational development strategies. BF: How are workplace psychology services changing in relation to wellbeing challenges? CS: Firstly, EAP and OD (Employee Assistance Programs and Organisational Development) services cover a broad spectrum, and are no longer just about reacting to situations when they have happened. There is a range of proactive psychological interventions businesses can make to develop skills and procedures so they can either prevent situations from occurring or mitigate their impact. And beyond this, positive psychology interventions allow businesses and employees to build on their strengths so they can maximise their wellbeing and productivity. We describe this spectrum as moving from struggling to coping and from coping to flourishing. Secondly, evidence-based best practice is that psychological interventions deliver better outcomes if they occur at all levels of an organisation including executives, leaders, teams and individual employees. This is referred to as a systems approach, and each of these cohorts has an important part to play in creating a productive workplace. BF: What trends is Assure Programs seeing in its customers and across industry sectors? CS: Assure Programs has about 300 corporate customers including many blue chips organisations spanning virtually all industry sec-

tors. Together they employ nearly 300,000 people, and in most cases we also cover employees’ families which means we look after the best part of a million Australians. Many of our customers are taking a more holistic view of health and wellbeing in the workplace, with a single strategy spanning the spectrum of both mental and physical wellbeing. This is leading them to form strategic partnerships with companies like Assure Programs, with long term objectives, investment and expected returns being driven from CEO and senior executive levels. With a strong focus on ROI, our customers are also becoming more savvy about the clinical quality of workplace psychology services. So whereas in the past some may have regarded EAP as a tick-the-box exercise and sought out the cheapest provider, many of them are now taking a broader view of the long term value of using experienced psychologists to deliver clinical best practice, and investing at all levels of their organisation from executives to leaders to teams to individual employees. Another trend that spans all industry sectors is a focus on societal issues affecting people’s personal lives – two thirds of issues for which employees access EAP relate to their personal lives not their workplace, although such issues may still have significant impact on their productivity at work. Such societal trends include domestic violence and other relationship issues, diversity and inclusion, self-harm, addiction and financial stress. In terms of specific industries, some of the trends we are seeing include:

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PROFILE| BFM

ventions that can help whichever psychosocial risk factors have been highlighted by the customer, targeting every level of the organisation including executive strategy, leadership capability, team dynamics and individual employees. In terms of positive psychology – moving organisations and individuals from coping to flourishing – Assure partnered with Professor Martin Seligman, the founder of positive psychology, over a number of years to develop Australia’s best in class, evidence based positive psychology service. BF: You were with Bupa for 12 years, what did your time at Bupa teach you about the industry? CS: I worked on the design and delivery of corporate health and wellbeing services, which taught me the importance of establishing quality relationships with both employers (who typically make the purchase decision) and employees (whose health and livelihoods we are supporting). It also taught me the impact that maintaining a healthy, engaged workforce can have on an organisation’s productivity and financial performance.

Chris Smedley

- For the legal, finance and other professional services sector: Increasing concerns with workload and life balance, and poor management practices such as bullying. - For the mining, resources and support services sector: FIFO work patterns leading to relationship issues, unhealthy diets and lifestyles, drug and alcohol abuse. - For businesses involving faceto-face customer contact: Dealing with difficult or aggressive customers such as drug addicts or armed robbery. BF: How is Assure Programs addressing/servicing this changing need? CS: We partner with organisations to combine best practice traditional psychology methods with the emerging evidence based science of positive psychology to create a uniquely different service.

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To help our corporate customers assess their needs and target their investment effectively across the broad spectrum of mental health, Assure Programs have developed a unique framework called “The Backbone of Mental Health & Wellbeing in the Workplace”. Using clinically proven best practice, this framework maps out 8 psychosocial risk factors that are important to any business and its employees. It then allows business leaders, without any psychology knowledge, to assess the health of their business against each of those 8 risk factors using symptoms they can easily observe in their workplace. This health check will clearly highlight where they may want to focus their effort and investment, either to address areas of high risk or to enhance and maximise areas of strength. Assure Programs then offers a range of psychological inter-

BF: How can organisations detect poor mental health within their workforce? CS: There are a number of warning signs that an employee may be experiencing poor mental health. At an individual level, these warning signs include changes in employees’ emotional responses, erratic behaviour, obsession with specific job duties, working longer or fewer hours and withdrawn behaviour. At a team level, warning signs can include increased unplanned absences, increased use of negative language, team conflict and reduced levels of performance. BF: What strategies can organisations put in place to deal with and treat employees with poor mental health? CS: The most important thing to remember when designing strategies is that everyone has a role to play, from executive leadership down to individual employees. Mental health and wellbeing strategies should address the following eight key psychosocial risk areas:

