BFM NOV/DEC 2017

BUSINESSFIRST for Business Leaders

November/December 2017

businessfirstmagazine.com.au

THE WINNING

FORMULA

SUPERANNUATION REFORM

How Mercer is creating superannuation’s secret weapon

SHAW AND PARTNERS’ SUCCESS IS BUILT ON MERITOCRACY

Closing the gender pay gap

OutsourcedHr Solution

Why Bartercard founder Andrew Federowsky turned his attention to outsourcing

How innovation is driving small business TAKE A SPIN IN THE PORSCHE CAYENNE TURBO

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BRAND HEALTH INVESTMENT PROPERTY TECHNOLOGY WEALTH

Day trading vs the long term approach

HAWAII – AN ISLAND PARADISE WITH AN AMERICAN ACCENT BUSINESS FIRST MAGAZINE Vol 4 Issue 5

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and more

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WOMEN’S LEADERSHIP DEVELOPMENT SCHOLARSHIP A limited pool of scholarship funding has been provisioned for women readers of Business First Magazine This initiative is providing women with grants of between $3,000 & $8,000 and is allocated with the specific intent of providing powerful and effective development opportunities for women Expression of Interest is now open Find out more and register your interest prior to Friday 15 December 2017

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BUSINESSFIRST MAGAZINE

CONTENTS

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REGULARS 4 Editor’s Desk 5 News

FEATURES 14 Amazon’s arrival creates both challenges and opportunities By Chad Gates 16 Introducing the new generation of small businesses By Cathy Yuncken 18 The road to 2025: Is your customer communications team ready? By Henri Dura & Nick Dempsey 20 How to be a high growth company By Raz Chorev

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SPECIAL FEATURE – CHRISTMAS 8 How Workplaces Can Celebrate The Festive Season Without Breaking The Bank By Jonathan Rowley 10 Seasonal SEO - The top 5 tips your business needs

to optimise Search for Christmas By Andreas Dzumla 12 The Future of Retail: Five strategies retailers can use to survive this Christmas and beyond By Adam Lance

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ASIA FOCUS 32 Asia to be home to 60% of the world’s over 65s by 2030 By Deloitte

BUSINESS FOCUS 23 Wealth secrets of the rich, kind and happy By Steve and Chutisa Bowman

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30 Let’s Address Gender Pay Parity By Nicolette Maury 42 Analysing customer behaviour for retail success By John Rankin 48 What is influencer marketing and is it right for my brand? By Sharon Zeev Poole 50 Data Management: Time to check under the hood?

By Lauren Scholtz 59 Traditional law firm model is unsustainable By Dr Stephen Moss 64 The ones to watch: the biggest business risks of 2017 at home and abroad

By Lambros Lambrou 66 Top Human Capital Trends

By Jan Pacas 71 How to build an authentic brand online By Kevin Spiteri 72 Learning from the best: Cyberattack lessons from the BFSI sector By Les Williamson 74 5 Tips to Create Your Perfect SaaS Sales Cycle By Benjamin Brandall

COVER STORY The wealth management firm where everyone is a partner Wealth management is a competitive industry, but for Shaw and Partners, the key to survival and success is engagement and meritocracy.

76 Maintaining a startup, collaborative culture By Neil Blumentha 78 Is Silo-isation Stifling Australian Innovation? By Matt Whale 80 Procurement – the game is changing By Daniel Fielding 82 How to manage your business through crisis By Dean Taylor

INVESTMENT FOCUS 38 Psychology of trading By Sheldon Slabbert 56 Why Australians need an alternative approach to investments By Alan Greenstein

PROPERTY FOCUS 55 Group Buying: The Property Equivalent By Nathan Birch 63 Trends in the commercial property market By Fabian Nager

LIFESTYLE 84 Gamification: the solution to getting kids active By Dan Newton 86 Hawaii…it’s not just a destination. It’s a feeling.

By Irit and Jonathan Jackson 88 Even more 911 in an SUV: the new Porsche Cayenne Turbo www.businessfirstmagazine.com.au

BUSINESS FIRST LOUNGE

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34 HDI Sets its Sights on ASEAN Expansion

The overarching message coming out of the HDI offices is that this wellrespected global industrial insurance company is very much in growth mode, with an eye on the Asia Pacific region.

44 How the founder of Bartercard is changing the outlook for outsourcing

Andrew Federowsky, the co-founder of the world’s largest trade exchange business Bartercard has his sights set on transforming a different industry – outsourcing.

40 Education: A life long pursuit

Annabelle Chauncy OAM is the Founding Director and CEO of the School for Life Foundation. Her passion lies in developing and implementing strategy, business development and speaking to promote the Foundation.

52 Value creation creates a cultural difference

Its parent company is a Fortune 100 corporation which has been in business since 1912, so Liberty International Underwriters feels it has several advantages in the Australian insurance marketplace.

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60 Superannuation’s secret weapon

Australia’s largest and most important industry, is going through change and Mercer, one of Australia’s largest super funds, is leading the charge.

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68 Victoria University: The business school acting like a business

Victoria University is in the top echelon of business schools thinking and acting like businesses, whilst preparing students to become better leaders, managers and human beings.

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BF | EDITOR’S DESK

Have a safe and happy Christmas

BUSINESSFIRST MAGAZINE

With the festive season upon us, it is a good time to reflect on the year that was.

2017 has thrown some curveballs at businesses, but the good news is that many of them have processes in place to survive any downturns, whilst thriving when economies are strong.

Some of the things to note this year have been the cycle of elections and their effects on policy: from Trump to Macron to Austria’s Sebastien Kurz and Catalonia’s declaration of indepedence, changes in governments have had and or will have serious implications for internal and external policy.

Even New Zealand has got in on the act voting on a coalition government made up of parties that seem at immediate odds with each other. New Zealand First leader Winston Peters will ask a lot of new Prime Minister Jacinda Adern including cabinet posts, a crackdown on foreign ownership of residential and farm land and deep cuts to migration, particularly of low-skilled temporary workers.

How will this coalition affect NZ business, only time will tell.

Meanwhile, we can point to Germany’s current account deficit, tightening of monetary policy, credit slowdown, the counter reaction to globalisation and the final nail in the coffin for Australian manufacturing with the closure of Holden, as issues that could have significant impact on the business landscape.

I’m only touching the surface here, but you get the picture that this has been a big year in business and politics.

This issue’s featured businesses, are part of the aforementioned group of companies that have processes in place to survive anything that may be thrown at them economically.

Take Bartercard founder Andrew Federowsky for instance. Federowsky built a global business that has survived many ups and downs and has now turned his attention to the resourcing industry, where he hopes to achieve similar success. His never-say-die, always stay positive attitude is one pillar of his success, but Federowsky also knows how to expand businesses when the naysayers come knocking.

Mercer is one of the biggest superannuation providers in the world and is working with government and businesses to ensure the wealth of its customers and indeed the country continues to improve. Here’s a company with a keen eye for customer satisfaction.

Wealth management firm, and subject of today’s cover story, Shaw and Partners, is also driven by customer satisfaction. Co-CEOs Allan Zion and Earl Evans believe you get the best out of your business by running it as a meritocracy. They make some very valid and important points about stakeholder engagement and how a meritocratic approach can transcend any economic environment.

Also featured in this issue are Victoria University Business School, Liberty International Underwriters and insurance solutions provider HDI Global.

If you are looking for somewhere to travel these holidays consider Hawaii and if you have a bit of spare cash and a penchant for Porsche, the new Cayenne is coming.

We look at a range of issues including surviving the post Christmas downturn, cybersecurity, HR management, property investment, short term vs long term trading and much, much more.

So, as you begin to wind down flick through the pages of Business First, take a load off and take that well deserved break.

From all of us here at Business First, be safe and have a happy holiday.

When you finally take that break in mid to late December, make sure you make the most of it.

Jonathan Jackson Jonathan Jackson Editor, Business First Magazine

www.businessfirstmagazine.com.au PUBLISHER Alan Hyman EDITOR Jonathan Jackson SUB-EDITOR Judy Hyman MEDIA & Jake O’Donnell COMMUNICATION Gavin McCullough WRITER Leon Gettler DESIGN Gino Hawkins PRODUCTION Caitlin Lacy Bonnie Weigang Head Office Level 1, 33-35 Atchison Street St Leonards NSW 2065 Australia Advertising enquiries Phone: 02 8416 5294 Email: bfadvertising@amgroup.net.au Subscription enquiries Phone: 02 8416 5294 Email: bfsubscriptions@amgroup.net.au Contributors Nathan Birch, Benjamin Brandall, Stuart Craig, Henri Dura, Andreas Dzumla, Daniel Fielding, Chad Gates, Alan Greenstein, Lambros Lambrou, Adam Lance, Stephen Moss, Fabian Nager, Jan Pacas, Sharon Zeev Poole, John Rankin, Jonathan Rowley, Lauren Scholtz, Sheldon Slabbert, Kevin Spiteri, Dean Taylor, Matt Whale, Les Williamson, Cathy Yuncken Associated Media Group Pty Ltd ABN 68 123 058 926 Copyright ©2017 Associated Media Group amgroup.net.au DISCLAIMER Readers are advised that Business First Magazine and Associated Media Group (AMG) cannot be held responsible for the accuracy of statements made in the advertising. Opinions expressed throughout the publication are the contributors own and do not necessarily reflect views or policy of Business First Magazine or AMG. While every reasonable effort has been taken to ensure the accuracy of the information contained in this publication, AMG takes no responsibility for those relying on the information. AMG and Business First Magazine disclaim all responsibility for any loss or damage suffered by readers of third parties in connection with the information contained in this publication.

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BUSINESS SNAPSHOT | BFM

Dirty deals affect innocent Aussies The purchase and rebrand this month of a successful, $27.5 million (annual revenue) company for only $6 million has highlighted the ramifications of Australia’s pro-creditor laws and how easy it is for an administrative error to bring down one of Australia’s corporate success stories.

An opportunistic insider of Welldog Pty Ltd (WDPL), which holds the premier downhole pressure monitoring supply contracts for CSG in Queensland, has carried out a premeditated, hostile takeover of the company, which resulted in the purchase of the company at a fraction of its value by its new namesake, Qteq.

Simon Ashton forced Welldog Pty Ltd into administration using insider knowledge and sensitive information, with many investors and suppliers demanding answers and reparation of the damage done to the company.

Ashton and his “Q Group”, a contrived name of a faction of WDPL’s directors, accelerated debts and refused payments in order to purchase the company off Ashton’s close friend, Bryan Hughes, who he appointed as the receiver.

Importantly, the failure of the company’s then-appointed law firm to respond to a statutory demand in time allowed the Q Group to finally advance a hostile takeover of WellDog by appointing a receiver after years of collusion and foiled attempts.

The takeover has left many shareholders, suppliers, customers and employees wondering how an administrative error, caused by a multi-national law firm, could make it so simple for a relatively minor financial stakeholder to take over a multi-million dollar company.

Welldog spokesperson Greg Quinn said the Welldog story made for a cautionary tale of the takeover “habit” that existed in Australia.

“Australia has most of the ingredients for a robust entrepreneurial ecosystem, except for the fact that the laws have not evolved to accommodate this private venture capital type of investment,” he said.

“So what we have is a situation where high-risk, high-reward private venture lenders are able to have the same rights as a low-risk institutional lenders such as banks.

“Combined with low or no court overwww.businessfirstmagazine.com.au

sight of receivers, you have a scenario where a comparatively minor investor is able to continually attempt a hostile takeover scheme, as has happened in this case.

“Little discussion has been had about the impact of hostile takeovers on shareholders of these companies and how a situation like this is unique to Australia.”

Mr Pope came to Australia in 2010 with only $10,000 to launch WDPL, which provides technical solutions to assist the coal seam gas industry by becoming more economically and environmentally sustainable.

Its customers produced 15 per cent more gas, worth about $500million in the last year alone, due to WellDog’s products and services.

GSTC claims the Q Group breached their Code of Conduct and fiduciary duties by depriving the company of opportunities to sell its shares that would have benefitted all shareholders.

The principal address of business for WDPL’s new owner, Qteq, is the same as that of other companies of Simon Ashton, a former director of GSTC and insider to WellDog Pty. Ltd., who was a member of the GSTC board during the time the debt was issued and during the very time he claims WDPL became insolvent.

Ashton has now purchased WDPL off

his close friend, Bryan Hughes, who he appointed as the receiver.

Ashton invested $1 million in equity in 2011, with the rest of the funding from him occurring via loans that required heavy warrant coverage, and repeatedly promised, including in May 2016, to not seek repayment of the debt until the company was able to make that payment.

An extension granted by Ashton in July 2016 was made with the understanding that the company would seek equity funding in order to repay his debt, until the Q Group interfered with the company’s ability to do so by issuing default notices, hindering potential investors, accelerating the debts and refusing payments.

WDPL was, in fact, never insolvent, with an independent report confirming this was the case as recently as February 2017.

Since its inception, WDPL’s parent company, GSTC, provided financial support to the tune of more than $22million through capital injections, loans and operational support, and reinvested all of WDPL’s profits back into the growth of WDPL, allowing its Queensland-based team to expand from two employees in 2011 to 75 employees in 2016.

More than $2 million of those funds remain outstanding after seven years.” BFM

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BFM | BUSINESS SNAPSHOT

A new blockchain-based renewable energy solution Tasmanian renewable energy company, Nest Energy and West Australian blockchain energy technology company, Power Ledger have joined forces to bring a new, high-value model of distributed renewable energy generation to Launceston.

The Merino Street Project will see 1 megawatt of solar panels installed on commercial roof-tops with energy traded between customers in the commercial precinct.

Trading energy between customers allows the investors in roof-top PV to maximise the scale of their investment knowing they can sell their excess energy to their neighbours for a healthy return.

The project will be the first of many in Tasmania with Power Ledger and Nest agreeing to a partnership arrangement that will see Nest offering the energy plus trading product to Tasmanian customers under exclusive terms.

Power Ledger managing director, David Martin said; “Coupling on-site renewable energy generation with peer-

to-peer trading allowed businesses the opportunity to maximise the value of their renewable energy investment while sharing the benefit with neighbouring businesses.”

“In a commercial precinct like Merino Street, not all customers have access to sufficient roof-space to install their own solar panels, but using the Power Ledger trading platform, they can now buy clean, low-cost energy directly from their neighbours,” Mr Martin said.

“Energy trading changes the value proposition for businesses installing roof-top PV; not only do they save money from reducing their exposure to retail energy prices, they can earn a healthy return selling their excess power, in effect, monetising their unused roof-space,” he continued.

Power Ledger uses world-leading blockchain technology to create an immutable record of energy generation and consumption allowing consumers in strata-titled developments to buy and sell energy among themselves with

confidence.

Managing director of Nest Energy, Mark Barnett said large scale solar on commercial premises was a costeffective way for businesses to reduce their energy costs. “Solar generation has a great correlation with business hours so can help businesses reduce their reliance on expensive gridsupplied energy,” he commented.

“Solar already has a great pay-back for customers but adding the ability to sell energy to your neighbours really makes installing solar make a lot of sense. It makes even more sense if a business operates five days a week because they can sell most of the power they generate on weekends to neighbouring businesses who are open on weekends,” Barnett concluded.

The Merino Street Project will be the first time Nest and Power Ledger have come together to provide the energy plus trading project in Australia and is an Australian-first for peer-topeer traded energy in a commercial precinct.” BFM

Business confidence: SMEs feeling optimistic despite rising costs The Westpac-Melbourne Institute SME Index (the Index), which examines the economic health of Australian small and medium sized enterprises (SMEs), shows business confidence rose by 3.2 per cent in the third quarter of the year. The Index shifted above the 100 neutral mark for the first time this year, rising from 97.6 in Q2 2017 to 100.7 in Q3 2017[1].

Business confidence continues to be anchored by a positive outlook for future conditions, as SMEs reported weak current conditions, dropping 3.2 per cent since last quarter. The detailed survey responses suggest the slight decline in sentiment towards current conditions reflects continued pressure on profitability and increases in overheads and costs.

Despite another challenging quarter, SMEs are strongly optimistic about future conditions as they approach the holiday season. As expected, consumerfacing industries such as Wholesale & Retail Trade and Hospitality & Recreation Services were among the most optimistic. However, other sectors such as Manufacturing and Health & Aged Care Services also reported higher levels of confidence.

Westpac Senior Economist, Matthew

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Hassan said: “It’s pleasing to see uplift in business confidence, regardless of difficult current conditions.

“Australian businesses appear to still be optimistic and planning for the year ahead. SME owners expect to see the number of staff in their business grow within the next 12 months, and the Index found a large number of SMEs are continuing to increase their levels of investment.”

This quarter saw particularly strong gains in sentiment across two major states, with an increase of 25.7 per cent in Victoria (101.4) and 8.3 per cent in New South Wales (109.1). Falls in confidence were reported in Queensland (down 11.2

per cent to 93.9), Western Australia (down 18.8 per cent to 90.1) and South Australia (down 17 per cent), which recorded the lowest Index reading of 84.1.

“The state results continue to show a very uneven profile with the wedge between strong and weak widening materially over the last quarter. Some of this likely reflects developments in the housing sector, with fears of a hard landing in NSW and Victoria easing somewhat, and conditions in Queensland and Western Australia failing to meet earlier expectations of a recovery,” said Mr Hassan.

“Pressure from rising overheads and costs is also a common theme across all SMEs. The state detail here suggests the underlying concern is around recent sharp increases in energy costs with SMEs in South Australia – the state being most heavily impacted by energy concerns – reporting particularly high levels of concern.”

Across industries, the SME Index was strongest for the Professional Services sector which rose 10.7 per cent (115.3), Manufacturing (112.3) and Wholesale & Retail Trade (104.7), with each sector expecting business conditions to improve over the coming months.BFM

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BUSINESS SNAPSHOT | BFM

AUSTRALIA’S TOP MBA COURSES RANKED AND REVEALED

• The University of Sydney tops The Australian Financial Review 2017 BOSS MBA rankings – taking out #1 for the first time • Schools from NSW, QLD, VIC and SA all appear in the rankings • The Melbourne Business School drops to #3 (continuing a decline after topping the list in 2009 and 2011), with the University of Queensland Business School falling to #2 after holding top spot since 2013.

• The value-for-money category sees Melbourne Business School back at #1, followed by the University of Sydney Business School (#2) and University of Southern Queensland (#3).

• The University of Sydney also rates highest for student satisfaction, followed by UQ Business School (#2) and Melbourne Business School (#3).

• La Trobe University ranks highest in terms of research output, followed by Adelaide Business School – University of Adelaide (#2) and Griffith Business School - Griffith University (#3).

• UQ Business School (#1), the University of Sydney Business School (#2) and Bond Business School (#3) take out the top three spots respectively for improvement in skills.

• The Australian Financial Review BOSS MBA report also reviews the $100K MBAs, revealing what students receive when they invest a six-figure sum, as well as interviewing the Deans of Australia’s top business schools about how they’re primed to adapt to growing demands for change.

• There are a total of 16 Business schools on the list.

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• There are 2 Business schools in the Top 5 of the list for the first time. They are Adelaide Business School - University of Adelaide and the University of Sydney Business School which premieres in top spot.

The University of Sydney can stake claim to Australia’s top MBA course – both overall and for student satisfaction – according to the 2017 BOSS MBA rankings, out today in The Australian Financial Review.

The University of Sydney takes the coveted #1 spot for the first time since BOSS started compiling and publishing the report in 2003.

The bi-annual report, last released in 2015, ranks MBA programs nationally and is considered a must-read, independent review, providing vital insight for anyone considering MBA study in Australia.

The 2017 report sees the Melbourne Business School drop to #3, after last topping the list in 2011, with the University of Queensland Business School falling from #1 where it stood since 2013, to #2.

Among executive MBA courses QUT Graduate School of Business was ranked first, Melbourne Business School second and the University of Sydney Business School third. Executive MBAs compress teaching into modules allowing minimal time off work.

BOSS found the Melbourne Business School to offer the best value-for-money MBA course nationwide, followed by the University of Sydney Business School (#2) and University of Southern Queensland (#3).

As part of a special analysis that will accompany the MBA rankings in today’s issue of BOSS, the magazine reveals a growing push for course revamps in order to meet the changing demands of employers, recruiters and students.

The in-depth study, the culmination of months of work by the Financial Review’s research team, also highlights growing demand for MBAs among international and undergraduate students.

Demand from domestic postgraduate students, on the other hand, was found to be shrinking, especially for full-time MBA programs.

“We have found that many MBA programs, which can cost upwards of $60,000, are undergoing extreme makeovers, with greater emphasis on creativity, critical analysis, interpersonal relationships and a systems-approach to problem-solving. These courses are very different to the norm of 20 years ago when traditional subjects such as accounting, marketing and organisational change were the focus,” said Joanne Gray, Editor of BOSS magazine and Leadership at The Australian Financial Review.

“If you are one of the many thousands of people starting an MBA, or if you are thinking about doing so, we hope the 2017 BOSS MBA and EMBA rankings offer some valuable insights,” added Ms Gray.

The ranking process for the 2017 BOSS MBA rankings began late last year, when the database of MBAs offered by business schools in Australian universities and other higher education providers was reviewed.

Business schools were invited to comment on the methodology and minor changes were made in 2017, including the EPAS accreditation and the allocation of points to schools that include a formal project with an external organisation to solve a real-life business problem.

The data for the ranking report is captured via participating schools answering a detailed questionnaire, as well as a survey that goes to alumni who have graduated in the past three years. The survey asks them about their satisfaction with the course and level of improvement they felt it had made to their business skills, as well as whether they considered their MBA value for money.

The full 2017 BOSS MBA rankings are available in today’s copy of BOSS magazine, in The Australian Financial Review, as well as online at afr.com.au” BFM

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BFM | FEATURE

How Workplaces Can Celebrate The Festive Season Without Breaking The Bank No one will deny the corporate year is stressful, as Australians spend 40.7 hours a week at work on average nationwide, and that’s not including the extra time spent in unpaid overtime staying back late, working through breaks, taking work home, working while in transit or answering emails out of hours. Workplace Christmas celebrations are an established custom in the corporate world, and serve as a reward to employees for the hard hours they log throughout the year. By Jonathan Rowley

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nless you’re a cash-loaded Silicon Valley company, planning an end-of-year bash does require meticulous financial planning and budgeting. What I’ve, reassuringly, observed over the years is that companies don’t necessarily have to break the bank to do something special for their staff.

Try these four effective suggestions for you and your colleagues to celebrate Christmas at work, have a fantastic time and balance out your cheque book.

1) Introduce a New Tradition A Deloitte survey found that nearly 80 percent of executives rate employee experience as very important. Companies that have a positive culture also have a better chance of retaining their best talent.

Consider introducing a new tradition and make it a part of your company culture. At Order-In, for instance, my kids write cards and select gifts for my employees’ kids. It really reiterates the importance of family and the spirit of “giving”. I also like to give all my staff a box of sweet mangoes or cherries and a bottle of champagne every Christmas – it’s quintessential Australian and the true taste of summer!

Think about your industry, brand identity and culture. What can you do at Christmas time with your employees that’s enjoyable and great for the company social media profiles?

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It doesn’t have to be an expensive activity and this is where you can balance out your budget. Anything from a company movie night in the boardroom and a baked goods competition, to cookie decorating and the best handmade Christmas Card competition will do the trick.

The point of introducing a new tradition should always be to bring your employees closer together, with cash savings as the sideline benefit.

2) Volunteer For Charity The core ethos of Christmas is kindness and thankfulness. The “giving” aspect of Christmas is heavily commercialised, but it wasn’t always so. As a business, you can participate in the traditional spirit of “giving”, and volunteer at a charity service. It costs you very little, only some time.

What’s more, numerous surveys have found that most people say they would be happier in a job where they can make an impact.

You can approach a charity activity in one of two ways. My advice would be, and I have found this to work brilliantly in the past, is to choose a charity service relevant to your industry. The Order-In team, for example, participate in The Salvation Army Christmas Appeal every year.

3) Catered Office Christmas Party Businesses may feel compelled to choose an expensive

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FEATURE| BFM

venue or restaurant because that’s the norm. However, done smartly, the office can serve as an intimate and convenient option to host a celebration event. Don’t forget that the office can be social too!

This year consider staying in the office, decorate it to your satisfaction and use what you would have paid to a venue to order some delectable catering instead.

The Order-In online portal allows you to choose from a range of caterers and there’s virtually no limit to how creative you can get. You could opt for the conventional Christmas barbeque by the beach or park with party games and entertainment for a festive atmosphere. If most of your staff members have kids, consider having a jumping castle or face painting booth.

We’ve found that keeping Christmas at the office can save your company a hefty bill without sacrificing the quality of the food or experience. The money you save can be channeled into buying gifts or awards for staff!

4) Secret Santa An oldie but a goodie, you absolutely cannot have Christmas at the office without a Secret Santa. It takes the pressure away from the gift purchasing process, and those who lack the funds to purchase gifts for their entire team will also be thankful for this exercise.

No one likes to miss out, or for that matter exclude someone. Secret Santa ensures everyone gets a gift, and can participate in the popular ritual of gift opening.

HOW WILL YOU CELEBRATE CHRISTMAS THIS YEAR? As you review your company cheque book and plan Christmas activities, ensure this year’s finances align with your intended itinerary. Just remember to plan new lower key activities with three things in mind: company culture, your office space as an invaluable and free resource, and the real spirit of “giving” at Christmas. BFM Written by Jonathan Rowley, the Managing Director of Order-In. He is a pioneer of the food-tech industry, and regularly takes part in charity initiatives, including the CEO Sleepout, OzHarvest CEO Cookoff, and The Smith Family Challenge.

