The Australian Business Executive - Q2 2016

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Contents REGULARS 5

Publisher’s Note

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News in Review

PRODUCT REVIEWS 8

Retro-Trio

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Soundshield Wireless

TRAVEL 44

International Breaks: Tahiti

FEATURES

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The Importance of Offshore Regulation in Australia Stuart Smith, CEO NOPSEMA

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Addressing the Effects of Penalty Rates Russell Zimmerman, Executive Director ARA

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The Era of the Strategic Communicator Jennifer Muir, National President PRIA

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COVER: Geelong Cats Character Over Talent

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Brisbane Broncos On and Off-field Success

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Alexium International Standing Out from the Crowd

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Allied Grain Systems Growing Together

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BCS Strata Management Professionalising the Industry

The Australian Business Executive - Q2 2016


Publisher’s Note The Australian Business Executive A division of Romulus Rising Pty Ltd ABN: 77 601 723 111 w: www.TheABE.tv t: (02) 8091 1410 e: communications@theabe.tv Publisher J. Landry Lead Writer Nicholas Paul Griffin Editorial Contributors Paul Amatril Raul Betancourt Arnie Taghoy Publication Layout Bien Swinton Jr. Toni Detablan Website Raizwan Butt

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his edition is a bit unique, with a range of topics so hopefully there’s something for everyone! Our cover story with the Geelong Cats’ Brian Cook identifies that certain people carry success no matter where they go. The same can be said for our second sport story with Terry Reader of the Brisbane Broncos. Thanks to his efforts the Broncos have made substantial gains in their corporate sponsorship, even during seasons when they weren’t considered contenders. It’s always great to read about an Aussie success story abroad, and Alexiu m I nter national is just that. In our interview with Nicholas Clark, Alexium’s CEO discusses his overhaul of an organisation that was a struggling R&D company to a profitable commercial entity servicing the American defence forces. John White and his company Allied Grain Systems have been in business for over 20 years and are representative of the hard work that comes from Regional Australia. As we’ve done with previous editions we continue to look at strata issues, and this time we speak with BCS Strata’s Ablo Jalloh on the necessity of legislating the industry. Strata faces significant issues and growth as more Australian dwellings are built in this fashion.

As always I hope you’ll enjoy,

J. Landry Publisher

Published quarterly, The Australian Business Executive (The ABE) provides an in-depth view of business and economic development issues taking place across the country. Featuring interviews with top executives, government policy makers and prominent industry bodies The ABE examines the news beyond the headlines to uncover the drivers of local, state, and national affairs. All rights reserved. Reproduction in whole or in part is strictly prohibited without written permission. Opinions expressed in The ABE are not necessarily those of the editor or publisher. All reasonable care is taken to ensure truth and accuracy, but neither the editor nor the publisher can be held responsible for errors or omissions in articles, advertising, photographs or illustrations. Unsolicited manuscripts are welcome but cannot be returned without a stamped, self-addressed envelope. The publisher is not responsible for material submitted for consideration. The ABE is published by Romulus Rising Pty Ltd, ABN: 77 601 723 111. www.TheABE.tv The Australian Business Executive - Q2 2016

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News In Review

Allianz Takes Out Support Service Provider Award in Mortgage and Finance Excellence Awards

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eading insurer, Allianz Australia, won the Support Service Provider Award, for New South Wales and Queensland, at this year’s Mortgage and Finance Association of Australia (MFAA) Excellence Awards. The MFAA Excellence Awards are the most prominent in the Australian Mortgage and Finance Industry and are judged by an independent panel of business professionals and experts. The awards, held in each state, recognise individuals and organisations that enhance the industry through the development of best practice initiatives and innovation. Allianz won the state based awards in New South Wales and Queensland in recognition of the Allianz Referral Program, which provides mortgage brokers with a no-advice spot-and-refer model that allows finance brokers to refer customers to Allianz for their home, landlord and motor insurance. Accepting the award in Sydney, John Buchelin, National Business Development Manager, thanked the brokers for their support, acknowledging the importance of their partnership. “It’s a great honour to be recognised for this prestigious award in both NSW and QLD. At Allianz, we are continually looking for opportunities to better service our partners and their customers. It takes a team effort to achieve this so I am pleased that our team has been recognised for the high level of service and value that we provide to our partners, brokers and their customers,” he said.

Australia Post to Form Strategic Alliance With Global Gogistics Leader

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ustralia Post and global parcel express deliver y and logistics company Aramex have announced they had agreed to form a strategic eCommerce alliance that will open emerging world markets to Australian businesses and online shoppers. Aramex, which grew its annual revenues by 50% over the last four years to $A1.4 billion last year, is based in the international trading hub of Dubai. It has a strong focus on increasingly impor tant markets to Australia, including South East Asia and India. Under the terms of the agreement, Australia Post and Aramex will enter into an Asian-based joint venture, targeting the global eCommerce market, with a particular focus on Asia.

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The joint venture will build on the service capability of StarTrack International and Aramex’s global express delivery network. Aramex will invest in StarTrack International and contribute marketing and sales capability. The arrangement will help Australia Post grow the Australian eCommerce market, capturing more inbound eCommerce parcel volumes and providing a platform for outb o u n d growth, par ticularly for Australian small businesses. For parcel volumes generated by the joint venture, Australia Post will provide last mile delivery services in Australia, utilising its extensive network of drivers and posties. Australia Post’s StarTrack Courier business intends to extend its capability by acquiring Mail Call from Aramex. The alliance with Aramex complements Australia Post’s existing range of global partnerships, including a joi nt vent u re w it h Ch i na Post, Sai Cheng Log ist ics I nter national. The alliance will allow Australian businesses and consumers to take advantage of the dramatic growth in cross-border eCommerce and the rising Asian economy. It reflects that cross-border parcels volumes are growing at 20% per annum, against slowing domestic pa rcel g row t h, a nd that international competitors are entering the Australian market.

Sale of Interest in IndoMet Coal

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HP Billiton has entered into an agreement to sell it s 75 p e r c e nt i nt e r e s t i n I n d oMe t C o a l t o it s e q uity partner PT Alam Tri Abadi (Adaro). IndoMet Coal comprises seven Coal Contracts of Wo r k w h ich a r e lo c a t e d i n C e nt r a l a n d E a s t e r n K a l i m a nt a n , I n d o n e si a . T h e H aj u m i n e , w h ich i s lo cated within the Lahai Coal Contract of Work, has a production capacity of one million tonnes of coal per annum and has been in production since 2015. James Palmer, IndoMet Coal Asset President said: “After a detailed review of IndoMet Coal, we concluded that although the Project could suppor t a larger scale development, BHP Billiton has a range of other growth opt ions i n t he por t folio t hat a re more at tractive for future investment.” Completion of the sale is conditional upon the fulfilment of customary regulatory approvals. During the approval period BHP Billiton and Adaro will work together to facilitate a smooth transfer of ownership.

The Australian Business Executive - Q2 2016


News In Review

Contract Awarded For Berala NSW Station Upgrade

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ransport for NSW has announced the design and construction contract has been awarded for planned improvements at Berala Station, marking the next step towards the major upgrade. Once complete, Berala customers will benefit from a new lift, canopies, family accessible toilets, wayfinding signs, lighting and new CCTV to boost access and security. A Transport for NSW spokesperson said the upgrade is a huge boost for t housa nd s of Berala customer s, e s p e cially older people, people with a disability and parents with prams. “This upgrade at Berala Station will make catching public transpor t a much more attractive option,” the spokesperson said. “It’s great to see this project is full steam ahead. Now that a contractor is on board we will be pulling out all the stops to start construction as soon as possible.” The Berala Station Upgrade is being delivered as part of the NSW Government’s Transport Access Program, an initiative to deliver modern, safe and accessible transport infrastructure. Wester n Syd ney customer s have been major b e n ef iciaries of this Government’s Transport Access Program with upgrades completed at Bankstown, Canley Vale, Clarendon, Fairfield, Ingleburn, Mulgrave and Riverstone Stations. Work is also now underway to upgrade Flemington Station and an upgrade is planned for Homebush Station.

NAB Named Bank Of The Year

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ational Australia Bank has been named Bank of the Year 2016 in the Money Magazine’s Consumer Finance Awards. In addition, NAB has received the Canstar award for Most Satisfied Customers. The Bank of the Year award, which was judged by customers, recognises NAB for the everyday banking products that make banking easy and simple for its customers, as well as the bank’s strong focus on customer service. Gavin Slater, Group Executive Personal Banking, said the awards recognise the hard work of the 36,000 people at NAB who are firmly focused on supporting customers. “Our people are passionate about making banking easy and personal for our customers.” Mr Slater said.

“This award is testament to the hard work they put in to understanding our customers’ needs and improving the customer experience.” Every year, Money Magazine partners with research partner Canstar to evaluate more than 15,000 financial products and ser vices from more than 140 f inancial institutions for the Consumer Finance Awards. The Bank of the Year Award is for the financial institution deemed to be best in their field and going above and beyond for their customers. Mr Slater said the award was a step towards NAB’s goal of becoming the most respected bank in Australia and New Zealand. “This award is validation that we are improving our service for customers and I couldn’t be prouder.”

Alexium International CEO Winner of 2016 Management Award

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lexium CEO Nicholas Clark has been selected a Stevie Bronze winner as Executive of the Year in the 14th annual American Business Awards competition, and will be presented with the award at the organization’s Gala in New York, New York. Clark’s recognition by the premiere business awards program in the United States came in the category of “All Other Industries,” one of 10 categories in the Executive of the Year competition. More than 10,000 entries per year from organizations around the world are received by the Stevie Awards. “Nick’s dedication and his superb leadership as CEO have been essential as Alexium has developed from a start-up, R & D firm into a commercial-oriented enterprise with global reach,” said Gavin Rezos, Executive Chairman, Alexium Board of Directors. “We are pleased that Nick has been recognized by the American Business Awards for his important contributions.” Clark’s nomination and subsequent award was based on a vast review in a number of areas, being management, leadership and strategy. In addition to his strong academic background and success as an accomplished entrepreneur, his achievements in rebuilding Alexium and taking it to a growth business was highly regarded. “The Stevie award is an indication of Alexium’s influence in the market, and joining the ranks of other winners such as Lockheed Martin, T Mobile, Accenture and John Hancock Financial Services is an honor,” Clark said. “At Alexium, we have a talented team which has developed innovative and environmentally friendly flame retardant products that are strengthening human safety and health in a wide range of applications from textiles to military equipment to resins.”

The Australian Business Executive - Q2 2016

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Product Review

Retro-Bit Super Retro Trio

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othing brings out feelings of nostalgia like the sounds of a tiny little 16-bit speaker blipping away as you mash frantically at the plastic buttons of your old school D-pad. If you ever get that craving to revisit the gaming days of your childhood, you might be tempted to bust out that old NES or your aging Mega Drive. What are the chances that your original consoles work, though? Sometimes blowing into those rusty connectors doesn’t work quite the same way that it used to, and you might find that your games are booting up and displaying a mishmash of incoherent pixels rather than your favorite retro game characters. What do you do if you want to breathe new life into those old games that you’ve been keeping in your mother’s attic for the past twenty years? Well, maybe it’s time to trade up. The Retro-Bit Super Retro Trio is exactly what you’ve been looking for to bring back those memories in a small, simple-to-use form factor. You can revisit all the old games from your childhood and maybe even introduce some of the classics that you used to play to your own kids. It can accommodate both NES and SNES cartridges, as well as games for the once popular Sega Mega Drive. With an easy to install adapter, you can also enjoy your old Gameboy and Gameboy Advance games, making this console a delightful five-in-one nostalgia machine that will remind you of what it used to be like when you were a kid. It comes with two controllers that are reminiscent of the ones for the classic SNES, albeit in a bolder color scheme. It has everything you need for an impromptu retro gaming party.

