Autumn 2013 Consulting Matters

AUTUMN 2013

Challenging Operating Environments

How leaders gain followers

Handling a

BAD

news day UP CLOSE AND PERSONAL:

BUILDING BETTER GOVERNMENT RELATIONS

Business strategies for challenging times

It’s always good to be first.

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Consulting Matters

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Consulting Matters

CONTENTS Protecting your business What does YOUR Professional Indemnity insurance policy cover?

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Economic Forecast March Edition

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Business essentials Managing risk

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Directors liability and WHS

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Corporate social responsibility

Challenging Operating Environments

Engineering project takes flight

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Linking vital services in a vast land

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Our industry High flying approach to Line of Site analysis cuts telecoms infrastructure costs

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Cover: SMREP Epping Station platform lighting cover Photo courtesy of AECOM Photography by Marie Muggivan

Construction of nutrient stripping wetlands

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Industry updates

Features

Industry comment

Why the world changed when we stopped putting our mobile phone against our ear and started looking at it

Seeing through the glass façade

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The issues our industry is facing in 2013

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Handling a bad news day

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Developing leaders can bridge the generation gap

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Professional Performance Innovation and Risk in South Australia

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How do we engage with Government on project funding?

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Influences in the property and buildings sector

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Industry updates

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What’s on in our industry

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What’s happening at Consult Australia From the President

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From the CEO

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Memorandum with ACSE

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New Consult Australia member firms 11 A productivity shot needed from the Federal Budget

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A new industry and innovation statement

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Double dip skills flip

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Civil engineers and 457 visa trends

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Professional services plan for NSW

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State updates

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FutureNet updates

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Business strategies for challenging times

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Australia… it’s time to be the smart country

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How leaders gain followers

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Up close and personal: Building better government relations

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What’s my consulting practice worth?

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Summer 2012 Awards edition corrections: • Development of People Award winner, Parsons Brinckerhoff for their Development Framework – Success Profiles and Career Pathways listed Client: Lend Lease. There was no client in this project.

• Highly Commended for technology innovation was awarded to Aurecon for 420 George Street. The accompanying image of Westfield Sydney was incorrectly displayed.

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Consulting Matters

Industry updates

Industry updates NEW APPOINTMENTS

MAJOR WINS

Beca Managing Director

Gateway WA Consortium

Mechanical engineer and Consult Australia Board member, James Wright (left) has been appointed Managing Director of Beca Pty, leading the consultancy’s operations in Australia. Prior to joining Beca, Wright undertook a range of regional leadership roles in KBR’s Asia Pacific division, including Director of Business Operations for Infrastructure and Minerals.

The Gateway WA Consortium by Main Roads will deliver the AUD$1 billion Gateway WA Perth Airport and Freight Access Project on behalf of the Australian and Western Australian Governments. Leighton Contractors, Georgiou, GHD, AECOM, and BG&E signed the Alliance Agreement in Perth, Western Australia in November 2012.

Minister for Roads and Ports, Duncan Gay has announced that SKM, in partnership with Parsons Brinckerhoff, has been awarded a contract to investigate, plan and provide advice on environmental issues during the business case development stage of the WestConnex project. Hassell has been appointed to carry out the urban design work and Ernst & Young will work with Parsons Brinckerhoff to assess transport opportunities and identify objectives and network design targets.

Sydney Monorail Removal Project

Arup wins marketing excellence award

Waterman AHW Sydney has been appointed by Transport for NSW (TfNSW) as engineering services consultant for the Sydney Monorail Removal Project (pictured below). Waterman is providing structural, civil and building services advice in relation to the removal project that includes track, workshops and stations that interact with various CBD buildings.

Arup’s integrated marketing and communications programme to support client collaboration was awarded the national honour at the most recent Australian Marketing Institute Awards. Over the past 24 months the program has supported staff to effectively focus on client collaboration, which enabled Arup to be recognised as a top tier brand within the sector, announce a 20 per cent plus growth and significant reduction in employee turnover.

High profile appointment to Hyder’s transport team Hyder Consulting is pleased to welcome David Teller (left) as the new Managing Director for Transport. David joins Hyder’s Australasian executive team where he will lead their transport team across roads, ports, rail, traffic and transport planning, policy and ITS. Most recently David held the position of Area Manager for Rail, Maritime and Aviation at SKM.

AECOM transport leader Managing Director of AECOM’s NSW business, Peter Wyton, has been appointed Managing Director – Transportation, Australia New Zealand, with Ian Hosking to lead AECOM’s New South Wales business.

Expert appointments to develop Westconnex case

Victoria Park Tunnel wins international award Earlier this year, the Victoria Park Alliance was presented with the 2012 International Road Federation (IRF) Global Road Achievement Award for Construction Methodology for the Victoria Park Tunnel project. The Alliance comprises the New Zealand Transport Agency, Fletcher Construction, Beca, Higgins Contractors, and Parsons Brinckerhoff.

AECOM urban community project wins AILA planning award The Davis Road Master Plan, located in the suburb of Tarneit in Melbourne’s west, recently won a 2012 Australian Institute of Landscape Architect (AILA) planning award for Victoria. The master plan, designed by AECOM for Stockland, focuses on improving the use of water, mitigating urban heat through the design of open space and championing genuine government and developer collaboration.

SMEC wins stormwater inspection services contract in the ACT

Sydney Monorail Photo courtesy of AHW Waterman

SMEC has been awarded the 2013‐2015 Australian Capital Territory (ACT) Stormwater Inspection Services Consultancy contract by the ACT Government. SMEC will: conduct visual inspections and assessments of Closed Circuit Television (CCTV) systems for newly constructed stormwater assets; review and assess Work‐As‐Executed drawings; review, assess and report on maintenance issues; and provide assistance to ACT developers in compliance with ACT Government standards and specifications.

Industry updates

Consulting Matters

Editor Cathy Mitchell

Editorial Coordinator Gillian O’Young

President Jamie Shelton

Chief Executive

Harry Sabatino, from the Torres Strait accepting his Summer School graduation certificate from the Governor of NSW Professor Marie Bashir AC, CVO Photo courtesy of Parsons Brinckerhoff

Sir Ernest Shackleton’s voyage tribute Photo courtesy of Arup

Megan Motto

Chief Operating Officer Julia Lemercier

Director of Policy Jonathan Cartledge

Senior Policy Advisor Jonathan Russell

Senior Legal Policy Advisor

INDUSTRY ANNOUNCEMENTS Engineering a bright start for Indigenous students Parsons Brinckerhoff’s work experience program for Indigenous students (pictured above) continues to generate positive results.

Five of the six students who participated in the 2012 program have achieved university places in 2013 – four to do engineering, one to study law. The remaining student will complete his high school studies this year.

Hyder helps bridge the gap for Indigenous students Hyder is helping bring engineering careers to life for Indigenous Australian students, with a recent sponsorship donation to Engineering Aid Australia’s Indigenous Australian Engineering Summer School program.

Engineering Aid Australia (EAA) hosts two annual Indigenous Australian Engineering Summer School events for Aboriginal and Torres Strait Islander students entering Years 11 and 12 who want to learn more about a career in engineering.

Parsons Brinckerhoff and the University of Queensland have announced a new scholarship for 2013 to encourage women to pursue engineering studies. Established to encourage and support female students who have been educationally disadvantaged due to financial circumstances or geographical location, the scholarship will provide AU$5,000 towards the student’s first year of study.

Cathy Mitchell

National Events Manager Alexandra Hopper

Designer Voltaire Corpuz

National Manager (Education & Training) Alexia Lidas

Executive Assistant Kerri Clifford

Operations Coordinator Sheena Nelson

Arup and the Shackleton Epic: a tribute to leadership and endurance Scholarship promotes women in engineering

Robin Schuck

Director of Marketing & Membership

January 2013 saw Arup’s Tim Jarvis lead a team of British and Australian adventurers across the Southern Ocean in a seven metre whaling boat and then across Antarctica’s mountainous interior (pictured above). The team followed the route of one of the greatest leaders of all time, Sir Ernest Shackleton.

The high profile expedition, also supported by international conservation group Fauna and Flora International, used the centenary of Shackleton’s voyage to highlight the impact of climate change on the polar ice cap.

Admin Assitant Sarah Lutton

Immigration Officer Sarah Gowing

Editorial Submissions gillian@consultaustralia.com.au

Advertising Enquiries info@consultaustralia.com.au Consulting Matters is produced by Consult Australia. Phone: (02) 9922 4711.

Website: www.consultaustralia.com.au

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Consulting Matters

Industry updates

Farewell to Dr Peter Owen Miller AM the ACEA Council 1964-1978, and was 13th President of the Association, from 1974-76.

Peter’s involvement in ACEA (now Consult Australia) saw a time of significant change in the industry. Increasing inflation coupled with massively expanding project size and complexity, eventuated in rapid price increases and overruns. This in turn led to a period of increased disputation and litigation in the sector, which of course both solidified the need for and purpose of the ACEA.

Consult Australia would like to take this opportunity to recognise the life of Dr Peter Owen Miller AM. Peter made a substantial contribution to our Association and to the international consulting engineering community more broadly.

Graduating as a civil engineer in Sydney in 1943, he went on to found his firm, Miller Milston Ferris three years later in 1946.

Peter was amember of the Association of Structural Consulting Engineers (ASCE), (which in 1968 become the Structural Branch of the NSW ACEA Chapter), being admitted as a member at the first Board Meeting held on 19 February 1954. He was a member of

In the years following 1974, Peter led an appeal to the then Trade Practices Tribunal to argue that fee competition in the consulting engineering profession in fact reduced effective merit based competition between firms and was not in the public’s best interests.

Whilst modern competition policy dictates otherwise, it is a belief that still holds true today.

Although his international involvement began much earlier, he became a member of the International Federation of Consulting Engineers (FIDIC) Executive Council in 1978, and went on to hold the position of President from 1983-85. This was the first time in FIDIC’s history that a President was elected from outside Europe or North America.

In October 1982, his absolute dedication to the industry was recognised when he was elected a Life Member of the ACEA which, at the time had only five Life Members.

Throughout his years, Peter gave his all to the industry and to our Association - often sending notes of encouragement through

INDUSTRY CONTRIBUTORS John Fennell – IBM

Nick Murphy – MLEI Consulting

Brian Shrowder – Hill + Knowlton

Paul Morris – GHD

David Luscombe – GHD Daniel Samson – University of Melbourne Isabelle Philips – Mackerel Sky Patrick Beaumont – BRIC Sean Wolridge – Link Jayne Richards – Parsons Brinckerhoff Wayne Sander – Aurecon Fiona Callaghan – E-tec Consultants Tony Arnel – Norman Disney & Young Ian Shepherd – GHD Greg Steele – Hyder Consulting Geoff Hardy – AECOM

Throughout his years, Peter gave his all to the industry and to our Association - often sending notes of encouragement through turbulent times and through our recent period of change. turbulent times and through our recent period of change. He was very proud of the accomplishments of the ACEA, which continues to prosper as Consult Australia.

He will forever be remembered by Consult Australia, and many of our members, for his integrity, his commitment to excellence and his humanitarianism. The engineering fraternity has lost a great advocate, but thankfully Peter’s generosity in encouraging those who followed in his footsteps mean that his legacy will live on for many years to come.

Megan Motto Consult Australia

CONSULT AUSTRALIA STAFF APPOINTMENTS Consult Australia welcomes Eve Crawshaw to the role of Event Co-ordinator for the NSW and ACT Division. Eve’s primary focus will be to co-ordinate all NSW & ACT Division Events including the 2013 FutureNet Business Leaders Program. Eve will also be responsible for marketing and increasing attendance at all state events.

Eve has recently moved to Sydney from the UK where she gained five years experience in event co-ordination and management in the corporate hospitality, catering and media industry. She also has experience in account management and sponsorship which she hopes to utilise in her new role.

To contact Eve, please email nsw@consultaustralia. com.au or call (02) 9966 4966.

Consulting Matters

Improving Profit and Performance with Benchmarking In today’s challenging business environment, it’s important that business owners understand their businesses and where opportunities exist.

Deloitte Private and Consult Australia are providing a secure, straightforward and cost effective Practice Performance Survey (PPS) tool, specifically for the engineering industry. Subscribers can benchmark against industry peers whilst developing a better understanding of their data, monitoring cost and revenue performance, and improving business strategy.

For more information about our introductory offers, please contact: Tara Hill Partner - Deloitte Private Tel: +61 2 9322 3691 email: tahill@deloitte.com.au

Sean Neale Director - Deloitte Private Tel: +61 2 9322 5540 email: sneale@deloitte.com.au

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited © 2012 Deloitte Touche Tohmatsu.

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Consulting Matters

Industry updates

What’s on in our industry Global

September 15-18, Barcelona FIDIC Centenary Conference www.fidic.org/

May 30-June 1, Brisbane Consult Australia: Contracts for Consultants www.consultaustralia.com.au

June 27-28, Sydney Consult Australia: Safety in Design www.consultaustralia.com.au

Northern Territory

Western Australia

July 25, Darwin Consult Australia NT Division: Responding to Risk www.consultaustralia.com.au

June 6-8, Perth Consult Australia: Contracts for Consultants www.consultaustralia.com.au

National April 18, national Consult Australia: Copyright for Consultants Webinar www.consultaustralia.com.au May 30, national Leadership: a key driver of success in professional services Webinar www.consultaustralia.com.au

Victoria April 4-5, Melbourne Consult Australia: Project Management www.consultaustralia.com.au

South Australia May 16-17, Adelaide Consult Australia: Safety in Design ww.consultaustralia.com.au

October 13-16, Perth AIPM National Conference 2013 www.aipm2013.com.au

Australian Capital Territory

New South Wales

March 24-27, Canberra National Planning Congress www.piacongress.com

April 3, Sydney Consult Australia & GBCA: Smart Cities 2050 and beyond www.consultaustralia.com.au

June 24, Canberra 2013 State of the Nation - Australia Adjusting www.ceda.com.au

April 11- 13, Sydney Consult Australia: Contracts for Consultants www.consultaustralia.com.au

Tasmania

April 19, Melbourne Victorian Transport: Innovation, Integration and Investment www.ceda.com.au

April 18, Sydney Consult Australia: Marketing Symposium www.consultaustralia.com.au

May 9-11, Melbourne Consult Australia: Contracts for Consultants www.consultaustralia.com.au

May 7, Sydney Consult Australia: HR Symposium www.consultaustralia.com.au

May 30-June 1, Melbourne 2013 National Architecture Conference www.architecture.com.au

May 9, Sydney Growth & Ownership Strategies Conference www.beatoncapital.com

June 13-14, Melbourne Special Course: Safety in Design for Architects www.consultaustralia.com.au

May 16-17, Sydney National Urban Policy Conference www.nupc.com.au

Queensland

May 23-24, Sydney Consult Australia: Project Management www.consultaustralia.com.au

April 18-19, Brisbane Consult Australia: Safety in Design www.consultaustralia.com.au

May 29-30, Sydney Roads Australia National Roads Summit www.roads.org.au

May 26-29, Hobart The National Facilities Management Conference & Exhibition www.ideaction13.com.au

Growth & Ownership Strategies Conference During this insight-rich and outcomeoriented conference, Beaton and guest panellists will share insights and case studies to help your firm address both growth and ownership in these uncertain times. The afternoon will be split into two core sessions: growth; and ownership.

The conference will be held on Thursday, 9 May 2013 at the Amora Hotel, 11 Jamison Street, Sydney.

Please contact Consult Australia to obtain a copy of the event brochure.

Industry updates

Letters to the editor Agree or disagree with something you’ve read in this edition of the Consulting Matters? Want your comment heard on the issue? Send a letter to our editor (max 200 words) at cathy@consultaustralia. com.au.

Letters to Consulting Matters must carry the sender’s name and firm.

We do not acknowledge the receipt of unpublished letters. When submitting your letter for publication you agree that we may edit it for legal, space or other reasons.

Consulting Matters

Not a member of Consult Australia?

To find out more about how your firm can benefit from our: • Benchmarking; • Business support; • Staff development;

Industry comments

• Business development; and

What do you think is the most pressing issue our industry is today facing? Submit an industry comment to Consulting Matters by emailing our Editorial Coordinator at gillian@consultaustralia.com.au.

You can speak about any subject matter you wish. Write about issues you feel are important to the consulting industry - government policy, business issues, opinions on consulting related topics, changes you feel the industry should make or anything in between!

Contact National Relationship Manager, Craig Spence on (02) 9922 4711 or email craig@consultaustralia.com.au

• Policy

www.consultaustralia.com.au

Has your firm registered for the

2013 Practice Performance Survey (PPS)?

The new PPS, delivered by Consult Australia in Partnership with Deloitte Private, will allow you to: • Benchmark yourself against your competitors; • Highlight inefficiencies and performance indicators; • F orecast various future scenarios in response to changes being made in your practice; • Review a cash flow analysis; and • V isualise your KPI’s and manage your business towards optimal performance.

2013 Skills Survey Results

Register now to receive: • A free trial • Automated data entry process • Cutting edge data protection • Instant reporting For more information, contact Tony Woods at Deloitte Private on 02 9322 5761 or email antwoods@deloitte.com.au today.

Visit the Consult Australia website for more results. www.consultaustralia.com.au

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Consulting Matters

What’s happening at Consult Australia

From the President

Most Australian businesses are facing challenges in their current day-to-day operations. Many of us have reconciled ourselves to this being a long-term shift from the buoyant business environment of the 90s and 00s, and have ensured our organisations react with substantial strategic and management changes.

For consultants in the built and natural environment this shift in business focus has not come easily and has not been without causalities. There have at least been pockets of relief through hyper activity in the resources sector and the building education revolution.

Currently, we are in a constrained and competitive market with limited opportunities and in which economic uncertainty and low levels of business confidence are the norm. It is certainly a challenging operating environment.

When discussing operational challenges it’s helpful to differentiate those that are short term from those with a longer horizon.

Short term challenges arise from one-off

events to which usually only one or two organisations are exposed. They may include the termination of a major commission, a catastrophe on a project, the loss of a key person, the loss of a major client, the breakdown of a computer server, bad press, a leaky roof, being sued, etc.

industry characterised by fluctuating work load, uncertainty and low margins.

Whilst some are better placed than others, very few businesses are entirely comfortable with their arrangements for managing through these short term challenges. Even if these arrangements are in place, firms rarely communicate or test them.

Ensuring that your strategic focus is embedded right through the organisation means understanding the needs of the market and being able to recognise and draw from your organisation’s particular strengths.

In these challenging conditions strategic focus is essential to the success of any organisation.

Be absolutely clear about what you do, who you do it for, and how you do it.

