Business First Magazine - July/August 2017

BUSINESSFIRST for Business Leaders

July/August 2017

businessfirstmagazine.com.au

Going too far?

DNA tests for executive employees

$45BILLION

IN FUNDS UNDER MANAGEMENT The secret to Sunsuper’s success Company culture should start in the boardroom

CIALE SPET UR FEA IES ODITIS E R COMM E ON TH

+

ASIA FOCUS FINANCE HEALTH PROPERTY TECHNOLOGY WEALTH

Monash Business School

Bringing corporate responsibility to the classroom

Why are major banks rejecting SME business loans?

CYIENT Engineering a better future BUSINESS FIRST MAGAZINE Vol 4 Issue 3

AU$12.95 NZ$13.95

04

and more

9

772203

129000

Unified Talent Management According to a recent Gallup survey, only 24% of employees in Australia reported to feeling engaged in their work. So what can organisations do to support employees and help keep them involved and passionate?

Cornerstone enables organisations of all sizes and in every industry to source and recruit top talent, develop and engage employees throughout their careers, improve operational execution, and cultivate future leaders. cornerstoneondemand.com.au

BUSINESSFIRST for Business Leaders

MAGAZINE

ANYTIME ANYWHERE Read Business First Magazine on any device

businessfirstmagazine.com.au www.hospitalitydirectory.com.au

Australian Hospitality Directory 2016

1

26

CONTENTS REGULARS 4 Editor’s Desk 5 News

FEATURES 16 Most common Q&As about aged-care 19 Brand reputation, regulation and innovation are the biggest risks 20 How the Board plays a pivotal role in managing organisational culture 22 DNA tests to recruit executives too radical?

24 Thanks Australia! 13,500 printer cartridges recycled every working day 67 Podcasting: cutting through the online noise 82 Getting the Right Franchisee, Look for Character Rather Than Skill Set

19

ASIA FOCUS

54

PROPERTY FOCUS 40 Interstate investment: How to have your smashed avocado and eat it too

LIFESTYLE

BUSINESS FOCUS

2

BUSINESSFIRST MAGAZINE

54 Why people are working harder than ever and accomplishing less

By Joel Hill 56 What is the quickest way to expanding market share?

By Raz Chorev 61 Grow and Stay Agile With 6 Software Decisions By Agile software 62 How to create a high performing SMS marketing campaign for your business

By Carl Krumins 68 To Secure Your Network, You Need to Know Your Network By Anthony Smith 74 Four ways to kickstart your small business from a first quarter lull By FactorONE 79 Why Australian small business loans are being rejected by banks By Mark Hearl 80 What innovative businesses do differently By Chris Brell

86 Capturing Value in Bluechip Mining Stocks By Gabriel Yi 88 Investors flex their muscles to shape corporate Australia By Simon O’Connor

38 The China Australia connection

32 Unchartered waters: Uncertainty shaping the priorities of Australian CEOs in 2017 44 e-Learning: Connect your learners to your training 50 Business with a purpose: it’s time to practice what you preach By David Vitek

Sunsuper’s high performance transition With more than one million members and $45 billion in funds under management, Sunsuper has become one of Australia’s leading superannuation providers.

INVESTMENT FOCUS

SPECIAL FEATURE – MINING 8 A new focus on South America as lithium requirements surge 10 Two Ways to Beat the Odds with Mining Investing 14 The rise of cobalt

COVER STORY

86

94

90 Health: Sudden cardiac arrest in the workplace… what would you do?

92 Health: Gut health and smart decision-making 94 Tourism: Tourism and conservation initiatives in National Parks across Australia 96 Fastlane: The all new 2018 Honda CR-V with Premium Design www.businessfirstmagazine.com.au

BUSINESS FIRST LOUNGE

42

64

34 Campbelltown: the Chrysalis of Western Sydney Campbelltown is undergoing an economic and social renaissance as it reconnects with the City of Sydney and works towards putting the aspirations of ordinary community members back on State and Federal government radars.

42 How one Fintech is bridging the gap between investors and SMEs Charlotte Petris, owner and co-founder of Timelio, says her fintech company has come along at the right time.

46 Working towards a better tomorrow Monash Business School does more than just teach its students the rules of business, finance and economics. It aims to produce good citizens – business leaders who make a difference to the world.

46 www.businessfirstmagazine.com.au

64 Specialist knowledge for new ventures While the directors of PAC Partners have seen great success throughout their journey, it would be a great injustice to all of their hard work and professional diligence to suggest it has been similar to a Hollywood movie.

76 52 Health, happiness, and wellbeing – the formula to success for a Top Tier wellness brand World ranking brands are not created overnight.

Business experts claim that the formula to success for any enterprise is all about having a clear vision, the right people and expertise.

58 Finding vision in a volatile market Scott Deane is the chief executive officer of Learning Seat, one of Australia’s largest providers of online compliance training, implementing training solutions for more than 500 organisations across Australia, New Zealand and the Pacific.

70 How Cyient is designing a better tomorrow Cyient, a Hyderabad-based global engineering solutions company, has been enjoying spectacular growth with its profits recently rising 15.7 per cent.

76 Changing the candidate experience Former accountant Greg O’Shea heads up [axr], a specialist provider of search and selection recruitment services that is determined to change the recruitment candidate experience.

84 Bridging the knowledge gap In a time where tailored solutions and bespoke services are part of many business operations, the process for securing funding can seem broad and generic. Grow Capital seeks to link business owners and individuals to find appropriate funding opportunities.

84 BUSINESSFIRST MAGAZINE

3

BF | EDITOR’S DESK

Enter FY18 Welcome to the new financial year and another issue of Business First.

Now is the time many businesses will hit the reset button, set their FY18 budgets and look at ways to improve relationships, bottom lines, internal structures and overall performance.

All of this happens despite political, economic and social uncertainties that many of the world’s best analysts believe will continue well into the future.

The best things businesses can do in these times is focus on their business and we hope we can give you the tips and advice to narrow that focus to something that can guide you on your journey.

If you are conducting business in Asia, we take a look at the Australia China connection to give you an insight into how important this relationship is. We also look at how a Korean crisis could impact Japan.

Do you have a business with purpose? If not, it may be time to think about putting one into practice. Are you a small business that needs a loan, we give you the answer as to why your loan has been rejected.

We look at what innovative businesses do differently, how to create powerful marketing campaigns, the quickest way to expand market share, how to kickstart your business in a first quarter lull and building a business with technological agility.

Importantly, we also look at the uncertainties shaping the priorities of Australian CEOs. And speaking of CEOs and business leaders, PAC Partner director Craig Stranger talks about success in corporate advisory, Cyient’s Sanjay Krishnaa gives us insight into engineering a better tomorrow and Greg O’Shea reveals how the recruitment landscape is changing.

Of course that is just the start of the profiles we have on hand this issue. Grow Capital is a family owned Australian business which aims to bridge the information gap between the funders with the people who want that finance. Scott Deane, chief executive officer of Learning Seat, an award winning e-learning company tells us how Learning Seat became one of Australia’s largest providers of online compliance training. Sunsuper CEO Scott Hartley talks about building a high performance culture to lead successful change and we look at how Charlotte Petris, owner and co-founder of Timelio, created her fintech company at just the right time.

Finally, we ask Campbelltown Council how it is burgeoning into a thriving economic hub and sit down with Michaela Rankin, Professor of Accounting and Deputy Dean (International) at Monash Business School to discuss Sustainable Development Goals in business and how the school is instilling sustainability values in its business students.

When you get through all of that, take a load off and a ride in the new Honda CR-V and read about how you can lead a healthy life.

So, with that in mind, stay hungry, healthy, kick-back and relax and look forward to FY18 being highly successful.

Jonathan Jackson

Jonathan Jackson Editor, Business First Magazine

BUSINESSFIRST 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 Contributors Chris Brell, Raz Chorev, Sarah Cordner, Annemarie Cross, Jo Formosa, Chad Gates, Mark Hearl, Joel Hill, Mike Irving, Carl Krumins, Ryan Makris, Simon O’Connor, Anthony Smith David Vitek, Gabriel Yi Head Office Level 1, 33-35 Atchison St St Leonards NSW 2065 Advertising enquiries Phone: 02 8416 5294 Email: bfadvertising@amgroup.net.au Subscription enquiries Phone: 02 8416 5294 Email: bfsubscriptions@amgroup.net.au 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.

WARRANTY AND INDEMNITY Advertisers and/or advertising agencies upon and by lodging material with AMG for publication or authorizing or approving of the publication of any material indemnify Business First Magazine and AMG, its servants and agents against all liability claims or proceedings whatsoever arising from the publication and without limiting the generality of the foregoing to indemnify each of them in relation to defamation, slander of title, breach of copyright, infringement of trademark or names of publication titles, unfair competition or trade practices, royalties or violation of rights or privacy regulations and that its publication will not give rise to any rights against or liabilities against AMG, its servants or agents and in particular, that nothing therein is capable of being misleading or deception or otherwise in breach of Part V of the Trade Practices Act 1974.

Publishing, adverti CILTA AWARDS

by Associated Med linkedin.com/company/business-first-magazine facebook.com/Biz1stMag/ twitter.com/Biz1stMag Download Business First Magazine to your PC, iPad, iPhone or Android device Get it on

Windows 10

4

BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au

BUSINESS SNAPSHOT | BF

ARA Future Proofing Australian Retail Talent As the retail industry’s peak representative body, the Australian Retailers Association (ARA) has proposed further changes to the 457 visa reform in a submission to the Department of Immigration and Border Protection (DIBP) ensuring the longevity of Australian retail.

ARA Executive Director, Russell Zimmerman said the ARA have long been advocating for its members on skills shortages in the local labour market and the costly flow-on effect of doing business in a competitive global market.

“Australian retailers are currently challenged by the availability of local talent to fill buying, planning and online roles in the industry,” Mr Zimmerman said.

“We have been consulting the Government and advocating for formal training and professional development options for retail employees, to support future careers in Australian retail.”

The ARA strongly believe the ability for Australian retailers to compete in a dynamic global market, and continue to employ Australian workers directly correlates with access to specialised talent.

“The recent changes to the 457 visa program have restricted Australian retailers in accessing specific roles required in modern day retailing, further crippling the growth and development of local retail talent,” Mr Zimmerman said.

Working with the Australian Chamber of Commerce and Industry (ACCI)

the ARA surveyed its members on how the 457 visa changes will have a major impact on future business growth, securing retail talent, promoting local employees and international competitiveness.

The survey identified Retail Buyers, Merchandise Planners, Merchandise Designers and Digital Commerce as four critical roles required in contemporary retailing and assisted the ARA in formulating an accurate response to the Department on the proposed 457 visa changes to ensure current and future applicants for these particular roles are not affected.

The ARA’s submission highlights the adverse effects to the sector caused by the removal of certain retail occupations and asks the Department to reinstate the Retail Buyer to the Short Term Skilled Occupation List.

The submission further seeks a more sophisticated and inclusive approach in identifying strategic retail occupations prior to any reforms being implemented and recommends a pathway for highly skilled visa holders in key retail categories to be offered permanent residency.

Taking a longer-term view, the ARA supports the development and implementation of HECS-HELP for tertiary qualifications to support careers in Australian retail.

Mr Zimmerman said the ARA look forward to working with the Department to develop local retail talent through relevant tertiary studies which will in turn guide the future of Australian retail.

“As skilled retail employees are an enormous asset to the industry, the ARA will work with the Government to future proof Australian retail talent.” BFM

Bad hosting is the silent rankings killer Jim Stewart, CEO of StewArt Media, has some advice for businesses on how server hosting can minimise downtime and loss of sales in light of the recent domain name system (DNS) outage that affected many Melbourne businesses.

In April Australian domain name registrar Melbourne IT and its subsidiaries Netregistry and TTP Wholesale experienced disruptions on their DNS servers that affected a range of customer services such as cPanel, TheConsole, cloud hosting and mail.

Knowing your host is key and thought-leader Stewart picks up on what a lot of business owners may take for granted.

“We see businesses being destroyed by bad hosting,” Stewart said.

It is vital for businesses to underwww.businessfirstmagazine.com.au

stand when their DNS is being handled, if it is being controlled by the registrar, hosting company or a third party, and whether or not HTTP 2 is installed.

Digital growth marketer StewArt Media makes it clear that security is an issue on many levels.

To avoid chronic downtime, businesses need their website to be secure and to have remote backups to prevent the risk of hosting companies losing sites for even small periods of time.

“We [had] another client that didn’t update plugins and they were hacked.

“This was the web developer you could point the finger at because they were also providing the hosting,” the digital marketing company said.

This translates to huge losses for online retail businesses and is something

StewArt Media said is preventable with different and regular online backups.

Server speed and efficiency is also something Stewart emphasises for online businesses in particular.

“You may be paying for a premium service, but you may still be on a server with thousands of other websites.

“That server is then underpowered and you don’t want that.

“We have our own set of servers here in Australia, hosted by American company WP Engine, on the WP Engine platform and they are physically located in Australia so it’s faster for Australian users,” Stewart said.

StewArt Media is one of Australia’s leading digital marketing providers with a refreshing approach to optimising business opportunities and creative marketing solutions.BFM

BUSINESSFIRST MAGAZINE

5

BFM | BUSINESS SNAPSHOT

LINFOX BECOMES FIRST FOREIGN LOGISTICS COMPANY IN LAOS Linfox has become the first foreign logistics company to operate in Laos with the signing of a joint venture with the Lao Logistics Group in Vientiane.

The joint venture enables Linfox to provide transport services throughout Laos in partnership with local businesses and people.

CEO Linfox International Group, Gabby Costigan said the partnership provides Linfox with a foothold in the emerging economies of the Mekong Delta region.

“Expansion into the greater Mekong Delta countries of Laos, Myanmar, Vietnam and Cambodia is a key objective of Linfox’s business strategy,” said Gabby.

“We see great potential in this region, not only for Linfox, but for the local communities and economies.

“Laos’s position in relation to its neighbours offers enormous potential as a land-link and location to build further trade connections internationally.

“It will also generate real income for local business and promote increased investment in the region through the provision of efficient and cost-effective logistics services.”

The partnership will also open up new opportunities for Laos to grow relationships with its Association of Southeast Asian Nations (ASEAN) trade partners.

“We believe this joint venture is a positive step towards achieving ASEAN’s regional economic integration agenda,” said Gabby.

“This is a very special achievement and I thank the Laos Government and the Lao Logistics Group for giving Linfox this opportunity.

“We look forward to learning more about Laos, its culture and people as we grow this relationship.” BFM

6

BUSINESSFIRST MAGAZINE

New voice for one million SMSF members Two associations that speak for Australia’s one million self-managed super fund members are merging to create an even stronger united voice.

The Self-managed Independent Superannuation Funds Association (SISFA) is Australia’s original SMSF advocate, established in 1998 to represent the interests of trustees and industry to Government. SISFA’s mission includes the encouragement of high professional standards through its professional membership and public education initiatives.

The SMSF Owners Alliance (SMSFOA) was established in 2012 to give the owners (trustees and beneficiaries) of SMSFs a direct voice on Government policies that affect them. SMSF Owners’ primary focus is on advocacy supported by comprehensive financial modelling to illustrate the impact of proposed and possible changes to the system.

Amalgamation into a single combined force and a single effective voice will protect and promote the interests of Australians who have taken responsibility for managing their own retirement savings and generating their own income in retirement without relying on the age pension.

This amalgamation comes at a time of great change and challenge for self-managed funds and the combined energy and expertise of SISFA and SMSFOA will be enlisted to obtain the best possible policy outcomes for the beneficial owners of SMSFs. During a long and complex debate regarding superannuation and the role of small and self-managed superannuation funds within the sector, our two organisations have realised our views are aligned on the ways to improve the fairness and efficiency

of the superannuation system and the needs of members and trustees of selfmanaged funds. The skill sets of the two organisations are complementary.

“Collectively we will represent over 10,000 trustees through our memberships,” says SISFA Chairman Chris Balalovski.

“SISFA has always encouraged the highest standard of professionalism and been regularly sought after for our opinion on matters of policy.

“Trustee membership has always been a pillar of SISFA’s charter and we have continuously represented the interests of SMSF trustees to government and the regulator to increase the level of education and awareness.”

SMSF Owners’ Chairman Bruce Foy said the Alliance was formed in 2012 in anticipation of attempts by Government to roll back the benefits of superannuation and imposes new taxes on retirement savings.

“That threat duly materialised in the 2016 Budget when limits were placed on superannuation savings and new, retrospective taxes were aimed squarely at successful self-managed funds.

“We are sure there will be further challenges to self-managed funds in the future and we need a strong organisation to stand up for self-reliant Australians who are taking care of their own retirement savings efforts.”

The new body will be badged SISFA (Incorporating the SMSF Owners’ Alliance) with the tag line Speaking up for the one million Australians with SMSFs. The latest ATO quarterly data (September 2016) shows there were 585,260 self-managed funds with 1,110,425 members and assets of $628.0 billion, the largest segment of the superannuation sector. BFM www.businessfirstmagazine.com.au

BUSINESS SNAPSHOT | BFM

FirstWave sees massive 76% surge in virus-infected email attacks, placing Aussie businesses at risk An Australian cloud security company that provides services to more than 350 Australian businesses, FirstWave Cloud Technology, has seen a dramatic 76% year-on-year surge in the number of emails carrying malware and viruses that have blocked at its cloud-based email security gateway.

Malware attacks, such as the ‘WannaCry’ ransomware launched on the 12th of May and the ‘Adylkuzz’ attack uncovered by security researchers yesterday, are capable of inflicting devastating losses on Australian smalland medium-sized businesses (SMBs) by destroying vital business information and IT systems.

So far this year, FirstWave’s cloudbased email security system has blocked more than 247,000 pieces of email malware from reaching customers, which is up 76% over the same point in 2016.

These advanced persistent threats (APTs) continue to expand in sophistication, frequency and impact mainly through attack vectors such as email (phishing), the web (‘drive-by’ downloads) and software-as-a-service (malware) applications.

The result is that SMBs face a growing business risk from malicious stealthy malware penetrating traditional or existing security defences and compromising their customers, systems or data.

FirstWave offers a comprehensive, integrated enterprise-grade cloudbased solution for any SMB customer using any or all of FirstWave’s core cloud gateway-based security services – email, web or NGFW, all incorporating world-leading security technology.

FirstWave’s industry leading cloud security technology also secures a number of Australia’s largest financial institutions, along with government departments and agencies at federal and state level, leading ASX-listed companies and major private businesses. The company’s customers include three of the big-four banks, leading FMCG companies and major national retail chains.

Speaking from Bangkok, where he is presenting at the Fortinet Fast And Secure Conference 2017, FirstWave chief technology officer Simon Ryan commented on this alarming trend.

“Our email analysis is a wakeup call to businesses in Australia. This is just another example of the huge increase in cyber risk. Email is only one security vector, so SMBs need to ensure they have enterprise-grade quality cloud security across all threat vectors including email, web and firewall solutions.

“Australian SMBs are not invisible or immune to security concerns originating overseas. When it comes to safeguarding your business, you must have the latest

Global Risk Landscape: Cyber risk key threat in Asia Pacific For the Asia Pacific region, cyber risk has been identified as the main organisational risk senior executives face in 2017, and disruptive technologies and reputational risk posing the most challenges over the next ten years, according to a comprehensive report published by leading accountancy and business advisory firm BDO. The BDO Global Risk Landscape 2017 report, gathered insights from more than 500 c-suite and senior level experts across 55 countries on their perception of risk. While the Asia Pacific region identified cyber risk as the key threat, globally the top three risks identified were: regulatory risk, economic slowdown/slow recovery, and increasing competition. BFM www.businessfirstmagazine.com.au

advanced threat protection as attacks are becoming more sophisticated and prevalent in Australia.”

Marita Corbett, Partner in Risk Advisory at BDO Australia said “The survey results highlight a growing recognition that responsibility for risk management ultimately comes from the top, with increasing evidence of regional similarities in a globalised and interconnected world.

“The challenge for businesses leaders is in how they adapt to this riskier world.

“How they identify and respond to current risks and opportunities and how they identify emerging issues that are likely to impact them further down the line.

“Resilient organisations, those destined to thrive regardless of the challenge, will have a strong risk radar and the ability to respond quickly and decisively” Ms Corbett said.

Report participants were surveyed early in 2017. Interestingly they predicted an imminent global ransomware attack, which came to fruition recently through the ‘WannaCry’ incident. This most recent report supports the findings from last year’s BDO/AusCERT survey, which showed that nearly a quarter of the organisations had experienced a ransomware attack in the past 12 months. BFM

ANTHONY PRATT TOPS 2018 RICH LIST Anthony Pratt topped the recently announced Financial Review Rich List with $12.60 billion.

This is the highest wealth value Anthony Pratt has ever had.Pratt’s Visy cardboard box manufacturing and recycling business dominates Australia, but his rising wealth is mainly due to the huge growth of Pratt Industries in the United States.

Pratt, who is executive chairman of Pratt Industries and the cardboard box and recycling giant Visy in Australia, took over the US business in 1991. He has overseen the rapid growth of Pratt Industries in America, where it now employs 7000 people.

Pratt was last #1 on the list of Australia’s 200 wealthiest people in 2009, just months after his father Richard Pratt died. BFM

BUSINESSFIRST MAGAZINE

7

BFM |SPECIAL FEATURE - MINING

A new focus on South America as lithium requirements surge The clean energy revolution has led to an abundance of miners and explorers looking for an edge in their exploration activities.

W

hile there is no shortage of commodities to search for with lithium, graphite, zinc and cobalt all adding to the mix of energy generating ingredients, one question that has arisen is where are the better locations to set up mining operations.

Nevada in the US has been a popular choice, driven in part by Tesla’s increasing requirements for lithium and graphite for its battery solutions.

The emergence of Tesla has been a game-changer and miners have taken note.

Tesla founder Elon Musk said for the company to meet its target of 500,000 cars a year, “we would basically need to absorb the entire world’s lithium-ion production”.

Lithium is a key ingredient in lithium-ion batteries, which power electric vehicles, and automakers are scrambling to source enough to keep up with forecast demand.