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Like any console, not everything is sunshine and mushrooms—there are a few goombas on the horizon. The Super Retro Trio isn’t quite as well-built as its predecessors, and feels a bit flimsy to handle, but that is somewhat to be expected; after all they don’t make them like they used! Additionally the Super Retro Trio doesn’t include HDMI output, though one could just interpret this as a homage to the consoles of old. Still, these small factors really shouldn’t deter anyone from giving this system a go. Overall, the Retro-Bit Super Retro Trio is a solid console that serves one very specific function and does it very well, without any bells and whistles. It is elegant in its simplicity and it will bring you back to a time when you were younger and games were more simple. If you’re not a hardcore collector or Ni ntendo pu r ist who is look i ng for an authent ic piece of history, and you just want to sit down and play the old games that you’ve been missing for years, then this product is a very good purchase. For further information visit: www.facebook. com/Retrobitgaming

The Australian Business Executive - Q2 2016


Product Review

Polaris Soundshield Wireless Headset

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re you looking for a vast improvement in your wireless headset experience, for either yourself or your call center employees? The Polaris Soundshield Wireless headset is sure to deliver what you’re looking for. It is specially designed to give you both control and comfort, along with unparalleled acoustic protection and HD wideband sound quality. It truly is one of the best headsets in its class. An incredibly intuitive and easy-to-use device, it is the only wireless headset to employ modern touch screen technology, making calls run much more efficiently and smoothly. Polaris put a lot of research behind these devices, studying the habits of users in order to create the best experience possible, and it really shows. Sound quality was also a major goal in the design of this model. It comes with top-notch acoustic protection, so you won’t have to live in fear of getting your ear blown off the next time someone gets a little excited on the other end of the line. This headset automatically filters such spikes in volume and employs patented shriek-rejection software that will keep your eardrums pristine. It also offers superior protection against static and other acoustic problems. Along with this, the HD wideband technology allows for crystal clear sound and natural-feeling conversations. If you need to keep on top of noise control and want some stats on how loud things are getting for your employees, these headsets can keep sound data for you that can be easily exported as graphs and analyzed by managers.

Sick of that annoying tell-tale beep that will cut your conversations shor t? Don’t let you r impor tant business dealings get interrupted again by a dying battery when you can use a headset with the longest-running battery of all wireless headsets. Not only does the Polaris Soundshield headset feature a battery that can last over 13 hours (or 9 hours in wideband mode), but it has a talk and charge feature that allows you to charge one headset while using another. Unless you’re performing a filibuster over the phone, you’re likely to never find yourself running out of talk time with these headsets. Best of all, this headset comes with a 3-year warranty, so you can rest assured that if anything goes wrong, Polaris will fix it up for you. This is the longest warranty available for any wireless headset on the market. The Polaris Soundshield headset represents a natural evolution in technology from just the simple headphone and mic combinations of the past. If you’re dealing with having to make business calls or running a call center, you need something that can provide business-level performance. Let the advanced acoustics technology and the easy touch screen interface help your business to run more efficiently, and keep the ears of your employees safe with some of the most effective sound protection technology. Find out more at: www. soundshieldwireless.com.au

The Australian Business Executive - Q2 2016

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The Importance of Offshore Regulation in Australia By Stuart Smith – CEO, National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA)

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n Australia, areas beyond three nautical miles of the shoreline of a state or territory fall under Commonwealth (federal) jurisdiction, which is also where the vast majority of Australia’s conventional oil and gas resources are located. The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) is the independent regulator for safety, well integrity and environmental management for oil and gas operations in Commonwealth waters. Offshore projects regulated by NOPSEMA include Esso’s operations in the Bass Strait, the Northwest Shelf Project operated by Woodside, and the Gorgon project operated by Chevron, together with an extensive range of other exploration and production operations, and large scale projects under development. NOPSEMA recognises the economic importance of the oil and gas industry to Australia, but our independent risk based regulatory functions are entirely separate from the resource promotion and economic elements of the regime. This separation of responsibilities avoids the potential conflicts of interest that may otherwise arise. As an independent statutory authority, we are also free of political influence which enables us to consistently make merit-based regulatory decisions. This is supported by independent reviews undertaken during 2015 which found NOPSEMA to be a robust, rigorous and competent regulator. NOPSEMA regulates under an objective-based regime which I consider is the best way to achieve strong safety and environmental outcomes. Objective-based regulation is an alternative model to prescriptive-based regulation and has been proven internationally to be particularly effective in managing high hazard and technically complex industries. It was introduced to the oil and gas industry following the Piper Alpha incident in the North Sea in 1988 which saw 167 people lose their lives. While the current lower oil and gas prices have resulted in a reduction in activity levels, there remains a core body of regulatory effort required to maintain effective oversight of the offshore oil and gas industry. As with all stages of oil and gas operations, there is also a need to ensure that as projects move from the development phase into production that risks are managed appropriately. Across industry in the current climate,

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it is crucial that any job losses or cost cutting do not lead to a reduction in safety and environmental performance or outcomes. We have not found this to be the case in Australia which is a credit to the industry. Nevertheless, we are continuing to monitor this issue through our rigorous compliance monitoring program. The number of annual inspections has increased since NOPSEMA’s establishment in 2012. A total of 195 inspections were conducted across our safety, integrity and environmental management functions during 2015. There is still more work that needs to be done by industry to ensure that consultation practices are providing the right information, to the right person, at the right time. During preparation of an environment plan, consultation must be undertaken with relevant persons who may be affected by an activity. Companies must demonstrate to NOPSEMA how these views have been, and will be, taken into account. Effective consultation is not only a regulatory requirement, but also an essential part of companies obtaining and maintaining their social licence to operate. As a regulator, we also need to demonstrate to our stakeholders why we should have a social licence to regulate. This requires community confidence in our abilities as a regulator to be robust, fair, and consistent. We also need to be open to engaging directly with stakeholders and to continue to take steps to increase transparency surrounding our decisions and processes. This has been a focus of NOPSEMA in recent years and will continue throughout 2016 and beyond. For further details visit: www.nopsema.gov.au

The Australian Business Executive - Q2 2016


Addressing the Effects of Penalty Rates

By Russell Zimmerman - Executive Director, Australian Retailers Association (ARA)

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e’re now more than a quarter of the way into 2016, and from the Australian Retailers Association’s (ARA) perspective, this year has so far seen a few wins for the retail industry, with hopefully several more still in store. 2016 kicked off strongly, with Christmas 2015 and January 2016 – the most lucrative two months of the year for retailers – tracking robust growth. Retail sales for the six week trading period to Christmas clocked an increase of 4.2 percent to $47 billion, which carried over into post-Christmas January sales with similar success. The first quarter also saw the introduction of draft legislation by Federal Treasurer, Scott Morrison, to close a loophole that allows international online sellers of intangible goods, such as e-books, music, and content streaming services to avoid paying tax. These changes are necessary to put a stop to the advantage online overseas retailers enjoy over Australian businesses. The so-called ‘Netflix tax’ is the final frontier in the ARA’s fight to maintain a fair and equal business environment for Australian retailers, and follows the Government’s abolition last year of the $1000 tax free threshold on physical goods bought from overseas e-commerce, which will come into effect in July 2017. The proposed legislation indicates that our recommendations to the Government have been heeded and we are pleased to see that the Government is finally moving to halt the advantage international online retailers have over local Aussie e-commerce. Moving ahead, the biggest issue for the ARA is that of penalty rates. In December, the Productivity Commission’s (PC) final report on Workplace Relations Framework put forward some incredibly heartening recommendations regarding the reduction of Sunday retail penalty rates. For the past 18 months, the ARA and the retail industry have been building a case for a reduction in Sunday penalty rates, which is expected to be concluded with the Fair Work Commission in the second half of 2016. While the ARA has argued for a reduction of Sunday penalty rates from 100 percent of base payment to 50 percent, the PC report goes beyond this, recommending that given changes to Australian lifestyles, Sunday rates should be brought into line with those of Saturday penalty rates - 25 percent.

It is important to note that the ARA does not advocate for the removal of penalty rates, simply a reduction of the current Sunday penalty rate of double time and a half. A reduction in Sunday penalty rates will have a number of benefits for the community and economy, in addition to cost reductions for retail businesses. Should Sunday penalties be cut, retailers will be able to afford to employ more staff for more hours. With youth unemployment rates increasing at a rapid rate, and retail one of Australia’s largest employers, this change will enable businesses to employ more staff, thereby helping to reduce unemployment levels, particularly in the sector of under 25s. In addition to these benefits, more staff employed for further hours will lead to more money in the pockets of these workers, increasing their spending power and fostering a stronger economy overall. Russell Zimmerman is Executive Director of the Australian Retailers Association. For more information on the above issues visit www.retail.org.au

The Australian Business Executive - Q2 2016

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The Era of the Strategic Communicator By Jennifer Muir FPRIA - National President, Public Relations Institute of Australia (PRIA)

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n the era of the strategic communicator, some organisations still struggle to install communication as part of the brains trust of their business. The rapidly changing media landscape and ever-increasing public demand for company accountability mean communication specialists should be firmly rooted in the senior management team. Being called in at the last minute to try to mitigate financial and reputational damage is unlikely to deliver optimal outcomes. The recent PublicAffairs Asia State of the Industry report says rapid changes to business practices seen in the last five years are set to continue. It found a growing recognition of the importance for educated and informed communicators to have closer proximity to senior management but their position was not always formally represented at board level. Communication is often seen as a mid-level position focused on reporting the organisation’s success stories rather than enhancing the organisation’s commercial strategy and developing early intervention tactics for the entire business. There is a crucial difference between strategic communications or public relations expertise and marketing. Strategic communication should be proactively incorporated into all aspects of the business, not as a sideline promoting good news stories. The message is, build it into your business model.

Authenticity is a big winner in today’s communication landscape

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communication strategist helps you find the line between being perceived as an impenetrable bureaucracy and a high performance company. For example, Optus’ Facebook community manager, Dan de Sousa, became a sensation, “Dan from Optus”, by calmly but firmly responding to complaints and threats to staff about its multilingual advertising. Dan isn’t a junior staff member with some self-appointed sass who is “having fun” with a multi-million dollar telco brand - he sits at a senior level within the business, guiding the engagement strategy for customers at a human level.

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At the other end of the spectrum is the #qantasluxury campaign from 2011. At a time the company was at loggerheads with unions and had grounded its fleet, a twitter competition was launched which encouraged people to tweet what their dream luxury inflight experience would be. What was meant to be a chance for people to win a first class gift pack became a medium for people to vent their frustrations towards the airline. Having strategic communication installed within the foundation of all aspects of your business drastically reduces the chance of such misfires. This approach creates genuine engagement, in turn delivering commercial value. The challenge is keeping pace with the marketplace and supporting these teams as they keep in daily step. There is greater consumer activism, more diverse media, stakeholders who are better informed and engaged while digital media can create a sense of corporate vulnerability and urgency. Underpinning all of this is TRUST – an essential core value and measure for any organisation to earn and manage with its audiences as recently reported in Edelman’s Trust Barometer for 2015

20/20 hindsight isn’t a good strategy

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difficulty for business is measuring how communication positively affects its bottom line. The adage that prevention is better than the cure comes into play here, so when you consider the cost to a company of a crisis, preventing it becomes affordable. Good communication strategists have command of in-depth measurement and evaluation frameworks, which can integrate into legal and financial reporting.. In 2011 the much lauded CEO, Reed Hastings, of the new disruptive kid on the block, Netflix, announced a doomed plan to split the business and increase subscription fees by almost 60%. The months surrounding the announcement was a period of significant upheaval and turmoil in senior executive ranks after a stable ten years. Four top managers left and its head of worldwide communication was replaced by someone who didn’t have the experience in early-intervention strategy.