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BFM | FEATURE

SEASONAL SEO

- The top 5 tips your business needs to optimise Search for Christmas It pays to think ahead and Christmas is right around the corner! It may not feel like it but you are running out of time to optimise your Search strategy.

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lthough Search is not a channel to drive awareness, if your business is one that benefits from the shopping frenzy over the holidays, the time to take advantage of this “always-on” channel is now!

THE BEST TIME TO START YOUR CHRISTMAS CAMPAIGN IN SEARCH WAS LAST YEAR Although September is months away from Christmas, by the time you have determined your ideal key words list with the optimal CPC to maximise sales for your target ROI, it’s Boxing Day! Retailers should be prepared to optimise against a moving target as user searches fluctuate in the leadup to Christmas, while most of all your competitors are making constant budget and CPC changes.

The best preparation for any seasonal user search behavior and competitor bid changes is to look at last year’s performance in the lead-up to Christmas.

If you have two or more years of seasonal data, even better! Overlay as many years of data as possible, consider both number of days to Christmas and day-of-the-week, and build a model for expected traffic, CPC, revenue and ROI to inform your campaign optimisation, budget and revenue run-rate for this year’s festive season.

THE BEST CHRISTMAS CAMPAIGNS ARE YOUR ALWAYSON, LONG TAIL, CAMPAIGNS The Christmas campaign is the Super Bowl of the competition – and if you haven’t played in the regular season and collected learnings from it, how can you do well in the Super Bowl?

Your always-on, search campaign throughout the year gives you all the data you need to make the best decisions on where to spend your extra Christmas campaign budget for the best ROI. Categories that work well, keywords that have high ROI, keyword variations that are broadly related, but just don’t convert into sales – key data you need to know.

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And the more long tail keywords you actively target – key phrases of three or more words where users search for something very specific – the better informed you are on actual user search behaviour and your site’s performance for all the different variations of keywords that describe your products.

TARGET THE ‘CHRISTMAS LONG TAIL’ There are indeed some very Christmas specific keywords, which you can make work for or against you. These can work against you while spending a lot of money with little return, if you bid on keywords like “Vegan hampers Bondi”, “Christmas vouchers for dogs”, “Xmas gifts for him / her/ mum/ dad”, “Christmas gifts for under $100 that look expensive” which land the user on generic landing pages, or worse, your homepage!

You can make these seasonal keywords work for you, if you land the users on tailored landing pages with exactly the relevant content and most importantly, relevant product lists (your users want to buy, not read) for the exact context of the keyword. All your vegan hampers, all your gift ideas for him/ her/ mum/ dad that look more expensive.

Before you start investing in landing pages, consult AdWords Keyword Planner for actual search volumes for the individual keywords and check your last year’s search term report to see volumes and past performance.

USE YOUR SHIPPING INFORMATION AS ‘URGENCY MESSAGE’ One of the few marketing ‘tricks’ that are proven to be effective on search landing pages, is the urgency message. A very simple and credible, even useful, way of creating an urgency message is showing the expected delivery date – Amazon is a genius in this!

“Order within the next 2hrs and receive the product by date XYZ”. In a Christmas context, it’s valuable and effective to tell your customers when they can

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FEATURE| BFM

last order to receive their products in time before Christmas.

You can further tailor this by user location and different shipping speeds in Australia by state, metro vs. regional and shipping options (standard, express or courier). Of course, this does not only work for Christmas, but all year round.

SEO FOR CHRISTMAS, DON’T REINVENT THE WHEEL If you have built Christmas-specific landing pages that rank for SEO, don’t build a new one every year – keep the URL and update the content. Data history like back links, traffic and usability stats for a specific URL is of high importance for SEO ranking. By creating new URLs each year, you lose all history and the pages’ past performance credit with Google.

If you have pages that refer to the current year, like “Top Christmas gifts 2017”, then you obviously need a new URL every year. In that case, make sure to

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add a 301 redirect from your 2016 version (and older versions) to the most recent one. While 301 redirects don’t pass on all ‘link juice’, ‘SEO history’ for Google, they do pass on around ~90% of it – and nobody will miss the page or content for “Best Christmas gifts 2009”.

Make this Christmas count for your business, and always think about the ultimate goal in Search - just like in-store, it’s customer experience. If a user asks for “Christmas gifts for dad under $50”, take them by the hand and lead them to the relevant product section – don’t just point them in the general direction. Just like you would train your in-store staff to do. BFM Andreas Dzumla is ex-Googler and Cofounder of Longtail UX, a patented SaaS platform that enables businesses to better convert the Longtail of search into sales.

For more visit www.longtailux.com.au

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BFM | FEATURE

THE FUTURE OF RETAIL:

Five strategies retailers can use to survive this Christmas and beyond The impending arrival of Amazon has spelled doom and gloom for Australian retailers – or so it would seem. By Adam Lance, The Village of Useful

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he bricks and mortar retail model that predates even bricks and mortar was chugging along nicely until along came the Internet and e-commerce. Customers flocked to the convenience, range and value of online shopping. Website design and user experience became the weapons that

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e-commerce used to pull customers into digital environments, away from traditional retailers.

But the battle is far from lost. According to US study

by CBRE, 70% of Millennials prefer a bricks and mortar experience and the Millennials have now taken over from the Baby Boomers as the biggest retail spenders.

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FEATURE| BFM

Traditional retailers need to consider how they can beat e-commerce at its own game by building on their inherent strengths and prioritising online’s own biggest weapon, user experience (UX).

Here are five UX strategies traditional retailers can use to play to their strengths and exploit online’s weaknesses.

1. Make immediate more immediate. The online environment allows customers to choose from a huge range of products from a multitude of retailers, but waiting is a definite pain point. People want their stuff now! Amazon Prime Now offers members free delivery on thousands of items within 2 hours. Traditional retailers wanting to win in User Experience would ask themselves, “how do we blow 2 hours out of the water?” Utilising programs such as ‘click and collect’ allows customers to buy online and pick up in store. New Melbourne department store, Debenhams has developed its own app that enables customers to pre-select items they wish to try on in store. Other plays retailers could make would be to introduce pick-up bays that are open after hours or 24 hours, they could streamline the process where a sold out item is sourced and delivered within the hour from a sister store - these moves may be costly at first but the long game is changing expectations of customers back to now.

2. More touch, more feel. Customers still prefer to touch and feel, to try before they buy - or use. Many people have experienced buying clothes online only to discover that they don’t always live up to the online images. This results in a disgruntled keep (where the item is kept in the closet, unworn) or the hassle of the return and the wait for the replacement purchase. A better customer experience would involve feeling it, tasting it, wearing it and retailers need to embrace it. Cosmetics retailers have been traditionally good at allowing customers to use ‘testers’, samples that women could apply with the help of a beauty consultant to really get a sense of how it works for them. Used car retailer, Carzoos has opened innovative stores in Westfield allowing customers to pick their car up from the store, drive it for seven days and just hand it back if they don’t love it. Traditional retailers need to work harder to get the products they sell into the hands of their customers.

3. Design unique experiences. A customer could enter most shopping centres from Perth to Sydney and know 80% of the stores on offer. Too little attention has been given to designing a retail experience that is uniquely localised. Platform is a small shopping mall in Culver City, CA. A great deal of thought has been put into designing a customer experience that is unique to the Platform location. They have deliberately avoided tenants you’ll find in every other mall across the country. The result is a destination mall that is defying the odds and the revenue.

Platform’s tenants are earning sales per square metre

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at 5x the industry average. Global retailer, Pepkor has just opened the aforementioned, Debenhams store in Melbourne. At 3300 sqm, the store has a much smaller footprint than a David Jones and Myers and instead relies on more careful curation of brands and individual items. This is about understanding the local customer better, adjusting faster and stocking fewer, more tailored products.

4. Make it more of an experience. Customers do not want to feel like they’re in an online store. Before it went bust, Toys”R”Us was a large, drab space filled with thousands of items and void of excitement or joy. The retailer could have considered a Nerf gun range, magicians performing magic (from sets sold in-store) or created small film sets that children could use to create Beanie Boos films (a quick look on Youtube will confirm their popularity). The online environment cannot deliver this thrilling shopping experience. Retailers must, more than ever, create an experience that draws on more of the senses.

This is the responsibility of the retailers themselves and the centres in which they reside. The Mall of America in Minnesota has an underwater aquarium and Xanadu mall in Madrid has a ski slope. Not all centres can go to that extent, but they can create more thoughtful socialising spaces than the average food court - Westfield’s 8 Street Food market in Garden City, Brisbane is a good example of creating a more interesting and unique sensory experience.

5. Flip the script. Take the online retailer strategy of ‘buying bricks and mortar for distribution strategy’ and flip it on them. Amazon’s purchase this year of Wholefoods for the benefits of fulfilment was well documented and caused huge waves within the retail industry. Overnight, the online behemoth solved its distribution challenge. But the strategy is already getting some pushback from traditional retailers throwing around their weight. In the USA, retailers and, more importantly, big tenants like Target and Best Buy are leaning on their landlords to restrict what goods can be distributed from the Wholefoods store with whom they share mall space.

This is a start, but they would be well placed to take it further and flip the model. Traditional retail should be looking to acquire online retailers that are succeeding as a result of a beautiful customer experience. These sites will offer a sales channel from which they can use their current stores as an improved fulfilment model. The flip model has begun in the US with Nordstrom buying Haute Look and Bed, Bath & Beyond purchasing furniture site, One Kings Lane.

The foundations for bricks and mortar retail must still withstand continued aftershocks from the online quake, but the news is far from all bad. Prioritisation of user experience is how online retailers won the advantage, but this same prioritisation is how traditional retailers will win the advantage back. BFM

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BFM | FEATURE

Amazon’s arrival creates both challenges and opportunities Amazon is arriving at last. After years of rumours, the online retail giant, which turned over $US136 billion in revenue and accounted for 43 per cent of the US online retail market in 2016, is finally setting up its shop in Australia. Chad Gates, Managing Director, Pronto Software.

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he company has confirmed its local fulfilment centre is based in Dandenong, Victoria; a fact that should cause concern among Australia’s major domestic retailers, particularly department stores. According to a 2017 Morgan Stanley report – The Amazon Effect in Australia – the local emergence of Amazon is anticipated to strip $800 million in earnings from chains such as Harvey Norman, JB Hi-Fi and Myer.

The report estimates Amazon will generate as much as $12 billion in Australian sales by 2026, and will gain 15 per cent of the department store market in the same time frame. Other retailers aren’t any less immune to the Amazon effect. Morgan Stanley predicts the online giant will have 5.6 per cent of the furniture and hardware sector, and 6 per cent of the domestic office

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supply market in the same time period.

The establishment of the Dandenong logistics centre, and the suggestion more could follow, indicates Amazon will place great priority on speedy, inexpensive deliveries to Australian consumers. The company’s logistical might is something local retailers will struggle to match, particularly if Amazon launches its Prime membership service. Consumers in the US pay $US99 per year for free, next day deliveries.

On top of free delivery, Prime members also get free access to Amazon’s music and video services, all of which serve to keep customers in the Amazon ecosystem.

Is it all bad news?

Australian retailers have reacted to Amazon setting

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FEATURE| BFM

up shop with a mixture of feelings, from outright fear to defiance, or that the company will have a limited effect on their business. Gerry Harvey, founder of the Harvey Norman chain, has described Amazon as “Attila the Hun” in terms of its market behaviour. In the same breath, however, he has said that he would match Amazon’s pricing, and that Amazon will find the Australian market tougher than in the US due to high wages, the expanse of the country, and the associated higher costs of delivery.

“We will be out there fighting them like no American retailer has ever fought them,” Mr Harvey said. “At Harvey Norman our skill sets have been built up over 35 years. You can’t do that from scratch, as you run into so many obstacles. That’s 100 per cent guaranteed they will run into trouble.”

Despite Mr Harvey’s bravado, the likely reality is that Amazon will have an impact on Australia’s major retailers. However, with challenges come opportunities, especially for small and specialist retailers.

In the US, a significant portion of Amazon’s business, and the products it carries on its shelves, are provided by third-party players. Businesses use

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Amazon as a marketing, warehousing and logistics agent, giving them the scope and reach that they would not have if they tried to master those skills on their own.

That fact suggests small and specialist retailers will also have the same opportunity in Australia, gaining a market reach and distribution capability they have never had before. Amazon has been quiet in Australia about the role of third-parties, but if the US model is anything to go by, small retailers will find a place at Amazon here.

Third-party retailers also don’t need to exclusively rely on Amazon. Amazon could become an additional – and potentially lucrative – channel serving to augment their existing ecommerce and bricks and mortar retail efforts. Providing an additional channel to Australia’s small and medium sized businesses has to be a good thing, adding revenue and giving them virtual shelf space they would not be able to obtain anywhere else.

Of course, the challenge then is how to differentiate and not just compete on price.

This multichannel approach for Australia’s small and medium sized retailers also means they will need to have their digital houses in order. Back-ofhouse software including logistics, supply chain and manufacturing technology all needs to be state of the art, and have the ability to seamlessly link in with Amazon’s retail, wholesale and logistical operations.

Along with small and medium sized businesses, consumers will also benefit from a wider range of products being included in Amazon searches.

According to financial services firm Raymond James, Amazon is the starting point for 52 per cent of ecommerce searches, compared to 26 per cent for search engines. If this behaviour is mirrored in Australia over time, Amazon could become the first port of call when a consumer goes online looking for particular goods. It will be interesting to see Amazon’s impact on e-Bay as they inevitably fight for search result rankings.

All this points to what could be a boom for small and medium sized retailers and producers. The reality of Amazon’s first foothold in the Australian market is that big retailers will be impacted, but such competition should propel them to enhance their operations to offer a more premium customer experience than before. However, consumer choice – at least in the range of products, and the logistics needed to deliver those products – will blossom. With challenges and competition come opportunities for innovation and growth, and it is those Australian retailers that embrace Amazon’s arrival into Australia, that won’t get left behind. BFM 1

http://www.theaustralian.com.au/business/companies/

gerry-harvey-wages-war-on-amazon/news-story/ aef4ec39d77d22657b2f60ed35ff0836 2

http://www.adnews.com.au/news/amazon-s-arrival-threatens-

google-s-grip-on-ecommerce-search

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BFM | FEATURE

Introducing the new generation of small businesses The growing demands of today’s consumer, along with the changing face of leadership, have influenced an influx of inspiration and ideas that is transforming the way we do business; forming the next generation. Cathy Yuncken, General Manager Business Bank, St. George Banking Group.

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he small business sector continues to be the engine room of the Australian economy, increasingly driving innovation and new ideas. Moreover, the savvier smaller businesses are embracing a social purpose, as well as a commercial imperative.

Small business is where innovation transpires, where risks are taken and where new business opportunities are generated and fostered. We see this across every type of small firm from microbusinesses, which may be a sole trader or three people starting a business in their kitchen, all the way through to large, private, multi-generational family businesses.

Innovation is embedded in what we do at St.George.

Being the first bank in Australia to launch internet banking in 1999, and the first bank globally to introduce touch fingerprint I.D. to login into an account, thinking outside the box is our temperament.

So we’re serious about seeing Australian businesses innovate and grow stronger, and we have a huge focus on helping business owners thrive in an environment of constant change.

The St.George Kick Start grants program is one way we do that. It’s an opportunity to support growing established businesses as well as fantastic new enterprises on their path to success, and help bring to fruition the next generation of ideas showing promise for a sustainable future.

We recently held the finals for the 2017 Kick Start program in front of a huge crowd at TEDxSydney.

This is an incredible annual showcase of ’ideas worth spreading’ and we were delighted to be able to position the program at the centre of this inspiring event.

During a ‘fast pitch’ competition, six established and six start-up firms pitched their business idea to go in the running to win one of two $40,000 grants for the winners and one of two $10,000 grants for the runners up.

We saw some incredible ideas from businesses that have the drive and knowledge to disrupt a diverse range of industries, including in health, agriculture and construction.

Patch’d Medical, this year’s winner of the new business idea category, is a good example of a business driving both a social and commercial purpose.

It has developed an app to collect a patient’s vital signs. In the future, Patch’d Medical aspire to keep many thousands of people outside the hospital

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system, rather than see them occupying a hospital bed so their vital signs can be recorded.

The winner in the new idea for an existing business idea category, Molten-Labs, is another example of a flourishing business with a social purpose. The company will spend its grant to further develop robots to detonate the millions of land mines all over the world that kill or maim more than 20,000 people a year. Molten-Labs and its purpose align really well with St.George’s values to help enterprises grow.

I was fortunate to be one of the judges for this year’s Kick Start awards. We were looking for businesses with a clear need and associated market opportunity. We wanted to see out-of-the-box thinking and we needed to be satisfied the grants would help the recipients in the next phase of their business growth.

More importantly, we needed to understand how the money would help their business grow stronger.

The strength of their 60-second pitch was the final criterion.

FUTURE FOCUS Of course, it’s not only the businesses that entered Kick Start this year that are innovating. Across our business, many of the small businesses we serve are forging important paths.

At the end of the day, small business owners are looking to manage two critical resources: cash flow and time. As they do this, many are actively looking to understand opportunities to leverage digital technologies to better serve their customers, and to ensure their business is more efficient.

To help save time, business owners are using new technology to assist them to be more efficient, manage their customer data more effectively, deliver products and services more effectively and enable customers to more easily access their capabilities and services.

When it comes to cash flow, technology is assisting many firms to manage cash flow cycles and invest back in the business to grow and continue to carve out a sustainable place in the market. As a bank, our focus is on how we can help our small business customers to better manage their cash flow.

Another emerging trend we are seeing is small businesses looking for new connections to help them be more successful. They also want to access, capture and translate the wealth of information out there into insights that help them make their business more successful. Concurrently, information overload and

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FEATURE| BFM

navigating the complexity of connections remains challenging.

At St.George, we help customers connect with industry partners to assist them to simplify the challenge of navigating myriad networks. Likewise, we can assist them in translating the plethora of information available in a way that supports their businesses.

This allows us to support the next generation of successful businesses so that they operate to their full potential. This includes simplifying the way customers are served, as well as identifying and satisfying a market need.

As businesses transition from being micro-sized through to a small and then to a medium-sized business, what makes them successful depends on how they adapt and leverage knowledge and technologies around them to stay relevant, at the same time ensuring commercial sustainability and financial robustness.

As a business bank, our job is to support our small business customers to achieve financial sustainability so they can focus on their growth strategy. Embracing the speed at which markets are shifting and changing,

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with an eye on the customer’s needs, is a big part of what drives success.

Additionally, in the increasingly digital environment, a growing number of smaller businesses have the opportunity to service big businesses.

Whereas in the past many small businesses have been more focused on consumer and small business markets, there has been genuine growth in small businesses that are servicing the large end of the market due to the former’s specialist or niche skills.

In particular, larger businesses are progressively outsourcing specialised parts of their requirements to a small business. This trend will only continue in a more inter-connected business environment, and help support the success of the small business sector into the future. We expect this dynamic to gather pace as Australia continues to transition to a service economy.

There’s a real opportunity for small businesses to develop truly innovative and nimble business models that will be the envy of some larger businesses. That’s a fantastic outcome for our customers, and St.George looks forward to partnering with our small business customers along this journey. BFM

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BFM | FEATURE

THE ROAD TO 2025: IS YOUR CUSTOMER COMMUNICATIONS TEAM READY? The year 2025 may seem like a long time off, but the technology investments that businesses make today will absolutely affect their ability to communicate then. By Henri Dura, CEO, GMC Software, and Nick Dempsey, General Manager, GMC Software, Australia and New Zealand.

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ustomer communications such as contracts, invoices and statements are an important component of the customer experience, yet are often over-looked.

The following scenario should not be a surprise to you.

The customer wants to arrange a personal loan.

The customer wants it easy and personalised.

The customer has the power. The customer has information at her fingertips. If she doesn’t, she knows where to find it. Customers communicate with each other directly or through reviews, feedback, and other ways, to offer up recommendations. Companies need to be listening.

The world is changing fast; and so is the businessto-consumer interaction experience. Companies need to be able to respond quickly. They need to be able to communicate via customers’ preferred channels.

Tone, style, and messaging needs to be consistent, regardless of the channel. Delighting the customer and delivering a great customer experience is a huge competitive advantage for any company.

This piece will explore how communication could be in 2025 from various perspectives – consumer technology, customer expectations and information availability – offering some guidelines on how financial services businesses should best plan to ensure they’re ready for now, and the future.

CONSUMER TECHNOLOGY WILL UNDERGO RADICAL TRANSFORMATION Over the next decade, the essential need to connect with people and handle transactions will not change much, but the devices we use, the frequency of switching touch points, and the etiquette of these communication channels will continue to evolve.

Today, we communicate via a multitude of channels including paper-based mail, smart phones, tablets, and desktop and laptop computers across a variety of third-party services, social networks and business networks. Consumers have also been rapidly embracing wearable devices such as fitness trackers and smart watches, as well as immersive 3D experiences. Today, Snapchat, Instagram and in ways, Periscope, are the latest social networks on the scene to be heavily embraced, yet by 2025 there will

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be a plethora of new social networks along with more apps and connected devices enabled by the Internet of Things (IoT). The information exchanged will flex to best fit these channels and the context within which they are used.

In the future, the average consumer will have five or more personal, connected devices, with several always available. And, the IoT and artificial intelligence driven tools will add additional sensors that communicate with these devices, allowing for new services that bridge people, devices and data across new media.

By 2025, businesses need to be equipped so that operations are friendly to new types of technology.

Technology is moving faster than the 12-month budget planning cycle, so you need a business that is built to absorb new technologies on their release schedules.

CUSTOMER EXPECTATIONS WILL EXPERIENCE PROFOUND CHANGE With various devices that send and receive messages all day, consumers will want to manage the noise level. And, there is no reason that consumers will start to tolerate a one-size-fits-all approach to businessto-consumer communication.

Customers of financial services businesses will want to be in control of the frequency and intensity of the interactions they have with companies. Sure, there is still a place for notifications when it comes to reaching maximum daily account transaction limits, but people won’t tolerate over-sharing. Some bank customers want to see a record of all credit card transactions for the month, others are happy with a summary statement. And others may prefer a single tweet, direct Facebook message or SMS-sized notification with just the amount and due date for payment. And most are demanding the ability for fast, real-time two-way interactions on company platforms through chat bot technology. The BMO Bank of Montreal, one of the top five banks in Canada, has recently implemented a new mobile onboarding customer journey that enables consumers to open a BMO Personal Banking account on a smartphone in as quick as eight minutes from start to finish. In 2025, the possibilities will expand, and successful communicators will learn those preferences and act accordingly.

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FEATURE| BFM

In 2025, unhappy customers will take their bad experiences viral faster than ever. They’ll turn a corporate communication failure into a new meme that pervades hundreds of social networks and billions of potential customers just by shouting something from their brand new 360-degree 3D videocasting device.

Businesses now need to consider how they will manage to communicate with the right frequency, intensity, and style. The technology will be there to communicate across all of the channels constantly.

Considerate businesses that resist the temptation to over-communicate will create the strongest bonds with customers.

INFORMATION AVAILABILITY WILL EVOLVE As more businesses and social networks share information, the sensible solution is to view information as an on-demand utility. When much of the same information can be accessed in different ways, customers will expect all information to be available on any channel, even retroactively. The business and social networks, apps, and corporate systems will be expected to get any information out to any form factor at any time from the client’s very first interactions.

This market shift will create a need for a major overhaul of archiving. We archive communications, which are discreet and fairly easy to identify. However, as devices fragment, social networks expand, and consumers change context frequently, the burden to

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re-create or reformat will fall on your company rather than the consumer. For instance, banks should deliver things like dynamic account statements that illustrate the customers’ monthly spending habits using interactive charts and graphs – on their channel of choice. The archiving landscape will undergo the most profound change of any infrastructure technology in the coming decade. This change will largely be unnoticed by the consumers—should it be done well.

CONSTANTLY ASSESSING THE CHANNELS YOU’RE DEDICATED TO Everyone gets excited when new channels are added.

But nobody gets excited about removing technology from a portfolio. In fact, many businesspeople get hostile about removing old channels from the mix, even if they are underperforming, difficult to maintain, or rarely used. A social media platform catching on can go from no users to a critical channel with 50 million users in less than a month.

While the number of channels will increase, the budget to execute will likely remain constant.

The businesses of today that will be successful communicators for the future are nimble when it comes to adding the new communication channels their clients, prospects and employees are using. They are constantly assessing and learning from the up and coming successful start-ups and fintechs on how the customer experience can be enhanced, not only from the moment they come on board, but throughout their entire customer journey. BFM

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BFM | FEATURE

HOW TO BE A HIGH GROWTH COMPANY I have often wondered what makes certain companies grow faster than others. What makes a company like Tesla, for example, overtake established market leaders like General motors, or the European or Japanese car makers. By Raz Chorev.

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hose car-makers have been showing steady Year-On-Year growth, over more the 100 years, yet Tesla is catching up to them, currently being in the top 5 list of automakers by market cap. I’ve read many research documents, excellent books such as Jim Collins’ Good to great & Built to last, and other research based books to try and answer that question.

However, people who know me well, know how sceptic I am when it comes to statistics. I believe that if you want to prove a point, you’d be able to conduct a research to prove your point. Statistically, 83% of academics will take the high road, and protest. That’s ok. Although I just made that up, it does make sense, doesn’t it?