8

BUSINESSFIRST MAGAZINE

Furthermore, it is not just Tesla that is shaking this market up: Mercedes, Toyota, Mitsubishi and most other car manufacturers are now looking to increase production of electric vehicles.

Samsung, Sony and other electronics manufacturers are also sourcing ingredients for their battery powered products.

Goldman Sachs has forecast that lithium demand could triple within 10 years and there’s real fear that lithium demand could outstrip supply.

China has set a target of five million ‘new energy’ vehicles on its roads within three years, and Norway want nothing but electric vehicles on its roads by 2025.

In the US, President Trump is threatening penalties for American companies manufacturing offshore, which gives US automakers another incentive to build electric cars and produce their batteries at home.

So as you can see, due to a heightened awareness of issues around unsustainable energy sources and CO2 www.businessfirstmagazine.com.au

SPECIAL FEATURE - MINING| BFM

thirds of the world’s lithium supply come from.

Argentina represents 15% of total world production of around 200,000 tonnes of lithium, but spurred by the growth of electric cars, lithium production is set to explode to reach 400,000-500,000 tonnes per year by 2025.

The upside for lithium is thus extraordinary.

At a Cannacord Genuity Battery Material Conference held in Toronto recently, it was noted that car manufacturer VW is expecting 25% car market penetration with its electric vehicles by 2025 and is likely to need 150GWh of battery capacity within this time.

This actually dwarfs Tesla’s estimated output of over 80GWh. Taking all of this into account, Argentina President Mauricio Macri, has implemented a number of promarket reforms since taking office in December 2015.

Argentina has thus become one of the most attractive places on earth to be exploring right now.

Macri sees his country’s lithium reserves as an opportunity to attract foreign investment and boost the sluggish economy – the third largest in Latin America. A boost to manufacturing of lithium ion batteries within the country also makes sense considering its production potential.

emissions from fossil fuels, the commercial market for lithium is now substantial.

If you have any doubts as to lithium’s validity this chart should address your concerns:

LITHIUM

8

So where does a miner look to break into this market?

South America has some of the most abundant sources of high-grade lithium in the world and its close proximity to the US could give miners a real advantage.

WHY SOUTH AMERICA? Argentina — along with Chile and Bolivia — make up what is known as the ‘lithium triangle’ where two www.businessfirstmagazine.com.au

A LOOK AT CHILE Chile has been a mecca for international miners since the 1970s.

While copper has been a primary focus in the past, lithium also drives this economy.

Like Argentina, Chile has a mining-friendly jurisdiction includes a favourable royalty regime, clear legislation, and protection for mining concessions.

It is also strategically positioned to service Asia and North American markets.

A Chinese-Korean group recently met with the Chilean government to discuss the construction of a lithium batteries plant in Chile.

It is not surprising as Chile contains 27% of global lithium reserves and contributes to more than 50% of global production. There is also now a concerted effort by the Chilean government to attract more mining investors to join the likes of BHP, Rio Tinto, Xstrata and Newmont, who already have operations in the region.

Chile’s Minister of Mining, Aurora Williams, has indicated the government specifically wants to bring foreign Capitals to the country’s salt flats.

Chile’s state mining company ENAMI presented multiple new greenfield and brownfield exploration projects, all seeking partners, to the Prospectors and Developers Association of Canada conference in May. For explorers paying attention, this won’t come as news. Late last year, a Chinese-Korean group decided to take a strategic long view and met with the Chilean government about building a lithium batteries plant in the country.

This plant is a $2 billion lithium battery megaplant.

So, if you’re an explorer or miner, and lithium is your focus, South America is a logical destination in which to set up operations and devote energies to positively impact the new energy paradigm. BFM

BUSINESSFIRST MAGAZINE

9

BFM | SPECIAL FEATURE

TWO WAYS TO BEAT THE ODDS WITH MINING INVESTING Gold has been trading sideways for a while, but that does not perturb Louis James, editor of the International Speculator. In this interview with The Gold Report, James explains why the he is comfortable with the current gold price and discusses his two investments theses for precious metals.

The Gold Report: Louis, you were in Paris, where you observed the election ths year. Is there anything you would like to tell us about the election and implications it might have for gold?

Louis James: If Marine Le Pen, the supposedly Trump-like candidate had won, I think you could have seen some very big changes in French policy. Much destabilization and the potential Frexit, which would have had major implications. Instead Emmanuel Macron, the supposed centrist, wins. And investors are breathing a big sigh of relief.

I always caution people, when the markets seem to think that they know what’s coming, that’s dangerous. Just because Macron is a centrist doesn’t mean we know what’s going to happen. He’s a young guy and not in any of the traditional French parties.

His party is only a year old. So, while the sigh of relief makes sense given what Le Pen might have done, it’s premature. We don’t know what Macron is going to do.

“Emmanuel Macron, the new president of France, visited the Montagne d’Or gold exploration/ development story that Columbus Gold Corp. has in a joint venture with Nordgold in French Guiana.”

One thing we do know is that he visited the Montagne d’Or gold exploration/development story that Columbus Gold Corp. (CGT:TSX; CBGDF:OTCQX) has in a joint venture with Nordgold SE in French Guiana. He came out as very pro-mining. So, if you were counting on Le Pen to rock the boat and to send gold north and you’re disappointed, then at least there’s a gold lining in that Macron is pro-mining.

And that’s not a bad thing in a major player in the European space.

The moment the exit polls starting calling the election for Macron, gold dropped a bit. But then it came right back. It’s been wobbling up and down ever since. But it’s pretty evident that the Macron win and the stay of execution for the European Union (EU) had been priced in already. It’s steady as she goes for now.

are fine at $1,200 gold. And the better explorers and developers with quality assets are fine.

When the market was really heading downward and through the darker times of 2014 into 2015, we did a lot of painful pruning of our portfolio. The standard was that any project or mine had to look economic at $1,000 gold.

Actually, if gold went sideways for ten years, that would be great for miners. It would be a stable price environment. They could plan in a way that miners rarely get to do, because the prices of commodities fluctuate so much.

It may seem like gold isn’t doing what it’s supposed to do because there are scary things in the news and gold hasn’t skyrocketed as a safe haven. But there are other factors that are bearish for gold. The economic recovery around the world seems to be gaining speed.

The EU hasn’t fallen apart: There are signs of the EU economy is getting going again. The politicians may have succeeded at kicking the can down the road— putting off the crisis that many of us think will tear the EU apart. It may not happen for years now, in which case we could expect gold to sell off. A lot of economic data seem bearish for gold right now.

So the fact that gold is trading in a range instead of falling shows that fear and uncertainty are keeping its price up. Recent threats from North Korea were good for gold, for example. This is gold doing what it’s supposed to do, more than many people realize.

When people ask me where I think gold’s going, I like to ask: “What do you see when you look out around the world? Do you see a world that’s getting saner and more predictable? Or do you see a world that’s more chaotic and dangerous?” If your answer is “sane and more predictable,” maybe you don’t want much gold in your portfolio. But I look at the world and it seems to me that craziness abounds—at home and abroad. For me, all the arguments for owning gold are intact.

TGR: Gold has been trading in a fairly narrow range over the last few months. What’s your view on the price of gold and where it may or may not be heading?

LJ: First, $1,200/oz for gold is not a bad price. The majors and others bloated their balance sheets, and didn’t really concentrate on margins when the gold price was surging up to 2011. Since then, there’s been a lot of tightening. The bigger, better companies

TGR: Are there other commodities that you’re watching closely?

LJ: The correlation between gold and/or gold and silver as precious metals and commodities in general is very high. An argument could be made that we’ve seen a bottom in late 2015, not only in gold but in all commodities; the commodity supercycle has in fact turned. But things never go straight up. We are in the beginning of a long bull in all commodities, including

10 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au

SPECIAL FEATURE| BFM

gold, which also gets a tailwind from the safe haven buying.

I am looking at all resource commodities. I like zinc, copper and nickel right now because of the supplyconstraint issues.

People get excited about oddball metals. Cobalt is one that wants to be the flavor of the day. But I’m leery of these thinly traded metals that don’t have the kind of market depth and transparency you get with the high-volume metals. That doesn’t mean you can’t make money on them; it just means it’s very high risk.

Despite writing a newsletter called the International Speculator, I’m very risk-averse. It’s not called the International Gambler. A rational speculator puts the odds in his or her favour. I’d much rather speculate on something where I can see the trend being my friend than on something that’s exciting now, but that I can never really predict what’s going to happen next. I’m very picky about the stocks I’m willing to recommend.

TGR: What’s your current investment thesis for resource companies?

LJ: I have two. The one I’m most keen on is something I call the Golden Runway. Think back to those charts of the life cycle of an exploration stock. The stock piddles along at no value and then, if the company is lucky, there’s a discovery and the stock goes vertical.

After the discovery, the company goes into the “boring engineering phase” and the stock slumps back down again. Finally, if the discovery has true merit, the stock ramps back up as the company approaches production. Then there’s a question mark. That’s because a mine is a depreciating asset. The more you mine it, the less there is left. So, a company has to make more discoveries or acquisitions to keep going up and growing. Either that, or the value fades over time as it mined it out.

Doug Casey told me about this pattern when I started with Casey Research in 2004. It’s why we like exploration; that’s where the 10-baggers are. An exciting discovery adds a huge amount of value. The www.businessfirstmagazine.com.au

problem with that is that you can’t predict a discovery.

Even the best in the business can’t guarantee a discovery.

At the more low-end risk of the life cycle— production—you’re not usually going to find 10-baggers. For speculators, that’s less exciting.

What nobody ever really asked before—and I checked with Doug Casey, Rick Rule, Bill Bonner and many people senior to me in this business—is about the gains during the moderate-risk middle of the life cycle, as a company ramps up from the boring engineering phase to production. What are the gains there typically? Nobody could give me a number.

They’d just figured it was priced in, so it couldn’t be much. When a company announces that it’s building a mine, everybody can see it, so there can’t be much profit to make betting on it. Right?

Well, it turns out that assumption is not true.

That’s what the data says. I’ve done three rounds of research on this with my team. Initially, we had a couple dozen companies. And then 50 examples of junior exploration companies that went into production. Now our sample size is 100. We don’t count existing producers building new mines. It has to be an exploration company that makes an identifiable construction decision and goes into production on its first mine.

The numbers are phenomenal. Of the 100 cases of companies that have made this transition, 92 of them succeeded at building their mine. Maybe that’s not terribly surprising. Nobody’s going to lend you to the hundreds of millions of dollars it usually takes to build a mine if they’re not pretty sure you can succeed.

The average of the 92 companies that built their mines was 101% gains from the construction decision to the first pour of that bar of gold or copper or whatever it was. Basically, this tells us that 92% of the time, you can get a double betting on a first-time mine builder. It takes a little bit less than two years.

And, if you look at the top five examples, the average is 699.97%. I give that number with two decimals,

BUSINESSFIRST MAGAZINE

11

BFM | SPECIAL FEATURE

because if I round it, people will think I’m making it up.

Another important thing is that out of our 100 cases, 30 built their mines primarily during bear markets. The average gain of these 30 companies was significantly less, only 27%. But still, this shows that you can still win in a bad market.

The gains don’t necessarily hold up after the company pours its first bar. The stock will often then go down. Investors try to get into the company just before they get into production, and then there’s often a retreat right afterwards.

TGR: Do you have an example of a company on the Golden Runway?

LJ: Well, I would caution people to be very careful as they do research. There are a lot of companies that call themselves mine-developers (builders), but they’re not developing anything. They’re just exploration companies with aspirations. So, make sure that you’re looking at a company that’s serious about building a mine.

“Guyana Goldfields Inc. has a chart that looks like a textbook case of a successful Golden Runway.”

Also, just because the average gain of the 92 successful mine builders that I mentioned was 101%, that doesn’t mean they all did 101%. The top five were 700%. There were 19 cases with negative returns. You can’t just throw darts at a board. You want to pick the better companies; one way to do that is to focus on the people aspect.

As for a recent example, one that has a chart that looks like a textbook case of a successful Golden Runway stock is Guyana Goldfields Inc. (GUY:TSX).

“Pretium Resources Inc. is on the verge of pouring its first bar of gold.”

An example of a company just about to complete its run up the Golden Runway is Pretium Resources Inc. (PVG:TSX; PVG:NYSE), Bob Quartermain’s monstersized, super-high-grade gold play in British Columbia.

What’s interesting is that it’s on the verge of pouring its first bar of gold, but the stock has not yet risen as much as we’d expect. That’s despite the company completing construction ahead of schedule. The reason is that because the deposit is so exceptional, Pretium has done some things differently. This has some critics saying the mine will not produce as much gold as projected. But Pretium’s bulk sample produced something like 60% more gold than was expected based on the model. That tells me that the company was not being risky or cavalier; in fact, it was being conservative. We’re about to find out if I’m right. So, instead of production being the end of the story for this company, I see it as a beginning.

TGR: What’s the second thesis?

LJ: I love prospect generators. Exploration is difficult.

As I said before, even the best people at it don’t always succeed, or they can take many years to succeed. The best way to mitigate this is the prospect generator model/joint venture model. You get good people to go out and prospect, generate interesting projects and then bring joint venture optionees to pay for the high-

12 BUSINESSFIRST MAGAZINE

risk work of exploration.

A lot of people don’t like this model. They think that if a company’s projects are any good, why would they give away 60, 70 or 80%? The answer is that even with legitimate projects of merit, most don’t succeed. The average odds for success in an exploration play is said to be on the order of 1 in 300.

If you can get other people to pay for 100% of the highest-risk exploration work and still end up retaining 30% of a world-class mine, it’s huge.

Especially when you start out with nothing. The tremendous addition of value, paid for with other people’s money, does wonders for share prices.

The prospect generator business model gives us shots at 10-baggers or even 20-baggers. But even so, the odds are still long. You have to have a basket with multiple picks. If you do that and you’re patient, you can have a real shot at some extraordinary gains.

TGR: Would you talk a bit about some companies that fits this model?

LJ: The prospect generator model has been followed for a long time very successfully by the Almaden Minerals Ltd. (AMM:TSX; AAU:NYSE) group. That company kept its main discovery called Ixtaca, and it spun out its exploration portfolio into a daughter company called Almadex Minerals Ltd. (AMX:TSX.V).

Another one I like a lot is a company called Eagle Plains Resources Ltd. (EPL:TSX.V). It’s a company that’s delivered 10-baggers several times over the cycles. It gets other people’s money to pay, each time.

It makes discoveries. It spins them out, it sells them and makes money for shareholders. And now it’s at it again in this cycle.

“An explorer I like is Balmoral Resources Ltd.; it has two highly prospective projects right now that I like a lot.”

Another explorer I like is Balmoral Resources Ltd. (BAR:TSX; BALMF:OTCQX). It’s not a prospect generator, but a pure explorer with people who have track records of repeated success. It has two highly prospective projects right now that I like a lot.

TGR: Any parting thoughts?

LJ: If readers want to find out more about my Golden Runway research and what the latest results are, they should visit CaseyResearch.com and click on the button for the International Speculator. That’s our flagship publication. I’d be happy to help them out with more with these types of investments.

TGR: Thank you for your time, Louis. BFM Louis James is at Casey Research, where he’s the senior editor of the International Speculator,Casey Investment Alert and Conversations with Casey. Fluent in English, Spanish and French, James regularly takes his skills on the road, evaluating highly prospective geological targets and visiting explorers and producers at the far corners of the globe and getting to know their management teams.

Article supplied by Streetwise Report’s The Gold Report: https://www.theaureport.com

www.businessfirstmagazine.com.au

INFOGRAPHIC| BFM

www.businessfirstmagazine.com.au www.businessfirstmagazine.com.au

BUSINESSFIRST MAGAZINE

13

BFM | FEATURE

The rise of cobalt

With the cobalt price shooting through the US$55,000 tonne price, experts are saying there is still plenty of upside. Business First looks at the rise of cobalt.

T

he price of cobalt has more than doubled in the past year and while not quite at the heady prices of 2008, which were more than double the current level, it looks set to continue to rise.

Interestingly, spot prices for cobalt have risen 117% year on year and as of March this year 55% percent since January 1. As such it is currently outpacing lithium.

In part this is due to the importance cobalt has play with battery based energy storage.

Cobalt is important for conductivity and energy density, but also adds to the safety and longevity of rechargeable batteries.

In fact, cobalt has a key role in the cathode part of a battery, with lithium batteries said to contain more cobalt than lithium, as the active part of the cathode contains up to 60% cobalt.

The main driver of medium and long-term demand is expected to be electric cars.

According to the OECD, in 2015 the manufacture of electric cars rose from several hundred to 1.2 million.

The supranational Electric Vehicles Initiative has called for an electric car fleet of 20 million by 2020.

Meanwhile amongst the large populace of China,

LIME Cobalt Cash Price 55,000 50,000

US$/tonne

45,000 40,000 35,000 30,000 25,000 20,000 6

1/1

/0

03

6

1/1

/0

04

6

1/1

/0

05

6

1/1

/0

06

6

1/1

/0

07

6

1/1

/0

08

6

1/1

/0

09

6

1/1

/0

10

/16

01

11/

6

1/1

/0

12

7

1/1

/0

01

7

1/1

/0

02

7

1/1

/0

03

Lithium carbonate - global average 12,500 12,000 11,500 US$/tonne

11,000 10,500 10,000 9,500 9,000 8,500 8,000 6

1/1

/0

02

6

1/1

/0

03

6

1/1

/0

04

6

1/1

/0

05

6

1/1

/0

06

6

1/1

/0

07

6

1/1

/0

08

6

1/1

/0

09

6

1/1

/0

10

Data as of March 8, 2017 Sources: Thomson Reuters, Benchmakr Minerals, SNL Metals & Mining, an offering of S&P Global Market Intelligence

14 BUSINESSFIRST MAGAZINE

/16

01

11/

6

1/1

/0

12

7

1/1

/0

01

7

1/1

/0

02

170,000 electric buses are in circulation and the demand from China is only increasing.

However there is a serious supply issue that needs to be addressed.

Almost two-thirds of all cobalt is sourced from the Democratic Republic of Congo, with as much as a fifth of Congo’s production, according to Amnesty International, coming from small-scale operations that rely on child labour to extract minerals by hand.

Manufacturers, under pressure from shareholders and customers, are now looking to source their products from more ethically considered locations.

In May this year Don Reisinger of Fortune Magazine wrote: Apple has stopped buying cobalt mined by hand in Congo following reports of child labor and dangerous work conditions there.

Apple said the new policy would be in effect until it can confirm that companies in its supply chain for the metal, used in iPhone and iPad batteries, have “appropriate protections” safeguarding workers and banning child labor, a company spokesperson said on Friday. The spokesperson added that all small mines must meet its workplace standards to qualify as suppliers. /react-text The announcement follows a recent report by U.K. broadcaster Sky News, which investigated the state of cobalt mine working conditions in the Congo. The investigation found several children, including an eight-year-old named Dorsen, who worked 12-hour days carrying heavy sacks in sometimes heavy rain while supervisors threatened them with beatings. An 11-year-old worker, Richard, told Sky News that his body “ached” each day following his shift.

Furthermore, the rise in the cobalt price is the supply crunch that has come about as decreases in production from Australia, Russia and Zambia has left a gap in output, with few projects to fill that gap.

So with interest in cobalt rising, but supply pressures having an impact, location will plat a pivotal role for cobalt miners and their end-users in future.

The US market is a less politically risky option for those seeking to move away from more volatile regions and miners in the US would be well-placed given the new energy boom and the subsequent speculative investor support for cobalt.

In effect, the rise of cobalt, like lithium, is primarily down to the growing interest in these metals to fuel the electric power revolution.

Battery storage and demand, including growing demand for electric vehicles is set to drive the lithium and cobalt markets for years to come.

It’s just a matter of ensuring the rise of cobalt is in line with ethical mining and supply.. BFM www.businessfirstmagazine.com.au

INFOGRAPHIC| BFM

www.businessfirstmagazine.com.au

BUSINESSFIRST MAGAZINE

15

BFM | FEATURE - AGED CARE

Most common Q&As about aged-care As Australians live longer, more and more will end up in residential aged-care. The number of people in permanent aged care in Australia is expected to triple in the next 35 years, from 225,000 today to 700,000 in 2050.

By Rod Horin.

T

he aged-care industry is very complicated and many decisions must be made, often involving large sums of money.

Here are answers to the most common questions we hear.

Q: Is the accommodation deposit negotiable?

A: Yes. The bond – otherwise known as the Refundable Accommodation Deposit (RAD) –can be as high as $2 million to secure a bed in an aged-care facility. In many cases these RADs are negotiable, and at times can be as much as halved. Willingness to negotiate on RADs depends very much on the demand for beds – and the supply of beds – in a particular aged-care facility.

Q: Is there any return on the bond that is paid back when the person in aged-care dies, or does the aged care facility keep any investment earnings?

A: The bond (RAD) is a fully-refundable deposit, not an investment. Essentially, it works like an interest-free loan to the aged-care facility. These deposits form an important part of aged-care facilities financial operating models, enabling them to renovate and upgrade their facilities and build and acquire new facilities. In a government accredited aged-care facility, the accommodation deposit is fully government guaranteed. Before July 2014, the accommodation bond repaid to the family would be reduced by retention amounts deducted by the agedcare facility. Since July 2014, any lump sum paid as a RAD is generally repaid in full at the end of the care period.

happens if you rent it out? and Will your decision have an impact on any pension or aged care fees? The family home is often a couple’s most valuable asset and many advisers wrongly assume that it needs to be sold to provide funds for RADs. The key driver is to make sure that, like any valuable asset, the home generates a financial return. This return takes the form of rental income and capital growth (which RADs certainly don’t provide). The home is treated on a concessional basis for the age pension and aged care fees. For age pension purposes if you move into care, the former home’s value will be excluded from the age pension assets test for 2 years after which it is valued at its net market value. Any rental income is assessable under the age pension income test. So in most cases, aged care residents who retain their home can expect to lose the pension when the 2 year period is up. For aged care means testing, the value of the home is currently capped at $162,087 and rental income is assessable.

