BUSINESSFIRST for Business Leaders
ANIE STEPCHE’S RI VE TOP FIESS BUSIN TIPS
When business and sport collide
Maintaining community standards
What CEOs can learn from Olympic champions
Evan Dickson’s keys to development success
Catering to the masses How Conrad Smith has improved flight BUSINESS FIRST MAGAZINE Vol 1 Issue 4
THE DIGITAL REVOLUTION Why e-strategies will help you survive
The height of luxury Hamilton Island, BMW, Attica and more
INSIDE: Investment // Leadership // Lifestyle // Property // Tech
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BF | CONTENTS
BUSINESS FIRST CONTENT
Editor’s Desk News The Revolution will be digitized The digital revolution is upon us, and, as in any revolution, chaos will precede order – and completely new opportunities. 10 The long and winding financial road Three months after the budget and the enormous amount of continued ire directed at the federal government, Business First takes a look at what the experts have had to say. 4 5 8
COVER STORY 12 The reflecting pool By her own admission Stephanie Rice’s life will never be normal, yet through the abnormality of an Olympic swimming career, this Olympic champion has learnt some sound life and business lessons. She speaks with Jonathan Jackson about hard work, sacrifice, mentorship and starting a business.
PEER TO PEER 16 Out of class experiences by Professor Fred McDougall 18 Business in Asia – an entrepreneurial perspective by Jon Michail 26 Take your investment in new executives one step further by Norah Breekveldt 28 The buffaloes on King Street and the secret to viral marketing by Nicole Smith 38 Being unstoppable by Chutisa & Steven Bowman 40 Lifting the haze over the cloud by Stephane Ibos 50 Time is money – the real value of mFunds by Andy Rogers 52 The insightful business by David Jackman 62 Bouncing back from your mistakes by Mat Jacobson 64 Strategies to drive savings as storm clouds gather by Allan McKeown 65 Creating a pipeline for success by Rosie Cairnes 70 International communication: the challenge for SMBs by Alex Blinko 71 View your property portfolio as a business by Patrick Bright 76 Driving business innovation one step at a time by Tim Reed 78 Budgeting and franchising by Stan Gordon 79 Healthy Money Habits by Pat Mesiti
LIFESTYLE 80 Perfection is in the philosophy of produce by Jonathan Jackson 82 Leadership through peak performance by Lauretta Stace 83 The Leader’s Bookshelf by Joshua Lansell-Kenny and Daniel G Taylor 84 Blue September 86 Paradise found by Jonathan Jackson 88 x4 marks the spot
CONTENTS | BF
BUSINESS FIRST LOUNGE 20 Flights of fancy – Flight catering has undergone its fair share of criticism in the past, however as expectations have changed the inflight dining experience has had to adapt. At the forefront of this adaptation is Conrad Smith, who speaks with Business First about servicing different tastes. 30 Building community spirit – Chardan is known for developing prestige properties, but there is more to the company than developing land. Chardan builds sustainable communities. Bob Forshaw speaks with Evan Dickson about what it takes to build a community. 34 Challenging the norm to achieve exceptional outcomes – Pat Tallon serves as the Chief Executive Officer of Civmec Limited, an integrated, multi-disciplined construction and engineering services provider to the resources and infrastructure sectors. It’s a long way from ‘being on the tools’. Pat speaks with Bob Forshaw about his early influences and what it takes to run a successful construction business. 42 Gold-laced business lessons – In 2013 Barrick Cowal Goldmine produced 297,000 ounces of gold at all-in sustaining costs of $746 per ounce. Proven and probable mineral reserves as at December 31, 2013, were 1.8 million ounces of gold. The man running this successful operation is Alan Fearon. He speaks with Bob Forshaw about the community-minded approach Cowal takes and what makes Cowal and parent company Barrick Gold so successful. 46 Where luxury meets mainstream – Despite the downturn in car manufacturing in Australia, the car market is thriving in other areas. Bob Forshaw speaks with Ateco managing director Ric Hull about distribution, diversity and the importance of China. 54 In case of emergency – Helicopter rescue seems like something you’d see in an action film, except emergency rescue is all too real and occurs all too often. So who are the people behind these services and what else do they do? Jonathan Jackson examines the necessity for companies such as CHC Helicopters.
58 Super trooper – Superannuation: we all need it, but many of us fail to understand how to effectively utilise it. Jonathan Jackson speaks with Tasplan CEO Neil Cassidy about changes to the superannuation industry and how one merger could benefit Tasmania. 66 Leading the innovation charge – Eric Morris is one of Australia’s most influential retail executives. As managing director and CEO of the PAS Group he oversees 1200-plus staff and 26 brands. Eric speaks with Bob Forshaw and Jonathan Jackson about growth in an ever-changing retail environment.
72 Let’s make a deal – Like any young man, cars were always something that interested Nick Strauss. His passion for cars, combined with his love of sales, which developed through the famed family business, Forges of Footscray, culminated in Nick forging his own path in the car industry. Nick is now he owner of the Berwick Motor Group (BMG). He speaks with Jonathan Jackson about ambitions and what it means to own and run a successful motor vehicle dealer group.
BF | EDITOR’S DESK
Good sports The correlation between sport and business is significant. Last year Ernst & Young commissioned a global online survey to investigate the role of sports in the development of female executives. This was done in connection with its Women Athletes Global Leadership Network. Go to http://www.ey.com/BR/pt/About-us/Oursponsorships-and-programs/Women-AthletesGlobal-Leadership-Network. This is a great website for information about the advancement of women in business positions. It connects elite female athletes with business leaders. The study found that in comparing C-level female respondents to other female managers, 55% of the C-suite women had played sports at a university level, compared with 39% of other female managers. A Forbes report on the survey stated that more than three-quarters, or 76%, of women agree that adopting behaviours and techniques from sport in the corporate environment can be an effective way of improving the performance of teams. The respondents included 821 senior managers and executives (40% female, 60% male) who work at companies with annual revenues in excess of US$250 million (AU$265). Sport increases team empathy, cognitive skills and develops leaders. People who play sport are usually driven to succeed and therefore are well placed to enter the corporate world. Our cover story this issue is Stephanie Rice, who has experienced the pinnacle of success in sport and is now about to embark on her own business venture. Stephanie has the honour of being our first female cover story. And she is a worthy one. She has learnt some hard business lessons in the last two years, but she has a determination to succeed in business that mirrors the traits she displayed in the pool. She talks about sporting success, the value of mentors and never giving up on your dream. Also featured in this issue is Conrad Smith who has taken in-flight catering to a new level, as the expectations of travellers become more demanding. Still in the air, Nick Mair discusses the logistics of running CHC Helicopters which provides emergency services as well as connection between the isolation of oil rig workers and their families on land. Meanwhile Tasplan’s Neil Cassidy discusses the constant changes to superannuation and growing a strong company in this sector and Nick Strauss and Ric Hull help us examine what it is like running a motor vehicle business in what is a very tight market. Eric Morris is one of the most influential men in retail and he gives us his insight into why the retail industry is struggling. We also tackle the topics of global digitisation, navigating the cloud, building a property portfolio, smart investment plans and smarter marketing. This issue is our biggest yet… and for good reason. More profiles, more analysis and even more luxury. We hope you enjoy this issue as much as we have enjoyed putting it together. Good reading
Jonathan Jackson Editor, Business First Magazine
www.businessfirstmagazine.com.au PUBLISHER Alan Hyman EDITOR Jonathan Jackson MEDIA DIRECTOR Bob Forshaw SUB-EDITOR Judy Hyman DESIGN Gino Hawkins Head Office: Suite 7, Level 1 174 Willoughby Road St Leonards NSW 2065 Australia Advertising enquiries: Phone: 02 9437 5155 Email: email@example.com Subscription enquiries: Phone: 02 9437 5155 Email: firstname.lastname@example.org Contributors: Nicole Smith, Pat Mesiti, Patrick Bright, Mat Jacobsen, Andy Rogers, Allan McKeown, Stan Gordon, Rosie Cairnes, Stephane Ibos, Aaron Sansoni, Alex Pirouz, Norah Breekveldt, Professor Fred McDougall , Tim Reed, Alex Blinko, Jon Michail,Blake Sterling, Federico Re, Steven & Chutisa Bowman, Daniel Kovacs, David Jackman, Jonathan Weinstock, Lauretta Stace, Daniel G Taylor.
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NEWS | BF
Credit reporting education Several months since comprehensive credit reporting (CCR) went live in Australia, the Australian Retail Credit Association (ARCA) has reinforced the critical role CCR plays in contributing to the robustness of Australia’s $1.49* trillion retail credit industry and reducing financial exclusion. According to ARCA the presence of a properly regulated CCR system assists lenders to identify financial risks more accurately (and potentially earlier), improves economic performance of retail credit lending, increases access to mainstream responsible credit and assists consumers to avoid over indebtedness by taking greater control of their credit identity. Speaking at Informa’s inaugural Privacy Reform in Credit Reporting Forum in Sydney,
ARCA CEO Damian Paull said there was a clear link between credit reporting and increasing credit accessibility. “Global studies** show comprehensive credit reporting can be used as a tool to increase credit access and stimulate growth. CCR is also a key component of financial inclusion by increasing the pool of eligible consumers who can responsibly access credit to buy essential goods or services that are beyond the monthly household budget, such as vehicles and furniture,” he said. Earlier in the year ARCA launched education site CreditSmart to give consumers and finance professionals more detailed information on the credit reporting laws and how to access credit reports. ARCA is currently working with key industry bodies and financial services
providers to raise greater awareness of the implications of the new credit reporting regime. “The World Bank quite rightly states that credit reporting is a vital part of a country’s financial infrastructure and is an activity of public interest. While it’s still early days for comprehensive credit reporting in Australia, some consumers still don’t realise they are entitled to a free credit report every year, or what the new credit reporting environment means for them. “Change isn’t going to happen overnight but clearly more needs to be done in placing credit reporting more firmly on the financial literacy agenda,” he said. *RBA data March 2014 **Political & Economic Research Council (PERC) studies (US) – 2009/10. BF
CHINA AND AUSTRALIA EMERGE The development of unconventional oil and gas resources is gaining momentum across the world, with China and Australia becoming two of the most important emerging markets for shale and Coal Bed Methane (CBM) exploration, says research and consulting firm GlobalData. According to the company’s latest report*, China has approximately 643 billion barrels (bbl) of risked, prospective shale oil and 4,746 trillion cubic feet (tcf) of risked shale gas in-place, of which around 32 billion bbl and 1,115 tcf are estimated to be technically recoverable. Joseph Gatdula, GlobalData’s Senior Upstream Analyst, says: “China is aiming to develop its shale oil and gas and CBM resources rapidly, in order to meet increasing demand for these products. However, a fast commercialisation of China’s shale resources could be difficult, because of the country’s shale geology, its nascent horizontal drilling and fracturing services industry, and water scarcity.” Australia is also witnessing a substantial
development of CBM and shale gas resources, according to GlobalData. The country already has a well-developed CBM industry, which would support a number of planned Liquefied Natural Gas export projects. Gatdula continues: “The Cooper Basin has
Foreign ownership Singapore based Wilmar International and Hong Kong based First Pacific look set to buy Aussie food icon, Goodman Fielder which has raised the ire of Australian entrepreneur and businessman Dick Smith. “With more than 80% of product in a typical supermarket trolley already either imported or
coming from a foreign-owned company, how long will it take for this figure to reach 90% or even 95%? And as these businesses go overseas, so does Australia’s wealth,” Smith says. “But does this truly reflect the purchase intentions of Australians or is it being forced upon us? Over 70% of Australians state they try
emerged as particularly well-suited for shale development, due to the presence of substantial gas processing capacity, gas-pipeline infrastructure and service providers for fracking and well drilling activities in the nearby area.” BF
to buy Australian made as often as possible. However, even the most patriotic consumers who want to buy Australian-made-and-Australian-owned find they increasingly don’t have a choice and the problem is becoming exponentially worse.” BF
BF | NEWS
New card a big hit with SMEss A new membership and rewards program, called Entrepreneur Card, has become a smash hit with owners of small to medium sized businesses, attracting more than 3,000 members across Australia and overseas just 45 days following its launch. Founder of the Entrepreneur Card Martin Martinez says, “We are delighted to have attracted a staggering response to our program, which is now providing our members with substantial discounts and benefits to them. “We are refining and upgrading the program after feedback from our members, who include well-established and successful entrepreneurs among the estimated two million small business owners in Australia, as well as senior executives”, he added. The card, which opens up a world of savings, benefits and rewards that were previously the sole domain of big businesses in Australia, now has more than 150 partners –ranging from telecommunications companies to printers. There are now three tiers of membership in the program, covering guests, individuals and corporates, who are now gaining access to potential savings of more than $500,000 per year. The most popular partners in the program are hotels, 50 of which have been added in recent weeks to take the total to 11,000 hotels across the world, as well as telco Optus and care hire company Hertz. Entrepreneur Card is finding strong demand among frequent travellers, providing access to the highest levels of membership and exclusive rates to a range of airlines and their lounges, private jet, car, taxi and limousine services. They are also gaining access room and suite upgrades and late checkouts with the card, as well as a free travel concierge service to handle both personal and business needs. Partnerships have also been secured with leading fashion, health and wellness brands. Members will also soon access to exclusive events like movie premieres, drive days with luxury brands, private dining experiences and golf days. BF
Spend on tech While small and medium sized businesses (SMEs) are turning to social media to help grow their brands, many are reluctant to invest in technology generally, according to the latest SME survey from small business finance specialist Bibby Financial Services. Conducted by CoreData in February, the Bibby Financial Services Small Business Barometer revealed Facebook is the most popular social media tool for SMEs – with more than two in five respondents (43%) using it for their business. Other common social media channels include LinkedIn (23%), Twitter (19%) and Google+ (16%). Moreover, 22% of SMEs expect sales growth to come from social media, highlighting its potential to boost revenues. The survey also revealed close to two in five (38%) small businesses believe websites are the most valuable type of technology. Other technology mediums seen as advantageous include social media (35%), high-speed broadband (31%) and smart phones (31%). However, despite the perceived benefits of technology, the majority of SMEs do not currently have plans for increasing their technology investment. Fewer than one in
three respondents (31%) expect to increase or significantly increase their investment on technology in the next year. A small proportion (5%) intend to reduce their technology spend while a further 12% are unsure. Mark Cleaver, managing director, Australia and New Zealand, said: “Technology can equalise the playing field between big and small business. Whether this involves spending more on faster computers, social media or on software that makes a business’ operations more efficient, technology investment is crucial for keeping up with competitors and the needs of customers. “Despite this, our survey revealed three in 10 SMEs (29%) don’t believe that technology will offer any advantage over bigger businesses. Moreover, two in five SMEs (40%) don’t currently use mainstream social media tools to promote their business. “SMEs need to use all the tools that they have available to build their businesses and brands in a highly competitive landscape. Social media is an effective and low-cost marketing tool that can help SMEs keep up with the efforts of bigger businesses,” Mr Cleaver said. BF
BIG DATA IN MINING Across the mining sector, Australia’s increasing production costs for operators are impacting their competitive advantage, says Deloitte in its recently released report Extracting business value through operational intelligence. During the recent mining boom, high demand and high commodity prices created favourable conditions for investment and expansion of mining operations whilst masking some inefficient work practices. Now that the economics of the industry have shifted, Australian mining operators are responding by cutting costs and pursuing operational efficiencies. “Our experience reveals that a delicate balance has to be maintained between ‘cutting too close to the bone’ and maintaining a sustainable operation that can respond quickly when the next opportunity presents itself,” says Deloitte Partner Links Chithiray. The report states that operational efficiencies can be gained by automating and integrating information across the value chain, which can also inform the more radical step of redesigning the operations. Operational intelligence is one of the key levers for improving efficiency. It equips mining businesses with actionable insights across the entire value chain and between
mine sites. It is changing the way information is used in mining. “It is the companies that enable their operators and management to respond in a timely way to operational variances and market volatility, that will be better placed to minimise any adverse impacts and take advantage of productivity opportunities,” Mr Chithiray says. “Ultimately, the goal of any mining operation in simple terms, is to optimise production at the lowest cost with zero harm to the workers and the environment. It is no coincidence that despite the tougher market conditions, global mining leaders are making big data investments in operational intelligence, remote operations centres, automation, analytics and mobility.” BF www.businessfirstmagazine.com.au
NEWS | BF
REAL GROWTH IN “BLUE CHIP” Clime Asset Management has joined other local value fund managers taking an international focus with the launch of its Clime International Fund, which seeks to tap into strong Asian growth and an economic recovery in the US and Europe. Clime has partnered and mandated global value investor, Sanlam Private Investments, to co-manage the Fund. Sanlam Private Investments manages private portfolios of $US10 billion and the Sanlam Group has over $US100 billion funds under management for investors worldwide. Clime’s Chief Investment Officer, John Abernethy, says the absolute return fund is designed to give sophisticated investors an opportunity to invest in a more diverse and dynamic group of blue chip international securities. “Investors need to allocate capital offshore,” Abernethy says. “But they can’t just buy markets. The opportunities are in selective stocks, particularly multinationals that are tapping into Asia’s and emerging markets’ growth.” Abernethy says Clime launched the fund because of the significant opportunities opening up for Australian investors offshore,
particularly with economic recovery in developed economies. “The US and Europe are emerging from recession,” he says. “The Australian dollar is also trading 20 per cent above its post-float average despite falls in the past few months, which makes offshore stocks attractive.” Abernethy says international stocks also allow Australian investors to diversify away from resources and banks, and he sees opportunities in food processing, branded consumable goods, IT services, pharmaceuticals and intellectual property. The Clime Australian Value Fund is one of the top-performing Australian equity funds having generated 19.5% per annum in the five years to February 2014. The International Fund will follow a similar value investment methodology philosophy, which Abernethy says Clime shares with Sanlam. The fund is a unit trust with a minimum investment of $A200,000, and aims to achieve a double-digit $A total return after all fees measured over a rolling five-year period. Abernethy says the aim is to remain unhedged in most circumstances, but he says Clime can hedge currency risk if it needs to. BF
Tech Investment DST Global Solutions, a market-leading provider of technology solutions for the investment management industry, says the latest data on total assets under custody for Australian investors highlight the need for asset managers and asset servicers to have scalable technology solutions in place that efficiently manage this huge and growing asset pool. Data released this month show that total assets under custody for Australian investment firms rose 8.3% between June 30, 2013, and December 31, 2013, to $2.3 trillion. Of that total, $1.7 trillion were Australian assets (up 8.4% over the period) and $647 billion were international assets (up 7.4%). Rhys Octigan, head of business development, Australia & New Zealand for DST Global Solutions, says, “As investor assets under custody climb higher, driven by rising asset values and superannuation inflows, custodians and investment administrators need to have the right technology solutions in place to process this huge pool of assets with speed, accuracy and reliability. True scalability cannot be achieved by simply throwing man hours at a problem, and consequently, technology that enables straight-through-processing of even the most complex asset classes is now seen as an essential component in winning new mandates and onboarding new clients.” www.businessfirstmagazine.com.au
Processing over 70% of investment transactions in the Australian market, HiPortfolio, DST’s investment accounting and asset servicing solution, has over 18,000 man days of R&D invested annually to help investment management firms automate end-to-end processes, increase efficiency and reduce operational risk. The drivers are two-fold: to ensure investment accounting and administration technology supports new products and services from asset servicers; and to optimise investment operations. The new capabilities in HiPortfolio support a variety of domestic and international ABS and MBS, as well as compounding-interest and inflation-linked swaps, while complying with Australia’s complex tax requirements including Tax on Financial Arrangements (TOFA) calculations. This helps significantly improve reporting abilities by the custodian to its clients and provides more transparency to better evaluate investment decisions. “The demand for more sophisticated technology to meet regulatory and client requirements means it’s time for asset servicers to assess where upgrading or expanding their use of their IT system can achieve efficiencies to boost productivity and gain a competitive advantage to win new mandates and clients,” Mr Octigan says. BF
It’s amazing the way technology is changing our landscape. Israel is well known for its technology breakthroughs. Here’s another. Olsi, an Israeli startup is revolutionising post with Postybell, a post box sensor that can detect post mail from any distance, long or short. The new cellular based sensor device sends you a real-time cellular alert when you receive post mail, no matter how far you are from your post box. Postybell works with all phones, including house, mobile, and Smartphones. It rings the number you configure it to. To make things even more convenient, Olsi has developed an app that ‘catches and records’ and manages these alerts. The app currently supports Android devices, but developing a version for iOS is next on their agenda. “By providing you with total control over your post box, Postybell takes snail mail into the online era, allowing you to review all logs and perform actions from any device”, Olsi’s CEO, Oren Lasman commented. Eliminating the distance barrier, Postybell informs you when you receive letters or packages to your post box, wherever you are. Combining a proximity sensor and a GSM module, Postybell senses any movement in the post box, immediately notifying you. While past attempts have been made to create such a device, they all relied on Wifi or Bluetooth technologies, alerting you ONLY if you were a short distance from your post box. Recently, Olsi launched an Indiegogo campaign to raise $30,000, through the popular crowdfunding platform. Funds raised will be used for the proposed iOS version, creating a product mold, as well as for production of Postybell’s first edition. Future upgrades to Postybell include a built-in camera that sends real-time pictures of new post mail and plans to expand Postybell’s capability range, by adding heat, humidity, and gas sensors. BF
BF | FEATURE
THE REVOLUTION WILL BE DIGITIZED The digital revolution is upon us, and, as in any revolution, chaos will precede order – and completely new opportunities.
dam Hassan, the business director for international design-bureau Designit, frequently uses the word ‘digital’ in his daily work. However, he admits the term is actually quite imprecise. It can refer to everything from a connected digital-world to smart phones and tablets, right through to “The Internet of Things” – the idea that any object, animal or person can connect to the internet and communicate. Hassan’s business helps companies to grow and create business value through strategic design. He says many companies, primarily those in the industrial sector, are having a hard time defining their digital identity. “For some reason, these particular companies are finding it difficult to get started,” he says. “Those that try often project a rather clumsy impression.” Part of Hassan’s job is to get business leaders to understand the value of Internet-based services and possibilities. But does everyone have to jump aboard the Internet bandwagon? “Yes, at least those that want to survive,” Hassan says. “Not utilising the opportunities that digital channels provide is like driving a horse-drawn wagon when everyone else is driving a car. The ongoing digital-revolution is the new industrialisation. Roles and tasks are disappearing while new ones are being created and society is undergoing radical change.” The advantages of “driving the digital sports car” can be boiled down to three elements: knowledge, presence and service. Let’s take knowledge first. Big data* and the possibilities for measurement and analysis provided by the Internet enable the gathering of information and data about markets, customers and prospective customers, as well
FEATURE | BF as about their needs and behaviour. A company with this knowledge also understands how to create increased interest in its products and services. With regard to presence, Hassan thinks it means being where the target group is. “At the moment, you may have customers who are not active on the Internet but it won’t always be that way,” he says. “Most people born after 1970 have a natural relationship to the Internet and digital services.” And then there’s service. Over the last century, competitive tools in many industries have developed from focusing on range to quality and service. “The digital space is already playing a decisive role in this area,” Hassan says. “When the goods or services you sell are not clearly differentiated from those of your competitors, you have to develop and refine your service and the customer experience. Digital and netbased services often dramatically boost the service experience.” But how does one go about it? How does a company change from being traditional and analog to a credible digital player? “Many companies start at the wrong end of the stick asking, ‘What will we get out of this?’” Hassan says. “Instead, I recommend investigating how digitalisation can enhance efficiency in the organisation of these companies. How can you save money and time as well as make things easier for yourselves? Start from the inside by making life easier for employees and thereby acclimating people to working digitally and creating positive conditions. From there you can progress and investigate what you can do for your customers.” Hassan says in many cases this means changing a corporate structure from the ground up. “The classic corporate structure with one leader at the top and a pyramid of employees below does not function that well anymore,” he says. “Many business leaders do not understand how changeable the new digital climate is. They try to squeeze new opportunities and methods into old paradigms.” Instead, organisations need to become flatter. Ideas and knowledge at the furthest reaches of the company must be cultivated, where they must be taken seriously and allowed to develop. Faster decision paths and greater freedom for employees at the base of the pyramid are often necessary. “Making such a change is not easy,” Hassan says. “First there will be chaos and then things will fall into place. This may sound off-putting, it’s called a revolution for a reason.” BF www.businessfirstmagazine.com.au
BF | FEATURE
THE LONG AND WINDING
FINANCIAL ROAD Two months after the budget and the enormous amount of ire directed at the federal government, Business First takes a look at what the experts have had to say.
ike any budget there are positives and negatives, winners and losers and the odd protest. According to Ken Raiss, managing director at Chan & Naylor the budget places a disproportionate burden on middle Australia who will struggle under the compound effect of increased revenue generating costs proposed by the Government. “Middle Australia and to a lesser extent Australian seniors are the losers from today’s Budget, and this may well have a likely knock-on effect on discretionary consumer spending at a time when the Australian economy needs a boost,” Raiss says. “Like a family budget, an economy can only survive if it spends less than what it earns, thus allowing savings to be reinvested and over time built into income generating assets. The Government’s focus on revenue generation rather than expenditure cuts may therefore negatively tilt the economy.” With the pension age now confirmed as 70 from 2035 onwards, Mr. Raiss believes that there are many middle-aged Australians in lower paid jobs or transitioning industries such as manufacturing who will now be feeling uncomfortable about their retirement future. “Building sufficient funds for a
10 BUSINESSFIRST MAGAZINE
comfortable retirement over the next 20 years may be challenging for this group, particularly in view of the increasing costs associated with Medicare, petrol as well as family benefit cuts.” This will be further exacerbated by the ‘smoke and mirrors’ effect of the 1.5% reduction in corporate tax rate, which Mr. Raiss says will result in lower tax credits being returned to super funds. Small business owners will also be no better off. “Those that do pay less corporate tax will have this benefit offset by the increase paid in marginal tax, and the two thirds of Australian small businesses who are not in a company structure will be disadvantaged in relation to their profit reinvestment strategy.” A positive for the Chan & Naylor MD is the commitment to infrastructure expressed by the government. “This form of investment will help reduce unemployment and boost long-term productivity at a time when the resources boom is giving way to the construction boom with the added benefit that expenditure is in Australia’s control unlike the resources boom.” Contrary to popular opinion, Mr Raiss supports the changes to tertiary funding.