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On a serious note, I’ve always believed that companies wanting to accelerate their growth, need to invest a lot more than companies that are happy with less aggressive growth. It kind of makes sense, but I had an urge to get some data which can prove it!

In the past few years, I’ve come across dozens of companies with various growth appetite. All of them wanted to grow (that’s why they’ve engaged me!), but their appetite for rate of growth was very different.

Some were in a steady decline, and wanted just to stop the bleeding, and others were in a start-up mindset, and wanted to grow in a hockey-stick growth curve. Not all companies are the same, and not every leader is as hungry as the next…

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FEATURE| BFM

Wow! That’s quite interesting, isn’t it?! This simple chart (I like simple!) demonstrates clearly that high growth companies actually spend LESS than the average growth companies. On average, high growth companies spend 12.6% of their revenue on business development-related costs, 1.1% less than the average growth companies. That’s an interesting finding, isn’t it? It’s especially interesting, as it kind of defies my cynicism of statistically biased research.

But here’s the interesting thing. Not only are the higher growth firms growing faster, while spending less, they are also more profitable!

Hockey Stick Growth Graph

PROFITABILITY 20.0%

So I went out and researched (typed in a few keywords and phrases in Google), to find the number to back up my innate belief. And lo and behold – I found what I was looking for!

Hinge Marketing has conducted a comprehensive study to prove that common belief, held by many marketers… and they have found there’s a direct correlation between spending and growth rates… So far, not surprising, right? It makes sense and all… but what I wanted to know, and what many of my clients have asked me, is what the growth/investment diagram look like: • Is it the more you spend, the quicker you grow?

• Is there a point where other considerations come into play?

• Is there a point where you spend too much, and can’t justify the investment as growth is minimal?

All very valid questions! And the answer is yes. To all questions. So let’s look at the data: Based on the company’s research paper, the research included 3 types of companies: Misers – lowest 20% of spending Typical – middle 60% of spending Big Spenders – highest 20% of spending Based on my previous assumptions, assumptions that could pass as ‘common sense’, we could come to the conclusion that Big Spenders enjoy the highest growth rate. But that would make this article unnecessary. Let’s go back to those valid questions aforementioned to understand the research findings.

But before we do this, let’s expand the spending categories, and include not only pure advertising spend (what is commonly known as marketing spend), but all business development costs.

BUSINESS DEVELOPMENT SPENDING 20.0%

% of Revenue

Average Growth 13.7%

High Growth 12.6%

% of Revenue

Average Growth 12.0%

High Growth 18.5%

0.0%

Now that’s ridiculous and grossly unfair. So those companies, spend less, grow faster, and make more money. What gives?

Again, due to my own experience, I had a gut feeling, or a hunch what the reason was that created that unfair advantage for the higher growth companies.

And this time I was actually right.

The advantage those higher growth companies had was a well-defined strategy. It all starts with a deep understanding of what your core business is, and how well you stick to it.

SPECIALISATION The research asked the participants to rate their companies from 0-10 on the level of specialisation they offered. It turns out that people working in high growth firms, rated their companies as highly specialised (9-10/10). Being everything to everybody isn’t a winning strategy, when it comes to growth rate.

Being everything to everybody isn’t a winning strategy, when it comes to growth rate.

DIFFERENTIATION Participants from high growth companies were convinced that their companies had a demonstrable differentiator, 3 times as the average growth companies’ participants.

OTHER STRATEGIES As demonstrated in the table below, there isn’t one winning strategy, but a variety of different strategies which define growth rate.

0.0%

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BUSINESSFIRST MAGAZINE

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BFM | FEATURE

Favored By

Strategy Element

High Growth

Narrowly focused target client Use of marketing partnerships Offering specialized service Targeted acquisitions

Average Growth

Go deeper within current client base Add new services Offering technology/service mix

BARRIERS TO GROWTH It was interesting to see what participants from average and high growth companies articulated as a barrier for growth.

Recently I watched a video about accountability, which describes the level of one’s accountability as being Above the line or Below the line. Although the video was referring to people, it was interesting to see how this correlates to companies as well.

Participants from average growth companies claimed that their barriers to growth were the Competition and the Economy. Both elements which are out of their control.

On the other hand, people at high growth companies were clear on their barriers to growth: finding the right people, finance and cash flow, and marketing/ business development activities. All areas which can be dealt with, and the company is accountable for.

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CONCLUSION Want to be a high growth company? Here are some tips: Strategy first!

Understand your clients, market, and your own offering, and match them all up. Define where you want to go, how soon and what to do to get there.

Then Clients!

Do you know your clients? How well do you really know them? Make a conscious effort to understand your clients, who they are, what motivates them, and what problems they’re facing. Once you understand your clients, it will become easier to focus your messaging and marketing investments.

Then Specialisation Focus is key for success. The more you’re focused on the value you bring to the market, the easier it is for your market to identify you. This is particularly true for service companies, although product companies should also specialise in something: solve a problem in a particular area (for example: Health, Beauty, Sport, pest control, etc.), or for a particular market (Home, office, mining, schools, etc.).

Be known for something, and stick with it. Let it be known what do you stand for, and keep repeating the message. Allow the market to “peg” you, find a fit for your products or services, and you’ll grow a lot faster, while enjoying higher profit margins. BFM Raz Chorev is strategic marketing executive, the Chief Marketing officer and co-founder of Orange Sky - an outsourced chief marketing officer service to medium sized enterprises.

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WEALTH| BFM

WEALTH SECRETS OF THE RICH, KIND & HAPPY

As co-creators of seven profitable businesses spanning fashion, jewellery, education, conscious leadership consulting and real estate, married couple Steve and Chutisa Bowman have got multiple income streams and the financial wealth piece covered.

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ith 41 years of marriage, endless global travel and a happy family life to boast about, Steve and Chutisa are rich in the gratitude, relationship and life experience stakes too.

None of these things alone, however, define what it means to be rich to this dynamic couple.

“What rich means for each person is different,” Chutisa says.

“In our minds, it’s a way of being and functioning in the world that is not about the money, but includes money. It’s about the exuberant expression of life which incorporates the willingness to have money as creators in the world that is inclusive of everyone and everything.”

Inspired by their own life success, both financial and emotional, The Bowman’s now share everything they know in a seminar called Right Riches for You. It is their contribution to helping people everywhere move out of poverty and limitation (victimhood) and wake up to the unlimited possibilities for richness in their lives too.

The Bowman’s use the following 7 points to create more richness in their lives every day: 1. Money is never the problem, your point of view on money is. If you want to change your money situation, you must find a new way to view and be in relationship with money.

2. Your whole life is your business, and your business is in living. In the same way that a business owner creates their business, you must claim, own and acknowledge that you are the creator of everything in your life, which means you can change it. If you don’t acknowledge that, you

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will always remain the victim of circumstance and other people’s realities.

3. Let go of a scarcity mindset to embrace prosperity consciousness. Most people don’t question their mindset. If you can be curious enough to question your current reality, you can be open to the understanding that the world is an abundant and unlimited place.

There is plenty to go around if you are willing to get curious and be creative.

4. Educate yourself about how our money reality works and use it to work for you. Learn how this reality works but don’t accept it as being rule. Rules, after all, are meant to be tested and broken.

5. Cultivate gratitude and conscious awareness. Corporate ladders often connect cultures that revolve around individuals concerned about me, me, me. True wealth and riches are created from conscious awareness, gratitude and collaboration. Money loves benevolent capitalism, which is win-win for all.

6. Be aware that multiple streams

of possibility and income are always available. The only limitation here are the limitations you have decided are real.

7. You are the leader (CEO, CFO, Chief Everything) of your whole life. A leader knows what to do, what not to do, when to do it and when not to do it. If you’re not the leader of your own life, then who is? If it’s a family member, the community, your spouse or a best friend, then you’re just an employee of theirs or of this reality.

“Most people have a point of view or judgement about money,” says Steve. “Some people believe it is bad, evil or that people who have money are terrible. Other people believe that the only way to make money is to work hard for it and they trap themselves in a linear construct of having to have a good job, climb the corporate ladder, earn a bigger hourly rate or salary.

But money is just an energy and there are many ways to tap into it, if you’re willing to get curious and ask the right questions to find out how.” BFM

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BFM | PROFILE

Shaw forges ahead in the financial services market Shaw and Partners has grown from strength to strength, expanding its business into financial planning and wealth management beyond its traditional stockbroking focus.

With strong management and a firm focus on client outcomes, the firm has successfully transformed into a high-end boutique wealth house and enjoyed substantial growth in assets under management and client wins. Jonathan Jackson sits down with the Shaw and Partners’ Co-CEOs, Earl Evans and Allan Zion, to discuss the firm’s growing presence as one of Australia’s most sought after financial services providers and the future of the industry in an ever changing regulatory and technological landscape.

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tarting out as Shaw Stockbroking, the firm has been more than 25 years in the making. Now Shaw and Partners is a leading broker and wealth manager holding more than $13 billion of assets under advice for its clients. Shaw operates offices in most Australian capital cities, with expertise that ranks among the best in Australia.

Two years ago, Shaw and Partners shook up its management structure to demonstrate exactly what a co-operative and collaborative financial services firm should look like. The new look Shaw and Partners emerged, with all its divisions Wealth Management, Institutional Dealing, Research, Fixed Income and Corporate Finance, contributing equally to its firm’s growth and success.

And they have, with strong growth in assets under management, a greater national presence and a very strong

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financial position. Shaw and Partners’ balance sheet boasts substantial cash reserves and no debt. The result of hard work and clever leadership.

After rebranding in July 2015, Shaw and Partners transitioned to a joint chief executive officer (CEO) model, with Earl Evans and Allan Zion both at the helm.

Highlighting their strong interest in the firm’s success, they are also the two equal largest shareholders of the business.

Under this management model, Allan Zion takes lead responsibility for all infrastructure and operational aspects of the business, while Earl Evans oversees all revenue-generating activities, including management of the Institutional Dealing, Corporate Finance, Research, Private Wealth and Fixed Income divisions.

It is a structure that works, for both the business and for its clients.

IT’S ALL ABOUT PARTNERSHIP Evans and Zion are passionate about Shaw and Partners’ business offering. When asked what the brand stands for, they are clear on their vision.

“We are about honesty and integrity. Our job is to provide the roadmap for where our clients want to be financially. We do this by operating within the boundaries of compliance and by collaborating with our partners to unlock opportunities of significant value,” Zion says.

“It is about transparency, respect and having a true partnership with our staff, clients and providers,” Evans adds.

“We treat everybody as a partner.

Partnerships are built on trust and delivering on promises – every time - and we pride ourselves on this. A lot of what we do is driven by the client, by asking them where they want to be in 20 years, what are their goals and how can we

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PROFILE| BFM

Earl Evans (L) and Allan Zion (R)

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work with them to achieve those goals,” Evans says.

Zion suggests that this is not a ‘construct’ that just happened.

A great deal of thought went into shaping the future direction and culture of Shaw and Partners before the firm rebranded.

“We made a conscious decision to think bigger picture and work beyond our own short-term profits. What we are interested in is longevity; but the recipe for this is not so simple, and involves creating a culture that is centred on giving our people the freedom to work towards their clients’ financial goals,” says Zion.

Now, Shaw and Partners boasts a private client advice firm and institutional and corporate advisory offering with skills and proficiencies among the best in the industry.

ESTABLISHED TALENT DRIVES OUTCOMES Allan Zion has been Shaw’s

Managing Director since 2009, after joining the company in 1991. Earl Evans joined Shaw and Partners in February 2015 from Macquarie Bank, where he was CEO of the North American Banking and Financial Services division.

Shaw and Partners’ NonExecutive Chairman and Ex-CEO of Merrill Lynch Asia Pacific, Paul Masi, said Evans has made a significant impact on the growth of the business.

“Since Earl joined Shaw and Partners in February 2015, the company has expanded and evolved appreciably. We have grown adviser ranks and implemented stronger processes for the benefit of all of our clients,” Masi said.

Evans was very definite about the path that Shaw and Partners needed to take to make it successful and relevant to a broader range of institutional, corporate and retail clients.

“We operate with two fundamental questions front of

mind: how do we empower our staff; and how can we provide a better offering to our clients? It’s all about precise execution in these two areas.”

“We operate under a flat management structure as a genuine meritocracy, as opposed to a more traditional top-down approach. This bodes well with our people because they know that they will be recognised for doing well for our clients,” Evans adds.

Shaw and Partners stay ahead of the curve by anticipating changes in the industry which allows it to be very nimble in responding to opportunities.

“We stay on top of the game by examining what international businesses are doing, where regulatory bodies see compliance practices and the industry heading and by not being afraid to implement changes when it is necessary to change,” Zion said.

With more than 25 years in the industry, Shaw and Partners has

Earl Evans

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PROFILE| BFM

Allan Zion

weathered volatile capital markets and recessions. During this time, while many competitors have gone out of business, Shaw and Partners has built a strong, robust firm that has been able to capitalise on gaps in the market and growth opportunities.

“Our cautious approach to organisational growth means we have not seen some of the issues that other firms have experienced across the rest of the industry,” Masi says.

“Shaw has always been a very stable business. Amid the deregulation of the industry, firms have come and gone and many international bulge bracket operations have made big promises upon which they couldn’t deliver, leaving good quality practitioners looking for somewhere stable to go.

Our stability is a key attraction for staff,” Zion adds.

SHARING THE GOOD FORTUNE “It’s easy to say, but we live, breathe and sleep client service www.businessfirstmagazine.com.au

excellence. We’re here for the client, because at the end of the day that is who our business exists for and without them, we don’t have a business,” Evans says.

Shaw and Partners has also made a strong ‘in-practice’ statement about existing for the communities in which it works; by launching its own charitable foundation, which involves a dollar-for-dollar charity matching policy.

“The response from our staff on our approach to philanthropy has been overwhelming. I think that says a lot about our people,” Evans said.

The Shaw and Partners Foundation was established in 2015 to provide a platform for greater participation in community service. The Foundation seeks to strengthen communities through financial support, volunteering and skills sharing and allows each office to further integrate into their local community by tailoring their philanthropic work towards local causes and issues. It has been a

galvanising force among staff.

Most recently, four Sydney based advisers abseiled 135 metres (33 storeys) down the 1 Market Street Building in the Sydney CBD, raising more than $20,000 for Triple Care Farm, a youth rehab and support program located in NSW. Shaw and Partners’ second Foundation Institutional Day this year raised $241,983. All brokerage generated through institutional trades was donated to the Australian Stockbrokers Foundation and the Australian Fund Manager Foundation; which support a plethora of smaller charities including Sydney Children’s Hospital, Lou’s Place Women’s Refuge, Odyssey House, Mission Australia and Second Bite.

“Corporate organisations have a social responsibility to give back to the communities they work in,” Evans said.

“Some organisations do this extremely well, but there is always more that can be done.”

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THE EVOLUTION OF FINANCIAL SERVICES Where financial services for Shaw was once about buying and selling equities, today the firm takes a far more holistic approach.

For Shaw and Partners this has meant reshaping the traditional full-service broking model from equities and derivatives to now include a successful investment and corporate advisory business, a highly regarded internal research house, with expertise that ranks among the best in Australia, and a leading wealth management and financial planning business.

The company has launched 11 separately managed accounts in past six months, providing clients with a comprehensive asset and risk allocation solution to managing investment outcomes.

Shaw and Partners has been assisted by an evolution in technology. Zion believes new

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technology has allowed clients to become far more educated and their expectations are now higher than ever before.

“What we are seeing is similar to the advent of PayTV and mobile technology in terms of how it has transformed industries. People now have information available to them 24/7 and where once advisers were the font of all knowledge, we have witnessed a shift in our clients’ expectations of our product and service offering. The average investor is far more educated.”

Success in financial service boils down to further educating an already knowledgeable client base.

“To do that you need cross collaboration and partnership between top analysts, dealers and advisers and their clients,” says Zion.

It is this trait that sets Shaw and Partners apart from many of its competitors.

So in this age of rapidly developing technology, Shaw’s people matter more than ever before.

“It is about identifying skills gaps, anticipating needs and spotting potential to build the workforce for the future. We have put considerable focus and effort into upskilling and training our people and we will continue to upskill people that have talent with further education and personal development,” Evans said.

During these times of technological advancement and automation, economic change and industry disruption, Shaw and Partners has developed the depth of knowledge, clarity of vision and strength of purpose to work shoulder to shoulder with their clients – now and into the future.

For Co-CEOs Evans and Zion, this is the cornerstone of what underpins the ‘partnership’ philosophy, upon which the firm is built. BFM

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Your partners in building and preserving wealth

Ride the wave of financial success

WEALTH MANAGEMENT | CORPORATE ADVISORY | MERGERS & ACQUISITIONS | INSTITUTIONAL DEALING | RESEARCH

Shaw and Partners is one of Australia’s preeminent investment and wealth management firms.

With a national presence and over $13 billion of assets under advice, Shaw and Partners offers the intimacy of a boutique investment firm with the resources and scale of a major financial group.

Arrange an obligation-free, initial consultation today. Call 1800 636 625

www.shawandpartners.com.au SYDNEY | MELBOURNE | BRISBANE | ADELAIDE | PERTH | CANBERRA www.businessfirstmagazine.com.au

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BFM | GENDER PAY

LET’S ADDRESS GENDER PAY PARITY It’s encouraging to see a 46% increase in the number of Aussie women business operators over the past two decades and learn that women now make up over one third of all Australian business operators1.

But does this growth mask a greater issue in the Australian business environment? By Nicolette Maury, Vice President & Country Manager, Intuit Australia.

I Nicoletter Maury

Vice President & Country Manager, Intuit Australia.

meet a lot of our customers and one of them told me recently that as the primary caregiver, she was disadvantaged in the business environment in which she works. Another, who has a successful bookkeeping firm and employs six staff, spends 12 weeks a year caring for her young family, taking time out of her business.

Recently, I spoke at the Women’s Leadership Symposium in Sydney and was surprised to hear similar issues being voiced by many women from a wide range of backgrounds including some of Australia’s well-known corporations.

Let’s explore some of the facts.

Over the last 20 years2 gender pay parity has hardly changed; full-time male workers earn, on average, 16% more than women while top-line male managers earn 26.5% more than women. Twenty years ago the full-time gender pay gap was 17%.

In addition, we recently conducted research among 300 female small business operators3 and found almost 60% choose to

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be self-employed because they want to be their own boss with 50% desiring a better work-life balance.

Before being self-employed, six out of 10 were employed in either small or large businesses. Interestingly a third who left were between the ages of 24-37.

Our research also showed that 57 per cent of Australian women who operate their own businesses are ‘pleased’ or ‘delighted’ with the quality of their lives, with 30 per cent feeling mostly satisfied.3 However, going it alone hasn’t solved all their problems. 60% of them say their biggest challenge is

maintaining a consistent income stream and many have found significant time away from their businesses means they simply can’t invest the time needed to scale and grow. These reduced working hours have, in turn, meant lowering what they pay themselves.

It’s time for bolder conversations The time has come for bolder, challenging and sometimes uncomfortable conversations about female employees in organisations and finding solutions to ensure women are progressing at the same rate as men.

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GENDER PAY | BFM

The time for these bolder conversations about gender equity and pay parity is upon us and I am excited to see what the future holds for Aussie entrepreneurial women. BFM ABS Report: Australian Women in Business 2015 prepared for the Office For Women 2 Gender Equity Insights 2017 Inside Australia’s gender pay gap: BCEC/WGEA Gender Equity Series 3 Pure Profile What Women Want survey (survey of 300 self-employed women commissioned by Intuit Australia, February 2017 4 https://www.wgea.gov.au/sites/ default/files/EY-(2013)-Untappedopportunity-The-role-of-women-inunlocking-Australias-productivitypotential.pdf 1

Women are playing an evermore-important role in business but there is still a way to go before they achieve full equality in the workplace.

Fostering the advancement of women in large or small businesses is not just for their benefit, there are also huge benefits for the company and the wider economy.

As Ernst & Young4 put it: “Getting more of our best-qualified women into the workforce will not only boost the supply of talent and ensure women are securing their career foothold,

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it will also improve the return on Australia’s investment in education. Currently, the nation is losing over $8 billion each year for undergraduate and postgraduate women who do not enter the workforce.”

I have personally witnessed how a diverse workforce that reflects the demographics of your customers, can help an organisation innovate and grow.

I also see women turn their hobbies into successful business ventures by harnessing easyto-use technology such as cloud accounting software.

Nicolette Maury is Vice President and Country Manager of Intuit Australia, responsible for leading Intuit’s rapidly expanding presence in Australia.

In this role, Nicolette heads a fastgrowing sales, marketing and customer care team to deliver dynamic business management solutions to small businesses and their financial advisors, along with world class customer support.

She brings more than 13 years’ experience in ICT to Intuit.

Prior to this role, Nicolette spent eight years at eBay in a number of key positions covering new business development and incubation, social innovation and most recently customer experience and strategy.

As a senior associate at the Boston Consulting Group she provided strategic advice and business analysis for major Australian and global corporations.

In 2013, Nicolette won the AFR Boss Young Executive of the Year Award.

She holds an MBA from the Australian Graduate School of Management and a Bachelor of Science degree in industrial chemistry from the University of New South Wales.

In October 2016, Nicolette was appointed as an independent NonExecutive Director to Grays eCommerce Group Limited (Grays eCommerce).

Nicolette can be contacted via Twitter or LinkedIn.

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BFM | ASIA

Asia to be home to 60% of the world’s over 65s by 2030 Asia’s over 65s will be the largest and fastest growing market in the world, providing a target-rich environment of business opportunities, according to the third edition of Deloitte’s Voice of Asia series.

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hose in Asia aged over 65 will grow from 365 million in 2017 to more than 520 million in 2027. While this creates emerging challenges for economic growth in ageing nations, ageing populations will also generate a growth cluster of new business opportunities.

“Ageing populations may well be challenging to some nations, but they will also present some incredible business opportunities within those same nations.

Our analysis shows ageing will produce some very large winners at the industry level, particularly in Asia,” said Chris Richardson, Deloitte Australia Economist.

THE IMPACT ON AUSTRALIA The ‘where’ and the ’who’ of business opportunities in Asia are set to move sharply over the next decade. We’ve known for some time Australia’s ageing population will weigh on the nation’s growth over the next decade. What Australians may not realise is that: • In the coming decade the impact of ageing on growth here in Australia will be greater than the matching impact in Japan – because Japan has already been through decades of challenge arising from ageing.

• While Australia will have its challenges, those challenges will be much larger still in Hong Kong, Taiwan, Korea, Singapore, Thailand and New Zealand – as well as in China itself. That means that group of six nations, which together with Japan account for almost half of all Australia’s merchandise exports, will have to deftly navigate

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growth opportunities over the coming decade.

• The good news is that there’s cavalry on the horizon. In particular, the likes of India, Indonesia and the Philippines will be on a demographic updraft at the same time as Asia’s existing Tigers enter a phase of slower growth.

“Rare among rich nations, Australia has a track record of welcoming migrants to our shores,” noted Ian Thatcher, Deputy Managing Partner, Deloitte Asia Pacific. “That leaves us less at risk of an ageing-related slowdown in the decades ahead.

“And we are also very well positioned to sell into the changing

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ASIA | BFM

growth dynamic in Asia. Having ridden a massive wave with China and mining, the coming potential out of Asia will lie more in other countries and other sectors. Australian businesses in tourism, agribusiness, health care, education and wealth management will all see a tailwind of Asian demand in the years ahead.”

AN AGEING ASIA TO CREATE A GROWTH CLUSTER OF INDUSTRY WINNERS More people, earning much more money – and keen to spend it.

That’s the magic formula of industry opportunity opening up in an ageing Asia driven by three big accelerators: • Asia is ageing fast, with a billion people in the region to be aged 65 and over by the middle of this century.

• money being spent by and on ageing populations will grow even faster than Asia ages, because the impact of new technologies and the on-going management of increasing chronic conditions means health care costs will rise faster than most other costs.

• private sector opportunities will grow even faster still, as stretched government budgets mean the share of health-related costs borne by taxpayers is likely to drop back in the decades ahead.

Tsuyoshi Oyama, Deloitte Japan Economist, notes that, “As is already increasingly evident in Japan, the surge in ageing-related opportunities will be evident well beyond health care. Rapid ageing in the Japanese population has changed the needs of people and the way businesses satisfy them. There has been increasing demand in sectors such as nursing, consumer goods for the elderly, age-appropriate housing and social infrastructure, as well as asset management and insurance.”

INDIA’S RISE AS AN ECONOMIC SUPERPOWER Some nations will be well positioned to take greater advantage of these demographic opportunities. In

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particular, India is set to rise as an economic superpower, driven in part by demographic changes.

Following the rise of Japan and then China in decades past, India will drive the third great wave of Asia’s growth. Its potential workforce is set to rise from 885 million people today to 1.08 billion people in the next twenty years, and it will remain above a billion people for half a century.

Anis Chakravarty, Deloitte India Economist explained; “India will account for more than half of the increase in Asia’s workforce in the coming decade, but this isn’t just a story of more workers: these new workers will be much better trained and educated than the existing Indian workforce, and there will be rising economic potential coming alongside that, thanks to an increased share of women in the workforce, as well as an increased ability and interest in working for longer. The consequences for businesses are huge.”

While the coming ‘Indian summer’ will last decades and have the largest impact on the world, India isn’t the only Asian economy set to surge. Indonesia and the Philippines have relatively young populations, meaning they’ll experience similar growth.