Q: What alternatives are there for paying the RAD? A: Many aged-care facilities prefer the RAD be paid as a lump sum up front. However it is possible to choose to pay interest payments only or pay with a combination of lump sum and interest payments. A bank guarantee is not an alternative.

Q: Why does the Government charge different daily care fees to residents?

A: The standard daily care fee for a resident in an aged-care facility ($49.07 per day) is set at 85% of the full age pension. All residents must pay this fee.

However, it does not cover the full care costs of the resident. The government may ask the resident to pay an additional amount as a Means-Tested Fee and then pays a subsidy for each resident’s care needs to make up any shortfall.

Q: Will I need to sell the family home to pay the RAD? A: Not necessarily. Four key questions are: Do you need to sell the home? Can you afford to keep it? What

Q: What is the Means-Tested Fee? A: The Means-Tested Fee is set by the government and collected by the aged-care facility based on an

16 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au

FEATURE - AGED CARE| BFM

individual assessment for each resident. It is an attempt by the government to ask residents with the financial capacity to contribute to the cost of care. This fee can range from nothing to a maximum $244.97 per day.

Q: Why is the Means-Tested Fee so high and how do I reduce it?

A: The Means-Tested Fee is based upon the income and assets of the aged-care resident, so it increases as the resident’s assessable assets and income increase.

For example, a resident on a part age pension with assets totalling $200,000 and deemed to be earning $28,109 per year will pay $2.07 per day ($756 per year) in aged care, while a resident with assets totalling $1.2 million and deemed to be earning $38,262 per year will pay $67.48 per day ($24,629 per year). One option to reduce the Means-tested Fee is to buy an aged-care annuity, if appropriate – advice is important.

Q: What is the Extra Services Fee and should I pay it?

A: The Extra Services Fee, which can be as much as $120 per day, provides for additional services like a choice of meals, alcohol at meals, expanded activities program, cable television etc. If your aged-care facility is charging an Extra Services Fee, you should ask what services are being delivered and assess whether or not you are receiving value for money.

Q: Paying daily fees will impact on my cash flow.

What strategies are there for dealing with this?

A: It is possible to negotiate to pay some or all of the daily fees from the RAD to minimise the impact on your cashflow. This means of course that less of the www.businessfirstmagazine.com.au

RAD will be returned at the end of the care period.

Q: What implications are there for my social security or pension?

A: The RAD is an excluded asset for social security purposes. Therefore, in some cases, where existing cash is used to pay for a RAD, it can result in a new or increased pension entitlement. More often, a family home is sold to fund the RAD. In this case, while the home is excluded, the proceeds from its sale are counted as an asset. As a result, the cash remaining after paying the RAD can often result in a pension being reduced or lost entirely. However, there are ways to maintain, or even increase, one’s current entitlements.

Q: What can families do if they are not happy with the aged care facility – for example if some of the services promised are not delivered?

A: The first thing to do is to talk to the staff and managers to try to reach a solution; nearly all agedcare facilities are very keen to have happy residents and families and are usually very accommodating. If an acceptable solution is not possible, the standard resident contract allows the resident to leave at any time by giving the agreed period of notice. Of course, this will usually involve finding a place at another facility, or having appropriate care arranged somewhere else. In this circumstance, the RAD will be refunded.

Q: What are the benefits in employing an aged care specialist to find suitable accommodation?

A: The aged-care industry is hugely complicated and

BUSINESSFIRST MAGAZINE

17

BFM | FEATURE - AGED CARE

people typically experience it for the first time during times of high emotional stress, when parents fall ill or are told by doctors that they cannot return home. In addition to providing clear explanations of the choices available, and assistance with applications, aged-care specialists can provide help with the following: • Specialists often receive regular weekly updates on vacancies from the aged-care centres and can pass this information on to clients. Specialists often know about vacancies before they are advertised to the public.

• Often aged-care facilities will call the specialists to see if they have any clients looking for accommodation.

• Because the specialist is aware of what vacancies there are, they can often negotiate a significant reduction in the Refundable Accommodation Deposit (RAD) which may not be offered to members of the public.

Q: What are the costs plus any tips and traps to watch out for?

A: There are several ways that aged-care specialists charge for their services, including fee for service at an hourly rate, or various fixed-cost packages depending upon the level of services required.

Key tips and traps: • Remember you get what you pay for; the cheapest is not always the best.

• The knowledge and experience of the specialist can be very important to finding the right accommodation.

• Ask your accountant or solicitor to recommend a specialist who they have confidence in.

• Like in many fields, word of mouth recommendations are generally a good guide.

Q: Why is aged-care so expensive?

A: Aged-care is very labour intensive, and land and buildings are expensive to buy and maintain. The owners of such facilities expect to make a return on their investment. From a client’s point of view, typical fees include accommodation deposits and charges, daily fees, extra services fees and means-tested fees.

Q: What are the top features that families should look for in an aged-care facility?

A: Different families look for different things at aged-care facilities, however the core features should include: 1. Being able to meet the care needs of the resident, including number and quality of nursing staff, therapy services offered, assistance with personal care, emergency assistance. These are the most important things for nearly all families.

2. Basic accommodation-related services such as beds, bathroom/ensuite facilities, mattresses, linen, bedroom furniture.

3. The ability to provide a range of care needs if a resident’s health declines.

4. Ongoing daily programs and activities to engage and stimulate the residents.

18 BUSINESSFIRST MAGAZINE

5. Close proximity to family.

6. A culturally compatible facility.

Q: There have been instances of aged-care facilities not returning bonds. What can families do to get bonds released?

A: The Aged Care Act sets out the procedure for repayment of Refundable Accommodation Deposits (RADs) – formerly known as bonds. When a resident leaves an aged care facility, lump sum RADs must be refunded within the following timeframes: • If more than 14 days’ notice is given, the lump sum must be refunded on the day the resident leaves.

• If notice is given within 14 days of leaving, the lump sum must be repaid within 14 days of giving notice.

• If no notice of leaving is given, the aged care facility must refund the lump sum within 14 days of the resident leaving.

• If the resident dies, the aged-care facility must refund the lump sum within 14 days after the day on which they were shown evidence of probate (the official proving of a will) or letter of administration (authority to administer the estate of the resident who has died without a will).

There is no risk about getting the lump sum back as repayment is guaranteed by the Commonwealth Government. The Aged Care Act also states that, should the aged-care facility fail to pay the refund within the above timeframes, interest is payable at a set rate.

It is worth noting that this situation applies to aged-care facilities which are accredited and funded by the Commonwealth Government. It does not apply to other facilities, such as Supported Residential Services, which are registered and monitored by state governments. These facilities are generally private businesses and there is no government guarantee for any bonds paid by residents. BFM Rod Horin is an aged-care consultant at Joseph Palmer & Sons (Vic), investment managers and aged-care specialists. www.businessfirstmagazine.com.au

FEATURE - RISK| BFM

Brand reputation, regulation and innovation are the biggest risks Australian businesses are more optimistic about the economic landscape than the rest of the world, but increased competition and consumer pressure to innovate pose the biggest threats to business growth, according to a new survey by Aon.

T

he latest edition of Aon’s biennial survey reveals that economics, demographics and geopolitics as well as technology advancements are creating a new reality for companies around the world.

Damage to brand and reputation remained one of the top ranked risks by businesses at home and abroad.

Lambros Lambrou, Chief Executive Officer of Aon Risk Solutions Australia said, “We have seen many recent cases in the media where scandals, poor customer experience or product recalls has impacted a company’s share price and performance in the shortterm – and in some cases caused longer-term financial difficulties. The increasing influence of social media and activist sites mean that risk and reputational issues can escalate very quickly.

“Organisations need to understand how perceptions of their brands are changing, and be ready to respond at short notice to unpredictable and often unavoidable crises. When handled well, a crisis can actually be a chance to improve brand perception,” Mr. Lambrou added.

REGULATORY AND LEGISLATIVE CHANGES: THE NUMBER ONE RISK The survey reports that the number one risk for Australian businesses in 2017 is regulatory and legislative changes. Globally, businesses ranked this at number four, illustrating that this is a much more acute risk for Australian businesses than for their global counterparts.

Commenting on the need for companies to consistently assess their political, security and

www.businessfirstmagazine.com.au

regulatory risk, Mr. Lambrou added that “Regulations can create advantages for consumers as the government attempts to create a level playing field across an industry, however, they can often be quite costly for companies to comply with – and even more so if they are breached. Periods of shifting regulation due to political motives between different administrations can make it difficult to define a long-term business strategy.”

FIERCE COMPETITION INCREASINGLY BECOMING A CHALLENGE Competition moved up to the number three risk concern for Australian businesses this year. The ranking of competition, innovation and technological infrastructure all in the top 10 signals a trend in corporate concerns about future proofing business against risks.

According to the survey, nearly a third of respondents claim that failure to innovate to meet customer needs has resulted in a direct loss to income over the last 12 months. Disruptive technologies is an emerging risk that ranked at number 20 globally this year but respondents believe it will be a top 10 risk by 2020.

Mr. Lambrou stated that “Once an organisation has deployed robust technology defences, educated staff about the risks of cyber-attack, and promoted policies about how to respond and move towards digital transformation - it has laid important foundations for its protection and growth in an increasingly competitive market.”

INVESTMENTS IN INFRASTRUCTURE: A CHALLENGE AND AN OPPORTUNITY Major project failure was a new entry to Aon’s list of top risks in 2017.

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. However, in trying to compete with overseas competition, aggressive infrastructure planning has resulted in crippling delays.

Mr. Lambrou said, “We are increasingly seeing reports in the media of how high profile social infrastructure and energy projects have had to absorb billions of dollars in losses due to major project failure.

Businesses in Australia need to fully integrate risk management strategies to deliver high quality, cost effective projects if they want to compete in a global market.” BFM

BUSINESSFIRST MAGAZINE

19

BFM | FEATURE - BOARD

How the Board plays a pivotal role in managing organisational culture There has been a lack of clarity around the role of the Board in organisational culture – particularly in terms of governance and management. But there is little doubt that Boards play a pivotal role in developing and changing an organisation’s culture.

The conversations and decisions made within the boardroom arguably serve as the foundation for implementing effective organisational culture structures – whereby culture serves as the mechanism for executing planned strategy. By Shaun McCarthy

G

overning bodies are clearly aligning on the role and responsibilities of Board members when it comes to culture. The Australian Institute of Company Directors rightly points out that organisational culture is “the Board’s responsibility” in which they are “the conscience of the company”. In order to effectively govern and manage culture at an organisational wide level, boards must transform this collective conscience into implementable and tangible practices.

DIRECT THE DIRECTORS There is a clear distinction between the roles, functions and responsibilities of managing

20 BUSINESSFIRST MAGAZINE

organisational culture between non-executive Directors and their executive counterparts. The latter do not need to be as mindful of the distinction between governance and management. Their role is one of leadership in the creation, maintenance and any required change, regarding the organisation’s culture.

In the same vein as strategy, regulatory compliance and fiduciary responsibility, the Board member’s role is best described as one who manages data and information, understands the current culture and the implications this has for strategy and regulatory requirements (risk, safety etc). It is therefore vital that Directors know how to interpret, navigate and www.businessfirstmagazine.com.au

FEATURE - BOARD| BFM

communicative approach from both the Board and CEO to ensure joint commitment to desired culture and strategy. Their approach will impact behavioural norms and constitute the organisation’s culture.

The Board also impacts an organisation’s culture through Board managed remuneration and risk committees. As rewards are a major driver of culture, how the Board chooses to remunerate and/or incentivise the CEO will impact on how other levels throughout the organisation are then ‘rewarded’. It is important to consider if these reward systems drive short-term or long-term thinking and behaviour.

What actual behaviours are being rewarded through the remuneration system? The result can inform employees about how they should behave.

reflect on the effectiveness of the current culture.

This requires gathering and referencing data – both qualitative and quantitative – such as surveys, behavioural observations (in an effort to deduce current instrumental norms) and review of staff interactions during on-site visits.

AMENDING CULTURE If the Board as a whole or a specific member does not believe the current culture is appropriate for executing an existing or a new strategy, then Board mechanisms should be in place to raise this and discuss it at the Board level.

One of the key ways in which the Board contributes to the management of the organisation’s culture (norms) is through the appointment and management of the CEO. The methodology and selection principles behind the onboarding of a new CEO is instrumental in implementing the future of an organisation’s desired culture. The prospective candidate needs to align with the desired culture and strategy in order to positively impact on the wider internal workforce. This in turn directly influences outward perceptions on how the company culture is viewed. It is necessary to apply a www.businessfirstmagazine.com.au

REAPING THE REWARDS Whilst rewards and incentives are real factors in influencing organisational culture, this shouldn’t come at the cost of being genuine and authentic.

In other words, rewarding the CEO for the sake of saving face or in the hopes of instigating a trickledown effect within the organisation will inevitably expose other structural instabilities and adversely impact the desired organisational culture. The Board therefore sets the context for culture by ‘rewarding’ or ‘punishing’ the CEO’s behaviour in a manner which elicits legitimate cultural behaviours. For example, acceptance of a hostile CEO’s behaviour gives permission for the rest of the organisation to behave hostile towards each other and this becomes the organisational norm.

At a more tangible level, the Board can help establish measurable objectives through the establishment of KPI’s which in turn sends signals about what the company strives to achieve and what is actually important. So, the Board also helps shape the organisation’s culture through the selection of performance criteria and measures chosen to review performance against these.

A Board further helps shape culture through their own behaviour as Directors and as members on the various Board sub-committees. As the senior person ‘in the room’ the Board member’s own behaviour sets an example to executives regarding what is acceptable or not. However, whilst these behaviours are commonly exhibited within the confides of ‘the room’, these need to be showcased in other communicative and observable domains to truly make an impact on the wider organisational structure and be held accountable as a ‘role model’. BFM Shaun McCarthy is the Chairman of Human Synergistics Australia Pty Ltd and Human Synergistics New Zealand Ltd. He is also a Director of Human Synergistics International (USA) and the Human Synergistics Centre for Applied Research. Shaun has worked with Directors and CEOs from many leading multi-nationals right through to operators on the factory floor, dealing with a broad range of organisational challenges.

He is an internationally respected authority on organisational culture and leadership with more than 30 years of consulting experience to an impressive list of companies in Australia, New Zealand, Asia, Europe and North America.

BUSINESSFIRST MAGAZINE

21

BFM | FEATURE - DNA

22 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au

FEATURE - DNA| BFM

DNA TESTS TO RECRUIT EXECUTIVES TOO RADICAL? Are you utilising DNA tests as part of your recruitment process? DNA tests are currently used by multiple police departments and in courts for identification of guilty and innocent individuals as part of the legal process in Australia and worldwide. So why not utilise it in the broader community especially to select people who have the genes to succeed as a CEO. By Ryan Makris.

L

eadership is vital as a CEO and simply, if your makeup is not strong in this skill, your success and results will be inhibited. Many workplaces in Australia and worldwide have random alcohol and drug compliance policies as part of their pre-employment and or ongoing recruitment conditions. Obviously DNA participation would need to be of a voluntary nature like urine samples for drug screening.

Kansas State University and National University of Singapore researchers concentrated on two traits of mild rule breaking and proactive personality which were required to make positive organisational change.

People with a certain variant of a gene called DAT1 were more likely to become leaders, thanks possibly to penchant to risk taking. DAT1 dopamine transporter gene affects leadership. DNA swabs as part of the recruitment process seems a non-invasive method which could more accurately identify individuals who would be capable of the rigors of the executive type roles. We are not asking for blood tests which would be crossing the line, as hygiene and ethical boundaries would need to be considered. Duke University Nita Farahany a law professor and bioethicist, tells CBS News, “People have access to all sorts of information about us. Yet we have no sense in how we monitor or value an invasion of privacy.”

People will say DNA sampling is genetic discrimination.

The suitability application process using the “DNA Sampling Kit” is used by the NSW Police Department.

The process of the DNA kits is a mouth swab (Buccal) required by the applicant. Furthermore, the South Australian police department is currently using DNA tests as part of their recruitment process. The following police departments in Australia currently use DNA testing for employment reasons (SA, NSW, TAS and WA) – used for vetting purposes only. The sample and paperwork is destroyed after vetting result.

Researchers envisage companies using genetic testing for personalised leadership development.

However, Richard Arvay a National University of Singapore Professor of Management and Organisations states the full effect of DAT1 on leadership is still too early to definitively say.

This type of testing could possibly be a combination of genetics and environment and could replace the

www.businessfirstmagazine.com.au

Myer Briggs model. Businesses embracing DNA technology will select staff more suited for their roles and internal promotions far more accurately using the genetic makeup producing friendly, effective and cohesive work culture.

DNA tests have increased our accuracy in many aspects of our lives from legal cases to proving innocence or guilt of individuals and paternity suits.

Technology has evolved to enhance our lives in the decision-making process and to ignore it would be taking a step backwards to a technology which is here to stay – whether we like it or not. Recruitment agencies and in-house recruiters currently use psychometric tests to filter candidates as part of the recruitment phases. DNA tests are no different in that it is a tool to identify better-suited executives to a position and organisation.

In 2016 Gartner researchers David Furlonger and Stephen Smith showed links between genes and traits with IQ, leadership and other qualities.

However, University of Michigan’s Ross School of Business expresses concerns at “the idea that it’s this single gene predicting a complex set of behaviours”.

Multiple genes or another gene correlating with DAT1 might be the reason.

BGI a Chinese firm is currently working to identifying human intelligence using DNA tests, so perhaps an answer isn’t too far away.

If employers do decide to use DNA tests for employment purposes, then it must be locked down so that employers cannot use the DNA tests for other reasons than employment for example health, genetic abnormalities or ancestry. Legislation must be passed to adequately handle these major types of concerns.

Without a framework, a Pandora’s Box will be opened and create moral and ethical problems for years to come.

CBS news legal analyst Rikki Klieman states “Ultimately we all worry about our DNA being out there. And if it’s out there someone can test it for any purpose that they want and we don’t want that to happen as a society.”

Richard Arvay a National University of Singapore Professor of Management and Organisations states the full effect of DAT1 on leadership is still too early to definitively determine. It’s possibly a combination of genetics and environment. BFM

BUSINESSFIRST MAGAZINE

23

BFM | LIFE CHOICE

Thanks Australia! 13,500 printer cartridges recycled every working day Responsible industry waste management hits record high Over the last 12 months Australians have made history by recycling a record 13,500 used printer cartridges every working day, making it the biggest year ever since the launch of the ‘Cartridges 4 Planet Ark’ program.

I

n total, over 3.5 million cartridges were returned for recycling or remanufacture, which is equivalent to 386 bathtubs of cartridges returned every working day, or 6 backyard swimming pools every week!

Ryan Collins, Recycling Programs Manager at Planet Ark, says a key factor in this success is the industry’s willingness to participate in this voluntary product stewardship scheme, which ensures the environmental impact of their products is responsibly managed at the end of their useful life.

“The success of ‘Cartridges 4 Planet Ark’ is a direct result of the commitment demonstrated by our program partners. With their participation the program has been able to build an extensive collection and processing infrastructure that makes it easy for households and workplaces to recycle their cartridges, which is clearly reflected in the previous year’s results,” Collins said.

Collectively the participating cartridge manufacturers Brother, Canon, Epson, HP, Konica Minolta and Kyocera have helped Australians divert 34 million cartridges from landfill, which is equivalent to over 14,500 tonnes of materials, since the program began in 2003.

“Working within a closed loop or circular process, like the ‘Cartridges 4 Planet Ark’ program, which allows us to recover and reuse valuable materials and keep them circulating, is essential. It doesn’t make good business sense to send useful and valuable materials to landfill, when they can be salvaged and directed back into the economy. We’re particularly proud of the fact that the program has consistently achieved zero waste to landfill every year,” Collins said.

Printer cartridges can take between 450 and 1,000 years to break down in landfill, and e-waste is the fastest-growing form of waste. Rapid innovation, decrease in product lifespan and declining prices of

24 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au

LIFE CHOICE| BFM

both electronics and raw materials have led to more and more items being discarded. So it’s vital, for the environment and a viable manufacturing industry, that the concept of a closed loop production cycle is embraced.

Overall, Australian consumers are supportive of responsible waste management and recycling. In a recent study, 82% of participants stated that they will recycle even if it takes more effort1.

Once they are collected, used printer cartridges are sorted and, depending on their type, returned to the manufacturer for remanufacturing, or dismantled, with plastics, metals, toner and ink collected for recycling by resource recovery partner Close the Loop®. Even the bags and ties that help transport the cartridges once the collection box is full get recycled.

Aluminium, steel and up to six different types of plastic can be retrieved from used printer cartridges to make a variety of new products including cartridges, pens, rulers, eWood which is used to make park benches, fencing and garden beds, and TonerPave™, an asphalt additive that improves the performance and longevity of roads.

Innovation in this area is continuing, with the recent launch of a new product, Tonerseal™, a worldfirst spray seal binder for roads which contains over 20% recycled waste toner and used tyre rubber. To date approximately 900 kms of Australian roads have been surfaced with TonerPave™ or Tonerseal™ which is longer than driving from Melbourne to Sydney, or almost going from Sydney to Brisbane.

Recently Australia Zoo also chose to lay 250 tonnes of TonerPave™ as part of a commitment to reduce its carbon footprint.

Manufacturers are also implementing a range of other changes to their cartridges and equipment to reduce waste. These include using recycled plastic in their production, adding extra-large print tanks to extend their life and developing technology to monitor and balance usage across all colours. Changes to toner chemistry also allow for quality printing with lower energy use.

Consumers and workplaces can access a free network of 4,000 ‘Cartridges 4 Planet Ark’ public recycling collection boxes around the country, located at all Officeworks stores and participating Australia Post, Harvey Norman, JB Hi-Fi, The Good Guys and Office National outlets. Workplaces may also be eligible for a free collection box.