The Australian Business Executive - Q2 2016


Public Relations Institute of Australia (PRIA)

There was subscriber fallout, an awkward series of YouTube clips by Hastings and company miscommunication. It culminated in Hastings apologising in a blog post, saying he had slid into arrogance based on past success. By then its share price had dropped from $US304 to $US77 in three months and it lost 800,000 subscribers. That was off the back of 1m new subscribers in the previous seven quarters. It took Netflix three to four years to claw back its market position.

Investing in your organisation’s communication makes sense

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t is short-sighted for business to make other aspects of the business a higher priority simply because it is sometimes difficult to show a direct link between communication efforts and the company’s bottom line. Investing in communication resources and an empowered culture of communication internally and externally will always pay dividends in the long run.

Hiring a ‘gun’ strategic communication specialist isn’t as t r ick y as you’d thin k, neither is building a com munication culture within your organisation. As with all professional services - accountants, lawyers and business analysts - there are professional standards and quality markers that you can rely upon in your hiring and workforce development processes. The PRIA, as the professional peak body can help guide these important decisions from student level right up to the c-suite. For more 67 years, the Public Relations Institute of Australia has represented all communication and public relations professionals in Australia. The Institute advocates for the Australia’s 30,000+ professionals, provides p r of e s sional development, t raining, mentoring and networking, and works closely with tertiary educators and researchers to ensure that the profession is recognised, rewarded and developed. Fo r f u r t h e r i n fo r m a t i o n v i s i t : www.pria.com.au

The Australian Business Executive - Q2 2016

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Geelong Cats: Character Over Talent By Nicholas Paul Griffin

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eelong Cats CEO Brian Cook has a unique approach to the business of sport, embracing the idea that excellent people, leadership and planning are vital elements for building a great sports club. This approach has seen the Cats achieve huge success in his time at the helm, winning the premiership on three occasions. Mr Cook spoke to The Australian Business Executive to explain why character always comes above talent.

Brian Cook

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r Cook moved to the Geelong Cats with the help of Frank Costa, the executive chair of the Costa Group of the Costa Group. Mr Costa was Mr Cook’s first chairman at the Cats, recruiting him for the role of CEO at Geelong in 1999. “Frank Costa is a character first man,” Mr Cook says. “When I went through his Derrimut offices, I noticed on the wall that there was a huge sign that said ‘character first, talent second’, and he was the one that orchestrated the initial momentum around this.” When Mr Cook arrived, the club was in dire straits, turning over just $16m and sitting in $10m of debt, with a dilapidated stadium and a captain and coach who were both on the verge of leaving for pastures new. The club was also in the unsustainable position of having six players who were taking up half of the Total Player Payments budget. This put immense pressure on the salary cap, around $6m, meaning drastic action was needed to manage salaries. “It was a real mess, and so we basically tried to develop a plan to get out of that, Frank and me and the board, and it took about twelve months before we could see any light at the end of the tunnel. We did turn it around eventually, but it took some years.” A careful combination of cultural and financial strategies was put into place to lift the club out of the mire, including the decision to begin hiring and firing with an emphasis on values, putting the inspirational words from Mr Costa’s office into practice.

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“We rewarded people on not only talent and winning but also on values, how they did things. We let people go on the basis of, even if they had a lot of talent, if they weren’t developing the values, particularly the team things, we let them go.” This resulted in the club parting ways with nearly 70% of its staff in the first two years of Mr Cook’s tenure, and in the first three years seeing nearly half the players leave. This huge turnaround laid the foundations for the rebuilding of the club with new priorities. “We started to develop a master plan for our stadium,” explains Mr Cook. “We’ve been on the go for fifteen years now on this stadium, and we’ve been able to attract, including our own money, $200m of funding for four stages, and we’ve got one to go.” Each stage of the build has required funding from a combination of federal government, state government and local government, as well as from the AFL and the club itself, meaning there has been nearly 20 different funding grants over the four stages. The stadium itself is a huge part of the club’s continuing plans to increase yield, with the club making about $900k profit per game, pulling in an average crowd of nearly 25,000, giving a yield of over $35 per head. “This has become our most important contract in the footy club. Not our best players, but the stadium contract, because this is what keeps us alive, it drives our economic engine, profit per game.” The stadium at Kardinia Park was so dilapidated in 1999 that there was talk of the club playing its games in Melbourne. It has only been more recently that the ground’s longevity has been discussed, the idea being for it to become a regional hub of elite performance. These plans have been boosted by the sale of the naming rights to Simonds Homes in 2011, and in 2013 the stadium had floodlights installed for the first time, meaning it could begin to host night games. “The current Victorian state government has established a management trust to look after and promote the stadium now, and that’s a real positive I think. It means that there’ll be an independent body who will manage the balance sheet, who will promote the special events, and we’ll simply become a tenant.”

The Australian Business Executive - Q2 2016


Geelong Cats

Mr Cook believes this is a huge plus point for the club, as any club’s core focus should not be on stadium maintenance and development, as it has been for Geelong for the last twenty years, resulting in the club’s activities being spread much thinner. “I have eight general managers,” Mr Cook explains, “because of the nature of this area and of our stadium. I have an infrastructure general manager, a community general manager, an IT general manager, an HR general manager, a footy general manager, and a few others.”

Building a Culture

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fter many years with Geelong Cats, the defining moment of Mr Cook’s career came in 2014, when he was offered the chance to make a big money move to North Melbourne Kangaroos, an offer he declined after much deliberation. “I decided,” Mr Cook says, “mainly because of the people at the club, whether they be directors or staff or players, I had developed relationships with them and I’m quite engaged with them. Should I have started again somewhere? Who knows.”

Seventeen years with the Cats has seen Mr Cook grow comfortable in the role, and at the time the decision needed to be made, he found he couldn’t leave, after being on the verge of deciding to do so. “I was very close to going, really close. I actually had made up my mind that I would probably go, but I wanted just a week to think about it. By the time I got back, the board had met and made another offer and I had pretty much decided to stay.” The key to his decision was the amount of time Mr Cook had put into helping to develop a fantastic team ethos, which he hopes can be embedded in the club for many more years to come. Such a culture can take a lot of time and dedication to create. For Mr Cook, the key to getting the best out of a sports club as a business is to first identify what the club’s competitive advantage is going to be, something he believes most clubs have still not managed to do. “Is it going to be their ability to recruit fantastic talent? Is it going to be their ability to train up talent and get the best coaches in Australia? Is it going to be the branding of the group, their community programmes, their profit per seat of the stadium?” He admits, however, that in the equalised environment offered by the AFL, this is easier said than done. The league structure is intended to make it equally likely for each club to win the premiership, making it tough for clubs to develop true uniqueness.

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Geelong Cats CEO Brian Cook has helped revolutionise a once stagnant club including Premierships in 2007, 2009, & 2011



Geelong Cats

“Some clubs win three premierships in five years, like us,” Mr Cook explains. “Or Hawthorn, three in a row. How do they do that? Well, my feeling is they work on three or four or five, or ten things, which are really relevant and unique to their own development.” This way of working then becomes part of a club’s DNA, and over time it is cemented and improved upon. Geelong’s u nique areas come f rom the club’s abilit y to attract and develop great people, to develop excellent leadership and culture, and to always have a great plan. “What runs through all of these things is values, and so values become a big focus for us. If you talk about great people, you talk about people with enough talent, but with great values, with great behaviours.” For Geelong, the club is run on the basis of ‘character over talent’, prioritising the recruiting of the right people with the right attitude to the club. Mr Cook believes this ethos has been a main driver in the club’s growth and success over the years he has been in charge. Mr Cook cites Sydney Swans and Hawthorn Hawks as examples of two AFL clubs with great cultures spanning many years. It is no surprise that these two clubs, along with Geelong, are generally regarded as the top clubs in the league for player satisfaction. In addition, the club has staff members who follow the sporting landscape regularly to observe developments in other sports, with regular trips to the US to watch the NFL, as well as time spent observing rugby teams such as Scotland and New Zealand. “We send four of our executive team to Harvard,” Mr Cook says. “I think our managers get as much if not more mixing it with fifty CEOs or GMs from other industries and other countries as they do by mixing it with other sports organisations.”

Decades of Change

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aving begun his career back when the original Victorian Football League (VFL) became the Australian Football League (AFL) in 1990, Mr Cook has seen plenty of changes in the way the sport and the league is run. “I’ve been in the AFL/VFL system now for two decades, for twenty years,” Mr Cook explains, “and it’s amazing what’s gone on in terms of change, not only culturally but economically. It’s changed dramatically.” Mr Cook’s career began in 1986, when he started working for the Western Australian Football Commission, in charge of its football development area. Back in the 1980s, many elements of the game were significantly different from how they are today.

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“I remember for instance, the broadcast rights, they were with the winners on Channel 2, and the AFL were getting about $1 million per year, for the whole season. When the new broadcast rights are triggered in 2017, the AFL will average $2.25 per game.” This change in the level of broadcasting revenue is just one indicator of how big the sport has become in the last thirty years. The economic shifts in the game have been colossal, and Mr Cook has been around the sport long enough to have witnessed many first-hand. “I remember starting at the West Coast Eagles in 1990, as CEO, and we were turning over $4m. I think they’re turning around about $80m now, and our football club Geelong is turning around $55m. So there’s been just huge growth in that economic side.” At the time of Mr Cook’s arrival at the Eagles, player wages were at an average of around $50k, whereas in 2015 players are for the first time in history demanding an average of around $300k to pull on the team jersey. “There’s all those types of stats that are around that indicate the enormous growth,” Mr Cook adds. “There was something like 1 in 60 people in Australia were members of a footy club back then, and now its 1 in 28.” The growth in popularity of the sport has been meteoric, with an AFL game now averaging 33,000 fans, the third highest average attendance of any league in the entire world, an astonishing achievement. “The industry has become more equalised. If you want talent, if you want dollars, if you want good fixtures, you need to understand we’re an equalisation system and it’s structured and it operates in such a way that only one team is supposed to win it every eighteen years.” The continuing equalisation of the industry has seen the AFL get closer to parity than any other sports competition in the world, with the possible exception of America’s National Football League. One of the biggest changes in the league currently is the digitalisation of the game, with more and more opportunities available for people to watch the sport and engage with their favourite teams. “There’s going to be more usage of mobiles, whether it be for Instagram or whether it be Facebook or whether it be the games themselves, live television, ordering food and beverages at games, we’re certainly moving into a digital and mobile world here in the AFL.” For clubs like Geelong, the question remains of how to go ab out c om me r cia l isi ng t he d ig it a l a r e a , w it h so cia l me d ia becoming particularly important. Mr Cook admits to moving the club’s social media from its media ar m to the com mercial ar m to ref lect this importance.