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BFM | PROFILE - Employee life balance and workload management - Competency and performance - Psychological support - Organisational culture and team dynamics - Recognition, reward and growth - Change facilitation - Employee involvement and influence - Physical and psychological safety These eight focus areas are incorporated in Assure Programs’ “Backbone” framework, and a strategy that combines them will provide organisations with a well-rounded, holistic mental health and wellbeing plan. At a tactical level, organisations also need to put in place systems to support and equip leaders to effectively recognise and respond to early warning signs and to work with employees to put adequate support plans in place. BF: How does Assure Programs deliver effective results? CS: We recently undertook a study

with over 400 employees within our customer organisations to evaluate the effectiveness of EAP to resolve symptoms of psychological distress. The study, conducted by a third party provider, assessed employees against the Kessler Psychological Distress Scale (K10) and explored the impact of EAP counselling on work performance. It also evaluated employee workplace participation against the Global Assessment of Functioning scale (GAF). The results of the study showed that, on average, employees who access the Assure Programs EAP service improved from a score of 25 (likely to have moderate symptoms) to a score of 18 (likely to be well). This improvement suggests that employees who access EAP are likely to return to functioning at the same level as the general population. Furthermore, 84% of survey participants reported that EAP was the key contributor to resolving their issue. So these two independent measures of change in employee func-

tioning show a trend of significant improvement for those who accessed Assure Programs’ EAP service. Results also show that those who access EAP increase their work attendance and productivity, and improve the quality of their work. BF: What risks do employees with poor mental health present to managers? CS: There is a range of workplace impacts associated with poor mental health, including absenteeism or presenteeism, conflict, resentment and frustration with colleagues. These impacts can pose real physical as well as psychological risks to managers, colleagues and customers. Assure Programs offers a range of leadership development and support services to equip managers to successfully recognise, respond and support employees showing signs of mental health conditions. Our Manager Support Program provides leaders with tools to mitigate these workplace risks. BFM

Your partner in building the backbone of M E N TA L H E A LT H AND WELLBEING EMPLOYEE LIFE BALANCE AND WORKLOAD MANAGEMENT

EMPLOYEE COMPETENCY AND PERFORMANCE

PSYCHOLOGICAL SUPPORT

ORGANISATIONAL CULTURE, LEADERSHIP AND TEAM DYNAMICS

RECOGNITION, REWARD, GROWTH AND DEVELOPMENT

CHANGE FACILITATION

DID YOU KNOW... 45% of Australians will experience a

mental health condition in their lifetime, and these conditions tend to affect people during their prime working years(1).

Almost $10,000 average cost per year

of an employee with untreated depression, in terms of reduced productivity and absenteeism(2).

IN THE WORKPLACE

Focusing on clinical quality,

Assure Programs

is Australia’s only national EAP and OD provider that exclusively uses psychologists with over 5 years’ post-qualification experience.

x2.3 Return on Investment – for every $1

invested in a successful mental health action plan, an organisation can expect an average return of $2.30(3).

EMPLOYEE INVOLVEMENT, INFLUENCE AND ENGAGEMENT

PHYSICAL AND PSYCHOLOGICAL SAFETY

Data sources: 1 . ABS (2007) National Mental Health & Wellbeing Survey 2 . Hilton, M (2004) Assessing the Financial Return on Investment of Good Management Strategies and the WORC Project, University of Queensland 3. PwC (2014) Creating a Mentally Health Workplace

Partnering with Australia’s leading businesses for over 25 years to improve workforce wellbeing, team performance and leadership capability

FEATURE| BFM

Australian Companies Struggle with Social Media Content Creation A whopping 87 percent of Australian companies think that social media provides a competitive advantage.

owever, they face a variety of challenges in harnessing that potential. That’s just one of the findings from Hootsuite’s Australian Social Media Management Study which examined the perceptions and experiences of businesses using social media in Australia. Hootsuite surveyed more than 100 executives and managers at businesses in various industries across Australia about their social media usage and challenges in 2015. They found that content creation on social media platforms is the biggest challenge facing businesses in Australia, as cited by 30 percent of survey respondents. Other barriers include social media measurement (18 percent) and simultaneous content distribution across channels (15), among other issues. For Australian businesses, brand awareness is key. A full 61 percent of respondents indicated that it’s their main social media objective. Other priorities included increasing brand loyalty (13 percent) and increasing sales (12 percent). More than three quarters of respondents recognized the competitive advantage that social media provides for their businesses and 61 percent are looking at increasing their use of social media. The majority of respondents surveyed (58 percent) do not actively use a social media management system. This underscores the need for more education and resources to help Australian organisations tap into the full power of social media. Facebook continues to lead the pack in terms of social network use for Australian businesses with 29 percent of respondents indicating that they use the platform to post content. Facebook is followed by Twitter (16 percent) and Instagram (15 percent). The findings provide a lot of insight into the social media use of Australian companies. Roger Graham, Hootsuite director of growth and marketing, explained what the results mean: “Australian businesses understand the benefits and competitive advantage that social media provides, however continue to struggle with fully capitalising on this trend. There’s great opportunity for companies to embed social media as a fundamental component in their marketing efforts.” BFM

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BFM | PROFILE

Laura Ruffles

Flying high It has been an exciting period of growth for Corporate Travel Management. The company has demonstrated year on year growth since its inception in 1994 despite recent challenges in the local economy. Jonathan Jackson spoke with CEO Australia & New Zealand Laura Ruffles about the company’s growth.

hen Jamie Pherous left his high-flying corporate job in the mid 1990s to set up, what was at the time, a small travel management business, little did he know the behemoth he was creating. It started well for Pherous. On reflecting upon winning his first client, he told the Australian Financial Review last year: “I’ll never forget it because you work so hard and you have one shot. I remember to this day how excited I was to get

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that opportunity. And we also knew once we had that opportunity, we were never going to let them go and we were going to look after them. I remember the very first time they phoned us to go firstclass on trips around the world.” Since then, CTM has enjoyed a meteoric rise that shows no signs of abating. Perhaps Pherous’ entrepreneurial spirit rubbed off on the business and its staff as it continued to grow and that is the reason for the

company’s continued success, or perhaps it’s just a good idea that had a lot of legs. Whatever the reason, the $2.5 billion in travel bookings is a substantial measure for this $1.3 billion capped ASX listed entity. Supporting Pherous in driving the company’s growth strategy both at home and around the globe is CTM’s CEO Australia & New Zealand and Global COO Laura Ruffles, who was appointed to the position in March 2015.