More workplaces than ever before signed up for a collection last year, so to register for a free box or to find your nearest retail drop-off location visit www. cartridges.planetark.org or call 1300 763 768. BFM Waste Less, Recycle More Initiative Community Benchmark Study, NSW EPA August 2015 1

Planet Ark Environmental Foundation is an Australian not-for-profit organisation with a vision of a world where people live in balance with nature. Established in 1992, we are one of Australia’s leading environmental behaviour change organisations with a focus on working collaboratively and positively. We promote and create simple, positive environmental actions – for everyone. www.businessfirstmagazine.com.au

BUSINESSFIRST MAGAZINE

25

BFM | PROFILE

CEO Scott Hartley

26 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au

PROFILE| BFM

SUNSUPER’S HIGH PERFORMANCE TRANSITION With more than one million members and $45 billion in funds under management, Sunsuper has become one of Australia’s leading superannuation providers. Jonathan Jackson spoke with CEO Scott Hartley about changing focus and building a high performance culture to lead successful change.

W

hen Sunsuper appointed Scott Hartley to the position of CEO in 2014, it was a time of change. That’s not to say the business was poorly managed, indeed it was quite the opposite. Yet to facilitate the growth required to bring Sunsuper into the future, change was necessary.

Before we look at the changes Hartley has brought to the organisation and why these changes were necessary, it is important to understand how Sunsuper achieved its prior success.

In 1992, the Keating Labour government introduced the Superannuation Guarantee (SG), a compulsory system of superannuation support for Australian employees. Paid by employers the legislation was well received, with the Australian Taxation Office stating that the first year of this new Act boosted coverage to 80%. www.businessfirstmagazine.com.au

By the end of the following decade, coverage rose to 91%, and the SG rate increased from 3% to 9% and rose more recently to 9.5%. By 2005 employees could choose their own retirement fund and ‘transition to retirement’, meaning a person could contribute a larger portion of their salary to super and replace their salary income with a drawdown from the pension scheme.

That’s probably too much information, however it gives you an idea of the importance and acceptance of superannuation funds in Australian life.

Sunsuper was formed just as compulsory superannuation was set up, as a sweeper fund for all Queensland workers not captured under a union or corporate arrangement. It was born as profit-for-members fund to act as a private entity equally sponsored by the Queensland Chamber of Commerce and Industry, the Queensland Council of Unions and

the Australian Workers Union.

Given the nature of the industry at the time, Sunsuper was able to grow organically and developed with minimal staff for the first decade of its life. When the first CEO, Don Luke entered the fray in 1996 he was tasked with building a strong commercial company, with a competitive team that could grow the funds under management.

When Luke retired in 2007, he could hold his head up high having expanded the fund and picked up a number of big brand corporate clients including PWC, HSBC and Virgin.

“Effectively Sunsuper came to see itself as a large profit-formembers fund – not an industry fund as it doesn’t have the support of any one particular industry and not a retail fund, but a fund that incorporates the best of both worlds,” says current CEO Scott Hartley.

“Sunsuper has the commercial

BUSINESSFIRST MAGAZINE

27

BFM | PROFILE

head of a retail fund in that it is a profit-seeking organisation, but it beats with the heart of a profit-for-members fund in that it seeks to return those profits to members in the form of lower fees and higher investment returns,” Hartley says.

And is a successful one at that.

So why the need for change?

Well, for one thing when Hartley arrived, the fund was still Queensland centric with around 80% of members coming from the sunshine state.

There was a cultural problem as well.

28 BUSINESSFIRST MAGAZINE

“The culture was somewhat siloed and male dominated at board and executive level. As such, in my view, we were well positioned but weren’t realising our potential.”

It is Hartley’s view that a high performance culture will outperform a really smart strategy and he therefore embarked on a journey to bring high performance culture into the organisation.

At the half way mark of this cultural evolution, Sunsuper is a different organisation and the change already implemented has led to Sunsuper being named Chant West’s Fund of the Year for 2017,

an award given to the Australian fund that demonstrates excellence across a range of criteria including member services, fees, investment performance and insurance administration.

Sunsuper has also been recognised by Chant West as Best Fund: Member Services 2017 and Best Fund: Corporate Solutions Fund of the Year 2017 and 2016. Further accolade has come from SuperRatings which awarded Sunsuper their Best New Innovation award for the company’s Income account, which features an easily activated

www.businessfirstmagazine.com.au

PROFILE| BFM

income account and a retirement bonus for eligible members.

Furthermore, Sunsuper’s contact centre has been recognised for its industry-leading customer service for the third year running and this year the company was once again awarded with the highest possible ratings from a number of the nation’s key superannuation ratings agencies, Canstar, Chant West, The Heron Partnership and SuperRatings.

So you can see Hartley’s approach has had a positive effect. You should also note that in a market place where there is approximately 200 super funds, with the largest market share held by AMP and Australian Super at 5.5% each, the integration of a high performance culture was required not only to compete with the major funds, but also excel in a fragmented industry.

“We were in the top 10 public offer funds when I came on board, but there was and is no guarantee of remaining there unless we accelerated our own growth,” Hartley says.

Hartley had a choice when he started: plan A: become a top five, long-term sustainable player in the industry or plan B: hand the keys over to somebody else, which happens quite consistently. Plan B would be a bad outcome.

“To do that we wanted to achieve a customer score measured by Roy Morgan that would give us a top 10 ranking and broaden our member base outside Queensland to over 40%. We wanted to feel we were comfortably above median returns for our members and we also needed to reduce costs by over 50%.”

“We set very high aspirational targets and while we had strong net growth, we wanted to increase that by 50% and grow to a market share of over 2.5% per annum by 2020 and aim be in the top 5,” Hartley says of the goals he set.

“We implemented a strategy that had pragmatic short term focus on organic growth that competed with the banks and AMP in traditional segments such as corporate super, but we also needed to refocus and double down on our efforts pursuing retail adviser distribution.

That was something we hadn’t done before.” www.businessfirstmagazine.com.au

To complement its growth strategy, Sunsuper strengthened its investment capability by restructuring its investments.

The goal was to create strong investment returns over 1-5 years to put Sunsuper in the top quartile for returns in the industry.

Hartley also understands that consumer choice is on the rise and in that world customer experience is paramount. This understanding shared amongst the executive team and board,

led to a major reinvestment to transform Sunsuper’s technology and operations to better enable a customer-centric, data driven, digital direct strategy.

“Our technology team was, combined with our customer design functions, to bring it to the front of customer thinking,” Hartley says.

“We don’t compare our customer experience to other super funds or banks, we compare to Amazon, Uber and Airbnb because

BUSINESSFIRST MAGAZINE

29

BFM | PROFILE

they are the experiences customers expect from providers.”

But again Hartley reiterates the most important change was about becoming a high performance culture.

“The only way to achieve all of this change was to build a high performance culture that could drive strategy and transform the culture from something siloed to something instructive, inclusive and collaborative - where hierarchies and silos are invisible or irrelevant,” he explained.

“We wanted to elevate from a competitive mindset to being an attacker and disruptor in the market.”

Hartley says you can’t micro manage this type of transformation or high performance, so the company needed to move from a group of very good managers to very good leaders.

“That’s a big investment in leadership to support that change,” he says.

Whilst the strategy was a top down approach, the cultural development was bottom up and it would lead to the full realisation of

30 BUSINESSFIRST MAGAZINE

the company’s purpose.

“We reviewed and refreshed our purpose which is to inspire and empower Australians to achieve their retirement dreams: that is where our difference is, this gives us relevance.”

The vision of the company was also addressed: to be Australia’s fastest growing fund, together achieving market leading results, loved by our customers, respected by the industry and recognised as a great place to work.

The vision is a five year vision that the company is now well on its way to achieving, however the purpose is enduring.

A set of values, critical to building a high performance culture was implemented, with ‘customer first’ at the top of the pyramid.

Trust, accountability, candour, collaboration, leadership and customer first are Sunsuper’s six core values and according to Hartley the staff live these values every day.

“We spend a lot of time embedding our values and running workshops and it is a big investment of my time, but if the CEO isn’t invested in cultural

transformation then it won’t work.

Good and bad habits flow downhill and therefore a culture shift has to come from the CEO and the CEO has to be 120% invested.”

The Board has also gone through a self-led transition and now incorporates four females and three directors based in NSW representing a national inclusive fund. Three independent directors have also been added, so there is a board full of people with complementary and diverse skills.

Sunsuper has achieved a great deal in the past two years which has been critical to its positioning.

“By 30th June, we will have basically doubled our assets in four years and increased market share by 1.5% to possibly over 2% market share,” Hartley says.

How has this been achieved?

Through a cultural evolution that now has everyone working towards the same goal.

And while Hartley isn’t declaring victory just yet, the journey is progressing well.

“Winning is a team sport and that’s what Sunsuper is all about,” Hartley says. BFM www.businessfirstmagazine.com.au

BFM | CEO

UNCHARTED WATERS: UNCERTAINTY SHAPING THE PRIORITIES OF AUSTRALIAN CEOS IN 2017

Last year ended not with shooting stars but with a bleak space of unknown. Weak international trade and subdued investments impacted global growth, bringing it to its slowest pace since 2009. The outlook for this year seemed much brighter, but a number of unknowns still loom on the horizon. By Chad Gates

F

rom unpredictable political leaders to unclear economic policies and unresolved geopolitical agendas, the remainder of 2017 is fraught with uncertainty for decision-makers who rely on facts and trends to assess risks and shape strategies.

How are Australian CEOs reacting to this ambient volatility?

If the results of recent research undertaken by The CEO Institute and Pronto Software are any indication, they are cautiously optimistic, using this lull in activity as an opportunity to reinforce their resilience and preparedness.

The study surveyed 185 CEOs from various industries, including IT, media, resources, manufacturing, retail and imports.

The results show that their top six concerns focus on organisational and environmental challenges.

Compared to insights secured from the annual survey in 2015 and 2016, the key difference is that this year, economic and

32 BUSINESSFIRST MAGAZINE

political uncertainties have taken centre stage. Now, more than ever, organisations need informed and decisive leaders to transform current challenges into future successes. Lets hone in on the top five concerns for Australian CEOs currently, according to the study.

1. Seeing clearly despite uncertainty Three key words appeared repeatedly throughout the survey responses: “Donald Trump” and “Brexit”. The respondents agreed that both events have left a trail of uncertainty behind them. As one CEO puts it, “At this point, not much is known about Donald Trump’s ability to go through with his measures… but one thing is sure. They’re bound to have unintended consequences on business confidence, spending and dynamism.” Until there is a clearer view of what the impact will be on the global economy, CEOs are struggling to determine how to

move strategically.

What is the best way to overcome this ambient volatility? Sit tight and continue to be innovative, until visibility clears. As one respondent says, “It’s a very different world now; the rules have changed and we need to be able to adapt to the new environment. Until then, it’ll be a wait-and-see approach to business this year.”

2. Transforming thanks to adoption of new technologies Another major concern for onefifth (21 per cent) of CEOs is their business’ ability to keep up with technological advances. Further, almost half (48 per cent) of CEOs know that technology will make or break their organisation’s ability to grow in the future, but they are unsure about which technology will do so. Disruption will come from artificial intelligence and automation according to 17 per cent of respondents. As one CEO puts it, “They may still be on the fringes www.businessfirstmagazine.com.au

CEO| BFM

to be gaining confidence, but business leaders remain cautious.

For 11 per cent of respondents, a key concern for the rest of the year will be to “find growth in a low growth economic environment”, as one CEO puts it.

How do CEOs plan to sustain growth and revenues despite the seemingly unfavourable global conditions? One approach is to innovate in as many ways as possible, developing new products and identifying new market opportunities. For others, it is best to roll with the punches.

Continuing to drive down costs while maintaining a high standard of product is the balancing act many CEOs are juggling, and will continue to, as they see this as the only way to stay afloat.

and probably won’t be visible for some time, but advancements in robotics, automation and machine learning will all impact us in some way.” While, for 11 per cent of respondents, big data and advanced data analytics, and cloud technologies will be the major disruptors because of their ability to reduce costs and increase efficiencies.

But the real question is less about which technologies will be disruptive, so much as how they will do it? Will new technologies help companies get better at what they do or will they make their business models obsolete? On this topic, opinions diverge.

For some, technological disruption comes with the risk of getting side-stepped, or even absorbed, by the very tools that are supposed to help them. For others, technology opens the door to a competitive edge. It provides an opportunity to lead the transformation of their organisation and their sector.

It’s critical for organisations to embrace business management systems that enable internal processes to be made more efficient and streamlined, allowing staff to be more focused on those tasks that require human www.businessfirstmagazine.com.au

intervention. Systems that integrate with business intelligence functionality is also key, ensuring staff at any level have access to the insights and analytics they need in order to drive smarter decision making.

3. Managing and improving operational processes Managing change is an important concern for 12 per cent of CEOs, as it was for the past two years.

Change calls for the transformation of operational processes and adaptation of organisational strategies. It is a direct result of the uncertain environment and technological disruption that are destabilising corporate assumptions and expectations. CEOs also frame the need for change management as a condition for survival.

Overall, whether reactive or proactive, it seems that operational agility is the key to longevity. It’s made clear that the need to be competitive on all fronts and in all areas, from consumer-facing operations to internal processes, is vital.

4. Sustaining growth and revenues Since the start of 2017, the Australian economy has appeared

5. Attracting and retaining skilled staff In 2015, hiring and retaining staff was the leading concern of CEOs and in 2016 they placed it second.

Today, it is only an issue for 11 per cent, putting it on equal footing with the need to sustain growth and revenues.

This change does not necessarily indicate that finding skilled talent is no longer an issue, but it does show how leaders’ priorities have shifted from seeking competent people towards seeking competent people who have the right specialty at the right time.

While conditions may not be ideal, most of the surveyed CEOs are cautiously optimistic and are getting ready for when things regain some resemblance of normality.

Instead of waiting for the next big disruptive marvel, they are proactively equipping their organisations with the processes and skills that will allow them to keep partners and competitors on their toes. And, rather than waiting for external conditions to improve, they are ensuring their organisations can overcome uncertainty better and more rapidly than others. BFM Chad Gates is Managing Director, Pronto Software

BUSINESSFIRST MAGAZINE

33

BFM | PROFILE

Photo courtesy Tanner Architects

CAMPBELLTOWN: THE RE-IMAGINED CITY

Campbelltown is undergoing an economic and social renaissance as it works towards putting the aspirations of its community at the forefront of State and Federal government radars. Jonathan Jackson spoke with Campbelltown’s Jeff Lawrence, Director City Growth and Economy about fostering a sustainable, proud community.

B

eing an isolated suburban Melburnian, the suburbs and cities of Sydney don’t tend to take up too much of my day to day focus. However as fate would have it, shortly after I received notification of an impending interview with Jeff Lawrence from Campbelltown City Council, The Today Show’s Lisa Wilkinson along with her Channel 9 cohorts were hosting a live broadcast from Macarthur Square, the city’s largest shopping centre and the fifth largest in NSW. And I was watching.

It turns out Wilkinson grew up in Campbelltown, attended Campbelltown Performing Arts High School and has long-time family roots in the area. There was a significant turn out to the

34 BUSINESSFIRST MAGAZINE

broadcast, as you’d expect when a big morning breakfast show hits your patch, but what was noticeable among the crowd was its spirit.

Indeed, as Council’s Jeff Lawrence points out, the city is enjoying a period of growth and is looking forward to a sustained period of prosperity which has the mood quite buoyant.

So buoyant in fact that the city has been suggested to be part of a bid by western Sydney, to host the 2026 or 2030 Commonwealth Games.

Driving the city’s growth is Council’s determination to, as Lawrence says, “foster a climate of private and public jobs creation within a more sustainable social, economic environment.”

Part of this will lead to the city becoming more recognised as a medical university city with new and more diversified employment generation.

We’ll come to Campbelltown’s health ambitions shortly, but to paraphrase music icon Bob Dylan, ‘times are a changin’ and Campbelltown City Council has adopted an innovation approach to make change happen.

First and foremost to this approach, is the Council’s ability to work very closely with other levels of government in order to instil community aspirations and visions with the best economic, social and environmental outcomes in mind for the city.

Furthermore there is an agenda for accelerated growth, with a www.businessfirstmagazine.com.au

PROFILE| BFM

focus on housing and employment generators, and a particular emphasis on ensuring housing has the necessary infrastructure to encourage better choice and affordability and to support strong economic development.

“Campbelltown has land availability for greenfield developments and for redevelopment at greater densities, which is critical in the context of Sydney’s diminished land supply, as well as increasing land prices and population pressures,” Lawrence says. “The city’s capacity to grow means we have much to entice prospective businesses.”

As a significant growth area just an hour’s drive from central Sydney, infrastructure is of paramount importance.

“It (Campbelltown) is one of the most significant growth areas in NSW and we expect the population to grow from 160,000 to 275,000 by 2036, with the additional capacity – under current planning provisions – to take our population to more than 300,000 people,” Lawrence says.

That is remarkable growth of almost 68%, hence the need for positive change and the requirement to become a better connected city.

“Lifestyle and connectedness are at the centrepiece of Council’s efforts in western Sydney,” Lawrence says. “We are working closely with all levels of government to ensure that the people of south west Sydney have the capacity to connect with other parts of Sydney to the Illawarra and beyond and to other parts of the world. That connectivity is the key to Campbelltown becoming the hub of Sydney’s South West Growth Corridor.”

This aim is being further enabled by the coming development of Sydney’s second major airport to be built in western Sydney.

Road and rail links are being planned and developed or enhanced, to ensure Campbelltown residents can access the expected increase in jobs that the airport will bring.

“A lot of areas are currently undergoing infrastructure change: roads have been really strained, www.businessfirstmagazine.com.au

so the Narellan Road upgrade will create additional linkages and extensions to the Campbelltown CBD to support the extensive urban development in the south west growth centre.

“Council continues to strongly advocate to the NSW Government for the Badgally Road bridge extension over the railway and into the Campbelltown CBD, to provide better connections into the city centre. Advocacy work also continues for the Spring Farm Link Road, including the connection for the Menangle Park release area to the Hume Freeway.”

“These are all critical connections that will better link Campbelltown to other strategic centres across western Sydney and which will drive economic sustainability into the longer term.”

Lawrence is certainly excited by the prospects of a better connected, more liveable city.

However, it is the development of the Campbelltown health and education precinct and the upgrade of the public hospital that he believes will drive this city forward.

The public hospital has completed stage 1 development and Council has been advocating to proceed with stage 2, working with government to invest the many hundreds of millions of dollars that Lawrence believes will help create a new Campbelltown.

In fact, prior to the publication of this article, the NSW State Government announced a $632 million boost to Campbelltown

Hospital which will expand on its paediatric services, cater for a larger emergency department, as well as improve mental health services.

“This hospital upgrade is absolutely fundamental for investment in our city’s services.

Doctors will stay and practice in Campbelltown,” Lawrence says.

“With our focus on developing a medical university city, it really is an exciting time to be associated with health in Campbelltown.

“Campbelltown Regional City Centre is uniquely positioned as the only strategic centre in western Sydney within which a major medical university campus is located in proximity to large scale developable business park lands. We are working alongside key stakeholders right now to plan and develop the health and education precinct, which will provide world leading education and specialist community based care in paediatrics, Aboriginal health and gastro motility.”

As in any region, retaining top talent can be an issue but the hospital upgrade and the opening of the Macarthur Clinical School, along with Western Sydney University’s School of Medicine, will provide students and educators with previously unseen advantages moving forward.

The recently opened $21 million, four-storey Macarthur Clinical School was jointly funded by the NSW Government and Western Sydney University.

With all that is going on in Campbelltown, the relationship

BUSINESSFIRST MAGAZINE

35

BFM | PROFILE

between community and Council, seems never to have been stronger.

“We have developed a strategic plan alongside our community to learn their aspirations, discover their ambitions and create a willingness to work with each other to shape the city’s growth.

“What we have found is that open spaces, lifestyle and recreational opportunities are important to our community.

This means creating better

36 BUSINESSFIRST MAGAZINE

job flow, fixing the traffic congestion issues, building quality affordable housing that is close to infrastructure and exceling in education to help keep the best professionals working in this region.

“Access to higher end jobs will help meet the aspirations of the community and shape the policies that best represent its interests.”

There is an ongoing dialogue between Council and the local community and Council has put a lot of time and effort into better communications to forge a community shared direction of the future.

What does the future look like?

Much of what we have discussed above.

In a nutshell, Campbelltown is working towards transforming itself into a 30 minute city where lifestyle opportunities abound, that is connected to itself and the rest of western Sydney, that is a city that people want to live, visit, learn, work and play.

And why wouldn’t they?

There is a well-regarded, burgeoning university with a School of Medicine that is integral to the

city’s future aspirations. There are many private and public schools, world class facilities including the sports stadium and Campbelltown Arts Centre, The Australian Botanic Gardens Mount Annan, the Dharawal National Park, and Club Menangle, the headquarters for Harness Racing NSW. If I wasn’t so connected to Melbourne, I could have convinced myself to give Campbelltown a go.

“The lifestyle of Campbelltown is second to none. We have a rich cultural diversity, a strong sense of civic pride, and significant existing infrastructure and high quality services,” Lawrence says.

“We are working hard to create a 30 minute city; a smart city that facilitates job creation, investment, business growth and innovation; a city that residents are proud to call home and businesses are keen to invest in.”

The message from Campbelltown City Council is discover Campbelltown – if you’re after a competitive edge, you will not be disappointed.

Campbelltown City – a city designed for ambition, innovation and opportunity. BFM

www.businessfirstmagazine.com.au

CAMPBELLTOWN CITY Ambition | Innovation | Opportunity Discover why Campbelltown City is the smart choice for business and investment We are developing a dynamic economy where businesses, family and neighbourhoods thrive.

With a strong entrepreneurial culture, the city has unlimited opportunities for people looking for a community where they can live, learn, work, play and invest.

Campbelltown - a destination locals are proud to live in, people are interested in visiting and industry is keen to invest in.

campbelltown.nsw.gov.au

BFM | ASIA

THE CHINA AUSTRALIA CONNECTION An award-winning program connecting future young entrepreneurs from Australia and China will explore opportunities for launching businesses in China’s fast-paced innovation sector.