“The broader focus on diplomas and trade based education is vital as the economy needs all of the skilled people it can.” “Medical research is traditionally the domain of the private sector where significantly higher sums are invested, so it is hard to see this initiative as anything more than a token legacy unless a major profit generating breakthrough is made ahead of other international players,” said Mr. Raiss. Alex Parsons is CEO of RateCity. com.au. Parsons believes a negative impact on disposable income will occur. He believes people need to start implementing change to alleviate financial pressures. “It’s very difficult to increase your income and so the easiest thing to do is look at your expenses and one way to do that is really look at your personal finances and try to decrease your expenses in that area.” While this was supposed to be a no tax budget, there are certainly taxes, or levies, call them what you will, that have been implemented. As for the deficit levy, Parsons says, “Despite the pre-election mantra of ‘no new taxes’, the Government has indeed come out, as expected, and delivered a new tax by way of the deficit levy, which aims at www.businessfirstmagazine.com.au
FEATURE | BF increasing tax revenue from the highest paid Australians. “This of course could have a negative impact on spending across the Australian economy, so this is something we really want to be careful about.” Parsons believes a similar impact will be felt with the fuel tax and retirement age increase. “On one hand, there will be fewer aged pensions and more income tax. On the other hand, it will be very difficult for some workers to work until 70-years-old. If you think of a brick layer, or if you think of any manual labourer, 70 is getting quite old these days.” One positive take has come from Keiran McIlwain, Head of Technical and Development at MLC who welcomed changes to the Superannuation Excess Contributions Tax rules which he says has penalised investors for going over their contribution caps. “This is good news for many people, particularly Australia’s 5.5 million Baby Boomers trying to invest as much as they can into super to take advantage of tax free benefits after the age of 60. “The removal of the tax will mean they are no longer penalised at a rate of 46.5 per cent. Instead they’ll have the option of withdrawing these superannuation contributions, with earnings taxed at their marginal tax rate. “The irony was that on the one hand Australians were being encouraged to save and invest in their super, and then penalised for investing too much. We have a $1 trillion superannuation savings gap; a simpler, fairer system should in some way help to bridge that gap. “From a business’ perspective, the removal of this tax will reduce a lot of time and resources spent on the administration.” As for small business, for Tim Reed, MYOB CEO says that innovation and making the most of online technologies to help boost their productivity, is something they should consider for the sake of business performance and their confidence in the economy. “Following the handing down of the budget, it can be tempting for business owners to bunker down, play it safe and postpone their plans for growth. There are still opportunities to be had for SMEs. “I’m pleased the government has set a target of reducing regulatory compliance costs on businesses, individuals and the community by $1 billion every year. Business owners and managers will continue to call for tax reform, www.businessfirstmagazine.com.au
deregulation and reduction of red tape – our latest SME research shows GST and BAS simplification continue to top the list of initiatives they hope to see. We call on the government to keep tax reform on the agenda and to consider broadening the GST to not only address the needs of health and education spending but to also ease the burden of completing a BAS on Australia’s two million businesses. “With the retirement age set to increase to 70 by 2035, small business stands to gain the most from taking up a new $10,000 incentive payment encouraging employers to hire over 50s. We encourage small and medium businesses to keep this in mind as they hire and install a new step in their hiring process to ensure they capture this benefit whenever they meet the necessary criteria. “I hope the rise in the fuel excise rate does lead to increased investment in roads including highways and rail in our cities and regions, to help ease the pressure of rising fuel prices. Fuel price was once again the top pressure point for SMEs this year, and has been since 2011. This change is likely to be the least popular part of the budget with SMEs, particularly so with certain sectors that will feel more pain – our latest research shows agribusiness and Western Australian-based businesses felt the most pressure from rising fuel prices. 61% of SMEs would welcome investment in transport infrastructure in our major states and cities. Adopting online and teleworking technologies can also help ease the pressure by
enabling business operators to operate from home or any location outside of the office. “Plans to facilitate innovation and self‑reliance via a new Entrepreneurs’ Infrastructure Programme will be well-received by SMEs. Our research shows more than half of SMEs would support increased government funding for innovation, R&D and training on how to use the internet to grow their business. The benefits of online technologies include the ability to compete on a more level playing field with local and global rivals, increased productivity and less time spent on business administration. This means more time for growing the business, which has the potential to make a difference to our economy. “Further support for small business include creating a specialised unit to help small businesses gain better access to government contracts, which is supported by half of the SMEs we surveyed. We strongly encourage assisting SMEs to gain access to government contracts and also encourage SMEs to take up these opportunities. “Small business will feel reassured that the budget has been put on a sound footing for the medium term. While noone likes tax increases, and a number of consumers will likely feel the pinch, and this may constrain spending, past behaviour indicates there is a chance that Australians will believe the worst is behind them and that economic growth will continue unabated – fulfilling the rising business confidence that recent surveys have shown.” BF
MYOB’s top initiatives that would turn SME election votes Small and medium businesses are the bedrock of our GDP health, and their needs are paramount to the success of our economy. We should do all we can to make their business life easier. To give them a voice, MYOB explored the initiatives and policies that they would vote for. They want the government to make doing business less complex, to invest in infrastructure and to encourage business investment. Policies that significantly simplify the GST/BAS reporting process – 64% More Federal Government investment in transport infrastructure in our major states & cities – 61% Keep the $6500 instant asset tax write-off in play – 58% Keep the accelerated initial deduction for motor vehicles that allows small businesses to instantly write off $5000 on motor vehicles – 58% 5. Increased Federal Government funding for skills, training & apprenticeship programs – 57% 6. Government backed loans to small business start-ups – 57% 7. The abolition of the carbon tax – 55% 8. Increased Government funding for innovation, research & development – 53% 9. Provide free Government-funded training to all small businesses on how to use the internet to enhance & grow their business – 52% 10. A proportion of Government procurement contracts being assigned to small businesses – 50% 1. 2. 3. 4.
BF | COVER STORY
12 BUSINESSFIRST MAGAZINE
COVER STORY | BF
THE REFLECTING POOL By her own admission Stephanie Rice’s life will never be normal, yet through the abnormality of an Olympic swimming career, this Olympic champion has learnt some sound life and business lessons. She speaks with Jonathan Jackson about hard work, sacrifice, mentorship and starting a business.
very CEO of any company in the world has made a sacrifice; has put the ambitions of the organisation ahead of personal stride. Yet these CEOs may still be informed by those who have put their lives on hold to achieve goals that leave most people in awe. From a sporting perspective, you just have to listen to the enthralled silence of a business crowd as they immerse themselves in the wisdom of AFL legends David Parkin or Kevin Sheedy. Those two have the speaker circuit in the palm of their hands. Olympic champions also have a great deal of knowledge and insight to impart. Perhaps more. Stephanie Rice has only been on the circuit for a few years, but her speaking engagements combine her ingrained desire to inspire and motivate. And she does. To speak with her is to be absorbed by an infectious positivity, which is tempered by the down-to-earth realisation of what she has achieved and how it can help others – from children to those in a stifled boardroom. We know her achievements: three Olympic gold medals in Beijing, a Commonwealth gold medalist and world record holder, all culminating in an OAM. We also know Stephanie has endured her fair share of complications, including a debilitating shoulder injury that effectively destroyed any hope of success at the London Olympics. Through those difficult moments, the dream for success never really died, it shifted into a different realm. Which brings us into the present, the impending launch of her children’s swimwear range and the
way she correlates business success with athletic accomplishment. It all comes down to working hard. “Being able to compete at Olympic level was a dream come true,” Stephanie says. “I wanted to be the girl who represented our fantastic country, but make no mistake I worked my ass off to achieve it. And that hard work ensured that everything lined up in the way it was meant to.” It also meant that life was less about being uneasy than it was about being abnormal. “I gave up normality when I was 11. Olympic gold was the only thing in the world I wanted. I didn’t go to my high school formal. I only did a few classes through year 12. I put every spare minute into training and took my naps between classes. My whole day was very regimented with schedules that left no chance for error.” When she transitioned out of school, life was about protein smoothies; gym, physio, lunch, sleep and waking up to do it all over again in the afternoon. “There was no chance to catch up for a coffee with friends. I knew that if I wasn’t going to sacrifice 100% of a ‘normal’ life, when other athletes in the same position were doing exactly that, then I wouldn’t fulfil my goals.” For Stephanie, the sacrifice was worth it. She thrived on the pressure. She says any serious athlete does. And despite certain troubles with nerves or goggles breaking at inappropriate moments, she ignored the pressure and took every opportunity to learn and improve personally and professionally. Her ability to handle pressure made the transition from sporting hero to
civilian easier, but it was still a hard habit to break. “It was all a really big challenge. Everything happened at one time and I definitely struggled. It hasn’t all been ‘easy breezy’. There have been some really tough times.” Those times were punctuated by problems with starting up a business, yet the one way to overcome these problems was to “take what I have learnt and apply those lessons. I sought to meet with successful business people and was receptive and open to new information and advice. I didn’t act like I had it all planned out. I relied heavily on coach and family because support systems are imperative.”
I gave up normality when I was 11. Olympic gold was the only thing in the world I wanted.” BUSINESSFIRST MAGAZINE
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COVER STORY| BF
Stephanie was determined to move forward. So she took the dedication and the scheduling of a sporting career and applied those skills outside of the pool. She used her natural energy and positivity to resonate with people. She applied a goal setting strategy and broke those goals down, figuring out the pathways to get to where she wanted to be. “I recognised the qualities I bring to business and those that I lack,” Stephanie says. “This phase of my life is not ego driven, I know I can’t do everything myself.” To help her, Stephanie has engaged mentors. The most recognisable being Yellow Brick Road CEO, Mark Bouris among others in business and finance. Bouris is also the host of Celebrity Apprentice. While it is a reality show in the very unreal sense of those types of productions, Stephanie’s time on that show was invaluable. Not only did she learn some great lessons, she won and raised over $300,000 for charities including the Heart Foundation. “What I learnt from the show was the value of team building and working within a team. You have to take notice of what everyone else is doing. How everybody goes about his or her management role. It’s about trying different things in different ways. I learnt that while I am happy for people to take the reins, you also have to be a fantastic follower and not wait to be told what to do.” In 2012, Stephanie dedicated much of her time to starting up a children’s
swimwear business; a long term project that combines her love for children with her love for swimming. Yet, like all start-ups she encountered problems in its early stages. “I was working with a team of people and things weren’t working out so I decided to start again. I felt like I had taken six steps forward, only to move six steps back. This time around I have made sure I surrounded myself with people I enjoy working with.” The business and her RACERiCE swimwear brand is now launching in November 2014. Stephanie believes the setback was a blessing in disguise as she wasn’t quite ready to swing at all the curveballs start-up businesses throw out. Today her team is on the same page as she is. They possess the energy and excitement that Stephanie projects. The team has goals that push them individually and will help everyone grow financially. And Stephanie draws on the outside expertise of everyone she knows to ensure those goals can be met. “I have a clear vision for the brand and how it will be sold,” Stephanie says. “Everything I’m working on is fresh and innovative in this sector.” Though she sets small, attainable goals, Stephanie does have big goals for the swimwear line. Within five years, she hopes to be selling the most popular kids’ swimwear line worldwide and expand into equipment. With her confidence and willingness to learn from people with more expertise than
What I learnt from the show was the value of team building and working within a team.”
herself, there is really no doubt she will succeed. Sure she has the profile, but it is a profile built on the traits that made her a success in the first place. The traits that she hopes will inspire a new generation of high-performance Australians. Which brings us back to the clinics Stephanie runs, particularly for kids. “I want to run fantastic clinics and implement the knowledge I have learnt to motivate the younger generations. Mentoring is an important thing for me. And the messages she imparts to children are the same she gives to CEOs. “I find that a lot of people are interested in what it takes to produce gold medals. It is a life that has become so normal to me, but I forget it is not common. When I am in front of people, I share my message of what I went through: goal setting, support structures, different stress and success scenarios. I don’t tell people what to do, I just tell them what I have done and what I implemented to achieve what I did. I would never tell a CEO how to run a business, but I hope to motivate and inspire and perhaps throw up some different ways to implement strategies that they may not have thought about.” We’ll finish with a quote that she didn’t give me in this interview, but one she gave dailyguru.com.au, which best sums up what she is trying to achieve. “I’ve been lucky enough to have people like Susie O’Neill and Mark Bouris give me a driving perspective at different stages in my career. I now love being able to do the same for others and enjoy being invited to speak and interact with teams of business people and other groups. The response I get is humbling and a beautiful reminder of what I have achieved and how that has affected people. If I can inspire just one person in a room to help them achieve what they are on their way to doing, then that’s a great day for me!” BF
BF | SPECIAL FEATURE
OUT OF CLASS EXPERIENCES Professor Fred McDougall discusses why out of classroom experiences are essential for education and building future business leaders.
O Professor Fred McDougall is Vice-Chancellor and President, Torrens University Australia.
ne of the biggest questions that arises when businesses look to expand, particularly within the Asian region, is how to maximise or best leverage the opportunities that present themselves. The importance of gaining relevant experience ‘outside the classroom’ is not a new one, but the variety of opportunities available to motivated students is rapidly evolving – and employers are taking notice. In fact, a select group of Australian employers were recently asked about the key traits they seek when recruiting graduates, raising the issue of the value of ‘book smarts’ compared to handson industry experience. Their answers were telling. Unsurprisingly, all acknowledged the importance of so-called traditional skills such as research, writing and industry knowledge acquired through university study. Each employer was also quick to point out the value of candidates demonstrating practical application of their theoretical knowledge, as well as strong communication, networking and interpersonal skills; with those who could demonstrate previous industry immersion considered more highly than those whose skills were apparently purely on paper Most quality universities are strengthening their focus on facili-
16 BUSINESSFIRST MAGAZINE
tating situations where students are ‘learning through doing’, not only to provide an opportunity to experience their desired industry at an early stage in their studies, but to help develop genuine workplace interpersonal skills, to begin building a relevant network of contacts and to better equip graduates to make the transition from classroom to workplace. A key consequence of the increasingly borderless global employment market is intensifying competition for jobs, with employers able to source potential recruits from an expanding, and increasingly mobile talent pool in which graduates with on-the-ground experience are rising to the top. Findings from the latest Graduate Outlook 2013 survey on “Employers’ Perspectives on Graduate Recruitment” by Graduate Careers Australia found that besides the obvious need for relevant qualifications, “Interpersonal and communication skills” was the
most important selection criteria for employers evaluating applicants. Graduates’ “passion, industry knowledge, drive, commitment and attitude” was considered the second most important selection criteria; with “critical reasoning, problem solving, lateral thinking” in third place; and “work experience” ranking fifth (coming in just under calibre of academic results), up from sixth five years ago. Whilst it may seem incongruous that Torrens University Australia espouses the importance of skills gained “outside the classroom” when employers ranked work experience in fifth place, there’s good reason for it. Many of the skills students develop via activities related to their studies yet undertaken outside the classroom are those that genuinely develop soft skills increasingly sought after by employers – such as communication, industry knowledge, negotiation, problem solving, lateral thinking and conflict www.businessfirstmagazine.com.au
SPECIAL FEATURE| BF
A key consequence of the increasingly borderless global employment market is intensifying competition for jobs, with employers able to source potential recruits from an expanding, and increasingly mobile talent pool in which graduates with on-the-ground experience are rising to the top.’
resolution. The ability to be able to demonstrate how these skills have been honed in real life situations, as well as being able to demonstrate – through active involvement – passion, drive and commitment to a prospective employer is a valuable asset for any CV. This is why Torrens is focused on ensuring outside of the classroom experiences are incorporated as an integral part of the university experience. Whether this be via international study programs, industry work placements, or through mentoring and networking opportunities – such as at this year’s World Business Forum (WBF) in Sydney. Mentoring has long been seen as a valuable tool in developing future leaders, and recently a cohort of students – including undergraduate and postgraduate students studying on-campus and online – from Torrens University Australia undertook roles as Student Ambassadors at the WBF event, assisting high profile keynote www.businessfirstmagazine.com.au
speakers including John Howard, Randi Zuckerberg, Kevin Roberts, Michael Porter, Lyn Heward, Andreas Weigend, George Kohlrieser, Gary Hamel and Ram Charan to “learn through doing” in an authentic and engaging way. As demonstrated by the hundreds of applications we received from Torrens students to be part of the WBF Ambassador program, we know it is this kind of hands-on experience and exposure to industry that is greatly valued by students. In the many years I have been involved in the education sector, I’ve found that graduates with the broadest range of learning experiences often gain the most out of their programs, and the value they add to their future careers. Many institutions are implementing some aspect of industry partnerships and overseas collaboration; however these initiatives need to be extended throughout university programs, and
be offered to all students no matter what their mode of study. [Note the international study trimester is only available to undergraduate students.] It’s only a matter of time before savvy students will demand as much emphasis be placed on their learning opportunities outside the classroom as they do on the theoretical knowledge they gain on the inside – and progressive education providers will need to adapt and evolve to meet the challenge. BF Professor Fred McDougall, Vice-Chancellor and President, Torrens University Australia. Fred was Deputy Vice-Chancellor and Vice-President (Academic) at the University of Adelaide, an appointment he held from 2005 until 2011. Previously he was the Foundation Professor of Management at the University, an appointment he has held since 1987, and Executive Dean of the Faculty of the Professions. www.tua.edu.au/about-us/governance
BF | ASIA FOCUS
BUSINESS IN ASIA – An Entrepreneurial Perspective Protocols are paramount when conducting business with Asian partners. Jon Michail offers his tips to making the best of your Asian business experience.
The top 6 Asian business tips (i) Learn & Understand the Culture “When in Rome (do) learn what the Romans do.” Face is everything – experience tells us that ‘face’ in terms of dignity, prestige, honour, respect and status is paramount. While Westerners often make jokes at their own expense or at other people’s expense, until you know your Asian counterparts well, humour directed towards them will cause them to lose face and if they lose face you will lose business.
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(ii) Why age wins Age represents wisdom, experience, rank and seniority (men and women). Be careful including too many younger team members, especially if the client is of a mature vintage. (iii) Social interaction & breaking ‘bread’ Prepare to eat and drink as part of the ritual, it’s regarded as the way to build deeper relationships. The Japanese call this ‘nominication, which means ‘drinking communication’ and in order to build any kind of meaningful business
relationship with your associates, you must go out for dinner and drinks... sometimes to the early hours. This may be followed by a karaoke session. (iv) Paying the Bill: In Asia, it’s usual that the host will be the boss, the head of the table, the eldest (or perhaps someone who is all three) who pays the bill. It’s considered an honour for him/her to do so, so insisting on taking the bill can be considered quite rude. Allow your host to pick up the tab and thank them graciously for it.