HOW COUNTRIES CAN MINIMISE THE IMPACT OF AGEING Ageing isn’t new: Japan is already dealing with rapid ageing and its implications aren’t fully determined. Even India’s projected growth isn’t guaranteed. It needs the right institutional set-up to promote and sustain its growth, otherwise its rising population could cause increasing unemployment and social unrest.

A number of areas can be addressed to fuel Asia’s economic future: • Raising retirement ages: Fewer jobs are labour-intensive these days, while rising life expectancies are encouraging longer working lives, and today’s higher incomes are also encouraging people to work for longer. Fostering these trends can help the economic growth of

those nations at the forefront of ageing impacts – as is especially true of Hong Kong, Taiwan, Singapore, Korea and China.

• More women in the workforce: Asia has far fewer women than men in paid work. Accessing that untapped people power is a direct lever with which ageing nations can boost their growth potential.

• Welcome migrants: 2017 is a year in which the politics of migration remains contentious, but the economics of migration remain excellent. Those nations at risk of a demographic-driven growth slowdown should open further to immigration. Accepting young, high-skilled migrants can help ward off ageing impacts on growth, but the critical issue is whether policy—and property prices—will allow this immigration to happen at sufficient scale.

• Increase productivity: Productivity is just as much a contributor to economic outcomes as demographics.

Governments can focus on education and re-skilling the workforce as a way to bolster the growth opportunities offered by new technologies.

An ageing Asia will rewrite the playbook of businesses in Asia and around the globe – generating new opportunities by geography, such as India, Indonesia and the Philippines, and by industry, not just in health care, but also more widely.

More analysis and details on Voice of Asia series can be found in Deloitte’s Voice of Asia series. BFM The Voice of Asia series brings to life the challenges and opportunities facing the Asia Pacific region today and tomorrow. There has never been a better time to create a cohesive narrative that reflects the interdependence of the region and provides a glimpse of what’s possible across Asia.

Edition three of the Voice of Asia includes three reports: • Ageing Tigers, hidden dragons • Asia’s growth on the cusp of change, driven by demographics • Demographics under the spotlight, by country

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BFM | PROFILE

HDI SETS ITS SIGHTS ON ASEAN EXPANSION

Graham Silton and Stefan Feldmann

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PROFILE| BFM

Globally, industrial insurer HDI Global SE handles more than 3,500 international insurance programmes and recorded a gross written premium volume of about Euro 4.3 billion in 2016. Yet this is a company that isn’t satisfied with its current level of growth. With over 110 years of history, HDI is still in expansion mode. Jonathan Jackson speaks with Regional Head Australasia & ASEAN and Managing Director HDI Global SE, Australia Stefan Feldmann and Managing Director at HDI Global SE Singapore Graham Silton about the company’s ambitions in South East Asia.

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he overarching message coming out of the HDI offices is that HDI is very much in growth mode. Founded in 1903 and with a substantial foothold across Europe, HDI operates through foreign branches, subsidiaries and affiliates as well as network partners in more than 130 countries worldwide, offering international industrial insurance programmes.

Born as a mutual insurer of the German iron and steel industries, HDI has continued to morph into one of the most respected and leading insurers offering a broad and needs-based range of insurance solutions. The eponymous Liability Association of German Industry remains the majority shareholder of HDI Global SE’s parent company, the EUR 8.5 billion capped Talanx which is also the parent company of the global reinsurance giant Hannover Re. Talanx is Germany’s third largest insurance group and among the top 10 in Europe.

In its homeland of Germany and throughout the rest of Europe, HDI is a leading industrial insurer and insures most of the DAX (German Stock Exchange) 30 companies.

That gives you a sense of this company’s size, but a company doesn’t dominate an industry without constant forward momentum.

Part of this momentum has been due to its foundations: “We were created by industry for industry,” says Regional Head Australasia & ASEAN Stefan Feldmann.

It has also been the company’s ability to hold true to its original values, whilst keeping pace with changing times.

“From the very beginning, we have set highest priority in a continuous communication with

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our customers, as we want to create individual solutions, understand if the risk situation changes, and if the coverage we offer has to be adjusted. Hearing from our clients that they appreciate this close dialogue, we anticipate being in a good position to move forward,” Feldmann says. In 2016, the industrial insurer already generated about 61 percent of its gross premium volume in international markets. By 2019, HDI is aiming to increase the portion of non-German business to about 65 percent.

The company is clearly well respected in Europe, but South East Asia is a burgeoning and promising market.

The countries that comprise the ASEAN Region represent a thriving trade and economic hub. More than 634 million people live in ASEAN alone. To put that in perspective, there are 261 million people in Indonesia, the most populous country in ASEAN and also the 4th most populous country in the world.

Indonesia is the only member of G-20 major economies and the largest economy in the region.

ASEAN alone has a GDP of US$2.55 trillion (Australia, US$ 1.2 trillion, EU US$16.5 trillion). If ASEAN were one country, it would be the world’s fifth-largest economy.

The region has an average annual economic growth rate of more than five percent over the last decade.

Moving into the region makes sense and HDI has made some ground in Australasia over the past few years already.

“As a big European-based insurer we were quite underrepresented in Australasia when we restarted the HDI brand in 2010,” Feldmann says.

Fast-forward to today and staff numbers have multiplied from 8

to over 50 and premium volume has expanded more than seven times complemented by solid underwriting returns.

According to Feldmann, the strong profitability of HDI’s local portfolio allows the company to be entrepreneurial and open for new business as the corporate insurance market is firming and many competitors need to take corrective actions and re-underwrite their books.

To further its growth trajectory and to be even closer to its clients and brokers, HDI has opened new offices in Melbourne and Brisbane in the last two years and has very ambitious plans for the region in general.

“HDI is nicely positioned to be part of the huge growth potential that clearly exists for the ASEAN region,” says new MD of HDI Global’s Singapore branch Graham Silton.

Silton who was previously the property manager in Singapore says of the region, “We are already seeing trends of greater levels of sophistication, awareness and buying styles for insurance. A trend in my opinion that will continue in the future. This means we need to be flexible, innovative and proactive in meeting our clients’ needs. In order to profitably grow we will continuously examine our product offering and accessibility to market. Success would be measured when HDI is considered a carrier of choice.”

As it looks to apply its principles to this region, there is a confidence that it can do so with the same panache that’s been present in Europe for the last 100+ years.

Silton has big plans.

“What we hope to achieve in the ASEAN region is to grow in all the traditional lines of industrial insurance business. We opened the Singapore unit in 2012 because

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we wanted to be close to our customers. Southeast Asia is experiencing a strong economic development, as are many of our clients here. We want to accompany them on their growth path by offering considerable expertise in setting up global and regional insurance programmes. By joining forces with the Australian branch in 2016, we are now able to secure larger projects and to work with more sizable customers than previously possible. We believe that this makes HDI even more attractive and will help us to further expand our business.”

HDI is a brand recognised widely in many parts of the world.

However, in the ASEAN region the company is quite young, but with enormous upside.

Silton says currently the company is seen as a follow market, however there is tremendous potential.

“We intend to fully unlock this potential and position HDI as a true market leader. In the minds of our clients, be they direct clients, cedants or brokers. For us, one of our criteria of success would be when we are seen as a natural ‘ go to market of choice’ in other words top of mind.

Another measure of success will be to increase our portfolio and premium volumes very strongly within the next couple of years, whilst maintaining the excellent returns for our shareholders.

Finally, equally important is to build a great team in all areas of our business who are respected and acknowledged by our industry peers and clients as best in class.”

To iterate the point further, Feldmann says while the company is huge in industrial insurance in Europe the ASEAN market is one that HDI can help to slowly blossom.

The aim here is to become a reinsurer of choice.

“There is a great need for reinsurance support here, so what we do is identify local market champions and empower those companies within that market. We think and act like a direct insurer and we help our local partners with our technical expertise and reinsurance capacity. We work closely with the direct insurers within the ASEAN region and assist them to become

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leaders for corporate business in their home markets.”

“I would go as far as saying that we work with local markets to allow them to blossom and become a lead insurer,” Feldmann says.

“We allow our clients to work with the local insurance market to enable them to grow in the corporate insurance space with our support. We partner up with one or two companies and give them European expertise.”

HDI is built on a global approach.

It is also built on relationships and closeness to its customers – an essential ingredient in HDI’s development.

“We have developed an international network of local experts who have a deep understanding of the market and its conditions,” Silton says.

“We are therefore able to support clients across national borders, giving them expert advice on their foreign target markets and creating an insurance strategy to suit their individual needs. This requirement is increasingly becoming a priority for companies of all sizes engaged in cross-border business, but only a few international industrial insurers have the necessary capabilities. This gives us confidence that we are in a position to offer some very interesting insurance concepts for companies and groups in the ASEAN region.”

Silton says that in order to achieve their targets HDI must have excellent knowledge of the market place and the dynamics in every country in the ASEAN region.

“Whilst SE Asia may be one region, it is not one country, we need to fully understand the economic environment, geo political landscape and business opportunities and outlook by country and execute our strategy accordingly.

“We need to grow our brand awareness and visibility. This means we need to travel and meet the right people and invest our time and resource to mirror where we yield the best return for HDI and our clients.

“We simply cannot be all things to all people, therefore we will identify those business partners in each country whom we believe have similar values and are committed to work and build a long

term and sustainable relationship for all parties.

“Clients’ demands of their Insurers are continually evolving and we need to be flexible and respond accordingly. HDI has a good reputation of being highly solution focused”, said Feldmann.

As well as expanding regional markets, HDI is also focused on expanding its product lines including Cyber and Crisis Management Insurance.

HDI has lead underwriters in all major lines of corporate insurance business including Property, Construction & Engineering, Marine, Liability and Financial Lines (D&O).

“These are highly professional talents recognised as leaders in their field who are followed by the market. As for our midmarket expansion HDI tries not to pigeonhole the market in the same way as other insurers do. What a lot of insurers do, which I understand brokers never really like much – is they slice and dice the market into large corporate, mid-market and SME. We don’t need to do that.

We have one team and basically provide all of our services to our valued brokers. We want to make it easy for brokers to deal with us.”

With that in mind, Feldmann also has ambition for the company to be more proactive in the region, meaning HDI will continually review its product offering and seek to introduce new products to match the real demands and needs of its clients.

Having recently rebranded, HDI is continuously looking to strengthen its global position.

HDI-Gerling Industrie Versicherung AG was renamed HDI Global SE in January 2016 to reflect HDI’s increasingly global profile.

“In practice, by highlighting HDI’s increasing global alignment means we give more visibility to what we can bring to the market.

As a big European-based company, this is especially important for non-European markets like Australasia and ASEAN. Although our business in these regions has experienced significant growth over the last years, we have not yet achieved the awareness and market share we enjoy in Germany and Europe,” Feldmann says.

And it is the ASEAN region where the challenge now lies. BFM www.businessfirstmagazine.com.au

WE ARE RISK ALLEVIATORS. THE BEST PROTECTION FOR YOUR COMPANY ARE COMPREHENSIVE SOLUTIONS FROM PROPERTY EXPERTS.

www.hdi.global www.businessfirstmagazine.com.au

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BFM | PSYCHOLOGY

PSYCHOLOGY OF TRADING Trading is an acquired skill and more of an art than a science. When it comes to trading as a profession or even simply for additional income, it’s important to do your research and having a passion for the business goes a long way. However, what many people don’t realise is that psychology also plays a key role in the success of a trader and it is important to understand your mindset when looking to trade the markets.

H

ow is day trading different to longer-term trading?

Many traders prefer day trading over longer time frames as there are generally more trading opportunities on an intraday timeframe than daily, weekly or longer. For the skilled trader, this means they can do a lot more with a lot less capital. Being a successful trader allows you to be your own boss, putting you in control of your own money and importantly, time. However, Intraday trading is a more pressured environment and traders need to be able to make more decisions faster than traders operating on a longer time frame. As a discretionary trader, success depends on the quality of the decisions made and it pays great dividend to be aware of the influences that impact your decision-making process to qualify the information you apply. Your mindset and ability to take control of emotions plays a huge role in your ability to make these decisions quickly and under pressure.

Personal psychology is often the last stone traders will turn over when searching for consistency in the markets. However, most successful traders will agree that taking control of their mentality towards trading was the deciding factor in their ultimate success. Here is a guide to help improve your day trading and the importance of psychology in trading: 1) Know why you are trading Define what it is that you want

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to achieve from trading. Don’t just think in arbitrary monetary amounts, but really define what successful trading looks like and what it means to you. This will drive you to persevere through the challenges along the road to becoming a successful trader.

Mentally rehearse your worst-case scenarios so, if they do occur, you are prepared and can keep a level head.

2) Avoid taking tips Tips can be dangerous. There is a lot more to trading than buying or selling the next hot stock or currency. Tips are not capable of addressing the key aspects of self-management and trade management that make up the crucial components of long-term success in the markets. Not only can tips rob you of your capital over the long run, it can also rob you of your independence as you become dependent on the tipster for the silver bullet to riches.

3) Trade plans are essential to your success Simply put, a trade plan is a set of instructions that can help achieve a result. It should clearly define the criteria of your approach and timeframe, which should be aligned to your personality, entry and exit parameters and capital allocation. Start with the basics, and while it is acceptable to cherry pick from others, it is important that you adapt the plan and make it your own.

4) Be selectively active The greatest advantage of noninstitutional and retail traders is that they can choose when to trade, as they do not have to be in the markets all the time. The ‘need to be in’ is an impulsive tendency among losing traders, and professionals only trade if the probabilities favour them. Loss of opportunity is preferred to a loss of capital and while certain traders can be much more active than others, this is usually by design and not impulse.

5) The markets are always right Prices can move for seemingly irrational reasons and continue to do so for longer than many may have thought possible. Countless traders have suffered huge losses picking tops or bottoms prematurely. As the great Jesse Livermore said, “Never argue with the tape. Markets are never wrong, but opinions often are.”

6) Losers average losers To add to a trade that has not yet shown a profit, has hardly ever profited a trader over the long run. The market is telling you through price action that it is not agreeing with you yet and may never. Averaging for a ‘better’ price increases the risk of loss as the probabilities of profit may have deteriorated since the initial entry, currently being indicated by the running loss on the initial trade. As the trader loses reasons for being in the trade, they should be reviewing their initial entry

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PSYCHOLOGY | BFM

and possibly look for a way out, rather than digging in their heels.

Professionals accept that losses are part of the process.

7) Trading is about control Control over self and control over risk. The biggest challenge most traders face is not with the markets or their trading systems but with themselves and how they are able to control their emotions throughout the trading process. Many traders suffer losses because they are unable to discipline themselves to follow their trade plans. Losing traders often have difficulty controlling their emotions and are incapable of accepting a string of wins or losing trades and often react adversely following either one of these occurrences. Risking too large a percentage of your capital or not having defined stops in place, inevitably hands control over to the market leaving your account vulnerable to its whims.

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8) Risk comes first Professional traders consider risk first, which may make them less impulsive as a result. On the other hand, most losing traders consider the possible gains first. This often feeds their impulses, making traders jump in and neglect their trading rules. Professional traders always consider the ‘what ifs’ before getting in and have a plan should the unexpected happen today. It’s also important to address the question of how much to allocate to each trade.

The sizes are usually the same and compound over time but on occasions when the probabilities favour them they will increase in size - big enough to make a difference to the account but not big enough to lead to ruin.

Therefore, trade selection and capital allocation are crucial.

discipline, and there is no room for egos. It’s imperative to have defined trade plans and approaches, however, the great traders such as Paul Tudor Jones and Stanley Druckenmiller have the ability to get out or even flip their positions should the evidence and price action tell them their current narrative or reasoning is wrong.

9) Be flexible and do away with egos Trading is often a counterintuitive

Sheldon Slabbert is Sales Trader, CMC Markets

10) Perfect practice makes perfect.

True perfection is not really the point but practice is. Great athletes are training, singers are singing and chefs are cooking. You have to work on your craft. These same principles apply to acquiring the skill of trading. Practice like you want to perform. Make it real, review your performance, take control of your emotions and make adjustments. BFM

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BFM | PROFILE

Education: A life long pursuit Annabelle Chauncy OAM grew up in rural NSW and completed a Bachelor of Arts/ Law at Sydney University. Her passion lies in developing and implementing strategy, business development and speaking to promote the School for Life Foundation, where she is Founding Director and CEO. School For Life aims to break the cycle of poverty in rural Uganda by building sustainable, productive and profitable communities through the building of schools.

W

LA: What do you think are the key components of successful leadership?

AC: There are several things that jump to mind here. The ability to be able to attract purpose within people is a big one.

It is also important to trust your team – don’t forget to regularly listen to your employees, show empathy and to foster clear and open communication. For me all of these traits are the hallmark of authentic leadership.

WLA: The School For Life Foundation has grown substantially since it was started in 2008. That must have brought its own set of leadership challenges, particularly considering it is an international organisation?

AC: You are right. At one stage we went from 1 staff member in Australia to 6 and 60 staff members in Uganda to 120 – all in just 12 months. Things got crazy and we had to step back and undertake a recalibration phase – it’s impossible to grow like that without what I like to call ‘cleaning up your own backyard’: assessing what we are doing, the systems, the processes, the leadership structure, etc.

As we grew, my ability to think laterally around how to tackle problems was really important.

You are working in Uganda – a cookie-cutter approach would never have worked. You have to be highly aware of cultural sensitives.

Managing witchcraft, for example – this is a strong belief in Uganda.

Some of the people you are working with have deep set views and

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beliefs about the way things should be done.

It’s so important to learn patience as things develop.

Keep your overall goal in mind; this will allow you to maintain your consistency. Develop an unwavering commitment to your vision, but be prepared to be challenged and for things to not necessarily come easily.

WLA: What advice would you give to younger women who are looking to lead?

AC: Firstly, your mindset is everything – you need to adopt a mentality of resilience and determination.

Also, follow your gut – this will enable you to follow what you are truly passionate about.

As you are starting out on your journey, particularly for young women, don’t forget to delegate. It is easy to fall into the trap of feeling like you need to do everything yourself. I’ve had

incredible mentors guide and lead me. I can’t appreciate enough the network of people who have been so instrumental in helping me get to where I have got to today.

Finally, and this follows on from the previous point, make sure you look after yourself. Don’t run yourself into the ground. Creating a semblance of equilibrium is really important.

For me, a big part of this rebalance is distancing myself from technology. The content on social media is such a big drainer – switch off sometimes! I think this is particularly salient for young people; particularly women. In order to be more strategic and effective I need to switch off and see the big picture. It enables me to develop a much longer-term vision.

WLA: What mistakes have you made and learnt from?

AC: I have made plenty of mistakes!

I was only 21 when I founded the

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PROFILE | BFM

business. I made some hiring mistakes initially. I turned over 3 key staff in the first 12 months which was a lot of changeover for a small company.

I quickly learnt that it is better to admit your mistake as soon as possible, have the difficult conversation and move on than sit on your mistakes and hope the issue just naturally blows over.

The other key mistake I made early on is saying ‘yes’ too easily.

Being passionate about this project, and naturally being a ‘yes’ woman anyway, I said yes too much too early. It’s important to set some boundaries and say no to stuff that does not align with your vision.

What are your future goals?

AC: I want to achieve sustainable development for Uganda, whereby the population is lifted out of poverty and is in education or employment. This model can then be hopefully replicated elsewhere.

I’ve had to redefine the models and timeframes for success over time. Initially, I was optimistic that success will be achieved in just a few years, but it is now more realistic to think it will take a few decades.

I’m still incredibly passionate and love what I do. BFM

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BFM | CUSTOMERS

ANALYSING CUSTOMER BEHAVIOUR FOR RETAIL SUCCESS

By John Rankin, Managing Director, Skyfii

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t is a widely known fact that the key to business success relies on a happy and satisfied end-user. For the retail sector, customers are key to business outcomes. A way to ensure retailers are meeting the needs of shoppers is by understanding them and their behaviour.

One way to be on the front foot is

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through in store data analytics. Not only do data and analytics provide insight into the customers entering a store, smarter and more informed business decisions can also be made.

UNDERSTANDING THE CUSTOMER In order to stand out from the crowd and attract customers,

retailers must know and understand customer behaviour, which can be determined by acknowledging and understanding: who the customers are, why do they visit a store, what do they purchase, where are they visiting from, what made them enter the store and how do they go about making a purchase.

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CUSTOMERS | BFM

In-store analytics can help retailers collect information to find out the answers to these key questions. Once store owners gather data and insights, they can leverage the information available to evolve in-store and businesswide strategies to better satisfy and attract customers.

WAYS OF GAINING A BETTER UNDERSTANDING OF CUSTOMER BEHAVIOUR One way retailers can gain a better understanding of the diverse types of customers visiting a store is by utilising technology and pre-existing infrastructures. BLE beacon networks, door-to-people counters, video sources, web and

social platforms, for example, allow retailers to not only the analyse behaviour of anonymous shoppers, but also gain deeper insights about the audience and shopping behaviours of those who opt-in to free internet connectivity. As consumers connect to guest Wi-Fi in store, retailers are able to gain insight into invaluable data, such as the age, gender, postcode, likes and dislikes of consumers.

Similarly, social media analytics and online activity can also be gathered to provide retailers, with a correlation between in store visitation to social sentiment, offering retailers with powerful insight into the success businesses have in creating awareness, appeal and value to consumers.

Equally as important as the data that is gathered, is the way it is presented. Having a dashboard that is comprehensive and represents information in an intuitive way will help retailers identify any trends in the market, and keep a pulse on the industry. This way, they are able to proactively and positively react to customer habits and gain a competitive advantage.

IMPROVING THE CUSTOMER EXPERIENCE Once store owners have a technology solution in place that can capture and present data in a way that is easy to digest, the insights presented can help retailers implement a bespoke shopping experience for customers. Not only will retailers be more in tune with their shoppers and their behaviour, major pain points associated with shopping in store can be improved.

Extended wait times, long queues, differing prices or out of stock items can be a source of frustration that can lead consumers out of store and result in a loss of sale.

Now that retailers understand the shoppers entering their stores, they can create smarter, more intuitive and more forward thinking shopping spaces. Through in store data analytics, patterns can be identified when traffic data is gathered so retailers are able to optimise the layout of a store. Retailers can experiment with different displays, signs and campaigns and identify which

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strategies are the most effective in attracting potential customers.

This not only helps with their bottom line and business management, but it provides consumers with efficient, enjoyable and personal experiences.

Retailers can further extend their tailored offering, by delivering data driven campaigns based on shopper behaviour through targeted promotional activity.

Utilising a range of channels and media formats including email, SMS, mobile notifications, video interstitials, OOH and Wi-Fi, store owners can send customers relevant promotions based on realtime data of their shopping habits and dwell time.

Retailers of any size can benefit from in store data analytics. A shopping centre for example, has utilised data insights to identify what sections of the precinct receives the most foot traffic. After identifying that the food court was the most visited area, and had the largest number of dwell time, with most consumers entering the centre just to visit that particular zone, the centre decided to move the food court to a different location, so that retail stores could benefit from the number of consumers entering.

Similarly, on a smaller scale, if a fashion store within a shopping centre explores the gathered consumer data and identifies its store receives a large volume of consumers that form a demographic slightly older than their target market, they can look to adapt their product range to accommodate a wider range of tastes and preferences, and/ or update their marketing and promotional strategy to realign and meet their intended audience.

Once retailers piece together a genuine understanding of their customers using in store analytics, and have a comprehensive understanding of those that are visiting their store, retailers will ultimately attract and retain customers as the instore experience is specifically customised for them.

By doing so, retailers will be able to predict, prepare and provide outstanding service to consumers, benefitting the bottom line and brand reputation. BFM

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BFM | PROFILE

HOW THE FOUNDER OF BARTERCARD IS CHANGING THE OUTLOOK FOR OUTSOURCING Andrew Federowsky, the co-founder of the world’s largest trade exchange business Bartercard has his sights set on transforming a different industry – outsourcing. However, as he tells Jonathan Jackson, in many ways these industries are complementary.

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PROFILE | BFM

W

e’ve all heard of Bartercard. It’s the global phenomenon that launched in 1991 and became the world’s largest trade exchange where small and medium-sized businesses barter-trade over $600 million each year in nine countries.

Bartercard members trade across a dynamic mix of industries and are serviced by 75 offices and 600 staff. That’s a significant business and one that co-founder Andrew

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Federowsky can be proud of.

Founded on the Gold Coast by Andrew Federowsky, Brian Hall, Andrew and Wayne Sharpe, with a vision to become the world’s leading trade exchange and business-to-business brand, it took just two years for Bartercard to launch globally.

The same passion, enthusiasm and drive that made Bartercard a success is now motivating Federowsky to achieve similar triumph in his latest venture, Outsourced HR Solution.

Outsourced HR Solution is a newly formed outsourcing business that connects skilled professionals that live and work in the Philippines and who are looking for work with Australian and New Zealand businesses looking to expand their workforce and shift back-office functions offshore.

This is not some call centre type relationship either. Outsourced employees are considered to be members of staff and are treated accordingly, with all the perks and/ or KPIs that entails.

How do you go from business-tobusiness commerce to outsourcing?

Well, the leap isn’t so large.

“When we founded Bartercard in 1991, we were seeing trends develop around the development of sales channels and commerce that were somewhat different,” Federowsky says.

“Loyalty programs such as discount clubs and Flybuys had sprung up, so we ‘Australianised’ the concept and started Bartercard.

The media picked up on it and labelled us the ‘knight in shining armour’ in business.”

Federowsky says that Bartercard became the largest business of its kind in the world over the next decade and a barometer for where business was at during various stages of the economic cycle.