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PROFILE| BFM

When she joined CTM in 2010, it was still a small private company with just 5% of market share and five offices across Australia. Laura was a key player in guiding the company through an extensive growth period, having played key roles in similar corporate travel businesses in Australia and Europe. Laura says the success of CTM is due to an unchanged value proposition. “We offer a high value service and that hasn’t changed. The business model is focused on how we can demonstrate a return on investment to our clients. If you need emergency assistance from the other side of the globe, there’s a familiar voice on the end of the phone 24/7. If you need to make a last minute change to your trip while you’re on your way to the airport, we can do that too.” This is a service industry that has changed dramatically due to the rise of technology solutions and CTM has embraced each and every one it feels can enhance its business. So important is the rise of technology to corporate travel, that CTM has invested in its own tech development department, CTM SMART Technology, located in their Sydney-based ‘Tech Hub’. “There has been a significant rise in technological solutions for the travel industry,” Laura says. “It has come on in leaps and bounds. The tools available today help people in corporate positions to make smart decisions, which deliver value through increased savings and greater efficiencies. “We have developed forecasting tools that show the best time to travel, across air and hotel, 21 days in advance and tools which can track flights and determine delays, meaning we can re-arrange our customers’ business meetings in the event of an unavoidable delay. And we’ve developed tools that can determine which of our clients are travelling at the same time to the same destination so they can ride share and save money.” CTM places a high value on return on investment for its customers. Due to its size now, it has substantial buying power and negotiating prowess with its suppliers.

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“In corporate travel, relationships are key. Beyond simply negotiating discounts on air, hotel and car suppliers, we utilised those relationships to deliver close to $3m in waivers and favours to our clients in Australia and New Zealand last year,” Laura says. With 82 offices in 53 cities, that’s potentially a lot of negotiation occurring on a range of global accounts. However the systemisation that CTM has created as the company has grown globally means a seamless travel experience for clients across the world. “We have an online customer portal that houses all our clients’ chosen travel tools in one place, and can be utilised in every region in which they operate. Our online booking tools can be customised to include high speed rail or travel that is specific to local nuances. We feed as much information as we can back to our clients; information that enables better travel buying decisions, and valuable information about the places that people are travelling to. Weather, traffic, taxi availability, even hotel reviews are available. The travel manager is ‘virtually’ with the traveller every minute of the trip. “If you go on a private holiday to Fiji, you usually go to a consumer website, but corporates don’t have that luxury; there’s no peer review site for corporate travel. So what we have done is built hotel reviews into the booking process, enabling buying decisions based upon valued and relevant feedback. How fast was the wi-fi? How far was the hotel from the office? This information can be critical in making business travel effective.” Technology now plays a big part in the travel industry and CTM sees itself at the forefront. Laura says just offering booking tools isn’t enough anymore. “We still use online booking tools, but when we see a gap in the market for unique functionality we will build it and integrate it with legacy system to enhance them, such as our SMART Forecasting technology. These tools are created by our in-house technology development team who work with customers to give them the best user experience.” SMART Traveller Tracker mon-

itors a traveller’s flight status in real time to see if a flight is delayed, which then enables CTM to notify their onward meetings and push the time or even fix connecting flights. Through these innovations, CTM has continued to improve its market share. “We expect customers to have access to real time data to act efficiently. We are leading the way in this field, and we continue to win and retain our customers as a result. Considering how tech savvy travellers now are, they should expect to have live updates and be able to manage their travel requirements from their smartphone. “There is a lot of legacy technology in the market, but we have built a framework around that, that is more modern and valuable and relevant to each market.” CTM is continuously looking ahead to emerging client needs, and sometimes delivers new technology enhancements each week. “We have an agile framework and can get through a sprint in one or two weeks. We capture live client feedback and when we see a trend emerging we can quickly implement changes. Sometimes they have been implemented in the same day and are personalised for the individual user,” Laura says. The innovation comes back to the entrepreneurial spirit that was the guiding light for the company 20-odd years ago when the first seeds were sewn. That spirit allows for agility and in turn that creates a ROI for clients. It also drives the high value ethos by which CTM conducts its business. “We want to be the best corporate provider in every region we operate in. To do that we must continue to produce great technology that is first to market and delivers a demonstrable return for customers, supported by our ongoing commitment to providing service excellence and localised support,” Laura says. “That is our pedigree and history and it creates a best practice mentality.” Which is vital for travellers who want a seamless travel experience. BFM

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Are you travelling SMART? CTM SMART Technology provides businesses with the tools they need to drive savings, efficiency and safety.