ASIA FOCUS | BF
O Jon Michail
is the founder and CEO of Image Group International.
ne of the biggest questions that arises when businesses look to expand, particularly within the Asian region, is how to maximise or best leverage the opportunities that present themselves. There are several ways to look at opportunities, but first you have to do a little research. The first element of expansion that you should examine is territory. Territory Research and explore which countries offer the best opportunities for the most satisfying potential return on investment: long and short term. Remember the ground you make with regard to territory also depends on your company and size, resources, connections, experiences in target market, cultural understanding and affinity etc. Other questions that you should ask yourself before deciding on territorial expansion are: what service/product will I import or export? Will I manufacture or purchase and distribute? Is it required? Will it need to be adapted for Asian market (exports or distribution)? Am I ready to export my product/service to other regions (USA, Europe)? Is the product/ service already exported to other regions? Risk The second thing you should do is evaluate the risk associated with territorial expansion. There are variable factors that will affect whether your product is a success or not. Your clients are paramount to your success; you need to build and maintain strong relationships. And this extends beyond your client to the industry you are in as well. It may be worth considering a joint venture, especially if certain political, economic or infrastructure parameters are in play. Other things to be aware of are corruption within certain partners’ operations as well as governments and bureaucracies, inflation and the value of the dollar. The following are ways to mitigate the risks: • Have a team on the ground to report – this may include people from HQ or local staff employed by HQ. • Create clear expectations of what is required of all: your team, your clients etc. • Set up systems – People reporting including a ‘pulse’ on how the relationship(s) is going. • Ask for help from seasoned Asia entrepreneurs. They will add value to your business, ask them to be ‘real world’ with you as without straight talk the risks are too much to bear
and will only be obvious when you are already in too deep. Start on the right footing. Your SWOT on the region should include: 1. Economic dynamics 2. Infrastructure 3. Ease of doing business 4. Domestic political risks 5. Social instability risks 6. External political risks 7. Systemic risks. Culture Identify the right people to place and engage with the client this means flying out with your team to meet the client. You must research the client: (preferably prior to flying out) to make sure they have the power to make decisions. Billionaire & Chairman of Crown Resorts Jamie Packer recently said “Our success in China would not have occurred without our partners.” It is paramount that you understand cultural protocols and etiquette, but mostly the way your client thinks. Check out contemporary culture in each country for clues. Culture works two ways: yours and theirs. Ask yourself whether your company has the existing traits to succeed overseas. Those companies that are able to maximise their opportunities in Asia share the following traits: - Established in home markets - Good product or service - Good reputation in home market - Brand recognition - Well-resourced including financially - Well connected - Appreciate different cultures – speaking the language is a bonus - Professional to the point of conservative - Patient and very good listeners - Good negotiation skills - Frequent visitors to the region - Relationship focused - Understand that process is a necessary part to results – no such thing as an overnight miracle; time is regarded as your friend. Create a position of power Once you have conducted a market discovery, remembering that the Chinese are different to the Japanese or Indonesians, it is time to put your powerplay into action. How will you position yourselves above Western competitors? There are certain factors that you must adhere to. Listen, listen and listen – silence is golden in Asian culture. For you and the client. It is a sign of politeness and
Identify the right people to place and engage with the client, this means flying out with your team to meet the client.’
contemplation. Westerners tend to talk too much and have a reputation for doing so. Be polite and always listen and you will gain trust and respect. Remember that ‘Yes’ does not always mean ‘Yes’. It’s not common to hear ‘no’ to anything. Business culture in Asia is nowhere near as direct as it is in the West. It’s important to give the people you are (or hoping to do) business with, a way out. If you ask them for a yes or no answer, you will hardly ever receive a no. But if you receive silence, a hesitation, or sometimes even a yes, the answer can often be no. Once you have landed in the territory, get yourself introduced by the right people to the right people; you are better to have no introduction than the wrong introduction. Focus on building the relationship, without a strong relationship contracts will not come. The best way to go about your territorial expansion is to seek advice from people that have been there before you. However, seek the right advice. Experience tells me that the advice you require as an entrepreneur is at times strikingly different to what a multi-national may require. Be street smart in your approach, forget about the politically correct advice that is so common today, ask the tough questions from people you trust and respect and have the runs on the board – explain to them that’s how you would like to be treated. In my experience this approach works best. If you follow these rules you will set yourself up to have a successful crack at doing business in any of the Asian territories. BF Jon-Michail is a 30 year veteran collaborating in entrepreneurial ventures in Asia. He is the CEO of Image Group International, Australasia’s NO 1 Image Coach – IGI Supports Professionals and entrepreneurs to monetise their personal and corporate brands. www.imagegroup.com.au
BF | PROFILE
20 BUSINESSFIRST MAGAZINE
PROFILE | BF
Flight catering has undergone its fair share of criticism in the past, however as expectations have changed the inflight dining experience has had to adapt. At the forefront of this adaptation is Conrad Smith, who speaks with Business First about servicing different tastes.
he flight experience needs to be as relaxing as possible. From first class to economy, there are expectations that must be met; friendly hosts, a diligent pilot, entertainment options should all be to a customer’s satisfaction. If not, brand loyalty and repeat custom is on the line. Crucial to the comfort of passengers is food supply. How many times have you been on a quickly turned around flight and the cabin has run out of snacks, let alone meals? It’s frustrating. Sometimes it’s unavoidable. However there are companies such as Alpha Flight Services, led by Conrad Smith, who not only ensures that you get your meal, but that the meal is a satisfying one. Conrad’s father, Peter Smith, had the foresight to recognise emerging trends and create a successful and sustainable business, founded a flight catering business, now Alpha, over 35 years ago in Tasmania. When Conrad took over the running of the business in February 2013, he had a strong base to work from. The
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PROFILE | BF
business had started with two customers, the now defunct TAA and Ansett; it now supplies catering services to airlines throughout the UAE, UK, Europe and Australia. Through the collapse of Ansett, Alpha acquired ten kitchens around Australia, which put the company in a position of strength. Conrad began his apprenticeship in cookery when he was just 15 and grew up in the business. He worked in different areas, took a sabbatical from Alpha to work in another of the family’s businesses – a hotel – and when the company sold out of pubs in 2006, he moved back into the swing of inflight catering. “We were a domestic caterer, serving two individual airlines that relied on service and offering to win customers,” Conrad says of the industry at that time. The airline industry has changed dramatically with the influx of low cost carriers. However, Conrad believes the service mentality is making a comeback. “The introduction of Virgin and low www.businessfirstmagazine.com.au
cost airlines in this country changed the mindset of carriers and passengers. Cheap flights took priority as service was seen as less important to cost. However as Virgin has grown and become a true competitor, service is back on the menu and a full service offering is once again a sales point.” In Australia this is a point of difference, with many overseas carriers offering nothing but a paid for snack – although, this also needs to be supplied. There are other challenges in this very volatile and changeable industry. Price wars, financial hardships and supplier competition all affect business. Yet Alpha is doing something right. They are the number one caterer internationally and sit at number two domestically. “There is a great deal of volatility in air travel, particularly in pricing and each airline is looking for the lowest costs and this affects all suppliers including caterers. We have to accommodate that and that is a challenge to manage. With international travel there is a lot more capacity on the market, so the airlines look at suppliers to reduce costs and improve their bottom line.”
Alpha’s success has been evident with numerous awards including Best Global Caterer for airlines including Etihad, Malaysian and Cathay Pacific.’
“The Alpha Group is dedicated to providing customers with wonderful meals while inflight. They ensure this by looking at every aspect of inflight catering, from the quality of the produce through to the effects of altitude on tastebuds. It has been a privilege to support the growth of the Alpha Group since its inception, providing a total fresh meat solution.” Haverick Meats
Partnering with Australia’s leading professional food service companies for two generations We know you never compromise on quality, reliability and consistency. Neither do we. The culmination of tradition and passion has made Haverick Meats one of the leading suppliers of quality Australian meat to the professional food service industry locally and internationally. We have one of the most technologically advanced, purpose built, export-approved facilities in Australia, so wherever you are, we are too. www.haverickmeats.com.au 13-15 Green St Banksmeadow NSW 2019
To win and maintain contracts, you not only have to be competitive on price, but the service has to be impeccable. There is a reason why Alpha is rated so highly. It is because they meet the expectations of airlines and in turn, those airlines’ clients. This is no mean feat when you consider that Asian competitors can supply cheaper products. Alpha’s success has been evident with numerous awards including Best Global Caterer for airlines including Etihad, Malaysian and Cathay Pacific. This is Alpha Flight is a very fast & Dynamic business with strong business ethics which drive the qualities that all customers/ Suppliers aspire to. Alpha’s ability to support suppliers with clear forecasts & expectations on supply, has been critical to maintaining the collaborative business relationship ongoing. Nu-Pure Beverages
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PROFILE | BF
testament to the dedication of our staff who are passionate about producing meals and also to our suppliers who continually deliver the finest quality produce available in Australia. A key element that sets Alpha apart is its respect for the different cultures and religions in the varied places it caters to. This philosophy was something that was implemented many years ago by Peter Smith. “Respect of customers religious beliefs is an important part of Alpha’s success. Halal requirements play a major role in our business. We have embraced customer’s food preparations requirements.” Another change to the industry has been the incorporation of the celebrity chef to airlines. It’s great for brand, but what does someone like Neil Perry mean to the caterers behind the scenes who are doing all the hard work? “Corporate chefs and celebrity chefs have a place in the market, but they need to work closely with the caterer to understand the costs of their signature dishes and the way airline kitchens work,” Conrad says. “Food is 40% of what we do, the rest is logistics. To bring the food to the aircraft is quite challenging. You have to ensure the food is cooked in the way it is to be delivered, packaged properly and reheated. You have to ensure that there is enough for everyone.” www.businessfirstmagazine.com.au
Airline catering is as much about logistics as food. It is about quality, design, costs and serviceability. “An international aircraft is a fascinating thing. It carries from 100 to 500 passengers with a limited amount of space dedicated to housing food and beverage offerings. Every square centimeter has to be used, allowing the cabin crew to efficiently deliver the quality meal prepared. Then there is the transit of the food. To achieve timely delivery, supplier relationships are crucial. Good relationships are based on honesty,” Conrad says. “Businesses are an open book. They need to make a return. We have a very open relationship with all customers and we are here to help them as long as they understand that we employ people and have to pay them.” Alpha has a fleet of approximately 130 vehicles of which 90 are trucks dedicated to servicing wide-bodied aircraft such as Emirates A380s. Alpha also employs 1800 people across its Australian network. “We have a great young team that I am fortunate to lead,” Conrad says. “We do things as a team, discuss things on a daily basis and listen to our staff. We listen and make sure they are comfortable and do what we’re here to do – supply the customers.” As for the future, Conrad says Alpha
“Morco fresh commenced business relationships with Alpha in 2006 with the supply of high quality fresh produce in Sydney with the view of supplying their business nationally. Today we are extremely proud to be associated with this reputable company.”
is constantly trying to improve. Part of that improvement was to take some time out from the significant growth phase of 2005 to 2012 which stretched resources and concentrate on existing customers and improving compliance and safety standards. “Through concentrating on existing customers, Alpha has been able to achieve the best product, service and delivery on board each and every aircraft. This goal remains the same through 2014 and into the middle 2015. At this time, we will look at initiating future growth through Australia and into neighboring Asia.” It is no mean feat to maintain excellence and positioning in this sector. However, Alpha has been able to achieve this for several years. It may be the family factor, or the deep knowledge of the industry, or it may be the relationships with suppliers and customers. Or it could be all of those things and behind each one, a dedication to quality and delivery. BF
BF | LEADERS
Take your investment in new executives one step further Norah Breekveldt discusses the numbers that may scare you – the high rate of failure in appointing leaders.
Norah Breekveldt is Director of Ampersand Advisory.
usinesses invest heavily in attracting and hiring the best executives the market has to offer. However, despite the best recruitment or search processes, success is by no means guaranteed and many new hires don’t make it – in fact around 40 per cent of new hires derail in the first 18 months – that is, they are demoted, are fired, resigned or failed to be as successful as expected. Can you imagine a business installing some new technology or investing in a piece of highly complex equipment and accepting a 40 per cent failure rate? Yet many organisations seem to accept this poor track record with its leadership asset. Some of the common reasons why new executives fail to meet expectations include: • They become swamped in operational problems or fire-fighting at the expense of focusing on longer term strategic, business development or leadership priorities • They underestimate the challenge of coming in as an outsider and over-rely on their previous successes to gain acceptance • They fail to engage their team or effectively turn around disgruntled staff • They lack understanding about the informal power bases and decision-making processes in the new partnership • They apply strategies that were successful with a previous employer, but fail to gain traction in the new organisation • They are unable to adapt to the new culture, different decision-making processes and distinctive leadership styles of individuals in the new business • They become captive to the views of the loudest voices. As a result they don’t build the right foundations, fail to listen to the right people and so get limited traction. When leaders derail their problems can almost always be traced to complex chains of events that developed early in their appointment. The issue is not simply one of poor internal induction or on-boarding strategies in the first
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LEADERS | BF few weeks. Careers still get derailed even with the best early induction plans. Derailment emerges typically over a six to twelve month period as forces conspire against the leader and the impacts of misjudgements or poor decisions start being realised. The consequences of these failures can be catastrophic for the individual and costly for the firm. Replacing a
top executive costs conservatively five times the previous incumbentâ€™s total cash component. There is also a serious waste of talent in the firm, the firm wastes costs in fixing bungled matters and it must deal with the implications of highly valued staff leaving the organisation as a result of poor leadership behaviour.
SO WHAT TO DO? Firms can substantially increase the effectiveness of new leaders and minimise the risk of derailment by equipping them with resources and support that maximises their integration. Investment in the integration of lateral hires is a priority for the leadership agenda of any firm. Smart and successful executives need sound advice and a confidential sounding board to ensure they not only meet expectations, but excel in everything they do. Just like an elite athlete who works with a sports coach to develop their capabilities further, the best leadership talent needs personalised, tailored, objective advice to ensure they increase their bench strength around their core capabilities, work around blind spots and recognise potential blunders or missteps that can stall or derail their career. Many leading companies are now recognising that investing in in-depth on-boarding support in the first three to six months of a new hireâ€™s appointment as a standard part of their selection approach creates business value, protects their leadership asset and minimises people investment risks. New hires who have been provided with proactive support accelerate their learning curve and become fully productive in a shorter period of time, can quickly engage their teams to deliver exceptional performance, and build effective influencing skills with key peers, customers and stakeholders. They are also able to retain high value internal staff who may be at risk of leaving, and minimise the risk of destroying team performance through poor team leadership and having a shallow succession plan for future leadership roles. CONCLUSION All new leaders require a proactive and supportive approach to their integration in order to succeed and excel. Leading firms recognise that investing in proactive support minimises the risk of outright failure, stems the potential loss of key staff and clients due to missteps that could have been avoided and ensures the new leader becomes productive and flourishes in the shortest possible time. BF Norah Breekveldtveldt is the Director: The Leadership Agenda, Ampersand 1 Executive Integration, Equipping Transitional Leaders for Success, D. Riddle, Centre for Creative Leadership (CCL) 2 Watkins, M., The First 90 Days, Harvard Business School Press, 2003, p. 1 3 Top Grading, Brad Smart
BF | MARKETING
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MARKETING | BF
The buffaloes on King Street and the secret to viral marketing “Sweetie, you know how we were filming the TV ad with the buffaloes today? Well, they broke loose and caused havoc on King St in Newtown.”
T Nicole Smith is the founder of Tin Shed Marketing.
his phone call from my husband heralded a text book example of viral marketing and a story that would have people laughing for days. My husband Chris, who owns a film locations business, was working on a South Korean TV commercial for a new mobile phone. The shoot had an array of crazy elements including giant tenpin bowling pins, balls dropping from the sky and, to top it off, a couple of water buffaloes. As a locations scout and manager, one of Chris’ roles is to deliver the impossible. The creative team wanted two water buffaloes grazing in Sydney Park. Chris’ job was to demonstrate that the animals were tame, would be tethered at all times, and therefore obtain the appropriate approvals from council and the police. The big day arrived. All was going well until one buffalo was spooked and broke free from its rope. The Korean crew, unaccustomed to a roaming buffalo on the streets of Seoul, headed for the trees. The other buffalo soon escaped from its confines too. In their collective buffalo wisdom, the great beasts decided that the park wasn’t much fun and that the Princes Highway looked a far more desirable place, so they headed off for Newtown. The Australian crew channelled their inner Crocodile Dundees, and frantically attempted to herd them back to their enclosure, but to no avail – they were determined to have their 15 seconds of fame. As the two lolloping creatures crossed the highway, miraculously avoiding trucks and cars, Chris realised he had no choice. The emergency services was called. It was then that the story broke. Twitter feeds shared the surprising sight. Video footage was uploaded. People called to share the story on talk back radio. The story took on a life of
its own. Within a matter of hours, the rampaging water buffalo story had hit every major newspaper, radio station, TV network and social media site in the country. What’s more, the story went global – because in so many ways this was the perfect story. So, what made this such a perfect story, and what does it say about the machinations of contemporary media? Here are the key elements: 1. Shock value: People everywhere did a ‘double take’. The train of thought ran from “Did I just see two buffaloes?” to “This must be a set-up”, to “There are actually two buffaloes on King Street! I have footage to prove it.” 2. Location: The denizens of Double Bay would have been less than amused by the interlopers, but on the colourful, crazy streets of Newtown, where anything goes, the introduction of two buffaloes is inherently funny. As one talkback caller put it “I thought ‘Oh my God, there are two buffalo’ … and then I thought, ‘ah well, it is Newtown’.” 3. Near calamity: Be under no illusions, this story could have ended disastrously. And yet, it was this knifeedge balance with danger that added something special that made it perfect for social media. 4. Drama: Contributing to the high drama was the crew, hurtling along on a quad bike behind the buffalo, yelling for people to get out of the way. 5. Crowds of people with mobile phones: 10am on a weekday is a busy time on King Street. The buffaloes’ two-kilometre run provided maximum exposure for people wanting to catch them on film. It also enabled the story to be broken by the general public.
6. Heroes save the day: Everyone loves ‘firies’, and the Newtown Fire Brigade just happened to be in the right place at right time. They helped the crew to corral the buffaloes into one lady’s front yard. 7. Aussie sense of humour: There was something about this story that appealed to the slightly rugged, wild sense of Australians. While the Koreans felt a devastating loss of face, the Aussies could see the funny side. 8. Classic one liners: The story spawned all manner of classic one liners, from the firey saying “I’ve seen a lot of bull in my time here, but never anything like this”, the lady who, indignant at the damage to her front yard, complained that “they’ve ruined my azaleas”. 9. Ongoing humour: The authorities were philosophical, understanding that no one intended for the buffaloes to get loose. It was just another reinforcement of the old adage ‘never work with children and animals’. A week later, the Newtown Fire Brigade posted a sign outside the station: ‘Number of days without Buffalo Incident: 6’. This spurred on another flurry of social media activity. So what’s the lesson in this story? My husband’s lesson was obvious. He promised the authorities to ‘never work with buffalo again’. For me, as a marketer, it crystalised the essence of the perfect story, and reinforced just how hard it is to fake it. In order to make a good story, you have to be authentic. BF Nicole Smith has spent nearly two decades helping professional services firms to grow their businesses. A strategic marketing expert, Nicole established the Tin Shed marketing co-op in 2010. See: www.tinshed.co
BF | PROFILE
Building community spirit
Chardan is known for developing prestige properties, but there is more to the company than developing land. Chardan builds sustainable communities. Bob Forshaw speaks with Evan Dickson about what it takes to build a community.
van Dickson isn’t your usual developer. He doesn’t have a degree in engineering, architecture or building, he is a financial controller and accountant who prior to setting up with Chardan worked for Ernst and Young before moving into the financial controller’s position at the very well respected Ray Group. However, it is this background that held him in good stead for his future operations. At E&Y, which was still Arthur Young when he joined, he was exposed to large-scale business operations and a strong ethical foundation. While with the Ray Group he gained real world insight into the workings and requirements of large-scale property development. The Ray Group is a private property development, investment and management group founded more than 40 years ago. It has history and reputation and provided a fantastic learning curve. “I was mostly working in invoices for small business through Brisbane and around QLD,” says Evan of his time with Ray Group. “We had a
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whole range of different clients in different industries and I was learning about financial cycles and managing businesses and people. This was the height of the 1980’s property boom and property development was exciting. We were doing some major work for major companies. That changed in the 1990s when the cycle finished, but it gave me a real taste for development.” As time passed, Evan took a more hands on approach with Ray Group and began to oversee and become more involved in the actual development process of the company’s many developments. He immersed himself in development in Calypso Beach and Koala Beach Residential Estate at Pottsville, NSW. There was also an entertainment themed attraction in Brisbane’s Amazon Waterpark. “I learned a lot by listening to experts in property finance and architects. I learnt about the whole process of development, which was critical in being able to run my projects. Most importantly, I learnt about creating a community,” Evan says.
“Year after year I spent learning the ins and outs of the industry. I didn’t have the usual background. I had a background in accounting, but this was a positive as I knew I could manage the financial risks associated with these projects.” With that confidence, in 1998 Evan established his own consultancy, KD Development Management. Through KDDM he met his former business partner, but it also put him in the presence of a major Brisbane developer who would change the course of his business. That connection was Perth based, family-owned company Expectation Pty Ltd. There was a synergy between the two, mostly to do with community values and not long afterwards, Evan was tasked with rolling out Expectation’s first east coast, residential project, Somerset Meadows in the lush environs of the Gold Coast Hinterland. “My goal with KDDM was to get involved in big projects with a long lifespan and create communities. All the projects we do now are community based.” www.businessfirstmagazine.com.au
PROFILE | BF So the meeting with Expectation was fortuitous to say the least. It was the beginning of Evan’s large-scale development business. KDDM became exclusively involved with Chardan Development Group and the development arm of Expectation. The first project as Chardan with Evan instated as the general manager was Chancellor Park. In mid 1997 Chardan acquired 300hs of open grazing land along the Bruce Highway near Buderim. “We saw a great opportunity to develop the area into a leading residential community, providing residents with a safe, enriching environment for their families.” Family growth was the purpose of this development. It enjoys close proximity to the highly regarded Sunshine Coast University, numerous public, private and secondary schools, beach strips, and Maroochydore’s city centre. The Chancellor Park masterplan, focused around a multi-tiered lake system, open space and landscaped parklands, which is now home to over 7,000 residents. Neighbourhood walkways and bike paths run beside
flowing waterways and lakes that meander throughout the green parklands, creating a sense of natural space and freedom. Barbecue areas, a skate-bowl and large playgrounds ensure people of all ages can enjoy the large range of
community amenity. More recently, a vibrant commercial hub including some 50 local and national businesses has complemented the growing community. This development put into practice the philosophies that Chardan had developed and now
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PROFILE | BF embraced as a masterplanned residential developer. Evan even called this development home for three years. Though a daunting project to begin with the success was due to “having a good team of consultants in engineering and town planning. That is how we run our projects,” Evan says. Upon the successful completion of the Chancellor Park development, Chardan wanted to secure another coastal development opportunity to capitalise on its local team, accumulated knowledge and expertise within the Sunshine Coast marketplace. Its brand had now been developed and Chardan stood as a quality residential, community developer. “The Chancellor Park project was built with a sense of community that evolved from within its education foundation. Families bonded as they held common values and desires for their children’s educational development.” To ensure their direction remained true, the Chardan team chose six keywords as their development yardstick for future projects. Sustainability. Community. Growth. Amenity. Innovation. Affordability. These six words mean Chardan is committed to responsible and ethical development that seeks to enrich their communities and the regions in which they reside. “We look at the common focus of what holds communities together,” Evan says. “In Chancellor Park it was the education facilities. In Sunshine Cove it is the urban environment.” The next project secured by Chardan, was Sunshine Cove. This 106 hectare of former farm land in the heart of Maroochydore is situated on the Sunshine Coast, Queensland. This parcel
Investor Property enjoys the long-standing and engaged relationship with Chardan due to their focus on innovation and responsible development. A focus that has helped underpin our clients’ successes by providing a foundation for strong growth in value and yield – and this is just the beginning. Mal Cayley, Managing Director – Investor Property
was a green infill site without any preconceived ideas enabling the many years of experience garnered from Evans’ previous projects and his team’s support to evolve into a true masterplanned community. The vision for Sunshine Cove was to build a community for those desiring a more urban lifestyle without sacrificing their individuality or the freedom of space. “A place where the tyrannies of commuting to work were a thing of the past, where you could actually live, work and play. A location that whilst right in the heart of the city, still offered easy access to all the elements of the highly desirable, laid back Sunshine Coast outdoor lifestyle.” Since 2004, Sunshine Cove has transformed from local farmland into a residential centerpiece for the Sunshine Coast and Maroochydore. The end value of which is estimated at $800 million. Potentially, some 6,000 people will live and work within the Sunshine Cove community that includes numerous local and national businesses, commercial precincts and small pockets of retail right in the heart of Maroochydore. Evan has worked tirelessly with builders, bureaucrats, councils and communities to make all his projects a success. He has kept up to date with building code changes and sustainability practices to ensure that these communities offer the best available services.