There are two key points in the connection between Bartercard and Outsourced HR Solution. The first is the ability to see a trend, differentiate yourself in the market and then capitalise. The second is understanding business cycles and what companies need to help them survive.

“Having a network of tens of

Andrew Federowsky thousands of businesses you get to see what is going on and see business trends developing.”

Given the nature of the current economic cycle and the post GFC recovery, one significant trend is that businesses have been looking to cut costs by outsourcing functions such as marketing and social media.

One important point that Federowsky makes is that you can’t outsource people, just tasks.

“You need to look at a task and decide if this can be done elsewhere. If so, you can then make the decision as to how you can save on payroll, facilitate business growth and bring in new sales.

Outsourcing allows you to do this.”

Outsourcing has become more and more relevant over time.

According to Statista, the global market size of outsourced services was US$76.9 billion in 2016. To put this growth in perspective, in 2014, the global market size of IT healthcare outsourcing alone was just under $US35 billion, and forecast to increase to $50.4 billion by 2018.

Given those figures, it is little wonder why Federowsky is following this trend and putting his own stamp on it, specifically setting up shop in the Clark district of the Philippines where local partners aren’t required and international businesses are protected by the government.

Clark is also just 10 minutes

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BFM | PROFILE

from the airport and surrounded by significant infrastructure. It meant that setting up in this region was smooth sailing.

There are further benefits to setting up in the Philippines, most notably the language – Filipinos have outstanding command of the English language.

“The English speaking people led to a natural migration to the Philippines for those who were looking to outsource. It has become usual for a business that may employ two to three people in Australia to have two staff in the Philippines. This then allows the businesses to create more jobs at home by freeing up capital.”

That is a point worth thinking about. If you can hire someone offshore to do your digital marketing at a saving of between 45%-60% on what would be an $80,000 to $100,000 salary, then you can hire someone to ramp up manufacturing.

Outsourced HR Solution has only been open for three months, but already it is gaining similar traction Bartercard did in its initial stages.

This is partly due to Federowsky’s Bartercard connections and understanding of the business landscape.

“I had clients at Bartercard who were looking to outsource but didn’t know where to turn to or who to trust. So there have been

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great synergies between the two businesses.

Also attributable to the quick success of his new company is the team he has around him, which has extensive experience in the Philippines.

By his side are Tony Godbehere and Tony’s wife, the Philippine born Alona. All three understand the landscape and are dedicated to helping local Australian businesses increase profitability, expand their business and lower expenses by providing cost efficient outsourcing services.

According to Tony’s biography, his mantra is to: provide quality professionals that live and work in the Philippines, so businesses can move their back-office functions offshore. Tony believes the key to success is simple; invest in the right people and create a positive work environment.

To reiterate the point one final time, Outsourced HR Solution is dedicated to delivering quality staff, not frustrating call centre operators. Outsourced employees are highly qualified and legitimate members of the team who contribute to the overall success of business operations.

“Each OHRS staff member is 100% dedicated to you and your business and because labour is cheaper in the Philippines, you can save between 40%-to-65%

on salaries compared to what you would pay locally,” Federowsky says.

With the outsourcing market being so competitive, Federowsky says if companies are looking to cut costs and deliver cheap products they will quickly be out of business.

However, if they reduce their costs through outsourcing, whilst using the money saved to create good quality products at better scale, then there is no limit to what they can achieve.

And speaking of no limits, one of Federowsky’s favourite quotes comes from the Austrian oak himself, Arnold Schwarzenegger: “ignore the naysayers”.

It is a mantra by which Federowsky has lived his entire life; one that has seen him through the successes and hard times with Bartercard and holds him in good stead for the future.

“We have been goal setters all along, going way back to Bartercard and we have taken the same philosophy with Outsourced HR Solution, even signing an option for a 3300sqm space to be executed next year.”

That reflects the confidence Federowsky has in this business and in his own capabilities to make it work. There is certainly no negative ambiance distracting him from his goals and he expects to grow quickly without sacrificing the quality of the service.

He has a simple formula for success, which he believes all businesses should follow, particularly those looking to upscale through outsourcing.

1. Have a go. A lot of people talk about what can’t be done, look at what can be done.

2. Be positive. Negative energy rubs off.

3.Go with the trends. If you don’t, you will get left behind. Look at what the telephone did to business, computers and Amazon. You can’t ignore the trends.

“I look at everything from all angles and I believe that if you decide to have a go, you need to leave no stone unturned. Thank god for outsourcing, because good outsourcing allows you to meet your ambitions.” BFM www.businessfirstmagazine.com.au

PROFILE| BFM

Providing quality people to smart business owners and CEO’s at a fraction of the cost.

Phone: +61 (07) 5613 2325 Email: info@ohrs.com.ph www.outsourcedhrsolution.com.au www.facebook.com/outsourcedhrsolution/

BFM | MARKETING

WHAT IS INFLUENCER MARKETING AND IS IT RIGHT FOR MY BRAND? ‘Influencers’ have dramatically changed the marketing landscape in the last number of years. Time and time again, it has proven to be extremely powerful for brands. In fact, recent studies have shown that ‘71% of consumers are more likely to make a purchase based on a social media reference’. In the ever expanding digital age, consumers are seeking more efficient avenues to source product information and credible reviews, rather than resorting to traditional means such as magazines. By Sharon Zeev Poole, Director, Agent99 PR

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s such, the power of social media, in particular Instagram, has fostered the birth of ‘influencers’. Influencer marketing is a cross between product placement and a consumer testimonial; and when delivered by someone with a large following, it yields huge benefits for organisations and their brands.

Businesses who harness the use of influencer marketing have shown positive outcomes with “over 80% of marketers who had launched marketing campaigns involving social media influencers found them to be effective for driving both engagement and awareness.” Agent99 experienced this first hand as we recently launched the ‘Experimental Series’ for premium whisky brand, Glenfiddich, through a specific influencer marketing strategy, which was awarded the ‘2017 Best Presence in Social Media’ by Australian Drinks Award. But with so many companies competing for the spotlight, all with a unique selling point, how can you be sure your brand will actually benefit from influencer marketing?

WHAT EXACTLY IS INFLUENCER MARKETING? Consumers are sensual learners as they make a lot of their purchase decisions based on what they see and hear. Consumers are becoming tired of traditional advertising,

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as seen in the increased use of ad blockers. These days, particularly the younger demographic, are looking to meaningfully engage with a brand they are interested in. Influencer marketing offers consumers the same sensual experience as advertising, but with credibility to back it up, which is why, “marketing induced consumer-to-consumer word of mouth generates more than twice the sales of paid advertising.”

Influencers are able to promote a brand in an authentic and creative way as they have cultivated a high level of trust with their audience, who tend to be like minded and share common interests.

Understanding this opportunity, Hi Smile Teeth turned over $10 million in their first 18 months by using influencer-led social media campaigns. Instead of a hard sell, they aimed to create a global movement by sending product to influencers, whose following reflected their target market, and encouraging them to promote a lifestyle and culture that was unique to their brand.

SO HOW DO I USE IT? The first step is to find influencers that are appropriate to your brand or campaign. Just as you would target your audience, you will need to filter through and select influencers that mirror your brand’s image. Consider the goals of your business, and

try to look for influencers whose goals resonate with yours – this will make it easier for you to build a relationship with them, and potentially increase the likelihood of them using your product.

Once you’ve found them, you will need to develop a relationship with them. Sharing, liking and regramming posts are all really crucial steps in having them perceive your brand positively. Additionally, it allows influencers to actually see your business and ultimately make a decision about the relationship they may want with it.

Lastly, once you’ve developed a mutually beneficial relationship with an influencer, you will need to trust them with the creative content. Capable and experienced influencers know what their audience wants to see from them,

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MARKETING | BFM

the likelihood that your business will reach certain consumers out there should be expected. Whilst this is fantastic news for your brand, it can still be extremely challenging breaking through the chaos and reaching your audience, which is where influencer marketing can really help.

If you are struggling to reach, engage or impact consumers and their purchasing decisions, you should definitely consider influencer marketing in your mix. Furthermore, if you feel like your brand awareness could be enhanced or your presence within the digital space is lacking, influencers can build credibility in this area. The results highlight that influencer marketing has made its mark and is here to stay, so utilise it as best as you can. BFM Sharon Zeev Poole, the Director of highly regarded boutique agency Agent99 Public Relations, has grown the agency from a one-man show to a full service, award-winning PR agency located in the thriving creative hub of Surry Hills, Sydney. https://www.forbes.com/forbes/ welcome/?toURL=https://www.forbes. com/sites/tomward/2017/06/26/ this-is-the-future-of-influencermarketing/&refURL=https://www. google.com.au/&referrer=https:// www.google.com.au/

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and strategically choose their posts accordingly. That doesn’t mean you can’t have any say, but you should think about how influencers use social media to present their own personal brand – they’ve come this far, so don’t instil doubt.

WHAT BENEFITS SHOULD I EXPECT TO SEE? Influencer marketing is essentially a more efficient form of word-ofmouth, as “66% of consumers trust consumer opinion posted online,” and “37% of customers are more likely to remain loyal when inspired by word-of-mouth marketing,” so the benefits are clear. These statistics indicate that influencer marketing deepens B2C trust and will enable you to connect and create a relationship with your audience via this trusted third party. Moreover,

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you’re likely to see heightened brand awareness as a natural outcome of this deepened trust.

Still hesitant? Ask Jane Lu, founder of Australian fashion e-retailer Showpo, who turns over $30 million in revenue off the back of social media marketing and utilising influencers that mirror the young and fun image of the brand.

https://www.forbes.com/sites/ forbesagencycouncil/2017/08/14/ seven-signs-you-should-invest-ininfluencer-marketing/#882be13176f7

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3 https://digiday.com/uk/latest-adblocking-report-finds-half-disableblockers-read-content/

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MY BRAND IS VERY UNIQUE, SHOULD I STILL USE IT? While we understand that almost all brands are unique to some extent, if yours is considerably niche, utilising influencer marketing could really assist in reaching prospective audiences. The consumer world is constantly expanding due to people’s inherent nature to search for the newest and latest products, it is an ongoing cycle. Due to this,

https://www.markethub.io/ influencer-marketing-vs-word-ofmouth-marketing/

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https://www.smartcompany.com. au/business-advice/four-lessonsshowpo-founder-jane-lus-failedbusiness/

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BFM | PEOPLE DATA

DATA MANAGEMENT: TIME TO CHECK UNDER THE HOOD? In 2010, I was on holidays in Atlanta, Georgia, USA with a friend. Neither of us had ever been there, but we rented a car and a GPS at the airport and started making our way to our hotel. Everything was going fine until the GPS told us to turn up a one-way street.

The wrong way. By Lauren Scholtz.

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ow naturally, two ladies in another country on the wrong side of the road, we freaked out, but not as much as the guy in the other car!

Luckily, thanks to some quick thinking, we avoided an incident and ended up back in the normal flow of traffic. Until the GPS told us to turn

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left into another one-way street!

At that stage, we lost all faith in our GPS and winged it the rest of the way to the hotel.

When we got there (finally), I had a closer look at the rented GPS. It turned out that the thing hadn’t been updated since 2004! We were relying on data from six years ago

to get us safely to our destination, data that didn’t take into account that many streets had been turned into one-way roads in that time to help manage traffic congestion.

On the way back to the airport, I bit the bullet, paid for some extra data and used Googlemaps on my phone. Things went much more

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PEOPLE DATA | BFM

smoothly. It even gave us a realtime warning of roadworks on the route we’d planned, and offered an option to go around them.

Your people data is like the GPS in your car. You rely on it to get you where you want to go, but it can only guide you based on the information it has.

People data needs to be managed well to give you the most value.

The value of good people data isn’t some fuzzy intangible either – it’s cold hard cash. For example: • It’s the extra productivity you get from a happy, well-trained worker; • It’s the money you save by identifying and managing an unsuitable employee out of the business early; and • It’s the hours your business leader spends doing their actual job instead of sifting through

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emails and diaries preparing for a performance review For many HR professionals, people data is something that lives on our personal computers (if we’re lucky). It’s stored on spreadsheets, or even in an actual filing cabinet.

This makes it hard to see, but even harder to maintain.

Data is a strategic asset, but we need to treat it like a physical one.

If it was a car, your business would likely have a plan for how and where it’s stored to keep it secure. You’d have a policy regarding who can access it and what it can be used for to create value for the organisation.

There would be a regular maintenance plan to keep it running smoothly and a person in charge of making sure the plan is followed.

People data is another asset to your business, and maintaining that asset starts with good habits.

Such as: • Follow a plan to ensure your data stays up-to-date; • Know who is accountable for the accuracy and completeness of the data; and • Consistently adhere to formatting standards for your data.

Ultimately, you want to know that your people data is something you can use to confidently make a business decision. Otherwise, you might find yourself driving the wrong way up a one-way street. BFM Lauren Scholtz is a customer success manager at intelliHR, a cloud-based people management platform that allows organisations to maintain a real-time handle on performance, creating a culture that contributes to strategic decision-making with datadriven insights.

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BFM | PROFILE

VALUE CREATION CREATES A CULTURAL DIFFERENCE Liberty International Underwriters (LIU) is a division of Liberty Mutual Insurance, a Fortune 100 corporation which has been in business since 1912, so LIU feels it has several advantages in the Australian insurance marketplace, writes Leon Gettler.

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here is a distinctive culture at LIU. As a division of Liberty Mutual Insurance, which has 50,000 employees around the world, there is the opportunity to share knowledge and learning, while ramping up the latest technology.

It is this culture that drives the success of the company and the relationships with its clients and partners.

“For me, one of the things to take away from our culture is that we have been around for a long time and we’re very stable, very strong and very consistent in the way we deliver our services to the market,” says Richard Todd, LIU’s Vice President of Accident and Health.

“While we have serious financial and regulatory responsibilities as an insurer, there are some benefits to not being locally listed on the ASX. It helps us centre our culture around our policy holders. We are able to really focus our decisions around the people and businesses that we insure.”

“We can quickly adapt to the changing needs of our policy holders and that’s a huge strength.

Obviously we still have to be a sustainable and viable business but it’s done with the policy holders’ needs in mind.”

That has enormous implications for customer service.

Todd says LIU treats its customers with empathy and compassion and exercises the discipline of being absolutely clear about what the terms and conditions are, or are not, and delivering on that.

It all comes down to deliverability and that, he says,

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Richard Todd is the major differentiator for the company. This is what sets it apart from the other insurers.

“What differentiates us is that we deliver on our promises. That allows us to build trust and credibility and long-term partnerships. We’re not just looking for a quick win or to write some business for the sake

of it. We look at what we can bring to the customer and how we can provide value for them, and then we deliver on it.”

“It’s very easy to stick it on a PowerPoint presentation or talk about it when you are out in the market and meeting brokers and clients, but delivering on it is the

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PROFILE| BFM

hard part, and that’s the bit LIU does very well.”

It’s an ethos that has allowed LIU to build solid customer relationships. It has a number of long-term clients, and it also has a high staff retention rate. There’s very little turnover.

“Every single company will say that employees are their best asset and happy employees will lead to happy customers or some similar theme on that. It’s either on the first page of the website or in briefings to the market,” Todd says.

“We say that too, but we deliver on it. The way employees are looked after and given opportunities to grow and develop is second to none here. There are huge career paths and working for a global organisation, there are opportunities across the company.”

“Since I have worked here, I have seen people that were working on the front desk in reception showing potential and moved into our claims team. I’ve seen an underwriter move into marketing, and our Head of claims has a legal background and also manages our technology function. I have seen people move overseas and people being moved from overseas back to Australia. It really is a culture that develops and grows our people to ensure they have rewarding and stimulating careers.”

“For me, I had the opportunity of being in Belfast for three weeks and Dublin for three weeks last year. Those opportunities to learn and meet different cultures and learn about their businesses and take those learnings back to Australia are amazing.”

There is that word again: culture.

And Todd sums up the culture by referring to it as ‘collaborative’.

“Everyone is working together and the support that I have had in a relatively new line of business has been amazing,” Todd says.

“Our service areas - such as legal, claims, actuarial, finance, IT and marketing - all of those areas are just as important as the areas that are out in the market day to day. They all work to deliver for our customers. And we are very clear

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about what that value is across the organisation.”

“We are very autonomous locally but for me it just comes back to everyone working together. It’s collaborative, it’s supportive and it’s a great place to work.”

The other great part about working for a global insurance firm is the teamwork and learnings across the company globally.

Sharing the technology has been particularly important.

LIU’s Accident and Health business launched in late December 2016 and was able to leverage methodologies and technologies to build its system.

“It was built out of Belfast and we have full access to all the underwriting and service expertise and shared efficiencies. We are very good at sharing information and communicating across the organisation and we are able to really tap into that pool of knowledge.

The most important thing for me is to choose what we use locally and adapt it to our needs. What that really means is that we are always in control of our destiny locally.”

“We are still finishing our system build. I literally talk to Belfast every night about putting the finishing touches on our system and what our broking partners and customers are telling us they want.”

The critical area, he says, is that the company is locally empowered.

“I have worked for global organisations my whole career, basically,” he says. “The key difference for me is that LIU empowers people locally. You have access to all that wonderful knowledge and expertise around the world. You are still very nimble and still entrusted to make decisions locally.”

Boston-based Liberty Mutual Insurance sold its first workers’ compensation insurance policy over a century ago, and now operates across all the property and casualty disciplines, offering everything from disability insurance and workers’ compensation insurance to home owner’s insurance. LIU itself offers a huge range of products in Australia and globally.

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In Australia, there are three key areas of Accident and Health.

There’s corporate travel for groups ranging from businesses and sports clubs to schools.

Customers include small businesses right through to multinationals purchasing group travel policies to cover their employees or members.

Then there’s group personal accident, covering things like accidental death, disability insurance and weekly income replacement if people are sick or injured. Again, that is sold to groups. It might be a sports club, a company, or it could be a small business.

There is also expatriate insurance providing medical insurance for people who are overseas working for Australian companies. The latter is particularly complex. There is no Medicare overseas and health care

costs can be particularly high.

“We offer the full range of services with a 24/7 helpline which allows people to ring up and just ask questions about particular destinations or particular events,” Todd says.

“If they are unfortunate enough to have an event - anything from a lost wallet to a horrific accident or a shocking incident, such as a terrorist attack, earthquake or tsunami - we can help. LIU offers a full range of assistance, including getting them to safety.”

“If they are in need of medical attention, we help them access quality local services. It’s really important to note that not all hospitals are the same, and not all countries have the same standard of health care. So we make sure that wherever they get to or wherever we take them, it offers the high quality of care that we would expect here in Australia.

Big picture thinking starts with tiny details At LIU we focus on the client’s needs. Through our extensive experience, local market knowledge and authority, we study the detail and work closely to provide bespoke solutions that add real value. It’s what sets LIU apart. liuaustralia.com.au

If the care is not available in that country, we look after the air ambulance services and getting doctors onto planes to where they need to be.”

Todd sees the business growing, bringing products to Australia and spreading out to Asia; however, the really exciting part for LIU, he says, are the opportunities offered by the changes sweeping through society.

“The technological changes and the development in society over the past 10 to 20 years have been phenomenal,” he says.

“Changes that will see selfdriving cars and increased working from home - I think there is opportunity to build service around these areas and grow businesses from there. I certainly see us at LIU working towards vastly different products over the next decade and creating value as opposed to benefits.” BFM

PROPERTY | BFM

GROUP BUYING: THE PROPERTY EQUIVALENT OF WHOLESALE SHOPPING Housing affordability is a hotly debated topic, but those taking the time to research property investing will find there are ways to achieve your home ownership dreams without a six-digit salary writes Nathan Birch, co-founder of Binvested.com.au.

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number of different approaches have been put forward to ‘solve the housing crisis’, but one strategy can work for buyers right now to secure property below market value - Group Buying.

Being hailed as the new property equivalent to wholesale shopping Group Buying is a concept bringing investors and first home buyers together to drive property prices down. It’s saving people thousands on a new home by banding together to bulk-buy properties below market value, in deals that work for both the developers and land owners.

You buy food at the shops in bulk and save, so why not with property?

HOW IT WORKS By bringing a significant number of buyers together to approach the developer you’re able to help them by cutting out much of the legwork and the agent fees that would result from selling each property individually on the open market.

Developers planning to build an estate typically need to sell off a number of properties before they can begin development, in order to secure finance from the banks We’re giving the developers what they need (pre-sales) to get their developments across the line from a finance perspective, while removing the stress and expenses of a large-scale marketing campaign with glossy brochures, sales teams and so on.

We’re essentially cutting out all the fat in the middle.

Using this approach you can negotiate a deal on a significant portion of the properties in the development and secure property well below market value.

founder of Binvested.com.au. Our clients save on average $100,000 $300,000 from buying their house and land on a bulk scale.

These deals are reliant on a large number of buyers coming together at the same time, which binvested.com. au are able to do with our established network of investors. The bulkbuying deals I’ve coordinated have been made up of anywhere between 30 to 100 different buyers, so there’s a huge element of trust.

Time is spent vetting each buyer beforehand to ensure they are in the financial position to be a part of these deals. As well as vetting the buyers, we ensure that we’re working with industry leading developers on these projects.

Having negotiated tens of thousands of successful real estate transactions, we have built up a solid reputation in this market and can negotiate deals of this scale with developers due to our credibility and history.

BENEFITS • Wholesale pricing • Equity - Making a profit from day one

• An opportunity for first home buyers to get a foot in the door • Ability to get yourself out of the workforce in 5-10 years by repeating this process over and over as part of an investment strategy If you’re considering a group buying deal it is essential to focus on the numbers, have a clear goal or strategy in place, have the right team around you (legal, buyer’s agent, property manager) and always speak to a finance strategist first. BFM Nathan Birch is the co-founder of full-service property investment group Binvested.com.au, offering buyers agents, financial planning, property management and each service required to become a property investor. With more than 200 properties and a net worth of 30 million, Nathan is one of Australia’s most highly regarded property investors. Binvested.com. au secure property deals for clients that meet their 3 core criteria: below market value, high growth potential and, where possible, are positive to neutrally geared.

HOW CAN YOU ACCESS GROUP BUYING? As a property investor and co-

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BFM | INVESTING

Why Australians need an alternative approach to investments The Australian investment market of 2017 is evolving rapidly: low interest rates and global monetary policy have pushed yields to record lows; in March of this year, according to figures from ASIC, property prices reached “bubbly” proportions in many locations; exchange-traded funds (ETFs) and listed investment companies (LICs) are attracting fans for their lower fees and higher liquidity; meanwhile, more and more Australians are eschewing the confines of a pooled superannuation and going it alone.

And against this backdrop, a wave of baby boomers reaching retirement age is creating huge demand for income-producing assets. By Alan Greenstein, CEO, Zagga.

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ow will the investment industry respond to these trends? How will it meet the demand for transparency, control and income that today’s sophisticated investors demand? And what opportunities does this new marketplace create for investors?

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THE RISE AND RISE OF THE “SELFIE” Figures from the most recent Black Sky Report from AMP Capital show self-directed investors are on the rise, driven in large part by the growth of self-managed super funds (SMSFs), which now account for almost one-third of the

superannuation pool in Australia.

These ‘selfies’ are driving a doit-yourself ethos in the wealth management industry, and it’s distinct from the traditional strategies of institutional investors.

SMSF investors represent the

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INVESTING | BFM

income of $250,000 and above, or $2.5 million in assets, or able to make a single investment of $500,000 or more), able to access products and schemes not usually available to retail investors.

largest group of ‘DIY’ investors, with significant investable assets and defined investment goals (accumulation ahead of retirement or income during retirement).

However, there are many other independent investors, with the ASX reporting in its 2017 Investor Study that 60 per cent of Australian adults hold investments outside of super. And while these investors are self-directed, they’re not always unadvised. 60 per cent use professional advice from financial planners, accountants, stockbrokers and lawyers to make investment decisions.

1.1 million Australians use a SMSF to manage their super, collectively holding $656 billion.

The behaviours and preferences of this group are shaping the investment market, influencing the products developed by the wealth industry, and the allocation of capital in Australia.

Many SMSF investors also fit within the category of ‘sophisticated investor’ (annual

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A DIFFERENT APPROACH TO PORTFOLIO CONSTRUCTION A common theme with Australian investors is their risk-averse outlook: nearly 70 per cent are seeking stable, reliable or guaranteed returns from their investments, and, compared to the rest of the world, only 29 per cent of Australian investors are prepared to increase their risk profile for the opportunity to earn more income, compared to 66 per cent of investors globally, according to the ASX’s Investor Study.

As a result, many investors have built barbell-style portfolios: low-return cash investments to stay safe, balanced by higherreturn equities, further up the risk spectrum, to increase returns.

This raises the question: why are they studiously avoiding the middle ground?

PRICES ARE UP. YIELDS ARE LOW. WHAT NEXT? In a low-interest-rate world, income investors are keener than ever to get returns above the cash rate.

But as they flock to incomeproducing assets, it has pushed valuations up, and perversely, pushed yields ever lower. Capital growth is good for overall returns but poses problems for investors, especially those in pension phase, seeking income.

Property prices have increased by up to 70 per cent in a five-yearperiod, while rents lag behind, leading to record-low yields.

This yield dilemma is true for both residential and commercial property.

Similarly, in the equities market, valuations and PE ratios are high, relative to historical trends. The

income-focused investor must pay a high price for bond-proxy stocks in this situation.

THE BONDIFICATION OF SHARES Their high allocation to cash suggests that for Australian investors, consistent income and capital preservation are top of mind, except when it comes to equities, where the search for growth and yield trump capital guarantees.