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Connect with CTM today to see how our technology is saving clients’ time and money. For more information TRAVELCTM.COM/TECHNOLOGY

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BFM | PROFILE

Lead with your Story Like most businesses, Our HR Company has a mantra – a philosophy by which it defines itself. For Our HR Company this philosophy is to connect employees with their employer’s business journey and overall corporate strategy. Jonathan Jackson speaks with Our HR Company Managing Director Margaret Harrison about how to put strategy into action.

ur HR Company was established 13 years ago and is led by Margaret Harrison, who before consulting in change management at PricewaterhouseCoopers and the RACV, was a lecturer at the Australian Catholic University. “I started my life as an academic at the Australian Catholic University, and after being there for many years, I was asked to be part the inaugural Melbourne International Chamber Music Competition. After that I couldn’t get my head around going back into a lecture room, so I decided to move into the business world.” It is a modest explanation of the lead up to starting Our HR Company. When you look at her CV, clearly Margaret had some influence with major organisations. We have mentioned PwC and RACV, but there was also the role as Human Resources Director at adidas Australia to consider. “One of the attractions to HR for me was to make things happen. I started Our HR Company to help businesses put the right people in the right jobs, and also to help managers manage their people well.” Underpinning this, and something that Margaret has had throughout her career, is an unwavering belief that the fundamental advantage an organisation has is its people. Our HR Company’s Story methodology developed after many years consulting in business strategy and delivering management training in large organisations. “Working with clients the likes of Crown, ANZ, IOOF, Wynn Macau, Save the Children, Russell Athletic among others, we could see how managers were struggling to get results, because of a lack of clear direction from the senior manage-

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Margaret Harrison

ment team. There were continual discussions in training sessions about conflicting directions from their leaders and how they hampered clarity of direction. That in turn hampers productivity.” From that insight, over a couple of years Our HR Company developed a unique way of helping businesses implement their strategy with a methodology which delivers one clear, concise message to everyone throughout the business. “Understanding we are all engaged by great stories, we based our methodology on turning a company’s strategy into a Story to engage everyone both rationally and emotionally to the journey the business is on. Stories are also strong drivers of human behaviour and our habits, beliefs, attitudes and culture are formed as a result of the stories we tell.”

Despite the disparity in businesses who have used Our HR Company’s services, there are some common challenges that arise when dealing with CEOs, although these challenges may not be overly apparent. “The most common challenge is keeping the message simple,” Margaret says. “In our experience there are too many muddled messages floating around organisations, ones that are too complicated and usually delivered using tedious PowerPoint presentations. “A clear and concise company Story gives everyone an immediate and compelling way to process the messages.” “I can remember being in one large organisation in a strategy delivery meeting and everybody was interested while the CEO was speaking. Immediately the CEO’s

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PROFILE| BFM slides went on, people started looking at their phones, reading work they brought with them, and their absolute concentration was not on the CEO and the message.” Margaret says another challenge organisations have is an unaligned leadership team. An unaligned team delivers the strategy message through their own interpretation of the message and then passes that down to their teams. The message becomes diluted and convoluted as it goes down through the organisation. Furthermore, long-term cynical employees are also a challenge to any new strategy. “They’re the dinosaurs of the organisation and everyone has a story about them,” Margaret says. “It’s important to communicate the new direction in an innovative way using simple words (no managerial speak), pictures and animations to connect everyone, including long-term employees, and bring them on board. This group of employees really needs special attention because they can sink a strategy quite quickly. Our Story methodology has been extremely successful in getting everyone involved and committed to a new direction.” Anywhere from 61% to 73% of companies struggle to implement their strategy. This can be due to cost, implementing a strategy for strategy’s sake when there is no compelling need, and sometimes due to CEOs who won’t implement what a project team or consultancy has recommended because they don’t like the results. “The CEO of one of our leading retail organisations showed me ten years of strategies developed by different consultancies all sitting in a cupboard in his office. It was a very long cupboard! None of the strategies had been implemented because they were too hard and too complicated and the CEO confided in me that he and former CEOs had hardly been involved in the development at all, which is really quite interesting.” This not only says a lot about the CEOs, but also the strategies developed. For a strategy to work, Margaret says the CEO and senior executive team have to be totally committed and involved in the strategy development, but then most importantly, follow up with the same

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commitment and enthusiasm when implementing the strategy. “The other thing is that middle and junior managers and everyone in the organisation need to know their leaders are united and committed to success, and that they’re all traveling in the same direction. They want to know that the CEO and executive team are in charge, that they have control. Then they feel free to actually do their work and know they are contributing to the end result. They happily become engaged and work enthusiastically. In the opposite case there is a feeling of uncertainty. “I’m sure you’ve heard people say, ‘They haven’t got a clue what they’re doing’. That’s an example of why it’s a big challenge for CEOs to get their strategy right. When there’s a new strategy or there’s a change happening, lower level managers need to know how to deliver the strategic direction and the messages. They also have to be given the tools to do so. One of the things we pride ourselves on is having the tools to help people implement the strategy way down to the last person on the organisational chart, so to speak.” Our HR Company specialises in implementing change in an engaging and effective way. Their program is designed to ensure that a CEO delivers the strategic message in a committed and inspiring way. They have to be a change leader and clearly tell their Story. People want to hear their Story! “Simply, all people want to know who’s in charge of the change and they also want to know that if the Board says there’s a new direction or change that the management team and the senior management team have accountability for making it happen – that they will be held accountable. Messages about change have to touch each person within the business. “I’d say the importance of people engagement is often overlooked in times of change. Engagement can’t happen overnight, especially if there’s low morale in an organisation. Engagement is directly linked to being connected to where the organisation is going. Knowing that your manager has control and is also connected to the same direction of the business, is how we help organisations through our