Those businesses that are well-managed and robust will have spent time outside of the heat of the moment planning for such events.

Their management systems will include contingency plans for a variety of scenarios, disaster recovery plans, IT back-up systems and key person redundancy. The list goes on.

Whilst this is clearly the role of effective leadership, it’s equally important for leaders to ensure that managers are appropriately skilled to deliver strategic outcomes in any environment. Often businesses are slow to realise that the managers of success in the organisations past, are sometimes poorly equipped to meet the challenges of the present and bring about necessary changes.

Larger organisations are typically better able to handle these short term challenges, simply because they have a deeper management resource to draw on. The impact on smaller firms however can be profound and they may benefit by developing plans that draw on external help from like organisations or specialist professionals.

In talking to businesses in our sector it is always impressive the confidence that comes from a strategically aligned organisation in which the individuals know where the company is headed and how their work contributes to this outcome.

It is the longer term challenges posed by the operational environment that provides the greater threat to the prosperity of our organisations and the entire industry.

If riding over the short term challenges is about good contingent management plans, then thriving in an environment with long term operational challenges is dependent on strategy and strategic alignment.

The longer term challenges include a depressed construction sector, subdued business confidence, failure of government funding, the pull back on resources, a constricted labour market, rising overheads, an adverse contractual environment, and changing regulation. The accumulation of these challenges is a very competitive

It is the longer term challenges posed by the operational environment that provides the greater threat to the prosperity of our organisations, and the entire industry.

Being a strategically aligned organisation, working behind a common focus and behind confident leaders will bring prosperity in adverse times. I look forward to our industry proving its strength and its ability to innovate through these challenging times.

Jamie Shelton Consult Australia

Consulting Matters

SAVE THE DATES: 25 & 26 JUNE 2013, CANBERRA www.bemp.com.au BEMP 2013 spotlights the Federal election – the clash of ideals, the policies, blueprints and priorities.

In addition, the nation’s trade and social justice organisations will unveil their manifestos for prosperity.

The focus is Australia’s cities as levers for growth, productivity and liveability.

BEMP 2013 offers unique and exclusive insights into alternative game plans for Australia’s future.

Our national political leaders will brief you on their policy platforms – you get to scrutinise and question their plans for our industry and the community.

It’s a must for anyone who finances, designs, builds or manages the nation’s cities.

Visit www.bemp.com.au for registration and further information.

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Consulting Matters What’s happening at Consult Australia

From the CEO The key for our members in these uncertain times is to manage effectively through them without damaging their ability to ramp up activity again in the future – true business sustainability this is made difficult by the fact that there are a limited number of levers for a professional services firm to pull when times are tough.

Managing in difficult times There is no doubt that there is a very mixed market in Australia for consulting services.

Whilst many firms are very busy, others are doing it tough. Some markets and geographies have had a kick-start by new governments and policies, while others are languishing in a finance-strapped and policy stunned malaise.

What is certain is that the overall level of constraint means that confidence is weak, project sponsors both public and private are twitchy, and consultants, like the canaries in the coal mine, are getting singed. Of course, this is not a new phenomenon. Whilst 20 years of straight economic growth had lulled us into a false sense of security, this downturn was inevitable. We will continue to experience these peaks and troughs until government planning mechanisms provide a more stable and consistent pipeline of work.

In these uncertain times the key for our members is to manage effectively without damaging their ability to ramp up activity again in the future – true business sustainability! But

Shedding staff is sometimes a necessity in order to bring P&L’s into control and keep both internal and external shareholders happy. What we are seeing however, is that firms are finding innovative ways of dealing with cutbacks which sees less leakage in an industry where competitive advantage equals retaining top talent. Firms are no doubt being smarter than during the downturns of the 80’s and 90’s in a bid to retain the valuable staff that they will need when the inevitable upswing occurs.

However this doesn’t prevent the ultimate need for redundancies during these times.

Managing culture and morale when cutbacks are being made is a key challenge for firms who are trying to maintain positive engagement and buoy confidence in their clients. Treating individuals who are transitioned out of the business with dignity and respect is paramount, but only a very small part of the equation. Ensuring your stakeholders are equipped to deal with the process is also critical.

Just as important is recognising that a lot of younger managers have never experienced this before. Many have spent their entire career rising to management floating on a wave of healthy workbooks and profits. They have built their skills fighting for talent, not letting it go. They have not experienced a full business cycle and find themselves in unfamiliar territory.

Letting good, loyal employees go can be heartbreaking - even to seasoned managers.

I remember my father personally giving redundancy news to some 600 staff in the early 90’s. He never spoke about it but the whole family saw the emotional toll it took – sleepless nights, guilt ridden dreams and the lines on his face said it all.

Supporting management staff to cope with both the operational and emotional impacts of the downturn will be a significant factor for firms. This is actually an opportunity for firms to build internal loyalty and respect for company culture and leadership.

Leadership, empathy and transparency is the key.

Megan Motto Consult Australia

What’s happening at Consult Australia Consulting Matters

Memorandum of Understanding with ACSE FOLLOWING A LONG RELATIONSHIP WITH CONSULT AUSTRALIA (FORMERLY THE ASSOCIATION OF CONSULTING ENGINEERS AUSTRALIA [ACEA]), THE ASSOCIATION OF CONSULTING STRUCTURAL ENGINEERS (ACSE) HAS RECENTLY AMENDED ITS CONSTITUTION, CHANGING ITS MEMBERSHIP CRITERIA TO ALLOW FIRMS THAT ARE NOT CURRENT MEMBERS OF CONSULT AUSTRALIA TO JOIN THE ASSOCIATION. WITH THIS CHANGE, CONSULT AUSTRALIA’S STATE MANAGER - NSW & ACT, AMY LOWE REFLECTS ON THE HISTORY OF THE TWO ASSOCIATIONS.

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Welcome new member firms Consult Australia welcomes new member firms: DHI Water & Environment Pty Ltd Controlled Power Systems Structural Reporting Pty Ltd Cox Howlett & Bailey Woodland The Buchan Group Dryka Consulting Engineers

Articles of Association and sharing the ACEA NSW Branch Secretariat. Over the years, a number of ACEA office bearers, including presidents, have served as Board members of the ACSE. In 2010, the Association of Consulting Engineers Australia changed its name to Consult Australia to reflect its diversifying membership base. The Consult Australia NSW Division also changed its structure - no longer operating with separate branches offering technical assistance.

Signing of the MoU with 2013 ACSE President, Tim Hoare and Consult Australia’s Chief Executive Officer, Megan Motto

The history of Consult Australia and the ACSE spans a total of 44 years.

The ACSE was registered in NSW in 1933, quickly becoming an active and respected organisation. Consult Australia, then known as the Association of Consulting Engineers Australia (ACEA) was formed in 1953 and various proposals were put forward, which looked to develop and maintain a close working relationship between the two organisations. A formal arrangement between the ACSE and the NSW Chapter of the ACEA was finally agreed upon in 1968, which saw the ACSE become the Structural Branch of the NSW ACEA Chapter. The two organisations operated as closely associated entities, with the ACSE remaining a corporate body under its own Memorandum and

At this time of critical change, it was important for the Board of the ACSE to consider the future of both Consult Australia and the ACSE. It was this period of change and reflection that resulted in the changes to the ACSE membership criteria, which was previously restricted to firms that were members of Consult Australia.

Whilst it is no longer a requirement for ACSE members to be a member of Consult Australia, this is by no means the end of our long relationship. There is now a Memorandum of Understanding (MoU) in place between the two organisations which outlines that we will continue to work together and collaborate on important industry issues.

This MoU was signed by Consult Australia’s Chief Executive Officer, Megan Motto and 2013 ACSE President, Tim Hoare on 20 December 2012.

Amy Lowe Consult Australia

Bellwether Contractors Pty Ltd Pritchard Francis Pty Ltd LP Consultants Pty Ltd MacLeod Consulting Florian Fire Consulting Geohart Consulting Pty Ltd Meinhardt Australia ADG Engineers (Aust) Pty Ltd TABEC Pty Ltd Sustainability House Engineering and Project Management Haskoning Australia Pty Ltd Stephen Waite Consulting Australian Water Environments Pty Ltd Mitchell Brandtman (QLD) J.H. Cockerell Pty Ltd Capital Engineering Pty Ltd Aquenta Consulting Mulder Kampman Design Capital Engineering Pty Ltd (aka Capital House Australasia) And Associate member: Holman Fenwick Willan

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Consulting Matters What’s happening at Consult Australia

A productivity shot needed from the Federal Budget Consult Australia is urging the Commonwealth Government to consider critical investment in cities infrastructure, increased workforce productivity, and more efficient procurement as key priorities as they consider the shape of the 2013-14 Federal Budget, which will be handed down on 14 May. As our member firms adjust to increasingly challenging operating environments, it is more important than ever that governments are pro-active in building business confidence. Across the states and territories Consult Australia is active in lobbying for increased infrastructure investment and a robust pipeline of projects supported across all political parties. Federally, we believe there are complementary opportunities to facilitate state investment and support our industry through a stronger national focus on cities and urban development, alongside policies that remove market barriers and support the competitiveness of our industry.

The 2013-14 Budget will be watched more closely than usual as it will shape many of the policies announced by both parties through the course of the election campaign in the lead-up to polling day on 14 September.

Our recommendations recognise the fiscal discipline that will characterise both parties’ approach to economic management in the years ahead. In this context, and in the face of declining productivity, our recommendations focus on boosting productivity, delivering improved efficiency, and eliminating waste. We highlight opportunities to capitalise on the Government’s existing policy foundations with well placed reform and continued investment.

Recommendations 1. Supporting better urban environments and infrastructure investment • Investing in the Major Cities Unit and Infrastructure Australia 2013-2018 2. Encouraging more productive workplaces; addressing the skills gap • Recommending an engineering education and training tax incentive 3. Facilitating a more diverse workforce • Supporting more flexible child care

Consult Australia believes ongoing investment in the infrastructure pipeline is critical to improving national productivity. As we approach the five year anniversary of Infrastructure Australia, it is timely to consider opportunities to strengthen existing governance arrangements.

4. Delivering value for money and efficiency across government • Establishing an independent Procurement Centre of Excellence Consult Australia believes ongoing investment in the infrastructure pipeline is critical to improving national productivity.

As we approach the five year anniversary of Infrastructure Australia, it is timely to consider opportunities to strengthen existing governance arrangements. Our recommendations focus on building the capability of Infrastructure Australia alongside a stronger role for the Australian Government Major Cities Unit, to support the delivery of the National Urban Policy.

In 2012 we saw the release of a landmark report from the Senate Inquiry into the shortage of engineering and related employment skills. As explored in the report, the market failure contributing to the engineering skills shortage remains systemic and in need of government intervention.

Our recommendation for an engineering education and training tax incentive is a strategic response that will help ensure Australian engineering remains competitive in the decades ahead.

Equally important to our industry’s productivity is maximising workforce participation and diversity. Consult Australia continues to work closely with our member firms to share best practice in relation to flexible working that helps to attract and retain employees who are balancing work and family commitments. In parallel, it is critical that the Government complements industry best-practice through a more flexible approach to child care policy and incentives.

Finally, we outline a new initiative that will help deliver long-term value for money outcomes for the government. Building on best practice procurement already being implemented across Australia, we recommend the Government provide the catalyst for further reform through the development of a Centre for Procurement Excellence. A relatively small investment towards better procurement across governments will quickly provide a return on investment with the realisation of greater efficiencies, less disputation and innovation in service delivery.

These recommendations will achieve: better urban environments and infrastructure investment; more productive and diverse workplaces; and greater value for money and efficiency across government. Our recommendations hold value not just for our industry, but for the wider community through greater productivity, more jobs and ultimately a better standard of living.

Consult Australia looks forward to working with the Government, the Coalition, Greens and Independents in the months ahead, to progress these recommendations and deliver real commitments to a better operating environment for our member firms and the wider industry.

Jonathan Cartledge Consult Australia

What’s happening at Consult Australia Consulting Matters

13

A new industry and innovation statement In February the Australian Government announced A Plan for Australian Jobs: The Australian Government’s Industry and Innovation Statement.

Generally welcomed across the business community, the plan revealed the establishment of up to 10 industry-led industry innovation precincts. Consult Australia congratulates former Chief Executive of member firm Worley Parsons, Mr John Grill on his appointment as Chair of the National Precincts Board established to drive collaboration between the business and research communities through sector-based precincts.

An Enterprise Solutions Program was also announced to help Small and Medium Enterprise (SMEs) bid for government

services and tenders. Funding of $27.7 million was made available for allocation to SMEs that present high-quality research and development solutions. Up to $1million will be awarded to develop proposals, including for prototyping solutions.

Through these announcements the Government has focused on delivering wider economic benefits for infrastructure and resources projects, and is seeking a stronger role for professional services through the establishment of a Services Leaders Group. In recognition of the growing role of services in driving productivity, the Services Leaders Group will explore whole-of-industry issues associated with services innovation, productivity, skills and international engagement.

Consult Australia will be closely following the implementation of the plan, and is working with the Government to ensure issues relevant to consultants in the built and natural environment are recognised.

Consultation on the plan will be undertaken through March-April 2013. More information is available at www.aussiejobs.innovation. gov.au

Jonathan Cartledge Consult Australia

Double dip skills flip If the results of the 2013 Skills Survey are anything to go by, the employment market looks set to become more challenging as it returns to GFC-esque conditions.

The Consult Australia Skills Survey was conducted over December 2012 and January 2013 to measure and record the industry’s human resources and skills issues over the previous 12 months. The survey data represents the experiences of companies that collectively employ over 21,000 people (most respondent firms were large companies with over 200 employees).

The big story is that the buoyant employment market of 2010 and 2011 is gone. Turnover is dropping as employees stop looking for new roles, and almost a quarter of companies are making redundancies. Demand for some disciplines has dropped dramatically. In contrast to 2010 and 2011, no firm reported difficulty finding enough civil and structural drafters and there is a much-reduced shortage of engineering managers and electrical, mining and water engineers.

But it’s not all doom and gloom. Almost half of respondents report that although there is a reduction in activity, they are still recruiting, though as always, they are having the greatest difficulty finding senior level staff. When looking at areas of work, the two disciplines most affected by shortages are geotechnical engineers and civil engineers.

The biggest change to recruitment practices is the use of skilled migrants. At the time of the last survey in 2011, all large employers recruited staff from overseas, with 40 per cent of companies using foreign workers to meet at least 10 per cent of recruitment targets. In 2013 however, a fifth of firms reported no use of skilled migrants in the past 12 months. Data from the Department of Immigration and Citizenship supports this.

For civil engineering work in the relatively active state of Queensland for example, the number of 457 visa nominations dropped by more than 35 per cent in the five months to 30 November 2012.

Final-year students and new graduates may also need to take heed. The survey

data indicates that they may not be in as commanding a position as they have been in recent years. For the first time since our Skills Survey began collecting uniform data in 2009, no firm has indicated difficulties recruiting graduates or junior staff, and many now report that graduates are entering their first job-hunting process with an expectation of high wages that are just not available.

However, all is not lost. In an interesting twist, although the intensity of work in Western Australia has dropped off markedly, it is still the state in which companies find it hardest to recruit staff. For graduates and indeed anyone looking for new opportunities, the message may well be, ‘Go west.’

To see the report in full, visit the Consult Australia website at: www.consultaustralia.com.au/Home/ Advocacy/Skills/SkillsSurveys.aspx Jonathan Russell Consult Australia

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Consulting Matters What’s happening at Consult Australia

Civil engineers and 457 visa trends The Department of Immigration and Citizenship’s subclass 457 statistics reveal a marked downward trend in 457 nomination grants in the occupation of civil engineer for the five month period ending 30 November 2012.

engineers holding 457 visas in Australia as at 30 November 2012.

At that time, there was a total of 1,800 in Australia, including 750 in WA and 450 in QLD. This made civil engineers the eleventh most represented occupation amongst 457 visa holders nation-wide.

For the first time in at least five years, civil engineer is not in the top 15 nominated occupations for 457 nomination grants Australia-wide.

Only in WA and QLD did the occupation of civil engineer remain in the top 15 nominated occupations (8th and 11th respectively). However, in both WA and QLD, the number of 457 nominations approved in the five month period was down by more than 35 per cent on the previous year.

These 457 visa-related statistics and many others are available on the Department of Immigration and Citizenship’s website at:

While the number of new 457 nominations for civil engineers is decreasing, it is worth noting that there was still a large stock of civil

www.immi.gov.au/media/statistics/statistical-info/temp-entrants/ subclass-457.htm Sarah Gowing Industry Outreach Officer Department of Immigration and Citizenship

Professional services plan for NSW There are some promising signs in NSW that real reform of procurement is becoming more of a reality, and that these reforms will address liability issues that have long been a bugbear for our industry.

(the ministerial council of Attorneys General from around Australia), with a view to achieving a national position prohibiting contracting out of proportionate liability.

One recent development that is worth further scrutiny is the release of the NSW Government’s Professional Services Industry Action Plan. The Taskforce developing the Plan was charged with leveraging strengths and removing roadblocks to further develop the professional services sectors in NSW, while developing a roadmap for the years ahead. Consult Australia had substantial involvement in the development of the plan through input to consultation hearings, and again following the initial release of the draft plan by advocating for liability issues to be further addressed.

• Recommendation 14.2 calls for the Government to undertake a review of infrastructure procurement processes with a view to achieving better risk assessment and allocation practices, including: prohibiting contracting out of proportionate liability; limiting liability; and not placing unreasonable insurance requirements on industry.

Of particular interest are the following sections of the final report:

• Recommendation 14.4 calls for NSW to advocate for a simplified, nationally consistent approach to procurement.

• Section 5.1.6 identifies a range of areas for improvement to current procurement practices, including the unfair transfer of risk to businesses engaging with government, inflexible practices that stifle innovation, and inadequate information about projects.

• Recommendation 14.3 calls for the NSW Government to audit procurement expertise, capability and skills, with a view to achieving better outcomes.

Pleasingly, the Government has already indicated broad support for these objectives in its response to the report.

• Section 5.2.3 looks at specific challenges to engineering services provided to government, including skills shortages and better integrating Building Information Modeling (BIM) into products.

When read in conjunction with the current ‘whole of government’ review of NSW procurement, this Plan represents a significant milestone, and is hopefully a positive indicator of future improvements to procurement in NSW.

• Recommendation 10.12 calls on the NSW Government to provide thought leadership to the Standing Committee of Law and Justice

Robin Schuck Consult Australia

Arbitration and proportionate liability: a cautionary case A decision handed down in WA potentially has implications for consulting firms agreeing to the use of arbitration. Firms should be aware that if they enter such an agreement, they risk waiving the protection afforded to them by proportionate liability.