This has been called the ‘bondification’ of shares – turning to equities for the consistent income; or as The Financial Times explains it, investing in stocks “with good dividends, fewer debts, strong pricing power, free cash flow and high return on equity — factors that make them more bond-like.”

However, shares are not bonds, and they have two crucial differences: their dividends are discretionary and they rank last in the capital stack. In contrast to debt products, where borrowers must make repayments (for example, paying coupons), companies are only permitted to pay shareholders if they are in good shape. And unlike fixed income securities, equities come last in the capital structure.

In other words, if the company is liquidated, bondholders get paid ahead of equity holders.

THE CREATION OF ALTERNATIVE INVESTMENT OPPORTUNITIES Australia is unusual in its low allocation to fixed income investments at both institutional and individual investor levels.

According to Mercer Australia, local super funds have an average of 25 per cent allocation to fixed income (including cash), compared to 40 per cent for the USA and Canada, 65 per cent for Sweden and 80 per cent in China.

These are professionally managed investment portfolios.

According to Franklin Templeton, when we look at SMSFs, as an

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example of self-directed investors, “the allocation to fixed income is alarmingly low, at one per cent”.

There are a number of possible reasons for this bias among investors, who favour share ownership ahead of fixed income, including familiarity with equities; dividend imputation; transparency and control.

Investors have the opportunity to increase their exposure to debt products, as long as they can increase their familiarity with them, understand the need to balance risk with reward, and have a sense of control and visibility.

DEMOCRATISATION OF LENDING It’s clear that Australian investors are comfortable with being owners and borrowers: they take out mortgages for their homes; negatively gear their investment properties; take limited-recourse loans to buy property in their SMSFs; they take equity stakes in companies.

And yet they are missing out on a key opportunity: to be a lender.

A range of factors have seen banks pull back on lending both globally and locally. Post-GFC regulation and capital requirements are key factors, but in Australia this has been magnified by efforts to dampen the housing boom.

Macroprudential policy has forced the banks to reduce their lending to property investors and foreign residents, with the result that credit is essentially being rationed, even to quality borrowers.

It creates a significant gap - and opportunity - for lenders who don’t have the same restrictions.

While the opportunity to lend money has been around as long as bonds, the advent of marketplace lending has made it more accessible for individual investors.

There are a number of models in this sector but the underlying concept is that borrowers can access capital being lent by individual (or institutional) investors, rather than just banks.

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It’s a democratisation and disintermediation of the traditional banking role.

A NEW APPROACH TO INCOME GENERATION The marketplace lending model provides exposure to the debt asset class, but for an investor focused on capital preservation, the solution needs to be safe as well.

Most existing players offer unsecured loans, meaning that the risk profile of their products may not align with the needs of investors, especially those in retirement.

Zagga flips the concept of a traditional marketplace lender on its head with a secure, fully-licensed offering suited to wholesale / sophisticated – including self-directed – investors,

in a safe environment. By providing only high-quality loans backed by real mortgages, the risk of capital loss is very low, offering a better investment overall.

This way of investing provides investors the ability to add a ‘middle ground’ to their portfolios, providing regular, consistent income.

Zagga believes this new type of income-producing asset will appeal to a growing class of wholesale / sophisticated investors, who want transparency, control and returns from their investment products. BFM Zagga is an alternative investment platform connecting wholesale/ sophisticated investors with quality, creditworthy borrowers via an online marketplace.

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LAW | BFM

Traditional law firm model is unsustainable Law firm leaders need to remain relevant to senior partners, junior lawyers and the clients they serve. This balancing act means the traditional law firm model is unsustainable, writes Dr Stephen Moss.

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he pressures of change are profound for law firm managing partners in all levels of firms in the market in Australia and internationally. The pressures private practice firms are facing are complex, and the solutions require a critical analysis and understanding of the changing landscape.

The old paradigms of raising rates annually, open ended billings based on hours worked, and a more sophisticated buying community for legal services has put enormous pressure on rates and margins for private practice law firms. This pressure, along with the call for deep specialisation across the profession, has left generalist lawyers with nowhere to turn.

The war for talent is clearly aimed at high calibre specialist lawyers, especially those who can strongly sell themselves and their services to both the corporate community and the top end law firms they aspire to join.

The internationalisation of the top-end of the profession has been profound over the last 10 years. Only a few of the major firm brands around the world 20 years ago exist today, and the new major firms are largely corporatized, with partners working as senior executive employees rather than actual partners, as defined 20 years ago anyway!

LARGE LAW UNDER SIEGE FROM THE BOTTOM UP With the traditional apprenticeship model of the law firm partnership giving way to a more entrepreneurial model, we are also seeing innovative lawyers choosing pathways other than the traditional partnership track.

Following Axiom Legal in the US, when Advent Lawyers began in Australia they introduced a new

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law firm model – “breathing new life into law” – where the contract lawyer was only paid once they were assigned to a piece of pre-sold work, with the lawyer being billed weekly or monthly.

Lawyers choose their own working arrangements – and it worked. Last year this innovative start-up was merged with Lawyers on Demand in the UK with nearly 1,000 full time equivalent lawyers.

There have been many followers, both disruptors and enhancers to the legal services landscape.

Probably one of the best enhancers is Crowd & Co*, which has both a two-sided digital marketplace for lawyers and buyers of legal services and also a SaaS offering for law firms, large and small, to white label the highly advanced Crowd technology within their own firm, with their alumnae community and across the industry through Crowd & Co’s public platform.

LAW FIRMS NOW ENCOMPASS A MYRIAD OF STRUCTURES Lawyers and law firms now encompasses a myriad of structures. The influence of the corporate sector has widened with the growth of sophisticated inhouse teams and there are so many new models of law firm and legal services supply chains coming to market driven by new technologies in block chain, machine learning and artificial intelligence.

So called “Alternative Legal Services Provision” has only just begun, both helping to dismantle out of date service models and enhancing the client experience, at significantly lower cost and very often offering a far more efficient solution to the client.

There will always be a place for the trusted advisor role, working closely with the CEO and boards of corporations. For such “bet the

farm” work the rates charged are seldom questioned, and the senior lawyers in such roles will always be in demand.

Long-standing relationships between ASX100 board rooms and law firms, and the senior partners within, are also still strong.

TWO TYPES OF TOP END LAW FIRMS It is now clear in Australia that there are two types of top end law firm, the international firms like Ashurst, Herbert Smith Freehills, Hogan Lovells and King & Wood Mallesons, and the local firms like Clayton Utz, Gilbert + Tobin and Minter Ellison. Many of these firms service the same top end corporate clients. The ability to attract the best top end work depends on both the brand and the individual partners, thus the war for senior talent continues.

The pressure of change across the legal services profession are indeed profound. The landscape has changed and will only continue to fracture.

The old ‘tiered/ structure of the Australian law firm market is now redundant.

Over the next six articles I will address a number of the trends causing this change to an age old and wonderful profession.! BFM Dr Stephen Moss is the Managing Partner of Eaton Capital Partners which provides highly specialised and bespoke services in two practice areas – corporate advisory and legal services. ECP Legal leads mandates in governance and management, strategy and discreet partner search, while ECP Advisory leads M&A transactions, assists with divestments and provides guidance to the wider professional services sector. *Eaton Capital Partners is an adviser to Crowd * Co

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BFM | PROFILE

Superannuation’s secret weapon Superannuation, one of Australia’s largest industries, is going through change and Mercer, one of the world’s largest consultancy firms for superannuation, is leading the charge.

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ustralian super funds and their leaders have achieved much in recent years. Our retirement industry ranks third in the 2017 Melbourne Mercer Global Pension Index and total assets set aside for the future are now $2.3 trillion, or 130 per cent of Australia’s GDP. There is now more money in the superannuation industry than there is cash in the banking system.

Because of its scale and increasing financial importance to Australians, the industry is coming under renewed scrutiny.

Financial Services Minister Kelly O’Dwyer introduced draft legislation this year that would see superannuation fund directors facing jail terms of up to five years for wrongdoing. She has also stepped up pressure on the sector to release its anticipated code of practice covering insurance in superannuation. At the same time, the Australian Prudential Regulation Authority has warned underperforming super funds that they will be forced out of the industry if they can’t operate in the best interests of their members.

Ben Walsh, Managing Director and CEO of Mercer in Australia says it’s only natural that the regulator is focusing on how the industry is performing and delivering on its promises. And that, he says, is a good thing for members and the industry.

“There’s something like 214 regulated super funds in the country; the top 20 of those

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PROFILE| BFM

funds have around $20 billion or more under management and the bottom third each have less than $1 billion,” Walsh says. “With such variation in scale, it’s good for super funds to be clear on how the government and the regulator are focusing on them doing a good job.

“It’s pleasing to see the government and regulator talking about how they evaluate whether the industry is performing and that’s by being focused on the retirement adequacy outcomes that members are enjoying in a superannuation fund.”

Walsh says that with the scrutiny of regulators tightening, it is now absolutely necessary for super funds to focus on how they will achieve the best outcomes for their members.

In this environment, Mercer is increasingly being seen as a secret weapon for the superannuation industry, as it continues a strategy designed to form partnerships that provide better member service and value to the overall industry.

It is now seeing many funds investing in areas of digital and member experience, accessing new types of investment and driving down the product’s cost curve.

All of these improvements are designed to help funds meet growing member demand and engaging experiences that are easy to understand and navigate.

“The world has changed,” Walsh says. “When you think back 10 or 20 years ago, superannuation used to be something you joined when you started with an employer, and you really didn’t engage with it, and even when you did engage with it, it was very old world with paper forms in triplicate, and strange language.

“In today’s environment, superannuation funds that are performing well have worked hard on the member experience they provide for their members.

They are embracing innovation and member engagement through enhanced technology, digitisation and ease of interaction.”

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Mercer has its own member analytics engine called Mercer Edge. It is a data-driven analytics, marketing and strategy platform that can predict members’ behaviours and provide them with personalised and contextual insights about what action they might need to take at a certain stage in their life to maximise their retirement outcome.

“IT’S A WIN FOR THE PILLAR CLIENTS WHO ARE NOW ADMINISTERED

BY MERCER. IT’S A WIN FOR OUR EXISTING CLIENTS WHO ARE NOW PART OF A MUCH LARGER ORGANISATION.”

“In the past a very low proportion of the membership might engage with communications sent by their fund. Today we are seeing click through rates that are significantly higher. We are getting cut through by providing the next best piece of information that a member will need, almost before they know they need it,” Walsh says.

“Our technology and analytics capability makes the most of every member interaction by adding value to the experience.

From highlighting personalised content experiences when a member logs into their account, through to call centre experiences based on next-best conversation, and innovations such as social media chat-bots designed to engage younger audiences. Our

approach provides not only a rich understanding of the issues that the member might have on any given day, but also a much richer understanding of the sorts of things that are likely to be relevant for them.

“That’s a tremendous innovation that has occurred within the industry only in the last few years, to take a much more sophisticated approach for how we think and how we serve individual members of superannuation funds.”

Mercer is now on a powerful growth strategy to deliver this approach to more and more super funds, whilst creating the flexibility for them to maintain control of what is core to their fund.

This growth strategy plays a major role in its ambition to be the industry’s most powerful secret weapon.

The company’s acquisition of the New South Wales government’s funds administrator, Pillar Administration in 2016 brought $100 billion of funds under administration into the business and 1.1 million member accounts.

“The important thing to remember is we are more than an administrator. We provide products and services across the entire industry. To the clients of Pillar, we are able to bring superannuation consulting services that Pillar previously could not provide, or investment management or member communications or a whole raft of new things. Plus it enables us to take to all of our existing administration clients more benefits through the advantage of that additional capital expenditure on people, process and technology.

“It’s a win for the Pillar clients who are now administered by Mercer. It’s a win for our existing clients who are now part of a much larger organisation.

“It was the largest acquisition that we had made in our history in Australia and it was transformative from a scale perspective. It reminds everyone within the industry that

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superannuation is core business for Mercer and that we are deeply invested in the Australian superannuation landscape.”

How does all this help the industry?

By partnering with Mercer, super funds can retain their brand identity and trusteeship, whilst simultaneously accessing a new world of benefits and features for their members.

Over the last two years, Mercer has made a number of acquisitions and entered into innovative strategic partnerships and alliances with firms like Virgin Money and TAL. Walsh cites the case of the partnership with Virgin Money where Mercer undertook investment management and administration for them. This

enabled Virgin Money to reduce their end price to the average member from $553 to $333 a year – a 40 per cent reduction.

“Super funds are very passionate about the members they serve, their brand identity, their governance structure and trusteeship,” Walsh says.

“They can own and manage all of those activities but everything else they can partner with other providers or a single provider like Mercer to create cost efficiencies and better retirement outcomes for their members.

“By being part of something bigger, they are able to access new features and more competitively costed features than on their own.

“We are not saying or suggesting those superannuation funds become part of Mercer, we

are saying they should think of Mercer as their secret weapon inside their business, helping them deliver their strategy whilst they own their brand and their trusteeship. BFM With more than $200 billion in funds under management globally and supporting over 2.1 million members, Mercer is one of the largest outsourced superannuation providers in Australia. As well as being a super fund administrator, Mercer is one of Australia’s largest actuarial and investment consulting companies and operates the $23 billion Mercer Super Trust.

Mercer is helping to make a difference in the Australian superannuation industry and creating a difference in people’s lives by offering a different kind of perspective.

A DIFFERENT KIND OF PERSPECTIVE “Mercer challenges our thinking and brings a richness of perspective.”

Belinda Tumbers MD / Kellogg’s AU/NZ #ADifferentKind

For the full story and to hear from other business leaders, visit mercer.com.au/adifferentkind

PROPERTY| BFM

TRENDS IN THE COMMERCIAL PROPERTY MARKET A vital commercial and operational component for all businesses is the property it uses, owns and manages.

By Fabian Nager, Development Director, Industrial, Mirvac.

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hat means that commercial property market conditions can have a significant impact on a business’ operational costs, and keeping up to date with trends in property development can help drive efficiencies and cost-savings.

Chief executives and managers across manufacturing, logistics, automotive, retail, food, beverage and transport sectors looking to establish a successful enterprise, consolidate facilities or change locations should be aware of trends in the property market so they’re ahead of the curve when they need to make their next move.

A KEY TREND – ECOMMERCE IN AUSTRALIA Demand The eCommerce sector will have a major impact on the property market in the next 12 months, with many businesses in the space already strategically positioning themselves for optimal performance.

In August 2017, Australia Post released its Inside Australia Online Shopping Report, which shows Australian’s spent $21.7 billion shopping online in 2016, an

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increase of 10.4 per cent compared to 2015. The research also found that growth in online spending outperformed bricks-and-mortar retail by 6.9 per cent.

Research from Colliers International shows eCommerce currently represents 40 per cent of the online retail market and has been consistently increasing over the past 12 months. This trend is particularly focused in greater Sydney, with industrial leasing activity to retail tenants within Western Sydney tracking at approximately double the 10-year average since the beginning of 2016 and major eCommerce players, such as Amazon and Alibaba, projected to increase their presence in Australia.

The increase in eCommerce and online sales in Australia is also driving activity in the transport and logistics sector, as demand to service the delivery of products grows. The research also shows that the transport and logistics sector has been dominating the demand for industrial property in Australia, currently representing approximately half of industrial property leasing deals.

Design In addition to demand for industrial property, the need and requirement of warehouses is changing as the scale and speed required to move goods becomes paramount.

Better-designed buildings have a greater scope in improving operational efficiencies, in turn, reducing costs. Design considerations include high bay logistics, increased use of robotic and mobile automation, greater cubic capacity, quality indoor working environment for employees, as well as for the condition in storing goods,

and sustainability, such as a Green Star rating.

Modern industrial hubs are increasingly designed for the evolving nature of the industry, with a focus on occupier amenity, working environment and enabling the use of current and future logistics technology.

It’s important to ensure that the specification of your facility enables future advances in technology, automation, as well as increased space and amenities for more intensive management of goods and additional services.

A number of property developers are capitalising on this trend, offering a blend of functional warehousing and market leading specifications, allowing for operational efficiencies. An example is Mirvac’s Calibre at Eastern Creek, a next generation industrial estate in Sydney’s west, comprising of 110,000 sqm over five buildings.

Building 3 at the development was built on a speculative basis to cater to businesses looking to secure strategically located, functional and flexible warehouses to improve operational efficiencies and future proof their businesses.

LOOKING AHEAD As a business leader, it’s important to understand how key business trends will impact the commercial property market and in tern your own assets. Also taking into account the future growth and needs of your business to ensure you’re planning for success.

When searching for your next property there is a range of factors to consider: Access to the metropolitan population as well as other key stakeholders, including suppliers • Proximity to existing industrial infrastructure • Strong accessibility in to and out of site • Internal flexibility in the movement throughout the facility • Scale in terms of cubic capacity • Scope to cater for current and future technology (e.g. automated material handling and racking systems). BFM

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BFM | RISK

The ones to watch: the biggest business risks of 2017 at home and abroad We live in an era of unprecedented volatility. Trends across three major areas—economics, demographics, and geopolitics—combined with the pace of technology change, are converging to create a challenging new reality for organisations around the world. By Lambros Lambrou, Chief Executive Officer, Aon Risk Solutions Australia.

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ith this in mind, Australian businesses need to ensure they are prepared and protected from potential risks, whatever their nature or size. Through our biannual Global Risk Management Survey, we gather input from public and private companies around the world to identify the biggest risks at both a global and country level.

Top 10 Australian risks are: 1. Regulatory / legislative changes 2. Damage to brand & reputation 3. Increasing competition 4. Failure to innovate/meet customer needs 5. Cyber crime / hacking / viruses / malicious codes 6. Major project failure 7. Failure to attract or retain top talent 8. Economic slowdown / slow recovery 9. Business interruption 10. Lack of technology infrastructure Top 10 global risks are: 1. Damage to brand & reputation 2. Economic slowdown / slow recovery 3. Increasing competition 4. Regulatory / legislative changes 5. Cyber crime / hacking / viruses / malicious codes 6. Failure to innovate / meet customer needs

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7. Failure to attract or retain top talent 8. Business interruption 9. Political risk / uncertainties 10. Third party liability THE RISE OF BRAND AND REPUTATION AS A RISK “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

Warren Buffett’s famous quote sums up the realities of reputation: something that is carefully cultivated over years can be destroyed instantaneously. Massive scale cyber-breaches, avoidable industrial accidents and scandals can harm organisations to the point of collapse.

Not surprisingly, damage to brand and reputation remains the number one risk globally in 2017, with 45 per cent of 2017 respondents listing it as a top risk concern globally. A further 10 per cent of respondents reported damage to reputation or brand resulting in the loss of income in the past year.

In dealing with events which may affect the brand or reputation of a company, crisis management can be seen as equal parts art and science – learning from the past, deploying cross-functional teams when needed, and authentically responding in a right manner – including making apologies and

taking appropriate steps to rectify any wrongs.

The insurance industry also has specific solutions available to help mitigate the risk to brand and reputation; by identifying weaknesses, companies can make sure these solutions are included in their insurance policies. Possible solutions range from traditional cost remediation funding, to advanced business interruption coverage that occurs as a result of an incident.

THE IMPACT OF REGULATORY CHANGES ON THE ECONOMIC ENVIRONMENT Regulatory risk was ranked as the number one risk in Australia and fourth globally. In Australia, multiple government leadership changes over the past few years have left businesses uncertain about regulatory stability in the future and scrambling to predict impacts to their businesses. Over

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RISK | BFM

However, in trying to compete with overseas competition, aggressive infrastructure planning has resulted in crippling delays and we are increasingly seeing projects absorbing billions of dollars in losses due to project failure. With this in mind, it is no surprise that Australian businesses are increasingly concerned about the risk of project failure.

The risk of major project failure highlights the importance of risk management at the early stages of engagement. This includes taking time to consult with the full project team, charting all the risks, and then planning out appropriate mitigation controls. In addition, a process of methodical reviews can identify new issues that could potentially impact the project, enabling risk management strategies and insurances to be adjusted accordingly.

the past 12 months, regulatory/ legislative changes have resulted in a loss of income for 21 per cent of the Australian survey participants.

Regulation can create advantages for consumers as the government attempts to create a level playing field across an industry, however, they are often quite costly for companies to comply with – and even more costly if they are breached. It’s crucial for companies to consistently and regularly assess their political, security and regulatory risk, ensuring they limit their exposure to sudden change.

Interestingly, economic slowdown and recovery ranks as the second biggest risk globally, which can be partly attributed to a shifting political landscape due to recent events such as the US Presidential election and Brexit.

However, it’s interesting to note that in Australia this ranks eighth, indicating that Australian

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businesses have a higher level of optimism towards the economy and economic growth. A surge in housing construction and government–backed infrastructure investment in road and rail has definitely been a factor in this confidence however it must be noted that Australia’s resilience in times of global economic volatility cannot be relied on to meet the challenges of tomorrow.

INFRASTRUCTURE AND PROJECT RISKS: A LOCAL CONCERN Major project failure did not feature on the global top 10 survey results but peaked as the sixth biggest risk for Australian businesses. Development of national infrastructure has been a centrepiece of the 2017-18 Budget, with the Government committing $75 billion in critical infrastructure funding and financing over the next 10 years.

THE FUTURE OF THE RISK LANDSCAPE As well as the risks which currently face businesses, it’s vital that they consider emerging risks that may become significant in the next few years.

A stand-out emerging risk in Australia is disruptive technologies and innovation. It is anticipated this risk, which currently ranks at number 20, will be in the top 10 list of risks by 2020. This shift can be partially attributed to the development of innovation and technology. From drones and driverless cars, to advanced robotics and automated learning, disruptive technologies are changing business models and business risks.

At Aon, we believe the Global Risk Management Survey should be used by businesses as a benchmarking tool to assess whether their current risk strategy is appropriate for their organisation. It can also help to identify any gaps that may need to be addressed. Without a regular assessment of the risk landscape, both at home and abroad, as well as existing risk cover, companies may leave themselves unnecessarily exposed to risks which could result in significant and far reaching losses for the business. BFM

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BFM | HUMAN CAPITAL

TOP HUMAN CAPITAL TRENDS As Managing Director of a HR-technology / financial services technology business I have the privilege of continuously speaking with clients and receiving constant industry exposure. By Jan Pacas - Managing Director & Co-Founder Flare HR.

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ereunder are just some of the most significant, recent human capital trends I have

seen: • The organization of the future • The employee experience: company culture for a digital age • The power of parity - advancing women’s equality • Digital HR technology trends • Lifelong learning for a CEO THE ORGANIZATION OF THE FUTURE Many organizations are moving away from hierarchical structures to a network of teams. This means

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more project work, focusing on customer engagement and new products. As a result employees are changing roles with greater frequency than before. These days it is quite common for an employer to offer a fixed term contract, in lieu of a permanent role, which has given rise to freelancing. This gives both the employer and the employee a greater freedom in the way they work. For the employee, for example, it gives them the flexibility of having greater time off between projects. As a result of the changes in the employment

offering, it requires organizations to change the way we set goals, reward people and lead.

Not only is the employment offering changing, but so is technology. For many companies automation is high on the agenda.

New systems with all kind of functionality are more cognitive, artificially intelligent and powerful than ever before. Yet, whilst this takes place, the issue is not one of “eliminating jobs” but rather “redesigning work”, and shifting people from technical roles to a role that’s “essentially human

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HUMAN CAPITAL | BFM

skills” to work in parallel within an organization.

The employee experience: company culture for a digital age Besides the redesigning of new role, risk aversion, weak customer focus and siloed mind- sets are also frequent challenges for organizations. In a digital world solving these cultural problems is a must to succeed. Further reading about this issue can be found here: http://www.mckinsey.com/ business-functions/digitalmckinsey/our-insights/culturefor-a-digital-age In today’s economy employee engagement is a tremendously important issue especially as it has been declining. Digitalization is a double-edged sword. Though it has simplified our lives in many ways, employees are now frequently working longer hours than before.

With the changes in the way employees work today, employee engagement has not been able

to keep up, as they are no longer fitting in with the employee’s needs. The digital work experience is quite complex, overwhelming and can be exhausting due to multiple projects employees are exposed to. Some innovative companies have replaced e-mails with interactive communication tools and have been working on designing entire end-to-end employee experiences. Companies are starting to look at employee journey maps, segmenting their workforce and deeply understand the “moments that matter” of an employee at work.

THE POWER OF PARITY – ADVANCING WOMEN’S EQUALITY Not only is understanding an employee’s journey at work important, but so is accelerating the progress toward gender equality. This is not only a moral and social imperative but it would also deliver a growth dividend to the organization. Gender equality in the workplace is linked to gender equality in society with the former is not possible without the latter.

Diversity and inclusion have been hot topics for a long time, yet progress has been somewhat slow.

Companies cannot simply train people to become less biased.

Whilst training plays a major role in educating and informing the workforce, bias is inherent human behavior. This change has to start from the top through leadership and accountability. This culpability then needs to transcend down to the whole organization.

DIGITAL HR TECHNOLOGY TRENDS In the best organizations HR is not primarily dedicated to paperwork and compliance but rather truly focused on people and organizational culture. Digital HR platforms are now frequently being used to help HR departments deliver these solutions.

Similarly to what was happening in the accounting or CRM space five to ten years ago we are now seeing a huge migration the cloud, across all industries. This migration has facilitated the simplification of the onboarding process by keeping its entire life cycle digital. With this availability and simplicity it is still astonishing to see what

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percentage of companies manage their employee onboarding program through traditional and complicated means.