methodology.” As we have touched on, not all change is successful and for various reasons. Academic Ken Blanchard says up to 70% of change initiatives fail. “He’s amazing,” Margaret says. “He says that people’s natural resistance to change is a major factor and even in this fast-paced world we’re living in, people still resist change. Often there’s a lack of understanding of the business case because it’s been communicated poorly and there’s inability to achieve buy-in. People want information. They want hard cold facts and realities and honesty in telling everyone what the change will involve – it is asking people to change behaviours in a way that makes sense and not just change for change’s sake.” “A key point that Blanchard makes right throughout his writings and speeches is the alignment of the leadership team. He’s definite about that point.” And that is the angle from which Our HR Company comes from; to align everyone’s agenda and priorities so that a message is delivered clearly and then acted upon. “If members of a leadership team tell conflicting stories and each member tells their own version, strategy or change message, it’s doomed to fail. This is why we’ve made aligning the leadership team a key milestone in our methodology. It’s one of the first things we do. We hold them accountable to each other, not to us, not to the CEO, but to each other, so that when they start telling gobbledygook around messages and around strategy direction to their teams, they can be called out on it. It’s wonderful seeing up to 20 people in a senior management teams together in a room and they all get it and they all commit to it publicly. It’s a very strong message. The strategy will very rarely fail after you’ve got that commitment.” The CEO of a large government instrumentality was delighted to see the senior management team aligned after this process. “Before we started the process of developing Our Story, the executive team were divided – they didn’t trust each other nor did they share information. Historically silos had been built between divisions

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BFM | PROFILE

and the alignment process led to changes in the way people worked. Senior managers were energised and initiated working groups across departments to share information and staff. The energy and enterprise was demonstrable.” It is important for businesses implementing a new strategy or direction in any part of the organisation to relay their stories in a clear, concise, and attractive way. “People need to know where the business has been and where it is going. What are the key challenges the business is facing, and what do they need to do individually and as a team to make it successful?” As each business is different, Our HR Company takes a bespoke approach. Margaret says the company’s greatest skill is in listening to a CEO’s needs, whilst asking appropriate questions and listening to and deducing the answers. “In our process we actually ask the same questions to the different people in the leadership team to

gain a very quick and clear understanding of who’s on the CEO’s bus and who isn’t quite there. Unless you have them all on the same bus, you’re not going to make anything happen. It’s quite amazing how many different versions of the same strategy are told in these sessions.” It is from there that Our HR Company develops the theme of the Company’s Story, clears away the cobwebs and builds a clear and concise version of where each client wants to go. “Each intervention, each part of our methodology is linked to the client specific needs.” Margaret’s academic background has been invaluable to this journey as her understanding of how people learn has been vital to the methodology implemented. Her understanding of how tools should be used has also been invaluable and now as she looks back to the journey her own business has taken, and why it has been successful she says her biggest

achievements have come via her clients’ successes and one client in particular. “One of our clients has had huge success. The turnover of managers dropped from 80% in the year prior to the introduction of their story, to 5% after two years. Can you imagine if 80% of your management team is turning over each year, it’s pretty diabolical. They were an organisation that couldn’t attract any applications for job vacancies, and now they don’t need to advertise. People come to them, so in their own area they’re wellknown for being a fantastic organisation, they’re all on the same bus and they’re all going in the same direction. They will at any time accredit our story telling methodology for making that happen.” Margaret is proud of the story she has developed for Our HR Company and those she has created for others and like any good story, she wants it to linger and continue to make an impression. BFM

Imagine your company if all people are aligned with your strategy... We can help you get there

40% of

discretionary effort is unused

61-73%

of Strategies Fail

73% fail

18% success

9% partial success

60% used

40% unused

Only 61% of employees are engaged with their work

61% engaged 25% actively disengaged 14% somewhat engaged

Everyone wants to hear your Story! Make your strategy live n Commitment to your business vision n Align your leadership team n Change your culture from apathy to energy and enterprise n Tap into the discretionary effort of all people n Build a place where everyone can be their best n

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(03) 9866 3866

INVESTING| BFM

THE EVOLUTION OF SHARE TRADING The world of online stockbroking is ever changing. Investors are more financially literate than ever before and have access to a plethora of information via the internet. In today’s world, technology has aided our search for knowledge and allowed investors to harness greater buying-power and decision-making regarding broker and stock selection. Not to mention the growing number of new asset classes in the quest for diversification writes Andy Rogers.