Late last year the Supreme Court of Western Australia handed down its decision in the case of Curtin University of Technology v Woods Bagot Pty Ltd 1. This decision suggests that

proportionate liability does not apply to arbitration. It would also appear that this point could be argued to apply to proportionate liability legislation generally, and not just in those states (NSW, WA and Tasmania) that permit contracting out of proportionate liability.

All firms should seek their own legal advice as to the implications of this decision on their agreements, or any future agreements they may enter into.

1

Curtin University of Technology v Woods Bagot Pty Ltd [2012] WASC 449

What’s happening at Consult Australia Consulting Matters

VIC POLICY UPDATE Victorian infrastructure: Members of the Victorian Division Committee recently met with Terry Mulder’s Chief of Staff, Peter Greenwood to discuss the current state of the sector in Victoria and the Government’s commitment to the infrastructure pipeline. We will be holding a boardroom luncheon in late March with Consult Australia representatives and Mr Mulder’s team to lend our expertise in the areas of infrastructure funding.

Victorian jobs and investment plan: The Victorian Division Committee is currently engaged in discussions with Shadow Minister for Roads, Tim Pallas to progress the issues outlined in our recent submission to Victorian Labors call for feedback as part of the development of a Victorian jobs and investment plan. The development of this plan is an important step supporting longterm policy development for a more productive and sustainable Victoria, and has lead to a successful follow up boardroom luncheon with Tim and our members to progress the issues.

VicRoads: Consult Australia Victorian Division and VicRoads representatives recently held a workshop to progress discussions around procurement, innovation and risk performance feedback schemes. If you are interested in being involved in the future discussions, please contact State Manager VIC & TAS, Zeina Nehme. The Victorian Division looks forward to an ongoing collaborative relationship with VicRoads.

VIC RECENT EVENTS

our own industry. For professionals across all industries, it is important to gain a clear indication on where the economy is headed for 2013, what can be expected, and tips on how to be best prepared. On 11 February, Bank of Melbourne Chief Economist, Hans Kunnen hosted a discussion with our members on the latest economic insights for Victoria and discussed how we can prepare ourselves and our businesses financially for what is yet to come. Thank you to the Bank of Melbourne for hosting this event!

VIC UPCOMING EVENTS Consult Australia and Transport Reform Network

• Visa options and case management • Immigration processes and changes to migration policy • E-lodgement of visa applications For more information, contact DIAC Industry Outreach Officer Sarah Gowing by email sarah.gowing@immi.gov.au or telephone on on 0466 150 022.

Phone: (03) 8699 7700

Email: zeina@consultaustralia.com.au

(TRN) will be holding an event on the Infrastructure of Melbourne. Look out on Victoria’s webpage for more information!

NATIONAL STRATEGIC PARTNER:

VIC DIVISION PLATINUM SPONSOR:

NEED INDUSTRY SKILLED MIGRATION ADVICE? The officer provides free advice on:

Zeina Nehme State Manager – VIC & TAS

Adrress: Level 6, 1 Southbank Boulevarde Soutbank VIC 3006

Are you Managing your Wealth and the Wealth of your Business? 2012 was a turbulent year, with a slowdown of activity in the investments market and in

Consult Australia members have exclusive access to a Department of Immigration and Citizenship Industry Outreach Officer.

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Consulting Matters What’s happening at Consult Australia

Amy Lowe State Manager – NSW & ACT Phone: (02) 9966 4966 Adrress: Level 6, 50 Clarence Street Sydney NSW 2000 Email: amy@consultaustralia.com.au

NSW RECENT EVENTS

ACT POLICY UPDATE

NSW Trade and Investment: Consult Australia State Manager NSW & ACT, Amy Lowe and Director of Policy, Jonathan Cartledge were contacted to meet with senior staff at NSW Trade and Investment to discuss our submission on the NSW Professional Services Industry Action Plan provided in March 2012.

Strategy update: The ACT Division held a strategy meeting on Friday, 15 February to outline the Division’s priorities over the next 12 months. Policy will play a major part in our ongoing activities and updates will be provided on the outcomes of these activities.

The Hon. Bronwyn Bishop, MP: Following on from Ms Bishop’s attendance and presentation at the 2012 FutureNet Business Leaders Awards, the Minister requested a meeting to discuss ongoing involvement with Consult Australia.

In late 2012 we decided to put our regular roundtable meetings with Shared Services Procurement on hold as we believe discussions had stalled. We will be looking to reinstate these meetings on a regular basis with key personnel and will be seeking a more outcome focused relationship.

NSW RECENT EVENTS

ACT RECENT EVENTS

2013 calendar: The 2013 calendar of events has been set with some exciting new events planned for the year.

Event calendar: The Division has developed an exciting event calendar for 2013. Event updates will be available from our website.

Disaster Recovery and Management: The first Consult Australia NSW event for 2013 was held on Thursday, 14 March. It focused on Disaster Recovery and Management and had a fabulous line up of speakers including Strategic Advisor, Dr Edward J. Blakely.

Dr Blakely is an expert in disaster preparedness and management and was appointed to lead the recovery of New Orleans following Hurricane Katrina in the US.

NSW UPCOMING EVENTS Smart Cities series: Consult Australia NSW Division has partnered with the Green Building Council to hold a series of events titled, ‘Smart Cities – 2050 and beyond’. The series will commence on 3 April 2013 with a half day launch.

Some of our speakers include: • Committee for Sydney CEO, Dr Tim Williams • Major Cities Unit Executive Director, Dorte Eklund • Professors from NICTA

NATIONAL STRATEGIC PARTNER:

Safe Design Seminar: The Division held a full day Safe Design Seminar on Friday, 1 March. We have received an overwhelming response to this seminar and will look to holding further topical seminars throughout the year.

ACT UPCOMING EVENTS Mini-Symposium: After the success of our first minisymposium in 2012, we will be holding this event again in 2013. Keep an eye out for a save-the-date notice which will be distributed in the coming weeks.

NATIONAL STRATEGIC PARTNER:

What’s happening at Consult Australia Consulting Matters

QLD POLICY UPDATE

• Facilitation of industry engagement, supported

by Consult Australia, to assist Aurizon’s strategic objectives.

Department of Transport and Main Roads (TMR): Over the last few months Consult Australia’s activities with TMR have continued. Along with our members, we attended a briefing on the updated Brownfields Design Guidelines, sought feedback from members and subsequently provided input into a draft innovation guide being produced by TMR.

We are looking forward to working with Aurizon to set up regular opportunities for engagement to continue some of these discussions in more detail.

Our pre-qualification working group has also now provided input into the review of three categories of prequalification (traffic engineering, geotechnical engineering and economic studies). Further categories will be reviewed as the year progresses.

QLD Industry Breakfast, Where Will We Be in 50 Years: Impact of Resources Footprint: What impact is the resources/energy sector having on regional communities and given the predicted growth what future impact will they continue to have? How do regional communities plan for this growth and how do we manage and capitalise on current and future growth while improving the quality of life for residents of Queensland? Our first breakfast of 2013 (held on 22 February) brought together Mayor of Western Downs Regional Council, Ray Brown, Deputy CEO of the Queensland Resources Council, Greg Lane and Urbis Director-Planning, Peter Gill to discuss these issues.

Consult Australia’s QLD Division last met with senior executives of TMR on 26 February 2013. At the meeting we discussed regional work flow, the pre-qualifications system, TMR initiatives for amending TMR standards to drive value for money and standard contracts. The QLD Division has a dedicated email listing for those interested in staying informed of our regular engagement with TMR. Contact State Manager - QLD, Stacey Rawlings to be included on this listing.

Department of Housing and Public Works (HPW): In November Consult Australia was invited to provide comment on the State Procurement Policy review.

Thanks to the members who contributed to the submission. Along with approximately 10 other industry associations, we were invited to participate in a post-submission industry briefing. The workshop flagged the replacement of the current series of policy objectives in the State Purchasing Policy (SPP) with a series of principles designed to reflect and facilitate the government’s broader economic objectives. We have met with senior officers of the Chief Procurement Office to further discuss broad concerns around procurement and have requested a meeting with the newly appointed Government Chief Procurement Officer to continue these discussions.

Board of Professional Engineers of Queensland: Following written feedback from our members and a follow up telephone meeting, we have provided a submission to the review of the Professional Engineers Act of Queensland. A full copy of the submission can be found on the Consult Australia website. This is also a reminder that the ‘representative of registered professional engineers’ board position is up for election in March. We encourage you to vote.

Aurizon (previously QR National): We were pleased to recently meet with Aurizon to discuss how we can work together to achieve continuous improvement outcomes to the benefit of both Aurizon and our industry. Some of the items discussed include: • Ensuring that Aurizon, receives value for money; • Allocation of risk and liability in contracts; • The effective use of standard agreements by client organisations to deliver cost effective and efficient delivery outcomes; and

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QLD RECENT EVENTS

Better Business Series: After a successful launch event in November 2012, we will be running a series of events in 2013 focussing on business related topics. The seminars will focus on the key areas of strategy, people, marketing and cash with each event including time for networking with your peers. The first of the 2013 series is titled, Client Relationships & Building Accountability Culture and was held on Wednesday, 6 March. The event sold out by mid-February, so be sure to keep up to date with our events to make sure you don’t miss out!

BEMPQ: Consult Australia joined with the Property Council of Australia (PCA), Australian Institute of Architects (AIA), Planning Institute of Australia (PIA) and Green Building Council of Australia (GBCA) to hold a Queensland Built Environment meets Parliament (BEMP). This follows the successful national and recent South Australian BEMP events, which bring together parliamentarians and industry in a conversation about the state’s built environment and its relationship to our communities. The successful event took place on Friday, 22 March.

NATIONAL STRATEGIC PARTNER:

QLD DIVISION PLATINUM SPONSOR:

Stacey Rawlings State Manager – QLD Phone: (07) 3020 3403

Address: Level 2, 143 Coronatin Drive Milton QLD 4064

Email: stacey@consultaustralia.com.au

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Consulting Matters What’s happening at Consult Australia

SA POLICY UPDATE

Jan Irvine State Manager – SA & NT Phone: (08) 8216 1177 Adrress: Level 3, 70 Light Square Adelaide SA 5000 Email: jan@consultaustralia.com.au

South Australia proposal: South Australia requires a robust, independent and transparent process and governance model for the evaluation, prioritisation and decision-making supporting infrastructure delivery.

Infrastructure investment is by its nature both expensive and often political. Securing a long-term approach to the prioritisation of infrastructure in South Australia that lasts beyond any single election cycle or change in government is essential. The benefits of having an independent agency, drawing on the expertise available across both the public and private sector to provide advice to government are obvious.

The SA Division has produced a proposal for Infrastructure SA and Projects SA, to reflect the best characteristics of approaches adopted across jurisdictions, tailored to deliver a more competitive, productive, liveable and sustainable South Australia in the decades ahead. Consult Australia’s Director of Policy, Jonathan Cartledge and State Manager SA & NT, Jan Irvine met with the Minister for Infrastructure’s Chief of Staff late in 2012 to discuss the proposal and the benefits of this model. Further meetings with relevant Ministers are being scheduled.

South Australia WHS harmonisation: As of 1 January 2013, South Australia’s work health and safety legislation, supported by the Codes of Practice are aligned with NSW, QLD, TAS, ACT, NT and the Commonwealth, bringing Australia a step closer to nationally harmonised workplace safety laws. The changes affect workplace health and safety in both business conduct and in the design of structures.

SA RECENT EVENTS February Industry Breakfast, Workplace Health & Safety, Safety in Design - update: This event was attended by a large number of industry participants keen to hear our speakers’ update on the most important aspects of the WHS Act, the impact it will have on the way organisations operate, and the far-reaching implications of these recent legislative changes.

Lynch Meyer Lawyers Partner, Sonia Bolzon explained potential implications of the new work health and safety harmonisation laws and SafeWork SA Chief Officer, Hazard Management, C.T. Wong presented on the obligations of the designer in relation to the new safety in design requirements. These requirements now cover the life of a project, and therefore must incorporate safe design for its operation and decommission, as well as to its construction.

Practice Performance Survey (PPS) Tool: With the introduction of Consult Australia’s revamped PPS tool, which is available exclusively to member firms, a complimentary demonstration of the tool was held in the Deloitte Private offices on 19 March. As Deloitte are continually refining the tool specifically for our members to ensure it is as relevant and useful as possible, attendees were able to supply feedback on what they’d like to see included and the type of data they’re looking to obtain through the survey.

SA UPCOMING EVENTS The SA Division will be holding further industry breakfasts, member-only boardroom lunches, and the next seminar of our best business practice series in the coming months.

Commercial Acumen Training for Consultants: We are also excited to introduce this new event, which will be held on 9-10 May 2013. A lack of commercial acumen within consulting firms is adding cost, eroding profits and presenting unnecessary risks to projects and organisations.

It is also having an underlying impact on the overall profitability of projects. In the current economic climate, it is vital that people within your organisation who are preparing, negotiating managing, delivering and administering commercial proposals, contracts and projects for your organisation have a solid understanding of the commercial practices that drive performance. Further information on all future events held by the Division can be found on the SA page of the Consult Australia website.

SA OTHER NEWS Once again we thank URS for their continued support and generosity in providing an office for Consult Australia in South Australia.

NATIONAL STRATEGIC PARTNER:

SA DIVISION GOLD SPONSORS:

NT POLICY UPDATE Boardroom breakfast with The Hon Adam Giles MLA: On 12 December 2012, the NT Division held a member only Boardroom breakfast with the Minister for Infrastructure, Transport and Local Government, The Hon Adam Giles MLA. Attendees discussed the vision of the new government in regards to infrastructure for the Northern Territory. Discussions focussed on upcoming major projects; capability and capacity for project delivery in the NT; and how Consult Australia can collaborate with the government and industry stakeholders to ensure a depth of resources within the industry in the near future and beyond, to better deliver successful outcomes. Another leading topic for discussion at this breakfast was procurement methods - the Department of Infrastructure indicated a willingness to explore options to best deliver projects in a way that is mutually beneficial to all stakeholders.

What’s happening at Consult Australia Consulting Matters

Open forum for design consultants: As a direct result of the breakfast meeting with Minister Giles, an open forum for design consultants was held between three representatives of the Department of Infrastructure (DoI) and six representatives from Consult Australia member firms including NT Chair, Jaswant Deo. The purpose of the forum has to discuss procurement options for the design of the Tiger Brannan Drive Duplication from Berrimah Road to Woolner Road, and from Dinah Beach Road to McMinn Street, which has an estimated construction start of July 2014. Early Contractor Involvement (ECI) and Early Tender Involvement (ETI) type contracts were discussed, as was design and construct versus design then construct.

All involved in the discussion acknowledged this is an important issue if projects are to be delivered to client expectations where corrective actions are implemented from lessons learned from previous projects.

It is also critical to effectively capture the intellectual property of all consultants involved in submitting projects, in order for the best information to be utilised to provide the final deliverable. Both parties believed informal discussions such as these are beneficial to all concerned, including the community, and encouraged further conversations. Now the relationship has been established, the Division expects to engage with the Department on an ongoing basis.

The NT Division are also currently in the process of securing meetings with relevant Ministers to promote the Infrastructure NT Proposal, which can be viewed on the NT webpage of the Consult Australia website.

NT UPCOMING EVENT Members will be advised of upcoming events via email as they are confirmed.

If you are not on the email list to receive correspondence from the NT Division and would like to be, please email State Manager NT & SA, Jan Irvine at jan@consultaustralia. com.au to ensure you do not miss out on information and the chance to be at the table for informative industry discussions and opportunities. An engaged industry body has a stronger voice and we encourage you to become involved with Consult Australia.

NATIONALSTRATEGIC PARTNER:

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TAS POLICY UPDATE Southern Water contracts: Consultants from member firms in Tasmania have raised concerns regarding Southern Water contracts.

We have sent a letter outlining our concerns and will be addressing these issues via correspondence between Consult Australia’s Senior Legal Policy Advisor, Robin Shuck, State Manager VIC & TAS, Zeina Nehme and representatives from three of our member firms: SKM; pitt&sherry; and GHD.

TAS RECENT EVENTS Division involvement: The Tasmanian Division encourages members to put forward suggestions on which ministers they would like to meet with and any local issues or initiatives that Consult Australia can be more actively involved in. Please forward your suggestions to zeina@consultaustralia.com.au.

TAS UPCOMING EVENTS The Tasmanian Division has a fantastic line up of events for 2013.

Keep an eye out on the Tasmania webpage for more information.

TAS OTHER NEWS Are you interested in joining the Consult Australia Tasmanian Division committee? Send your expression of interest to zeina@ consultaustralia.com.au.

NATIONAL STRATEGIC PARTNER:

Zeina Nehme State Manager – VIC & TAS Phone: (03) 8699 7700 Adrress: Level 6, 1 Southbank Boulevarde Soutbank VIC 3006 Email: zeina@consultaustralia.com.au

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Consulting Matters What’s happening at Consult Australia

WA POLICY UPDATE Josephine Howlett State Manager – WA Phone: (08) 9324 3383

Address: Old Swan Brewery 173 Mounts Bay Road Perth WA 6000

Email: josephine@consultaustralia.com.au

BMW: Through its membership of Built Environment Design Professions (BEDP), Consult Australia has continued to advocate against the exclusion of Part 1F of the Civil Liabilities Act from BMW Agreements. As part of these discussions, the Division is also trying to establish a cap on liability. BMW appear to be committed to negotiating an agreed position on their proposed amendments to the AS4122 with meetings on the subject scheduled for every 2-3 weeks.

as a panel member on the Australian Professional Indemnity Group to address the topic, Insurance vs.

Contracts for the Provision of Professional Services for Construction Projects. Issues that will be covered include: indemnity; proportional liability; assumed liability in contract; and exclusion of waiver of subrogation.

NATIONAL STRATEGIC PARTNER:

Conditions on Government projects: Through BEDP, Consult Australia has briefed the Shadow Minister for Works, The Hon Ken Travers, on the issues that consultants face on conditions associated with Government projects.

Engineering Services Panel: Consult Australia is working with BEDP to establish guidelines for a proposed new Engineering Services Panel, which will replace the current panel which has been in existence since 2005. An Architectural Panel has recently been put in place which has highlighted some insurance issues that have arisen from the proposed amendments to AS4122. This is the subject of our ongoing discussions with BMW.

WA UPCOMING EVENTS

GOLD SPONSOR:

SILVER SPONSORS:

Woodside breakfast: The WA Division will hold its ‘12 months on’ breakfast event with Woodside CEO, Peter Coleman on Friday, 12 April at Frasers Reception Centre.