The Australian Business Executive - Q2 2016


Geelong Cats

Geelong

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e elong’s location as a smaller city just out side Melb ou r ne h a s prove d a dva nt age ou s for t he club, helpi ng it avoid d i r e c t c omp et it ion w i t h t h e b i g cl u b s i n t h e M e l b o u r n e r e g i o n , w h i c h h a s t r a d i t i o n a l l y r e p r e s e n t e d t h e l e a g u e ’s st rong hold . “[Geelong] has its ow n com mu nities, and really has its ow n ter r itor ies,” M r Cook explains. “Once upon a time, other AFL clubs did have that through their zoning, b u t t h e y d o n’t a n y m o r e , a n d s o we h a ve t h a t u n i q u e advantage.” T he club is i n t he p osit ion of b ei ng able t o promote, capt u re and integ rate with the com mu nit y in ways other A FL clubs are u n able t o, a p osit ion it t r ie s t o ex ploit at eve r y op p or t u n it y t o maximise revenue. “In fact, we extend that u niqueness to being what we think is attractive to all regional Aust ralians, so that people who live in the r u ral areas can at tach themselves to o u r b r a n d , b e i n g a r e g i o n a l cl u b , a n d we’r e t h e o n l y regional club in the A FL.”

Research into the club’s fan base shows the club attracting nearly 50,000 members for the first time in its history, with around 26,000 of this number living in Geelong, about 18,000 in Melbourne and 6,000 in other parts of Australia, particularly regional Australia. “We have two markets, much like Hawthorn are trying to develop two markets - one in Melbourne, one in Tasmania - we’ve naturally developed one over a century I suppose, and we have a hybrid element to our club in terms of its marketing arms.” These two arms of the club’s marketing are in Melbourne and Geelong. The club also boasts the league’s highest percentage of female members, with 40% of the club’s 50,000 members made up of women. With the global development of the game encouraging events such as Port Adelaide Power heading out to play in China, Mr Cook is aware of the pressure in the modern game to move the club from its local markets into the international sphere. “I think we’ve really got to capture Greater Western Sydney and the Gold Coast and make them work to be honest,” he says. “That’s our priority. Let’s capture Australia first, and we haven’t quite done that yet.” Mr Cook believes the league should be aiming to have the game become the dominant code in every Australian state first and foremost, but agrees that China in particular offers great opportunities for clubs to grow their international brand.

The Australian Business Executive - Q2 2016

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Geelong 2016 memberships now exceeds 50,000

“A media deal in China is probably worth fifty times the media deal might be worth in Western Australia, for instance, and I understand that, it’s relevant. I’m not so sure a game comes first though. I think it’s a bundle of activities that probably need to take place.” This bundle would need to include a significant amount of television and promotional activity, as well as offering the chance to recruit one or two Chinese athletes onto the rookie list of a number of AFL clubs. More important than any overseas expansion is the club’s community activity, the centrepiece of which is the Deakin Cats Community Centre at Simonds Stadium, which has seen about 240,000 people pass through in the last three years. “This is an amazing feat given the total population of Geelong is 220,000. We have a lot of deep dive projects, like ‘Closing the Gap’ and ‘Read the Play’ for depression. They’re all related to good decision making in young people.” In addition, the club regularly visits hospitals, schools and clubs to help out the community. All of the club’s players are involved in these visits, taking on ambassadorial roles in the club’s community strategy. 20

“We’re really proud of what we do in the community, and I think that’s one of the unique things that we do have. It would be fair to say that our club doesn’t see its success as simply winning games, it’s more than that. It’s about engaging with the community, living our values, being commercial and considered.”

Corporate Opportunities

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s with any sports team, taking advantage of commercial opportunities is vital to sustaining financial stability. Geelong has benefitted from many such relationships, most notably its longstanding partnership with Ford. “The Ford sponsorship is a magnificent one,” Mr Cook says, “because it’s been going since 1924, so its approaching over ninety years now. We’ve got a contract that goes until its ninety-fifth year.” This deal is one of if not the longest in the history of sports, and represents a significant achievement for the club, something which can only be matched by high profile deals such as Wrigley’s sponsorship of the Chicago Cubs’ baseball stadium.

The Australian Business Executive - Q2 2016


Geelong Cats

“We wanted to put ourselves into the Guinness Book of Records, but what we had to do was prove every year that we had some correspondence from Ford or that we’ve provided Ford, and we just haven’t been able to do that, we haven’t got the records.” The partnership with Ford has been fantastic for the club, in the early days, there were assembly line jobs given to the team’s players, as well as the players being provided with cars. Every year the partnership has grown. hugely benefitting both parties. “They’ve found in their own research that pro-rata on a per-head basis, the sales of Ford are the highest pro-rata in Australia, in Geelong. So, there’s more people in Geelong pro-rata buying Fords than any other car.” More recently, Ford has ceased manufacturing in Geelong, but maintains a high sales and marketing presence in order to continue selling cars, meaning the strength of the relationship remains despite the change. The change in broadcast rights over the years has meant increased opportunity for corporate sponsors, with the club looking to increase levels of branding, marketing and sales through television, attendance and in particular social media. “The sponsorship world, the corporate world, is just moving all the time I reckon, and it’s quite dynamic at the moment. Simonds [Homes] are becoming a public company now, you’ve got the changes at Ford, you’ve got the changes at [ healt h i nsu rer s] N I B a nd t hei r ma rket wh ich is international now, not simply in Australia.” Mr Cook recognises the need for clubs to be aware of what corporate sponsors are working on, and how they can be linked with the club to create new campaigns to benefit both the club and the sponsor. “That tends to me to be the biggest change,” Mr Cook adds. “It’s not simply about signage rights and a few drinks in the box anymore. It’s offering relevant assets to the sponsors in order for them to improve their business.”

Transcending Talent

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he club’s continuing business strategy still very much runs along the lines of Frank Costa’s maxim about character, and within this the identifying of competitive advantages to bring the best out of a club. “We think it’s not necessarily about talent here anymore,” Mr Cook explains. “I mean, you need to have enough talent, but it’s supposed to be equalised, so if it is equalised, we’ve got to find other things.”

The Cats are the pride of Geelong For Geelong this means finding great people with good talent and values, having great leadership based on humility, resilience and aligning people to a shared mission and vision, look ing af ter stakeholders and collaborating internally. “There’s the g reat cult u re that we thin k we’ve developed, or are trying to develop, and finally, we always have what we think is a very good plan. They’re the things that we really concentrate on.” The main thread running through all of these areas of development is values, which is one of the most important elements the club considers in all of its dealings, making sure it has the right people with the right values. On top of values, the club looks to take advantage of its place in Geelong as the league’s only regional club, making sure the entire city is engaged with the club and the team to help breed success both on and off the field. “Our mission is a lot different I think to some other sports clubs,” Mr Cook concludes. “We try and add layers to our mission, like community work, so that we actually mean more to the community at the end of the day. It’s a good way of attracting a lot more people.”

The Australian Business Executive - Q2 2016

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The Australian Business Executive - Q2 2016


Brisbane Broncos: On and Off-field Success By Nicholas Paul Griffin

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ollowing the success of reaching 2015’s Grand Final, the future is once again looking bright for the NRL’s most successful club, Brisbane Broncos. Equally important to the club’s continued growth is the off-field success it has experienced over the last few years. The Broncos’ General Manager of Marketing and Commercial Operations, Terry Reader, spoke to The Australian Business Executive recently to discuss the club’s commercial strategy.

European Experience

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he game and our club are successful because people are emotionally connected to it,” Mr Reader says. “But the greatest challenge we have is making the right decisions for the club and the company, and making sure that they’re not emotionally based.” The club’s appearance at the Grand Final in 2015 came on the back of almost a decade without winning the Premiership, and Mr Reader understands the importance of everyone at the club working together to capitalise on being so close to a first victory since 2006. “Premierships alone don’t guarantee profitability. We understand our members, sponsors, shareholders and supporters, and we know they expect a competitive team to support each year, and a team consistently performing in the top four provides that base.” “I grew up here in Brisbane,” Mr Reader explains. “I was actually a Bronco fan growing up myself, and went through University here in Brisbane, and then when I graduated I went over to England for four years to travel and work.” After a couple of sales roles in England, Mr Reader soon began working with a big sponsorship and PR consultancy in London called Consolidated Communications, where he worked for over two years, rising to the role of Senior Account Executive. “In that role I had a wonderful opportunity to work on the Anheuser Busch account, which included the Budweiser and Michelob beer brands, and was exposed to some of the biggest sporting properties in the world.”

In his role with Anheuser Busch, Mr Reader worked on the sponsorship and PR elements for the Budweiser and Michelob brands across the UK during the 2002 FIFA World Cup, as well as working with the Michelob brand in their capacity as sponsor of golf’s Ryder Cup. “I also worked with Manchester City, Manchester United and Chelsea, who we formed sponsorship arrangements with while I was working at the agency, so I was exposed to some wonderful experiences in the UK. I believe I wouldn’t be where I am today if I hadn’t gained that valuable experience.” The biggest difference for Mr Reader while working overseas was the level of money gained from TV rights, which he admits eclipses that of Australian sports. Despite the financial benefits, however, these broadcast arrangements can also bring creative problems. “I believe, in some overseas markets, thinking outside the square commercially is not as good as it is in Australia, because we’ve got such a congested market. For example, there’s 47 professional football teams in our four codes.” In a country with a population of less than 24 million, this congestion means a heightened sensitivity to commercial opportunities is required to separate a sports team from the many others across the country. Mr Reader returned to Australia in June 2003 to take up a sponsorship position with the Broncos, in a small commercial team of only 7 people. After nearly 5 years at the Broncos, he moved on to work with the Brisbane Lions AFL team, joining as Commercial Manager. “I got offered the opportunity to go to the Lions and look after their whole commercial operations area, which was a big challenge. I learned a lot about how the AFL was run, how they dealt with the clubs and the commercial magnitude of the AFL at the time.” On the back of his past performance and experience with the Lions, Mr Reader was invited back to the Broncos in 2009, with a new General Manager role created for him. “It was nice to be missed,” he admits, “and flattering to have the business side restructured to provide me with the opportunity to lead the Broncos’ commercial and marketing areas.”

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Brisbane Broncos

Commercial Restructure

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he position which Mr Reader now fills includes overseeing sponsorship, corporate sales, events, game day, membership, ticketing and merchandise to bring revenue into the club, as well as managing the brand through marketing, communications, advertising and digital. “I’ve got a wonderful staff, that has certainly grown since re-joining the Broncos in June 2009. We’ve gone through a very big change process since 2009, with a complete restructure of the commercial and marketing areas of the club.” This restructuring resulted in the development of a three-stage process that has helped the business build steadily, taking some areas that were previously outsourced back in -house and growing staffing levels from 9 to 24 since 2009. “One of the biggest changes was in 2011, when our new CEO Paul White came in. He came from a HR background in his previous role, and the board and executive staff developed a new strategic plan, linked to Performance Management systems for the entire club.” After failing to finish in the top four in the seasons before 2015, it felt as if the club had lost some of its aura. The club is nothing without its fan base, so keeping the sport and commercial sides of the business in sync is vital to its ongoing success. The secret behind the Broncos’ continued commercial success, despite a period of 3 or 4 lean years on the field, lies in the board’s willingness to back management to innovate and invest in people in order to grow the business. Over the first three years of the restructure, the club didn’t enjoy much on-field success, experiencing a lowest ever placing of 12th in 2013. Despite these setbacks, the Broncos’ commercial performance has remained solid, even increasing in the following years. “The Performance Management system we put in,” Mr Reader says, “when we developed the strategy, allowed us to employ new staff, people who are skilled in their respective areas, taking on more defined roles with clear KPI’s.” “We’re always trying to exceed our budgets, even when we set very challenging budgets. We are comfortable being uncomfortable, and always look at new ways to grow the business to achieve those challenging budgets.” As the only sporting team in Australia publically-listed o n t he A SX , t he clu b ex p e r ie n c e s r ig id level s of governance and a necessity to make sure that the business r e m a i n s s t r o ng, e n s u r i ng d iv id e nd s a r e p a id t o shareholders.