F Andy Rogers is director of stockbroking at CMC Markets.

rom the inception of trading on the floor centralised at the stock exchange, taking phone calls from sellers and buyers to today’s retail traders making trades in the palm of their hand direct to markets around world, stockbroking has undergone one of the most significant shifts of any industry of late. Back in the day the process was very methodical, investors engaged the brokers and the brokers would battle it out with the Exchanges. Brokers were the key as they controlled access to the markets. However, increasing competition and improvements in technology caused a significant change in the market structure. The ability to trade electronically dramatically increased trading volumes and liquidity, and allowed for greater access to various financial markets. As the industry began to change, so did the investor. Investors have evolved with the market, becoming sophisticated traders who access a range of information from various trusted sources, the rise of the self-managed super funds in Australia is certainly a good example of this. The Australian Share Ownership Study released in 2015 by the ASX shows that Australia continues to have one of the highest levels of share ownership in the world (36%). More investors here traded online (58%) than through a broker or advisor (31%), reflecting a growing desire of investors for self-direction and control over investments. Recognising that CMC’s client base is always evolving has meant we put innovation at the centre of everything. The need for businesses to constantly evaluate and adapt their offering is paramount in a competitive market with a well-informed customer base. The next step in evolution of

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trading is access to institutional level information via mobile, tablets and the home PC. In 2001 direct retail investing became more mainstream with an increase in accessibility online, over the next decade the GFC rocked the market causing disillusionment with experts and raising awareness of the interconnectedness of world markets. Leading to retail investors becoming more considered and research reliant than ever before. The ASX’s 2015 Share Ownership Study found 55% of direct investors believe they can only succeed if invested for the long-term and 53% have a fairly disciplined approach to the sharemarket. It’s impetrative for investors arm themselves with necessary means to make the best-informed decisions if they are to succeed. As uncertainty plagues the share market our focus is always on helping our clients to succeed through innovation and education. Following client feedback, we spent 18 months designing and developing the fully customisable Pro platform to meet the evolving needs of Australia’s frequent share traders, leading us to create an Australian industry first. To date, the retail online broking market in Australia has not offered much choice to frequent share traders in terms of sophisticated, professional trading platforms. Overseas, particularly in the US and Europe, brokers are offering a wide array of platforms with unique features. As clients demand more information and better quality charts all at their finger tips and accessible via any web browser to do this. To meet our demand, we needed to create a platform on the most current mark-up language, HTML5. HTML5 is the future for online share trading platforms, and Pro

platform is the first in Australia to ensure cross-browser support that doesn’t require software plug-ins, downloads or software updates. Redefining the online share trading market in Australia, this product will become the new standard that switchers seek, across technology, service and value. The new HTML5 Pro platform gives retail traders access to an advanced charting package with the ability to open up to 10 charts at a time on one screen, while offering a range of additional fundamental tools for our Active Investors and Frequent Traders, so they can make better investment decisions. Pro platform is a fully customisable platform with multiple layouts. The charts work seamlessly together via our module linking feature and offers a host of new feature including over 95 technical indicators, 35 drawing tools, 12 different chart types and pattern recognition. Through the tireless work of our global IT and product development teams, underpinning the Pro platform there is seamless connection to partner services and tools so our clients can trade effectively on one platform. The cream of these include: • Morningstar – Summary of fundamental data for investors • Reuters News – Live data feed • TheScreener – Star-rated valuation reports • Leveraged margin lending facility – fully integrates with our margin lender via an API. From the trading floor to access in the palm of your hand, share trading will continue to undergo change as the industry innovates to meet customers’ needs. BFM Andrew Rogers is Head of CMC Markets Stockbroking

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BFM | HEALTH

APPS TO KEEP YOUR HEALTH IN CHECK Australians are more concerned that they will die from preventable diseases than accidental injury. The national survey, commissioned by Baker IDI Heart and Diabetes Institute, found that 67 per cent of people fear dying of cancer and 50 per cent of people fear dying of heart disease, yet despite these concerns Australians are ignoring simple steps to reduce the risks.

tudies have indicated that physical inactivity is the fourth leading cause of death worldwide. Evidence links prolonged sitting in adults with a 24 per cent increased risk of death from all causes, including heart disease and some forms of cancer – the very things Australians are most afraid of. Despite evidence that Australians sit for up to nine hours per day, only one in five survey respondents state that they prioritise the reduction of sitting time in order to protect their health. Head of Physical Activity Research at Baker IDI, Professor David Dunstan, says that Australians largely underestimate how many hours they spend sitting during their day, including time spent at a computer or device, commuting, driving and sitting in front of the television. “Australians need to prioritise regular movement every half an hour to reduce their risk of diseases including type 2 diabetes, heart disease and some cancers. When sitting, our blood-‐ flow slows down because our muscles are inactive. Our body relies on movement to keep blood flowing efficiently and to help clear glucose and fats. “This affects everyone who sits for extended periods, even those who exercise regularly. While daily exercise is important, it does not counteract all of the negative effects of sitting for extended periods of time – that’s a common misconception.” Data from the current survey also found that more than one in ten Australians list death due to