RPS is proud of Chardan’s achievement in creating a benchmark community offering a new approach to urban living on the Sunshine Coast. In addition to urban design and survey, RPS provides planning and landscape architecture services from offices across Australia. “Communities take time to build, but they need the right infrastructure and focus,” Evan says. “They have to be built with facilities including schools, shopping and recreation areas. Council and government approvals do take some time, but they are a process you have to go through at the beginning of the project. The timing of those approvals is critical to the success of the project. And while the approvals process has changed dramatically over the years, they have resulted in a far better product than was available 20 years ago.” There is still five or six years left to complete Chardan’s vision for Sunshine Cove as a commercial and residential hub. It is one of the group’s strengths that it finishes what it begins. And Evan sees this ability to create communities from the beginning of a project to reality as Chardan’s biggest achievement. BF
BF | PROFILE
CHALLENGING THE NORM to achieve exceptional outcomes
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PROFILE | BF
Pat Tallon serves as the Chief Executive Officer of Civmec Limited, an integrated, multi-disciplined construction and engineering services provider to the resources and infrastructure sectors. It’s a long way from ‘being on the tools’ for the Irish tradie with a background in carpentry and joinery, who travelled to Australia in the early 1990s. Pat speaks with Bob Forshaw about his early influences and what it takes to run a successful construction business.
he early 1990s marked the rise of multiculturalism, neoliberalism, the Internet, Nirvana and a major cultural change. The cold war thawed and the Soviet Union dissolved, while economies and political power realigned. Among the great changes, were a raft of entrepreneurs and business minds about to embark on their own, very personal life changing careers. We can roll out the usual suspects, but we won’t here. This article focuses on one man, in the construction industry, who may be unfamiliar but has achieved a great deal. Pat Tallon is one of the men behind construction giant Civmec Construction and Engineering. He is responsible for the safety, budgets, management and development of its operations, setting all Group policies such as those relating to safety, quality and the environment and the improvement of productivity. It’s a big job, but Pat has the grounding: first as a tradesman in Ireland and Australia, where he came to understand the machinations of the building and construction sector and later when he returned to Ireland in the mid 1990s to set up his initial construction business. In 1999 he docked Down Under permanently and set up Ballymount Enterprises with his brother, where he was responsible for promoting, expanding, developing and steering the company as well as guiding its operations in structural concrete contracting. Bally in Irish means ‘place of ’. The construction industry is certainly a place in which Pat belongs. Eventually when he joined up with executive chairman Jim Fitzgerald in 2009, he was right at home in the industry. “My brother Nick had been involved in Civmec at the very start and Nick and Jim knew each other for a very long period of time,” Pat says of the partnership. “Ballymount was also doing some contract work for Jim’s previous company, so I got to know Jim through that connection as well.” Things really took off for Civmec in 2009 when they purchased land at the Australian Marine Complex (AMC).
The AMC provided the perfect location for operations. “We had undertaken a thorough review of opportunities in the marketplace and were confident that with the new facilities and capabilities we would bring to the industry we would secure work as soon as the facility was running. The move paid off as today the company operates within a new purpose built four-storey office in the same location.” “The 6,500m2 headquarters has been constructed in-house to accommodate over 450 personnel,” Pat says. “The facility incorporates an extensive training and induction centre and a well-equipped medical centre with a full-time qualified nurse for pre-employment medicals. “Our belief at Civmec is that improved productivity combined with a high level of support services, ultimately means more cost effective project delivery. The more efficient we can be in carrying out projects locally, the more likely we are to see more projects being approved for Australia. “It also prepares us for growth within the global market. The opening of this office provides increased capacity to develop our strategic plans, and in the future will enhance our position nationally and potentially as a major global supplier.” Pat is looking to expand into international markets as a natural extension of the steady growth Civmec has enjoyed over the last few years. The issues surrounding this concern the speed of the expansion. Pat says you have to be able
to control growth to enjoy it. “We maintained a lot of control and we’ve made sure every one of our disciplines, every one of our businesses here was fully operational. We can’t tell one hundred per cent if the bolts are all in place but we could certainly have a large percentage of those bolts fastened before we embark on the next phase of expansion.” Those bolts to which Pat refers are Civmec’s capability offerings which include heavy engineering, modularisation, structural, mechanical, and piping installation (SMP), precast concrete, site civil works, industrial insulation, offshore logistics, access solutions and maintenance. Once they felt they were in control of those areas, they could look more geographically inside Australia, with room in the future for global operations. “We have a strong realisation that the company needs to grow and we need to follow wherever the work is and give shareholders value.” The shareholders wouldn’t be com-
We were very strategic in making sure we set certain foundations before moving forward.”
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PROFILE | BF
plaining. Civmec recorded revenues of S$20 million in its first year. Their revenue is now in excess of S$400m. The company has increased resource levels with direct labor somewhere in the region of 1500 to 1700 and Pat says they are directly responsible for the wages of at least another two thousand people in the local area. “It’s been interesting growth,” Pat says. “We were very strategic in making sure we set certain foundations before moving forward. And we were resolute about being profitable and realistic.” Being realistic is a tenet Pat holds dear. Civmec is a company that builds relationships on its forthright and honest approach to staff, sub-contractors and clients. “If we won’t do the right thing, we won’t get work. There is a limited amount of work out there and we are constantly looking for new avenues to expand our business to ensure that we are giving everybody constant employment. “Jim and I are from trade backgrounds and we understand what it’s like to be on the tools. We are totally honest with our staff. We gather all our workers at least twice a year and tell them exactly what’s going on in the company and what the future holds. We are realistic. We let them see our projects are in line with where the company is heading and the feedback is always very, very good because they know where they stand.” Clients also appreciate the honest approach. Some of those clients include Rio Tinto, BHP Billiton and Chevron who require a high standard of work and association. It means Civmec is constantly updating systems, and facilities and expanding controls which is the foundation for securing long term relationships. While local, Civmec understands that it operates in a global market and has to service its clients as such. “We have to look at what’s going on around the world and not just what our competitors are doing locally. So it’s very important that we consider our clients, our suppliers (predominantly in steel and concrete) and all our employees as strategic partners and if we don’t all work together, the work is just not going to happen here in Australia. If that is the case we won’t be effective. We all need to work together to get the best results for our clients and to keep working here in Australia.” www.businessfirstmagazine.com.au
Civmec certainly takes a smart approach to business. They hire well and value their people and they deal with their problems quickly and efficiently. One of the first major challenges the company had to overcome arose when they opened their fabrication facility. “When we opened the fabrication facility, it was difficult to constantly track our material and systems. We’re talking about thousands and thousands of pieces of material being cut and put together in large modules. You need to know where every piece is because the requirements in mining, oil and gas projects is extremely high. The client wants to know the material data for every single piece that is supplied on their project and so that took some time to master, but we ended up building an in house system which is very effective and we provide full traceability of our materials.” Another challenge was building clients. Civmec is only five years old and working in a competitive environment. “Building client confidence is a huge task. We’ve been honest with them upfront as to what we feel we are capable of doing and then honouring the commitment. The client is a tough taskmaster and a unique supplier. You have to understand the net effect for them if you don’t supply. If you have an iron ore product that needs to get to the trains and you don’t deliver, it costs them a lot. That’s why we treat our clients as strategic partners and work on solutions together. We have to be honest and tell them exactly what’s going on and come up with solutions to fix problems rather than reasons why we can’t continue.”
As a remote project specialist Access Hire Australia is proud to be a trusted supplier to CIVMEC. We are the largest supplier to Australia’s largest construction and mining companies specialising in Elevated Work Platforms, Telehandlers, Forklifts, Lighting Towers and Generators.
Civmec listed on the Singapore Exchange in 2012. It had a two-fold advantage. It enabled the company to raise the capital required to expand the AMC facility and expand geographically around Australia and potentially globally. The listing has also enabled employees to become shareholders, which is another advantage for a fast growing business. It means that most people within the company want to see growth. It will come from expansion and innovation. It will come from delivery and relationships. It will come from honesty and openness, which Civmec and Pat are renowned for. “The amount of people in this company that want to see Civmec become bigger and bigger and be very successful is very pleasing. That’s one of the most rewarding things; to see people are not here just to pick up a pay cheque. They want to see the company improve and grow.” It seems Civmec is a company that challenges the norm to achieve exceptional results. And with everyone from staff to clients on board, Pat’s job of driving the business forward is made that much easier. BF
BF | OUTSIDE THE BOX
UNSTOPPABLE Steven and Chutisa Bowman ask what do world class leaders have in common?
I Chutisa & Steven Bowman
are global business advisors.
n today’s world, being unstoppable matters. We live in perhaps the most stirring and electrifying economic period in our lifetime. New realities are happening. The ways business may be generated and created are changing. These new realities will bring with them tremendous possibilities and an influx of unlimited potentials. To thrive and flourish in the decade ahead will require a different mindset in addition to a more conscious way of being and operating in the world. Innovation and a different way of being and looking at the world are needed to become unstoppable and become a world-class leader. Failure to do so will suppress advancement at a period
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when progress is vital. The next decade belongs not to those who subscribe to the business-as-usual paradigm but to visionaries who will choose to function outside the confines and the limitations of this reality. So, what does it mean to be unstoppable? It means choosing to stop operating within the limitations of this reality and stop taking on the limited points of view that other people buy into. Being unstoppable therefore is about not being controlled by anybody else’s reality. It’s about being willing to be out of control. Being out of control is not being uncontrolled. It’s not being drunk, disorderly, or illegal. Being
out of control means nothing controls or stops you—and you don’t need to stop or limit anyone else. When you are out of control, you are willing to function outside of contextual reality and conventional points of reference. Leonardo da Vinci and Steve Jobs are examples of people who were choosing to stop operating within the limitations of this reality. They were naturally nonconformists even in the face of unfavourable consequences. They pushed the boundaries of knowledge, exploring things that were outside of contextual reality. They had the courage to stand alone, follow their own knowing, and take what others would regard as the risky options while everyone www.businessfirstmagazine.com.au
OUTSIDE THE BOX | BF
Leonardo da Vinci and Steve Jobs are examples of people who were choosing to stop operating within the limitations of this reality.’
else’s point of view of them was. So, how can you embrace ‘Being Unstoppable’ as a way of being in your own life? First, you must realise that being unstoppable is a choice. It is a commitment you make to yourself not to live by anyone else’s judgment and reality ever again, no matter what. Each of us has the ability to become unstoppable. It is not an extraordinary privilege or a special treat that is only bestowed to some people and not to others. It is a knowable and attainable state of being that is available to everyone, if they choose to claim, own, and acknowledge it. Being unstoppable is an experience
of expanding your awareness beyond its present limits. It is a state of flexible awareness, with no fixed points of view. If your organisation is to thrive and provide real value, you as the leader must choose to be unstoppable. With a different mindset, you can re-imagine what is possible, discovering what you can do that is new, and how best to do it. You will be able to perceive the major trends that will change the business landscape and draw on your awareness to make choices that will create greater future potential for your organisation. You won’t just navigate tomorrow’s global trends, but actually shape them. BF
5 Things You Need To Do To Be Unstoppable
1 else selected the safe route. They were supremely gifted people who saw different possibilities and were aware of different things. They undertook actions that produced societal value and shaped a future way beyond most people’s imagination. They inspired others to act. Both da Vinci and Jobs didn’t let the controls of other people’s points of view, realities, judgments, and decisions become the controlling factor in their life. They had an unshakeable courage and trust in their tenets, even though their initiatives and ventures confounded conventional practices, and often unleashed irregularity, mayhem, and chaos. They always trusted themselves and their vision, no matter what anyone else thought. They had absolutely no concern for what someone www.businessfirstmagazine.com.au
Making the choice to choose. You have to choose to be unstoppable; it’s not a place you go to—it is who you are. When you are being unstoppable you are truly being you. You do not define yourself from the limited perspective of this reality. You do not go by anyone else’s reality. You do not adjust your world to fit anybody else’s reality.
Become aware of limited points of view. To truly become unstoppable, you must come out of any limited points of view you have created. You have to become aware of where you are functioning from, that is creating limitation in your business and in your life. The moment you take the initiative to become aware of your limitations, habits, and any unconscious conditioning, you are on the path to becoming unstoppable
Commit yourself to change in every aspect of your life and give up defining yourself in any way, shape, or form. You have to make a demand of yourself: “No matter what it takes, no matter what it looks like, I am going down this path.” Be willing to be vulnerable and to stay open to the new, the unfamiliar, and the
unknown. Be open to all possibility and be willing to look at what you can do that will generate different possibilities.
You must be willing to challenge traditional perceptions, assumptions and points of view. To be unstoppable requires you to become aware of the boundaries and restrictions that confine your behavior and then deliberately let those boundaries and restrictions go or step beyond them. This is not about breaking the rules. It is about renouncing the significance of conventions, rules, and regulations in general, and most especially those which do not contribute to your success. It is about finding more generative, dynamic, and flexible ways of being.
Be flexible and spontaneous. Choose to be ever aware and mindful, ready to shift strategy and tactics as the situation requires. Cultivate the ability to change and transform on a dime. The ability to change and transform on a dime comes from the capacity to adapt as needed and to create flexible structures that are appropriate and suitable for that moment.
BF | TECHNOLOGY
LIFTING THE HAZE OVER THE CLOUD Looking through the haze, now is the perfect time for SMBs to move to the cloud says Stephane Ibos.
T Stephane Ibos is CEO and co-founder of Maestrano.
he cloud is one of the trendiest topics in business right now. It may feature on nearly every event program but it continues to be wildly misunderstood. Most businesses understand that the cloud ‘will happen’ and are waiting for its time to really arrive. The reality is that this time has arrived and it’s time to dispel some myths. SMBs are the bread and butter of most economies. Australia is no exception with a staggering two million SMBs powering the nation. These businesses are driven by successful, motivated professionals pioneering
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exceptional products and services on limited resources. These companies attract bright, nimble minds that collaborate to make fast decisions and propel growth. Paradoxically, these forward thinking businesses are managed and run on spreadsheets. According to Microsoft’s “Drivers and Inhibitors to Cloud Adoption for Small and Medium Businesses” 2013 survey, 80% of SMBs use spreadsheets as a primary tool to conduct their operations and more than 60% of these self-manage their IT. I am fascinated by this discrepancy in reality and intention.
Cloud services have become much more sophisticated in their evolution. The advantages of the cloud are becoming better known and accepted – 80% of business owners feel they need to move to the cloud very soon to benefit from its ease of use, delocalised access and low costs – so what have been the traditional barriers to entry for SMB owners? CLOUD VS SMALL TO MEDIUM BUSINESS – IN THE BEGINNING, UNREQUITED LOVE Firstly, the cloud has traditionally been difficult to access – and particularly to www.businessfirstmagazine.com.au
TECHNOLOGY | BF
find the right cloud for your business. There are plenty of offers out there online and suffice to say that typing ‘Cloud CRM’ in an online search engine will return more results than you could ever hope for – a time-consuming and difficult task to sort through the options and understand the benefits and costs. Secondly, cost has been a showstopper in the cloud story for SMBs. Plenty of websites will offer attractive (if not free) entry offers, which soon turn out to be insufficient. These offers are designed to lead the prospect to choosing paid plans. Once stepping into the world of ‘real’ plans, it is disappointing to realise how pricey they become – particularly when compared to that free spreadsheet! The third and final barrier to entry is security. Most of our customers ask (and rightly so) where their data is hosted, who owns it, what would happen if the company disappeared or if a natural disaster struck? These are relevant questions but unfortunately most cloud solution providers do not clarify these points in a simple, transparent and understandable manner. We are wise enough to know that when something is unclear, it’s probably worth avoiding. Weighing up these three barriers, it’s clear why the cloud can seem complicated, expensive and unsecure. The challenge is for the next generation of cloud services providers to change the perception and prove the inherent advantages of moving business systems to a sophisticated and secure cloud based service. THE NEW GENERATION OF CLOUD SERVICES – YOUNG LOVE The beautiful thing about the internet is the constant innovation that it nurtures. There are great products and platforms out there that have endeavoured to change the way the cloud operates and hope in turn that its perception will change as well. There’s never been a better time to trust in the cloud. As it becomes more widespread, platforms become available to distinguish between the good and bad and help businesses compare and analyse offers. Most new cloud services are transparent and offer great ways to get www.businessfirstmagazine.com.au
started with simple tutorials, free trial periods and support provided by real people – a real game changer. Innovative platforms such as Maestrano have launched with the dedicated intention to bring to the cloud a whole new level of simplicity, security and enhanced services, specifically for SMBs. It is becoming far easier for SMBs to find clear products at cost-effective prices. Today is the first day of the rest of the cloud’s life. And it is an opportunity for SMBs to save time, money and get rid of the burden of the expensive server in the backroom of the office. Gone are the days of the IT consultant coming in every Friday to change the hard drive and the outrageous licenses paid for limited functionality desktop software. THE FUTURE – MAKING A MARRIAGE It is understandable that fears remain. For most SMBs it has been hard enough to establish systems that just ‘do the job’. Changing and learning new systems can be a daunting task but sophisticated engineering has enabled the cloud to evolve into a solid and stable place offering real options and support for SMBs. As President Abraham Lincoln said on education versus ignorance: “If you think education is expensive, try ignorance.” I would offer, “If you think new is scary, try old.” SMB owners are embracing a growing mind shift as they realise the huge benefits of moving to the cloud and that there has never been a better time for businesses to make the jump. The cloud migration is happening. A RingCentral annual survey in 2013 forecasted that SMBs will spend more than $9 billion dollars by 2016 moving to the cloud. These businesses will be faster, more agile and secure, well positioned to deliver new products and services in real time, anywhere, anytime. The haze is lifting, the cloud is a real opportunity for SMBs – the sky is the limit. BF
Cloud facts A recent survey conducted by Assets1 and reported by Ramco found: • More than one third of the survey respondents cited accessibility to information through multiple devices as the most important reason for their decision to adopt cloud computing. • About 14 per cent of the companies have downsized their IT after cloud adoption. • 82 per cent of all companies saved money in their last cloud adoption project. • 65 per cent of the companies chose cloud-based solutions more than a year ago. • About 64 per cent of organisations say that adopting cloud based solutions has helped them reduce waste and lower energy consumption. • More than 90 per cent of all companies saw at least one area of improvement in their IT department since they moved to the cloud. • 52 per cent reported increased data center efficiency and utilisation while 47 per cent companies said that they witnessed lower operating costs after cloud adoption • 80 per cent of the companies experienced improvements within six months of moving to the cloud.
The beautiful thing about the internet is the constant innovation that it nurtures.’
Stephane Ibos is CEO and co-founder of Maestrano, an innovative cloud based solutions provider aggregating the best open source applications into a seamless, secure and intuitive platform. www.maestrano.com.
BF | PROFILE
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PROFILE | BF
In 2013 Barrick Cowal Goldmine produced 297,000 ounces of gold at all-in sustaining costs of $746 per ounce. Proven and probable mineral reserves as at December 31, 2013, were 1.8 million ounces of gold. The man running this successful operation is Alan Fearon. He speaks with Bob Forshaw about the community-minded approach Cowal takes and what makes Cowal and parent company Barrick Gold so successful.
he Barrick Cowal mine is located in Central New South Wales, Australia, approximately 32 kilometers north of West Wyalong and approximately 350 kilometers west of Sydney. Cowal is an open pit operation, mined by a fleet of dump trucks, excavators and ancillary equipment. This is a big operation and it takes a team of committed professionals to make it a success. The one thing that stands out about Cowal’s operation is that it is a committed effort by a community workforce. To be clear, this is not a fly-in, fly-out company, but an organisation that employs community members. “The business hires locals,” Cowal general manager Alan Fearon says. “One of the conditions of employment is you must live in the area. From our perspective this helps us retain good, experienced people who view this site as part of their life. We have 317 employees and everyone lives in the community; people want to work here, be part of the gold mine and not just accept a pay cheque.” Sometimes building a community is easier said than done, however a strong community is one that is well lead and Alan has done his best at creating an inclusive culture in which all and sundry feel involved. For Alan that inclusiveness is created by accountability, which begins with his own. “Success is determined by how good the team under me is. I try to develop people to have a good skill base. I am accountable for that and in turn they become accountable for their responsibilities. I believe that we reach our goals together and that’s what we have to deliver on.” There are times when leadership and community are tested. In 2013 the gold price dropped significantly and disaster in a lesser organisation may have been imminent. However the damage was minimised through exceptional change management practice, where everyone from leadership down played their part to keep the company in good shape and continue to thrive. Coming through this period and navigating through the low gold price is one of Cowal’s biggest achievements. “We had a big review last year and while cost pressures were tight, we were able to reduce production costs despite increased power and labour costs. We had to let five people go, not 15 and we were able to instigate solutions before the price crash.”
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The community, the council and Cowal’s suppliers were integral to the organisation’s strength through this period. In fact, these stakeholders play very positive roles in Cowal’s ability to operate successfully. Alan not only oversees the internal community, but an external one as well. “We have to work with local businesses and council to make sure that we operate a sustainable and ethical business within Barrick’s codes and practices. This is an organisation that we hope puts money back into the community and creates more business for everyone involved. I believe the companies in this region have grown with us and grown within the community.” As part of their community mindedness, Cowal heavily supports development programs. One program revolves around youth mental health. “There is stress and strain in this industry,” Alan says. “Mental health programs are an important part of the community, especially for those who are affected by severe drought which can ravage this region. By providing funding to government programs and helping to improve resources in this area, we can assist the local community in terms of stress. Many of these people are employed or affected by Cowal in some way.” The partnership between Murrumbidgee Local Health District (MLHD) and Barrick Cowal Gold Mine has
Momentum Energy’s strong relationship with Barrick is based on providing value for money in a key cost input to their business. In our continued relationship with Barrick Gold, Momentum Energy is excited to collaborate on new energy efficiency and procurement methods to ensure their business continues its cost efficiency journey. resulted in the employment of a Youth Mental Health Promotion worker for the West Wyalong, Temora, Coolamon and Junee districts. Cowal remain sensitive to the needs of the community and their concerns for the environment. As such when it tendered to extend the operation from 2019 to 2024, there was very little objection. “We had to go into a public consultation with the Department of Infrastructure. We put in our submission and 73 out of 80 were in support of it. That’s a good number and it has been a fairly easy process. We are still waiting on final approval, but remain hopeful of a successful determination. It just shows that the community has confidence in what we are doing and the way we go about achieving our aims.” Cowal’s parent company Barrick Gold Corporation is the biggest gold producer in the world. It has reached this position because of its recognition
of local cultures and customs. As evidenced above, Australia is no different. Barrick recognises there are different cultures: from Africa to Australia. This ensures they have the flexibility to run the business no matter what the region. There are policies and processes, but they are adaptable. We have several projects and work really had to make ourselves and brand an employer of choice, with a good culture and safety ethic.” Alan keeps abreast of what is going on in other regions as this informs some of the decisions made in Australia, but he says no matter what his position, he enjoys learning. He has studied all over the world: the cultures of South Africa, Zimbabwe, the UK and Australia. What he has learnt is that you don’t go into a region blindsided. “You go in with open eyes and ears, accepting of people’s processes and respectful of their culture.” Another important lesson that Alan has learnt about leadership is to be open and honest about failures. He encourages that from employees as well, so that everyone involved can work through the failure and figure out why it happened. It comes back to a culture of community and everyone being accountable for what they do. Alan has several responsibilities: to Barrick as the parent company, the employees of Barrick Cowal Gold Mine and to the community at large. It is no easy task, but through a policy of inclusion he is ensuring that everyone is achieving their goals and that the company is in a good position to expand the life of the mine and for future exploration. BF
BF | PROFILE
WHERE LUXURY MEETS MAINSTREAM Despite the downturn in car manufacturing in Australia, the car market is thriving in other areas. Bob Forshaw speaks with Ateco managing director Ric Hull about distribution, diversity and the importance of China.
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PROFILE | BF
ic Hull has been in the car industry for much of his life. While he does not consider himself a car lover in the ‘rev head’ sense of the expression, he is very much engaged with the business of cars. “It is one of those industries where we have a large volume of turnover of relatively high value commodities, so when it is good it is very good,” Ric says. The man who graduated with a commerce degree from the University of Melbourne, began his career with a trade association but soon found
himself at Ford where he spent 16 years working in what he calls a very disciplined, organised company. “Ford was highly regarded back then. It was a great learning ground, particularly in finance and in dealing with programs such as the Asian Car Scheme.” It was this scheme that introduced Ric to Asian business practice and while with Ford he spent four years in Japan and three years in Taiwan. He took a sabbatical from cars after that working for an optical company, but
soon found himself at Bond Group importing the Hyundai brand. “The Bond Group was more handsoff. But that was the era where Bond had to sell off everything.” Ric says. Those would have been interesting days indeed. Daiwoo provided a more settled environment. He began Daiwoo importation into Australia and later SsangYong, all the while building contacts in all the right places. When he landed at Ateco in 2000, Ric took a hands-on role with Kia, a relationship that lasted for six years.