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Brisbane Broncos’ GM of Marketing and Commercial Operations, Terry Reader

“It’s a priority for any public-listed company to be always increasing revenue and growing profit, but when you also combine that with a football club environment, I think that has helped the club have very clear goals, to ensure we are producing a profit each year and always looking at new ways to stay ahead of change on and off the field.”

Avid Fan Base

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he club is not only considered to be one of the most highly-valued in Australia, but has also been recognised as the most supported team in the country, with the most avid fans, as well as amassing a significant following across TV and social media. “The Broncos brand extends way past the 80 minutes that you see on the football field,” Mr Reader says. “We’re quite proud of being leaders in most measures off the field. We’re not number one in every area. We benchmark ourselves against teams locally, but also from around the world, to make sure we are continually looking to innovate.”

The Australian Business Executive - Q2 2016


Brisbane Broncos

Part of this process is offering fans and members a great club experience, especially on game days. The club’s strategy for building its fan base and reinvigorating the game day experience has so far proved extremely successful, listening to what the fans want and providing it. “When you look at our social media footprint, that hasn’t happened by accident. We were certainly the first NRL club to employ a full time digital person. We did that at the end of 2009, which was still quite early to be doing things like that.” “The digital area has advanced faster than any other, and our metrics have grown on the back of a clear strategy around the timings and content of posts and engagement.” The club’s commercial strategy has certainly paid off, as crowd sizes dwarf those of other NRL teams, with an average home attendance last year of nearly 34,000 at Suncorp Stadium more than doubling the league average of 16,000. “Membership is very important to us,” Mr Reader says. “We’ve got a strategic goal to have 35,095 ticketed member s by 2017. T hat nu mber sou nd s really wei rd , because it is, but that is the bottom two seating bowls of Suncorp Stadium.”

Mr Reader admits that everything the club does is focused towards the three key pillars of its strategic plan, with the hope of eventually filling a significant percentage of the 52,000 capacity stadium, giving its ticketed members the very best seats in the house. “At the moment, around 50% of our crowd is casual, and our research tells us that those casual attendees only actually attend 2 games a year. So, working on ways to get those 2 to 3 [games a year], or graduating them to ticketed memberships, will make a big difference.” This work is often done in conjunction with third parties, since the club doesn’t own the stadium, ticketing or many other areas, meaning changes can take some time to implement and involve a significant amount of third party input and coordination to bring to life. “One of the biggest differences in terms of growing our membership base, certainly our ticketed membership base, has been our four-game membership. Three years ago, we were able to bring in a GA [general admission] area at Suncorp Stadium.” The new seating area has made it possible for fans to purchase a four game flexi-membership, allowing them to choose which matches to attend on a game-by-game basis, rather than having to commit to certain games at the start of the season.

The Australian Business Executive - Q2 2016

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Brisbane Broncos

“We’ve seen growth in this membership product since making it more flexible, the result being a 25% increase in the first year, further growth in the high 20s year on year, and this year we are already seeing great growth again. It’s been a wonderful thing for the club and is making it easier to become a ticketed member.” Despite the growth in popularity of flexible ticketing in the game, Mr Reader insists that it is still the full, twelve-game season ticket memberships that benefit the club most, continuing to grow despite the popularity of the four game flexi-membership. However, Mr Reader is quick to add that non-ticketed memberships are equally important to the club and its commercial strategy. “We like to see ourselves as a Queensland team,” he adds. “We do regional events around the state each year. Over the last four years we’ve done in excess of 17, in places like Mount Isa, Longreach, Gladstone and Rockhampton - we’re actually off to Cairns this week.” These events are opportunities for fans unable to get to Brisbane to engage with the club. Many events take the form of a dinner, with junior footy clinics often linked. Proceeds go back into the community as a donation to local junior rugby league clubs, made after each dinner.

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“Some current players, ex-players and our CEO or Chairman generally will attend each dinner and interact with the guests, and each of the attendees at the event becomes a non-ticketed member of the Broncos, as part of the ticket price.”

Queensland

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he club certainly has an important part to play in the growth of the state, with the Broncos posting over $40m of revenue in 2015 alone, a significant contribution to the economic and cultural development of the local area. “We see ourselves as a very big part of Queensland and certainly Brisbane culture,” Mr Reader explains. “Going to a Brisbane Broncos game we hope is something people want to do and are excited about doing.” W hen the club was engaged in the process of renewing its stadiu m ag reement a couple of years ago, fan research undertaken at the time indicated that 16% of the Broncos’ match day crowd tends to stay in Brisbane for one or more nights.

The Australian Business Executive - Q2 2016


Brisbane Broncos

“The media would periodically generate stories on the back of our big crowds, quoting a number about what the Broncos are worth to Brisbane and our local economy, but often without a truly accurate figure. So we thought we’d com mission a research agency to do it correctly.” Mr Reader admits to being pleasantly surprised about the economic contribution the club makes by enticing people to games, with huge benefits seen through employment, food and beverage sales and hotel stays in the area. “As I mentioned previously, 50% of our crowd is casual,” he says, “and we’ve even got members coming from places like Gympie, Dalby and Toowoomba to come down to watch a Brisbane Broncos game.” The club enlisted the help of spor ts consultant Fut u r e s Sp or t a nd Ent e r t a i n me nt t o u nde r t a ke t he research, which found the club generating an impressive $135.3 million into the area each year, representing a significant contribution to the local economy.

Commercial Success

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ne of the biggest areas of revenue for our club is through our sponsorship family. We’ve got a strict sponsorship hierarchy, divided into categor ies depending on investment levels, which has helped drive that revenue increase and protect the rights of sponsors investing in the club.” This carefully cultivated sponsorship system has seen the club generate significant revenue over the years, and the ability to foster longevity in many of its sponsor arrangements has driven this revenue generation even further. “In our premier category of sponsors,” Mr Reader says, “we have an average tenure of over ten years, which is significant, and we have four sponsors that have been with us since the club started in ‘88, which we’re very proud of.” The secret to this longevit y lies in the club’s tailor-made approach to deals, ensuring each arrangement is unique for the partner. Deals are designed to meet the individual objectives of the sponsor, ensuring they have an incentive to renew and increase the association in the future. One such sponsor is NRMA Insurance, a sponsor with the club for over 13 years and principal partner for 6 years. NRMA have launched several campaigns over the years, but one of the most successful was its Broncos carbonators campaign to reduce carbon levels, in which they hoped to gain 20k new customers, and with the help of the Broncos brand gained 40k.

“We’ve seen some wonderful growth,” Mr Reader says, “certainly over the last four years, year-on-year, which in a challenging market, and from all reports hasn’t been the same for many other clubs.” “We have developed into a form of a media company where we sell daily, weekly, monthly and annual packages on our channels. We can provide meaningful measures for sponsors and advertisers and the explosion in the digital channels has seen the traditional nature of our sponsorship and partnerships change.” In an era where TV deals are paramount to the success of sporting teams, the announcement of a new $1.8 billion NRL TV deal for 2018-22 is signif icant for all clubs, but will have a particular benef it for the Broncos. In the previous broadcast agreement, a Broncos clause was inserted to ensure no team could play any more than three quarters of their games in any one slot (such as Friday night), except the Brisbane Broncos. The new agreement will put the power back into the hands of the NRL, which will be able to tailor a fairer TV schedule. In addition to national TV schedules, the club r uns its own TV show on free-to-air with Channel 9, which is cur rently played in the UK, Asia and Africa, and will feature on Foxtel from this year. The show is a lifest yle prog ram me, i ncor porati ng arou nd 25% football content. The club will have a TV studio installed as part of a new $25 million training, administration and community facility at Red Hill, which is scheduled to open in 2017. This new centre will represent a huge step forward for the club, taking them to another level. “ T he t h i ng I’m p r ou d e s t of a b out wh at t he Br o n cos have achieved over the last f ive years,” Mr Reader says, “is our sponsorship growth in a challenging market.” “The fact that we have a strategic plan that everyone’s bought into with the Performance Management system, li n ked to K PIs that motivate and reward st aff, has really complemented the hard work.” Mr Reader stresses that ever yone at the club plays a part in the business, from the players through to the commercial team, a factor which has contributed hugely to the commercial strides the club has made. “ O ve r t he l a s t f ive ye a r s , t h at c om me r cia l success for us hasn’t been an accident, it’s been about the people and vision. You’re only as good as the people that are act ually i n you r busi ness, with ever yone work ing together to achieve goals.”

The Australian Business Executive - Q2 2016

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Alexium International: Standing Out from the Crowd By Nicholas Paul Griffin

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espite being registered in Perth and listed on the ASX, chemical solutions firm Alexium International is now plying its trade in the United States, and has benefited greatly from harnessing military technologies and partnerships. The company’s CEO, Nicholas Clark, spoke with The Australian Business Executive to discuss his role in Alexium’s rise.

An American Tale

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efore joining Alexium, Mr Clark spent a number of years in the US, undertaking mergers and acquisitions work with investment banks, before returning to Australia to work with Citi Securities. “I sort of went backwards and forwards to China, and I was head of commercial and risk for them for a while, and then I just ran into Gavin Rezos, who’s the executive chairman [of Alexium] and he and I connected very well.” Having amassed over seven years’ experience in the US, and with a strong investment banking background, as well as having had large Chinese exposure, Mr Clark was quickly offered a part in the Alexium story. “It was a bit of a risk for me,” he explains, “because I had a lot of strong, senior executive leadership corporate roles, and [Gavin] said this is really exciting, and there are also alternative opportunities too in other areas.” Mr Clark decided to take on the challenge, beginning in the role of CFO for the company secretar y, before recommending the company appoint a strategic-driven CEO, a job which Mr Rezos believed he was already perfect for. He said, you’ve got all the experience in the US, you know where to go and you know what places to get into. So I packed up stumps to move back to the US to take on the role of CEO at a company that at the time really wasn’t doing very well.” There was some concern around the company that it might not last, considering the poor position it was in, but Mr Clark was able to turn it around, creating a successful, steadfast business that is now growing steadily month by month.

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During its first year of true commercial sales in 2016, Alexium expects to break even at r un rate by mid-year, putting the company well on track to hit its impressive target of $18.5 million per year. “We’re very unique,” Mr Clark adds, “because we really, genuinely are one-of-a-kind. Anybody that’s doing our sort of stuff is still in the brominated Flame Retardant market, and anybody who is doing our sort of stuff is huge.” The other side of the market encompasses smaller companies without the same capacities and chemistry as Alexiu m, and without an ASX listi ng, put t i ng the company in a very unique position in the market. “We really sit in this very enigmatic area. We don’t fit in with the big boys and we don’t fit in with the small boys, and we’re sort of just out there alone. We’re not trying to mimic ourselves against anyone - we’re Alexium, and that’s it. It’s as simple as that.”