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complications of type 2 diabetes as one of their top five concerns. But Australians should be more concerned, as evidence suggests that those who sit for extended periods of time have a 91 per cent increased risk of type 2 diabetes. Approximately 269 adults in Australia aged over 25 develop diabetes every day. Complications from type 2 diabetes include the increased risk of heart attack or stroke, kidney disease and poor circulation. In response to the evidence, Baker IDI has launched a national campaign to encourage people to move every 30 minutes with the help of a new free smart phone app named Rise & Recharge. The efficacy of apps in reducing sedentary behaviour is supported

by evidence from a pilot study conducted by the American Cancer Society that found participants who set Smartphone reminders added approximately 25 minutes of activity to their day. The study supported the premise that Smartphone prompts help boost people’s physical activity levels and reduced their risk of certain types of chronic disease. The Rise & Recharge app has been developed with support from the Vodafone Foundation Australia. It’s now live on both the App Store (http://rise.re/1QS1pED) and Google Play (http://rise.re/1VB2BLJ) and is compatible with popular wearable fitness devices. Vodafone Foundation has formed a three year partnership with Baker IDI as part of its commitment to

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HEALTH| BFM supporting charities to harness the power of mobile technology to improve the health of Australians.

More about the app The development of the app by Baker IDI with support from the Vodafone Foundation Australia, underscores the growing global interest in technology to transform raw data into meaningful information that can have positive health effects for users. The app sends alerts to remind the user to move around at selected intervals, tracks the users movement through their smartphone or wearable device and records the data in a summary that is easy to read and interpret. Creator of the app, b2cloud Managing Director Josh Guest says the technology displays data on a person’s prolonged sitting in a simple way that empowers behaviour change. “There is a lot of raw data about an individual’s health that they can now access. But it is only if this raw data is presented in a meaningful way that it can become a motivator for behaviour change,” he said. “The purpose of apps like Rise & Recharge is to provide users with regular information about their health and behaviours – like a visit to the doctor would, but on a more regular basis.” The Rise & Recharge app is one

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of a handful of apps globally that connects to both Apple Health and Google Fit, complementing a variety of wearable technology. It has been designed for both iPhone and Android – designed to utilise the technology that a user is carrying around with them on a daily basis, providing as much flexibility as possible. The efficacy of apps in reducing sedentary behaviour is supported by evidence from a pilot study conducted by the American Cancer Society that found participants who set Smartphone reminders added approximately 25 minutes of activity to their day. The study supported the premise that Smartphone prompts help boost people’s physical activity levels and reduced their risk of certain types of chronic disease. Head of Physical Activity Research at Baker IDI, Professor David Dunstan, believes that technological interventions such as these are a critical path forward to improving the health of Australians. “Australians continue to underestimate the amount of time they spend sitting on a daily basis. We believe the smartphone reminders will provide them with the prompts they need to move more and reduce the serious health risks of long term sitting,” he said. BFM

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BFM | DESTINATION

ROLLING THROUGH THE ROCKIES

Impeccable onboard service, gourmet cuisine and luxurious surroundings are a few of the reasons why Rocky Mountaineer rail journeys are considered by many to be the only way to see the Pacific Northwest and the Canadian Rockies.

he worldâ&#x20AC;&#x2122;s largest privately owned luxury tourist train, Rocky Mountaineer has welcomed nearly 2 million guests since its first departure in 1990. With four unique rail routes, this unforgettable all daylight train trip offers romance and history, reminding us that travelling is as much about the journey as it is the destination. Guests from across the globe come to appreciate the exceptional onboard experience and to revel in the stunning Western Canadian scenery with endless views of old growth forests, glacier-capped

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mountain peaks and shimmering waterfalls. The voyage comes alive with Rocky Mountaineerâ&#x20AC;&#x2122;s onboard Hosts keeping guests engaged and entertained with stories of the passing region. As the train travels through some of the most remote areas in Western Canada, guests have the opportunity to unplug and enjoy uninterrupted days, during which they have the chance to catch up, reconnect with loved ones, and create lasting memories. The only digital gadget necessary is a camera to capture the natural drama unfolding just outside the window,

a welcome idea in the days of constant digital connectivity. To highlight the iconic destinations in the Canadian Rockies, the company offers over 65 vacation packages including several Rail and Cruise itineraries that combine a luxury rail vacation with a dramatic Alaska cruise. Packages can be customised to suit each guest and make their trip even more memorable, including inspiring activities such as helicopter tours, whale watching excursions and gourmet dining experiences. Rocky Mountaineer has launched

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DESTINATION| BFM

TAKE ME THERE

• Rocky Mountaineer is an all-dome fleet, featuring two levels of service to choose from: GoldLeaf or SilverLeaf • The four routes available are: • First Passage to the West (Vancouver – Lake Louise, Banff, or Calgary) • Journey Through the Clouds (Vancouver – Jasper) • Coastal Passage (Seattle – Jasper, Lake Louise or Banff) • Rainforest to Gold Rush (Vancouver – Jasper via Whistler and Quesnel, 3 day journey) • Rocky Mountaineer’s season runs from end of April to midOctober • Air Canada operates a daily direct flight between Sydney and Vancouver, and is launching new flights from Brisbane to Vancouver starting June 3, 2016 • For more information or to book, head to www.rockymountaineer.com