Cloud-based HR platforms these days are very powerful and allow companies to focus on productivity as well as employee engagement. I believe this coming year will mark an entirely new identity for HR. This will take place through the refocusing on the function of employee productivity, performance, wellness and engagement instrumented with data like never before.

LIFELONG LEARNING FOR SENIOR EXECUTIVES Today, like never before, organizations do not just need experienced leaders at the helm.

In an ideal world they need someone who is not only up to date in leadership and industry knowledge, but someone who is agile and flexible in their thinking as well as being “digital-ready.”

By leading by example, the CEO and the leadership team are able to maximize the value and impact of their organization. This is a challenging area and one where many organizations continue to struggle if they continue to use dated models for leadership.

Due to the evolvement of the digital age increasingly people are significantly using complex cognitive skills, across many industries. In the best companies, CEO’s understand how to get their people ready, especially when dealing with employees who are not comfortable with this. This is not because it’s a nice thing to do but because it gives the organization a competitive edge on how to drive wins in the knowledge economy.! BFM Jan Pacas is the Co-Founder and MD of Flare.HR and Benefits, a platform that launched just over a year ago and raised over $9 million in start-up funding to date. Flare was created on the basis of giving new starters a really great first impression of their clients’ companies. Flare provides an intuitive cloud based platform accessible via computer or any mobile device based on today’s best practice onboarding principles.

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BFM | PROFILE PROPERTY

Colin Clark

Victoria University: The business school acting like a business In 2014, Forbes magazine asked the question: Why Aren’t Business Schools More Like Business? It was an interesting inquiry at a time when the world had only just recovered from the Global Financial Crisis.

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he article questioned why business schools weren’t following their own advice.

Author of the article Steve Denning wrote: Business schools are well aware of the threat of disruption…

And business schools themselves teach the very nature of the threat: the failure of businesses to respond to the competitive threat of disruption is a staple of the curriculum. So why don’t business schools themselves do something

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about the imminent threats of disruption that they themselves face?

Post GFC has seen the business world change dramatically; technology has transformed the landscape, ethics have evolved and international ties are becoming more and more significant despite the rise of isolationist policies in the wake of Brexit.

If we ask that same question today: why aren’t businesses more

like business, it is likely the answer would be different and we would find that the top business schools do indeed act like businesses.

Victoria University is certainly in the top echelon of business schools thinking and acting like businesses, whilst preparing students to become better leaders, managers and human beings.

According to Dean of Business, Colin Clark it is the school’s

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PROFILE| BFM

close connection to industry that has elevated it in its very young history.

“I think historically the business school has been well connected with industry and professionals and as a consequence our curriculum has been contemporary and enabled us to produce better students,” Professor Clark says.

External engagement has been a characteristic of Victoria University across its history. It began as a tech school, before becoming an Institute of Technology and finally a University in 1991, last year celebrating its 25th anniversary of the establishment of Victoria University.

Industry connection has been the mainstay in the university’s evolution.

Across history it has continued to have an engagement with the regions businesses. In more recent decades that has become an international commitment.

The school has developed research and teaching partnerships internationally and does a significant amount of teaching in China, Singapore, Malaysia and India.

International partnership is a personal passion for Professor Clark and that commitment is reflected in the curriculum. When he took over as Dean in 2013 (having been with the university since 1992), he was keen to pursue international engagement further.

“Asian engagement and within that China engagement is consistent with Australia’s international trade development and preparing students for this world where they are likely to be engaged is fundamental,” he says.

“One of the distinctive things we’ve done is establish the Victoria Business Confucius Institute.”

Whilst there are 500 Confucius Institutes spread across the world, the Victoria Business Confucius Institute is one of only 10 in the world focused on

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business as their specialisation.

The Victoria Business Confucius Institute (VBCI) offers Chineselanguage, business and cultural workshops, and facilitates China-focused scholarships and tours. The institute works with business, government, industry and educational and community partners to foster cultural understanding between Australian and Chinese people.

Located within the College of Business, Victoria Business Confucius Institute teaches Mandarin to foster capability in Chinese language and culture and themes around doing business in China.

International relationships and broader globalisation is just one factor in the recent disruption of business practice.

As alluded to above, in this current era all business sectors have been disrupted and whilst profit is important, the way profit is made has become just as critical.

So as internationalism is a key touchpoint in Victoria University’s curriculum, so too are other key themes.

“We focus on significant themes as a business school that prepare graduates for a professional career. At the top of the list of those themes is Big Data or Business Analytics. Then there is a whole push around sustainability, corporate social responsibility, business ethics and entrepreneurship.”

Oracle, IBM, Microsoft, Teradata and SAP are the top five data analytics software providers in the world, a fact that itself indicates how powerful this movement has become.

Data analytics plays a major role in Victoria University’s learning directions, with the university setting up a big data lab for SAP and a number of partnerships with businesses that provide real world business data from which students can analyse and provide recommendations.

“We have several courses

around this. We have a postgraduate programme in business analytics, but we embed this theme across a range of offerings in our approach,” Professor Clark says.

Sustainability is another major theme.

MBA students are currently working alongside Monash University students in the 100 Resilient Cities movement. This movement pioneered by the Rockefeller Foundation (100RC) is dedicated to helping cities around the world become more resilient to the physical, social and economic challenges that are a growing part of the 21st century.

“Victoria University helps

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BFM | PROFILE

businesses undertake an evaluation around sustainability and that leads to businesses being offered advice. Out of that process we are able to build engagement with industry and an understanding of what businesses are doing which informs government policy.”

It is these types of programmes that have enabled the university to stay relevant through extraordinary change in the business landscape.

“The rate of change business has experienced is rapid and so preparing students for a changing environment is critical to their business training. What we need to be developing is a continual learning and an approach to learning for life. The development of skills isn’t something that stops at the graduation ceremony.”

At the forefront of this

continuous learning paradigm are the partnerships Victoria University has developed.

“We have students doing practical projects. At undergrad level our students do a final year unit that has them working on a social enterprise project for the Big Issue magazine.

We do a similar exercise with Bendigo Bank. We have a range of specialisations across our offerings and they are reflected in our industry networks: tourism, hospitality, and events management programs.

Victoria University works with some of the biggest names in business both here and abroad and this has not only attracted students, but academics as well.

The quality of teachers on staff is reflected in the university’s MBA rankings, with all academic staff holding a PhD and many having

professional experience.

Guest lecturers have also included the likes of Alan Kohler, and Dr Craig Emerson, former federal Minister for Finance.

Victoria University is ranked in the top 350 universities in the world that’s the top 2% globally, and 56th globally for universities under 50 years old.

Its reputation can be directly linked to its ability to meet the demands of modern business practice and keep changing with the times.

In five years, Professor Clark expects that Victoria University will be known for having programmes that are well connected with industry and graduates that are profession-ready and prepared for a global career.

That is not the lot of a university that is acting contrary to business. BFM

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BRAND | BFM

How to build an authentic brand online As the founder and CEO of digital marketing agency Menace Group as well as an Author, Entrepreneur, Startup Investor and Marketer I’m often asked how you can build an authentic brand online and whether showing personal content leaves you vulnerable. By Kevin Spiteri.

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ur audience almost always wants one thing above all else and that’s authenticity.

They want to see and feel a connection with the real you.

People trust other people. People do business with people. They want to know who you are, what you do, how you do it, why you do it. They want to hear your story.

Despite the vast array of digital platforms, I think as a society we’ve become a bit disconnected.

We’re all looking for something raw and honest in a sea of often overly-curated content, that shows vulnerability and a human component.

If there is one thing you should master, it’s the ability to show who you are in an engaging and personality-driven way, through the content you share with your audience. This authenticity is what people connect with: your behindthe-scenes pictures on Instagram, the moments you share with friends and family on Facebook, the interactions you have with your customers, perhaps through your case studies or blog. People want to see the real you and feel like they know you.

When it comes to building an authentic brand online, there are a few things you can consider: • Have you clearly identified the vision and values for your business?

• Look at your website and social channels. If you were a stranger seeing these for the first time, what is the immediate impression you take away?

Perception is reality afterall.

• What are the things you admire in other businesses? Who are the people you choose to buy from?

• Assuming you have a clear idea of your target audience, what are their values, what do they want

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to read, see and hear? (learn about my ‘Profiling Methodolgy’ in “I Just Want It To Work!” http://book.kevinspiteri.com.au) A lot of the relationships that we develop aren’t just commercial, they are quite personal. People are letting us get into their businesses, we are working with people who have spent years building a business, building an empire and often it’s quite personal for them too. As I mentioned, people build trust with other people.

A lot of private business owners want to know who they are dealing with. Let them know that you’ve got a personal life and you’re not just working 24/7. Show them that there’s more to you than just the commercial side of things. Much like when someone is employing you, they want to understand who you are – what drives you, how you look after yourself, create balance in your life and what you’re proudest of. Often businesses fall into the trap of believing that to appear “professional” through their digital channels, every post must be strictly business. I’m not saying you should start sharing cat memes, unless you’re selling cat food perhaps, but don’t be afraid to show your personality.

By sharing content on my social channels about things I enjoy and value, such as time spent with family at the beach or great food and wine, people can understand a bit about who I am as a person, as a human being. I want people to feel a certain level of comfort and a level of personality, familiarity and authenticity behind what I do and understand that these are the things that are valuable to me, because ultimately we do business with people who resonate with our own values.

It really is as simple as saying

“hey, this is me. This is what I’m up to,” or “hey, look at the job I’ve just done for this person and how great they feel as a result.”

Use the opportunity to also ask what your audience wants to see more of? Perhaps its responding to questions? Specific advice? Behind the scenes?

You can get creative with content and delivery, without having to be present and posting constantly on every social channel. Pick a couple of channels where your audience are present, and post when you have something valuable to share.

Some methods to consider: • Video • Image • Time-lapse video • Blog post • LinkedIn post • Email Some messages/content to consider: • Work you’ve done for a client recently • How did you get started in your business?

• What makes you tick? Why do you love what you do?

• How do you spend your weekends?

• What work have you been most proud of?

• What are your unique views on your business?

• What tips can you offer your audience Keep it simple and be genuine.

If you’re authentic about what you do, you’ll take your audience on that Journey with you. Think about why you started your business beyond paying the bills and start telling that story! BFM For more information or a copy of Kevin Spiteri’s new book ‘I Just Want It To Work’ visit www.kevinspiteri.com.au

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BFM | CYBERATTACK

LEARNING FROM THE BEST: CYBERATTACK LESSONS FROM THE BFSI SECTOR

By Les Williamson, Area Vice President, Sales & Services, Citrix A/NZ

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The banking, financial services and insurance (BFSI) sector in Australia is one of the most prone industries to cyberattacks, as transactions and connectivity among consumers become more digitised. The proliferation of mobile apps and data is fuelling an increase in cyberattacks around the world, often because of vulnerabilities and poor security practices of the app owners.

In developed markets such as Australia, the BFSI and communications sectors had the highest incidence of distributed denial-of-service (DDoS) attacks in 2016. Breaches are also becoming increasingly sophisticated and highly targeted, as demonstrated by the recent spate of WannaCry and Petya ransomware attacks, which often result in millions of dollars in damages. The average cost of a cyber-attack to Australian businesses is about $622,000 AUD and approximately three quarters of all Australian businesses have been attacked in the past year, with as many as one third in one month alone.

When these breaches occur, financial institutions are some of the quickest to respond, investing heavily in innovative, reliable and modern security systems. A recent ASX survey found that Australia’s financial services sector is tackling cyber breaches most effectively.

Because banks and financial institutions acknowledge their duty of care to protect the highly sensitive data and confidential information of their customers, they have some of the most heightened security practices and infrastructures in the business.

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Banking is also one of the most highly regulated sectors, so safeguarding data is often a legal requirement.

Other sectors, including retail, manufacturing, education, healthcare, government, transport and logistics, and energy, can look to banks’ stringent compliance practices and best practice to inspire their own IT safeguards.

What specifically are these institutions doing so well and what can other sectors learn from them, to protect their apps and data from malicious hackers and safeguard their customer’s personal information?

architected its online internet banking service, such that it requires consumers to complete a two-factor authentication – an extra layer of security that requires not only a password and username, but also a private piece of information only they know.

These added layers of security underpin everyday transactions, such as fund transfers and bill payments. While multifactor authentication can be circumvented with the right targeted malware, organisations across all sectors can still deter cybercriminals with more rigorous security systems in place.

THE BEST SECURITY INVOLVES MULTIPLE LAYERS When it comes to IT protection, the more security layers an organisation has in place, the more difficult it is for criminals to gain entry to their systems, apps and data. Looking to Asia, Singapore’s DBS Bank has

DETECTION AND PREVENTION CAN PROTECT AGAINST FRAUD As well as strong user authentication tools, many banks offer two-way alerts which notify customers of suspicious activity in almost real-time, and let customers respond – to let their bank know if a transaction is

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CYBERATTACK | BFM

legitimate. Alerts notify customers of unusually large transactions or transactions taking place in a foreign location. This is relevant for the retail sector, where online retail giants have been the victims of high-profile data breaches. eBay, for example, suffered one the biggest data breaches in history, when around 145 million records, that contained passwords, were accessed by hackers.

Retailers are slowly catching up and they are often seen adopting detection and prevention practices. Last year, Amazon sent out emails to its users asking for a quick password reset – the reason was a possible breach of some of the users’ credentials.

Bricks and mortar stores can also adopt tighter security measures for their store-issued shopping cards, including PIN security and chip-based “smart cards” (which are already being used in Europe). Credit card fraud remains a massive problem worldwide,

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but fraud can still be slowed with ‘smarter’ safeguards.

COMMUNICATION IS KEY Amazon’s alert emails also highlight the necessity of swift and informative communications with users. The Brussels-based Society for Worldwide Interbank Financial Telecommunication (SWIFT) recently warned customers it was aware of a number of fraudulent payment cases, where affected customers suffered breaches in their local payment infrastructure.

SWIFT quickly launched an initiative to share cyber threat information with customers to help them protect their own environments from intrusions and malware.

Other sectors can learn from banks’ improved communications to, and education of, customers, as well as swiftly reacting when an attack occurs. No matter the industry, trusted communication is key for customers to feel protected and valued.

The finance sector is constantly being challenged to fight cybercrime and, given the potential financial gains from successful attacks, the battle with malicious hackers is likely to rage on if the current climate is anything to go by. However, banks employ some of the most rigorous security tools, technologies and services, and other sectors can look to these trailblazers for best practice.

Multi-layer authentication tools, detection systems and customer communications are just some of the cyber safety lessons that apply to all sectors, in order to better safeguard mobile apps and protect customer’s personal information from key vulnerabilities.

From a business perspective, a ‘new normal’ of security is required – one where IT risks are communicated in business terms and IT safety is backed up by the right technology infrastructure and installations. This will help empower organisations to achieve compliance within their sector.

Cybercrimes pose a serious threat to companies, leading to significant business implications and bad press. Ultimately though, absorbing best practice from industry leaders allows companies to increase sales, save time, cut costs and foster better connections with customers. BFM Citrix (NASDAQ:CTXS) aims to power a world where people, organizations and things are securely connected and accessible to make the extraordinary possible. Its technology makes the world’s apps and data secure and easy to access, empowering people to work anywhere and at any time.

Citrix provides a complete and integrated portfolio of Workspaceas-a-Service, application delivery, virtualization, mobility, network delivery and file sharing solutions that enables IT to ensure critical systems are securely available to users via the cloud or on-premises and across any device or platform.

With annual revenue in 2016 of $3.42 billion, Citrix solutions are in use by more than 400,000 organizations and 100 million users globally.

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BFM | SALES

5 TIPS TO CREATE YOUR PERFECT SAAS SALES CYCLE It’s no secret that marketing and sales are two of the largest expenses for SaaS companies.

When companies like Salesforce spend 51% of their total yearly earnings on something, you’d best be sure it’s important.

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ith over $2.75 million going towards marketing and sales in 2015 alone it’s safe to assume they have a tried-and-tested system for capturing and converting their leads.

So, since most of us don’t have that kind of budget, why not analyze what they do to create your own effective sales cycle?

By signing up to 280 of the top SaaS companies in the world (including the Montclare SaaS 250 and the highest earning SaaS startups in AngelList) and analyzing the outreach sent, we were able to figure out what makes these top performers tick.

Although the full information (along with copies of everything we received) is on Inside SaaS Sales, here are five of the best tips we learned.

1. Keep messaging your leads for 9 days One of the biggest problems when setting up your sales cycle is knowing how long you should stay in contact with a potential customer. After all, there comes a point where the resources you invest in getting the sale outweigh the worth of the deal.

On average, the companies we signed up for stayed in contact (without any further replies from us) for nine days. However, those who only sent emails only stayed in contact for only five days.

2. Use voicemails to go above and beyond Voicemails are typically a sign of a high-touch approach to sales, as they cost significantly more than just sending emails. This can be seen in the sheer majority of companies that didn’t leave any voicemails.

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74% of companies didn’t leave any kind of voicemail, showing that even with a potentially high-value lead (we signed up with fake details of an imaginary Virgin employee) 3. Use marketing automation to save time and effort With the sheer amount that these companies spend on marketing and sales it pays dividends to save money wherever you can. Even if you save a fraction of a dollar on each potential lead, that can quickly add up to the price of an extra employee at scale.

The best way to save money (and time) in your sales cycle is to use automation software to complete some tasks for you.

Think of these as services (software) that you can set to complete simple tasks and free up your team’s time. You can do this for anything that has a set input and output.

For example, services like Mailchimp can both manage your email list and automatically send a set of emails to a new lead when they sign up.

This was an incredibly popular tactic, with 53% of the emails we received being sent by a piece of marketing automation software.

Not only that, but a significant 39% of all of those companies used only marketing automation to follow up with us - there were no salespeople involved. A further 28% mixed automation with salespeople, leaving 33% who only reached out with living, breathing salespeople.

It’s easier, it’s quicker, it’s cheaper, and it lets your salespeople focus on more important tasks (like setting up demos and closing highpriority leads).

4. Send one email per day You don’t want to drown your leads in constant communication. Doing so will likely just push them away and relegate your messages to their spam folder.

Equally, it’s important to contact them regularly lest they lose enthusiasm or get stuck at a key juncture in the conversion process. They could also simply forget that they’ve signed up and not visit again - an email will jog their memory and can save some otherwise dead leads.

The top 280 SaaS companies follow pretty varied patterns depending on the length of their sales cycle, the number of times they make contact, and the way they reach out (email vs voicemail), but in general they sent an average of one email every day.

Now, the important term here is “average”, since very few actually stuck to one email every day since the beginning of the cycle. Instead, many opted for a trickle approach.

At the beginning of the sales cycle (when your lead’s enthusiasm should still be high after signing up) companies like LivePerson sent one or two emails every day.

Then, as time went on, emails and/or voicemails became more infrequent - it wasn’t uncommon for three or four days to pass before we received our final email.

5. Use one of these five words in your subject line The language you use is just as (if not more) important than the frequency you communicate, so when we analyzed our data we made sure to check for the most common words in every email’s subject line.

Perhaps unsurprisingly, the most

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SALES | BFM

common words were: • Your • Re: • Demo • Request • Trial To inspire action, therefore, the top 280 SaaS companies try to make things personal (“your”), imply a conversation (“re:” - these were all false since we didn’t reply to anything), give a benefit

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or solution to a problem (“trial” and “demo”) or give the reader an answer to something (“request”).

Although we discovered a lot of useful lessons during this project, remember that these are all averages, and that there were many exceptions to these rules. Each of the top 280 SaaS companies can be boiled down to a rough sales cycle, but the truth is that they do what works for their customers.

The key is having a foundation to go and test on your own audience, then customize to your own needs.

Here’s to hoping that this pos has helped you do just that.BFM Benjamin Brandall is a content marketer at Australian startup Process Street, where he writes on startups, SaaS, and workflows. He has written for TechCrunch, Fast Company, and The Next Web.

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BFM | START-UPS

Maintaining a startup, collaborative culture The term “startup” has been bandied around with accelerating regularity over the past several years, and there is no official definition that all can agree on. Most can agree that a startup can be described as a company that is in its first stages of operation. It is a company working to develop a service or product for which they believe there is a demand, and according to Warby Parker co-CEO Neil Blumenthal, “a startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed.”[1]

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ome define a startup more generally. For instance, Stanford professor, Steve Blank describes it as “an organisation formed to search for a repeatable and scalable business model[2]”. While others boast definitions centred on the culture and emotions it elicits among its people.

While the company I co-founded is 13 years young, my business partner and I still very much view the business as a startup, and we are focused on working to maintain a ‘startup mindset’ among our more than 300 person team.

In order to do so, we employ a few different strategies and aim to carry key, core values through the team.

FUELLING AND MAINTAINING A COLLABORATIVE CULTURE Culture is hugely important in a business today, and it’s critical to create an environment where talented, skilled people come together and feel like they are part of a family. There should be a conscious effort to maintain the feel and entrepreneurial spirit of a startup, which encourages all people to innovate and feel empowered to develop ideas.

To empower staff, we aim to foster innovation through a flat hierarchy. To promote a collaborative business, we

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approach our projects and challenges by combining members from all teams to ensure we get a holistic view and a collaborative outcome. And, at least in the early stages of a startup, there is an even, healthy balance of specialisation and specific skillsets, allowing for cross-functional teams and a more lightweight process. Gone are the days where a CEO or Founder should be boxed away in their private office, with staff too paralysed with fear to knock on their door. It’s now expected for business owners to be regularly seated among their employees, with staff at any level able to chat to them at any time, which I aim to mirror each day.

Further, I believe it’s critical for staff to be heard by the business owners and management – staff should feel comfortable to be themselves, and management should listen and learn from their insights. Your employees know better than anyone what’s happening at the forefront of the business, hence it’s critical to listen to their insights, as well as be genuine and honest with them when it comes to strategy and business decisions.

MAKING DECISIONS I strongly believe in taking a collaborative approach to significant business decision-

making. The value that comes from working as a team and bouncing ideas back and forth will never die. I’ve learned this through my experiences with my business partner, where we’ve grown a company that was once two people in a garage to now more than 300 people across two countries. As we’ve grown I have learned to include more and more people into our decision-making process, bringing new skills and experience to the table. We are a diverse company and that diversity in thoughts, ideas, past experiences (life and work), have been a competitive advantage for us.

Another key component of the decision making process is to test and learn. In particular for digital and technology businesses, the team needs to be agile, able to quickly implement and test ideas

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START-UPS | BFM

prior to making a decision that impacts the entire business. I also urge business owners to employ individuals with data science capabilities, enabling the business to dive deeper into its back-ofhouse data to help inform and facilitate the decision making process.

NETWORKING IS WORKING I attend networking events regularly, especially events related to technology and entrepreneurialism. The beauty of networking is that you are exposed to people that are experiencing or have experienced - what you are doing. Not only is networking important for business owners and the management team, but it’s also critically important for the wider team.

That’s why I encourage the entire

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team to attend networking events relevant to their skillsets, levels and interests. Collective thought is truly powerful and inspiring. Being open and talking about things with experts and like-minded people outside of the company can be a great way for seeking answers and growing, no matter your level in a company. For the most part, people at such events have like-minded goals and areas of interest to you, and are very receptive and willing to share their advice and experiences as well.

LEADING PEOPLE I am a strong believer that leading from the front is the way to go.

A good leader should find the right balance between doing groundwork, as well as coaching and inspiring the team around them.

I provide my team with the freedom to be their own boss while still asking them questions, involving them in my own decisions and challenging them to think harder and differently.

This is always initially challenging when your business first starts to grow, as at this point you’re used to working on everything yourself. I had to learn to let go, trust people, and empower them to be their best, and I haven’t looked back.. BFM Roby-Sharon Zipser is COO and Co-Founder, hipages [1] https://www.forbes.com/sites/ natalierobehmed/2013/12/16/whatis-a-startup/#5a9b6e324044 [2] https://www.businessinsider. com.au/what-is-a-startupdefinition-2014-12

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BFM | INNOVATION

IS SILO-ISATION STIFLING AUSTRALIAN INNOVATION? The story of Australia’s ranking on the Global Innovation Index is a sad tale. In a measure that compares economies on innovation environment and output, Australia has slipped to 23rd this year, down from 19th in 2016 and 17th in 2015.

By Matt Whale, Managing Director of innovation consultancy, How To Impact.

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ith over a decade of experience driving corporate innovation projects under our belt, we’ve seen first-hand that for many organisations’, their ambitions to innovate, disrupt and design compelling new offerings is often misaligned with the reality of the leadership, systems and structures they put in place. In other words, there is a gap between what organisations say and how they actually behave.

It is this gap that we sought to unpack when we undertook a government funded research project into ‘Positive Ambiguity’ and the attitudinal frameworks that support successful innovation.

Ironically, what we found is that one of the biggest cuprits is in fact the innovation lab itself. From NAB Ventures to Telstra Ventures to the Growth and Innovation Group within Rio Tinto, it would seem that seeding an innovation mindset within your organisation begins with establishing a dedicated internal innovation capability and a protected department that operates outside of business-as-usual, right?

Wrong. Yes, everyone’s opening a lab, but a shiny new space or

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a pop-up lab as your designated innovation zone is not the answer to establishing a true innovation culture. In fact, for many organisations we interviewed, it was agreed that the lab should be the last element of an embedded innovation process.

Why? Because when innovation is put into a lab that sits aside from the rest of the business, this creates a silo culture of innovation - effectively saying to the organization: “This is where innovation behaviours, attitudes and processes live”. Rather than promoting innovation behaviours and attitudes as mandatory, it has the potential to create a ‘them and us’ culture where only the elite have permission to think differently. It takes us one step back from making innovation a unilateral attribute of every job.