Reactive Surface Treatment

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lexium International was originally founded on the back of US Air Force technology called Reactive Surface Treatment (RST), a highly specific, niche chemistry technology for applying functional coatings onto fabrics than can bead liquids to stop degradation on fabric. “It was originally developed,” Mr Clark tells us, “for chem-biological warfare suits, because how it runs is, when a chemical-biological warfare suit gets exposed to some kind of wetness - fuels, oils, whatever it may be it degrades, and it’s not as effective.” Alexium’s plan was to adapt the technology for other uses. Mr Clark admits that when he joined the company as CEO, it was at risk of becoming an R&D company, constantly trying to gain funding in the hope of eventually working with the RST chemistry.

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Alexium International CEO Nicholas Clark 29


Alexium International

Despite their ASX listing, Alexium International’s business is driven in the USA

“Nat urally, what we wanted to do was go and com mercialise, and I asked Dr Bob Brookins, who is now our Vice President of Research & Development, how do we get this particular chemistry commercialised?” Dr Brookins advised that the task would be difficult, suggesting instead that the technology could be used in Flame Retardancy (FR), since it would provide an environmentally friendly, cost effective alternative to other FR technologies. “RST based technology replaces all the bad toxin chemicals in the compound, such as Deca-bromine, and we can do it in a cost effective manner and we can do it across all materials, including polymers and resins.” The result would be a unique product unlike any other Flame Retardant in the world. Mr Clark immediately authorised Dr Brookins to make it happen, setting the wheels in motion for the company’s core product to begin production. “We came up with a safe, environmentally friendly Flame Retardant solution amongst all fabrics, and that’s basically how Alexium was born. The FR chemistry technology that we now have didn’t come from the original RST, so we still have the RST.” The original chemistry technology, known to the company as Ascalon, is still sitting on the shelf ready to be utilised at a later date. In the meantime, Alexium’s work with Flame Retardants is 100% proprietary, developed in the company’s labs. 30

“Ever y thing in life needs to be com mercialised,” Mr Clark explains. “Unless you specifically target you r self as an R&D company, where you’re selling R&D to other people, ever y thing has to be com mercialised.” Compa n ie s st a r t i ng of f w it h R&D m i nd-set s w i l l b e n ef it g reatly f rom employ i ng st r at eg ic m i nd s with an understanding of where to take the technology and the place i n w h i c h i t s i t s i n t h e c o m m e r c i a l w o r l d . E v e n m o r e i m p o r tantly, they must k now how to get it there. “The second thing is, absolute leadership, employing the right people for the right positions. Taking the technical people and letting them do what they do, but not allowing them to have a com mercial or st rategic impact in the business outside of their core specialt y.” M r C l a r k b el ie ve s t h a t t o o m a n y b u s i n e s s e s fail to t a ke t h is approa ch , end i ng up i n a sor t of R e s e a r c h & D e vel o p m e n t l o o p, w h e r e s c i e n t i f i c people focus too much on the technology, to the detr i m e n t of t h e c o m m e r c i a l s i d e of t h e b u s i n e s s . “The reason why this business is the way it is is simple: because we put the right people in the right jobs, and we made sure we let the right people know that they were the right people for specific jobs.”

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Alexium International

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Department of Defence

lexium is listed on the ASX, and also features on the US OTC market, though Mr Clark doesn’t consider the company dual-listed. When the company was listed on the ASX back in 2010, its premises were noted as being in Perth, but it now operates exclusively in the US. “The headquarters are in Perth, but 98.8% of our business operations are in the US,” Mr Clark explains. “We did come here purely because we started our life with DOD (Department of Defence) relationships, military relationships.” The company’s core chemistry technology was defence, so it was a natural progression for work to begin in that capacity. As the company began to develop its Flame Retardant technologies, defence work continued steadily as a result of the original relationships. “We just continued the defence work on, because we also knew that moving into the FR realm, especially with materials, fabrics and uniforms, we knew that was something that we could address, so the US just seemed to be a natural fit.” Mr Clark admits the company tried very hard to introduce the chemistry into the Australian market, but for one reason or another it has so far proved challenging, with the technology failing to catch on. “I’m not really sure whether or not they don’t understand it, or whether they’re just not ready for it. Over here [in the US], they seem to have picked it up a lot faster, and naturally because the US is always fighting in wars, this kind of chemistry is very important to them.” Mr Clark describes the last few years since 2013 as representing “an amazing growth story” for the company, achieving a share pr ice high of $1.17, while staying consistently in the high 60s, and posting quarter-on-quarter revenue growth for the last eight quarters. “The stock performance is expected to improve now with the recent shift to the institutional register and our recent privilege of being listed as an S&P 300 company. Business doesn’t need to be complicated. At the end of the day all that counts is growth.” The future for Alexium certainly promises a continuation of this growth, and Mr Clark sees this as the company’s primary objective going forward: “we see ourselves as just continuing to grow,” he says, “it’s as simple as that.” The company’s simple business model is to continue to sell products, to open up into wider markets and provide solutions for bigger clients, to get people to recognise and k now the company, all of which will nat urally stimulate f ur ther growth.

“There’s certainly a lot of work in the background to make it happen. What would be nice is, maybe somewhere along the line, a company that we’re either working with or we’re working against takes enough notice, and might consider coming and knocking on our door.” The work Alexium conducts with the military tends to be very clinical and a little stale, with fixed budgets meaning the company has little inf luence. The upside is that the relationship with the DOD lends the chemistry technology an extra level of validation. “It’s the fact that we can put our hands on our heart,” Mr Clark says, “which we can, and say this is military grade chemistry that can be applied to the commercial sector. That’s what wins it for us, not to mention it’s still a ransom booty.” The real growth story comes in the commercial sector, however, which Mr Clark describes as “a treasure-chest”, representing to the company over $7 billion a year globally in materials alone, and growing at over three percent annually. “In addition to that, we’ve only just tapped into the polymers market, which is totally untapped. I mean, the polymers market - which is building materials, construction, plastics, resins - nobody has been able to achieve that up until now, which Alexium has.” The opportunities in the commercial sector are significant. Alexium already uses its Flame Retardant chemistry to work with indoor and outdoor fabrics, tenting, carpets, curtains and many more everyday fabrics.

Managing People

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always like to look inside the house first,” Mr Clark says, when asked about developing the right people to drive the business for ward. “And there’s t wo reasons why that is. Number one, because its respectful to your staff.” M r Cla rk a d m it s t he re a re no proble m s w it h d emanding success-driven results, but it will mean nothing to the company’s employe e s u n le ss t hey a re show n r e s p e c t a n d p r o v i d e d w i t h p r ofe s s io n a l g r ow t h o p p o r tunities within the business. T h i s i nvol ve s p a y i n g a t t e n t io n a n d l o o k i n g inside t he orga n isat ion t o f i nd st af f w it h somet h i ng spe cial t o offer the business, something Mr Clark look s t o ha r ne ss by prov id i ng i nd iv idu al g row t h oppor t unities. “I give them the opportunity, and if they want to take the challenge on, I give them the opportunity to take the challenge on, but I don’t hold it over their heads. One thing is, it was never their job in the first place.”

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Alexium International

“Unless you specifically target yourself as an R&D company, where you’re selling R&D to other people, everything has to be commercialised.”

If a staff member is taken out of a job to try something new, which ultimately doesn’t work out, then Mr Clark believes the original job should be left open for that member of staff to return to. “A classic example is one of our bench chemists. He had a really vibrant personality, he was dynamic, he was aggressive. He’s a technical guy, but I saw something particular in him that I thought: this guy can really sell ice to Eskimos, and he knows the technology.” After being encouraged to pursue a role in the sales team, the staff member agreed to move departments. Mr Clark explains that this employee is now one of Alexium’s most successful sales executives, proving that most skills are transferrable. Mr Clark admits that where many CEOs fall down is by placing too much importance on professional resumes and Ivy League educations as indicators of job suitability, an assumption which can often prove to be ill-founded. 32

“The problem is, you get them in the job and there’s no drive, there’s no value of performance, and they maintain their positions in their jobs based on their academia. Everybody that I’ve employed in Alexium have just been very modest.” For Mr Clark, the defining value of these people has been an exemplary character, which has been visible right from the interview stage all the way through their career at the company. “That’s the value of good leadership. That’s the value of looking past what’s glittery and bright and looking at the character. That’s what makes the business, that’s what grows the business, that’s why our business is thriving now.” The company’s down-to-earth approach to direct sales has helped to drive continued growth, ensuring the right people are brought into the business. Mr Clark believes that this is the simplest way for a business to run. “It’s just common sense. We’ve lost our way of common sense these days, everything has to become more complicated than what it actually is.

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Alexium International

At the end of the day, what is business? Business is simple; this is what you’ve got, and this is what you’ve got to do.” Mr Clark laments the need for months of unnecessary planning, when business boils down to little more than identifying markets and then penetrating them, a strategy he pinpoints as one of the key drivers of success for Alexium. “We don’t need to complicate things, and this is where we’ve lost perspective in driving businesses forward, in developing businesses. Now, I’m not suggesting that simplicity is the way to go, but when you break it down, it’s about the simple process of getting from A to B.” It is vital to have good leadership to drive that journey forward. Mr Clark knows there is a big difference between leadership and management, and that strong leadership is key to pushing a business to the next level. Having worked for a decade in America, Mr Clark recognises key differences in the way businesses are handled in the US and Australia respectively, most notably in the way leadership roles are assumed and key decisions made.

“I saw the US at a time in the early 2000s when it was very much like the Western Australian cowboy state, where you could be deaf, dumb and mute and still get $50 million for a project that you’d only read in a science fiction book.” But times have changed in the US, and Mr Clark admits that the country made some huge mistakes with regulations, creating a fear of making executive decisions that has never been a problem in Australia. “I live in the most litigious country in the world. There are more lawyers here than there are school teachers and doctors put together, which is horrible. And the problem is that you can sue anybody for anything.” Along with its litigious nature, Mr Clark recognises how political a nation the US is, and how influence can be used to great effect to drive businesses forward, but conversely a lack of influence can have the opposite effect. “Unless you’re here, unless you live it and breathe it, unless you have the influence, to move forward here in any form is next to impossible. So, it really becomes more about influence in relation to preventing or driving progress in the business.”

“That’s the value of good leadership. That’s the value of looking past what’s glittery and bright and looking at the character.” 33


Allied Grain Systems: Growing Together By Nicholas Paul Griffin

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ecording an annual turnover of $15m, New South Wales’ Allied Grain Systems has grown from humble beginnings to become a market leader in the Australian grain storage and conveying industry. The company’s philosophy is to build for its customers cost effective grain storage and handling systems to suit specific requirements, whilst taking into consideration the future needs of the customer to remain cost effective. Company founder and Managing Director John White explains how Allied Grain Systems began and where it is heading.

John White

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r White grew up near Bogan Gate, New South Wales, on a family sheep and wheat property, where he started to develop his practical experience as well as personal values, before moving to Sydney to start work in the mechanical field and study engineering. “Over a number of years I completed the engineering qualifications with the Institute of Technology,” he explains, “and then in about 1989 I moved back to Young in NSW and continuing studying externally.” Mr White began working in an open-cut mine in Young, doing mechanical and production work. After that he worked for a major construction company, National Engineering, as a mechanical engineer, handling projects such as moving tier seating at Docklands Stadium. “We used to do lots of conveyer systems for the Ricegrowers and GrainCorp and those type of customers. We used to design and build a lot of conveyers and grain storage systems, therefore I got involved in a lot of the design work and a lot of project management as well.” After that, Mr White was asked to become a partner in a grain storage company, which he accepted, filling the role for a short period of time before moving on to set up Allied Grain Systems in 2004. “We started with minimal capital, but a really good wealth of industry knowledge and good client contacts from the previous fifteen-odd years. I knew a lot of the engineering staff at GrainCorp and Ricegrowers, SACBH and CBH at the time, so I did have good contacts there.”