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a newly extended route for the 2016 season, Rainforest to Gold Rush, which for the first time begins or ends in North Vancouver rather than Whistler, as it has done since the route was established. Travelling through Howe Sound, Squamish and Cheakamus Canyon to connect the worldclass destinations of Vancouver and Whistler, the extended route provides guests with an exclusive look at some of the most spectacular views in British Columbia. The Rainforest to Gold Rush route will continue to link Whistler and the largest national park in the Canadian Rockies, Jasper, AB, with an overnight stop in the quaint Gold Rush City of Quesnel, BC. For those interested in visiting the cosmopolitan US city of Seattle, Rocky Mountaineer’s Coastal Passage route seamlessly connects Seattle with Vancouver and the jaw-dropping landscapes of the Canadian Rockies. With many

cruise options from either Seattle or Vancouver ports, the Coastal Passage route provides guests with numerous options for customizing their vacation. Renowned for its luxurious bilevel glass dome coaches, Rocky Mountaineer’s GoldLeaf Service features optimal views of epic scenery and wildlife such as black bears, elk, bighorn sheep and moose. In the lower-level dining room, internationally-acclaimed chefs create outstanding dishes, made with the freshest of regional ingredients. Selections include wild Pacific salmon, prime Alberta beef and locally sourced vegetables, accompanied by award–winning wines from British Columbia’s Okanagan Valley. For those who would like to recreate some of the culinary creations available on the Rocky Mountaineer, Eat Play Love: Regionally Inspired Cuisine by Rocky Mountaineer is the perfect memento for guests to take home and share with family and friends. This beautiful cook book includes recipes for many of the popular dishes designed by Executive Chefs Jean Pierre Guerin and Frédéric Couton. BFM

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BFM | FAST LANE

AUDI INNOVATION:

SQ7 TDI

Following the launch of the SQ5, Audi is now applying the concept of a diesel-engined S model to the Q7 model line.

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he 4.0 TDI has been newly developed from the ground up. It combines bestin- class performance with low consumption and guarantees maximum dynamics. The V8 engine has a displacement of 3,956 cc. The two exhaust-gas turbochargers are activated selectively according to the concept of sequential charging, since exhaust gas only flows through one turbocharger at low and intermediate load. The second turbine is only activated at higher loads. An electric powered compressor (EPC) augments the work of the two turbochargers, particularly in the lower engine speed range, providing for extremely dynamic off-the-line performance. With 320 kW and 900 Nm of torque between 1000 and 3250 rev-

olutions per minute, the SUV sets new benchmarks in the segment. It accelerates from 0 to 100 km/h in 4.8 seconds; top speed is 250 km/h (governed).

High efficiency: The eight-speed tiptronic The redesigned eight-speed tiptronic is impressively efficient. It changes gears extremely quickly and efficiently, and at high speeds allows coasting at idle. A self-locking centre differential is the heart of the quattro permanent all-wheel drive system. It is compact, lightweight and interacts very precisely with the suspension control system. The maxim of lightweight construction also applies to the suspension â&#x20AC;&#x201C; its links are made primarily of

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FAST LANE| BFM

aluminum. Electromechanical power steering, the Audi drive select driving dynamics system and adaptive air suspension with S-specific tuning are standard.

Body roll stabilisation A new solution in the competitive environment is the electromechanical active body roll stabilisation. Here a compact electric motor with a three-stage planetary gearbox separates the two halves of the stabilizer. On an uneven road surface, they are actively decoupled from one another, resulting in improved ride comfort. During sporty driving, the tubes are interconnected and twisted against each other. That significantly reduces body roll, i.e. the lean of the car.

Five seats or seven Audi offers the SUV with a choice of either five or seven seats. The second row comes standard with a three-section backrest with segments that can be folded down separately. The optional third row folds up and down electrically.

Potent computing power: Infotainment and Audi connect

optional top-of-the-line infotainment system in the SQ7 TDI, uses the second-generation Modular Infotainment Platform. Thanks to the integrated LTE module and the Wi-Fi hotspot included in the Audi connect package, passengers can surf at high speed with their mobile devices. The Audi connect package brings comprehensive online functions on board. New on the market is the Audi connect safety & service package, which also includes the myCarManager package. With this, customers can use their smartphone to lock and unlock the car or check the vehicle status, for example. Another infotainment highlight is the Audi smartphone interface. In the car, a tailored environment on the MMI monitor makes it easy to control smartphones with iOS or the Android operating system. The sound systems in the SQ7 TDI are as innovative as they are upscale. In the Bang & Olufsen Advanced Sound System, the digital signal processor drives 11 channels with a total of 23 speakers in such a way that the sound is equally precise and harmonious in every seat. Optionally, two Audi tablets can be docked in the backs of the front seats.

MMI navigation plus, the

Driver assistance systems The SQ7 TDI offers a wide range of 24 driver assistance systems to help drivers travel safely, fuel-efficiently and comfortably. The predictive efficiency assistant, for example, provides additional information in the instrument cluster to help the driver save fuel. The standard Audi pre sense city â&#x20AC;&#x201C; an anticipatory warning and emergency breaking function for avoiding accidents and protecting pedestrians â&#x20AC;&#x201C; makes the SQ7 TDI even safer. The adaptive cruise control with traffic jam assist relieves the driver in slow-moving traffic on wellpaved roads by taking over the steering in many situations. The predictive ACC enables the anticipatory adjustment of driving speed to the route and speed limits, such as when entering towns. BFM

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