Tiziana Bianco, General Manager of the Innovation Labs at CBA, shared the below insight when we interviewed her for our Positive Ambiguity research project: “The last few years have seen a surge of innovation labs, accelerators and corporate

venturing around the world, where businesses are exploring bold approaches to creating new value. In our observation and experience, the most successful innovation strategies are the ones that have found a way to work collaboratively within their organisation, while building connections with external experts, and acting as a bridge between the internal strategy. The CommBank Innovation Labs continue to elicit learnings not only in the areas of banking but how we work as an organisation.”

Successful innovation requires organisation-wide buy-in, that ultimately starts at the top, not in the lab. The leaders of a business are responsible for setting the vision, mission and strategy of a company and have the ability to mandate innovation as a responsibility for all employees in the business. It’s harder to do that than set up an isolated innovation showcase.

But these same business leaders are under enormous pressure to direct their organisations through times of unprecedented

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INNOVATION | BFM

flux, to encourage growth and a return for investors. In order to innovate inside this pressure cooker of uncertainty, businesses need to recognise that ambiguity and complexity are unavoidable and instead, nurture adaptive behaviours throughout their teams to help deal with the heat. The key is setting a cultural tone of “permission to innovate” in one’s day job.

Liz McPherson, Chief Culture Officer at the Future Fund, has a suggestion: “Move away from established ways of working.

The more we can rattle the cage of traditionalism, the more we can get people to think differently… we can say a lot about being open to ideas, but people can still feel like they need permission to problem solve or make suggestions for improvements.”

This “culture of permission” includes adopting innovation behaviours and attitudes that allow a business to test, learn and pivot, becoming more flexible and more agile in the process.

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Taking a scientific approach to idea development by setting hypotheses, tackling each in small iterative cycles of exploration (proving and disproving them) and then pivoting to the verified hypotheses will help organisations get closer to establishing the desirability, feasibility and viability of an idea before the business bets the farm on it. Think: controlled business experiments undertaken in every department. And get ambiguous about the end solution – let the nature of the problem direct you.

There is a massive drive across the world for disruptive innovation and Australia is no exception.

However, the search for the magic innovation panacea via an ‘innovation lab’ is counterproductive to a sustainable innovation culture. Start first with your business leaders who should instil from the top a set of corporate values that allow for experimentation and comfort with failure, with the view that as long as there are pertinent learnings that can be channelled into future R&D, experimentation

is a worthwhile exercise. This will empower teams to embrace the positive aspects of ambiguity and understand how to adopt the vital attitudes needed to sustain effective innovation and thrive in an uncertain world. BFM Matt Whale is the Managing Director of How To Impact. The innovation consultancy is currently leading the Positive Ambiguity Index, a study into the attitudinal frameworks that support effective innovation and design thinking in Australia. Visit www.howtoimpact.com to find out how to take part in the research and get a report on the effectiveness of your organisation’s innovation culture.

About How To Impact A dedicated innovation agency, operating in Australia since 2008.

Our aim is to raise the bar on the effectiveness of innovation in Australia, by coming up with ideas that stick. We believe that the right process, structure and behaviours can unlock growth and a greater return on innovation investment. www.howtoimpact.com

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BFM | PROCUREMENT

PROCUREMENT – the game is changing

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PROCUREMENT | BFM

In the first of a series of six articles, Daniel Fielding (Director at ArcBlue Consulting and Fellow of the Chartered Institute of Procurement and Supply) explores how procurement needs to change to adapt to a new business environment.

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rocurement has evolved over many years, from the early transactional roles through to the more strategic procurement functions that we see today in many organisations.

Through our work supporting procurement organisational change around the world we are seeing a need to shift the thinking in the way procurement is operating so that it becomes more central to organisational strategy.

The world is changing fast.

Businesses need to more agile to take advantage of global opportunities whilst also being more sensitive to the impact of local procurement; they need to deliver cost savings whilst managing risk; they need to drive change whilst maintaining stability. It’s not easy to balance these competing forces, but it is essential that procurement changes become a driver of change across the business.

To meet these challenges, procurement needs to change. As the serial entrepreneur Richard Branson has proven time after time - “Every success story is a tale of constant adaption, revision and change.” To do this, we see five key themes that leading organisations are starting to embrace, these are highlighted below and explored further in this series.

COMPETE WITH OUR COMPETITORS - NOT OUR SUPPLIERS In the past, some procurement teams have developed a reputation as ‘hard-nosed’ negotiators – sometimes the ‘bad-cop’ who will put the supplier under pressure to give more than they want.

Whilst of course there is always the need for buyers to stand up for themselves, for strategic suppliers we see the need to collaborate with our supply base.

In many industries (for example transport, retail) our suppliers are often the same suppliers that our competitors use. Our job then becomes to get more out of our

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critical resources – our supply chain - than our competitors do. We then start seeing our counterparts as the competition rather than our suppliers. This is a fundamental mind-set change and is core to the role of next generation of procurement functions.

COMMERCIAL TEAMS AND A BROADENED ROLE To meet the demands of the future, our procurement teams need to change. In some organisations, procurement has developed into a function that is a blocker, not an enabler of change. To support organisational agility, we need our procurement teams to be agile. This means moving away from rules based roles and moving more to a broader commercial role, incorporating contract management and supply chain management. In some organisations, this will mean an increased alignment to the business such that procurement are seen as embedded rather than a separate governance roles.

For some, this will be a challenging transition but in our view an essential one if procurement teams are going to take the next step. The skill set of the future will therefore be more focused on commercial skills and the ‘softer’ skills of influencing and negotiation to engage better with the business.

SIMPLE PROCESSES, ENABLED THROUGH TECHNOLOGY Procurement processes have become overly complex and confusing and as such many procurement functions have lost the support of business unit stakeholders. Fortunately, there are many technology solutions out there which are supporting the goal of simplifying procurement, to make it easier for stakeholders to comply with processes rather than finding ways around the policy. As these solutions take hold, we are

seeing the importance of change management to work across the business to ensure that all stakeholders requirements are met and that technology is used to help rather than hinder.

DATA, DATA, DATA Procurement teams have always realised that understanding spend is key – in fact it is hard to be strategic about procurement without a good idea of what you spend but spend data is just one piece of the jigsaw. We are seeing leading organisations really leveraging internal data and linking other available data sources to provide insightful dashboards and powerful forecasting. What if you could get early warning of supply chain risks? what if you could predict the changes in demand due to changes in weather patterns? The Procurement Data Revolution is coming and if harnessed, provides an amazing opportunity for all businesses.

CHANGE THE WORLD THROUGH PROCUREMENT Can procurement change the world? Its sound ambitious, but maybe it can. CEOs and CFOs of the future will have increased responsibility not only for their suppliers but their supplier’s suppliers. This is a sobering thought - but it also gives a great opportunity to change entire supply chains through the actions and policies of the ultimate buyer.

Companies that can demonstrate environmentally sound supply chains and are using procurement to enable social good will be increasingly seen as game changers in their industries.

The procurement game is changing… the challenge for all organisations is to take advantage of the opportunities is offers and adapt. Richard Branson has a point about the need to adapt and has proven it many times – now its procurements turn. BFM

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BFM | CRISIS MANAGEMENT

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CRISIS MANAGEMENT | BFM

How to manage your business through crisis Cracka Wines CEO Dean Taylor explains what glass bottle shortages, logistics nightmares and unprecedented demand taught him about resilience.

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n 2015, Australia experienced a glass bottle shortage.

Without enough processing plants around the country and low recycling levels, this shortage of glass bottles was the last thing Cracka Wines, a direct-to-consumer online wine marketplace, foresaw as a risk when planning a retail promotion.

Let me take it back a step. In 2010 we were riding on the success of a growing trend of websites leveraging the internet, inventory and information to connect suppliers and consumers at scale, such as carsales.com.au and seek. com.au. Cracka Wines was born, providing a one-stop online wine shop that cut out the middleman and allowed winemakers to sell directly to customers. The business was thriving.

By 2015, we were representing more than 700 winemakers around the country and growing at a rapid rate. We had decided to partner with a major Australian retailer to offer a gift-with-purchase: an opportunity to expand our customer base by an estimated 10,000-20,000 and significantly increase our exposure through TV, print, in-store and website advertising and branding, but this opportunity was not without risk.

We predicted the number of eligible purchases (spending $400 or more) to be around the 10,00020,000 mark based on sales data and spent six months planning the campaign around this figure.

To manage the risk, we produced 10,000 cases of wine, ready to be dispatched from the first day of the promotion. We secured an additional 10,000 cases and planned to assess how the promotion was going after the first week. We’d continually produce over the four week promotion and would easily be able to meet our six week delivery time frame… or so we thought.

The campaign launched and we were immediately inundated with orders. Around 30,000 cases were

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redeemed in total, 50 per cent more than we expected and had planned for.

To give you an idea - the average small winery makes ~ 5,000 cases per year. We needed: • 1,200 barrels of wine • 27,000 litres of wine • 360,000 bottles • 470 pallets of wine … That’s 24 semi-trailers full of wine.

Then the glass bottle shortage hit. We needed an additional 250,000 bottles to fulfil our orders.

There were delays. To make matters worse, when August rolled around, we began to experience significant logistics issues. We were working with Toll, who had taken on Australia Post that year, and many of our existing customers were refusing to buy from us while we worked with Toll. With the sheer volumes of stock we were delivering, we saw hundreds of cases ‘go missing’.

We had to regroup. While our revenue was at an all-time high, the underlying business was in turmoil. Our switchboard had gone into meltdown, our sales staff were glued to the phones and we couldn’t find enough seats for all the temps we’d brought on to assist.

Using every resource we could muster, by the end of the six week period we had managed to deliver 85 per cent of our orders on time, a mammoth effort from all involved.

Unfortunately, the 15 per cent we couldn’t deliver to within the six week period still represented 4,500 angry customers. While our attention was focused on “making good” and trying to salvage the promotion, our underlying business suffered massively. We’d lost focus on our existing business and our most loyal customers.

It took nearly 18 months to fully recover the business. It wasn’t all bad news though. For our business to continue going from strength to strength, this stumble proved immensely valuable in planning for

the future issues management.

We learnt some valuable lessons: Never, ever underinvest in planning and prevention.

In the event of a crisis: 1. Make a plan • Isolate the ‘fire’ and contain the spread of damage • Protect your core business and/or revenue • Be prepared to bring in external help – sooner rather than later 2. Over communicate • Identify a spokesperson • Provide updates early and often to those affected • Don’t forget social media 3. Communicate well • Be transparent with all stakeholders (employees, suppliers, customers) • Ensure messages are consistent • If you reset expectations, under promise and over deliver These were costly lessons to learn, but ultimately challenged us for the better. Our year-onyear growth is around 25 per cent - well in excess of the overall online retail industry. Having rebuilt relationships and trust, we’re currently supplying 250,000 customers and have saved many smaller wineries from going under.

When we get behind a wine we can move an entire vintage. For example, we recently sold over 10,000 bottles of an $80 shiraz to our customers without even telling them what the actual wine was.

We’re planning to harness this trust and support by inviting our most loyal customers to invest in the business and join us on the next phase of our journey, taking premium Australian wines to the rest of the world. BFM Dean Taylor is the founder and CEO of Online Liquor Group, which includes Cracka Wines, Winegrowers Direct and My Wine Guy. With seven successful ventures under his belt, he’s been named one of the ‘50 Stars of Wine’ and one of the ‘Top 50 People in Australian E-Commerce’. www.crackawines.com.au

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BFM | HEALTH

GAMIFICATION: THE SOLUTION TO GETTING KIDS ACTIVE How Dan Newton, CEO of MyFirstGym is flipping technology on its head to get kids moving.

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echnology is lending a helping hand when it comes to leading a healthy and active lifestyle, with apps and trackers set to motivate and encourage us to step away from the desk, refresh and get outside.

But, when it comes to making sure our kids are moving - what is available? Dan Newton, CEO of Brisbane’s newest kid’s gym, MyFirstGym, says the integration of technology and fitness is the way forward when it comes to children’s activity.

Research shows the rate of childhood obesity is exponentially increasing with only 29% of children aged 5 – 11, and 8.2% of adolescents aged 12 – 17 meeting the recommended amount of daily physical activity for their age group. The concept of gamifying health and fitness is a gamechanger for time-poor parents who want to track their child’s physical activity while keeping them engaged.

More than half of Australian children use social media by the age of 10. The online world has become a vital tool for kids to learn and socialise.

Newton says MyFirstGym’s activity tracker, MyMovementBuddy works because it gamifies kid’s fitness. Newton hopes the MyMovementBuddy concept will help to improve the nine out of ten children not getting the recommended amount of movement each day.

“If you make fitness too serious, it becomes a chore and is hard work, but MymovementBuddy brings the fun to exercise, with prizes – it’s like a game,” says Newton.

Created by MyFirstGym, MyMovementBuddy is a simple wristband worn by children and

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adults that tracks physical activity throughout the day, and syncs with an app.

TIPS AND TRICKS Passionate about promoting a healthy lifestyle, even when life gets in the way, Newton shares his top tricks and tips that any timepoor parent can integrate to keep the family fit and healthy.

1. UTILISING THE MYMOVEMENTBUDDY TECHNOLOGY “The MyMovementBuddy technology formulates a plan for the family, by engaging the whole clan in daily and weekly point goals. The technology has helped make fitness plans for the whole family, as we compete to reach the highest point scores throughout

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HEALTH | BFM

the day and week for my family.

It has become a weekly challenge, with everyone involved.”

2. IT’S ONLY ONE HOUR A DAY “What’s your hour? Whether it is walking to school, or playing in the park, make exercising easy for your children. When you put an hour into an adult’s perspective, you sweat for an hour, but from a kid’s perspective, you play for an hour. Segmenting physical activity into bite-size pieces, kids won’t feel overwhelmed at the thought of exercising every day.”

3. MAKE IT A RITUAL “Each morning, my wife and I go running with our three children in strollers. This routine formulates the kids expectation of what happens in the morning, and when they grow older, it will already be a part of their lifestyle. Based in ritual, the children don’t know any different.”

4. SURROUND YOURSELF WITH POSITIVITY AND ACTIVITY “The key to living an active lifestyle consistently, is surrounding yourself with activity and positivity. Even when we go to barbeques, we make sure that there is something to do that’s active, as well as socialising and eating. Whether it is integrating a visit to the park on the way to a friend’s house, or selecting activities that get the kids moving, there is always a way to incorporate physical activity.”

5. LEAD BY EXAMPLE “Actions speak louder than words, and you have to prove to your children that leading a healthy lifestyle is important to you. You can tell them as much as you want, but children will absorb what they observe. We show our children every day that being active and healthy is important to them. Whether it is their ritual morning run, competing for MyMovementBuddy points, or playtime at the park, we instil that being active is a top priority.” BFM

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BFM | TRAVEL

Hawaii…it’s not just a destination. It’s a feeling.

Words by Irit and Jonathan Jackson. Photography by Show & Tell Imagery

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awaii, the Pacific Island paradise with an American accent has grown up since we last visited its sandy shores. However, no matter how much it has changed, the feeling remains the same.

We first experienced that feeling on our honeymoon seven years ago. Back then, we may have misunderstood it as a mix of stunning destination and newly married bliss that makes you see everything through rose coloured glasses.

However, with our 6-year-old daughter Lily-Rose in tow, and the newly married elation way behind us, that blissful feeling was still very much present.

The Hawaiian feeling is apparent from the second you disembark the plane.

It’s a long 15-minute walk from the gate to customs and you may be exhausted from the long flight, but it’s worthwhile stopping for a minute to admire the beauty of the green mountains. Pinch yourself now – you have reached your destination.

Everything surrounding you indicates you are in Hawaii: from the patterns on the carpet and wallpaper to the music playing ever so gently in the background.

The relaxed manner and smile of everyone who greets you at the airport is an easy way to help you start immediately unwinding.

We chose to stay at Hilton Hawaiian Village. It is the perfect resort if you are travelling with

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a family. With its five pools, lagoon and widest stretch of beach in Waikiki you are sure to find something that will make everyone in the family happy.

From the resort, it’s an easy walk into the heart of Waikiki on Kalakaua Ave featuring luxury shops, the popular Cheesecake Factory, souvenir stores and anything else you may need.

If you feel like getting lost in a maze of 340 shops and restaurants, head over to the Ala Moana shopping centre. There’s even a Bubba Gump restaurant in the mall where you can eat shrimp and test yourself on Forrest Gump trivia.

It’s an open air, shopping oasis that receives a very refreshing light breeze running through it once the sun sets. It’s a really nice relaxing way to end a hot day.

Waikiki is all hustle and bustle, so we took off for a day for a tour to the North shore. No trip to Hawaii is complete without a tour of the island and we were very fortunate to have Adam White from Private Hawaiian Tours show us around.

Adam became sole owner of Private Tours Hawaii back in 2013.

Running a small, local business, he understands the importance of good customer service, flexibility, punctuality and professionalism.

Private Hawaiian Tours customize each day’s itinerary to the requests/desires of their clientele.

The vehicle was clean, well maintained, comfortable and safe with a booster seat for Lily-Rose.

This service fills a much-needed

customised niche in Oahu’s circle island tour industry.

Having our 6 year old with us, we wanted a tour that would excite her just as much as it would please us.

The benefit of our private tour was that we could tailor it to our wants and needs (although, as much as we had hoped our child would try some local produce from the amazing food trucks on hand…she requested a McHappy meal from McDonalds).

Our tour was full of photo opportunities and stops. Adam, who was promptly labelled Madam

by Lily-Rose, kept us entertained with his kid friendly jokes and trivia questions to which the person with the correct answer would win a pineapple candy. That alone was enough to thrill our child.

Our tour took us to Diamond Head Lookout, Chinaman’s Hat, Sunset Beach, Waimea Bay just to name a few hot spots. We stopped at a roadside fruit stand where we bought fruit, treated our daughter to a famous Matsumoto Hawaiian Shave Ice in the small historic town of Haleʻiwa, ate like locals and got our shrimp fix at the North Shore Shrimp Trucks.

Haleiwa is very much a laidback surf town with a very local country style to it. It has a number of boutiques, art galleries and restaurants. The north shore is more tropical than the south, with mountains, trees, flora and fauna surrounding you in every direction.

It’s the total opposite to Waikiki

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TRAVEL | BFM

and that’s exactly how the locals like it.

During the tour, Adam drew our attention to the cause of Keep the Country Country.

It’s a group of residents working to protect communities on Oahu, predominantly along Ko` olauloa and the North Shore from the dangerous effects of large scale development.

With close to 1 million people on the island of Oahu at any one time, 800,000 of them work in or visit the southern part of the island every day making it an extremely busy area to be in. Keep the Country Country is trying to ensure the north shore coastline isn’t ruined with high-rise buildings and tens of thousands of tourists.

Oahu teaches you the importance of respecting the land. Caring for and living in harmony with the land is at the core of every Hawaiian’s values. If you respect the land, it will sustain life. This is a relationship that has been honoured for many years and shows in every aspect of Hawaiian life.

Being a family holiday, we chose the obvious child friendly activities

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during the rest of our stay.

The Honolulu Zoo is one of the smaller zoos we have visited but its beautifully organized exhibits are divided into three tropical ecological zones: the African Savanna, Asian and American Tropical Forests, and Pacific Islands…introducing us to some animals we have never seen before.

All of this with the magical backdrop of Diamond Head right in our line of vision. Being able to see it in the background was a wonderful reminder that we were in Hawaii.

Not far from the Zoo is the Waikiki Aquarium. This is also one of the smallest aquariums we have visited but its exhibits did not disappoint. They included sea horses, sea jellies and fluorescent jellyfish and giant groupers that could reach 2.44 m in length and weigh over 360 kg.

There are also two resident Hawaiian monk seals from a critically endangered species.

After we experienced all the usual tourist spots, we managed to spend a few days relaxing at the Hilton Hawaiian Resort and felt like we ate for Australia: the Tropics Bar

& Grill offers a great atmosphere and excellent food overlooking the beach, Bali Steak and Seafood is a fine dine experience also beach side, CJs will give you a pure American diner experience, go to Benihanas for teppinyaki and there are plenty of other restaurants on the resort - too many to mention.

There is no reason to leave, however it is always great to check out the food trucks and local restaurants and then there is a pretty classy Hard Rock Cafe (albeit a small menu) and the aforementioned Cheesecake Factory franchise’ where you can always get a decent meal and a large slice of cheesecake.

Note: don’t order nachos as an entree at the Hard Rock Hawaii.

It’s a main size meal and ruins whatever you ordered as a main that you now can’t get through.

I’m not usually much of a beach fan. I don’t like to get in to the ocean for a dip…but when in Hawaii, I seem to crave it. Maybe it’s the fact that the water was so blue, maybe it was the warm water that I have never felt anywhere else, maybe it was the soothing waves…or maybe it’s just the Aussie in me, excited that I was back in Hawaiian waters with Diamond Head to the left and a lone monkey pod tree to the right.

Hawaii has a real hold on me.

Mahalo. We shall return!” BFM

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BFM | FAST LANE

EVEN MORE 911 IN AN SUV: THE NEW PORSCHE CAYENNE TURBO With its world premiere at the 67th International Motor Show in Frankfurt, the new Porsche Cayenne Turbo is taking its place at the top of the model line.

T

he completely new topof-the-range model from the third generation of the Cayenne is once again raising the bar for sporty performance.

The four-litre V8 biturbo engine delivers 404 kW (550 hp). The increased driving dynamics are based on the combination of innovative technologies, such as active aerodynamics including roof spoiler, controlled three-chamber air suspension, mixed tyre sizes and the new high-performance aero brake.

With additional options, such as rear-axle steering or electric roll stabilisation with a 48-volt system, this SUV can achieve the driving characteristics of a true sports car.

The new Cayenne Turbo accelerates from zero to 100 km/h in 4.1 seconds (3.9 seconds with the Sport Chrono Package) and reaches a top speed of 286 km/h.

EVEN SHARPER DESIGN With an exclusive front end and the LED main headlights of the Porsche Dynamic Light System (PDLS), the Cayenne Turbo has an appearance that is both dominant and independent. At night, the new Turbo sets itself apart from other Cayenne models with its doublerow front light modules. The side view is characterised by standard 21-inch Turbo wheels specially reserved for the top model, in widened wheel arches with painted wheel arch trims. The twin tailpipes, specific to the Turbo, are the key distinguishing features on the rear end.

The door trims and rear apron are painted in the exterior colour.

The completely new interior demonstrates the increased spread of the Cayenne Turbo: more sportiness and more comfort at the same time. Virtually all the vehicle functions of the fully networked SUV can be displayed and operated

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using the high-resolution display and touchscreen of the Porsche Advanced Cockpit. Among them, for example, is the BOSEÂŽ Surround Sound System with 710 watts, fitted as standard. Drivers and passengers experience this top-of-the-range model in sports seats with 18-way adjustment. The integrated headrests are a new feature and are also reminiscent of the 911. All seats and the multifunction sports steering wheel in an exclusive Turbo design are heated as standard.

GREATER POWER, GREATER TORQUE: BITURBO EIGHT-CYLINDER WITH 550 HP At the heart of the Cayenne Turbo is the new four-litre V8 engine with twin turbocharging. With an output of 404 kW (550 hp), it exceeds the power of its predecessor by 22 kW (30 hp), while maximum torque of 770 Nm represents an increase of 20 Nm. The new eight-speed Tiptronic S converts both into acceleration and speed by means of the active all-wheel drive Porsche Traction Management (PTM). The new Turbo sprints to 100 km/h in 4.1 seconds (3.9 seconds with the Sport Chrono Package) and reaches a top speed of 286 km/h. The centre of gravity is lower and therefore the cornering precision is higher.

ACTIVE CHASSIS WITH THREECHAMBER AIR SUSPENSION AND DIFFERENT TYRE SIZES The new lightweight chassis of the Cayenne Turbo combines the best of three worlds: the precision of a sports car, the comfort of a saloon and the adaptability of an off-road vehicle. In particular, the combination of the new three-chamber air suspension with the active shock-absorber system PASM extends the range considerably. The concept of the

new mixed tyre sizes with standard dimensions of 285/40 at the front and 315/35 at the rear comes from sports car construction and produces even better longitudinal and lateral traction.

Three air chambers per spring strut are used in the adaptive air suspension, therefore the chassis is able to map different spring rates. With six selectable height levels, the ground clearance can be manually adjusted to suit the offroad terrain. They are also actively controlled via five new driving programmes for road journeys and off-road journeys.

First SUV with adaptive roof spoiler and new high-performance brake The new Cayenne Turbo is the first SUV to have an adaptive roof spoiler as a component of its active aerodynamics. Depending on the position, this optimises efficiency, increases downforce on the rear axle and, in the airbrake position, shortens the braking distance from higher speeds. At full braking from 250 km/h, the SUV comes to a stop up to two metres shorter as a result.

The aerodynamic system therefore complements the effect of the new standard fitment highperformance Porsche Surface Coated Brakes (PSCB) which takes care of deceleration in the Cayenne Turbo. The tungsten carbide layer applied to the steel discs increases braking performance and resistance to wear.

THE NEW CAYENNE FOR AUSTRALIA Local pricing and specification for the Cayenne Turbo has not been finalised and therefore will not be announced until early in 2018 Australian deliveries of all three Cayenne variants will begin from mid 2018. BFM

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FAST LANE | BFM

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