BF | PROFILE
“I stayed with Daiwoo for five years,” says Ric. “Then Neville Crichton approached me. He wanted to pitch Kia and because we knew each other, he knew I had a great deal of Korean car experience. He approached me to see if we could entice the Kia distribution rights. We did and kept the rights for the next six years.” Crichton is the owner of Ateco. Though the company has a low profile, they have maximum exposure and import and sell: • Chery • Great Wall • Lotus • Maserati • Ssangyong • Foton light trucks and utilities This is an exceptional mix of prestige, luxury and general-purpose vehicles. And under the guidance of both the owner and the MD, the brand value has continued to increase because the diversification puts Ateco in a strong position across the market. In terms of growth, Ric says, “We have always had our ears and eyes open for opportunities. We were successful in securing Kia. We knew in 2005 it was returning to the factory. Kia
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had been very effective as a volume seller beneath our prestige and luxury brands, so I started to look at other high volume brands. We travelled to India and China, but it was China that I felt would be the right source.” In fact Kia was so successful that when Ateco took it over it was selling 5,000 units a year, when they let it go the number was 25,000 and that happened in a five-year timeframe. They are experiencing similar growth with Chinese brand Great Wall, which launched in 2009 and already has 40,000 units on road. When you look at the statistics it is easy to understand why China is such a significant growth market. “They did 23 million vehicles last year; that is more than the US and Japan combined,” Ric says. “I think they will be a major source of motor vehicles in Australia.” According to Total Executive the reason China is so strong is because 1. They manufacture spare parts for the majority of brands globally. 2. They have access to technology from many of the top brands globally – a lot of which manufacture in China. 3. They have access to much of the
PROFILE | BF
We have always had our ears and eyes open for opportunities. We were successful in securing Kia. We knew in 2005 it was returning to the factory.” technology available from global component makers who produce in China. 4. They still produce at competitive prices. 5. Growth and volume is ensuring their investment in infrastructure for the future. It means Chinese brands have become a big part of the Ateco business and will continue to be in future. And as for dealing directly with the Asian market, Ric uses the same approach he would anybody. “I have dealt with the Asian market all my working life. I don’t make any particular changes to the way I do business with anyone. Honesty, a forthright and professional approach will enable you to do business very readily.” Ateco’s business model is also very attractive to suppliers. Ric sees it as a simple model amidst a sea of complications. “We like to keep the business as simple as possible. In this industry there is a temptation to complicate and build model variations, but we don’t think this is a rewarding approach. So our approach is to keep things simple, while investing in infrastructure. “ In 2010, there was a major infra-
structure investment in Ateco’s $32 million headquarters and Ferrari/Maserati dealership in Sydney. They staged Australian debuts of Ferrari’s 458 Italia super-coupe and Maserati’s GranCabrio convertible in front of more than 550 invited guests. This followed the opening of retail outlets in Melbourne, Brisbane and Perth, and upgrades to premises in Adelaide and Auckland. “We’ve achieved our goal of building the best car dealership in Australia,” said Crichton at the time. “This magnificent new Sydney dealership means that we now have a network of dealership that can stand comparison with the best in the world. “Wherever our owners visit a dealership they will be welcomed by a unique level of customer service in facilities that match the legendary performance, technology and style of their cars.” Ateco has always stood out. According to Ric there are three major importers, however while two concentrate on one major brand, Ateco has a divergent range of products concentrating on the European, Korean and Chinese markets. The company has crucial relation-
ships in these markets, due to its management’s foresight and experience. “Our relationship is important with suppliers because we are a franchise business, we operate in franchise agreements from our supplier and we need a good relationship between the franchisors,” Ric says. “If that relationship breaks down it can mean that that brand is lost to us.” Ric understands the car industry. He has seen radical changes from duties of 57.5% to 5% and imports now making up 90% of the Australian market when it used to be 15%. He believes manufacturing in Australia will phase out completely, however he still sees a place for the manufacture of parts. “The biggest impost to business, and one major factor that killed the car manufacture business in this country, is the currency fluctuation,” Ric says. “It affects the business at the most fundamental level.” However, imports will continue to grow and according to Ric the market is showing signs of a steady growth, which augurs well for the future particularly for a company whose brands are so disparate that they have all ends of the market covered. And that’s where a knowledge and understanding of past and present market drivers comes in handy. Ric can utlise the lessons of the past to steer the company forward and into a very robust future. BF
BF | INVESTMENT INNOVATION
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INVESTMENT | BF
TIME IS MONEY – the real value of mFunds Cash-rich corporate Australians are becoming more time-poor with every year, which is having a big impact on a number of executive’s long-term financial security and personal wealth writes Andy Rogers, head of CMC Markets Stockbroking.
F Andy Rogers head of CMC Markets Stockbroking.
or some executives a high salary and career success results in the neglect of personal wealth because there simply isn’t enough hours in the day. More complex still, most finance professionals are restricted from holding direct equities due to the potential for conflict of interest. Understanding and overcoming these complexities, after a high octane week in the office or a weekend of parenting, requires a good degree of staying power for any executive. Ask yourself, after family commitments, travel plans, juggling projects and managing staff would you go home and dive into the world of wealth management, or would you rather relax and put it off to tomorrow? KEEPING IT SIMPLE For those for which tomorrow never comes, here is my tip for achieving a healthy investment portfolio that’s simple to set up and easy to manage, invest in an mFund and have a proportion of your wealth professionally managed. Launched by the ASX earlier this month, mFund is a ground-breaking web-based service that allows Australian investors to use an ASX broker to buy and sell units in unlisted managed funds. Heralded as the future of managed funds, the mFund service is completely
Assess if mFunds is right for you: • Are you time poor and neglecting your long-term wealth potential? • When was the last time you opened your statement? • Do you want to have a portion of your wealth professionally managed? • Do you want to see the value of your investment online, quickly and simply? • Are you willing to set aside a couple of evenings this month to get sorted?
online and fully integrated with a large range of funds and brokers, so investors can buy, sell and switch funds by the click of a mouse. mFunds should prove to be popular with investors because they offer wide exposure to a range of asset classes and industry sectors in international markets (via specific managed funds), which are otherwise underrepresented in the Australian share market. They should prove to be especially attractive to high net worth individuals because they are relatively hassle-free, maintained by a professional fund manager and as easy to track as online banking. THE ART OF SUCCESSFUL INVESTING Most experts will tell you that keeping costs down is the art of successful investing because the power of compounding interest means that any small sum grows exponentially over a period of time. In fact, academic research shows it’s possible to double an investment over 10 years by reducing fees by just 2%. You can achieve staggering investment results by simply selecting the lowest brokerage commissions and managed funds costs, as these costs can significantly eat into your investment returns. For example, an investment of $20,000 over a 40-year period offering returns of 10% per year, can show wildly different outcomes depending on the brokerage commissions or managed fund costs. For example, with zero costs, our invested wealth rises to $905,186, compared to $628188 after 1% costs, and just $434,490 after 2% costs. My advice to all investors when selecting a broker is to do your homework. Be merciless when comparing rates and platform tools and features,
so you start off on the right foot for your investment journey. Look for brokers offering low rates and reward your custom by providing tools that simplify portfolio management and tax reporting requirements. CANSTAR take the hard work out of the search for a broker, who will help you lower the risk of eroded investment return, by producing a ratings report each year that helps investors identify the best value offerings with the best platform features and tools. Currently there are 47 managed funds available through the mFunds offering and it is expected to grow significantly as popularity increases. It is important to remember that each fund is different. They may focus on a particular sector of the economy such as technology, property or emerging markets. SUPER RETURNS The mFund offering will be particularly attractive to SMSF trustees looking for international exposure or trying to diversify their portfolio away from holding purely Australian assets. Coupled with low transaction costs the mFunds offering is a powerful investment option for SMSFs. Another question Australians who have opted for an industry scheme should ask themselves is: When was the last time I opened my Super statement? And, Do I know the current and projected amount of Super I will attain during my working lifetime? If reading any of this makes you feel uneasy why not put a couple of evenings aside this month to take a thorough look at your financial status and wealth management potential, so you can take control of your financial future. One thing is for sure, in the future, you will always be glad you did and it could quite literally change your life. BF
BF | BUSINESS INTELLIGENCE
THE INSIGHTFUL BUSINESS 52 BUSINESSFIRST MAGAZINE
BUSINESS INTELLIGENCE | BF
Businesses that are not making decisions based on data are running the risk of flying blind writes David Jackman.
David Jackman is the managing director of Pronto Software. pronto.net
ithout the knowledge of past, current and predicted activity within the business, it is difficult to make informed decisions. This is why so many enterprises are moving toward a data-driven approach to managing their operations in real time and increasing visibility throughout the business. Organisations that are moving in this direction realise that different roles and responsibilities within a business require very different information to perform their job to the best of their abilities. A Business Intelligence (BI) system can deliver the right information to every person within the enterprise, no matter their role or level of seniority, to make decisions based on real-time insights – I like to call this smart data. Let’s take a look at the different information requirements of varied functions within a business. • Team members If you’re working as part of a team, what you really need in order to make decisions throughout your daily regime is access to reports and dashboards that can show you how you’re tracking against key performance indicators. Importantly, you need to be able to access all this information quickly and easily, without needing to think too much about creating reports – it should all be at your fingertips and from whatever device they use, mobile or in the office. Let’s take a retail store floor for example. If you’re part of the team, you need to know information such as stock levels, sales targets and real-time sales results. With a BI system in place, you have access to such data which should be pulled into digestible reports in an automated and instant manner and encompass up-to-the minute information. Traditionally, BI has not been deployed in any significant numbers to these users, but the trend is shifting as businesses recognise the value-add staff can bring when empowered with the right data at the right time.
• Line managers People working at a line managerial level will need quite different information compared to the people who work for them. What people in these roles are looking for to be able to really shine is information on trends across the organisation, as well as a system that can easily pinpoint anomalies, to ensure the organisation is working towards its strategic goals. A great example is a warehouse manager. Someone in this role needs access to an accurate picture of stock-in-hand, often across multiple facilities, and have the capacity to categorise this by supplier and product group. This breadth of information may not be easily accessible without BI. So if, for example, there has been an issue with late shipments, the manager will be able to pinpoint the reason behind this. For instance, by examining and exploring data available within an intuitive BI system, the warehouse manager may find late shipments are due to low stock levels, and he can then remediate the situation, quickly and appropriately. • Financial analysts The financial analysts in the business are those in the enterprise charged with keeping on top of business performance across its entire operations. So their information needs will be more holistic than team members and line managers. They will have a very sophisticated grasp of analytical information, so they need a system that can deliver that level of detail. People in this role will need to have access to data to help them make decisions about whether going into a new business is a good idea, based on an analysis of the capacity and capabilities of the operation. Their work revolves around information, so they need the support of BI technology that can be customised to their very specific needs. IMPLEMENTING A SYSTEM THAT WORKS Although various roles in a business
have very different and unique information needs, there’s still significant commonality across all facets of an organisation: 1. Everyone in the organisation needs easily-accessible information. With a 24-hour business cycle among us, key decision makers need to be able to find the right information to support their work in an instant, not an hour. 2. Staff members shouldn’t waste their time on labour intensive tasks that can be automated, such as setting up reports or data gathering systems. Those reports should be available to them via a BI system that has been built and customised to the unique requirements of the company. 3. Team members should not have to wade through reams of unnecessary data to find the information that’s relevant to their work. The insights they need should be right in front of them and easy to digest. So, what’s the best way to ensure everyone in the business has access to the information they need, quickly and easily? Organisations should find a BI partner who will be able to listen to people at different levels of the enterprise to gain a thorough understanding of the intricacies of the entire business’ information needs. This partner needs to be able to develop a deep understanding of the specifics of the enterprise and its industry, to adapt a custom-built system that ensures the organisation operates at its peak, makes decisions based on fact not guess work, and empowers people at all levels to work at an optimal level. Businesses that do this will not only be able to better manage their resources, they will also increase productivity and staff engagement. It’s one of the best ways of generating real competitive advantage because when smart technology is being adopted by an agile organisation, it can disrupt large established players that are slow to implement change. BF David Jackman, Managing Director, Pronto Software.
BF | PROFILE
In case of emergency Helicopter rescue seems like something you’d see in an action film, except emergency rescue is all too real and occurs all too often. So who are the people behind these services and what else do they do? Jonathan Jackson examines the necessity for companies such as CHC Helicopters.
ick Mair’s Scottish brogue is unmistakable, as his dedication to CHC Helicopters, with whom he has grown since 1999. If there is one thing he knows, it is helicopters. He has been in the aviation industry for over 20 years. Yet it is a different facet of the helicopter industry in which he is involved: a very important service operation that saves lives and also links the isolation of gas and oil rigs and those working on them back to the land and waiting families. Entrepreneur Craig Dobbin, along
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with a group of investors had the vision to put helicopters into the oil and gas markets. They created Canadian Holding Company (CHC) and went on an acquisition spree. While Dobbin no longer owns CHC, he made a smart decision and the business never looked back. When Nick joined in the last year of the twentieth century, CHC had acquired Helicopter Services Group of Norway (including Bond Helicopters), Helikopter Service AS, Lloyd Helicopters of Australia and Court Helicopters
of South Africa. It was a great time to join and Nick worked through the company to become regional vice president for the Western North Sea Division following the integration of CHC’s European and global operations into a single Helicopter Services Division. Tasked with leading CHC’s business units in the UK, the Netherlands and Denmark, Nick oversaw the oil and gas business and the search and rescue bases in Ireland and the UK. Today he heads up operations in www.businessfirstmagazine.com.au
PROFILE | BF
“We have enjoyed the close and open working environment that has been developed between both companies as we see it is an effective approach to doing business and we look forward to continuing to support CHC for their future endeavours” Sikorsky
Australia and South East Asia as the regional director Asia Pacific. “Australia is a relatively new market, but the history goes back,” Nick says. “I put the longevity of this company down to its ability to provide solutions to our customers. More recently we have made bold decisions and predicted what helicopter types would be suitable to customer operations to enable us to get ahead of the game. And using the size of the company we can deliver cost effective solutions.” Australia is obviously a natural fit for www.businessfirstmagazine.com.au
what CHC does. After the acquisition of Lloyd Helicopters, the core business of emergency services multiplied into sizable opportunities in oil and gas. “We moved from Adelaide to Perth and closer to oil and gas producers,” Nick says. “It’s a market that will continue grow. Meanwhile because of the sheer size of the country there will always be a lot of opportunity in search and rescue. So from a strategic position, there is growth in both sectors.” So what exactly does CHC do? “We provide a critical service. Search
and Rescue is always a service that is required and we have the capability to provide excellent service. You may just see a helicopter, however the skill and expertise of the people who provide the service is exceptional. Their experience and training gives customers a sense of comfort. On the oil and gas side, it is also a critical service because people can’t get back to shore quickly and safely without it. We have skilled pilots and engineers who can deal with any situation and that is a good place to be.” Sometimes those situations are harsh. Australia is unfortunately renowned for its natural disasters and that’s where intense training stands CHC in good stead with its customers. “It’s not only the people caught in these situations who are exposed. It is our pilots as well. However, they are trained to deal with most of the things they see. We have post event counseling services. We provide ongoing support. They are an amazing bunch of people and do a lot for the communities they are helping.” There is a significant amount of training undertaken because a significant amount of skill is required, particularly when it comes to emergency services. “We can’t simplify recruitment; it requires a significant level of skill and training, diligence in signing off people at various stages of highly prescribed programmes. They then go into live operations and fly with experienced personnel. The training ensures that pilots only go out when they have met the criteria.” Emergency services are an important element of the CHC business, however in Australia oil and gas represents 75% of all business. The other 25% is divided between emergency service and maintenance and repair. Managing the logistics of this is an impressive feat. Nick’s charter when he arrived in Australia was to enact
LOGISTICS SUPPLY & SUPPORT • MAINTENANCE • REPAIR & OVERHAUL • DESIGN ENGINEERING • TECHNICAL TRAINING • CUSTOMER SUPPORT
Sikorsky Helitech 777 Macarthur Avenue Central Pinkenba QLD 4008 Australia
Phone: +61 (0)7 3632 7000 Fax: +61 (0)7 3260 1616 E-mail: firstname.lastname@example.org Web: www.sikorsky.com.au
PROFILE | BF
reasonably paced growth and implement systems, processes and structures to facilitate this. He had come from a more mature market in the UK and his experience was needed Down Under. In his first year, his aim was to make himself visible. He made a pact to visit all bases around the country. He made it to all but one, however visited some bases multiple times. Geography in Australia is a challenge, but Nick recognised the opportunities. To keep abreast of things when he’s not on base he engages in everything including conference calls within a significant communications network, but he understands that face to face contact is invaluable and attempts it as much as possible to enable employees to raise concerns. In terms of communication, Nick is open and direct. “There is no ambiguity. I am always calibrating messages so that I can gain a full-picture perspective. I will always be honest but I will sometimes give an answer people aren’t looking for. However it is the truth and the answer I stand by. This organisation is about transparency.” As for growth, Nick says CHC is comfortable with the markets they operate in. There is no reason to drastically diversify, but should customers and supply partners have a request the organisation remains open-minded. The suppliers and customers are important and their ideas equally so. They include helicopter manufacturers (CHC has 50 helicopters in the Asia Pacific region) and supply servicers for parts and components, which is a division within CHC. www.businessfirstmagazine.com.au
The most important factor required from each partner is to ensure that CHC has the capability in its helicopters to meet the demand of the customers. “That quickly narrows the field to a reasonably small number of providers,” Nick says. CHC has lasted because this is a dynamic business and requires constant change management to stay ahead of
the competition. It is the type of service that movies are made from, however it is far more serious than that. This is a business that affects lives and requires strong leadership and Nick, with the help of a very experienced and skilled team, delivers in spades and rotors. So, next time you see an emergency service helicopter in action, think of what goes on behind the scenes and thank your lucky stars that services like this exist. BF
Book by book When not working Nick likes a good laugh. Currently he is getting that through comedian Michael McIntyre’s autobiography. Michael McIntyre Life and Laughing reveals his showbiz roots, his appalling attempts to attract the opposite sex, his fish-out-of-water move from public to state school and his astonishing journey from selling just one ticket at the Edinburgh Festival to selling half a million tickets on his last tour. Michael McIntyre’s “Life and Laughing” is riveting, poignant, romantic and above all very, very funny. Michael McIntyre was born in South London in 1976 to parents from the world of showbiz. His Hungarian mother was a dancer and his Canadian father co-wrote “The Kenny Everett Television Show”. Now he is a stand-up comedian who in 2009 sold out a record six nights at Wembley Arena and four nights at London’s O2. Michael lives in North London with his wife Kitty and their sons Lucas and Oscar. This is his first book.
BF | PROFILE
Superannuation: we all need it, but many of us fail to understand how to effectively utilise it. Jonathan Jackson speaks with Tasplan CEO Neil Cassidy about changes to the superannuation industry and how one merger could benefit Tasmania.
eil Cassidy has either been at the forefront or been through several changes to the superannuation industry and has seen its evolution into a freeform system managed by unions and employers, to the Keating Labor Government’s superannuation guarantee (SGC), to the Gillard Government’s introduction of the My Super program which came into effect in January this year. Neil, who in 1972, began his career in superannuation after moving from country Victoria to Melbourne experienced a quick learning curve with T&G and then with National Mutual as the companies merged. It’s not the type of occupation a self-confessed country boy is likely to take up, however in 1983, just eleven years after he entered the industry, Neil became one of the authorities behind
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the development of forms and systems that defined the creation of industry super funds that are still in use today. “My role was to assist in the drafting of the enrolment forms for employers and members,” Neil says of that shift towards industry funds. The emergence of industry funds provided strong, low cost products in competition with the corporate and retail organisations, which were expensive and charged high fees on member account accumulations on top of a 5% contribution fee. So the unions stepped in to launch a competitive product and were able to provide jobs and investment. The difficult thing at the moment is that the banks are now offering superannuation, so the funds are further pressured.” In 1987 National Mutual approached Neil about moving to Tasmania to establish Tasplan.
“Following a three year stint in Sydney, I said to my wife it would be good to get back into that country environment. The appointment was meant to be for two years and we have been here for 27 years now,” Neil says. During that period Neil took a four-year sabbatical, after National Mutual withdrew its Nexus branch from Tasmania. In the interim he became a superannuation consultant, however in 1998, Neil found himself drawn back into the corporate world when he successfully applied to become general manager of Tasplan. Today Tasplan’s CEO oversees a $2.2b fund, including over 100,000 members and 11,000 employers making contributions on behalf of their employees. More growth is in the pipeline with the pending merger between Tasplan and Quadrant. Neil sees this as an important www.businessfirstmagazine.com.au
PROFILE | BF
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step in improving Tasmania’s infrastructure via job creation, local spend and local investment. “I initiated discussions of a three-way merger because I could see we had plateaued and this meant we would be ripe for a takeover by larger mainland funds. Our competitors would target Tasmania, staff would be displaced or moved on and we wouldn’t be able to service our members or employers in the way we
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would like. “This was three years ago and I felt we were sitting here like a dead duck. I door-knocked politicians and sowed the seed about this issue. There are three funds that have been around for quite some time and we need to come together. I maintained those visits to the politicians and to the Premier and it finally got to the point where they understood what I was saying. Our chairman thought it was a good way to go and, while we have a long way to go to finalise things, the merger between Tasplan and Quadrant will occur.” Neil believes this merger will have great benefits for Tasmania, in identifying investment opportunities.. “We could end up with $10b under management and 150,000 members,” he says. The public service super fund is another matter as Treasury pulls the purse strings. A 3-way merger with the government’s Retirement Benefits Fund has many obstacles to overcome, but could in total create a much larger $7 billion Tasmanian-based fund. It remains to be seen. However the deal with Quadrant is a big step in the right direction. Tasplan’s chair Naomi Edwards said
the funds would bring complementary aspects to a merger. “Improved product range and quality, and expansion of services to all regional areas of Tasmania, are key considerations,” she says. A larger, stronger Tasmanian superannuation fund no doubt ensures that employment and expertise is retained within the state. While Tasmania had the lure of a small town when Neil travelled down there all those years ago, it has an enormous amount of strength in its population. Tasplan is there to stay and wishes to grow. They recently moved into purpose-built offices in Launceston and Hobart and they understand that being local is important. Naomi Edwards told Investment Magazine, “Tasplan is totally open to any possibility that would continually get our members access to better products but we know they value us being local and on-hand for them.” Neil says, “We have targeted Tasmania and we are here to help them navigate through the changes that continue to occur.” One of those changes is the increased retirement age brought in recently by the Abbott government.
20/06/2014 2:21 pm
PROFILE | BF
We have targeted Tasmania and we are here to help them navigate through the changes that continue to occur.”
“The baby boomers are coming into retirement and they will rely on their SGC contributions. However many of them haven’t saved enough on top of those contributions and they are looking to retirement with an eye on the pension. Everyone knows this is too much pressure to put on the pension and the landscape needs to change.” At the forefront of those changes is a communications strategy designed to help people understand what will happen to them. Tasplan has invested a lot into its communication strategies by going out to employers, making presentations and engaging the next generations through social media. “You need to have the tools to engage each generation,” Neil says. “We prepare booklets and annual statements and while you can get people to come to your conference, it is another thing to make them understand. This is not about being in control it’s about enhancing the knowledge that members have. Not many people have an interest. At the end of the day, the biggest problem is that communications have always been complex.” So how do you bring simplicity to the message?