T

he China Australia Millennial Project (CAMP) hosted ‘See the Future: China Innovation Update’ at Sydney Town Hall on Tuesday 13 June. The event and gala dinner on June 16 was the culmination of a 100-day bilateral accelerator program held in Shanghai and Sydney for the young Australian and Chinese leaders.

38 BUSINESSFIRST MAGAZINE

The City of Sydney has sponsored CAMP since 2015 and is supporting the 2017 program with $30,000 funding and more than $26,000 value in-kind venue support.

Lord Mayor Clover Moore said CAMP was a great opportunity to showcase Sydney’s knowledge and creativity, while encouraging collaboration between the next

generation of Australian and Chinese leaders.

“We’re committed to supporting emerging entrepreneurs and nurturing their ideas through programs such as CAMP,” the Lord Mayor said.

“This is equipping the next generation of Australian entrepreneurs with the cultural understanding and networking www.businessfirstmagazine.com.au

ASIA| BFM

skills required to navigate the important economic relationship with China.

“China is transforming its economy to become a global leader in science and technology.

This program offers a unique opportunity for the young leaders of Australian and Chinese startups to connect, share knowledge and work together to solve common problems.

“Our support for CAMP is part of our growing relationship with China and will provide valuable opportunities for cross-cultural collaboration that will attract foreign visitors, support the local economy and foster innovation.”

CAMP CEO Andrea Myles said the www.businessfirstmagazine.com.au

unique program was a blueprint for building bilateral relationships between Australia and China.

“CAMP’s goal is to connect 100,000 Australians with new opportunities in China by 2025, connecting a generation whose careers will be characterised by the rise of the middle class in China and the impacts of the digital and artificial intelligence revolutions that alone will see impacts 30 times larger than the industrial revolution,” Ms Myles said.

“In many ways there’s little understanding locally about the speed of change in China’s innovation sector, or how to access what’s going on. We’re in danger of being left behind if we don’t

start to learn how to operate within the amazing ecosystem that’s developing and evolving.”

See the Future: China Innovation Update’ featured eight minute presentations from eight speakers who provided insights into the rapidly evolving Chinese innovation landscape.

Speakers included: Jess Scully, City of Sydney Councillor, Daniel Zhan, Landing Pad Manager, Austrade Shanghai, Sandy Plunkett, Founder Innovation Clearinghouse and commentator on innovation, James Hudson, director corporate affairs and marketing, Alibaba Group Australia and New Zealand, and Danmaji Niu, founder of China-based social enterprise, Yak My Body.

Danmaji Niu attended the 2015 CAMP and returned to the 2017 event as a speaker after launching a social enterprise in her native Gansu province, a Tibetan region in north-west China. Her business supports local women to produce handmade yak milk soap which she exports to Australia, China and America.

Now a Sydney resident after studying at the University of Technology Sydney and the University of Sydney, Ms Niu says there are many opportunities for Australian businesses looking to launch in China.

“The key is to identify gaps in the market and explore how you can fill them to get a foothold in the international startup world.

Australian entrepreneurs need to make themselves adaptable, but with a strong team, I think they can exist and thrive in this fast-paced environment,” Ms Niu said.

“CAMP is a great way to learn the skills you’ll need. Being part of the program helped me form my business idea and tap into the CAMP network here and in China. I now have mentoring and professional networks from 2015 that I use every day.” BFM

BUSINESSFIRST MAGAZINE

39

BFM | PROPERTY

Interstate investment: How to have

your smashed avocado and eat it too Headlines of late link the unaffordability of Sydney property prices with the consumption of smashed avocadoes for breakfast and have been making young heads spin, and rightfully so. Sydney’s median house price has reached $1 million, with no sign of slowing down in the near future and unfortunately cutting luxuries like eating out and travelling will only scratch the surface of the deposit needed to get a foothold in this hot property market.

I

t’s high time to look further afield than the outskirts of Sydney as an alternative to the more popular inner suburbs of Sydney and for many, investing in Perth could be the answer.

At this point in time, Perth presents an incredible opportunity for those locked out of the Sydney and Melbourne property markets who don’t want to wait decades or sacrifice their lifestyles to secure their future. Most analysts agree that Perth is very close, if not already at the bottom of the property cycle so now would be a strategic time to buy from panicked sellers.

Perth currently has some of the lowest houses prices in Australia and some of the highest wages coupled with a government which is committed to boosting infrastructure spending; the perfect combination for savvy investors.

The difference in median house price between Sydney and Perth is at a record high, with the median price for Perth apartments sitting at around $471,500 and at $850,000 for houses compared to $820,000 for an apartment in Sydney and over $1 million for a house.

Perth employees also enjoy one of the highest average annual earnings in Australia at $68,952 compared to $62,088 in Sydney and $57,772 in Melbourne.

You may have heard that the mining boom is well and truly over and it makes sense that confidence is low in Western Australia since residents went through a tough period of major job losses creating nervousness state-wide. However,

40 BUSINESSFIRST MAGAZINE

the job market appears to have stabilised and will lead to an increase in confidence, with recent reports of more jobs certainly contributing to this.

Western Australia’s unemployment rate has decreased from 6.6 per cent last December, to 6.4 per cent which compares favourably to Queensland at 6.4 per cent and Victoria at 6.1 per cent considering the Eastern States are currently experiencing increased demand in the housing construction sector.

The Western Australian Labor government also has a mandate headlined by major infrastructure investment, a focus on job creation and debt reduction. Metronet is the first major infrastructure project the government is looking to introduce, beginning with the Thornlie to Cockburn rail link.

Other significant projects underway in the state include the Perth Stadium and the new six-star Elizabeth Quay Ritz-Carlton Hotel and Towers. Qantas also recently reached an agreement to run direct flights between Perth and London which will position Perth as an international hub for both business and tourism.

Perth has a really bright future and it’s only a matter of time until the masses begin to notice that. It presents an opportunity for people to own and pay off their own homes faster, earn higher wages and enjoy a growing city. For Sydney-siders, you can have your smashed avocado and eat it too. BFM James Nihill of Patrick Leo www.businessfirstmagazine.com.au

PROPERTY| BFM

www.businessfirstmagazine.com.au

BUSINESSFIRST MAGAZINE

41

BFM | PROFILE

Andrew and Charlotte Petris

How one Fintech is bridging the gap between investors and SMEs Charlotte Petris, co-founder and CEO of Timelio, says her fintech company has come along at the right time. With banks still adjusting to the global financial crisis, funding for small to medium sized businesses is drying up. And for these businesses, managing cash flow now is more critical than ever before.

T

imelio is an online marketplace that connects businesses directly with a network of investors providing them with access to fast and flexible growth capital. In effect, Timelio allows them to unlock the cash tied up in their receivables by auctioning off their invoices to institutional investors and high net worth individuals.

Timelio improves cash flow for businesses by enabling them to get paid immediately, without waiting 30, 60 or 90 days for customers to pay.

“Our funding model means we have a more flexible solution to provide more funding to businesses,” Charlotte says.

42 BUSINESSFIRST MAGAZINE

“We’re seeing huge growth in demand for our service and so proud to have put $100 million of funding into the hands of business owners in just two years.”

Charlotte started the business in early 2015 with her husband Andrew Petris who, like her, is an accountant.

“We met in London when we worked together at one of the banks,’’ Charlotte says. “I worked in corporate finance advisory and Andrew’s experience was in investment management, investing high net worth money into hedge funds and private equity funds. What works best for us, being a husband and wife team, is we also bring very specific skill sets to the business.”

The launch of Timelio’s core product, a marketplace for invoice finance, was a result of their extensive experience in finance and identifying the opportunity to innovate in an industry that has been slow to adopt new technologies.

The flexibility of Timelio’s offering means they also offer export finance for overseas debtors, trade finance, contract finance and staged revenue payments. They fund businesses across a range of industries, from IT, manufacturing and recruitment to those in the food supply chain who sell to the supermarkets.

Growing businesses are the target customers for Timelio’s www.businessfirstmagazine.com.au

PROFILE| BFM

invoice financing offer.

“We’re really focused on helping businesses grow,” Charlotte says. “Because with any business that is growing, they’re taking on new employees, new contracts, expanding production, development, inventory; they can’t do that without some sort of injection of cash flow.”

“This is where our service works really well. As that business grows, our funding grows with them.”

Timelio’s unique and proprietary technology is key to that.

“We use technology to speed up our customer onboarding, risk assessment and data analytics.”

Timelio offer a fast, online application and integration with cloud accounting software to enable them to process applications within 24 hours and advance funding the same day.

Timelio’s platform includes an integration with Xero and MYOB to allow businesses to instantly access outstanding invoices in their accounting software and pull these into Timelio’s portal.

This year, Timelio has launched two new products, expanding from its core invoice finance offering.

The first is Supply Chain Finance (SCF) which is the invoice financing offer in reverse. Timelio works with large corporates (the buyer) to enable their suppliers to receive early payment. “We seamlessly integrate our purpose-built platform with the corporate’s systems, so that the suppliers can access early funding in just two clicks!”

This can improve working capital for both the buyer and the supplier, with no cost for the corporate to implement the program.

They benefit from the increased financial strength of their supply chain and stronger supplier relations.

“In terms of our purpose and our vision, we aim to improve the financial wellbeing of business owners. Both of our funding products enable us to achieve this, in fact, some businesses use a combination of both products for their different customers!”

Charlotte says the Supply Chain Finance offer was developed following discussions with corporates wanting to offer a solution for funding their suppliers. www.businessfirstmagazine.com.au

The second new product launched is the Timelio Capital Fund, a managed investment scheme providing sophisticated investors a passive vehicle to participate in invoice finance and supply chain funding programs.

“Our investors are from Australia and around the world,” she says. “They gain access to a new fixed income asset class offering diversified returns.”

“A business will upload an invoice and once approved, it goes live on the platform. Those investors who prefer to invest directly into invoices rather than through the fund are then notified, they login and can fund the whole invoice or a fraction of the invoice.

The fund takes an automatic fraction of every invoice. The whole process is facilitated through our online platform.”

For many SMEs, Timelio offers a service that is better than them going to a bank for funding. If a company is able to receive finance from the bank, they would put all sorts of conditions on it. If the bank decides the customer is too risky or does not meet their long check list of requirements, there will be no funds.

Not so with Timelio.

“With our funding model, we’re automatically diversified through a broad network of investors. The peer-to-peer model is excellent in providing a superior product and customer experience,” Charlotte says.

At the same time, she says the business provides investors with a great alternative, compared to keeping their money in the bank or investing in equities.

“In terms of the sharing economy, there’s a whole lot of people with excess capital and they don’t know what to do with it,” she says. “And there are people on the other side that could utilise these funds to invest in their business.”

“Bringing these people together is a really efficient business model in terms of also creating benefit to the economy. By removing the many hurdles that traditional financial institutions put up, we can help organisations grow, employ and build great businesses again.”

As Charlotte sees it, Timelio fills a gap in the market. Since the global financial crisis, lending to business has been restrained by

banks. Directors wanting to get finance would have to put their house on the line.

So there’s the problem: SMEs represent 95 per cent of businesses in Australia. They are the lifeblood of the economy and they’re not getting the lending that they need.

“That’s the opportunity.

It’s making the process more efficient,” she says.

“We’ve come into this space with a very clean, transparent, ethical approach to this product in the market. And also provide a superior service and experience.”

The pricing, she says, varies significantly and depends on the level of risk.

“Typically, we’ll asses the credit risk of the customer, the underlying risk of their business and the transaction and price it accordingly.”

Two years on and Timelio has been voted in the Fintech Asia 100 and has won multiple awards.

Charlotte says that’s exciting because it offers opportunity for growth across the Asia-Pacific region.

Charlotte says there is a lot of interest from Asia. “Expansion outside of Australia is certainly something we are exploring.”

The Timelio story is remarkable.

In just two years, a fintech has come from nowhere and has now carved out a niche and reputation with businesses and investors. And it’s not just small businesses.

They are now funding the whole spectrum of companies and organisations, from SME to ASX listed companies. BFM

BUSINESSFIRST MAGAZINE

43

BFM | E-LEARNING

Connect Your Learners To Your Training With The Adult Learning Principle of Relevance Many educators have at some point experienced what it’s like to lose the attention of their class. Whether it be to excitable conversation going on between students, a drama happening outside the window, an interruption by someone entering the classroom, a mobile device or laptop they are working with, or simply a lack of interest in the training the latter being the most common cause of all. By Sarah Cordner.

A

lack of learner interest in the topic often comes down to the training missing the adult learning principle of ‘relevance’.

If your training programs are not designed, delivered or contextualised in a way that continuously reinforces how what is being learned directly applies the daily life and work of each individual student, then engage levels are highly likely to waver.

Your learners need to know why and how your training applies to them and their lives in order to fully engage.

THE IMPORTANCE OF RELEVANCE Have you ever had to sit through a meeting where everything being discussed has nothing to do with your role or even your department? For those who have, you’d know that trying to maintain concentration is difficult, even for the most motivated of people.

This is because when we feel that information is not relevant to us, our brain turns off and ‘saves its batteries’ for something else.

If your learners do not feel like your training is relevant to them, their willingness, or readiness to learn, will be unsubstantial at best.

This characteristic of adult learning considers an adult’s need for relevance in their educational programs. This refers to their willingness and preparation to get started on their learning journey It proposes that the content of a training program must be meaningful and relevant to the adult learners, their lives and their business. They have to clearly see why and how this is important to them personally and how it applies to their life.

44 BUSINESSFIRST MAGAZINE

CREATING RELEVANCE Relevance is a highly subjective consideration and many training programs make applying this principle even harder for themselves as they do not have a system in place for collecting information from learners in advance to find out why the training is important to them, or what purpose they personally see it playing in the bigger picture of their lives.

Always make sure that your preenrollment information collects this kind of information.

While the relevance in many cases may be obvious, such as a tradie taking a specific trade qualification; a business owner taking an MBA; a high risk worker taking their high risk work licence; the relevancy is not always as clear.

We can never assume what the underlying motivations are behind a learner enrolling in our programs.

By including an inquiry into our learner motivations as a preenrollment activity, we can better lay the foundations for embedding the adult learning principles of relevance in our training.

The immediate value of the learning needs to be clearly understood by the learner. If they can’t see how they personally can apply the learning to their own life and roles, motivation towards the training intervention will be significantly reduced.

Knowles suggests that as a person matures, his readiness to learn becomes increasingly relevant and focused to the developmental tasks of his social role and to help him effectively cope with life situations that such roles entail.

In short, the theory of this

relevancy concept is that adults must see a reason for learning something in order to hit the gas pedal, enroll and fully engage and benefit from the experience.

There are a few ways that you can design and deliver your training programs to ensure that you meet this principle in your courses.

Adults are ready to learn when they see your course as something that they want to learn or master.

Second to wanting to learn the skills is feeling that they need to learn whatever your course is teaching in order to get better at their job or life in some way.

An adult’s readiness to learn will increase when they can see that taking on the new information, skill, knowledge or competency will help them directly improve their own world.

SETTING CLEAR GOALS AND OUTCOMES Adult learners focus on the goals and outcomes that the learning will provide them, and they then use these to decide if those outcomes are relevant to them and if they are ready to acquire those outcomes.

Ensure that your course sales pages and descriptions clearly explain the outcomes they will get in as much detail as possible, in language that is most likely to be used by your target learner so that the highest opportunity exists for them to see the relevancy of your training.

Break your outcomes down into their smallest parts. For example, if you were teaching a course on how to make a sandwich, don’t just say in the description “In this course you will learn how to make the world’s most delicious sandwich.” www.businessfirstmagazine.com.au

E-LEARNING| BFM

Break down everything they will learn about making that sandwich, listing specific learning outcomes that cover every stage of the process, e.g., you may create multiple learning outcomes for each one of these stages: 1. shopping for and selecting the ingredients 2. how to tell if the ingredients are fresh and ripe 3. different types of bread and how they affect the taste of the sandwich 4. how to safely and effectively slice the bread 5. the correct layering of the sandwich filling 6. the perfect amount of butter and how to spread it without breaking the bread 7. how to cut the sandwich into the most aesthetically pleasing shape Of course, this is a silly sandwich example, but by the time you have done the equivalent in your own topic, you will find that you have deeply illustrated significantly more outcomes than your course originally would have described and have subsequently multiplied the opportunity for learners to see

www.businessfirstmagazine.com.au

your course’s value and relevance to them.

In summary, adult learners: • want timely learning, i.e. they only want to learn things that are relevant and applicable right now • seek meaningful learning experiences • need clear learning objectives so that they can decide if the learning is directly relevant to their immediate wants and needs.

• realise that learning is applicable to their work or other responsibilities and is of value to them.

Therefore, course creators, facilitators and educators of all kinds must identify objectives and explicit learning outcomes for adult participants before the course begins in order to capture their attention and engage them from the outset.

It also means that theories and concepts must be related to a setting familiar to the participants.

This way, learners will be able to fit the information they need to know into the framework of information that they already possess. This

enables learners to not only find relevance in your course materials, but also enables them to remember what you are teaching and take that information with them far beyond the end of your session. If they are able to link your content into what they already know, if they are able to contextualise your material, then their mind can connect it to something that is already placed in their memory and makes it easier for them to recall.

Final Thoughts Adult learners search for relevance.

While in some instances you can force learners show up to compulsory learning, or incentivise your course outcomes to the point where it becomes worth their time, you cannot demand their attention without making your learning material valuable to them by linking it inextricably to their lives. BFM This article is altered from Sarah’s bestselling book ‘The Theory and Principles of Creating Effective Training Courses: What To Do Before Creating Your Course’

BUSINESSFIRST MAGAZINE

45

BFM | PROFILE

Working towards a better tomorrow Monash Business School does more than just teach its students the rules of business, finance and economics. It aims to produce good citizens – business leaders who make a difference to the world.

M

ichaela Rankin, Professor of Accounting and Deputy Dean (International) at Monash Business School says the School is committed to meeting its responsibilities as a signatory of the United Nations Sustainable Development Goals.

The Sustainable Development Goals set out to tackle a whole range of issues, from gender inequality to climate change. The unifying thread throughout the 17 goals and their 169 targets is the commitment to ending poverty, noted as the greatest global challenge and an “indispensable requirement for sustainable development”.

The goals below are part of Monash University’s broader education agenda.

“Sustainability is one of the primary research focuses of the Business School, and researchers have engaged in a broad range of projects from an economics and business perspective,” Professor Rankin says.

“Projects have included poverty reduction in India, building resilience in agri-food systems in Asia through sustainable and equitable practices, and the measurement of social values through the development of the Assessment of Quality of Life Instrument.”

The Business School also actively engages with business to bring a focus to the goals. “We have a strategic partnership with the Future Business Council, through which the School engages with the Council’s corporate members with a strong interest in sustainability,

46 BUSINESSFIRST MAGAZINE

innovation and ethical business models. This partnership has led to a number of public forums and events, including exploring directors’ fiduciary duties with respect to climate change.”

The Sustainable Development Goals are also integrated through the education programs of Monash Business School as a result of the School’s commitment to the UN Principles of Responsible Management Education. Students address a number of issues including Prosperity, Poverty and Sustainability in a Globalised World; Accounting for Sustainability; Cross-cultural Management Communication and Sustainability Regulation for Business.

“The School sees this as one of its most important activities,” she says. “The role of business schools, is to develop the next

generation of leaders. We think it is essential that tomorrow’s leaders understand the significant challenges and opportunities presented by sustainability and the Sustainable Development Goals, not only for governments, but for business. We want to ensure our graduates are equipped with the knowledge and expertise to appreciate the role government and business has to play in addressing these challenges.”

She says the UN Principles of Responsible Management Education (PRME) are about transforming management education, research and thought leadership globally.

This is done by working through the PRME framework, developing learning communities and promoting awareness about the United Nations Sustainable

www.businessfirstmagazine.com.au

PROFILE| BFM

Development Goals.

“The mission of the school is to engage in high quality research and education to have a positive impact on a changing world. This statement, and our values that underpin it is entirely aligned with the goals of UN PRME,” she says.

The aim is to ensure these are not just high-level goals.

“We like to use real world problems and activities in teaching.

For instance, in our Accounting for Sustainability subject, students evaluated the tension faced by the board of Transfield Services from the perspective of financial performance and the moral or governance issues the company faced in being contracted to run offshore detention centres.”

Students are shown how to implement these goals when they enter the business world.

“We provide students with a range of ‘real world’ experiences where they can test this through their degree: via sustainable leadership programs where they work on a real world business case, to internships and students engaging in community projects.”

As an example Professor Rankin cites students’ engagement with the Oakleigh Legal Service, where www.businessfirstmagazine.com.au

teams of law and finance students provide finance and legal advice.

“It’s then only a small step to continuing this engagement while in the business world,” she says.

Engaging students in responsible management and creating awareness of the Sustainable Development Goals also occurs outside the classroom. One example is the School’s Take One Step online engagement platform where students are invited to engage in a program aimed at inspiring sustainability leadership and action.

“It is an interactive platform, akin to social networking, that challenges students to take action to live in a more sustainable manner,” she says. “Whatever actions are chosen, every small step makes a big difference in a world that needs positive change. Students’ actions ranged from adopting a vegetarian diet, selecting sustainable purchasing options, using a reusable rather than a disposable coffee cup, using sustainable transport or switching to an ethical bank.”

Professor Rankin believes a number of businesses are leading the way, implementing these goals and values in their strategies and

supply chains.

“Managing supply chain is a key issue that has been embraced by a number of firms, including Intel, which aims to improve diversity in its supply chain by investing in diverse entrepreneurs and supporting gender equality via digital Literacy Training for women in Kenya; Callebaut, which has committed to have 100% sustainable ingredients in all of their products, and to eradicate child labour from their supply chain. Google has committed to help 20 million SMEs in India establish an online presence to increase their revenues.”

BUSINESSFIRST MAGAZINE

47

BFM | PROFILE

Yet according to Professor Rankin these businesses are the exceptions. Overall, she feels businesses are not doing enough to address important global issues.

“I would argue that while many businesses might see these issues as peripheral, they are in fact not. For example, management of supply chain to identify working conditions and human rights practices should be part of the business risk management strategy. Studies have shown that diversity across the workforce will only benefit the business.”