Mr White’s connections helped to add the extra support needed in starting up the company, providing an excellent platform to move forward commercially. The company also benefitted from some significant international support. “When I started Allied Grain Systems, Global Industries in America backed me as well, so they understood what I wanted to achieve and where I wanted to go. I had numerous conversations with the CEO, Doug Fargo, at the time, and we had a vision.” Global Industries likewise had a vision for how it wanted to proceed in Australia, and this resulted in Allied Grain Systems becoming the sole supplier of Global Industries’ silos and conveying equipment in Australia. “We’ve sort of grown together,” Mr White says, “and it’s been a real partnership. That’s evolved and the partnership has got st ronger and ou r t u r nover with Global Indust r ies has increased over the last twelve years.”

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The Australian Business Executive - Q2 2016


John White (left) of Allied Grain Systems is consistently recognised as a Regional company achieving success across Australia

Best in the Business

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ne of the most important parts of the business is ensuring client satisfaction, something the company achieves by adding value for clients across the eastern seaboard, working direct with customers and retaining a significant percentage for repeat business. “With value adding, being a project engineer, a mechanical engineer, we identified that we wanted to have the best product available in Australia to present to our clients. We didn’t want to have the second best or third best, we wanted to have the best product.” The company has worked extremely hard to achieve this goal, and Mr White believes that Allied Grain Systems has succeeded in its task to offer the best grain storage equipment in Australia for purchase. “We work really hard to understand what our clients’ needs and wants are,” Mr White explains, “and we understand that it is our duty of care to provide our clients with a cost effective solution and a well-engineered solution to give them what they want.”

The company has invested a lot of money into research and development over the years, taking advantage of a big push for sealed silos in Australia. Allied Grain Systems is currently one of only two companies that can provide flat-bottom sealed silos for fumigation purposes. “What’s happened in Australia is, there’s a lot of resistance from insects in the storage of grain around Australia, and the resistance is coming from a lot of sealed storages where they fumigate but the concentration levels of the gas dissipates.” This means there is not the correct concentration of gas in these storage vessels, which allows some stronger insects to become resistant and breed, making the fumigant products ultimately redundant. “We’re sort of running out of fumigant products to gas these insects to kill them. The remaining products they want to try and keep, and to keep the remaining products you have to have storage vessels that are gas tight, and there’s only two of us in Australia who can do that at the moment.” A large amount of the company’s efforts and resources have gone into making this possible, and Mr White admits that the company now provides every one of its customers with gas-tight silos.

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Allied Grain Systems

“We really try and listen to what our customer’s needs are,” Mr White explains, “and we spend a lot of time doing preliminary front-end engineering for them with designs and process flow and that type of thing, so we just try and get the design right at the start.” By doing this early design work, the company eliminates many of the major problems that can arise later in a project. Allied Grain Systems also prides itself on looking for future stages of the project, leaving additional room for project expansions should they be required. “Most of the clients that we work for, a lot of these people double what they think they’re going to need as far as storage and conveyer systems go. Within five to seven years the industry’s just been moving forward.” This future planning also helps the company retain nearly 100% of its business, of which 60% currently represents repeat business, proving that it continues to give excellent service to its customers, as well as offering further growth within its projects. “We as a company just understand that our customers are our lifeblood, and we have some pretty strong mottos about what is a customer. Our company culture is towards customers; we say ‘what is a customer?’ and we’ve got seven points.”

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The company lives by several mottos, such as ‘the customer is the most important person to enter the office, whether by person, email or by phone’, and ‘a customer is not dependent upon us, we are dependent on the customer’. “We find that the customers really appreciate what we do and how we go about it, and so if they go and do something in the future we form that relationship, so when our customers grow, we as a company grow with them, and it’s like an evolving relationship.” Mr White explains how some of his customers have been in business with the company for over twenty years, a fact that suits the company very well in terms of keeping strong and healthy relationships, which are the backbone of the business.

Success Stories

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he company has worked with many big firms over the years, such as GrainCorp, Cargill, Barret Burston Maltings and Joe White Maltings, delivering exciting and innovative projects that have helped drive Allied Grain Systems’ growth and profile.

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Allied Grain Systems

One of the company’s most significant projects involved working with Australia’s largest piggeries, which developed out of a relationship formed with Cameron Pastoral Company, one of the country’s largest pork producers, based near Goondiwindi. “We initially installed storage for these customers in 2009, and then last year they built a whole new mill and we designed their new additional storage and grain-handling system, which is four 4,000 tonne bins with fully automated conveying system, so it gives them more capacity of 16,000 tonnes to help them feed that new mill.” Cameron Pastoral Company has been in the business a long time, seeing significant expansion over the last ten years, meaning Allied Grain Systems has been able to grow alongside it during that period. “That job is reasonably remote, so things aren’t always that easy, but we actually really like working on those job sites. We just deal direct with the customer, there’s no third party project management team involved.” This means the process to get approvals and other important procedures through is cleaner and clearer, with the customer putting trust in the company to get all the details correct, giving the team more freedom to provide the best possible outcome.

“So it’s up to us to provide them with [the best job] without taking any short cuts, so at the end of the job we walk away and they’re happy,” Mr White explains, “and next time they expand, we get the phone call.” In 2013, the company began working on a project with GrainCorp in Geelong, working to rectify insect issues in the major export terminal at the Port of Geelong, as well as helping to increase container capacities. “What we designed for GrainCorp was a new facility that has total automation for the fumigation so they can feed into the silo system from their existing storages there in Geelong and it’ll go into three big 18,000 tonne fumigation and storage silos.” This new system allows GrainCorp to fumigate the silos over a 24-hour period, injecting the gas, which is automatically monitored and topped up when necessary, meaning at the end of the process all the fumigants are stripped, leaving the insect-free grain ready for export. “We incorporated into that project container-loading facilities where they are able to load B-Double trucks with multiple containers on them without the truck driver having to get out of his cab. I think it’s probably the quickest container loading facility in the country.”

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Allied Grain Systems

The containers first pull up at the mastering station, where a specially designed drawbridge drops down to allow the operators to open the container door and insert the artificial bulkhead, before the truck reaches the filling point. The truck is then weighed on a special bulk weighing system that complies with Australian Weights and Measures in order to certify the amount being carried, before the containers are filled in about five minutes through computerised measurements. The last step sees the truck move forward to a final drawbridge where an operator steps out and closes the container door and installs the shipping bolts to keep it locked and ready for overseas transport. “It saves a lot of manpower to fill the containers from what GrainCorp were traditionally doing on that site, and it’s a lot safer, it’s got a lot more occupational health and safety advantages compared to how it was traditionally done before.” The company has also been working for quite a few years with CBH at its Metro Grain Centre site in Forestfield, providing the company over the years with upgrades, additional silos and storage. Allied Grain Systems also works very closely with Cargill Malt, recently completing a new upgrade to its Adelaide plant, involving storage silos as well as the design of all the structures, walkways and conveying systems.

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“Cargill really like us, because we pay a lot of attention to the engineering detail and we also have ver y good occupational health and safety standards. They appreciate that we take our safety very seriously on site and we record everything. Our policies and procedures are very strict, and we run the site productively, in a very safe manner.” Over the years the company has developed a design philosophy that suits the way Cargill wants its equipment supplied, which has helped to create an exceptional professional understanding that has led to an excellent, longstanding relationship. “Back in 2014, we completed a major upgrade at Cargill’s Minto plant in Sydney as well. We installed ten new storage vessels, and associated structural and conveyer systems. It was a very tight site, we had to fit all storage in confined spaces to give them what they needed.” On top of these significant relationships grown by the business, Allied Grain Systems has been recognised a number of times within the industry for its exceptional work, receiving several awards. “We won the 2007 Australian Bulk Handling Magazine major award for project and infrastructure,” Mr White says, “and that was for a project that we completed for Riverland Oilseeds in Numurkah.”

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Allied Grain Systems

In addition, the company has won the Business of the Year award at the Business Chamber of Commerce in 2014, as well as receiving several other instances of recognition for its work over the years. According to Mr White, Allied Grain Systems’ biggest asset is its excellent team of dedicated staff, each and every one of them willing to step up and take responsibility for their part in the running of the business. “Without our dedicated and loyal workforce,” Mr White concludes, stressing the importance of the team, “we would not have been able to achieve what we have, and what we are going to do in the future.”

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BCS Strata Management: Professionalising the Industry By Nicholas Paul Griffin

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ody Corporate Service (BCS) Strata Management has been providi ng professional ser vices to st rat a and community title schemes, as well as developers in New South Wales, Queensland and Victoria for over 40 years. BCS is proud to be the market leader and largest f i r m i n t he p r ov i sio n of p r ofe s sio n a l s t r at a a nd com mu n it y title management in Australia. With an unparalleled depth of local knowledge and experience, BCS delivers better guidance and reliable support to its clients. From resorts to commercial, industrial, residential, mixed use and community title developments, BCS Strata Management tailors its service solutions to meet the u n ique needs of its clients across an extensive portfolio. Ablo Jalloh is the manager of BCS’s Melbour ne branch. “We’ve got two branches in Victoria,” Mr Jalloh explains, “the biggest one is in the city, which is the one I’m managing.” After ear ning a Bachelors Degree in f inance, Mr Jalloh began working in banking, both at JP Morgan Chase and ANZ, before joining BCS at the end of 2008, beginning work in the Southport, Queensland branch. T he oppor t u n it y came about af ter the cor porate f i nance depar t ment M r Jalloh was work i ng for at A NZ was t ransfer red to Syd ney. Unable to move with the g roup, M r Jalloh began look i ng for other oppor t u n ities. “This opportunity came up in Southport,” he explains, “and they needed somebody who understands accounting and f inancial management, so that’s how I ended up joining the PICA [Pr udential Investment Company of Australia] Group, which BCS is a part of.” The change from banking to strata management may seem like an unusual professional shift, but it was Mr Jalloh’s background in accounting and f inance which made it possible, si nce one of the pr i mar y functions of strata management is to manage money for clients.

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Ablo Jalloh is the head of BCS Melbourne

Prudential Investment Company of Australia

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CS has been around for over forty years as a member of the PICA group, the largest strata management company in Australia. As a parent company, PICA holds multiple other strata and debt management brands, of which BCS is the largest. “BCS has had multiple awards,” Mr Jalloh says, “industry awards from the SCA, and recently we were awarded best strata management website by the SCA, which is the Strata Community Australia, our industry body. It has had multiple other awards over the years.”