CME update 12 April 2013: The resources sector is a major driver of both the Western Australian and Australian economies. Given recent changes in market conditions and the increasing costs of doing business in Australia, it’s important to understand where the sector is heading.

Consult Australia’s WA Division update, scheduled for 12 April, will introduce CME’s State Growth Outlook with guest speaker Reg Howard-Smith, who has been with CME since 2002 as a Director and was appointed Chief Executive in 2007. Reg has worked in the Oil, Gas and Mining Sectors and is a graduate of The University of Western Australia, majoring in economics. The State Growth Outlook is CME’s flagship publication which looks at the growth plans of the resources sector over the next ten to 15 years and considers the key growth enablers of people, energy and water.

WA OTHER NEWS WA membership update: During the last quarter of 2012 The WA Division was pleased to accept Cox Howlett and Bailey Woodland as the first architectural company to become a member of the WA Division of Consult Australia. Cox Architecture Principal, Greg Howlett has been co-opted to our committee. Greg comes with a wealth of experience in the industry in Western Australia, as the current Chairman of BEDP, Vice President of the Association of Consulting Architects and as a Past President of the (Royal) Australian Institute of Architects. Greg is to shortly represent Consult Australia

BRONZE SPONSOR:

What’s happening at Consult Australia Consulting Matters

NSW FUTURENET NEWS Committee update: FutureNet committees are currently undergoing a restructure in Sydney and Newcastle. Nominations were called for in late 2012, with a view for new committees being ready to commence in the first quarter of 2013. Congratulations to all our new committee members.

NSW FUTURENET UPCOMING EVENTS Motivation and inspiration: The first Sydney event for the year was held on Thursday, 21 February with ex-Rugby League legend Wayne Pearce. The event focused on inspiration and motivation to get everyone set for the year ahead.

Sell Yourself: The first event in Newcastle was held on Thursday, 21 March with Professional Business Coach, Peter Black. Peter held an interactive session on how to get ahead in the 21st Century by outlining the importance of social media for the young professional and demonstrating how it should be used!

NSW FUTURENET BUSINESS LEADERS COURSE

ACT FUTURENET RECENT EVENTS

Committee: The FutureNet committee remains dedicated to providing successful events throughout the year. A strategy document and event dates, with potential topics have been identified and will provide a great starting point for forward planning.

ACT FUTURENET RECENT EVENTS Motivation and inspiration: The first Sydney event for the year was held on Thursday, 21 February with ex-Rugby League legend Wayne Pearce. The event focused on inspiration and motivation to get everyone set for the year ahead.

Applications open: Applications are now open for the 2013 course.

Contact the NSW Division for an application form.

ACT FUTURENET BUSINESS LEADERS COURSE

Course changes: This year sees a number of changes to the FutureNet Business Leaders course. Once such change is the introduction of Hogan’s assessments for participants and mentors to ensure their professional development is personalised. Hogan is designed to help participants succeed by developing their key talent, and evaluating leadership potential.

Applications open: Applications are now open for the 2013 NSW course. Unfortunately we do not hold this course in the ACT at present. If you would like to express you interest in holding the course in the ACT please contact State Manager NSW & ACT, Amy Lowe on (02) 9966 4966.

This year we will also be ensuring participants have access to their professional mentors from the very first day. We think this will increase not only the value to participants, but also to mentors.

ACT FUTURENET GOLD SPONSOR:

If you have any questions about any of the changes please contact the Division on (02) 9966 4966.

NSW FUTURENET (SYDNEY) SILVER SPONSORS:

ACT FUTURENET SILVER SPONSORS:

NSW FUTURENET (SYDNEY) BRONZE SPONSOR:

NSW FUTURENET (NEWCASTLE) SPONSOR:

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Consulting Matters What’s happening at Consult Australia

QLD FUTURENET NEWS Committee News: QLD’s FutureNet Committee has welcomed in the start of 2013 with a new Chair and a number of new committee members. Brad Sandford (Aurecon) will lead the new committee, whose details are listed below. This year the committee are focussing their events around professional relevance. With this theme in mind, look out for events that will explore how we can improve our standing and influence within the wider society and engage the community, industry and government with greater effectiveness.

Chair

Brad Sandford

Aurecon

Co Vice Chair

Jaco Le Roux

Opus International Consultants (Australia) Pty Ltd

Co Vice Chair

Mark Case

Brisbane City Council

Immediate Past Chair

Brent Lillywhite

Corrs Chambers Westgarth Lawyers

Mentor

Cameron O’Brien

Baulderstone Pty Ltd

Marketing

Amanda Kipniak

AECOM Australia Pty Ltd

Committee

Ashleigh Chambers

Beca Pty Ltd

Committee

Caitlyn Young

Arup Pty Ltd

Events co-ordinator

James Charalambous

Baulderstone Pty Ltd

Committee

Lauren Drew

Corrs Chambers Westgarth Lawyers

Committee

Matthew Tomkins

McVeigh Consultants Pty Ltd

Committee

Tom Salmon

RPS Pty Ltd

Committee

Vanessa Vong

Sinclair Knight Merz (SKM)

The FutureNet committee are all committed to raising the profile of Consult Australia’s FutureNet initiative and are willing to visit firm offices to provide a brief presentation on the benefits of your firm getting involved. Contact the QLD Division to arrange a presentation.

QLD FUTURENET RECENT EVENTS On Thursday, 21 February, QLD FutureNet kicked off the year with a launch event to introduce the 2013 theme and to provide firms with an overview of the various activities run by the enthusiastic committees (including the Business Leaders Course, essay competition, and the regular networking activities). Many firms who have not previously been active were invited to attend to continue the drive by FutureNet QLD to broaden their reach and diversity. Thanks to SKM for providing the venue for the launch.

QLD UPCOMING EVENTS Event 1 – 18 April, Idaes Fiesta – Brisbane City Hall: We are excited to be partnering with Brisbane City Council to deliver our first event of 2013. Stay tuned for more details.

Dates have been set for the remainder of the year, so mark your calendar: • 23 May • 10 July • 29 August • 24 October

What’s happening at Consult Australia Consulting Matters

QLD FUTURENET BUSINESS LEADERS COURSE Expressions of Interest for 2013: As a professional in the built and natural environment you will be technically competent in your area of expertise, but are you looking to expand on your professional knowledge and develop your leadership skills? The FutureNet Business Leaders Course is aimed at professionals with approximately 5-10 years post-grad experience who are looking to take the next step in their career. Express your interest now to find out more. Past participant Department of Transport and Main Roads Principal Engineer (Civil), Brad Garrett has provided us with the below testimonial.

‘You get where you are by being a technical perfectionist during the early parts of your career. This course gives you the content, skills and networks to excel at the next level. It was one of the most beneficial professional development courses I have completed in the past five years.’

QLD FUTURENET GOLD SPONSORS:

SA FUTURENET NEWS SA FutureNet Committee: The SA committee has planned an exciting calendar of events for 2013, with some new additions as well as the inclusion of some favourite networking sessions.

Keep an eye out for further information on our engineers vs. architects debate and speed networking events. The team was enthused to again hold the exclusive FutureNet at the Fringe Club Night, our most popular event in recent years.

QLD FUTURENET SILVER SPONSORS:

SA FUTURENET PLATINUM SPONSORS:

SA FUTURENET SILVER SPONSORS:

SA FUTURENET EVENTS FutureNet at the Fringe Club: This FutureNet event was held on a Friday night this year – all the better to cut loose and enjoy all the Fringe has to offer! All attendees were welcomed to the purpose built haven where world-renowned artists and VIPs hung out under the stars before and after shows. Located in the prime parkland position of Rymill Park, the venue incorporates bars, stages, DJs, marquees and a massive outdoor beer garden. What more could you want from the best networking event of the year!

SA FUTURENET UPCOMING EVENTS • April: Networking breakfast - details released soon • June: Engineers vs. architects debate • August: Networking event details yet to be released • September: Speed networking • October: Integrated design breakfast

SA FutureNet end of year function “Jingle Bowls”

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Consulting Matters What’s happening at Consult Australia

WA FUTURENET RECENT EVENTS

The art of supertall buildings: 2012 finished on a high for FutureNet WA with the final event featuring a presentation by multiaward winning architect, Marshall Strabala, (the man behind three of the worlds ten tallest buildings including Burj Khalifa and the Shanghai Tower). With qualifications from UCLA and Harvard and a resumé boasting projects in excess of USD $3.0 billion and multiple awards from across the globe, Mr Strabala is one of the world’s most renowned architects. Over lunch at the Astral Ballroom at Crown Casino, Mr Strabala gave insight into the processes behind completion of these mega projects as well as ideas and techniques gained throughout his career. One of his most memorable quotes was, “Engineers are the adult supervision of the architect world.”

Presenting like the pros: A good spokesperson gives themself, their company and their brand a valuable competitive edge.

But holding court isn’t always as easy as it looks! FutureNet WA’s first event for the year was held on 8 March to help our professionals with these skills. Over breakfast at Frasers Restaurant in Kings Park, FutureNet members joined former ABC TV newscaster, Deborah Kennedy as she took the audience through the traps and tricks of presentation skills. Attendees were given examples of what can go wrong and learnt the key elements to ensuring the delivery of an effective and well-crafted oral business presentation to large and small audiences alike. Deborah Kennedy has been a journalist for almost 30 years and has held high profile positions in newspapers, television and radio in Western Australia.

WA FUTURENET GOLD SPONSORS:

WA FUTURENET SILVER SPONSORS:

What’s happening at Consult Australia Consulting Matters

VIC FUTURENET RECENT EVENTS FutureNet Victoria 2013: FutureNet Victoria kicked off 2013 with an event on the Webb Dock Redevelopment. We welcomed over 105 people who came together to hear about the port project and why it is important for our economy.

General Manager of Communications for the $1.6 billion Port Capacity Project, Brian Wilson provided an informative and interactive presentation on what is one of Victoria’s largest infrastructure projects.

VIC FUTURENET UPCOMING EVENTS 2012 event calendar: We have a diverse range of events planned for 2013. Our next event, scheduled for 16 April, will be a trivia night at the Metropolitan. Keep an eye out for more information in the coming weeks.

Outgoing Chair: The FutureNet Victorian Division wishes to express their thanks to Luke van Grieken from Norton Rose, who has completed his two year tenure as Chair. His dedication to the role was second to none and we wish him all the best. We are pleased to announce that Jane Espie from Kellogg Brown & Root has successfully taken up the position of Chair and we look forward to working with her.

VIC FutureNet event

VIC FUTURENET NEWS For the second year running, the FutureNet Business Leaders Course has been a success! Participants presented impressive projects that ensured the judges had the hardest job of all – choosing the 2012 winner! Our final dinner at the Sofitel was a standout, with various government bodies joining us. Thank you to Department of Planning & Community Development Executive Director, David Hodge for his support, and a big thank you to the FutureNet Business Leaders Chairman, Cameron McIntosh for his assistance.

Applications are now open for the 2013 course. We have already had applications submitted, so get in early to secure your place!

VIC FUTURENET SPONSORS:

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Consulting Matters Features

Why the world changed when we stopped putting our mobile phone against our ear and started looking at it IT WAS AT THAT POINT THAT WORK MOVED OUT OF THE OFFICE, ONTO THE TRAIN AND INTO OUR HOMES AS WE COULD ACCESS EMAILS, INSTANT MESSAGES AND WEB PAGES THAT WERE PREVIOUSLY RESTRICTED TO OUR OFFICE DESKTOP. Next time you are on a commuter train take the time to look away from your smart phone and see what other people are doing. You will see few reading the paper, and many doing work on a tablet or laptop, or texting and reading emails on a smart phone.

The digital evolution is underpinning the future of the workforce.

Telecommunications, including teleworking (using applications such as video conferencing, cloud computing, large file sharing and realtime collaboration), is becoming ‘surrogate transport’. It will enable greater mobility, flexibility and ways of working – focusing on what and why work is done instead of where it is done. This new way of working will drive productivity gains by attracting a more diverse workforce – including the inclusion of women and older workers, as well as skilled workers located outside major metropolitan areas.

It is predicted that one in four people will be working at least partially from home, if not full-time by the middle of this century. If this is the case, we will have over five million people in Australia working from home, of which almost half would directly benefit from, if not actually be enabled by, high-speed ubiquitous broadband. It will have the added benefit of taking millions of commuters off the roads!

This change in workplace will create new challenges for businesses – in organisational culture, mateship and collegiality. Smart companies

Telecommunications, including teleworking (using applications such as video conferencing, cloud computing, large file sharing and real-time collaboration), is becoming ‘surrogate transport’. It will enable greater mobility, flexibility and ways of working – focusing on what and why work is done instead of where it is done.

are already harnessing the use of social media to overcome these challenges.

There has been a lot of negative press about the way our work is intruding into our personal lives with horror stories of Gen Y’s reading their emails or Facebook before they get out of bed. Unfortunately, very few people focus on the benefits to the employee, the employer and to the community as a whole.

Whether looking after a sick child, waiting for the plumber or just needing an uninterrupted workplace to complete an important report, as an employee teleworking provides the flexibility to be at home when needed without interrupting your work flow. As the key tools of the telecommuter are the phone and PC, with teleworking you gain the opportunity to engage in real time, with colleagues in other offices in Australia or overseas. You can now be part of extended global teams - giving you the opportunity to broaden your skills and experiences in a manner that is unlikely to occur in a traditional working environment.

Telecommuting enables the employer to retain valuable knowledge and experience as employees move through various phases of their lives such as child rearing, illness or caring for close relatives.

Employers also benefit from less absenteeism due to family and personal issues.

Teleworking does however throw up a few challenges to the IT management. The first thing that comes to mind is the security of data that the employee may have on their personal laptop or smart phone.

The next issue is bandwidth. In addition to external firewalls and telecos, how do we support the volume of traffic we can expect in the coming years? How do we ensure that technology is fed quickly enough to support productivity levels? In addition, many employees have an expectation that their office applications will run on the latest version of pad, PC or smart phone which brings into discussion the acceptance of Bring Your Own Device (BYOD).

After technology, the next question is how do we know that the employee is being productive? At IBM we have over 400,000 employees worldwide that have the ability to telecommute either full time or on a casual basis. We could simply say it’s a trust thing but the reality is that, like most tertiary or knowledge based organisations, we are employing people for results. Whether it be sales people with quotas or project managers with deadlines it’s the results that count not the hours spent behind a desk in an office.

Does teleworking mean the end of the office and in the future will we all be working from home for virtual organisations? The office as we know it is changing. It is now more of a central hub where team members congregate, not to mention the all-important water cooler

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Social media is in many ways the water cooler conversation of the electronic world. meeting where we unintentionally meet someone in the office and start sharing knowledge and ideas.

Social media is in many ways the water cooler conversation of the electronic world. Casual conversations can start and opinions can be formed by both our customers and employees online through Facebook, Twitter or blog sites. Before we switch off and say that is Gen Y territory, studies in the US have shown that 72 per cent of baby boomers are now social media users. Business needs to tap into this to firstly to understand their market but also to communicate directly with their client or consumers. We now think about it all as ‘social business’ - where business connects with its customers on a one on one basis through or as a result of social media.

This is a challenging environment for any business to operate, but also one that brings with it many opportunities.

Looking at the broader environment in which we operate today, it is predicted that over 70 per cent of the world’s population will live in cities by 2050, or to put it another way an estimated one million people are moving into cities each week. The fundamental idea behind teleworking has also led to IBM’s Smarter Cities initiatives which focus on supporting the use of existing infrastructure with technology, such as optimising the use of existing roads and utilities using intelligent systems and applications.

Teleworking technology is just one part of the overall smarter way of managing our growing cities and our changing businesses.

John Fennell IBM

Book now to secure your place!

In 2013, Consult Australia and the Green Building Council of Australia (GBCA) have partnered to bring you Smart Cities – 2050 and beyond – a series of breakfast events covering the key issues, challenges, ideas and solutions for the creation of smart cities for future generations of Australians.

For more information or to register contact the ConsultAustralia NSW Division via email to nsw@consultaustralia.com.au.

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Consulting Matters Features

Handling a bad news day STAFF DOWNSIZINGS CAN BE A MINEFIELD OF REPUTATIONAL HAZARDS. HILL+KNOWLTON STRATEGIES’ BRIAN SHROWDER EXPLAINS HOW HAVING A STEP-BY-STEP COMMUNICATIONS PLAN CAN AVOID A PR PITFALL AND MINIMISE THE FALLOUT FOR YOUR BUSINESS.

Think about your messages, from the business rationale to your company’s concern for those affected, and brainstorm the worst questions you might be asked by all audiences.

It was always going to be a difficult day for the entertainment retailer HMV. In late January 2013 administrators of the company’s UK business, Deloitte laid off some 190 employees in an effort to cut costs and improve the balance sheet.

But, as staff members were called into a meeting to hear the bad news, the difficult day quickly became a whole lot worse.

HMV’s official Twitter account fired into action with this unusual message to its 60,000 followers around the world, ‘We’re tweeting live from HR where we’re all being fired! Exciting!! #hmvXFactorFiring’.

Over a 20 minute period, this was followed by a series of tweets including, There are over 60 of us being fired at once! Mass execution of loyal employees who love the brand. #hmvXFactorFiring.

The tweets were coming from HMV’s 21 year-old social media manager who had been left in control of the company’s Twitter feed despite having just lost her job. It appears from the Tweets, her actions sparked a sudden, if belated, sense of panic among management, ‘Just overheard our Marketing Director (he’s staying, folks) ask ‘How do I shut down Twitter?’ #hmvXFactorFiring’.

A self-inflicted injury The marketing director did regain control of the Twitter feed and the offending messages

were quickly deleted, but by then damage had been done. HMV’s ‘live-tweeted sackings’ had already gone viral, re-tweeted thousands of times in a few minutes, creating a self-inflicted reputational injury that could easily have been avoided.

Much of the commentary about this highlypublicised incident has chided HMV for failing to properly manage its social media assets.

After all, you don’t leave the keys to your corporate Twitter account in the hands of someone who’s just lost their job.

However, there’s an even bigger lesson to be learned from the HMV fiasco and that is that all aspects of redundancy communications need to be meticulously planned well in advance.

The tough reality Closures, downsizing and layoffs are a part of the tough reality of doing business and there is no way to do it painlessly. Speed and sensitivity are watchwords. Effective communications with employees, customers and other audiences can determine how well a company comes out of the process.

Consider developing a comprehensive stakeholder communication plan. If you are planning a mass redundancy, think about who you need to communicate with, what messages you need to convey, and who in your company has responsibility for that communication and when. For example, are there State or Federal MPs or local councillors who need to be advised, or unions to be informed?