The next generation of business leaders could play an important role in this change.

“Change in business happens not just from the culture at the top of the organization, but from the staff and middle management engaging with these important issues,” she says. “Both is needed to effect change, so having a body of graduates moving into a business who are able to see and understand the implications for the business

in addressing the Sustainable Development Goals will mean change can be driven across the organisation, and the workforce containing these graduates will already be sold on the benefits.

“A clear understanding of the Sustainable Development Goals and what they mean for business is a first step, as well as some research on the benefits that can be gained not just by society but by the business, and their stakeholders by making even small changes that align with the Goals would be beneficial.”

Business leaders need to understand the business case and responsibilities around Sustainable Development Goals.

“Next, businesses could define what they see as their priorities, which would include mapping the value chain of the business to identify where their operations might engage with the Sustainable Development Goal agenda, identifying indicators of performance, and defining their

priorities,” Professor Rankin says.

“Setting goals would be next, over the short, medium and longer term. It is essential that the Sustainable Development Goals are embedded across the business strategy and operations, not just as a ‘side issue’ if business is planning to effect any change.

“Finally it is important to measure, report and communicate what it is doing to key stakeholders, both internally and externally. The UN Global Compact is one organisation behind a guide for business.”

The aim is to have students entering the workforce with Sustainable Development Goals being part of ‘business as usual’.

The Monash Business School’s education offerings are structured around that.

“We strive to be a leader in responsible management education both in Australia and globally, and we are working hard to collaborate with other institutions to make this happen.” BFM

Michaela Rankin, Professor of Accounting and Deputy Dean (International) at Monash Business School

48 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au

THE ONLY CONSTANT IS CHANGE.

CRICOS Provider: Monash University 00008C

WITH EVERY CHANGE, COMES OPPORTUNITY. BE FUTURE FIT. MONASH BUSINESS SCHOOL. In a rapidly evolving business world, Monash Business School is pushing research and teaching beyond traditional boundaries to create leaders at the forefront of change. We are the largest business school in Australia and among the world’s top 1% of business schools to hold the prestigious ‘triple crown’ accreditation. When you study with Monash Business School, you won’t just experience change. You will drive it. business.monash.edu

MONASH BUSINESS SCHOOL

BFM | PURPOSE

BUSINESS WITH A PURPOSE: IT’S TIME TO PRACTICE WHAT YOU PREACH Businesses today face a number of challenges to their growth and success. Externally, digitalisation and rapidly changing consumer expectations are forcing businesses to adapt and change, quickly.

Concurrently, the demands of a new generation of employees on the quest for more meaningful work and a wider debate about the role a business should play in society are reshaping expectations. By David Vitek

T

o combat these internal and external forces, savvy businesses are now focusing on ideals beyond pure profit and finding that purpose-driven strategies are helping to improve employee brand, make a difference in society and, as a flow on affect impact the perception of a business by its customers.

In a global survey by EY’s Beacon Institute, the study found that although there is a strong understanding in the business community about the value of purpose in driving performance (90 percent of business leaders), only 46 percent of the executives surveyed said their company had actually articulated a sense of purpose and used it as a way to make decisions and strengthen motivation.

From this research, it’s clear that despite our best intentions as business leaders, leading a company with a purpose is much harder to practice than it is to preach.

According to EY, some of the most common barriers to adopting a purpose within a broader business strategy include short-term shareholder or

50 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au www.businessfirstmagazine.com.au

PURPOSE| BFM

investor pressure, systems and infrastructure that are not aligned with long-term purpose, and the lack of performance targets and incentives aligned with purpose.

So, how can you overcome these barriers to successfully drive purpose and put your money where your mouth is?

HARNESS YOUR STAFF TO CHAMPION THE CAUSE A key driver of a business’ purpose-led strategy is its staff.

According to research by Deliotte, respondents who said their companies have a strong sense of purpose are much more optimistic about the future prospects of their organisations.

In fact, an overwhelming majority of respondents (91%) whose organisations have a strong sense of purpose believe that their organisation will maintain (or strengthen) its brand reputation and loyalty, compared to only half (49%) of those working at organisations without a strong sense of purpose.

At hipages, working with our staff to ensure that they understand not only our business purpose but also dedicate time to philanthropic avenues that are important to them, enables us to foster an inclusive, respectful and collaborative workplace culture. To encourage our staff to give back, we provide our team with two paid days per year to volunteer for charitable causes they care about. As a result, we’ve increased our employee loyalty and average tenure and ensured staff feel more connected to our business.

On an individual level, an area close to my own heart is homelessness and this year I will again be participating in the 2017 Vinnies CEO Sleepout. To bring this purpose to life and ensure our staff understand we’re a business that really cares, we’re also bringing Vinnes into our offices to present to our team about the work they do – a full circle experience that keeps our employees close to our business purpose.

BUILD YOUR PURPOSE Leading with a purpose isn’t just important for internal culture and employee brand, it also helps with the acquisition and retention of www.businessfirstmagazine.com.au www.businessfirstmagazine.com.au

customers. Deloitte found that 89% of respondents working for an organisation with a strong sense of purpose said their clients trust that they deliver the highest quality products and services.

That’s in contrast to only 66% of those businesses that do not have a strong sense of purpose.

With over 83,000 registered tradespeople in our network – this set of customers are critical to the success of our business. It’s important we keep their needs close to our business planning and ensure their voices are heard.

When speaking with a number of our tradies a key theme to come out of these conversations has been a desire to help their local communities, but a lack of understanding as to how to get involved. With our purpose top of mind, we’re working hard to facilitate opportunities for our tradies to work with us and give back to their communities.

A recent example is a competition we ran where children around Australia were invited to submit a drawing of their dream cubby house. A winner was selected and we’ve engaged our tradies to help build a real-life version of the cubby on the playground of the Shepherd Centre in Newtown, NSW and in the back-yard of the winning child’s home. The Shephard Centre provide early education for deaf and hearingimpaired children. We had an overwhelming number of tradies on our platform offer to donate their time and resources into bringing this project to life – an example of how a strong business purpose can be build and embraced by a variety of stakeholders.

PURSUE PURPOSE: REAP REWARDS There will always be challenges for companies in implementing and maintain a strong business purpose, however, the benefits will far outweigh these challenges when purpose is a priority. The research is clear, companies perform better if they have a clear sense of purpose. Purpose-driven companies make more money, have more engaged employees and more loyal customers, and are even more innovative. BFM

By David Vitek, Co-founder and CEO of hipages.

BUSINESSFIRST MAGAZINE

51

BFM | PROFILE

Health, happiness, and wellbeing – the formula to success for a Top Tier wellness brand World ranking brands are not created overnight. Business experts claim that the formula to success for any enterprise is all about having a clear vision, the right people and expertise, an appropriate amount of liquidity, and so forth. Whilst these factors are cliché to say the least, the reality is that each company has its own unique model or blueprint to making their business grow.

A

Federico Re

CEO InspireTalkTV

ccording to top tier wellness brand – Swisse, what underpins their success story hinges around health, happiness, and wellbeing.

These three core elements is what Swisse Managing Director, Oliver Horn, describes as the ‘DNA’ of the Company.

AN ENTREPRENEURIAL JOURNEY In an intimate discussion with

52 BUSINESSFIRST MAGAZINE

Oliver at his head-quarters in Collingwood, Victoria, I was able to uncover the real essence and truth behind the accomplishments of this iconic brand, founded in 1960 by entrepreneur – Kevin Ring.

From humble beginnings, and for more than half a century, the business building that took place is clearly evidential. Interestingly, it took three decades for the Swisse brand to actually evolve and

release its first branded product for Women, in 1991.

In 2008, the entrepreneurial spirit and commitment of Radek Sali, who pioneered the innovative developments of the company for 12 years, is without a doubt a core reason why the company’s entrepreneurial culture is deeply buried within its core values.

Today, Swisse is continuing this entrepreneurial endeavour, by www.businessfirstmagazine.com.au

PROFILE| BFM

and outwards towards its products and the community. “You need to provide support for the employees and for the community”, says Oliver. Putting this philosophy into practice, Swisse provides free lunches for every employee once a week, as well as a healthy breakfast and free snacks every day; gym classes to promote movement; personal fitness instructors to encourage and inspire people to live well; yoga sessions and daily meditation to promote healthy mindset, etc.

FOSTERING THE RIGHT CULTURE Apart from the evidential entrepreneurial history of the organisation, and the great leaders that have existed from day one, the focus today is more about fostering the 300+ staff globally to think like ‘intrapreneurs’. According to Oliver, “it’s about a collective leadership approach. Swisse is a house of entrepreneurs”. This is achieved by offering autonomy to staff; providing accountability; and inspiring them to make decisions.

The ultimate goal is “about providing personal development to each individual, and keeping them healthier and happier”.

Swisse Managing Director, Oliver Horn

hinging on the expertise, passion, and dedication of its new leader and his talented crew of people across the globe. Swisse products are currently available in Australia, New Zealand, USA, China, Singapore, the UK, Italy and the Netherlands, with plans to launch into further countries over the coming years.

PASSION BEFORE PROFIT Traditional education will teach the fundamentals to the 4 P’s of marketing, and how these are the building blocks to the marketing mix. Swisse, on the other hand, has redefined this rule to ‘people, principles and passion before profit’.

Oliver makes reference to the ‘3 pillars’, namely movement, nutrition, and mindfulness.

This philosophy to creating wellness extends from within the organisation and to its people, www.businessfirstmagazine.com.au

BRAND AMBASSADORS Apart from Nicole Kidman, Ricky Ponting, and other high profile international TV personalities, the essence of why Swisse aligns itself with such influential people, is actually not about ‘showbiz’ per se, but really about the ‘brand DNA’ and leveraging off the cross-synergies that exists in the partnership. Fundamentally, “brand ambassadors believe in the brand; they promote it; they use it; and essentially become part of the team”, proclaims Oliver.

A SCIENTIFIC APPROACH Research and development is generally an important facet for most large scale organisations.

For Swisse however, this matter is taken very seriously, and a significant amount of effort and investment goes into clinical trials, long term research, collaboration with scientific institutions like CSIRO, development of new technologies, and so much more.

For me personally, the complexity and level of the R&D the company engages in is impressive and comparable, in my opinion, to the standards set by international companies like Cochlear, Boeing, and even NASA. As far as the future is concerned and the opportunities this will present to companies within the wellness sector, Oliver firmly believes that ‘personal self-diagnosis’ technologies will become the trend, allowing individuals to monitor their health condition and take the necessary proactive measures to stay healthy.

For me personally, I envisage Swisse collaborating with astronauts on missions to Mars, where daily supplements for their crew members are provided to create their complete source of nutrition ! Whilst this is more science fiction than fact, there is no doubt that this type of advancement will take place for Swisse in the future.

COMMUNITY ENGAGEMENT Swisse’s core mission is to “make millions of people healthier and happier”. Around this commitment, is the Company’s close affiliation with the ‘Celebrate Life Foundation’, which has raised over 2 million dollars since 2014, which has been given back to the community and a variety of charity organisations.

Social entrepreneurship also plays a core part. “It gives purpose to employees to engage in grassroot level activities within the local community”. Examples include cycling to work, assisting in local fundraising events, etc.

This philosophy again hinges around the 3 pillars of movement, nutrition, and mindfulness.

“Intuitive passion is the core driver of this process”, says Oliver, and it stems from within the culture of the organisation.

There is no doubt that Swisse is pioneering and disrupting the marketplace across many levels.

Whilst competition within the food supplement and wellness sectors is overly saturated, an array of opportunities still exists for start-up companies and aspiring entrepreneurs entering this global and booming marketplace. BFM

BUSINESSFIRST MAGAZINE

53

BFM | STAFF

WHY PEOPLE ARE WORKING HARDER THAN EVER AND ACCOMPLISHING LESS Are you busy? I bet you are. Everyone is busy. Frantic, even. Putting fires out, chasing targets that are not only lofty but borderline impossible, and all with less resource and budget. Such is life in the business world these days, and it’s a new world we are well used to by now.

B

ut doesn’t it seem odd that you can often have a team of people working long hours, with minimal breaks, and still you don’t seem to be getting any closer to meeting your objectives?

It could be that the targets are too ambitious and need to be reviewed, but before making this case to your superiors (which can be akin to admitting defeat) it pays to apply a little due diligence to your situation and understand why, with all the people and all the hours being worked, things are still being missed. You are treading water, and that’s not going to be a situation that goes unnoticed for too long. Best to get on the front foot so you have a clear idea of the cause(s) before you start implementing solutions (or have solutions thrust upon you by the powers that be!).

So why does this happen? Here are some things to look at to uncover what’s really going on in your team.

1. Is everyone clear?

I cannot stress enough how important clarity is in business.

Clarity on what you’re trying to achieve, and what success looks like. Don’t be afraid to get crystal clear on what is expected of your team, and put some hard numbers behind deliverables where possible. The more exact you are the less wiggle room there is when objectives are not met.

Do you, as a manager know what is expected of your team?

Do you understand the drivers of business performance and the issues that need to be addressed?

If the answer isn’t a resounding yes, then you have some work to do, as if management don’t have clarity around expectations

54 BUSINESSFIRST MAGAZINE

and priorities, this sense of self-created ambiguity will filter through your business which is not good for morale. If people don’t know what to prioritise they will be spending time working on those time-sucking, low value ‘tasks’ that can certainly add up to a lot of time spent achieving very little.

2. Do you creep or do you hold?

It’s very frustrating when you get the all-important clarity on objectives upfront from your stakeholders, work hard and diligently on achieving what has been agreed upon, only the have the goal posts shift. And shift again. This could be because your stakeholders weren’t really sold on the objectives to begin with – maybe they didn’t fully understand, or maybe things have changed in their world and this is having an impact on the scope.

Whatever the reason, commencing and continuing work on something that is continuously changing means time and energy is being spent on work that isn’t achieving much. I suppose the exception to this is where you’re being paid by the hour, like in an agency or consulting situation, however even then working hard and never achieving a result is pretty soul destroying to anyone who takes pride in their work.

If you realise scope is creeping for your projects, up your communication. If something changes, get the team together and let them know what is going on and that there may be a scope change.

Decide if it’s worthwhile carrying on when things are uncertain.

Don’t have your team keep working towards something when you know game-changing turbulence is coming. This wastes their time

and doesn’t show them that you particularly value their time.

Sometimes things change and you have no control over this. It happens, and that’s the way of business. If this is the situation ensure your team know why the change is happening, and re-visit your objectives, ensure everyone understands the new expectations and timelines, as well as what has changed and (where possible) the reason for the change.

3. Do you have the right technology?

Having smart and intuitive systems in place isn’t a nice-tohave, it’s critical to maintaining a competitive edge. It doesn’t matter what industry you work in, if your staff are labouring over systems that are clunky, timing consuming and involve inputting from multiple sources (one at a time) and reporting from various places (separably)- there is time right there being wasted (and likely quite a lot of it).

Take call centres. The call centre agents are the frontline of customer service and they need a strong system to support them if they are to offer these customers a satisfactory experience.

Customer satisfaction would be up there with the most important deliverable a business can have, as happy customers keep spending money with you. A system that allows agents to have all relevant information on the customer on one screen before they answer the call allows them to have a personalised, meaningful conversation. Simple but very effective. Managers can monitor calls and offer unobtrusive tips and coaching on screen, in real-time, without having to interrupt the call www.businessfirstmagazine.com.au

STAFF| BFM

or even be in the same postcode.

Reporting can be done whenever on whatever metric, not limited to end of month or end of campaign.

When you’re stuck in the elevator with your boss (and it happens to us all, usually when you’re least prepared!) you can answer the right questions and show them you’re on top of things.

The right system isn’t just an enabler of performance, it’s essential in maintaining a competitive edge and providing your staff with an easy, clear way of achieving their objectives. No one wants to spend their time flicking from screen to screen, system to system, reformatting, calculating and manually inputting. Not fun for anyone.

4. Do you have the right people?

We don’t need staff who can complete tasks, we need staff who can meet objectives. This means you need to be more selective in your recruitment process so you’re hiring the people who can add more value to your business. How do you do this? Try throwing away the scripted interview questions and having a conversation to try to get to the heart of the person www.businessfirstmagazine.com.au

you’re interviewing. Is their tone of voice flat, uninterested? Red flag. Do they spark up when they describe a challenge they’ve nutted out? That’s a great sign. Use a bit of intuition and look for people who don’t rattle off answers to your questions but seem to consider each before they answer. You want people who can achieve, not people who simply turn up to work.

We’ve all heard of AI, we know that chat bots are here and can do a lot of the simple tasks traditionally done by humans. Need to record customer details? Chat bots can do that for you. Need simple, regular queries answered and information provided? Chat bots are perfect for this. They are coming to the fore in customer-facing tasks, but the rise of AI means that in the future there will be many tasks previously n your team’s to-do list that simply won’t be required of them.

When you think of the right team you need to meet your business objectives, think in terms of the more challenging deliverables that cannot be completed by a robot.

Couple this with spending more time and putting more thought into your interviewing and you’ll likely have higher quality staff

who can spend the hours they are at work working through the more challenging tasks which will add the value you need to see a shift in your productivity.

There’s no silver bullet to productivity. When you have a team full of people seemingly working hard and not making a dent in your targets, it’s easy to say your targets are too ambitious and your budget is not enough. But without looking at who you have in your team, the environment and culture they work in and tools with which you are expecting them to work, you may be missing some clear clues on how to improve your performance. The good news is it’s not hard make a pretty quick difference. Be clear in your objectives. Be consistent in your scope and communicate change well. Have the right systems in place and recruit the people who can master the tasks that add the most value. You might then find that you get closer to those elusive goals, or if not can have a clear, non-defensive and honest conversation about your team’s performance when the time comes. BFM Joel Hill is General Manager at Noojee Contact Solutions.

BUSINESSFIRST MAGAZINE

55

BFM | MARKETS

WHAT IS THE QUICKEST WAY TO EXPANDING MARKET SHARE? There are a handful of tactics companies can employ to increase their share of market.

But first, let’s understand what market share is, before we get into tactics. By Raz Chorev.

M

arket share is calculated by taking the company’s sales over a period and dividing it by the total sales of the industry over the same period. This sounds straightforward, doesn’t it?

The trick is to define our market, before we can claim ownership of a share in it. Defining a market isn’t that straight-forward though. We need to understand our existing customers as well as our potential customers, what options they have, what they are looking for, their purchase behaviour, and other factors. This holds true whether you’re selling physical products or professional services.

Let’s examine a simple example.

Let’s say you own a small watch shop. The watch industry is very broad and very heterogeneous, so assuming your market is simply ‘Watches and Time Pieces’ is not realistic. Prices range from $7 for children’s watches to hundreds of thousands of dollars for custom-made luxury timepieces.

Furthermore, since you own a shop, you could also consider yourself as part of the Retail industry. Would it be fair to you to count yourself as part of the global retail industry, which turns over hundreds of billions of dollars per annum? Obviously not! We would also need to consider whether you have only a main-street shop, or do you also run an ecommerce (online) business.

To define our actual market, we need to drill down and use some basic yardsticks – goods / services sold, geography and distribution mechanism or channels.

With Professional Services, it works exactly the same. If you’re a Doctor, an Accountant, Lawyer, Broker or Consultant, the market definition factors are still valid.

Now that we have the market definition under control, what can we do to grow our market share?

If our strategic goal is to increase market share, what are our

56 BUSINESSFIRST MAGAZINE

options? Ultimately, we only have two ways: 1. Organic market growth.

2. Inorganic market growth.

Organic growth is the process of business expansion byincreased output, customer base expansion, or new product development, as opposed to inorganic growth which is growth by mergers and acquisitions.

ORGANIC GROWTH An organic growth happens when businesses focus on YoY (year on year) growth by increasing production, servicing more clients or selling additional services.

Looking at historical data and applying a total percentage of sales growth – e.g.: “increase sales by 10% year on year” – is a common goal, which ensures a company’s sustainability, but doesn’t necessarily guarantee increased market share.

For example, if you’re running an accounting firm collecting $750,000 of fees in 2016, you’d aim for $825,000 fees in 2017 financial year, $907,500 for 2018, and so forth. That demonstrates growth, but not necessarily in market share. It is possible that the market increased by 10% per year, meaning you are just keeping up with market growth but not increasing your share of the market.

Another common approach to organic growth is adding more services or products to our practice.

Using the above example of the accounting firm, we can introduce technology sales (MYOB, Xero, or QuickBooks partnerships), financial planning, mortgage broking, insurance sales, etc. A lawyer can increase market share by venturing into other territories and servicing a larger geography.

This approach has been proved to be a successful way of growing your share of the pie. But are you really increasing market share, or growing the market segments or

geographies you’re competing in?

To help us find organic ways to grow not only our market, but market share, let’s focus on understanding our customers and their purchase preferences.

We also need to keep tabs on our competition, and understand what they do, and the variety of services they offer.

To grow our market share within a defined market place, we need to take customers from our competition. There is no other way to grow our market share. How do we do that?

1. Grow brand awareness – Making sure more people know about us, so they can buy from us. If our target market doesn’t know about us, they can’t do business with us. This will involve every kind of promotional activity you can think of, and afford: online and offline advertising, direct mail, radio and TV, billboards, direct mail, etc.

2. Direct Sales activities – Find out where and how your direct competition does business, and encourage their customers to buy from you. Offering sales incentives, better service, more convenience, cheaper prices, and anything else that may entice your competitor’s client to buy from you.

Those activities have been working well for many businesses to grow their market share.

However, it takes time and resources many don’t have.

INORGANIC GROWTH Inorganic growth refers to activities that are shorter in time frame and bypass the need to entice customers away from your competition. Companies looking to expand their control of the market in a specific segment can acquire, merge with, or take over other players in the market.

The most common examples of merger and acquisition (M&A) activities in professional services can be found in the accounting www.businessfirstmagazine.com.au

MARKETS| BFM

and legal professions. The ‘Big 4’ accounting firms employed inorganic growth tactics to get where they are today. Similarly, the top legal firms in the world used similar strategies. The Partnership business model allows rapid expansion by acquiring smaller firms, making the owner of the acquired firm a partner in the larger firm, and bringing their client base with them.