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BCS Strata Management

BCS endeavours to employ good people, many of whom have been with the company thirty years and amassed a high level of experience to serve its clients effectively. BCS prides itself on offering more comprehensive advice to clients than its competitors. “We have this longevity and industry experience,” Mr Jalloh explains, “where some of our competitors, the smaller ones, will have to rely on lawyers or legal firms and accountants to provide that kind of advice.” BCS’ financial stability is a huge plus point to the business, another significant advantage over smaller competitors, many of which may have amassed debt over the years. BCS remains debt free, thanks in the most part to its parent company’s financial stability and its effective ability to manage its affairs. “We are the leader in the industry, by far,” Mr Jalloh says. “We manage about a quarter of a million lots, and our nearest competitor has about 50,000, and that’s a massive difference, so we have that market leadership strength there.” Similarly, the company has excellent corporate governance. BCS’s board is made up of PICA members as well as those of a further two international companies, each of which owns a 50% stake in PICA. “FEXCO is a financial management company in Ireland,” Mr Jalloh explains, “and the other company that owns PICA is Nippon Kanzai, which is a comprehensive building management firm in Japan.” PICA is an investment and asset management firm established in Australia to be involved in, among other things, strata. BCS operates for PICA in just three states: Victoria, New South Wales and Queensland. “In Victoria, we’re not that big; we are bigger in New South Wales and Queensland. We don’t have any presence in any other states, but despite that we are bigger than any in the industry. We’ve got all sorts of clients, from duplex units to multi-functional buildings; hotels, office buildings and high-end residential apartment buildings.”

“The difficulty in strata is that a lot of people get in not knowing what they are getting into. A lot of people who buy into these things don’t realise that they should not, for example, smoke and flick cigarette butts from their balconies, and/or store flammable materials on their balcony around heating pipes like the air conditioning pipes.” The biggest challenge for the industry is to educate the public about the potential dangers in strata, to make sure accidents like the recent fire in the ducklands aren’t repeated. One of BCS’s priorities is to provide educational advice to its clients at every opportunity. “As Strata managers, one of our responsibilities is to provide education about strata and to increase awareness to the public at large,” Mr Jalloh says. “Letting people know that their responsibility to ensure that their buildings are operating effectively in compliance with legislation is ongoing. Just because you’ve bought into a building, doesn’t mean that you basically have no responsibility in making sure that everything that’s supposed to work is working.” Some of the general public tend to think of the owners corporation as a hands-off third party, separate from the lot owners. The truth is that the owners corporation is the lot owners themselves and their building, and responsibility must be reflected as such.

Strata in Victoria

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ith significant issues arising in Victoria such as building defects, fires and many more concerns for the strata industry, Mr Jalloh is sure that there is plenty more to be done to prevent industr y problems going forward.

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BCS Strata Management

“T hey show cont ractor s - who we as t he body c o r p o r a t e m a n a ge r s e n d ove r t o m a i nt a i n t h e b u i ld i ng - t hey show t hose cont ractor s a rou nd t he bu ild i ng a nd g ive t hem access to mai nt ai n what need s to be mai nt ai ned.” I n ma ny cases, a n ow ner s cor porat ion w ill not k now t he d if ference bet ween t hese t wo ma nager s, and not even k now that they need a facilities manager to t a ke ca re of t hese a reas of upkee p, result i ng i n ma ny not hav i ng one at all.

BCS is one of Australia’s biggest strata companies “It’s a big challenge to let people know that yes you are the body corporate, you are responsible for your private lot, you’re collectively responsible for your building on the common and shared property along with the other owners.” Mr Jalloh believes that owners need to have a better understanding of the responsibility that lies on their shoulders. The body corporate manager is primarily responsible for things like financial management, legislative and compliance consulting and administrative work. The strata managers are there to help provide advice and guidance, but at the end of the day it is the owners’ building and the manager’s responsibilities are limited, a fact not always made clear to members of the public. “We manage our clients’ funds that they contribute every month to maintain their common and shared facilities in the building. Legislation in each state dictates how money is collected and how it is spent, so we provide legislative advice to our clients on these matters.” As strata managers, BCS guides its clients on how to collect the money and how to spend it. The legislative and compliance consulting is equally important, as BCS has to make sure that its clients comply with all legislation regarding the upkeep of the property. “The most common advice we give is letting the owners k now the difference primarily between what a body cor porate manager does, and what a facilities manager or property manager does, because oftentimes they seem to think its one and the same.” A body cor porate ma nager or st rat a ma nager l i k e B C S i s t h e o n e t h a t m a n a g e s t h e m o n e y, p r ovides the legislative advice and the administrat ive a nd secret a r ial work. T he facilit ies ma nager s or b u i ld i n g sit e m a n a ge r s a r e o n sit e e ve r yd ay t o m a n a ge t h e m ove m e nt of p e o ple , c o nt r a c t s a n d c o nt ractor s, prevent at ive mai ntena nce a nd long ter m mai ntena nce. 42

The Future of Strata

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s the population continues to grow, moving rapidly into urban centres, the face of strata in Australia is set f o r g r e a t c h a n g e s . “ I n t h e f ut u re, I thi n k the gover n ment will start implementing licensing requirements,” Mr Jalloh says. “Right now in Victoria there is no barrier to market entry, so anybody can open up shop, which means that anybody who wants to be a body corporate manager can be one, if they have a building or two, even if they don’t understand what it is they are supposed to do.” This approach can lead to problems, as some body corporate managers will make mistakes through being unfamiliar with their responsibilities. This can often culminate in the wrong advice being given to owners corporations, which can impact negatively on the public, since they are getting different advice from different managers on the same issue. “They are adding to the complexities or problems that are out there, making the client even more confused,” Mr Jalloh says, “because they are getting advice from the wrong person, or somebody who doesn’t qualify to give that advice.” “I think what will happen down the road is the g ove r n ment will star t requiring some sor t of license requirements or some sort of tertiary qualifications for people to get into the industry as managers, and that would help.” This is an issue that has been debated for some time, re pre sented by a recent government panel being installed to review the act and provide advice. This advice has since been provided, but the government is still in the process of deciding what to do with it. Recently there have been questions asked in Victoria as to whether owners should be prevented from using buildings for short term letting, utilising schemes such as Airbnb, an issue that has been something of a problem for strata buildings in recent years.

The Australian Business Executive - Q2 2016


BCS Strata Management

“If you own an apartment and you advertise with Airbnb, then you want to use your apartment technically like a hotel, guests will come in and, not often, but sometimes they cause damage to the common areas leaving unnecessary expenses for the community.” A recent VCAT ruling stated that owners corporations have no jurisdiction in determining how lot owners use their lots, but some believe that legislation should not dictate how the owners utilise their own property, something Mr Jalloh admits represents a big challenge going forward. This raises an issue about the role of body corporate owners, primarily as owners of the individual apartments, but also the level of their responsibility for the upkeep and maintenance of communal areas. “You own your apartment,” Mr Jalloh explains, “but you don’t own the common areas, the access to the apartment you don’t own. So from the minute somebody walks in the front door, and using the lift and going to the hallways, until you get to your door to enter your apartment, you don’t own that bit, you share it with everybody else.” These shared sections are the right of the body corporate to maintain, raising questions about their treatment by owners. Even if the body corporate agrees they do not want certain short term schemes entered into, the government doesn’t yet recognise this right of restriction.

Mr Jalloh admits that many of these industry issues are in the process of being rectified, and that in the not-too-distant future the industry is likely to see significant changes that will make the lives of lot owners, residents and strata management companies like BCS easier. “This low barrier to entry, if it is addressed by the government, it will help to at least professionalise the industry. Because if licensing and certain education requirements are introduced, then professionals will get in. That would only be good for the industry.” As it stands, especially in Victoria, there is still a certain amount of professional quality lacking due to the absence of such legislation. In New South Wales there are these rules put in place, and Mr Jalloh can see the benefit for BCS if Victoria were to follow suit. “We’ve got an industry body, which is the SCA. That body is, if you will, the lobbying body with the government, so they are aware of this, and I’m sure whenever changes are made to the legislation these things will be talked about.” In the meantime, BCS will continue to serve the body corporate owners of Victoria as best we can, delivering excellent advice and financial management to ensure that strata continues to be a steadily growing and improving industry.

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International Breaks: Tahiti

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ike many of the Polynesian islands, Tahiti was settled thousands of years ago during a mass migration from Southeast Asia, and, though its people sha re many t raits and even language roots with the peoples of other surrounding islands like the New Zealand aboriginals and even Hawaiians, it has its own distinct and fascinating culture. The island remained untouched by Europeans until 1767, when lieutenant Samuel Wallis first landed there in the HMS Dolphin. Over the years, Tahiti has fascinated outsiders the world over, and has become a prominent and friendly destination for travelers.

W hat does this t ropical get away have to offer? Li ke most remote islands that still feat u re access to pr isti ne pockets of nat u re, some of the best act ivit ies i n Tahiti are snorkeli ng and scuba divi ng i n its clear waters. Even if you’re not much of a snorkeler, you can visit one of its many lagoons to get close and personal with the local f ish, eels, cr ust aceans, and other sea creat u res du r i ng a hel met dive, or you can tou r the lagoon on you r ow n motor ized u nder water submar i ne scooter.

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If you’re into sea mammals most especially, you can go out into the ocean for a whale-watching tour and experience the many species of whale and dolphin that inhabit the waters surrounding Tahiti. For a dryer look at these natural wonders, you might also take a glass-bottom boat tour and watch the aquatic wildlife from the dry comfort of a vessel. Are you more of a risk-taker? One of the most exciting excursions you can go on in Tahiti is swimming with the native sharks and stingrays in Bora Bora. Find a guide to take you out into the shallows and feel the excitement of spending some close-up time with some of nature’s most fascinating predators. If you’re not one for swimming with schools of fish and exploring the reefs, perhaps you’d like to take a swim at one of Tahiti’s famous beaches. Step into the champagne-colored waters near the shore and watch your feet sink into the white sand. While you’re there, why not get in on some surf lessons and learn to ride the waves with the help of an experienced native? If you want to step it up a notch, you can also try kite surfing or jet skiing along the coast of Bora Bora. When you’re ready to head further into the horizon, try some deep sea fishing and get a chance to reel in one of Tahiti’s many diverse kinds of fish. Once you’re done checking out the wide, sparkling lagoons of Tahiti, you might want to head inland and explore the body of the islands, along with their culture. One of the best ways to do this is to rent a bicycle and visit the local villages at your own pace, getting a taste for the authentic side of Tahiti and getting a feel for what the native population is really like when the tourists aren’t watching.

If you want to bring home more than just souvenirs, but rather a wealth of experience, sign up for some traditional dance lessons and learn the nuances of this Tahitian art form. Dress in the traditional pareo before learning how to move to the same music that Tahitians have danced to for hundreds of years. When you’re ready to get a wider look at the landscape, many options for tours of the islands are available. One of the best ways to see nature in Moorea is via ATV, where you can explore some of the unique mountains and terrain of Tahiti and get to know many of the local species of plants and wildlife. You can also take a Jeep safari and explore all kinds of landscapes that are inaccessible by other means. Take a tour through different plantations and juice factories to gain an understanding of Tahiti’s fascinating economy. As the sunset approaches, it’s the perfect opportunity for rekindling that spark of love between you and your partner. Rent a private boat and go out into the lagoons to spend some quality time together in the silence and peace of Tahiti’s paradise. Before you’re ready to turn in for the night, though, you’ll definitely want to take in a dinner show with your family, and see native Tahitians putting on one of their famous fire dances. No matter where you go in Tahiti, there are fun and fascinating adventures that await you, whether it’s checking out the beautiful landscapes and wildlife, or simply enjoying the quiet, pure beaches with the natives. If you consider yourself to be a world traveler, Tahiti should most definitely be on your bucket list. For more information visit: tahitinow.com.au

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