Link Group is a proud partner of Tasplan. In an almost 20 year association, Link recognises Tasplan as an innovator within the superannuation industry and will continue to collaborate with Tasplan in providing market leading superannuation services to its membership.
Tasplan has picked up two national awards for its social media campaign “Super – Straight Up” using short videos to explain super in ‘plain English.’ Tasplan won the “Best Use of Social Media” category at the 2011 Association of Superannuation Funds of Australia (ASFA) Communication Awards. ASFA’s CEO, Pauline Vamos congratulated Tasplan for the excellent job they have done in communicating to and engaging members, especially younger members, via social media. “Tasplan’s social media strategy aimed to increase awareness and engagement in super and financial planning early in the lives and careers of young members,” Ms Vamos said. The judges noted ‘Super-Straight Up’ was a fresh approach to superannuation education using YouTube and Facebook. Despite a small budget, the campaign engaged a young demographic, increased web traffic and drove new enquiries to the fund. Tasplan also picked up the Innovation Award – Social Media at this year’s Rainmaker SelectingSuper Awards. Neil said the awards highlighted that a medium-sized Tasmanian fund can hold its own with the larger funds when it comes to innovation. “Quite frankly, a lot of people find super confusing. We wanted to explain the basics of super in an easy to understand and humorous way. Being small, we could not do some of the things our competitors could do. So we instigated a campaign to promote how to save money with six of You Tube grabs all with different messages. It really resonated with young people.” There are plans to do more in this
area and Neil says Tasplan are investing more in digital channels. “You have to break down that haze and you have to find ways to get past that haze. We live and die by the members and though it is difficult keeping them abreast of every change, we need to start building a face so that we are better engaged.” Better engagement means greater understanding of programs like My Super, which seem to have created more confusion than clarity and a better understanding of how and where members’ investments are being placed. With increased regulation and fluctuation in the market brought on by factors such as the GFC, property downtrend and even the tech wreck of the early 2000s, the waters are increasingly muddied. However, a strong superfund in Tasmania, with everyone on message and working towards a common goal will go a long way to strengthening not only the industry, but the state and along with it, people’s investments.” Neil believes he has the staff to pull off this challenge moving into the future. The 60 year old, sees himself retiring within five years and he is confident that he is leaving Tasplan in good hands. “My best investment is my staff. I was involved in their selection and they are a smart team. They understand the business and want to thrive. I am really happy with our culture.” So when Neil does retire and more change comes to the superannuation industry with his retirement, Tasmanians can be assured they are in good hands, their investments continue to grow and their knowledge increases. BF
BF | LESSONS
Bouncing back from your mistakes I don’t believe any successful entrepreneur has ever written a detailed business plan on day one, and looked back years later with no change at all to their initial strategy writes Mat Jacobson.
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ntrepreneurship is about great business skills and a competitive product offering, sure. But it’s just as much about adaptability: the ability to move and respond to market changes and market opportunities. The flipside is that mistakes will inevitably occur in a volatile, fast paced environment. But learning from the mistakes you’ve made and growing from them plays a critical part in achieving success. The good news is it’s even better if you can learn from other people’s mistakes, including mine, instead of repeating the same mistakes. Before founding tertiary learning organisation Ducere, I founded an education company focused on providing
the highest quality certifications to the financial services sector. I brought in a venture capital firm very early into the business. They were a high profile firm and after the negotiations and due diligence, once the deal was signed, we thought we were then all on the same side with the common goal to build a great business together. The structure was such that the investment amount and shareholding was agreed to, but that the investment would be spread over a number of payments. As fairly young and naive entrepreneurs, we saw no issues with this approach. They were not a passive investor by any means. They actually operat-
Mat Jacobson is the founder and executive director of Ducere.
LESSONS | BF
ed more as a contracted operations manager of the business. That was something that appealed to us as we thought that we would learn from their past experiences on how to build a big business and even go public. Over the next few months we relied heavily on their recommendations, which were to greatly increase expenses (e.g. using PwC as accountants instead of a small suburban firm, using high profile lawyers, spending all our money on R&D and product improvement). The argument from their end was that we needed to think about setting up for an eventual public offering, not on profitability in the next few months. We went along with that logic. We were working together on a day-today basis with all communications being very positive and no issues raised whatsoever. Until that is, it came due for the second tranche of www.businessfirstmagazine.com.au
I can tell you with absolute certainty, even knowing the short-term pain of start up owners and having learnt from my own mistakes; it’s better to take no money than to take money from the wrong partner.’
funding – all of a sudden things took a turn for the worse. We were brought into a formal meeting where we were presented with a long list of things that were not as our investors initially predicted, such as greater expenses on lawyers and accountants, far more money into R&D etc. We found this somewhat absurd as we were simply following their advice, however it was clear this argument wasn’t holding any sway. Very quickly we realised the game that was going on and lo and behold, the conclusion from the venture capital firm was; we will put in the same money but we want twice the shares as were originally agreed to. We were being played, and as we were young, and they were holding the cash, they thought we would simply capitulate to anything they demanded. We were very fortunate to have great lawyers (lesson number one!) as our legal contract didn’t allow for them to alter the shareholding and they mistakenly thought we would be desperate for their money. It then became not only a commercial issue, but a moral one as well. We felt that we had been duped. If we had made the mistakes we would have taken it on the chin and accepted the consequences. But to be deliberately set up in such a way, there was no rectifying the relationship in those circumstances. We informed them that we wouldn’t accept further investment from them on that basis. This was quite a surprise to them as they assumed we would have to take their money, but instead I decided to mortgage my house to pay for the on-going funding needs of the company, and in addition I bought out their initial funding round so that we fully terminated the relationship.
The whole investment exercise was a huge waste of time and money. In the end, we sold that business to a global public company for about 40 times their investment amount. If they had kept to the original deal I believe it would have been one of the best investments that company ever made. I guess their school of thought was to try and screw people to get the best possible deal you can… but my philosophy is to work in a partnership that is fair and reasonable for all parties. Aside from being the right thing to do, having this approach also creates the environment where everyone is motivated to get the best outcome for the business. This is a very tricky situation for start-up entrepreneurs. Often they need the cash desperately to get their dream off the ground, but the reality is that you need to do as much due diligence on the firm you are about to partner with as they will no doubt conduct on your business. We subsequently realised that they weren’t all they were cracked up to be, with very limited venture capital success. But start-up entrepreneurs are often blinded to the details and simply see a cheque with zeros on it as the vital funding they need to succeed. I can tell you with absolute certainty, even knowing the short-term pain of start up owners and having learnt from my own mistakes; it’s better to take no money than to take money from the wrong partner. BF Mat is a pioneer in the e-learning field. In founding Dūcere, Mat works together with Presidents, Prime Ministers, global CEOs and other prominent leaders to deliver on the vision of providing the most sophisticated tertiary qualifications. ducere.co
BF | PROFITABILITY
Strategies to drive savings as storm clouds gather Australian businesses have so far weathered the storm created by the global financial crisis. The recent federal fiscal responsibility budget however, will require bracing for still more challenging times ahead writes Allan McKeown.
W Allan McKeown
is the CEO and Founder of Prosperity Advisers.
ith continuing questions about long-term growth rates, businesses are often left with only one option to improve profitability cost reductions. Tough decisions that tend to involve workforce reduction and increased productivity from existing employees are areas sure to be examined. However, if businesses look beyond labour, they can often find additional ways to drive meaningful long-term cost reductions. Here are a few areas to consider -
1. Product lines and customer segments Many businesses have product lines or customers that fail to generate meaningful profitability, or worse, generate losses. The Pareto Principle — the 80/20 rule — often applies; many find that the majority of their profits are generated by a relatively small number of products or customers. By simply shifting energy from less profitable products or customers to more profitable ones, companies can dramatically improve profitability. 2. Inventory Many manufacturers and distributors are still dealing with excess inventory levels, which can lead to unnecessary carrying costs and negative cash flows. The most profitable companies effectively use material requirement planning systems (MRPs) and/or enterprise resource planning systems (ERPs) to reduce inventory levels without running the risk of exhausting supplies. 3. Outsourcing Many businesses are gaining significant cost and operational efficiencies from outsourcing non-core activities. Careful analysis including the proper allocation of on costs and overheads will reveal these functions usually cost much more in dollar terms and distraction than perhaps thought. Areas such as payroll, HR, IT, bookkeeping and even entire finance functions may be better performed by specialists who can deliver volume and expertise to your business, allowing your team to concentrate on strategy and execution. 4. Suppliers Businesses can often reduce general and administrative costs through techniques such as supplier consolidation and/or
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the implementation of formal tender processes. Think about the number of departments or locations using different suppliers for routine products such as office supplies. Then, think about how often purchases of such items are made on an ad-hoc basis without pre-negotiated pricing terms. By consolidating vendors and negotiating terms with selected suppliers, companies can leverage purchasing power to reduce general and administrative costs. 5. Employees Whether your business has 20 employees or 2,000, it never hurts to engage them in cost-reduction initiatives. Because they are in the trenches, they often have first-hand knowledge of areas of waste. By soliciting their feedback and implementing an incentive system to reward them for cost savings, businesses often decrease costs and increase employee retention. While there is no single solution for cost reductions that applies to all businesses, learning more about what other businesses have done can spur innovative strategies that lead to longterm improvements in profitability. By tackling these issues now, you can drive near-term increases in profitability and ensure you are prepared for any future economic difficulties. BF Allan McKeown is the CEO of Prosperity Advisers. He has over 25 years experience providing business growth advice, corporate assurance, and strategic taxation services to a range of business clients. Asset Magazine has rated him as one of Australia’s ‘Magnificent 7’ Financial Advisers and he has extensive experience as an independent Director of businesses in a number of industries including Power, Ports, Banking and Professional Sport. www.businessfirstmagazine.com.au
ADVANTAGE PROFILE | BF
CREATING A PIPELINE FOR SUCCESS According to business leader and former General Electric (GE) CEO, Jack Welch, an organisation’s ability to translate learning into action is its ultimate competitive advantage writes Rosie Cairnes.
I Rosie Cairnes is the Regional Leader Skillsoft Asia Pacific.
n Jack Welch’s 21 years as CEO, the company increased 4,000 per cent and realised a market capitalisation of more than $US400 billion. His approaches to leadership development and management have since been adopted by organisations all over the world and his proven methodologies echoed throughout Learning and Development (L&D) circles. Business leaders recognise the value of investing in sound leadership, as evidenced by a Bersin by Deloitte survey* (2013) that shows organisations are spending more on leadership development than ever before. However, the same survey showed 75 per cent of respondents say their organisation’s leadership development programs miss the mark in terms of effectiveness; three quarters of leadership teams surveyed failed to achieve business goals; and more than half of global executives cite lack of leadership as a reason the company does not manage market changes effectively. WHY IS THERE A DISCONNECT AND WHAT NEEDS TO CHANGE? Many organisations still rely on traditional leadership development methods; focused on classroom, resource-intensive, face-to-face learning. Furthermore, a significant proportion of L&D dollars are invested in those in the highest ranks of the organisation. In today’s ‘overextended’, ever-changing work landscape, leaders are under immense pressure from stakeholders, the board and shareholders to perform – and perform fast. As baby boomers move towards retirement, leadership positions are coming to younger and less experienced team members. Many show high potential but do not have the luxury of experience to attain ‘lift-off ’ as quickly as the future business climate will demand. To prevent critical skill gaps in the future and keep the organisation performing at a high level, strategic de-
cisions must be made to ensure leaders and supported and nurtured. CHANGING LEARNING LANDSCAPE Leadership development has evolved rapidly over the last few years to better serve the global marketplace and keep pace with technological change. Moving forward, the most successful organisations will adapt learning to fit the diverse needs of leaders at all levels, as they realise a one-size-fits-all approach does not work for today’s professionals in today’s work context. As modern workplaces become more mobile, social and flexible, business leaders must look to new technologies that can deliver a higher productivity and return on investment. The Welch Way is a unique program developed by Jack Welch. As a set of outcome-based elearning programs, it delivers the core leadership skills all managers need; through action-based, practical methods. By tailoring learning informally and delivering it through continuous, micro-bursts of training experiences, memory retention increases and learning is more likely to be implemented into daily practice. SO WHAT CAN BUSINESS LEADERS DO TODAY TO MAKE SURE FUTURE LEADERS SUCCEED IN THEIR ROLES? • Encourage leadership at all levels: In a global, competitive business climate, leaders must identify leadership as a collective endeavour and an on-going process in order to ‘prime the leadership pipeline’ and strengthen all layers of the organisation. Astute leaders encourage leadership behaviours among all members of their team. This makes employees more accountable for their actions and removes organisational barriers; encouraging greater responsibility, innovation, problem-solving abilities and the motivation to succeed. When employees are empowered to take on leadership roles earlier on in their
careers, they are in a better, more experienced position to “step up” to a leadership role later on. • Collaboration with L&D teams: Leaders must make sure business goals, growth opportunities and desired organisational outcomes are visible and transparent to L&D teams. This way, teams are in a better position to develop pragmatic, actionable programs and strategies which hit the mark on organisational need. Giving HR exposure to business decisions made at the top will help identify and deliver new resources that complement the ‘modern business environment’. • Keep pace with current technologies: Despite constantly evolving work environments, organisations have been slow to adapt to technologies that assist in delivering stronger leadership development outcomes. Professionals today demand the right to work more flexibly – and have appropriate mobile devices to support their work. Moving forward business leaders will see a better response to learning initiatives, and deliver a stronger return on investment if they embrace new technologies which synchronise leadership development into daily work flows. Investing in dynamic leadership development programs at all levels will provide a framework to help prepare an organisation’s current and potential leaders for the myriad of business challenges ahead of them. Those leaders that accept the challenge of developing skilled leaders, will leave a strong legacy and a footprint for future success. • Five Trends in Leveraging Leadership Development to Drive a Competitive Advantage by Bersin by Deloitte (2013). BF Rosie Cairnes is Regional Leader Australia and New Zealand at Skillsoft Asia Pacific.
BF | PROFILE
LEADING THE INNOVATION CHARGE
Eric Morris is one of Australiaâ€™s most influential retail executives. As managing director and CEO of the PAS Group he oversees 1200-plus staff and 26 brands. Eric speaks with Bob Forshaw and Jonathan Jackson about growth in an ever-changing retail environment.
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n June 2014, PAS Group listed on the Australian sharemarket. The result wasn’t as expected; however market conditions were not advantageous. It’s the risk of listing that you hope all the cards fall in the right place at the right time. The weak opening doesn’t faze CEO Eric Morris. “Profit downgrades by other retailers affected the price,” Eric says. “Yet when you look at our fundamentals they are strong and our earnings are on track. Our shareholders know the value of taking a long term view.” The confidence of shareholders is backed by the company’s solid performance over a sustained period of time. This culminated recently in a successful $120.5 million fully underwritten capital raising of fully paid ordinary shares in PAS (Shares) priced at $1.15 per share (Offer), giving PAS a market capitalisation of approximately $157.2 million.
BEHIND THE GROWTH
The PAS Group was formed in 2004 by the then Deutsche Bank private equity fund to undertake a consolidation of what was a very fragmented apparel sector. They had initiated the acquisition of the Breakaway Group when Eric was brought on board. Together with CFO Derick Krowitz they began an acquisition strategy that continues to this day. “The companies we looked at were spread out in all different locations, so we had to bring them together and create IT systems, back office facilities, back-end logistics including shipping and warehousing and we used the leverage of the organisation to negotiate supply.” There was a great deal to do. Yet Morris had a clear vision – he still does – to build the organisation. His background is impressive, so he was certainly the man for the job. Before Eric led the Group’s acquisitions and the successful integration of its eight businesses, he held senior executive positions in major international and national companies. Myer recruited the South African native to Australia where he held the inaugural position of general manager of the Private Brand Division responsible for the creation and launch of a number of successful Myer brands. He also spent 14 months at Walt Disney International as regional director, with responsibility for Softlines for Asia Pacific based in Hong Kong and spent eight years with Reebok International as regional www.businessfirstmagazine.com.au
director Asia Pacific, regional director Africa Middle East and director and general manager Reebok South Africa. He brought to PAS Group significant experience in retail, wholesale/supply, licensing, manufacturing and distribution. Upon joining PAS Group, he instigated systems and culture to ensure all acquisitions were operating at the same level. “Culture is driven from the top,” Eric says. “It is about doing whatever makes sense.” Remaining relevant
Sensibility has been a pillar of the company’s strength. They have developed an innovative business model and diversification strategy to weather the volatility of the retail sector. “We are covering different sectors and age demographics and that creates a natural hedge,” Eric says. “We have gone with multi-channel offerings and we have a good online business, with a third online entity coming on board in July. The diversity of the business meant that when many bricks and mortar businesses were complaining about an online ‘scourge’, PAS Group remained stoic. When international retailers started to make their mark within Australia’s major shopping precincts, Eric saw it as a positive. “The advent of these international brands has made the shopping centres a more exciting place to shop and has brought more people into the centres. It has also made local retailers lift their game.” He went further when he told the Australian Financial Review, “It’s probably a market that’s been a little bit lazy over a number of years. It’s a market that’s had the ability, before the international arrivals, to go overseas, work in reverse seasons and be able to buy samples and actually replicate that here. That’s not going to be possible anymore and innovation is going to be really key for most of the Australian retailers.” That is the reason for the PAS Group’s focus on originally designed product. Asked if he sees international companies as competition, Eric says no. “I think the most important thing for any retailer is to offer a unique product or market position. PAS Group does that and it means we won’t be competing with the likes of H&M.” Take Black Pepper for example. As many of the international brands
The advent of these international brands has made the shopping centres a more exciting place to shop and has brought more people into the centres. It has also made local retailers lift their game.” launching into Australia set their sights on the youth market, Black Pepper targets a more mature sector. This is a brand that has been in existence since 1976. It has a strong following, which has developed into 93 stand-alone retail stores and 5 concessions. The brands are also sold in approximately 650 wholesale accounts across Australia and New Zealand. The PAS Group has significant retail expansion plans for the Black Pepper brand. Other brands under the Black Pepper business include Breakaway, Yvonne Black and Equus, experiencing similar growth levels and followings to Black Pepper. Other long-standing brands that have created their own niche include Metalicus and Review. Established in 1992, Metalicus differs in delivering a unique stretch fabrication which provides versatility to a woman’s wardrobe. The fabrication enables the product to be perfect for travel due to its easy care attributes and is also ideal for maternity wear enabling the product to be worn before, during and post the pregnancy. They have 29 stand-alone retail stores, 12 Myer concessions, approximately 185 wholesale accounts and an online store. Meanwhile, Review is a brand
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that has built its own unique position offering feminine product inspired by vintage with a modern twist. The brand focuses on fashion for women aged between 24 and 40. Review operates 32 stand-alone stores and 55 concessions within Myer. It is among Myer’s best performing “Damco (Pacnet) Australia has an open book approach to business with PAS Group. Since the commencement of our association, we have worked cohesively to ensure that the relationship is advantageous for both parties. PAS Group Eric Morris, along with CFO Derrick Krowitz, operate in a fair and open manner. There pair is transparent about any problems that may arise and there is little mystery when it comes to conducting business. This transparency is reciprocated by Damco Australia. We have an open door policy and are happy to compromise and find solutions to any problems that may arise. We look forward to continuing this long and mutually beneficial association.” Paul Milborrow - Damco
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concession brands. Review captures a large share of the value chain through operating a vertical retail model; it has significant brand equity and customer loyalty with speed to market and regular store inputs of up to 15 new styles provided weekly. Retailers take note: by instigating a unique market position you can weather any storm. EYE ON THE FUTURE
The numbers are impressive as is PAS Group’s reach. They produce exclusive and licensed brands for retailers including Big W, Myer, Kmart and Target. There are 223 stores with ambition to grow to 340 stores by mid 2017. “We will continue to grow on a few different levels,” Eric says. We plan to open 110 stores in Sydney alone and we are focused on growing the online channel as well as our brand licensing www.businessfirstmagazine.com.au
business.” The PAS Board and management team are focused on delivering across the key growth drivers of the PAS business: • New retail sites: PAS has displayed consistent year-on-year retail site growth and plans to open an additional 41 sites in FY2015, with further plans to have 340 retail sites operating by June 2017. • Online: PAS has been experiencing strong growth in online sales and will continue to expand this channel. • Licensed brand opportunities: PAS will maintain its proactive approach to new brand licensing opportunities, with examples of recently obtained brand licenses including Slazenger, Fred Bare, Everlast and Mooks. • Acquisitions: PAS is experienced in identifying, acquiring and integrating complementary businesses and
will seek to enhance its growth with strategic ‘bolt-on’ acquisitions. This has been in evidence with the recent announcement that PAS has been appointed as the Australian and New Zealand licence partner for the Karrimor brand and the DKNY Menswear brands. Karrimor is a leading global outdoor adventure brand, which has been secured through Designworks’ strategic alliance with global brand owner, International Brand Management & Licensing (IBML), while DKNY is a leading international designer brand. PAS Group’s ongoing success is proof that a less than successful ASX listing does not necessarily reflect the strength of a company. And this company led by the very experienced Eric Morris is in safe hands when looking at future projections, earning stability and growth in key retail markets. BF
BF | COMMUNICATIONS
International communication: the challenge for SMBs It’s a challenge faced by many small-to-medium sized business owners – an employee travels abroad, and needs to stay in touch with the office and business contacts on the ground, only returning to face a colossal mobile phone bill writes Alex Blinko.
F Alex Blinko
is managing director of Truphone Australia.
or many SMBs in today’s 24/7 connected world travel and communication are absolutely vital. Where a few years ago, voice was the key component to stay connected internationally, data has now risen to become an integral part of the business travellers’ arsenal. Global mobile data traffic grew 81 per cent in 2013; making it 18 times larger than all Internet traffic in in 2000. A recent survey of Australian business travellers demonstrated the significant growth in reliance on email, with 54 per cent of businesses surveyed using it to stay connected while travelling internationally. Not surprisingly, the cost of both data and voice charges are contributing to the roaming employee’s (and their employer’s) challenge when travelling or communicating internationally. And with Australian businesses travelling frequently – with 65 per cent travelling to North America, 54.9 to Oceania, 67.2 to Europe and 70.7 to East Asia, SMBs are seeking a simple and affordable solution to managing their international communications. Mitigating the pain points for SMBs A local perspective for international business
Time and money are often the prior-
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ity of small-to-medium businesses, and with some international mobile bills topping five figures in a single trip, managing or reducing costs can be a cause of concern for the SMB owner or manager. For SMBs opening or operating in new markets, finding solutions such as using local SIM cards present additional challenges over and above cost alone. Using local SIM cards limits usage to that specific country, and means employees lose the ability to stay connected to people trying to contact them on their existing phone number. Truphone’s patented SIM card allows an employee to store up to eight international mobile numbers on a single SIM, from any country in the Truphone Zone. This enables ‘always-on’ connectivity, with contacts able to reach the employee on a local numbers, at local rates wherever they are in the world. The added value for SMBs is they have a real ‘in-country presence’ with these local numbers being always active, and providing them a local point of contact – essentially their own shop-front – in countries where they frequently do business. This can help SMBs level the playing field, and remove some of the barriers of doing business internationally. Shared bundles, at home and abroad
Another challenge for SMBs can be maximising their communications costs across all their employees that travel and communicate internationally. SMBs should seek a provider which offers shared bundles that suit the needs of their entire fleet. Our shared global bundles have an allowance of calls, texts and data that can be used across a number of subscribers in 66 countries, and we’ve just recently announced the world’s first half a
terabyte data plan. For SMBs with cost-savings top of mind, this enables them to spread the usage across a number of employees, so if one employee’s usage is reduced in a month, this can be utilised by another staff member. Peace of mind without the policy
In an attempt to curb international communications costs, SMBs are also looking to policy as a potential solution. Often policies will limit usage to Wi-Fi hotspots, or prohibiting use altogether, however the impacts on productivity and staying connected whilst abroad are often felt, and for employees travelling internationally, often such policies are ignored. Relying on Wi-Fi can mitigate costs, but the convenience factor is not always present. Looking for directions between meetings, or needing to check emails on the go are potential pitfalls of a reliance on Wi-Fi only. So if policy or utilising free Wi-Fi is not the answer, how do SMBs get peace of mind in managing their international communications without limiting productivity? Shareable international plans can remove the need to curb usage, and give SMB owners and managers peace of mind, and control over costs for their employees travelling internationally. One thing is clear: Australian SMBs looking to expand or operate internationally have an increasing need for affordable international mobile communications. To stay competitive and compete on a global stage, SMBs doing business abroad need to ensure all their staff have access to seamless, cost-effective global communications, and one that gives them peace of mind in controlling costs. BF Alex Blinko is Managing Director, Truphone Australia. www.businessfirstmagazine.com.au
PROPERTY | BF
View your property portfolio as a business The beginning of a new financial year is a good time to sit back and analyse your property portfolio in the same way any small business should analyse its performance writes Patrick Bright.