The Big 4 accounting firms also expand their market share by taking a more customer-centric approach. They are shifting from their traditional accounting and audit service lines and specialisations to become business advisory and consulting firms, and are now expanding their services to encompass project implementation too. In truth, the Big 4 accounting firms haven’t been primarily “accounting firms” for several decades. Instead, these large, sophisticated and increasingly global firms have been slowly but surely transforming themselves from audit firms, to multidisciplinary professional service firms, to “globally integrated business solution providers”. Those firms are not only expanding their own market share, but threatening to eat other industries’ cakes too – competing head to head with management consultants, ad/media agencies, legal firms, and IT service providers. Their growth strategy revolves around their customer, and they are aiming to provide every service imaginable to their customer, to help them grow.

On a personal note, I’ve had multiple conversations with partners in some of those Big 4 firms, looking to integrate marketing services under their client offering. It’s an integral part of their growth strategy, and they are willing to pay to buy companies for both their clients and talent.

As a small or a medium size business owner, you may want to begin exploring the growth opportunities available to you, within your market segments. But how do you do that?

1. Define your own strategic growth ambitions: How large do you want to be, and what is the time frame to achieve that goal?

2. Articulate the market segment www.businessfirstmagazine.com.au

or geography you’d like to expand.

3. Identify potential acquisition targets. You can ask your accountant for advice, or ask to be referred to a business broker, advisory firm or M&A specialist to help you with identifying other companies with a similar mind set.

CONSIDERATIONS FOR ORGANIC VS. INORGANIC MARKET SHARE GROWTH There are pros and cons for both growth strategies. It’s not about making a right or wrong decision; it’s a decision about what’s right or wrong for you and your business, at this point in time.

David Annis and Gary Schine, authors of the book, “Strategic Acquisition: A Smarter Way to Grow a Company,” summarise their perspective: “Growth through acquisition is a quicker, cheaper, and far less risky proposition than the tried and true methods of expanded marketing and sales efforts. Further, acquisition offers a myriad of other advantages such as easier financing and instant economies of scale. The competitive advantages are also formidable, ranging from catching one’s competition off guard, to

instant market penetration even in areas where you may currently be weak, to the elimination of a competitor(s) through its acquisition.”

Growing market share by acquisition, offers two-fold growth: Growing your market, brand reach, audience, sphere of influence, and supply chain while also eliminating or overtaking your competitors by acquiring them, until your company is the largest in your competitive market.

However, there are also risks in this growth strategy, and positive attributes to organic growth activities. Let’s sum it up: CONCLUSION In both cases, though, strategic planning is required to ensure growth is both attainable and sustainable over a long enough period to achieve the company’s goals and justify the expense and effort required.

It’s usually best to explore both options thoroughly before heading too far down either path.

Discuss your options with your trusted advisors to consider all the pertinent details. BFM

Pros

Reason

Control

Management and owners have control over pace and direction of growth.

Organic Growth Stability

Fast

Business as usual.

No disturbance to day to day operations

Immediate market share increase.

Cons

Reason

Slow

Steady growth is slow – it could take years to gain public awareness and market share.

Competitive Risk

Many markets are rapidly changing and disrupted.

Waiting for organic growth can meet with introduction of other players in your market, which can pose a threat.

Cost

Inorganic Growth

Competitive Edge

Increase knowledge and expertise Increase financial position

Volatility

Large upfront investment required. Either by self-financing or raising debt.

Integrating two companies cause management challenges, culture and processes challenges, which will ultimately impact service.

BUSINESSFIRST MAGAZINE

57

BFM | PROFILE

FINDING VISION IN A VOLATILE MARKET

As a policeman, Scott Deane quickly developed the skills to review and understand a situation and the people around it to make the best possible decision. While the actions of people in a high pressure social situation may be somewhat different to those in a boardroom, this ability to read the play and make solid judgements has held Scott in very good stead in his professional life outside the force.

S

cott Deane is the chief executive officer of Learning Seat, an award winning e-learning company based in Melbourne. Learning Seat is one of Australia’s largest providers of online compliance training, implementing training solutions for more than 500 organisations across Australia, New Zealand and the Pacific.

Scott joined Learning Seat in 2013, following a wealth of experience in sales, marketing, general management and IT – with a real focus in the B2B market. He was directly responsible for some of the largest BPO outsourced contracts in Australia and also has direct experience as a co-founder of a successful Australian software business that was developed from the ground up and ultimately sold to a US company. And all of this came after joining the Victoria Police as a fresh-faced 19 year old.

“I look at 19 year old kids now and I think they look so young, so I often wonder how I ended up there at that age,” he laughs. “But I was there for roughly eight years and loved it. Looking back, I see the remarkable grounding experience it provides, so although it wasn’t by design, it definitely helped me in my future life.”

When Scott decided to leave the force, he was a little lost at what to do. An opportunity came up in sales for facsimile machines, moving his way up to senior management and ultimately the National Sales Manager for Ricoh.

An opportunity to move into a business of his own presented itself when Scott was in his 30s.

It proved to be very successful

58 BUSINESSFIRST MAGAZINE

Scott Deane

and was ultimately acquired by a US company. While Scott stayed on with the business as the head of sales and marketing, he knew his future would be elsewhere.

So when a personal contact at Computershare was looking to expand its offerings, Scott moved across.

“Computershare was looking to develop the BPO side of their business in the communication services side, specifically on in-bound digital mail, which is partly my expertise. So I helped set up and create a new side of the business for them, which was very successful.”

This continued growth personally, and in skills, eventually brought Scott to Learning Seat, where he has overseen sustained growth and a consolidation of business and strategy.

“When I first arrived I saw this business with brilliant ideas and potential, but I actually put the brakes on to slow everything down.

The company had over committed on a number of projects that they previously sold, resulting in a big backlog of work that needed to be done. I felt that it was extremely important that we met our obligations before gearing up for real growth,” he explains. www.businessfirstmagazine.com.au

PROFILE| BFM

“The other thing that the business probably didn’t really have at the time was a clear vision on what we stood for and what we wanted to do, or be known for, in the marketplace. So we spent a fair bit of time really refining that and got everyone in the business believing in the vision.”

The position of Learning Seat when Scott joined is completely understandable when you consider its background. The landscape of online training has changed dramatically in growth and systems in the last two decades. Through its history, Learning Seat had been developed as a private enterprise focusing on customised training, before shifting towards co-building of compliance training with existing clients. In the mid-2000s, News Corp bought the company as part of a digital strategy, before on-selling it in November 2012 to two private equity firms.

Growing and developing in a volatile market, and under different ownership structures, can naturally lead to disjointed processes or a lack of vision, and Scott was quick to identify what structures it needed to move to the next stage.

“I could see this development around good sales process, sales structure, and culture best suited to a B2B business,” explains Scott. “This business, like a lot of companies in that technology training space, had experienced rapid growth but then it needed some more mature structures in place to make sure it could meet the next phase of growth.

“That’s really where I saw my opportunity. As many people in the BPO space will tell you, if you’re not customer focused and meeting their needs, you don’t last very long. I think the e-learning wave started where everyone had gone from face to face training but needed to reduce costs, and this technology option of online presented and worked pretty well for a number of years. However, as the market started maturing and people were looking for more sophisticated and meaningful solutions, the focus needed to change.”

Scott’s starting point was to address the structure of the team and the way it presented to market. www.businessfirstmagazine.com.au

He effectively doubled the size of the sales team and created a scalable business that was capable of covering the whole country.

He then set about establishing what barriers people had towards training.

At a broad level, most people will recognise the importance of a business having compliance training. While the specific requirements of a business may vary by the industry, all companies can recognise the need to address fundamental issues such as bullying and harassment, equal opportunity and workplace health and safety.

However, the challenge for any training provider is reminding the business of their legal (and moral) obligations if they don’t stay on top of their requirements.

“I often find myself telling people that the three things that a business needs to do to be covered and adhere to the right standards: it needs to have solid policies, procedures, and training. Of course, those three things obviously provide no guarantee that people still won’t do stupid things, but it does go a long way to protecting a business from the inevitable claims that arise as a result of breach of compliance,” says Scott.

“As I describe it, no one goes to work really looking forward to doing compliance training, but without doing it, businesses are simply at risk of being unable to defend themselves in court. So we also discuss what a compliance breach costs a company in relation to reputational damage, being on the front page of business media, the personal business brand damage, as well as the obvious fines or even a personal charge.

“We generally find that if we can get in a meeting with a CEO, company director or owner, and explain exactly how far the legal responsibility can go, they require no convincing of the need to take action.”

Needless to say however that many of us have worked in organisations where training is enforced, but the manner in which it is delivered is so uninspiring or generic that it loses all meaning.

As such, Learning Seat puts in a large amount of effort to create programs that staff will

Whistleblowers elearning program engage with and undertake with resonance.

“I like to say that we’re storytellers,” says Scott. “The way we go about our training is basically to bring real life incidents into the training and tell the story of what happened from all sides. It helps us create really engaging content that people can genuinely relate to. The sad part however, is that we’ve got far too many stories to choose from.”

Naturally, the media attention that comes from severe workplace incidents puts the focus back on training, continuing the circle of engagement and need.

With a solid structure in place and clear philosophy of what the company stands for, Learning Seat is in a strong position to expand.

That growth, says Scott, could take a few directions, but will definitely relate to providing strong support and specialist service.

“We are seeing the growth of a number of companies globally through content aggregation. It’s a bit like the iTunes of training where you can log on and there are thousands and thousands of courses. I think from our perspective, we’ve looked at that a number of times, but we think there is still a really strong place to have specialist organisations, especially in compliance, because it’s not just your standard sort of training and the risk of getting it wrong is too great.” BFM

BUSINESSFIRST MAGAZINE

59

PROTECT YOUR BRAND AND PEOPLE SO YOUR BUSINESS CAN THRIVE

TO REDUCE ORGANISATIONAL RISK, CREATE A COMPLIANCE CULTURE

BUILDING ONLINE COMPLIANCE SOLUTIONS

15 YEARS COMPLIANCE EXPERIENCE

THE BENEFITS OF COMPLIANCE TRAINING Mitigate financial, criminal and reputational risk by: » making your people aware of their legislative duties and obligations » reducing legislative breaches in the workplace.

Create a positive culture by: » fostering a safe work environment » helping your people identify unsafe or unethical behaviour and report it.

Protect your organisational brand and reputation to: » improve trust and brand loyalty » increase your profit.

PROTECT OVER 500 ORGANISATIONS

MAKE COMPLIANCE SECOND NATURE Protect your people and brand from within. Create a positive culture and increase profit by making compliance the backbone of your organisation.

AWARD WINNING TRAINING We create award winning online training that is not only legally compliant but also brings about real behavioural change.

OUR LEGAL PARTNERS We draw on the expertise of our leading legal partners, Australian law firm Lander & Rogers and New Zealand law firm Simpson Grierson, to ensure that our programs are legislatively sound and include the most relevant and up-to-date case law.

Strengthen your employee engagement to: » minimise staff turnover » attract talent » boost productivity.

Contact us: 1300 133 151

MORE THAN 700,000 LEARNERS

www.learningseat.com.au

SOFTWARE| BFM

Grow and Stay Agile With 6 Software Decisions According to Gartner research, Australians will spend more than $85 billion on IT services and equipment in 2017, a 2.7 per cent increase on 2016 IT expenditure. With this in mind, it is important to note that when you’re growing a business, you need to ensure you have all the right components to ensure it continues to thrive.

I

t is imperative that you choose the right software, as this choice is directly related to growth and agility, and critical to overall success. Choosing the right software for your company can be particularly daunting, so we’ve selected our top six software features to consider when choosing software this year.

1. 21ST CENTURY SOFTWARE DEVELOPMENT Business growth is reliant on the ability to stay agile — especially when it comes to products.

Developing software that helps IT professionals to simplify their work requires developers to adapt quickly to the challenges they face daily.

For example, when a new security leak like Heartbleed discovered, a software update needs to be released within hours, not weeks. In addition to these hotfixes, developers also build and test several new versions of software per day and regularly deliver new versions to customers several times per week. Modern software development tactics like agile development and fully automated build and test and delivery processes are key elements.

2. CONTINUOUS ROLLOUT Customers are accustomed to continuous update delivery with SaaS solutions. It’s a simple and convenient way to run the latest version of a service. Even though software is run “on-premises” (i.e. within customers’ networks), developers adapt the concept to offer the advantages of continuous delivery to users – introducing continuous rollout enables users to receive new versions including new features and improvements, on a regular basis. Nowadays even large vendors (e.g. Microsoft) have adapted this approach to update their operating systems.

For a software development company this means that instead

www.businessfirstmagazine.com.au

of delivering just a few versions per year, with massive changes between them, developers can now be agile in development processes, testing new codes and features before rolling out to all servers.

3. NO CUSTOM DEVELOPENT, NO OEMS Many companies used to provide custom developments on a project basis, to kick start business growth and momentum. Bespoke offerings may produce quick revenue, but it can also cause massive delays in the growth of internal products.

Companies realised that in the long run, sustainable business comes from focusing on products. At Paessler, our calculations told us this was also true if we charged our customers as much as $AUD2150 for a developer’s day. Since this discovery, we haven’t undertaken anymore custom projects, focusing all our energy on ensuring PRTG Network Monitor can be used by 150,000 users every single day.

4. DON’T TALK ABOUT THE FUTURE Planning software projects is hard. Especially when you must maintain and support a product consisting of upwards of two million lines of code and hundreds or thousands of customers at the same time in a constantly evolving world of networks. New features or functions aren’t talked about publicly before going through the channels. This helps avoid getting users’ hopes up too soon and disappointing them if a promised feature gets delayed (or even cancelled) by evolutions we can’t foresee.

5. DON’T LOOK AT COMPETITORS It’s tempting to keep track of what your competitors are up to in terms of products, user interfaces and strategy, but this kind of competitor screening blurs vision and creativity. Instead, listen to

users and come up with your own vision for products, concepts and user interfaces. If everybody starts copying everyone else, then all products would be equally boring.

You’re left with washed-out products with no “personality” or “excitement” for the user. Try to be bold, try to be unique—and find your own way.

6. WHAT’S THE BANG-FOR-THEBUCK OF NEW FEATURES? Users always have more feature requests and ideas than can be implemented but it can be a matter of limited resources. That’s why at Paessler we developed a “bangfor-the-buck formula”, which allows us to evaluate incoming feature requests with the help of the following four parameters: 1. Reach: How many of our licenseholding customers will benefit from the new feature? How many have asked for it?

2. Boah: How likely is it that those users will be impressed, happy, or relieved by this new feature?

3. Pain2: How much pain would it be to the affected users to not have this new feature? This value is used squared in the following calculations, so a truly annoying problem is much more important than any nice-tohave boah effect item.

4. Effort: How many days do our developers need to research, create, develop, test, and document the feature?

Stay Agile, Stay Ahead. BFM Agile software must be ahead of the industry; offering continuous updates, new features/improvements and providing a unique offering that isn’t being offered by competitors. The business world is fast moving and longevity and growth is now dependant on being able to adapt to any change in a matter of hours. By following the top six software development decisions there is no reason business can’t grow or stay agile.

BUSINESSFIRST MAGAZINE

61

BFM | MARKETING

62 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au www.businessfirstmagazine.com.au

MARKETING| BFM

HOW TO CREATE A HIGH PERFORMING SMS MARKETING CAMPAIGN FOR YOUR BUSINESS

By Carl Krumins, CEO SMSGlobal

S

MS has been a solid communication tool since its inception in the 1990s.

Its appeal lies in its simplicity – a short message delivered quickly that cuts through the noise and straight to the pocket of the recipient.

Its efficiency as a business marketing tool is evident when looking at the open rates of SMS; an impressive 97% are opened, the majority within the first three minutes of being received. This is largely due to the trust consumers have in this widely-used channel.

For marketers, SMS does not require copious amounts of copy or extensive design, saving businesses time and money. Furthermore, the success of campaigns can be easily tracked and measured.

While the benefits of SMS are abundant, there are many businesses failing to leverage the communication channel to its full potential.

The importance of communicating at the right time, in the right place, with the right message and through the right medium cannot be understated.

With technology rapidly changing and every communication channel becoming overworked, getting the correct mix is integral to any marketing or communications strategy.

With this in mind, below are some guidelines and considerations to help you create a high performing, successful SMS marketing campaign for your business.

CHOOSE A SUITABLE CHANNEL While you may be accustomed to sending an SMS from your mobile device, it may not be practical to send multiple messages to varying groups of customers in one hit. There are three distinct and unique ways in which you can

www.businessfirstmagazine.com.au

send mobile messages; through your web browser, integrated with an API or by email. Sending SMS through your web browser gives you total control over your mobile communications; you can tailor messages to individuals or groups of your choice, and web platforms are designed to maximise your sending functionality and effectiveness.

If you’re a larger business, you may prefer to send SMS through API integration technology, which will give you have the flexibility to send messages through your own software. For something quick easy and effective, email to SMS converts standard emails into SMS messages, allowing text messages to be sent from any device that is email compatible.

CONSIDER YOUR TIMING It is vital to reach your customer at a time when they are able to think about and action your message. For general marketing messages, reaching customers on their lunch break is optimal – between 11am and 1pm is perfect.

If you’re promoting a weekend sale or special event, send a message Thursday afternoon or Friday morning for maximum engagement. Carefully consider the most appropriate time to reach your target market and ensure to schedule your SMS messaging campaign accordingly.

PROVIDE A GENUINE VALUE PROPOSITION SMS is direct and using this technology allows you to enter your customer’s personal space. This means you need to be respectful and tread carefully; ensure that your customer’s choice to ‘opt-in’ to your messaging is worth their time. Engage your customers with incentives; contests, giveaways, exclusive and exciting deals.

Don’t waste their time with unexceptional discounts.

KEEP IT PERSONAL No one likes a generic message that begins “Dear Valued Customer”; once you’ve invited yourself into the pockets of your customers, you need to make them feel like they are more than a number. To maximise the effectiveness of your SMS campaign, choose a channel and platform that allows to you to address your customers personally, using their first name.

CONSISTENCY IS KEY People like consistency. From the moment they opt in you need to ensure they know what they’re opting in to. For example, “Enter your mobile number to receive exclusive updates about new products, sales and giveaways”.

Then, deliver what you’ve promised. Be reliable, be consistent and you’ll be rewarded.

INTEGRATE THE MOBILE EXPERIENCE SMS doesn’t stand alone in a digital marketing campaign. Ensure you are marketing across other platforms is mobile friendly and include links to these platforms in your messages to customers.

Creating an integrated experience allows your customers to see all of what you have to offer, and ease of access is integral in the success of a mobile marketing campaign.

CREATE A SENSE OF URGENCY Finally, create a sense of urgency to encourage your customers to respond to your calls to action.

If you’re offering a discount, for instance, ensure you clearly state the offer expires next week. This will maximise your chances of receiving positive and immediate responses to your mobile marketing initiatives. BFM

BUSINESSFIRST MAGAZINE

63

BFM | PROFILE

SPECIALIST KNOWLEDGE FOR NEW VENTURES The world of stockbroking conjures up images of massive financial wins, risk and excess.

W

hile the directors of PAC Partners have seen great success throughout their journey, it would be a great injustice to all of their hard work and professional diligence to suggest it has been similar to a Hollywood movie.

The core team at PAC Partners has worked together for 15 years, with a previous venture acquired by a large international financial services group and opening the door to the current operation almost four years ago.

“We began as a research and corporate advisory group, and are now a full service independent stockbroker with clients across Australia and Asia,” explains PAC Partners managing director and co-founder, Craig Stranger.

“We often describe ourselves as a wholesale and institutionally focused stockbroker. We have raised more than $120 million in the last eight months for Australian emerging companies, both listed and unlisted. Our investor clients are either institutions (for example, superannuation money), high net worth and family offices, or our own growing internal emerging companies fund.”

PAC Partners is also one of the more active capital providers in what Craig describes as the “small end of the market”. They pride themselves on achieving the balance of matching vendor expectation whilst providing

64 BUSINESSFIRST MAGAZINE

enough upside for investors to be interested.

The opportunity for PAC Partners, explains Craig, is often in initial public offerings (IPOs), with three successful outcomes in 2017 already, and another six in the pipeline crossing such diverse sectors as 3D printing through to cobalt and Fijian kava.

“We seek to be specialists in certain areas, with deep research lead analysis,” he says. “Our focus sectors are where Australia has global differentiation; namely agribusiness and food which we are probably most known for, but also in technology, life sciences, resources and other specialist small companies.”

This approach has naturally led PAC Partners into some interesting business. Bubs Organic Australia and Murray River Organics are two IPOs that they have successfully led in recent times with high growth rates and expanding end markets proving to be very attractive to investors. The agribusiness area is considered an emerging market and therefore holds interest for vendors and investors alike – however Craig also believes that the resources sector is becoming popular again – thereby highlighting the variety of possibilities.

“Pockets of the market are good and the outlook for equities is relatively strong we believe. The world is flush with liquidity and super low interest rates make

equities very attractive; however the IPO market will always have its challenges. Vendor expectations have been too high for much of the last six months and there isn’t enough reward for the risk new investors are being asked to take.”

While success stories are the basis of building a name, sustained reputation comes from hard work and honesty around expectations.

Craig says they strive to always supply conservative numbers with realistic valuations.

“An IPO investment has a lot to do with trust in management, so we work hard to over-deliver,” he says. “We have long term relationships with most of our corporate clients and we like to think there is a good two-way trust.”

The relationship and trust component has been an integral part of PAC Partners growth – a point that Craig believes is underwritten by the staff.

“I am well aware that any www.businessfirstmagazine.com.au

PROFILE| BFM

Craig Stranger, managing director and co-founder PAC Partners

business is only as strong as the team around you, and I’m fortunate to have Brooke Picken as my 2IC and COO for much of the last 15 years; together with Paul Jensz as a co-founder who runs the agribusiness franchise. We have a team that are generally friends as well as colleagues.”