The stakeholder plan becomes critically important on the day that affected employees are to be informed of changes. A minute-by-minute action plan, from informing staff to conducting individual meetings with HR representatives and notifying the remaining workforce, will help avoid a damaging miss-step.

Don’t forget the responsibility to inform shareholders and the ASX if you are a listed company. Customers are also likely

to have concerns, especially if there is any suggestion that a restructuring will affect your ability to service their needs.

TV cameras at the gates Be ready for contingencies – especially the possibility of media attention. In the old days, television news crews would lie in wait outside the front gate to interview sacked workers. They still do but, as HMV’s Twitter meltdown showed, the media doesn’t have to wait long to get the news. What you say to your staff will almost certainly be shared with the world outside your workplace.

Depending on the level of media interest your firm attracts, you may need to consider drafting a short press statement or even briefing journalists who cover your industry.

In high-profile cases there is often an expectation for a media conference, in which case thorough preparation and spokesperson coaching is essential.

Think about your messages, from the business rationale to your company’s concern for those affected, and brainstorm the worst questions you might be asked by all audiences.

A time for leadership How you deliver the message will also be remembered. Accounting firm KPMG made headlines for the wrong reasons in the UK last year when it used a voicemail message to inform some five hundred consultants that their jobs were at risk.

It had an unfortunate echo of George Clooney’s character in the movie Up in the Air. Closures and layoffs are a time for leadership to step up and be visible. CEOs should be front and centre, articulating the company’s strategy and the way forward for all concerned. It won’t ever be easy, but planning and preparation will help a company survive even a worst-case scenario.

Brian Shrowder Hill+Knowlton Strategies

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Business strategies for challenging times When your part of the economy doesn’t seem to be growing and seems to exceed client demand in your marketplace, competition hots up and margins are squeezed. Particularly for a professional services industry, the question arises, ‘Is it going to be possible to continue with the volume of work and staff?’

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W hile there is time, do some internal training and team building.

The first thing most firms do is tighten up and try to cut all unnecessary costs, but what other strategies can be executed? Here are some ideas you may wish to consider, as well as a few thoughts about the short and longer term impacts of each.

Great companies like Toyota turn slow market times into opportunities for training and they also even assign staff to do community projects, such as visiting schools. By training staff during these slow periods in the market, you are building significant goodwill as well as skills and capabilities within your workforce.

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For at least a while, ask staff to reduce their

hours - from 100 per cent to any lesser number.

Staff usually understand that when work volumes are down belts have to be tightened, and they accept initiatives like moving to a four day week or similar. Critical to such a move is that your staff need to be able to see fairness and equality in such requests, where the burden is being shared reasonably and equally. Consider what forms of flexibility can be arranged at work to supply lowering demand levels. Remember that you want to be positioned to bounce back up when the market does.

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Innovate in the market.

Try new things with existing clients that might create new value for them, and keep them loyal to you. See which of your existing clients might partner with you and let you do some projects for them which just cover labour and some overhead costs, in order to keep people employed. This requires there being a pre-existing stock of goodwill with your ‘A+’ clients, who you can be open with.

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Identify and reduce all forms of waste.

Now is a great time to recognise and eliminate all the internal inefficiencies that during the good times we are often too busy to act on. Pick some areas of internal processes that cause waste and frustration and assign staff teams to analyse the problems and implement improvement measures, so that the firm is in better shape when better market conditions return. These internal projects can be in any aspect of work, with a typical opportunity being IT and work process systems. I recently investigated a smallish firm and found that the same pieces of data were being manually inputted into their system five times. This is four too many!

All data systems contain large amounts of ‘noise’ that consumes one third of people’s time. This unproductive aspect of workplaces and processes can be attacked and doing that well delivers a great return on investment.

C onduct brainstorming exercises on new product and new market opportunities and activities focused on how the firm will bounce back even stronger once the market volumes return.

When given the opportunity, people are usually very creative.

With some training, it is likely they will be able to identify service and market expansion opportunities, or even ideas on how to sell additional services to existing clients.

From a strategic perspective it is a case of balancing the short term imperative of staying afloat and cash flow positive wherever possible, with the longer term capability that is invested in the skill-base of our staff. If we see our staff as mainly a cost driver, then when market volumes turn down we will cut that cost driver immediately. If we see our staff as a critical and valuable resource key to our success, then we will try a lot of other things first, some as described above, before eventually letting staff go.

There is ample evidence that those who generally invest in their human resources achieve a higher return on shareholder funds than those who do not. However in tough times, it takes courageous partners and directors to dig deep into the company’s reserves to do this. We would be silly to take this too far of course but at the very least, this is an important debate that directors should have: do we cut staff numbers as far and fast as the market falls, or do we try to provide some cushioning, based on and creating goodwill with that human resource. How much cushioning is optimal for your firm?

Finally, when such cuts are necessary, there are smart and not so smart ways to do it. I am not a fan of calling for voluntary redundancies, because we often lose our most marketable and valuable people in that scenario. Despite the flak they got in the media, I liked the way Toyota did it a couple of years ago: they systematically identified those staff who were not aligned to Toyota’s values and who underperformed in their work, and asked them to leave, keeping all their high performers and concentrating the quality of their skill base. Again, it merits deep thought and consideration of the balance between short and longer term performance implications.

Professor Danny Samson University of Melbourne

Professor Danny Samson, University of Melbourne, conducts the residential leadership program for Consult Australia September each year. The 2013 Professional Services Excellence course will run from 9-11 September.

For details, see the Consult Australia website or contact d.samson@unimelb.edu.au.

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Consulting Matters Features

Australia… it’s time to be the smart country AUSTRALIA IS A LUCKY COUNTRY. WE ARE BOUNTIFUL IN NATURAL RESOURCES, DEMOCRATIC, POLITICALLY STABLE, MULTICULTURAL, AND ENJOY A HIGH STANDARD OF LIVING. OUR HERITAGE OF CREATING OPPORTUNITIES THROUGH INNOVATION AND HARD WORK IS NOW CHANGING AND WHILST OUR RESOURCES AND OPPORTUNITIES ARE PLENTIFUL, SO TOO ARE THOSE IN MANY OTHER COUNTRIES.

Our resources industry can work more succinctly with other sectors such as agriculture, food production, manufacturing, water, land management, environmental conservation, energy, property and even retail in order to remain sustainable.

Australia is ranked as one of the most attractive destinations in the world across a range of parameters, including economic and government stability, strength of banking, education, and training. Why then are some stakeholders in the resources industry putting themselves into survival mode; reducing their capital expenditure in Australia and investing in other locations, such as Mongolia and parts of South America or Africa (those that are ranked substantially lower)?

of our world. Communities need to better understand and appreciate the importance of mining for not only economic benefits, but also for the important role it plays in providing the natural resources that are used to manufacture almost every material item that we use on a daily basis. A balance between mining and environmental preservation can be achieved. With trust comes healthy relationships and so it will be through improved collaboration between miners, communities and our political leaders that we will see better outcomes for all.

We should never assume that our efforts to date will sufficiently provide for our future.

Australia is yet to realise its full potential and the contribution it can make to global markets. A strong demand for global investors into the sustainable management and development of our resources will only occur when the political and business environments are aligned.

Continuing to be the lucky country means striving to be a smarter country - a leader in the sustainable management and development of our natural resources. This focus will deliver long term benefits to our businesses and communities. Mining is a necessity for the ongoing development

We need a business environment that is innovative, adaptive and flexible in the way it delivers services - one that maximises the downstream economic cycle from extraction of our natural resources. There has been a significant shift in Australia’s ability to refine and commoditise its own resources which has been based on a number of factors, including the high cost of labour and energy, combined with countries off-shore being positioned as a substantially cheaper option. The balance has been lost between the utilisation of onshore and offshore downstream activity, but it can be corrected.

We need to consider applying smart thinking to these problems and use technology to

A strong demand for global investors into the sustainable management and development of our resources will only occur when the political and business environments are aligned.

find innovative solutions which allow us to remain competitive. Recognising this opportunity, and creating a desire to change and shape our future, is what is required to ensure the longevity of those industries that rely on and use our natural resources.

This will create enormous flow on effects with cost competitiveness, employment, economic prosperity, social improvement and community pride.

The provision of services towards a shared political and private industry vision will come from a trained and skilled workforce, supplied from both within Australia and internationally.

We live in a global, highly mobile community.

We need to take advantage of highly trained skills developed in other regions to help solve our own challenges. We must more effectively access international educational institutions, service providers and skilled workers, as they will allow us to remain technically proficient and competitive across the breadth of industry.

Over time, our universities have grown into substantial businesses, recognising the financial benefits associated with international students. It is important for us to support and incentivise international students educated in Australia to stay, be part of our communities, share in the opportunities and contribute to the economic prosperity of Australia. Our past success supports this multicultural approach. There is a strong need for tertiary institutions to reshape their approach to education; to collaborate with industry in a way that delivers adaptable graduates who can evolve to the demands of industry – mining and other.

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The potential of our resource-base will not be fully realised unless governments at all levels pull together to solve the infrastructure (hard and soft) issues. This must take priority over short term political imperatives.

There is a place for mining alongside other industries in the Australian business landscape: there are more synergies between them than most people recognise. Our resources industry can work more succinctly with other sectors such as agriculture, food production, manufacturing, water, land management, environmental conservation, energy, property and even retail in order to remain sustainable. It is this collaboration, and its flow-on social and economic benefits, that may also lead to the development of Australia’s regional areas (including our northern communities).

The potential of our resource-base will not be fully realised unless governments at all levels pull together to solve the infrastructure (hard and soft) issues. This must take priority over short term political imperatives. Our leaders must articulate clear, long term visions that will encourage optimism, enthusiasm and be a catalyst for action. We’ll benefit from a political landscape that recognises and strives to shape our future to its full potential.

Being smarter about how we shape our future will deliver one that we can all look forward to for generations to come.

David Luscombe GHD

ProjeCt ManageMent CPD Are you delivering your projects on-time and within the budget?

Attend this course to learn about: • Time management • Contract administration • Risk management • Construction management With over 27 years experience in senior management and project management roles within the construction and engineering sector, Mark Griffith is a highly sought after presenter at key legal and construction conferences for practical advice about issues relating to project management.

Book now For more course information and dates contact Alexia Lidas on (02) 9922 4711 or alexia@consultaustralia.com.au

$1,650 for Consult Australia members $2,220 for non members Group booking and in-house discounts available

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Consulting Matters Features

How leaders gain followers THREE STRATEGIES TO BUILD IMMEDIATE AND ENDURING ATTACHMENT

One key aspect of transformational leadership is the ability to drive discretionary effort from knowledge workers.

Right now the world needs resilient companies which can transform their operations to meet an unprecedented demand for change. The spectre of peak oil, global warming and population growth will drive the success of agile organisations which can continually re-create themselves.

Distinguished Professor Dexter Dunphy says, ‘If we are to continually re-create our organisations, then we must have transformational leaders who understand how to lead and manage change and we need them, not just at the top of the organisation, but all the way down’.

One key aspect of transformational leadership is the ability to drive discretionary effort from knowledge workers. Every leader I coach is focussed, in part, in gaining the ‘overs and aboves’ from their workforce. At conferences I ask knowledge workers, ‘Is is possible to look like you are doing your job, but actually be doing very little, or even, not working at all?’ Every-time, the response is yes. This speaks to what Drucker saw as the challenge for this century, ‘To make knowledge work productive will be the great management task of this century, just as to make manual work productive was the great management task of the last century.’

So how do leaders drive discretionary effort?

It is in the transformational leader’s ability to create a sense of attachment in his or her followers. This will move the knowledge worker from care-factor-zero to believing that their effort makes a difference. Gallup, Fast Company, HBR, CEO Magazine and others are all commenting on this aspect of transformational leadership on their e-zines, hard copy magazines and twitter posts daily.

Both the experts and the populace agree that attachment is at least one of the key factors that leaders now need to be great. Recently researchers have begun to bring together the fields of attachment theory and leadership for this purpose.

Attachment theory centres on four styles of attachment: secure; disorganised; anxious; and ambivalent. Studies in the Israeli military have successfully demonstrated that the secure attachment style is the style that correlates with transformational leadership and transformational leaders – those who drive the elusive discretionary effort. The important questions here are: A) What is secure attachment?

B) Why do I need to create attachment in followers?

C) Is creating attachment in followers a matter of luck, or can a leader ‘do attachment’?

A) What is secure attachment?

The best way to describe secure attachment is the adult who has good self-esteem, who can build trusting, lasting relationships, share feelings easily, and seek out social support. We know that transformational leaders have this, but how can they create it more often in their followers? For CEO’s and other senior leaders, followers includes more than those who report directly to them. Followers include clients; peers; stakeholders outside their own organisations; and the communities they serve.

B) Why do I need to create attachment in followers?

Experts (social psychologists and neuroscientists) show that attachment experience correlates with a spike in brain levels of the neuropeptide oxytocin. When leaders meet a job candidate, a company auditor, a government minister or a client there is the opportunity for an experience of attachment, for oxytocin to flood both brains. When this happens to us we include the other in our ‘ingroup’. Getting more people to percieve you as part of their ‘in-group’ is key to your success as a transformational leader. We all listen to messages from ‘in-group’ members in a different way to people percieved as ‘out-group’. Think for a minute about how you listen to media grabs from your preferred political party. You are listening for the big picture. You are listening for what is true and right and good in their message. Think now, about the way you listen to your nonpreferred political party. You are listening for the error.

Transformation leaders create attachment experiences in staff and other stakeholders by ensuring they feel a part of the ‘in-group’. The messages of these leaders come through clearer and drive greater discretionary effort and therefore better results.

C) Is creating attachment in followers a matter of luck, or can a leader ‘do attachment’?

We often put the experience of attachment down to the nebulous idea of ‘chemistry’ or ‘luck’. What if this assumption is wrong? What if one of the transformational leaders’ holy-grails (the experience of attachment), was accessible through predictable mental activities that can be generated at will, by almost everyone? I asked ninety-nine leaders in different sectors, ‘What is the mental activity of leaders during the experience of attachment?’ Their responses reflected three strong themes: Co-celebrating: ‘Acknowledging the great work they did’.

‘Informal feedback about the good progress they were making with their tasks.’ ‘Giving a presentation to a new client and watching the development the new employee had made’.

Compassion: ‘Sharing work challenges - working out how to deal with specific prospect issues in order to win the business.’

‘Debriefing with employee after a very difficult internal interview she had with upper management’.

Goodwill: ‘Sharing the employees work challenges and what he is learning and developing as a leader and as a person’. ‘Talking

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And ask yourself what else could you use to bring about the experience of attachment with a greater range of stakeholders and followers? about activities that excited the employee and how we could find flexible work options to achieve these goals’.

It seems that three very normal mental activities are being employed when attachment occurs. It was no surprise to see trends in the data based on industry sector. The consulting sector was big on co-celebrating.

The not-for-profit sector predominately reported compassion and the state and federal government respondents reported goodwill most often.

Ask yourself, what is your strength - co-celebrating, compassion or goodwill? And ask yourself what else could you use to bring about the experience of attachment with a greater range of stakeholders and followers?

ProfeSSional ServiCeS exCellenCe

Implications These mental activities of compassion, goodwill and co-celebrating are not supernormal. They are part of the normal range of human experience and can be generated at will. This has significance for transformational leaders in any context who wish to achieve faster and more effective attachment with broader demographics of people to meet the challenge of this century and build discretionary effort in knowledge workers.

These ideas are important for the work of organisational development specialists, HR practitioners, executive coaches and anyone involved in the development of leaders. At the organisational level it may serve any company aiming to improve their diversity statistics including boards across the globe.

Attend this course to learn about: • Leadership of the service focused organisation • The principles of service excellence • Marketing and differentiated pricing • Attracting and retaining the right clients • Teamwork and service operations • Strategic business improvement • Firm measuring and reporting performance • Practical case studies of service excellence • Financial management of a business

Good luck practising co-celebrating, compassion and goodwill with the those you intend to influence today!

Book now

Isabelle Phillips Mackerel Sky - Leadership Matters

For more course information and dates contact Daniel Samson on (03) 8344 5344 or d.samson@unimelb.edu.au

Isabelle Phillips is the founder and director of Mackerel Sky - Leadership Matters. She is a sought after speaker, executive coach and facilitator.

Her teams run leadership programs for leaders in Australia, New Zealand and Asia who are seeking to make a bigger difference. Call: 1300 898 321 or 0408 008 454. www.mackerelsky.com.au

$3,950 which includes full residential costs (private executive room) and meals

33

34

Consulting Matters Features

UP CLOSE AND PERSONAL:

BUILDING BETTER GOVERNMENT RELATIONS ‘ALL COMPANIES WILL LIKELY BENEFIT FROM TAKING STEPS NOW TO BUILD THE CAPABILITIES THEY NEED TO ENGAGE SUCCESSFULLY WITH GOVERNMENTS AND REGULATORS IN THE FUTURE.’1

Whether considering the size of the industry, the services your firm provides, or the importance of client relationships, getting up close and personal with government increasingly makes good business sense, and should be considered a core component of corporate strategy and risk management.

Consult Australia represents an industry comprising some 48,000 firms across Australia, ranging from sole practitioners through to some of Australia’s top 500 firms. Collectively, the industry is estimated to employ over 240,000 people, and generate combined revenue exceeding $40 billion a year. Reflecting increasing consolidation across the sector, collectively the larger firms represented by Consult Australia (those 23 firms with more than 300 employees), employ over 40,000 people. Exports of construction related services by our industry have averaged $1.4 billion a year over the last six years.2 These are large numbers, and reflect the importance of the sector to the wider economy. However, unlike many industries, it is not just size that determines its importance to public policy debate - it is the business of consulting firms in the built and natural environment to solve some of those most intractable problems facing governments around the world. No other industry has the knowledge and experience to directly advise and add value to policy across so many portfolios critical to economic growth and productivity. Climate change, infrastructure, planning and urban development, energy efficiency, adaptation, and resources all fall within our firms’ remit, and are central to improving the day-to-day standard of living of individuals and communities.

As a consequence of this expertise, for many firms consulting in the built and natural environment, government is a major client. Consult Australia’s 2012 Economic Forecast report identified 51 per cent of large firms’ income (some $7 billion in 2010-11) was derived from public sector clients. In this context, and somewhat uniquely, good government relations would seem to be a natural consequence of good client relationship management.

However, in spite of the size of the industry, the relevance of the services provided which support the delivery of public policy

It is the business of consulting firms in the built and natural environment to solve many of those most intractable problems facing governments around the world.

outcomes and the importance of government as a client, the extent to which strategic, targeted government relations exists as a strategic focus within our industry’s individual firms is less clear.