T Patrick Bright is the Director of EPS Property Search
oo often, I find investors are reluctant to question whether their property investments are getting the best return. For some reason they seem to favour leaving them to tick over in the hands of a property manager. Regardless of whether you have one, three, five or more properties you need to treat them all like a business and undertake regular reviews. Ideally these reviews should be done six monthly but no less than annually. You need to ask the tough questions on a regular basis if you want your investment to perform at the highest level. As a stocktake, here are five questions that you should ask to help you review your property portfolio: 1. AM I GETTING THE BEST POSSIBLE RETURN ON MY INVESTMENT? If you want to maximise the return on your investment you must ensure you are receiving the best possible return on it. Insist that your property manager undertakes regular rent reviews to make certain your rental rate matches or exceeds current market values and if it’s consistently falling below the mark, then you’ll need to ask why? As a starting point ask yourself: “Have I selected an inefficient property manager or have I purchased a property that is performing poorly and will continue to do so?” 2. AM I PLANNING ON ADDING TO MY PORTFOLIO? By writing down clear goals for the future growth of your portfolio you should be able to determine how
much money you’ll need for the necessary deposits and incorporate this information into your overall financial plan. Make sure you work out whether you’re buying properties to hold for the long-term or whether a buy, renovate and sell strategy would be better suited to your needs. You will need to factor in any major changes to your likely income (e.g. plans to start or grow your family) or expenditure streams when examining the timeframes needed to save the deposits. If you’re due to add to your portfolio in the next 12 months then start getting your finances in order now to determine the equity you have in your existing properties so that you know how much you have to draw on for a new purchase. 3. AM I ON TRACK TO REACH MY RETIREMENT NEEDS? Make sure your financial plan is on track to meet your retirement needs and includes the timings of when you want to buy more property to build up your asset base. Don’t underestimate what it will cost you to keep your living standards at the same level or better than your current lifestyle as you are likely to spend more in your retirement years, particularly if you want to travel. If you’re not on track to meet your financial goals then it’s better that you realise this sooner rather than later so you can make adjustments now. Small adjustments over 10 or 20 years will make a significant financial difference when it comes to retirement.
4. AM I GETTING THE BEST INTEREST RATE? Lending institutions are keen to compete for your business and so you should shop around to see if you are really getting the lowest interest rate available in the market. A drop of even 0.25 per cent will save you tens of thousands of dollars over the life of the loan but be sure the conditions of the loan also marry with your future plans. It is advisable to review your interest rate level every one to two years to make sure you’re getting the best deal. You may even find that your current lender is willing to match a competitors’ rate, saving you the hassle of moving, but you’ll never know unless you ask! 5. AM I TAKING ADVANTAGE OF ALL THE TAX DEDUCTIONS I AM LEGALLY ENTITLED TO? Surprisingly many property investors claim significantly less back from the Tax Office than they are entitled to each year simply because they don’t claim every legitimate deduction. Tax rules and regulations change every year and you need to keep abreast of the current environment. For this reason it pays to invest in a good accountant who can structure your properties tax-effectively and keep you up-to-date on all the latest rulings from the Tax Office.BF Patrick Bright is the Director of EPS Property Search. As a buyer’s agent he has purchased over 500 million dollars of real estate for clients and is the best-selling author of four Real Estate books in his “Insider’s Guide” series.
BF | PROFILE
Like any young man, cars were always something that interested Nick Strauss. His passion for cars, combined with his love of sales, which developed through the famed family business, Forges of Footscray, culminated in Nick forging his own path in the car industry. Nick is the owner of the Berwick Motor Group (BMG), one of the largest independently owned and managed automotive Dealer networks in Australia. He speaks with Jonathan Jackson about ambitions and what it means to own and run a successful motor vehicle dealer group.
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orges of Footscray was once a Melbourne institution. In its century-long history it built a reputation as a business built for the people: a particularly important trait in an area that has always been industrial working class. There was a lot to be learnt from Forges before it we sold: the way it conducted business, treated staff, presented to customers and not least the way in which it stood firm as a Department Store as large competitors sprouted around. The company was eventually sold to Dimmeys, another iconic brand that has also disappeared from the radar, but that history provided an important role in Nick Strauss’s business foundations. When you speak with Nick you get the feeling that he has taken many of the above traits to heart. He had even completed a two-year Retail Management course at the famous Harrods Store of London, as a pathway to take over Forges. That business was sold in 1987 and the hand-over never occurred, however Nick gained further grounding as part of the start-up team at Gazman from 1989 to 1992. Following his tenure with Gazman, Nick found himself within the automotive industry and knew this was where he would build his future. “It wasn’t until I joined Fowles Auction Group in 1993 that I began to see an opportunity present itself. Ever since that moment, I’ve lived and breathed anything automotive and developed a real passion for cars and the auto industry. Being the human sponge that I am I kept learning all the facets of our industry and what seemed to make the industry tick.” Fowles Auction Group was another with a long history in volume sales and customer service. While there were many lessons to be learnt at Forges, it is the training he received and the relationship building skills that came from the auction giant that gave him the industry springboard perspective. “Being my first foray into the automotive world, it definitely opened my eyes. My biggest lesson, which I still refer to today, always comes back to developing relationships with everyone you meet and deal with. Every relationship you build, no matter how small, creates life long opportunities.” And Nick wasn’t afraid to make the most of his opportunities. He pushed boundaries. He made sure he was doing more than the guy sitting next to him and he listened to his mentor; one of his early managers who helped Nick
I’m never too proud to hear great ideas, feedback or advice from anyone. Everyone has an idea and successful leaders don’t sit on the fence, we make decisions based on facts and information. Without that you’re simply travelling in the dark.”
take the next step to senior management and business ownership. That mentor taught Nick to create opportunities and understand when an opportunity presents itself, then shape it to provide an experience like no other. “Still to this day, I pride myself on listening: two ears, one mouth. It was one of my first lessons from a successful businessman.” Another lesson was that, in any business, complacency is a quick killer. To avoid complacency it is imperative to challenge your team and question your own effort every day. This requires listening to staff. “I’m never too proud to hear great ideas, feedback or advice from anyone. Everyone has an idea and successful leaders don’t sit on the fence, we make decisions based on facts and information. Without that you’re simply travelling in the dark.” This philosophy led him to the position of sales manager and then general manager of Noel Gould Holden/South City Holden. Yet he sees his first big break as the opportunity to buy equity at Northern Motor Group in Bundoora. Taking all that he had learnt and combining those lessons with his own ambitious traits he built Northern into a dominant multi-franchised car dealership comprising Nissan, Kia and Chrysler brands Jeep and Dodge. During his 10 years as director, the company grew to employ over 100 staff and had an annual turnover in excess of $100m. Nick sold his shareholding in November 2012 and purchased Clydevale
Australia P/L now known as Berwick Motor Group. Today, BMG employs over 200 staff and has an annual turnover in excess of $170 million. The growth is due to several elements, not least Nick’s leadership abilities. “I try to be a very down to earth CEO and love to mingle with my staff and help to develop the next generation of elite sales people. When I can, I still love to meet our customers on the showroom floor. This helps me keep my feet well and truly on the ground. It’s what my business is about and I like to remind myself that’s what I’m about.” Trust in business is also a key component to developing a successful company. “My team has my full confidence to make decisions and implement their own ideas, which allows me to focus and oversee the business’s future direction and issues at hand.” There are 10 brands over six locations including Chrysler, Alpha Romeo, Fiat, Nissan, Kia, Great Wall and Suzuki. BMG sell new and pre-owned cars and offer service and parts and vehicle finance. They also look after large fleet companies. There’s a lot to manage, but Nick has put a team in place that ensures management is fluent. Fluency comes with great communication. It builds internal and external relationships, which is vitally important when you are dealing with car manufacturers. “Communication and being involved with your partners is a key to success. A lot of the other car dealerships do what they do and that’s about it. However, without a healthy relationship neither of us have a business. I have spent a lot of time working with the manufacturers on improving the way we partner each other, including chairing a number of councils. “We need to continue to work together. The history of manufacturers dictating how a dealership should run their day-to- day business has hopeful-
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ly long gone, and I would like to think I have had a little bit to do with that. I have always provided feedback – good or bad – and advice to the manufacturers from a retail perspective to help steer the industry and inform the way it currently operates.” One thing that Nick feels separates him from most other dealers is his embrace of new ideas and initiatives. He says manufacturers really appreciate this openness and are willing to go the extra mile for BMG. Nick is known for being innovative within the industry and is never satisfied. He feels there is always something BMG could be doing better. “I’m a big believer in doing things a bit differently or breaking the mold, especially in the auto industry which has a bit of a reputation for complacency. There’s no growth in any business by keeping the status quo.” In terms of fleet management, this is one aspect of the business that sets BMG apart. Over the past 18 months, Nick has invested heavily in this area. Once again he placed high importance on relationships with fleet companies and business owners to build this aspect. “One of our sales team members showed real enthusiasm for fleet sales and his ambition and drive led me to promote him to the role of fleet sales manager. “Unlike traditional retail sales, we are not spending large amounts of money to drive enquiries and sales, instead we are spending time developing relationships with the decision maker, and ensuring our overall service levels are above and beyond what is expected. Fleet sales within the industry have nearly doubled over the past ten years, and we’re trying to regain that loss in retail sales with a strategic move into the fleet side of the industry. It’s all about moving with the times and adapting to change.” Which is necessary in a climate in which the Australian car industry is in a volatile position. “Nick and his team at Berwick Motor Group are definitely supportive and forward thinking. From a marketing perspective, Nick is always looking for different ways to reach customers, which I think sees him at the top of the curve in online auto marketing” Andrew Moore – Suzuki
Firstly, it’s about maximising the good times with the knowledge and realistic approach that it won’t last forever.”
The positive is that Australia has one of the highest proliferations of new car brands in the world. This means prices have fallen with increased competitions and market saturation. The negative is that while brands on the Australian market have reduced their retail prices to retain their market share and meet their targets, overheads and general business costs continue to increase for the dealer. This is where fleet management offers diversity in the market. Nick says the market has made him more diligent in how the business is operated. He takes a two-pronged approach. “Firstly, it’s about maximising the good times with the knowledge and realistic approach that it won’t last forever. Forward planning is a key component in any business and successful businesses plan for every scenario, good and bad. Secondly, when times are tough it’s all about being smarter in what we do and how we do it. A willingness to change and adapt the business to suit the current economic environment goes a long way in guaranteeing longevity, while those who don’t plan or change their ways seem to come and go very quickly.” Diligence pays. BMG is the number one Kia and Nissan dealership in Australia. “There’s a lot of hard work from everyone that goes into being number
one,” Nick says. “All the staff have a real passion for the brand and the company, and most importantly have the drive to stay at the top. Over the years we’ve developed processes and refined the way we do things with the aim of being the best. Our staff have quite a lot of input into the way we do things, which gives everyone a real sense of ownership and motivation and sets us apart from most businesses. We’ve rolled this out over the entire company and it has paid dividends; we were awarded the Nissan Platinum Dealer of the Year award in 2013, and have received a multitude of other dealership and individual staff awards across the group. Now the challenge is to continue to grow and do things even better in order to stay number one.” Nick is a prepared man. He has developed plans to combat a range of scenarios. He is still the same passionate man about the industry that he was when he first entered and he is still a calculated risk taker. This augurs well for BMG in the future as he sets out to maximise opportunities by taking a change management approach to technology, product and systems. “I want to explore these and hopefully utilise them to grow the business and become one of Australia’s largest dealer groups. More importantly I want to change the industry stigma that we’ve been plagued with for far too long.” BF
BF | INNOVATION
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INNOVATION | BF
DRIVING BUSINESS INNOVATION ONE STEP AT A TIME As a key driver of business, financial and economic growth, improving our nation’s level of innovation is something of an endless debate writes Tim Reed. How are we performing? What are the benefits of innovation for business owners and managers seeking growth? And how can Australian businesses boost innovation in our country?
I Tim Reed
is the CEO of MYOB.
nnovation comes in many forms. It may involve implementing technology to automate processes and free up more time to spend on sales and marketing. Or, it could be assisting them to target new markets closer to home or further afield with the support of organisations such as their local business chamber. It could even be simply partnering or merging with a similar or complementary business. When a business creates a change culture it opens itself up to receiving new ideas from every quarter: customers, staff, business partners, competitors, the local community and the broader global marketplace. Innovation – like inspiration – can come from anywhere. However it’s most likely to take hold in businesses where it becomes part of the culture. This can be done in a range of ways, from formalised inter-company sharing of project successes and techniques, to encouraging online feedback from customer communities through monitored channels. The key is that an innovative company accepts that it needs to keep changing, and that the best ideas aren’t necessarily going to come from where you’d expect, and it empowers every member of the team to spark inspiration. Local businesses have the potential to drive a vast improvement in our domestic economy if they are encouraged to further adopt innovation in their business. It’s something each of us can contribute to by making incremental improvements. For example, there is considerable scope to improve marketing through the use of online technologies. Depending on what research you read, anywhere between two thirds to four fifths of
consumers will search online first when looking for a product or service, yet nearly half of SMEs don’t have a website. This means a significant number of local businesses are missing out on sales and marketing opportunities simply by not having an online presence. Many business owners don’t have a solid business plan and only use their accountant for tax compliance, not realising the potential breadth of their service offering. Recent MYOB Business Monitor research found SMEs using an accountant for business advice and strategic planning, rather than just tax compliance, were 31 per cent more likely to see an earnings uplift last year. That’s a strong case to dig a little deeper and explore the possibilities of the relationship. We know improving innovation leads to increased productivity and in turn has the potential to free up time for business owners to spend more time doing what they want. Whether it’s growing or maintaining their business health, spending time with family, playing golf, volunteering for a charity or something else entirely. No matter what aspirations they have, most business owners would understand the benefits of having more time in their day. As business leaders, we have a part to play in helping support innovation within our local business community, wherever we might identify it. Further, the larger the business, the higher the rate of innovation. So, if we are to improve innovation we need to encourage micro and small business to adopt a mindset of continuous improvement. The smaller the business, the more likely it is to be solely dependent on the owner to lead innovation. We need to therefore find new ways to support smaller businesses so they can
draw from a wider range of knowledge and inspiration. Part of that role is to ensure the entrepreneurs and business owners we work with understand the realities of developing a new idea. At the same time, we have an obligation to find ways to support the innovation we see. We also have a great opportunity to help identify where new ideas could make a radical difference to the way a business runs. Why? Because as a nation, we all stand to gain. Innovators don’t just benefit themselves and their shareholders. They create an environment in which new concepts and technologies can have an enormous knock-on effect, creating whole new industries off the back of a successful idea, or new categories a whole sector can develop. If we don’t nurture local, smaller and growing businesses, they won’t be employing people in the months and years ahead. We need to apply much greater focus to making it easier to run a business, and to recognising and celebrating the innovation of our smaller businesses. The enthusiasm, drive and passion of smaller business owners have a much larger financial and emotional, direct and ripple, effect on our economy than many realise. Innovation doesn’t happen in a void. Now’s the time to talk about what your business or the company you work for could be doing better. Let’s collaborate to take the next steps. BF Tim Reed is the chief executive officer of Australia’s largest business management solutions provider, MYOB. He develops and drives the business’ strategic development, including its expansion into online business management solutions.
BF | FRANCHISING
BUDGETING AND FRANCHISING Like any business, when it comes to franchising there are plenty of considerations to give thought to; things that both franchisors and franchisees must think about in order to be successful. Some of these considerations will be similar for both parties, others vastly different writes Stan Gordon.
Stan Gordon is CEO, Franchised Food Company.
critical element to any business is planning – financial planning and forecasting – as well as mapping out all the various elements you need to create a sound project. Without a good plan and a proper budget, you’re not allowing for the variety of scenarios that you may face: whatever your business or project could be. If you want to succeed, it’s absolutely crucial to estimate, plan and consider the variables. It’s even more critical that this is done often. Numbers aren’t always the most fun thing when it comes to business (and it’s of course a good idea to hire someone who can help you with this), but you need to at least understand and respect them well enough to fool proof yourself – as best as any business can – for the rainier days that can come. Business and change go handin-hand, and rapid change can be devastating if you’re unprepared. Budgeting and financial mapping when you’re in franchising is just as critical as in any business and can be the key difference between one person’s success and another’s failure. So, when paralleled with a standalone business, what are the main differences for those working with
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a franchise model when it comes to budgeting? Strictly speaking, the principles are the same, but franchising isn’t necessarily as daunting as taking the leap on your own. In a franchise you’re (hopefully) working with a recognised brand with support mechanisms, and ultimately there is less to deal with alone. It’s not a bad option if you’re willing to take a leap, but not quite ready to go skydiving. On the proviso that you a) have funding to get you there in the first place, and b) get the top line and planning right, franchising can be one of the more relatively controllable business models. There are strategies in place for franchisees to follow, benchmarks for comparison and advice just a phone call away. Not many businesses have the luxury of tapping into the networks that franchisees do, so those that follow the matrix and use their advice avenues wisely, find the budgeting requirements much easier because there’s a map already in place. These are the franchisees at the top of their game. Franchisees generally have a yardstick to work with. They have a reasonable idea of their fixed overhead cost (rent); cost of goods percentage, advice on how much labour is necessary (usually as a percentage of sales), so all that is necessary is the forecast of sales. The bottom line is that franchisees must be ‘real’ in terms of the expectations of sales and what they want to achieve. As a franchisor, one must also ensure budgetary expectations are realistic. There’s no point planning for huge growth via franchisees alone – it’s got to be more than that. For us at Franchised Food Company we plan to grow via an increase of store sales; organic system expansion and acquisition.
Sometimes success in budgeting comes down to gazing into the business crystal ball, riding the waves as they come and getting a feel for those waves, as well as prepping for the times that are a bit unpredictable AND predictable. Two of our franchise brands sell ice cream - hugely seasonal when it comes to profit. These franchisees must squirrel money away so they’re prepared for a downturn in the cooler months, and on the flipside, be extremely disciplined in the summer months when profits are typically at their peak. Financials can be a hard task to master, and with this, personal budgeting is also important. It’s very easy to spend and be frivolous with your cash when it’s coming in quickly; but not so easy to cut back when things take a turn in the opposite direction. Just like every business model, there will always be things with franchising that need ironing out. If everything was peachy and hugely profitable, every business idea would take off and we’d all be millionaires. My parting words… Do your best to utilise the avenues you have at your disposal, and plan. Without a plan you can’t forecast, you definitely can’t budget and more importantly, there’s probably no way out for you either. When you create a budget and set your forecasted plan, with a sound business plan and map in toe, suddenly you will feel like you have more money, and more confidence to keep pressing on, and you will have more fun… And that’s always a good thing. BF Stan Gordon is the CEO of Franchised Food Company, the umbrella organisation encompassing the brands Cold Rock Ice Creamery, Trampoline Gelato, Mr Whippy, Pretzel World, Nutshack and Europa Coffee drive thru.www. ffco.com.au www.businessfirstmagazine.com.au
FINANCE | BF
Healthy Money Habits
Pat Mesiti looks at the top five ways to creating healthy money habits.
W Pat Mesiti is an internationally celebrated speaker and author.
e always hear about negative money habits. It seems every time we hear newsworthy stories they are always tales of woe, especially when it comes to money. Today I want to share with you some vitals keys to building healthy money habits which will ultimately help you achieve your financial success. Here’s my top 5: 1. Create money. 2. Pay yourself first. 3. Simplify your life. 4. Live on 50 – 60%. 5. Give. Now I know you may be thinking ‘some of these are obvious Pat’, and yet others not so much. In fact you may even be thinking some of these are a little counter intuitive. Well can I just say, perspective is an amazing thing. You see, up until now you have used your perspective to create the world you live in. But if it’s not the world you wanted then a change of perspective could bring about the change you need. At the very least it will show you new things which can provide you with growth opportunities. I’ve discovered people long for a change of lifestyle without a change of thinking. Your growth is a process not an event. What you do daily determines what you are permanently. The five habits above have served me well and what I am sharing with you is from my experience. So let me explain each point to give you a clearer understanding. Create some money. It may seem obvious, but you can’t save, invest or give what you haven’t got so it’s very important to be committed to creating money. Remember, wealth is created. It’s built over a
sustained period of time, so number one is learn to create money. Learn to pay yourself first. Now let me be clear on this. I don’t mean pay your bills first, I mean pay yourself first. Put some money aside into an investment account. “Why?” you ask... Well if you wait to use some of your left over money for investing, think again. There will never be any left over. Learn to simplify your life. It’s surprising how complicated we make our lives when we can live just as happily more simply. I have found that many of us spend money on stuff we don’t really need. We buy the latest clothes, the latest gadgets, the latest this and that, even though we’ve got perfectly good gadgets like phones and computers which are just as good as the brand new ones. Think about it, do you really need the latest whizz bang camera on your phone to live a fulfilled life? Obviously not! So learn to simplify your life. Live on 50 - 60 per cent of your income. This is an ideal range for you to live your life. Aim to pay your mortgages, electricity, food etc. from no more than 60% of your income. I believe if you start to exceed this you need to look at where you are spending your money. Learn to give. It’s very important to set aside a certain amount of money which you give on a regular basis. We need to remember generosity is not a once in a while thing, it’s actually an all the time thing. Generosity is a way of doing life. Unfortunately, many of us don’t live a life of generosity. We live a life of donation. This is where
we give a donation a couple of times a year. I think it’s a lot wiser to learn to be consistently great givers. This opens up a path for a lot more to come back to us. So there you have it, five healthy money habits. Of course creating habits like these won’t happen overnight, every single habit we want to apply in our lives takes time to establish. And remember, if you fall off the bike; get back on as soon as you can. There is nothing more frustrating than thinking you’ll get it right every time. Learn from your mistakes, chalk it up to experience and get back in the game. I really believe that by fostering these healthy money habits: simplifying your life, living on 50 – 60% of your income, being a giver and investing 10% of what you create, you will build yourself a prosperous future. And if you really want to take your financial success to the next level, focus on investing in your personal growth and personal development. Remember, it’s not what you create financially that is ultimately important; it’s what you become. BF Pat Mesiti is an internationally celebrated speaker, seasoned business executive, entrepreneur, mindset growth strategist, best selling author and consultant. Pat’s books and courses have sold over two million copies. He is the author of eight bestselling books such as The $1 Million Reason to Change Your Mind, How to Have a Millionaire Mindset,Soaring Higher, Dreamers Never Sleep, and Staying Together Without Falling Apart and in February 2013, he released Pathway to Prosperity. www.mesiti.com
BF | FINE DINING
Perfection is in the philosophy of produce
Ben Shewry doesn’t see himself as Australia’s best chef, however for the last two years he has the accolade of running Australia’s best restaurant. Jonathan Jackson examines why Attica has become so popular among the world’s harshest food critics.
ipponlea is a long way from Ocean Grove where Ben Shewry, the family man, lives with his wife and three children. It is even further from Waitara, the isolated corner of New Zealand’s North Island where Shewry grew up. This gritty, harsh farmland is surrounded by miles of black sand beaches which hold a mesmerising beauty all their own. It is where the land and sea come together as one and where Shewry gained an understanding of fresh produce and how to present it.
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Shewry’s philosophy is simple: use the best of what is available right at your doorstep. He often uses the fresh produce from Ocean Grove, which he either grows or catches to create something spectacular on Attica’s menu. He told Good Food: “Foraged produce is more flavoursome than cultivated food which tastes softer. Plants I find and pick myself are grunty because they’ve had to struggle for survival, while cultivated food is mollycoddled.” He presented this philosophy to a group of second year Canadian
hospitality students. In a blog post for MADfeed he writes, “My mind was open to the many culinary possibilities of the great region of Ontario and its people, and I was free from the dishes we cook each day at Attica — no potato cooked in the earth it was grown, no kangaroo, and no infuriating miniature beehive desserts… “With six or so young cooks in just their second year of professional cooking by your side, you can throw all notions of ‘seeking perfection’ out the window. As you should. The point of www.businessfirstmagazine.com.au
FINE DINING | BF my being there was to inspire and show these great young people the way I view the world through food. It wasn’t about trying to recreate Attica, an Australian restaurant with a culture and ingredient set to draw from that are very different from Canada’s.” Shewry’s love of local produce is well regarded. Indeed, it was what defines he and his restaurant. It is why for the past two years, Attica has been listed in the world’s top 50 restaurants. Last year the restaurant starred in 21st place. This year there has been a drop of 11 places to 32, however Attica remains Australia’s best-regarded restaurant ahead of Sydney’s Quay. THE CHANGING TIDE Attica wasn’t always on top. Shewry joined the restaurant in 2005 as a young chef who’d worked alongside Thai expert David Thompson. It was excellent grounding. In 2013 when Attica was voted into 21st position, Thompson’s restaurant Nahm made it to 13th on the list. However a Thai restaurant in Ripponlea certainly wasn’t an original concept. They were serving as little as two people a night. In the nine years that Shewry has been in charge, he has changed the fortunes of the restaurant around, by changing tack and bringing philosophy to food. About five years ago, Attica made the top 100, coming in at number 73. Shewry told news.com.au, “Prior to that business had been extremely tough and David (co-owner David Maccora, an emergency medicine doctor) and I thought we might have to close several times. I didn’t realise the impact being number 73 would have. It was like a lightbulb being switched on – thousands of new customers descended upon us and through that we have been able to reinvest the small amount of money we made back into the business and progress our offerings a great deal.” After its ranking of 73 in 2010, Attica jumped to 53 in 2011, 63 in 2012, and 21 in 2013. Restaurant manager Banjo Harris told news.com.au, “there was “a marked upswing in interest from all corners of the globe” when Attica first made the top 50 list last year. “We went from having a waiting list of about four or five tables each night to having a waiting list of close to 40 tables each night.” The restaurant seats approximately 50 people and there are just five sittings per week; that’s 275 people through the doors each week, so you can imagine the long wait to sample Shewry’s food. www.businessfirstmagazine.com.au
UNPRETENTIOUS IS BEST Attica is a small restaurant. Its façade is an unassuming looking converted bank that belies the beauty of the food served inside. And Shewry is as humble as both the building and the ingredients he uses. He seeks solace in family, music and surf. His children keep him grounded. His son Kobe once hinted that his father presented great food, despite the lack of a hamburger on the menu. Recently he tweeted, “Singing Fleetwood Mac as I cook Sunday night dinner and the little one says “oh daddy I thought you were crying” #sticktothecookingdad.” When Attica was voted in at number 21 last year Shewry said, “You can’t believe your own hype. You’ve got to keep your feet grounded and you’ve got to take it with a grain of salt. I appreciate it very much and it’s great recognition for our hard work but there are a lot of great restaurants in the world.” This year he tweeted, “Massive gratitude for all the lovely messages about @TheWorlds50Best So proud to lead our unbelievable team and honoured represent Australia.” Which brings us back to Shewry rejecting the ‘Australia’s best chef ’ mantle.
“I don’t see myself as Australia’s best chef. There are too many other good guys out there, a whole heap of people who are amazing cooks. If you believe you’re the best chef, you’re in some spot of bother as a person and as a professional.” Making any top list can help a business to boom. When Attica hit 21, the website crashed, the phone system went into meltdown and 10,000 people were disappointed they couldn’t make an immediate booking. Yet, what makes Attica really great is the Shewry doesn’t rest on his laurels. One of his favourite sayings is a quote by the late Cliff Burton an American musician, best known as the bass guitarist for American band Metallica: “You don’t burn out from going too fast. You burn out from going too slow and getting bored.” Of his own goals Shewry says, “I have plans to make a feature film about cooking. It’s a longer-term plan, I suppose. I’m working on a project with some friends. It will be unlike any other film you ever saw that a chef made.” Most importantly, he will continue to experiment with fresh produce in a way that reflects his philosophy to create more exciting, flavoursome dishes. BF
Attica serves an eight-course degustation menu for $190, which has included whiting cooked in paperbark with lemon myrtle and oyster pearl meat, a charry warm salad of perfect cucumbers, ruby kangaroo, or marron in a lush sauce of pork and onions. On Tuesday nights, there is discounted menu of dishes made from scratch that morning.
BF | HEALTH
LEADERSHIP THROUGH PEAK PERFORMANCE I Lauretta Stace is Chief Executive Officer of Fitness Australia.
recently had the great fortune to be able to attend the World Business Forum in Sydney. The Forum was a truly inspirational event, bringing together world-leading business and strategy experts to discuss the ideas, trends and innovations that are shaping the global business landscape. In several of the presentations,
the principle of exceptional human physical performance was often used to make a point about great leadership. The elite athlete was often used as an example of how leaders can inspire others, but also how they embody the attributes of courage, determination, resilience and dedication to achieving goals and getting results.
This led me to reflect on the athlete mindset and its parallels with inspiring and effective leadership and the role of physical fitness in the development of leadership skills. We can use and apply the athlete mindset in many ways to achieve our professional goals. For example, here are the four D’s of leadership success:
Every athlete has a desire to succeed. Desire is visionary, aspiring, optimistic and goal-oriented.
An athlete cannot achieve their desire (vision) without constant devotion and commitment to their chosen field. They have to persevere to succeed.
An athlete has to have resolve, willpower, grit, purpose and fortitude to make it to the top. Not all things will go to plan, but the true athlete never gives up.
An athlete has to practice their craft until they master it. This requires significant self-control and a commitment to continuous improvement.
All of this rings true for business leaders as well, so it’s a handy mantra to have in your leadership toolkit to remind yourself of what it takes to succeed at whatever you do and to be an inspiring leader. On the flip side, a commitment to personal physical fitness can help you to embrace the athlete mindset. So don’t forget to get the heart pumping every day and keep those muscles flexible and strong!
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READING NOOK | BF
The Leader’s Bookshelf Edited by Joshua Lansell-Kenny and Daniel G Taylor
The 7 Habits of Highly Effective People (25th Anniversary Edition): Powerful Lessons in Personal Change. By Stephen R Cover. Simon & Schuster, 2013 $24.99.
The Wolf of Wall Street (Film Tie-in Edition). By Jordan Belfort. Hachette Australia, 2013. $22.99.
Few books merit reading more than once. Of those, even less are worthy of being reread every year. The 7 Habits of Highly Effective People is one such book. The habits that the late Dr Covey teaches are concerned with greatness of character. To achieve this, you first master yourself. Only then can you achieve effectiveness with other people. The final habit overlaps all the others: take care of yourself as you pursue your mission. The 7 Habits steps beyond the label of “classic” and is worthy of being called “wisdom literature.” That’s a label Covey himself gives to the greatest books. Each time you read The 7 Habits , you’ll learn something new. What it teaches you will be as relevant today as it is five, ten, fifty or 500 years from now. And while Covey attracted criticism for his use of management jargon, in many places his prose is as simple, elegant and beautiful as anything you’d find in the greatest classics. What strikes me most about The 7 Habits after studying it for 20 years is how it captures the humanity of Dr Covey; it’s imperfect, but it is authentic. This is one of the few books I recommend anyone read. But if you’re a leader, then this is your basic text. -- DGT.
CEOs beware: only read this if you’re looking for a big lesson in how NOT to run a company. Jordan Belfort rises from nothing and then loses everything that matters. He’s open about his flaws. His arrogance sees him go sailing into 20-foot waves. He lost his helicopter, boat -- and nearly his life. He believes he’s bulletproof, breaking several securities laws. As a result, he has a lifetime ban from the brokerage market. As a “man of power,” Belfort thinks he can sleep with as many women -- and take as many drugs -- as he wants. Instead, he loses his wife. At heart, The Wolf of Wall Street tells of a life destroyed by cocaine-fuelled insanity and how Belfort goes on to pull his life back together. It’s because of this, he can offer hope. Through blatant disregard for the law, Belfort’s career shifted to high gear, earning more than one million dollars a week. At the peak of his drug use, he was down to three hours of sleep -- a week. After a psychotic episode, he went into rehab and came out clean. If you think you’ve been through some setbacks, this book will show you how to bounce forward. -- JLK.
BF | PHILANTHROPY
BLUE SEPTEMBER Some of Australia’s biggest businesspeople and celebrities have thrown their support behind Blue September 2014 to raise more than $2.5 million to fight men’s cancer.
igh profile people like Anthony LaPaglia, Ronan Keating, John Aloisi, Chris Judd, Lote Tuquri, Mark Holden, Liesel Jones – even the former First Bloke Tim Matheson have supported Blue September since its inception in 2009. Corporate support includes a commitment from outfits like Autobahn, Red Bull V8 Supercar Racing Team, oOH! Media, Hallmark, QLD Rail and Metro Rail. The brainchild of Big Health Foundation director Mike Chapman – the month-long campaign aims to make the connection of ‘blue for men’s health’ in the same way pink has be-
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come synonymous with breast cancer and women’s health. “September is relevant because of Father’s Day, it’s football finals in both AFL and NRL and it’s Internal Prostate Cancer Awareness month. The Blue part signifies it’s for men and we lose too many of them to prostate, lung, skin, bowel and testicular cancer.” The national campaign raises funds and awareness for the Australian Prostate Cancer Research and the Australian Cancer Research Foundation to help them to reduce the risk of developing and dying from cancer by making better lifestyle choices and seeking help sooner rather than later.
“Early diagnosis and research are the two ways to beat cancer and so any money raised for Blue September goes to those two vital areas,” Chapman said. “Traditionally men have been way too reluctant to get to the doctor to get a regular health check – event though statistics are clear that early detection saves lives – it really is that simple. “Because of men’s historic reluctance, campaigns like Blue September are even more important. We need to talk to men out there and show them it’s important in a supportive way.” Chapman – who also runs a communications agency MWC Media – said he has found working with high profile www.businessfirstmagazine.com.au
PHILANTHROPY | BF ambassadors a powerful way to connect with men. “When a strong role model like Mark Holden, who lost his Dad to prostate cancer, or Ronan Keating, who lost his Mum, gets up there and speaks from the heart it has cut through. “Or if Chris Judd, Mark Schwarzer, Lote Tuquri or other big, strong and tough athletes speak about how important it is to take care of your health, men listen.” Former Australian Idol judge Holden has been an ardent campaigner for Blue September. “Dad never spoke to me about his illness – men of his generation were like that. Far too many men die each year from cancer, but thanks to developments in research and treatment that number is declining – but there is still more work to be done.” Chapman said he has also been impressed by the strong support from corporate Australia for 2014. For example, leading car care company Autobarn is one who has recently came on board as a 2014 official sponsor. Autobarn stores around Australia wide will be promoting Blue September. It will sell Blue September wristbands from mid-August. Each band has a space to write the name of the person who inspired the purchase. Autobarn CEO Paul Dumbrell said he was pleased to support such an important cause. “Blue September not only plays a part in helping to raise much needed funds for cancer research but also raises awareness of cancer in our lives and the lives of loved ones,” he said. The company will also be holding a charity dinner during September featuring V8 Supercar identities, Craig Lowndes and Jamie Whincup from Red Bull Racing Australia. But can we really prevent cancer? At least one in three cancer cases is preventable. “Thousands of men’s lives could be saved by making healthy lifestyle decisions such as quitting smoking, reducing alcohol intake, taking care in the sun, regular exercise, maintaining a healthy weight and eating a balanced diet. “Lives can also be saved if more men know more about the symptoms of cancer and contact a health professional as soon as they notice something worrying such as a lump or a nagging cough.” Thanks to support from Blue Sepwww.businessfirstmagazine.com.au
tember, Australian Prostate Cancer Research are about to launch a worldfirst online cancer support program for men with prostate cancer. Prostmate is a ground-breaking personalised support system for men and their families dealing with prostate cancer. It will provide access to the latest research validated information, personalised support, specialised programs and consultations with prostate cancer specialist nurses and psychologists. It is being developed in partnership with leading cancer agencies, researchers and clinicians. It will be free to join, easy to use and a valuable resource to help make informed choices. The cancer statistics: - Australia has the highest rate of prostate cancer in the developed world - In 2013, it is estimated that over 122,000 Australians will be diagnosed with cancer and more than half of these cases are expected to be males - In recent decades cancer mortality rates have fallen due to vital advances in research. If your business wishes to sponsor or become a corporate fundraiser for this years Blue September please contact the Sponsorship Manager on 0409 504 030. BF
BF | HIDEAWAY
PARADISE FOUND The Chiva Som experience at Qualia Resort in Hamilton Island is a mixture of great indulgence and absolute comfort. Words by Jonathan Jackson: Photography by Show & Tell Imagery
n a gated community, just a short drive from the very small Hamilton Island airport, where the runway quite literally runs into the Coral Sea, is a resort that makes you feel like you are one of the rich and famous. Around the corner from the resort is Beatle George Harrison’s former abode and the island itself is littered with the homes of some better-known business owners, entrepreneurs and celebrities. For those who don’t own homes on the island, Qualia is the resort of choice; intimate, tranquil, it is the getaway for those who like their service supreme and their privacy unencumbered. Our stay at Qualia coincided with Cyclone Ita. It didn’t matter though. This is one place where the staff is confident that no matter what the conditions there will be something to enjoy in this safest of havens. Even during the
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eye of the storm, when the winds blew over 100kmh and the bamboo bent to the ground, the glass panels that separated the inside of the luxury rooms from the outside storm stood firm. While you may say any port in the storm, Qualia is the port to be. Our stay at Qualia coincided with the Chiva-Som experience. Part of general manager, Matthew Taverner’s edict is to treat Qualia guests with a range of luxury experiences. Spa Qualia is placed at the heart of the resort and is perfectly situated to catch the soft sea breezes and take in the tranquil views of the Whitsundays. Their spa treatments are thoughtfully designed to rebalance the synergy between mind and body and to capture the essence of Australia and the Great Barrier Reef. Treatments include facials, a range of massage options, men’s regeneration treatments, couples
treatments and a day spa indulgence. It is pampering to the nth degree, however the Chiva-Som treatments brought an entirely new experience. For those unfamiliar with Chiva-Som, it is the only destination spa in the world to have consistently appeared in the top three of the Conde Nast Traveller (UK) Reader’s Travel Awards. Chosen as the “World’s Best Destination Spa” in the 2009 Travel+Leisure Reader’s Travel Awards, Chiva-Som is also a member of the Destination Spa Group and Healing Hotels of the World. It is the perfect march for Qualia. I had the option of four types of Chiva-Som massage: 1. Manual lymphatic massage - ideal for anyone on the Chiva-Som Detox or Weight Management programme and for pre and post-surgical procedures. 2. Maya Massage (50 min) www.businessfirstmagazine.com.au
HIDEAWAY | BF
The view from room six.
This treatment is a so-called the deep colon-cleansing massage. This Maya Massage is designed to help the colon rebalance itself through gentle yet deep manual massage. It is the perfect adjunct to colonic therapy. 3. Postural Integration (50 min) Good posture is essential to your health and well-being. When our bodies are perfectly aligned, we move with ease and free of pain. As soon as we lose our perfect alignment, all of this change, tension appears, movement becomes awkward, and pain sets in. Since we are born without posture, we must develop it and then maintain it. 4. Stress Release Therapy (50 min) Frequent use of a personal computer and sitting still for extended periods of time can cause chronic physical problems. These common ailments affect many people who work long hours and don’t receive the correct therapies and treatments. Stress Release Therapy has been created to relieve these stressed musculoskeletal areas. Using our myofascial relief technique, soft tissue release and upper body massage with superficial heat applied on the whole arm, we help to increase blood circulation and relieve tension that manifests itself in the upper body. The treatment ends by applying an herbal compress to the eyes and facial area to relax soft tissue around. Given my profession, I could well have chosen the stress relief option, but due to small back ailments, I chose the postural procedure. It was one of the best massages I have ever had. The masseuse was also a physiotherapist and put me through some serious therapy. I’d recommend this to any executive, who spends most of their www.businessfirstmagazine.com.au
time cooped in an office in front of a computer. The massage followed the Chiva-Som lunch. This was clean Thai food; a three-course flavour sensation that took me back to holidays in Thailand (minus the alcohol). Fish, seafood, soup. It was a great meal. We followed that up with a five-course Chiva-Som dinner, which also hit the mark. Take a look at the photos they speak for themselves. I’d recommend any hard working executive try Chiva-Som. You’ll feel refreshed. On the second day of our two-day stay, it was like Ita had never been through. The blue skies and island views were postcard perfect. We ascended over the island in a helicopter
to take in the scenery and get a sense of the Whitsundays. If you have no aversion to helicopter rides take the trip. It gives you a great sense of the reef and the small islands. The pool at Qualia overlooks the sea; in fact there aren’t too many areas where you can’t see the ocean. The mid level rooms have their own plunge pools – pool water to ocean provides a stunning view. Room six is one of the most magnificent rooms, you could ever stay in. We didn’t get to see the private house, however the plunge pool pavilions are nothing to sneeze at. It is almost the perfect room. The service is impeccable. It is far from intrusive, however your every need will be catered for no matter where on the island you are. As a side note, one of the great things about Hamilton Island and Qualia, is no matter where you are on the island you can charge everything back to your room. This is a friendly, relaxing experience. It can be expensive, but you get what you pay for and you receive a great deal. BF
BF | FASTLANE
X4 MARKS THE SPOT
BMW just keeps releasing cars, which is great for fans of the German automobile maker, especially if you want a different BMW for different occasions. In July this year the manufacturer will launch the X4 into the Australian market.
ased on the X6 and X3, the all-new Four badge, looks like the former coupé, but performs like the latter. It has all the right BMW curves and is slightly longer than the X3, but it sits lower. It is also roomier with 500 litres of luggage room, expandable to 1400 with rear seats dropped. The top of the range is the 35i: a sporty number. While it looks like the 6, it has less bulk and can be thrown around safely (and enjoyably). The X4 is part of the SUV family and is delivered in four different models ranging from $69,990 to $87,900 plus on road costs for the model above. It’s roughly a $10,000 premium from the X3 series. The base model is the xDrive20i: a 2.0-litre four-cylinder turbocharged petrol engine producing 135kW/270Nm. The xDrive20d is the second-tier offering. It features a 2.0-litre four-cylinder turbocharged diesel engine returning 140kW and 400Nm. It travels 0-100km/h in 8.0 seconds. The xDrive30d is a 3.0-litre six-cylinder turbo diesel engine producing 190kW and 560Nm and goes from 0-100km/h performance in 5.8 seconds. The xDrive35i is a 3.0-litre six-cylinder turbocharged petrol engine with 225kW and 400Nm. Zero to 100km/h is achieved in 5.5 seconds. All models will feature performance control and variable sports steering, enabling different settings for performance or comfort-oriented driving. Standard features include 19-inch wheels, dual-zone air-conditioning with rear air vents, leather upholstered sports seats with lumbar support and electric adjustment for the front seats, automatic tailgate and Bi-Xenon headlights with LED daytime lights. The new BMW X4 (fuel consumption combined: 8.3–5.0* l/100 km [34.0– 54.3 mpg imp]; CO2 emissions combined: 193–130* g/km) blends the hallmark features of the successful BMW X family with the sporting elegance of a classical coupe, and introduces the unique Sports
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Activity Coupe concept to the premium mid-size segment. Highlights Extrovert and dynamic appearance. The new BMW X4 is based on the technical blueprint of the BMW X3, but displays a sporting character very much its own and takes dynamics to another new level. That much is clear when you view the new model head-on. The large air intakes positioned on the outer edges of the front end and the character lines in the front apron allow the BMW X4 – with its signature BMW twin headlights and front fog lamps (both optionally with LED technology) – to maximise its visual presence on the road. The driver and front passenger sit 20 millimetres lower than in the BMW X3. In conjunction with the two-seat look of the rear, this accentuates the coupe character of the new BMW in the classy and exclusive interior as well. At the same time, the X4 offers generous levels of space for up to five people and – thanks to the standard 40:20:40 split rear seat backrest – impressive variability. Unparalleled engine power combined with supreme refinement. In keeping with the vivacious character of the new BMW X4, customers can choose from three petrol engines and a trio of diesel units from the BMW EfficientDynamics engine family, whose output ranges from 135 kW/184 hp to 230 kW/313 hp. All the engines meet the EU6 exhaust gas standard. The BMW TwinPower Turbo technology of the state-of-theart engines offers a promise of superb performance married with exceptionally low fuel consumption. For example, the flagship petrol unit in the BMW X4 xDrive35i (fuel consumption urban/extra-urban/combined: 10.7/6.9/8.3 l/100 km [26.4/40.9/34.0 mpg imp]; CO2 emissions combined: 193 g/km) develops an outstanding 225 kW/306 hp and peak torque of 400 Nm (295 lb-ft). BMW EfficientDynamics: driving
pleasure meets fuel economy. The unparalleled BMW EfficientDynamics technology package also minimises the fuel consumption and emissions of the new BMW X4. Included are features such as the Auto Start Stop function and coasting function (if an eight-speed automatic gearbox is fitted), Brake Energy Regeneration and on-demand operation of ancillary units, ensuring an admirable degree of environmental compatibility to go with maximum driving pleasure. Also available as an option to add further efficiency to the mix are fourth-generation reduced-rolling-resistance tyres, which reduce the CO2 emissions of selected variants of the BMW X4 by another 7 g/km. * Figures with optional reduced-rolling-resistance tyres on 17-inch Streamline style 306 light-alloy wheels. BMW ConnectedDrive: Services & Apps and assistance systems. The BMW ConnectedDrive features available for the new X4 allow BMW to restate once again its leadership in the link-up of driver, vehicle and outside world. Among the highlights in the new BMW X4 are the full-colour BMW Head-Up Display, the anti-dazzle High Beam Assistant, and Driving Assistant Plus including Lane Departure Warning, Active Cruise Control with Stop & Go function, preventive pedestrian protection and a Collision Warning system, which applies the brakes with anything up to maximum stopping power as required. Added to which, the optional ConnectedDrive Services also allow drivers to sign up to innovative services such as Real Time Traffic Information (RTTI), the Concierge Service and Remote Services. Facebook, Twitter, AUPEO! personalised internet radio and music platforms like Napster and Deezer have also been optimised for incar usage and can be accessed easily on board the BMW X4. The BMW X4 is everything you expect: stylish, quick and with all the amenities that the modern driver requires. BF www.businessfirstmagazine.com.au
FAST FASTLANE LANE | BF
Published on Jul 9, 2014
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