It may be surprising for some to hear that when lobbying government, the value and substantive contribution of the industry and those individual firms represented by Consult Australia, is not always widely understood, or immediately appreciated by policy makers. While PricewaterhouseCoopers, KPMG, Ernst & Young, and Deloitte are household names in policy circles, Worley Parsons, GHD, SKM and Cardno are arguably less recognisable.

Without overdrawing the comparison, for those who work in policy but have no direct experience working with consultants in the built and natural environment, the value of those services our firms provide relative to other industries is often under-appreciated.

Perhaps this is no surprise when we consider the background of our parliamentarians. The current Federal Parliament is dominated by elected representatives with a background often unrelated to those industries represented by Consult Australia.

Research against the current parliament indicates 43 per cent of parliamentarians come directly from political jobs (consultants, advisers and lobbyists, party or union employees, electorate staff etc.); nearly a quarter of members come from a general business background (self-employed, executives, managers); and another twelve per cent are made up by lawyers.3 In any parliament, state or federal, the presence of a former architect, engineer or related

Features Consulting Matters

professional can generally be counted on one hand, if at all. The Victorian and Queensland premiers are high profile, but rare examples.

Not that the background of parliamentarians is the only factor at work. The media presence of firms consulting in the built and natural environment is often notably lower than that of other professional services firms and industries. A strong media profile is a key component of any external affairs strategy, and the broader commercial benefits of such a strategy are too often overlooked through risk averse decision making and a preference to maintain a lower public profile.

In considering Why good companies create bad regulatory strategies,4 McKinsey observes that: ‘The typical career track of successful executives in many industries—save highly regulated ones, such as telecommunications or electric utilities—doesn’t involve exposure to government issues. As a result, those executives often are personally ill-prepared for shifting political winds that boost the importance of regulatory issues and are prone to underinvest in the regulatory skills of their organisations or to delegate without exercising sufficient oversight. That’s one explanation for the frequency with which companies must rapidly scale up their government-relations function when they or their industries enter the crosshairs of regulators.’

35

The presence of such resources within firms is increasing, but still relatively unusual across Consult Australia’s member firms, and certainly far less pronounced relative to some other sectors. This is not to suggest that government relations are best managed through a dedicated government relations team. Though there are benefits to such an investment, the McKinsey survey results suggest a more integrated approach coordinated across the business is more characteristic of an effective strategy.

Ultimately the demand for government relations within firms will be dependent on corporate strategy, commercial objectives and the regulatory environment. Nonetheless it is worth considering the potential business benefits of a closer relationship between individual firms and government, operating in parallel with the collective industry relationship supported through Consult Australia membership.

Jonathan Cartledge Consult Australia

1

cKinsey Quarterly. February 2011. Managing government relations for the future: M McKinsey Global Survey results <https://www.mckinseyquarterly.com>

2

Consult Australia. 2012 Economic Forecast <www.consultaustralia.com.au>

In this context, Consult Australia’s work across government, raising the profile of the industry collectively, is critical. However alongside this work there is an opportunity for firms to consider the profile of their own brands within government and the media as part of their broader external affairs strategy.

3

J essica Irvine. 19 August 2010. Toffs replace tinsmiths in parliament. Sydney Morning Herald <www.smh.com.au>

4

ndre Dua, Robin Nuttall and Jon Wilkins. McKinsey Quarterley. June 2011.

A Why good companies create bad regulatory strategies <www.mckinseyquarterly.com>

These issues were well explored through two surveys by McKinsey and Company in 2009 and 2011 (including an international survey of nearly 1,400 executives across a wide range of different firms and industries). The report from the 2011 McKinsey survey identified five categories of respondents reporting on their different attitudes toward government. These include: opportunists and partners (believe policy and regulation generate new business opportunities or provide broader business benefits); avoiders and reluctant engagers; and adversaries (taking a more negative view). In considering these, McKinsey reports:

5

cKinsey Quarterly. February 2011. Managing government relations for the future: M McKinsey Global Survey results. <https://www.mckinseyquarterly.com>

6

eoff Allen AM. Corporate Public Affairs. Volume 22, Number 1, 2012. The G business case for proactive government relations <www.accpa.com.au>

‘A quarter of respondents to this survey fall in to the opportunist group, and 23 per cent are partners [...]. Still this leaves us with more than half of respondents who are more negative than positive about government’s role in their business.’ 5 As the industry advocate, Consult Australia works hard as both an ‘opportunist’ and ‘partner’ on behalf of member firms and the wider industry. The valuable contribution of member firms, through direct advocacy and policy roundtables is critical to Consult Australia’s success in driving better policy outcomes, and an improved operating environment for firms.

The business case for proactive government relations In an analysis of the McKinsey results for the Centre for Corporate Public Affairs, Centre Chairman Geoff Allen AM notes: Some companies, who think governments don’t treat them fairly and try to hide from political and regulatory intervention, seek to adopt a low target strategy and avoid interaction with policy makers and regulators.

However outside Consult Australia, firms themselves might usefully reflect on their individual relationship with governments; into which category their collective attitude could be categorised; and the likely impact of that on their business strategy. Reflecting on the McKinsey research, Geoff Allen AM notes that:

Again, however, analysis shows that when companies are unlikely to have a low profile by virtue of scale, significant in an industry, or other factors, it is desirable to acknowledge the futility of low target strategies. The better approach is to proactively steward reputation and build constructive relationships with governments and other politically relevant interests.

‘Many who believe they should engage proactively with government and regulators regardless of immediate interests are not doing so, and those who react on an as-needed basis, and avoid engagement as much as possible have to engage more, presumably from a position of disadvantage.’ 6

Attempting to ‘fly under the radar’ lessens a company’s ability to shape agendas, to defend a company against others seeking to define it and relevant issues to suit themselves, to correct disinformation, and to under-leverage good stories and capitalise on public relations opportunities.

Looking across the business community, it is not uncommon for businesses of all sizes, some much smaller than Consult Australia’s largest members, to directly employ government relations staff and lobbyists to act on their behalf, and in parallel with their industry associations.

Geoff Allen AM. Corporate Public Affairs.Volume 22, Number 1, 2012. The business case for proactive government relations. <www.accpa.com.au>

36

Consulting Matters Features

What’s my consulting practice worth?

Have you ever thought, ‘What is my superannuation worth and will it be enough to cover my retirement?’

Maybe you’re thinking about succession planning and you need a valuation for a potential incoming partner.

Are you considering growth by strategic acquisitions and hence considering what your business is worth now and what are the values of acquired practices? Is this the most effective use of our capital to strive towards our own exit?

There are a number of reasons for valuing a business, other than buying or selling it.

Businesses are valued for estate and tax purposes, divorce settlements, succession planning and raising capital.

WHAT IS BEING VALUED? A business can be made up of a number of critical components - some critical, some surplus.

1. Plant, equipment and furniture: A fair market assessment should form the basis – not auction value, not written down tax value, not overinflated, but realistic second hand value.

2. Goodwill: Goodwill reflects the

reputation, viability and potential earnings and growth of the business.

3. Intellectual property (IP): A realistic assessment, if there is any special IP involved, by industry specialists.

4. Real property: If real estate is involved, a realistic assessment by a qualified real estate valuer is needed.

KEY FACTORS AFFECTING THE VALUE • Financial: Historical and future profits, cash flow and predicted capital expenditure.

•E xternal factors: The state of the economy, similar business values and how many purchasers would be interested.

• I ntangibles: Intellectual property, strength of clients/alliance partner relationships, growth potential including signed forward contracts and key employees locked in, economies of scale for purchaser and good systems to reduce risk.

•A ssets and liabilities: Value of fixed and current assets, how full the order book is, the level of debt.

•T eam: Management record of success, experience and loyalty of team and business dependant on owner’s skills or team skills.

VALUING A BUSINESS As Warren Buffet says, ‘Price is what you pay, value is what you get.’

Business valuation is a mix of art and science.

The bottom line is, of course, that a business is worth what a buyer or incoming partner will pay for it at a point in time. However, there are specific professional accounting standards combined with commercial marketplace expertise in estimating a fair price. There are variations of these and other methods that apply to specific situations.

It is not uncommon to value a business by a number of different methods and use an average (or more likely a weighted average that gives more weight to some methods than to others) of the various methods used.

VALUATION METHODOLOGIES To select the right methodology, we must understand what is being valued, the underlying characteristics of the business, the purpose and accept the right data and management information.

The following are some of the more popular methods: • Multiple of net maintainable profits: Used for surveying practices with history, non volatility in profitability or abnormal

New monthly webinar series Develop your skill set and earn valuable CPD points without taking time out of the office and losing billable hours.

‘Copyright for Consultants’ Thursday April 18, 2013 Intellectual Property lawyer, Scott Buchanan, will provide an overview of key copyright issues for design professionals. Better understanding of intellectual property rights will ensure your business is positioned to leverage your valuable copyright assets. The webinar will include practical guidance for dealing with clients including negotiating strong copyright ownership and licensing terms together with some tricks and traps in the tendering context.

‘Leadership: a key driver of success in professional services’ Thursday May 30, 2013 This webinar will discuss the key characteristics that successful leaders develop and use, in driving for the highest possible levels of motivation, effort and business success in their professional services firms. These leadership dimensions will be presented in a way that participants can not only learn about them, but can then also assess their own personal leadership strengths, observing opportunities for improvement on those factors. This webinar will be provided by the Professor of Management at the University of Melbourne, Danny Samson.

Consult Australia Member $20.00 Non-Member $30.00 Group booking discounts available

For more information email education@consultaustralia.com.au or visit www.consultaustralia.com.au

Protecting your business Consulting Matters

Business valuation is a mix of art and science. The bottom line is, of course, that a business is worth what a buyer or incoming partner will pay for it at a point in time.

Safety in DeSign CPD Are you aware of your duties and obligations under the new WHS legislation?

Attend this course to learn vital information on: • Designer duties under current legislation

growth, unlikely to change business operations with profits to remain or grow in the future. Simply a multiple of ‘normalised’ average profits taking into account growth and risk. Larger companies generally have a higher multiple while smaller businesses a lower multiple.

• Asset valuation: For stable business with significant equipment assets plus a value for goodwill.

• Entry cost: A benchmark method to establish a start up – buying equipment, employing staff, developing products, attracting customers etc.

We’ve conducted all sorts of valuations from one-man operations to firms with up to 50 employees over different locations. The base principles we adapt are to be commercially fair for an ultimate win-win. That is the value has to be realistic for a buyer and seller – these are our guiding principles.

• Hazard Identification Tools • Risk assessment, control, and management • Safety in Design procedures and documentation • Best Practice Examples • Safety in Design Resources

Book now For more course information and dates contact Alexia Lidas on (02) 9922 4711 or alexia@consultaustralia.com.au

$1,650 for Consult Australia members $2,200 for non members Group booking and in-house discounts available

Sean Wolrige Link

37

38

Consulting Matters Protecting your business

What does YOUR Professional Indemnity insurance policy cover?

Professional Indemnity (PI) insurance policies vary greatly from one policy to the next. With well over 40 different products available in today’s market, ascertaining whether one policy is better than the next is an extensive exercise. The cover offered by PI policies has evolved over the years with many insurers offering areas of cover that were not available as little as three or four years ago. It is important to understand what your PI insurance policy covers or you might get caught out.

TRADITIONAL PI INSURANCE Traditionally PI insurance policies provide indemnity for claims against the insured entity for civil liability incurred in the conduct of the business or for a breach of your professional duty of care. An example of a typical insuring clause is provided below: ‘Underwriters agree to indemnify the Insured against civil liability for compensation incurred in the provision of Professional Services for any Claim first made against the Insured and notified to Underwriters during the Period of Insurance’.

Some insurers restrict this cover further by requiring an act, error or omission, or the requirement of negligence. However in essence, the policy will provide indemnity to the insured entity for claims made against it where the claimant has suffered financial loss, property damage or bodily injury which has resulted, or is alleged to have resulted from the provision of the insured entity’s professional services (i.e. design, advice or specification).

Further to this, insurers will usually provide cover for the legal costs associated with the insurer’s defence of the claim. Insurers provide cover for the legal costs either in addition to the limit of indemnity (a costs ‘exclusive’ limit), or within the limit of indemnity (a costs ‘inclusive’ limit).

EMERGING COVER Some insurers now offer areas that were not previously covered by PI insurance because the nature of the loss would not trigger insuring clauses like the example provided

above. Many insurers do not consider the following policy inclusions as fundamental PI cover and are reluctant to provide them under their policies.

Criminal prosecutions

the professional. Once again, these matters alone may not trigger the insuring clause in insurers’ policy wordings, therefore a policy extension will normally have to be provided by the insurer in order to cover the costs associated with the preparation of a defence and appearance at the inquiry.

For an insurance policy to provide indemnity for a claim against the insured entity, the insuring clause must be triggered. However with the implementation of recent changes to work health and safety legislation, it is possible for professionals to be criminally prosecuted where it is alleged they have provided an unsafe design of a workplace, building or plant.

The sanctions available to the professional body will vary depending on the powers it has been granted, however invariably they can range from a fine, to suspension or cancellation of the professional’s licence.

Where a fine is imposed on the professional, most insurers will not cover the fine itself however they may provide cover for the legal costs incurred in the defence of the inquiry.

Therefore PI policies that only cover civil liabilities will not respond to claims of a criminal nature and the legal costs incurred in defending such a claim would not be provided by the insurer.

With increased competition amongst PI insurers, almost every insurer has been forced to provide cover for the legal costs associated with representation at an inquiry.

Because it has become so readily available in the market, there is now an expectation that PI policies must provide this cover to be comparable with the available market alternatives.

In order to cover these liabilities, some insurers now provide an extension that allows the policy to respond to claims against the insured entity that result in a criminal prosecution. The mechanism by which insurers provide this cover can vary, however essentially the criminal matter would have to otherwise give rise to a claim that would be covered under the policy for it to respond to the criminal matter.

An important limitation on the cover provided for criminal prosecutions is that some insurers also impose a condition that if the insured entity is found guilty of the criminal charge, then the legal costs incurred by the Insurer in the defence of that claim must be repaid by the insured entity.

It remains to be seen whether such a fundamental shift in thinking, such as cover for criminal prosecutions, will be widely accepted by the PI insurance industry. The fact that cover for criminal prosecutions has been offered by some insurers for over four years, yet most insurers still do not offer it, means that they may never offer it.

It is important to note that as we are now experiencing a greater expectation of the professional conduct of every profession, there will also be an increase in the number of inquiries into conduct by the various regulatory authorities.

Fines and penalties There is often confusion surrounding cover for fines and penalties that have arisen out of the provision of the professional services, and those that have arisen out of the running of the business.

Inquiries

Generally speaking, cover for fines and penalties are not insurable under a PI insurance policy. Many people purchase Management Liability (ML) insurance to attempt to cover this gap, however fines and penalties arising out of the provision of the professional services will usually also be excluded under an ML policy because most do not cover claims that arise out of the provision of professional services.

It is now common practice for professional bodies to undertake inquiries into the professional conduct of their members. This will usually arise from a complaint made by a third party in relation to the conduct of

Where an ML policy is able to fill a gap is where the fine or penalty arises out of the running of a business (i.e. a fine for providing an unsafe workplace for your employees) may be insurable under a ML policy.

Protecting your business Consulting Matters

It is important to gain an understanding from your broker as to the range of coverage options available to you when the negotiation of your insurance program is taking place. You must ensure that if cover for these additional exposures is required, then this is established early in the negotiation process to allow the broker to explore the available options.

Where your broker has simply rolled over your existing policy year after year it is likely that you may have missed out on some of these free benefits.

Patrick Beaumont BRIC

Consult Australia member firm, Broune Group Consultants share their experience using the PI Pathway

BROUNE GROUP CONSULTANTS IS A SMALL STRUCTURAL AND CIVIL ENGINEERING CONSULTING PRACTICE SPECIALISING IN FORENSIC INVESTIGATIONS OF BUILDING DEFECTS AND FAILURES. We first signed up with BRIC in 2005 as we wanted an insurance broker who would represent our interests and not that of the Insurer.

BRIC stood out as they focus on the representation of the interest of the Insured, go to lengths to understand the practice of the Insured, do not assume a generic practice.

BRIC also has a willingness to negotiate on the terms of the specific risk of the Insured.

BRIC benefits my practice most importantly by representing the interests of Broune Group Consultants rather than those of the Insurer. Just as importantly, BRIC staff take the time to truly understand my practice and minimise my risks and costs by properly explaining my risk profile to Insurers.

Rod Broune Broune Group Consultants

Professional Indemnity question?

Consult Australia believes that it is important to support members in all aspects of their business.

We also recognise the impact that the insurance market has on Consult Australia member firms in terms of availability, affordability and quality of Professional Indemnity Insurance.

Post your latest Professional Indemnity Insurance cases on the Consult Australia Linkedin group and our PI Insurance Pathway will advise you on the best steps to tackle these issues.

BRIC

Bovill Risk & Insurance Consultants

39

Economic

Forecast

March 2013

Welcome to Forecast: a quarterly publication that aims to keep Consult Australia members up-to-date with the latest market trends in building and construction.

Overview Leading indicators suggest that growth in the economies of our major trading partners will pick up to around trend in the six months ahead. The indicators have improved significantly in recent months, with higher readings for the United States, the Euro area and the five major Asian economies.

The January Update by the International Monetary Fund suggests that world growth slowed to 3.2 per cent in 2012, but predicts that it will accelerate to 3.5 per cent in 2013 and to 4.1 per cent in 2014.

Importantly for Australia, growth in our trading partners’ economies is expected to remain at, or a little above, its long-term average in both 2013 and 2014.

The Reserve Bank’s February forecasts see the Australian economy growing by 3 per cent in 2012/13, by 2–3 per cent next year, as growth in both mining and non-mining investment slows, and by 2.5–3.5 per cent in 2014/15.

Growth slowed to an annual rate of 2 per cent in the September quarter, and we are forecasting growth of only 2.8 per cent this year. Our forecasts for 2013/14 and 2014/15 are within the RBA’s range of estimates.

The RBA expects a gradual recovery in dwelling investment and in non-mining business investment; but it admits that the timing and extent of the business investment recovery remains particularly uncertain.

Engineering construction activity increased by 4 per cent in the September quarter and was 14 per cent greater than a year ago.

Work done on non-residential building however, fell by 6 per cent and was 7 per cent less than a year ago.

New housing activity increased by 1 per cent but was nearly 2 per cent down on a year ago.

Work done on housing renovations fell by 3 per cent to be 12 per cent less than a year earlier.

Non-residential Building Measured in constant 2010/11 prices, activity fell by 6 per cent in the September quarter of 2012 to a seasonally-adjusted annual rate of $32 billion: 7 per cent less than a year earlier.

Forward indicators weakened further in the September quarter.

Work commenced in Australia in the year to September was 7 per cent less than work done, although at the end of September there was still nearly eight months work in the pipeline.

The indicators were relatively strong in New South Wales, South Australia and the Northern Territory, reasonably healthy in Victoria, but weak elsewhere.

National approvals fell sharply in the September quarter to an annual rate of around $28 billion. They picked up to nearly $30 billion in the December quarter and totalled $33 billion in the calendar year. As the chart opposite shows, at the close of 2012 approvals were trending down in New South Wales and Western Australia but up in the other large states.

Business confidence fell further in the December quarter, and the National Australia Bankâ&#x20AC;&#x2122;s quarterly survey concluded that non-mining capital spending was likely to remain restrained in the year ahead.

The monthly readings, however, improved in December; and they held that gain in January to return a positive result. Confidence improved sharply in mining and wholesale trade, but deteriorated in all other industries.

The recovery probably reflected the December cut in interest rates, stronger world share prices and better activity in China.

Non-residential building activity fell by 4 per cent in 2011/12 and is forecast to fall by 4 per cent again this year before steadying in 2013/14.

Non-residential Building Forecast: by State & Territory

value of work done, $ million, constant, 2010/11 prices

NSW

VIC

QLD

SA

WA

TAS

NT

ACT

Australia

2010/11 (a)

8,804

8,372

7,695

2,380

5,082

687

456

1,332

34,808

2011/12 (a)

7,271

8,592

7,018

2,238

5,987

481

703

1,252

33,543

2012/13 (a)

7,340

8,500

6,360

2,370

5,320

425

850

1,035

32,200

2013/14

7,700

8,670

6,050

2,450

5,100

460

900

920

32,250

2014/15

8,000

8,860

6,465

2,300

5,200

490

920

805

33,040

2011/12

-17

3

-9

-6

18

-30

54

-6

-4

2012/13

1

-1

-9

6

-11

-12

21

-17

-4

2013/14

5

2

-5

3

-4

8

6

-11

0

2014/15

4

2

7

-6

2

7

2

-13

2

% change

Economic

Forecast

March 2013

Engineering Construction Recent activity: Measured in 2010/11 prices, the volume of work done increased by 4 per cent in the September quarter to an annual rate of $128 billion: 14 per cent higher than in the same quarter a year ago.

Forward indicators of activity continued to ease in the September quarter but remained strong. In the year to September, 18 per cent less work was begun than was done; but at the end of September there was still 12 months of work yet to be done.

In Queensland and Western Australia there was around 16 months work in the pipeline.

Commencements increased in the September quarter.

Nationally, they rose to an annual rate of $91.4 billion, but in the year to September totalled only $82.4 billion: down 35 per cent on the previous year to September.

As the chart opposite shows, the year-to-date volume of commencements has fallen sharply in Western Australia and Queensland, so unless some big new projects get underway, by this time next year activity will be declining.

The volume of work yet to be done fell by 7.7 per cent to $121.6 billion in the September quarter. Nearly two-thirds of this work ahead is on mining and heavy industry. Another 10 per cent is on bridges, railways and harbours, 10 per cent on electricity and pipelines, and 9 per cent on roads.

Activity increased by a massive 35 per cent in 2011/12 to $115.8 billion. It is forecast to increase by 4 per cent to $120.7 billion this year, and to peak at $121.7 billion in 2013/14.

Engineering Construction Forecast: by State & Territory

Value of work done, $ million, constant, 2010/11 prices

NSW

VIC

QLD

SA

WA

TAS

NT

ACT

2010/11 (a)

18,470

11,189

23,873

4,670

25,189

2011/12 (a)

21,692

11,519

34,202

4,784

39,991

2012/13 (a)

21,400

10,610

37,200

4,450

2013/14

20,370

9,960

38,540

4,260

2014/15

20,750

10,350

34,450

Australia

960

928

769

86,047

975

1,885

789

115,839

42,550

1,030

2,700

760

120,700

43,540

990

3,520

520

121,700

4,470

37,400

860

3,650

470

112,400

% change 2011/12

17

3

43

2

59

2

103

3

35

2012/13

-1

-8

9

-7

6

6

43

-4

4

2013/14

-5

-6

4

-4

2

-4

30

-32

1

2014/15

2

4

-11

5

-14

-13

4

-10

-8

a = Actual

New Housing In the year to June 2012, Australiaâ&#x20AC;&#x2122;s population increased by 359,600, with natural increase up by 1 per cent to 151,300 and net overseas immigration up 22 per cent to 208,300. Growth has accelerated strongly in Queensland, South Australia, Western Australia and the Northern Territory.

In the chart opposite, the ABS estimates of population, which currently overstate growth between 1998 and 2006 and understate it between 2007 and 2011, have been revised along lines which the ABS proposes to adopt in revisions to be published in June.

These revised estimates have been used to re-calculate the underlying requirement for new housing in Australia, which is now estimated to be around 170,000 in 2011/12.

Dwelling approvals, as the chart opposite shows, strengthened in the December quarter in New South Wales, South Australia and Western Australia, but eased in Victoria and Queensland.

Nationally, the trend in approvals remained steady at an annual rate of 155,000: well short of requirements of around 170,000.

Consumer confidence rose strongly in February and for the first time in two years exceeded its ten-year average.

At its current level, confidence is 7 per cent higher than a year ago: probably a delayed response to the four cuts in the cash interest rate that have seen it fall from 4.25 per cent a year ago to 3 per cent. At least one more cut is likely.

The â&#x20AC;&#x2DC;time to buy a dwellingâ&#x20AC;&#x2122; component of the index fell by 3.3 per cent in February; but it was still 14 per cent higher than a year earlier and 16 per cent higher than in February 2011.

New Housing Forecast

Value of work done, $ million, constant, 2010/11 prices

NSW

VIC

QLD

SA

WA

TAS

NT

ACT

Australia

2010/11 (a)

8,778

13,687

7,488

2,458

6,394

677

373

1,230

41,085

2011/12 (a)

8,296

13,557

6,851

2,130

5,442

570

392

1,317

38,556

2012/13 (a)

9,200

12,150

7,250

2,000

5,900

520

410

1,170

38,600

2013/14

9,850

11,900

7,950

2,150

6,900

570

480

1,000

40,800

2014/15

10,700

12,200

8,650

2,200

7,150

590

520

950

42,960

2011/12

-5.5

-1.0

-8.5

-13.3

-14.9

-15.8

5.1

7.1

-6.2

2012/13

10.9

-10.4

5.8

-6.1

8.4

-8.8

4.5

-11.1

0.1

2013/14

7.1

-2.1

9.7

7.5

16.9

9.6

17.1

-14.5

5.7

2014/15

8.6

2.5

8.8

2.3

3.6

3.5

8.3

-5.0

5.3

% change

a = Actual

44

Consulting Matters Business essentials

Managing risk Consult Australia’s Practice Notes are a great source of information on issues often faced by consulting businesses, and are freely available to owners and staff of Consult Australia member firms.

A risk management system seeks to achieve five main outcomes:

The Practice Notes cover a wide range of topics under the broad themes of professional ethics, liability and insurance, legal advice, personnel matters, general and financial, appointments and contracts, workplace health and safety, and quality assurance.

• Analyse risks;

The following article is derived from the Practice Note titled, Risk management guidelines for consultants.

Risk management Like many enterprises, consulting is a risk business and requires risks to be identified, evaluated and properly managed.

For firms that are either renewing policies or obtaining Professional Indemnity (PI) insurance cover for the first time, it is becoming usual for firms to be required to have an industry-compliant risk management system in place.

Risk management systems range in complexity depending on the individual needs of the business. However, some form of risk management system is an essential part of the business planning process and leads to an understanding of the degree to which a business is exposed to risk.

• Establish the context; • Identify risks;

• Assess risks; and • Treat risks.

The standard, AS/NZS ISO 31000:2009 Risk management - Principles and guidelines, provides organisations with 11 risk management principles that they should comply with and a management framework for the effective implementation and integration of these principles into an organisation’s management system.

It emphasises that risk is the effect of uncertainty on objectives, not just an event.

Managing your business practice under AS/ NZS ISO 9001:2008 Quality management systems – Requirements, can be another effective way of setting up a risk management regime and if your practice is called on to demonstrate its duty of care, a quality system would be regarded favourably.

However, it should be noted that establishing a quality system and failing to comply with it might be regarded as negligent.

assessment process and these can form the basis of regular audits and reviews of business operations and projects.

Checklists may comprise simple ‘tick the box’ questions and be developed to cover routine business operations, as well as each individual project handled by the consultant.

This is an exercise which, for sole traders and small business, is generally simple to complete, and is of great value in demonstrating a genuine desire to reduce risk to insurers.

For larger or more complex businesses, there are professional risk audit services that can provide objective risk assessments of business operations. Checklists may include: • Workplace safety checklists; • Professional indemnity checklists; and • Commercial risk checklists.

For the full text of this Practice Note and many more, visit the Consult Australia website at www.consultaustralia.com.au.

Jonathan Russell Consult Australia

Small businesses that may not have the necessary in-house expertise and resources to implement and maintain a recognised quality system could find it advantageous to discuss less complex alternatives with their insurers or brokers.

What is a risk management system?

Identifying and quantifying risks is the first step in a process of prevention that includes developing strategies to minimise the possibility of an action or incident occurring.

Risk management processes also explore how to minimise the impact on a business if an incident does occur.

Consulting firms face risks in a number of ways, and each management program is different, but may consider at least the following: • Professional indemnity/liability; • Commercial/legal liability; • Workplace health and safety; • Public liability; and • Conditions of employment.

Developing risk management checklists The development of risk management checklists is a good starting point for a risk

Risk management systems range in complexity depending on the individual needs of the business.

However, some form of risk management system is an essential part of the business planning process and leads to an understanding of the degree to which a business is exposed to risk.

Business essentials Consulting Matters

45

Directors liability and WHS With the commencement of the harmonised model legislation on 1 January 2013 in Tasmania and South Australia, the process of moving Australia to a simplified arrangement of Workplace Health and Safety (WHS) laws is now reaching its final stages.

One issue of concern to a number of consulting firms has been that of directors’ responsibilities and liability under the new arrangements.

There are two important aspects of the legislative changes that affect directors. The first is the extension of WHS obligations to ‘persons conducting a business of undertaking’ (PCBU), with the term ‘persons’ including business entities. It follows therefore, that personal responsibility may lie with directors or officers (a person who takes part in the management of the organisation, regardless of title) of that business.

The second aspect of the new legislation is that PCBU’s obligation to ensure, so far as is ‘reasonably practicable’, the health and safety of workers engaged or caused to be engaged by the PCBU, and workers whose activities in carrying out work are influenced or directed by the PCBU while the workers are at work in the business or undertaking.

More specifically, this means the PCBU must ensure, so far as is reasonably practicable: • The provision and maintenance of a work environment without risks to health and safety; Consulting Matters Advert.pdf 21/01/2013 9:23:37 AM Consulting Matters Advert.pdf and 21/01/2013 9:23:37 AM • The provision maintenance Consulting Matters Advert.pdf 21/01/2013 9:23:37 AM

of safe plant and structures;

• The provision and maintenance of safe systems of work; •T he safe use, handling and storage of plant, structures and substances; • The provision of facilities that are adequate for the welfare of workers as they carry out activities for the business or undertaking, including ensuring access to those facilities; • The provision of any information, training, instruction or supervision that is necessary to protect all persons from risks to their health and safety arising from work carried out as part of the conduct of the business or undertaking; and • That the health of workers and the conditions at the workplace are monitored for the purpose of preventing illness or injury of workers arising from the conduct of the business or undertaking.

Directors specifically must exercise due diligence to ensure the PCBU complies with its obligations. In the case of WHS, due diligence involves taking proactive steps to be aware and stay up to date with WHS matters, understanding the health and safety hazards or risks associated with their business activities, developing appropriate responses to those hazards or risks, ensuring adequate processes exist and resources are provided to implement the responses, and verifying the satisfactory implementation of these responses to risks and hazards.

Robin Schuck Consult Australia

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46

Consulting Matters Corporate social responsibility

Engineering project takes flight

Following the construction and completion of an all-weather airport the worldâ&#x20AC;&#x2122;s second largest refugee camp in Dolo Ado, southern Ethiopia will now be accessible by air throughout all seasons of the year.

Located in a river basin, the previous airstrip for Dolo Ado was flood prone and saw the United Nations Humanitarian Air Service (UNHAS) aircraft unable to land for weeks at a time during the wet season.

The flooding also compromised the ability to medically evacuate refugees and humanitarian workers and slowed the delivery of supplies to the camps.

Deployed by RedR Australia, Australian civil engineers Stefan Prystupa and John Weir, and the World Food Programmeâ&#x20AC;&#x2122;s (WFP) field engineering team, worked closely with the Ethiopian civil air and road authorities to make the airstrip vision a reality. The team cleared an area equivalent to 26 soccer fields, installed more than four kilometres of drainage and compacted 17,250 cubic metres of gravel.

Stefan managed the construction of the airstrip which involved overseeing complicated contract negotiations, hiring an on-site engineer, managing the logistics of housing 40 workers in Dolo Ado, and ensuring the project remained on time so it would be completed by the rainy season.

Tsota and Stefan in the World Food Programme office

John Weir with site engineer Yohannes.

Stefan worked closely with Tsota, a local engineer who designed and documented the airstrip and assisted with contract negotiations.

Stefan credits Tsota for the successful outcome and noted that the

Corporate social responsibility Consulting Matters

camaraderie the two engineers shared was one of the highlights of the deployment.

At the end of Stefanâ&#x20AC;&#x2122;s contract the airstrip was well underway, with the bulk of the earthworks complete. In reflecting on his deployment Stefan expressed his joy seeing something built which enhances the wellbeing and standard of living of people in need.

The completion of the project was left to John Weir, who managed the challenges associated with gravelling the 1,600 metre airstrip.

Compared to the relative quality which Australian materials are supplied, working on the airstrip in Dolo Ado saw John dealing with large rounded stones for the gravel surface and conducting remedial work on the final surface.

Over recent years, humanitarian activities in this remote area have increased significantly to meet the needs of more than 170,000 refugees who have escaped civil unrest, violence and ongoing drought in south-central Somalia and south-eastern Ethiopia. The number of humanitarian organisations on the ground has increased from 20 to more than 60 and each are heavily reliant on the Dolo Ado airstrip.

In reflecting on the impact of the project, WFPâ&#x20AC;&#x2122;s country director in Ethiopia, Abdou Dieng said that by giving aid workers better access to those in need throughout the entire year, it will significantly reduce the chance of disruptions to the provision of lifesaving aid.

About RedR Australia RedR Australia is a humanitarian agency which maintains a Standby Register of highly skilled personnel for United Nations agencies to draw on for short-term emergency and disaster response.

The aid agency is also a leading provider of humanitarian training. These courses have a particular focus on realistic scenario exercises to equip participants with skills to respond quickly when working in humanitarian emergencies.

Consult Australia is a founding body of RedR Australia which celebrated 20 years of humanitarian action in 2012. First aid workers to be deployed by RedR Australia assisted Rwandan refugees in camps set up by UNHCR in Tanzania and Uganda in 1995.

Since that time thousands of aid workers have been prepared for humanitarian fieldwork and more than 670 humanitarian assignments have been undertaken across 75 countries.

Find out more about RedR Australiaâ&#x20AC;&#x2122;s training programme and Standby Register at www.redr.org.au. Do you have what it takes?

Photo: Touchdown! The 1,600m airstrip in action.

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48

Consulting Matters Corporate social responsibility

Linking vital services in a vast land Within the vast expanse of Western Australia more than 240 Aboriginal communities face the daily challenges of living in Australia’s most dry and remote lands. Their power supply is ‘off the grid’ and typically relies on diesel or solar power, the closest technician is a plane flight away, and failure of a pump could mean that a community runs out of their water supply within a day.

These communities in the Kimberley, Pilbara, Goldfields and Western Desert regions are home to some of the most resilient people in Australia. They live in inhospitable terrains and experience extreme weather conditions – like flooding and drought – which can leave them isolated for extended periods.

Distances between the communities can be large, with 3,000km separating those in the northern-most areas to those in the south.

The Remote Area Essential Services Program (RAESP) was established in 1998 to provide a cyclical repair and maintenance service for water, power and wastewater infrastructure in the largest of these communities.

Since 2005, Parsons Brinckerhoff has managed the program in support of the Department of Housing. Three Regional Service Providers (RSPs) are appointed under contract to provide services on the ground: Kimberley Regional Service Providers; Pilbara Meta Maya; and Ngaanyatjarra Services.

The Department of Housing, Parsons Brinckerhoff and the three RSPs now work together to provide services for up to 91 communities in the program.

If the distances and extreme weather conditions aren’t challenging enough, the team face the obstacles of aging infrastructure, cultural differences and resource constraints. To overcome their challenging operating environment, the

team has a strong focus on collaboration, innovation and flexibility.

Collaboration To ensure smooth operations, the RAESP team has skills and experience in program management, project management, contract supervision, remote area water and wastewater services, remote area power systems, Aboriginal liaison, asset management, water quality sampling, and public health.

The communities rely on the RAESP team to: • Repair and maintain services for power, water and wastewater infrastructure for approximately 11,000 people; • Ensure safe drinking water and compliance with Australian Drinking Water Guidelines through a water quality monitoring program that requires approximately 3,000 microbiological and 500 chemical water samples per year and extensive logistical arrangements to ensure that the samples arrive at laboratories in Perth within their holding time; • Manage an emergency power, water and wastewater repair service for approximately 200 non-RAESP remote Aboriginal communities; and • Drive continuous improvements in delivery of essential services within the program.

Innovation Providing essential services to these remote communities presents a range of unusual challenges, which often require

unconventional approaches. Solutions must always be viable, long–term, culturally appropriate and sustainable for the community on an operational, environmental and financial level. Due to the challenging conditions, the preference when installing infrastructure is ease of operability, remote monitoring capability and sustainable management through limited attendance.

These necessities motivate the RAESP team to think outside the box as solutions that meet metropolitan standards are not always the best use of technology in a remote environment.

The program’s successful use of advanced water treatment technology such as the installation of an Ion Exchange unit in a remote community in the Kimberley region has ensured that remote communities have access to safe drinking water. This work has also received numerous industry accolades.

In 2011, RAESP won the Regional Engineers Australia award for Engineering for Regional Communities and the Infrastructure Partnerships Australia (IPA) National Infrastructure award for Smart Infrastructure.

The program was also a finalist in 2012 for the Australian Water Association awards for Infrastructure Innovation.

Flexibility The multidisciplinary program management team has nurtured strong stakeholder relationships (government, contractors and community) with a mutual focus on sustainable outcomes for the communities.

This has enabled the program to focus on flexible and appropriate solutions to manage risk effectively and maintain reliable service delivery.

Corporate social responsibility Consulting Matters

The RAESP team service over 90 communities with 3,000km separating the northern-most and southern-most communities. Photo courtesy of Parsons Brinckerhoff.

Parsons Brinckerhoff provides technical support and advice to three RSPs who keep the essential services operating safely and efficiently by carrying out the necessary maintenance, repair and monitoring activities.

The RSPs are an essential part of the program and challenges are often overcome and improvements made through their initiative and involvement with the communities.

At the community level, the RSPs train local Aboriginal people to carry out day-to-day tasks to keep services running like taking water samples, cleaning solar panels, taking water samples and meter readings and checking fuel levels.

The RAESP team recognise that maintaining power to ensure water supply, cooling, food storage, and systems such as dialysis machines switched on, is vital. While purpose-built infrastructure is key to providing essential services, the program extends beyond service delivery to include research, training and education.

Through collaboration, innovation and flexibility, the program runs the most diverse water quality management program in Western Australia. As a result, on an industry level RAESP can now be used as a case study for other remote areas across Australia – and the world.

Jayne Richards Parsons Brinckerhoff

ContraCtS for ConSultantS CPD Do you know what you’re signing? You could be exposing yourself and your firm to avoidable risk.

Attend this course to learn about: • Contract information • Contract terms • Contracting issues • Liability and relief • Construction contracts & consultancy agreements • Onerous contract terms • Professional Indemnity (PI) Insurance • Ending a contract • Dispute resolution

Book now For more course information and dates contact Alexia Lidas on (02) 9922 4711 or alexia@consultaustralia.com.au

$2,145 for Consult Australia members $2,440 for non members Group booking and in-house discounts available

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50

Consulting Matters Our industry

High flying approach to Line of Site analysis cuts telecoms infrastructure costs Emerging technologies are rapidly changing the way we communicate and conduct business, with telecommunications infrastructure becoming increasingly important. Network operators want to deliver mobile and wireless telecommunications infrastructure quickly and economically to meet ever growing user demands.

Large scale national telecommunications projects can require anywhere up to 2,000 base stations, each one needing a point to point link into the wider network via a microwave transmission dish. As such, these sites must be located where Line of Sight (LOS) has been verified allowing the site to transmit and receive data from the network without interference from obstructions such as trees, terrain or infrastructure.

Traditional LOS method Typically, to determine the suitability of a particular location for a telecommunications tower, an Elevated Work Platform (EWP) is hired and transported to a site to test the line of sight. The EWP is used to shoot to an existing tower, a blimp or a second elevated work platform to ascertain whether there are any obstructions.

Limitations of this method include: • A lack of availability of EWPs in some regions; • Access issues, such as difficult terrain, gaining the required permissions and wet weather conditions, can cause delays; • Lack of suitably qualified LOS companies in the country to cater to large projects;

A cost-effective alternative LIDAR (Light Detection and Ranging) is an alternative to traditional methods that has significant benefits for network operators.

Light aircraft, fitted with this technology, capture data by laser and are capable of mapping ground and non-ground data over a path of up to 1,500 metres in width.

The laser has the capability of striking the same point on the ground four times over, each providing return data capable of determining the height of the ground but also the nature of the strike. That is, the laser is capable of deciphering whether the strike is ground, building, tree or water. The technology has been developed to a point where a species of plant can be identified.

As the plane travels at speeds in excess of 250 km/h, more than 30 path profiles can be captured in a single day compared to approximately two paths per day using EWPs. While it is not a new technology (LIDAR has been fully developed worldwide for atmospheric research and meteorology), the benefits of its use on large scale projects have only been realised through the efforts of Aurecon’s Geographic Information Systems (GIS) and telecommunications teams.

Other advantages of LIDAR over traditional methods include: • Quicker mobilisation to regional areas than relocation of EWPs. LIDAR planes can operate from any local air strip; • Earlier provision of reports than traditional LOS methods allow. Typically, 30 reports could be issued within two weeks of capture. Traditional path checks via an EWP would typically take three weeks to capture and another two weeks to compile reports; • Significant cost efficiencies on large scale data captures due to time efficiencies; • Wide path capture allows relocation of site anywhere within the data path without the need to re-verify LOS; and • LIDAR is a well-established industry with operators in all capital cities capable of working anywhere in the state.

The table below shows the efficiencies of LIDAR in capturing 27 paths in the Cairns area.

Even though LIDAR cannot capture data through cloud or fog, with its high speed data capture, it can capitalise on clear weather windows by capturing data over a large area.

LIDAR doesn’t rely on light and is equally efficient in capturing data at night, a time when clearer conditions are often present.

• Mobilisation can be slow due to the time needed to set up the equipment and relocate it to another site; Traditional LOS (EWP)

LIDAR/GIS

Capture Rate

2 sites per day

30- 40 sites per day

27 paths in Cairns

21 days+

1 day

Delays due to bad weather / maintenance

Up to 20 days

1 – 3 days

• Safety and maintenance issues including breakdown, bogging and hydraulic failures.

Re visits required due to access issues or relocation of site

10% - new job required

Nil within data path

Undertaking this work in remote locations poses further cost and time challenges.

Typical Cost

AUD4 800 per site including Report and mobilisation.

Total AUD129 600

Less than AUD70 000 including Detailed LOS Report.

• There are often lengthy delays between acquisition and reporting; • Concerns over accuracy and reliability of data; and

Our industry Consulting Matters

Creating meaningful outputs using GIS The outcome of a flight is a file consisting of billions of points of data which can then be imported in to ArcGIS system and used to build Detailed Elevated Models (DEMs).

Algorithms are incorporated to depict Fresnel Zone (FZ), the area around the proposed microwave path that must be clear of obstruction to allow property connectivity.

Individual trees, including the identification of species, can be picked up from LIDAR data and mapped or monitored for FZ intrusion.

The data can be overlaid on other GIS layers including cadastre, land-use and height zones. This allows the modelling of the path against future obstructions including development to approved height zones and projected tree growth by species.

The GIS-centred approach also facilitates integration between transmission and radio frequency coverage planning processes.

Viewshed and inter-visibility analysis on regional detailed elevation models allows rapid identification of alternative candidate sites and fatal flaws based on land-use, tenure, accessibility, and so on.

Looking ahead The adoption of this technology is providing real time and cost benefits over traditional LOS techniques. While work for LOS checks via EWPs still remains the most cost efficient method for projects requiring few paths, LIDARâ&#x20AC;&#x2122;s effectiveness and accuracy will ensure that its role in the telecommunications market will expand as strict budget and time deadlines apply. LIDAR is also utilised to capture accurate topographical and vegetation information for new road, rail and pipeline projects.

Wayne Sander Aurecon

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Consulting Matters Our industry

Construction of nutrient stripping wetlands Transforming an initial concept for a Constructed Wetlands into reality along a 1,200m section of the Ellen Brook tributary to the Swan river in Perth WA, meant the E-Tec Consultants civil designers, working in conjunction with the Swan River Trust and Syrinx Environmental pl, needed to carefully consider the long-term operating conditions under which the system would function.

In doing so, a balance needed to be reached between the benefits of a scheme, which will provide a long term and wider reaching improvement to the greater Swan River environment, against the environmental impacts of the scheme on the localised watercourse and floodplain.

Early on in the design process, it was identified that the long term operational success of the scheme hinged on providing a system which not only meets the immediate operating requirements for nutrient stripping, but incorporates sufficient flexibility to allow the future adaptation of the scheme to incorporate development changes in the testing and treatment requirements. The challenge in the design was in ensuring the scheme could continue to successfully operate in the long-term within the challenging environment of an existing river channel and flood plain.

The challenge in the design was in ensuring the scheme could continue to successfully operate in the long-term within the challenging environment of an existing river channel and flood plain.

The Ellen Brook is a significant contributor of nitrogen and phosphorous nutrients to the Swan Canning River System. While contributing only 14 per cent of total annual flow, it delivers 28 per cent of Total Nitrogen (TN) and 39 per cent of the Total Phosphorous (TP) load to the Swan River from coastal catchments, leading to unacceptable water quality and proliferation of algal blooms within the river system.

The Swan Canning Water Quality Improvement Plan prepared by the Swan River Trust (December 2009) identified artificially formed ephemeral wetlands as being one of several viable measures for delivering TP and TN load reduction and improving river water quality within the Swan River environment. In addition, the use of Neutralised Used Acid (NUA) filter media (a mining by-product) as a successful nutrient stripping material still requires further research to determine its suitability for large scale application over extended periods of time.

The 1,200m stretch of the Ellen Brook north of West Swan Road has been identified as a suitable location for a scheme which can incorporate both of these functions.

Within the current design scope, the majority of the 4.0ha of wetland basins are to provide nutrient removal from the tributary waters through natural organic plant processes while a small portion (<10 per cent) of the basins are to be utilised as testing areas for nutrient filter blends incorporating NUA. If the initial NUA testing programme proves to be successful, expansion of the testing programme could

require additional areas of the basins to be converted to incorporate NUA filtration media. As both the functions require differing operating conditions, primarily in the rate of delivery of the tributary waters to the basins and the depth of construction of the basins, the challenge was to provide a mechanism which when in operation could deliver the tributary waters to the basins across a range of flow rates and elevations yet still be adapted to cater for changes to the operating conditions over time.

Various options for the water delivery were investigated, taking into consideration the terrain, the existing river channel operating characteristics, maximising sustainability and minimising environmental impacts on the existing area, the biological design criteria for the wetland/NUA testing basins, the available technology and capital and long-term operating costs. Eliminated options included a gravity feed delivery system to the basins (eliminated due to the terrain characteristics) and the use of Hydraulic ram pumping systems such a Glockemann pump (eliminated due to river channel characteristics and operating restrictions).

Ultimately, the most suitable operating system which could deliver a controlled and variable flow across a range of elevations was an electrically powered pump system feeding a 280mm dia pressurised distribution main from which individually controlled spurs could serve each basin. With this scheme, each basin can be independently operated and adapted to suit the requirements of the future operation of the wetland system and the NUA testing facility.

Fiona Callaghan E-Tec Consultants

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54

Consulting Matters Industry comment

Seeing through the glass façade Are current buildings future fit? We need to think about the longterm future of the buildings we’re designing, and equally importantly, adapting current building stock to ensure they’re fit for the future.

closer. Architects are now required to think about the services and energy strategy and engineers are required to think about façade performance and external shading.

We need integrated low carbon design to respond to a changing climate, and to changing market and regulatory demands. It’s here that traditional towering ‘glass boxes’ may have a hard time passing BCA and doing well in NABERS and Green Star.

Developers and design teams must accept the requirement for future fit, low energy buildings will challenge the generic transparent-glassbox aesthetic for commercial buildings.

Buildings built to earlier standards, and the current generation of barely BCA-compliant glass box buildings, are vulnerable to climate change impacts, and rising energy costs.

The days of an architect designing a building, then presenting it to the services engineers to ‘make it work’ are over. The relationship between different design team disciplines needs to be much

Architects and engineers need greater collaboration to ensure integrated design solutions that respond to changes in both our natural and built environments. As designers, we need to adapt to evidence based design and implement computer modelling earlier, and more often, throughout the design process.

Tony Arnel Global Director of Sustainability Norman Disney & Young

The issues our industry is facing in 2013

Developing leaders can bridge the generation gap

Through being positive and having a proactive outlook, the coming year can be different to those preceding it.

Recently I hosted a farewell for one of our senior people who had been with Hyder for over 40 years. The occasion caused me to reflect on the challenge we have ahead as a generation of older engineers retires. Supporting and developing our next generation of leaders is essential to support business growth into the future.

As consultants we can and should view this time as an opportunity to remain agile and innovate to help our clients, both in Australia and globally, meet their objectives. Overwhelmingly these objectives, borne out of pressures on both private and public sector balance sheets, relate to getting maximum efficiency from assets. This means we have to consider ways of delivering projects smarter, more effectively, and more sustainably. These value adds are expected rather than requested, as our professionals face an era of healthy competition.

Intrinsically, we work harder, faster and push the boundaries. This drive can deliver breakthroughs in the application of new technology, force us to look outside of the box, and lead to pivotal changes in the way future generations of technical professionals will operate.

A focus on collaboration will position consultants to compete effectively on the international stage, yet the strength of the Australian dollar will impact our pricing on the international market, constraining competitiveness.

It is vital that our managing teams support those ‘on the ground’ in providing leadership, development opportunities, and a seat at the table when undertaking client relationship activities. Our professionals must also acknowledge the great work our people contribute and the commitment they make.

Ian Shepherd Chief Executive Officer GHD

Figures from an Engineers Australia* 2011 publication confirmed that 40.8 per cent of the labour force are now aged 45 years and over and 16.2 per cent are aged 55 years and over. Almost all are men. As these older engineers retire, it will be increasingly difficult to replace them, particularly as we have fewer engineers coming through the ranks behind them.

It is critical that all firms invest strongly in the next generation of leaders, and give opportunities to younger engineers that many firms perhaps would not have considered a generation ago. One way to do this may be by ensuring there are structured leadership action groups in place that work directly with our Board on strategic projects so they can learn on the job. This will develop leaders at all levels of the organisation.

In the last five years, Hyder has introduced Design Excellence Centres in India and Philippines that support our teams in Australia, provide extra capacity when needed and provide opportunities for our younger people to work overseas.

It’s about listening to the next generation and responding to their needs now, and matching that against where we need to be strategically. * Engineers Australia, The Engineering Profession: A Statistical Overview Eighth Edition 2011.

Greg Steele Managing Director Australasia Hyder Consulting

Consulting Matters

55

Autumn 2013

We hope that you enjoy this copy of Consulting Matters magazine.

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56

Consulting Matters Industry comment

Professional Performance Innovation and Risk in South Australia The Australian engineering industry is facing a new quality test with The Warren Centre’s Professional Performance Innovation and Risk (PPIR) Protocol. I personally believe that the protocol will lead to the creation of a better understanding by clients, professional peers, government and the community of how to gain the best advantage from the application of the engineer’s skills, knowledge and experience. The focus on professional performance, innovation and risk will lead to greater recognition of engineering issues and engineering innovation, and will lead to an improvement in the relevance and quality of engineering expert advice. Widespread adoption will also surely see innovation become a driving force in Australian engineering practice.

I am proud to say that MLEI Consulting Engineers is the first South Australian and first SME practice in Australia to adopt the PPIR protocol. The PPIR is a great incentive to improve the standard of performance of engineering across the board. Our industry has changed and although engineers are skilled in providing technical aspects, we need be proactive and introduce changes to align ourselves more closely with the commercial expectations of the procurers of our services.

Nicholas Murphy Managing Director MLEI Consulting Engineers

How do we engage with Government on project funding?

Influences in the property and buildings sector

Project funding is a major issue throughout Australia as governments at all levels struggle with debt profiles that prevent them from allocating funds to much needed infrastructure. Many consultants are keen to facilitate funding of projects to get them to market by engaging third parties or in some circumstances, taking a stake in projects themselves. We are not talking about high profile mega projects, just regular community infrastructure or programs.

Looking at the key influences in the property and buildings sector for the coming 12 months, we’ve observed a number of long-term trends that are impacting our clients: urbanisation in China, India, throughout Asia and Africa; the globalisation of supply chains; and a shift into the information age where immediate demand for complex data is the norm.

Difficulties arise when governments or their agencies do not have a clear and transparent engagement framework that takes into account the needs of a potential private sector partner. These frameworks need to have processes for protecting intellectual property associated with innovative approaches, an awareness of commercial confidentiality concerns, as well as flexibility in procurement to allow partners to implement a concept without having to compete in the market for their own ideas.

Governments are relying on the private sector to participate, but have not yet established the framework and internal capacity to take full advantage of these partnerships. Sure it takes trust on both sides and value needs to be established, but a clear engagement process is the place to start.

Geoff Hardy Director, Infrastructure Advisory AECOM

We’ve noted that consultants are working on less stand-alone developments, with a trend towards more integrated facilities, particularly those that mould into the provision of infrastructure (i.e. transport hubs, terminals, community living). Combine this with client demands for smarter developments, and ‘places that work,’ and it means that the outputs from our people are more customer, or end-user focused.

We’re seeing more competition from the emerging markets of China and India, and thus are too focussed on value added services – this means providing more strategic, holistic solutions to clients, rather than traditional design documentation.

Stripped back to the design phase, the use of BIM and integrated design means that we’re developing models, not drawings, and working collaboratively across the globe, utilising virtual offices, and each contributing expertise into a single platform. This breeds surety and efficiency in the design process, helps us to become more competitive in the market, and ultimately delivers a smarter, more efficient, and more fluid built environment.

Paul Morris Global Market Leader Property & Buildings GHD

Industry comment Consulting Matters

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THE LATEST PATHWAY TESTIMONIAL SLR Consulting Australia’s range of environmental engineering and scientific services has broadened considerably over the past several years. As we continue to grow, new services are being introduced, new offices open and other consulting practices are being acquired. Our overseas work on significant international projects has also increase markedly.

As a consequence, greater focus on managing the technical and commercial risks of our multi-disciplinary service delivery was required. Significant changes to our Professional Indemnity (PI) Insurance cover became necessary. We realised that professional risk management advice well beyond that provided by a normal PI broker was required – we needed an insurance advisory service with considerable consulting industry experience.

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SLR Consulting Australia selected a broker associated with Consult Australia PI Pathway, as the services provided seemed an ideal match. The broker was able to ensure continuity of cover, broadening the scope of cover and negotiating a reduced premium. Their contract review service and ongoing staff risk management training have proven invaluable to our business, enhancing the professional standard of our client contractual relations and improving the quality of our service delivery.

SLR Consulting Australia Pty Ltd

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To get a quote please visit: www.consultaustralia.com.au/PIPathway/Default.aspx

Consult Australia’s PI Insurance Pathway gives Consult Australia members access to the PI market through a Panel of Brokers selected by Consult Australia. Consult Australia is providing a referral service only and is not providing any form of financial advice or offering a financial product. Consult Australia does not guarantee the value, price and terms of cover that may be received from any member of the Panel of Brokers. Any agreement entered into through use of the PI Insurance Pathway will be expressly between the Panel Broker and the Consult Australia member firm.

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