This is reflected in the staff numbers which have increased three-fold in the last three years – with the majority coming from professional connections and a desire to be part of a team with great culture.

While PAC Partners has clearly achieved great success, Craig keeps the feet firmly on the ground with a realistic view of the industry and the challenges they face.

“A lot of what we do is, understandably, success based – and that presents some unique challenges in this field of work.

For example, we did an enormous amount to jointly underwrite a $220 million dairy transaction www.businessfirstmagazine.com.au

involving the largest set of dairy farms in Australia. We were overbid at the eleventh hour by an overseas group, and that was 18 months work that evaporated in a minute.

It’s the ups and downs of the game and the reminder that you can’t control everything.”

This sort of honesty is a positive in an industry which is often accused of being over-zealous in its approach. Some may suggest it’s a by-product of being a small, independent broker; however Craig is quick to highlight that PAC Partners has the same relationships with investors and corporates as the “big end of town”.

“There is some misunderstanding in this area,” Craig explains, “we are just as well placed to underwrite hundred million dollar transactions as global or offshore brokers. In fact the large superannuation funds of Australia support most transactions and they are all close clients of us all; provided we each

deliver the required service levels.

“Investors perceive us as the main broker to stocks or sectors where we have a long history of coverage and a strong history of interaction. We specialise in industry sectors and know those stocks we cover well. Funds know we know those stocks well and, more importantly, we know the funds’ views on those stocks.

For a successful capital raising, it is important that the whole sales team of a lead manager is able to explain the capital raising with credibility and to make sure there is an orderly, well informed aftermarket.”

With such a strong platform, Craig sees a bright future for PAC Partners. Growth is likely to come through adding more specialists to service wholesale clients, whilst providing the same level of service to clients in pre- and posttransaction.

In other words, business as usual in an often unusual business . BFM

BUSINESSFIRST MAGAZINE

65

“We focus on leading emerging and mid cap companies through long-term and highly-personalised relationships.”

Leading, independent equities provider in Australia Emerging & mid-market focused Best Positioned to Meet Investor’s Objectives Successful track record Email: enquiries@pacpartners.com.au or call: +613 8633 9831

www.pacpartners.com.au

FEATURE - PODCASTING | BFM

PODCASTING: CUTTING THROUGH THE ONLINE NOISE Market fragmentation and a disruptive, competitive marketplace have businesses worldwide concerned. Especially as traditional marketing and advertising continue to become increasingly ineffective.

I

n fact, according to the KMPG 2016 CEO Outlook Report, 88% of CEOs were concerned about the ‘loyalty of customers’ and 88% about ‘their competitors ability to take business away from our company.’ The next 3 years will be critical in shaping our future. The change is ‘Now or Never’, the report claimed.

Annemarie Cross, recent Award recipient of the Best Business, Marketing & Entrepreneurship Podcast at the Cast Away Australian Podcast Awards, believes one of those changes enabling business to connect and engage with their consumers is a podcast.

Ms Cross, a podcasting veteran, has been podcasting since 2008. Since that time, she has amassed tens of thousands of listeners across numerous countries.

For podcasts to be successful, Ms Cross says, the five following tips are crucial: 1. Know your audience: Get totally clear on what your audience is interested in. This way your information will be valuable as it will solve a problem or help them to overcome an issue. When it does, they’ll want to know more and will see you as a valuable resource.

2.Work that Introduction: Your introduction will either seize your listeners’ attention, or not. Why should

www.businessfirstmagazine.com.au

they listen? What’s in it for them? If you don’t tell them within the opening segment of your podcast – then they’ll probably just press stop.

3. Forget the jargon: Industry terminology and jargon will only confuse listeners. Simplify your language and speak to people in a way they can understand you.

4. It’s NOT an infomercial or lecture: Keep it conversational. Start to sound like a lecturer or an infomercial and people will stop listening.

5. On-Brand Creatives: Everything from your choice of music, voice-over professional, show introduction, graphics and other creatives must be ‘on-brand’.

Remember, you’re creating an experience for your listeners. Is the experience you’re creating one that is memorable in a good way?

If you adhere to these tips and really think about your podcast, your brand and your customers. You will get cut-through and your followers will start to grow. BFM Annemarie Cross is the CEO & founder of the media and broadcasting corporation – The Ambitious Entrepreneur Podcast Network

BUSINESSFIRST MAGAZINE

67

BFM | IoT

To Secure Your Network, You Need to Know Your Network The Internet of Things (IoT) fever has swept across Australia, with tens of thousands of connected ‘things’—whether it is a patient monitor within the healthcare space, smart street lighting systems in public venues, or a surveillance camera monitoring the office — multiple devices and systems are making their way into our lives and workplaces.

I

n fact, according to ‘The Internet of Things: Today and Tomorrow’ report, by 2019, 77% of organisations in Australia will have some form of IoT in place. But as we try to stay abreast with the onslaught of smart devices, have we seriously considered securing IoT? Interestingly, despite the widespread uptake of IoT, the concept may be new for many Australian businesses, with Australia lagging behind global IoT adoption.

68 BUSINESSFIRST MAGAZINE

One reason why Australian businesses are slow to adopt IoT is due to its potential security concerns. Across various industries, such as government, healthcare, manufacturing and retail, there are thousands of devices relying on IoT technology, and each requires a different security protocol.

According to the report, only one in three (32%) Australian businesses completely agree that IoT devices are appropriately

secured with the proper security strategy in place. Despite the significant security gains from IoT, security flaws were found across many IoT deployments. The study found that 88% of organisations in Asia Pacific have experienced at least one IoT-related security breach, the highest in the world.

Below is a list of the top four industries that have suffered the most IoT-related breaches and how IoT is being used to provide key learnings and insights into the

www.businessfirstmagazine.com.au

IoT| BFM

challenges Australian businesses are facing. To have a strong handle on your organisation’s security, you need to be able to see these devices and their connections to be able to effectively protect them.

1. Healthcare: 89% have suffered an IoT-related security breach By 2019 it is predicted that 87 percent of healthcare organisations worldwide will have adopted some sort of IoT. Patient monitors and imaging systems are some of the most-used IoT devices in the industry, which are enabling valueadded services such as patient tracking and remote operations of devices.

While these bring significant benefits to patient wellbeing, security fears cast a looming shadow. When looking at the current state of IoT in the healthcare space, 76 percent of healthcare organisations believe that IoT will transform the healthcare industry, however

security will remain a top priority, to reduce the number of security threats. Nearly half of healthcare companies reported malware issues on their devices and 39 percent reported that human error led to an IoT-related security breach.

2. Government: 85% have suffered an IoT-related security breach When adding new elements to a city infrastructure, governments must balance new and old technologies. In the case of IoT, it is about walking the tightrope of legacy technology and a sufficiently secure network to create smart cities—and 49 percent of government workers find this a particular challenge.

Governments are further lagging in their IoT progress compared to other industries; 35 percent of IT decision makers within government roles claim that leadership has little to no grasp of IoT. This lack of understanding, combined with limitations of legacy technology within cities and security risks associated with IoT implementation, poses a huge challenge to the wider development of the smart city.

By over coming the key challenges of understanding IoT and security concerns, governments will be able to utilise IoT to save costs, increase equipment and assets utilisation, as well as collaborate more seamlessly across departments.

3. Manufacturing: 82% have suffered an IoT-related security breach The industrial sector understands the significance of automating the supply chain, and the operational efficiency and healthier profit margins it delivers. Countries such as India and Vietnam are already on the cusp of the Fourth Industrial Revolution, which will see the rise of smart factories—one that is outfitted with IoT, cloud computing and cyber-physical systems.

To capitalise on this, Australian manufacturers need to secure their network and devices. Of those who experienced an IoT-related security breach, half were malware related whereas 40 percent were due to human error. This gap needs closing, particularly as

www.businessfirstmagazine.com.au www.businessfirstmagazine.com.au

manufacturers are connecting devices such as chemical sensors and picking systems, to reduce operational risks and maintain operating infrastructure.

4. Retail: 76% have suffered an IoT-related security breach Over half (56 percent) of retailers who have implemented IoT in their stores are allowing personal mobile devices to access the network in order to enhance the consumer experience. When taking into account the 41 percent of retailers who have already suffered from an IoT-related attack because of malware issues, it is clear they need to find a middle ground between delivering an integrated and seamless shopping experience and protecting their network from any attacks.

By doing so, retailers will be able to increase productivity, expand into new markets and continue to improve customer experience.

TOTAL NETWORK VISIBILITY Across all of these industries, it is clear that organisations need more information about the devices connected to their network. Network managers require the ability to create policies and permissions around them, so that if a device is compromised, whether by malware or human error, it can be immediately identified and removed from the wider network.

The network must be completely transparent. When analysed and accessed, the information gathered should enable organisations to be more granular in pinpointing and securing devices with different levels of threat, while granting different levels of access to different users.

IoT within businesses in Australia and the growth of its use across all industries is inevitable.

With 49 percent of Australian businesses currently utilising IoT experiencing an approximate return of 20-40 per cent ROI, and 15 percent noting the ROI was as high as 60-80 per cent, its important to address these security concerns and start benefitting from IoT today. BFM Anthony Smith, is General Manager South Pacific, Aruba

BUSINESSFIRST MAGAZINE

69

BFM | PROFILE

HOW CYIENT IS DESIGNING A BETTER TOMORROW Cyient, a Hyderabad-based global engineering solutions company, has been enjoying spectacular growth with its profits recently rising 15.7%. Business First speaks with Sanjay Krishnaa, Senior Vice President-Communications and President-Asia Pacific, Cyient to find out what is behind the company’s success.

H

aving celebrated its 25th anniversary in 2016, it is a good time to reflect on the success of one of the world’s leading engineering solutions companies – Cyient.

Part of the company’s success can be attributed to the fact that it is more than just an engineering company. Cyient delivers services across several verticals: Engineering design services, Design-led manufacturing, Networks and operations, Data transformation, and Analytics.

Within these verticals, Cyient services clients in industries as diverse as Aerospace, Communications, Defense, Rail Transportation, OffHighway & Industrial, Power Generation, Mining, Oil & Gas, Communications, Utilities, Geospatial, Semiconductor and Medical Technology.

In its 25 years, Cyient has developed and sustained longstanding relationships with leading names in these industries, which has led to the company employing over 13,800 people across 48 locations in North America, Europe, and the Asia-Pacific region.

Leading the APAC region is Sanjay Krishnaa, who has played a key role in the company’s sustained growth.

“When I joined Cyient 15 years ago, my portfolio was to grow the Middle East and Eastern Europe markets,” Krishnaa says.

Krishnaa spent about two years growing these markets before the company turned its eye to Asia Pacific.

THE IMPORTANCE OF APAC AND DESIGNING TOMORROW TOGETHER “The region provides a blend

Sanjay Krishnaa

70 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au

PROFILE| BFM

of developed and emerging economies with an enormous opportunity that exists for every industry that we serve. The amount of investments that was happening at that time and even now, Asia Pacific is becoming an important region that we can’t afford to ignore but to invest.”

Krishnaa says.

With that potential of the APAC market in mind, Cyient entered the region in 2003.

“That is when I started to grow the business here in Australia.

We made an entry by setting up a base in Melbourne in 2005 and started supporting some of the large power and gas utilities. We support them even today playing an important role in managing their networks and systems. Cyient also plays a significant role in providing value to some of the large telecom carriers in planning, designing and deploying copper, fibre and wireless networks. We partner with global telecom carriers using a framework called ‘Plan, Build and Operate’.”

Importantly, Australia is seen as one of the top regions for adopting new technologies, which plays into Cyient’s hands as it pursues its global vision of ‘Designing Tomorrow Together’.

Designing Tomorrow Together is the basis of Cyient’s brand promise to work with its clients to improve their business and the lives of their customers. It’s a value that encompasses Fairness, Integrity, Respect, Transparency and Sincerity.

A vision that has enabled the company to attract many high-networth and brand name companies who have remained as clients since they first partnered with Cyient.

To put Cyient’s retention rate in perspective, 98% of its revenue comes from existing customers. If you ask those customers, why they remain loyal, their answer will be that Cyient’s ability to use its design skills and industry knowledge to creatively help their customers do more is a primary factor.

As the company itself states: We make them more capable, more flexible and more competitive, so they get to market faster and reach further.

Krishnaa says the company has had to work hard to build this www.businessfirstmagazine.com.au

trust, but trust is a key factor in its growth and its ability to work across a client’s entire lifecycle.

“One example of this would be on the product engineering side, the design work that we do for Pratt & Whitney aero engines.

Pratt & Whitney, part of the United Technology Corporation, a Fortune 50 company. As a preferred supplier of aerospace solutions, we have earned recognition for both our innovation and productivity. As a Design-Build-Maintain partner that takes solution ownership across the value chain, we empower our clients by aligning strategically to their goals so that they stay ahead of the curve.”

“We are part of the entire design and engineering lifecycle; from concept to design and design to production,’’ Krishnaa says.

“Most of the engines that go onto the Airbus A320s and Boeing’s 777s have been provided by Pratt & Whitney. Pratt & Whitney has achieved two significant game changer milestones, they were able to increase the fuel economy by 50% and achieve significant noise reduction of about 75%.”

“In both of these areas, Cyient has played a significant role in designing these state of the art engines.”

A ROLL CALL OF CLIENTS Pratt & Whitney is the largest

customer Cyient has today. They are also investors in the company.

However, Cyient has several big name clients.

For the rail industry, Cyient provides product engineering services for companies like Bombardier Transportation, Alstom and Siemens.

HOW CYIENT GIVES BACK

Giving back to the community is important to Cyient.

Below, Sanjay Krishnaa talks about its Corporate Social Responsibility (CSR) programme.

“The philosophy, we believe is that the more we give back to society, the more it prospers, and the more it helps us grow. Under our CSR initiative in Cyient, we allocate 2% of annual profits for social causes. We have made definite forays in the area of education by adopting primary schools.

We adopted 16 schools which have over 11,000 children being educated. We also empower local communities through digital literacy, with an aim to provide high-quality digital educational resources to underprivileged students of government schools, as well as community members “The goal is to promote education including for those people who are underprivileged. It is to make society more educated and increase the ratio between boys and girls.

“Coming back to Australia we have ties with the Western Sydney University in Sydney and we employ engineering graduates. Whilst it is easy for companies like us to bring in skilled people from India or from other parts of the world, we always consider how we can create more local employment and start building local skills that can support the growth of the Australian economy.

BUSINESSFIRST MAGAZINE

71

BFM | PROFILE

“We do a lot of work with Metro Trains in Melbourne and the Perth Transportation Authority in Western Australia.

We collaborate with the rail transportation industry on three key areas: Designing the Rolling Stocks, Rail Signalling Systems and Electrification Systems.”

The other main business is around “Network Engineering” – providing end to end network engineering and systems end to end network engineering and system services to the Telecommunications, Utilities, Power and Gas industries globally.

“Our second largest customer is a large telecom carrier player from this part of the world and we partner with them on various areas and technologies, specifically around copper, fibre, HFC and wireless networks. We also support the local NBN fibre roll-out.”

In short, Cyient provides its telecommunications companies with end-to-end network engineering and design services globally.

“The nature of the telecommunications industry is that technologies are changing rapidly, bringing complexities to the way the carriers can support their customers with better uninterrupted connectivity. Cyient is positioned to adapt to these technological advancements and disruptions, innovate in this area and create value proposition that can help the global carriers meet its customer expectations.”

Krishnaa is confident that Cyient

72 BUSINESSFIRST MAGAZINE

will continue on its journey with its long-term clients.

Krishnaa is venturing big on wireless especially around small cells and 5G roll-outs, new technological transformation such as digital, IoT, SDN and others.

THE CHANGING FACE OF INDUSTRY Krishnaa provides some fascinating insights into how each industry is changing. Again, it’s all about Designing Tomorrow Together.

“What is challenging and exciting – specifically for companies in the telecom industry – is the need to create solutions that can help them be better connected to their customers and provide value. What we are seeing as a shift is that telecom carriers can no longer operate as a traditional telephony company because of the emergence of new technologies and new applications.”

“Consumer behaviour has also changed. The demand for more data and less talk time has made carriers think more innovatively.

They have also invested in new technologies to be ahead of the game, or at least maintain their current market in this competitive environment.”

Krishnaa says you’ll no longer find these telecom carriers being able to grow their revenues from mobile calls, it is the data usage that will be in demand exponentially.

“The behaviour of the telecom carriers will change dramatically going forward, mainly because

they will see that the value is not in making calls. The call will be more or less free. The survival and to be a differentiator in the market space will be by adapting new technologies and provide new services to their customers.

WhatsApp and Viber are examples of those change agents.

LOOKING FORWARD Cyient has close to 800 people supporting major carriers in APAC, and like any successful listed company, it is focused on growth.

Cyient has a clear roadmap for the next 5 years. Krishnaa says, is to create more value and to be part of their every customer’s end-toend journey.

“We have a robust strategy for growth for each industry that we operate. The plan is to grow to $1B by the end of 2020.”

Cyient is getting close to that now.

“Last year, our revenue stood at US$538M with a growth of over 13% year on year. We are aiming for around 20-25% growth year on year to get to our one-billion-dollar objective, and not all of it will be organic growth. We are looking for acquisitions globally.”

So as Cyient actively looks at acquiring companies that align to its business and its four-year roadmap, it is worth reflecting on its success to date.

Certainly, Krishnaa has been heavily involved in this success and sees a vibrant path forward based on designing tomorrow with its growing list of clients. BFM www.businessfirstmagazine.com.au

cyient.com

www.businessfirstmagazine.com.au

BUSINESSFIRST MAGAZINE

73

BFM | SME

Four ways to kickstart your small business from a first quarter lull With the first calendar year quarter done and dusted, many small businesses can run into trouble at this time of year. FactorONE, a leading turnaround funding partner, works closely with Australian turnaround specialists to help small businesses, often facing ATO bills, get back on track at this time of year.

T

urnaround specialist Steve Hogan, from Annecy Advisory, has two pieces of advice for small businesses who may be struggling, and FactorONE’s head of debtor finance Wayne Smith has two tips on cashflow.

Mr Hogan advises clients to focus on profit growth by understanding what makes money and what doesn’t – sometimes the answer isn’t as obvious as many business owners think!

His top two tips are: 1. Drive for show and putt for dough; that is, sales are meaningless without profits A successful business focuses on revenue that comes with an acceptable gross contribution.

You might chase some low value product revenue for tactical or marketing reasons, but such revenue should be at the fringes and not the mainstream of the business.

“Analyse sales and work out which of your product sales are at an acceptable margin, then calculate each product’s gross contribution. Sometimes it isn’t the gross margin percentage that matters, as the volume makes up for it – think Woolies or Coles,” Mr Hogan said.

“Select the top five product contributors, and spend more of your time with those high contribution product sales rather than those which contribute little.

“Too many SMEs talk about sales revenue rather than profit contribution. Focus on sales at an acceptable gross margin, which deliver profits and cashflow to the bottom line.

“Sales with low gross margin tie up working capital. Spend your

74 BUSINESSFIRST MAGAZINE

time making more meaningful sales with real gross contribution, and watch your profits and cashflow improve.”

2. Forewarned is forearmed – cashflow forecasting is valuable Mr Hogan said taking time out day to day to look at receivables, payables, inventory levels and bank statements, and comparing this over time, is a great exercise is coming to grips with working capital.

“This exercise will show you how working capital moves through your business from sales order to cash receipts. When I’ve done this with some clients, it has scared the daylights out of them to see that the time from order to receipt can be 120 days!

“There are trade facilities available to fill in this cash hole, which is great because if you are a small business owner knowing that your cashflow could go backwards as your sales go forwards can be alarming if not understood.”

FactorONE head of debtor finance Wayne Smith says even solid small businesses can stress from March to May, because for many there is a dip in sales after Christmas, but the bills and BAS commitments keep coming.

Mr Smith said his two tips to SME owners were: 3. Take control of cashflow “Keep on top of outstanding invoices and be quick to get on the phone to ensure trade terms are understood and adhered to.

Managing cash closely and having cash flow forecasts in place, will give you a much clearer idea if your business will be able to cope during lean months,” Mr Smith said.

“Now’s a great time to look back over the past 12 months to track seasonal trends in your business.

A close look at sales can help you decide whether some product lines should be pruned and others expanded.

“It’s also a good time to focus on supplier and customer relationships. Improving your cash position by negotiating extra time to pay suppliers or persuading larger customers to pay early can help you weather future business storms.”

4. Take a fresh look at funding options Even though business circumstances ebb and flow, many businesses keep the same funding arrangements year in and year out, regardless of whether they are the best fit for their business, Mr Smith said.

“Invoice finance is one of the most versatile funding options for startups and SMEs, because it is a line of credit secured against outstanding sales invoices, so the funding available grows in line with turnover. It also has the added advantage of not requiring the family home to be offered as security and it makes cashflow easier to manage.

“At FactorONE, we believe in looking forward rather than backwards. We have a track record of supporting businesses in turnaround and are committed to helping provide them with the best possible chance of executing their turnaround strategy and preserving shareholder value.

“It’s no secret that cash-flow – or a lack of it – is a killer for many small and medium-sized enterprises, yet there is still a lack www.businessfirstmagazine.com.au

SME| BFM

of awareness amongst business owners around working capital options beyond the major banks.

There are some great alternatives out there in the non-bank space which are worth researching.”

Improving cash flow increases the working capital available to a business, which in turn increases buying power to seize opportunities or negotiate early settlement discounts.

www.businessfirstmagazine.com.au

“These enhancements can put a business on a significantly improved competitive footing, opening up further growth opportunities,” Mr Smith said. BFM One of the leading invoice finance specialists in Australia, FactorONE is able to approve the majority of applications within 24 hours.

FactorONE provides invoice finance facilities for small to medium sized

businesses, specialising in transport, temporary labour hire, wholesale, manufacturing, printing and business services. We are part of Scottish Pacific Group Ltd (ASX:SCO), which handles more than $14 billion of invoices each year, providing debtor and trade finance funding exceeding $1 billion. www.factorone.net.au Follow FactorONE on Twitter - @ Factor_ONE and on LinkedIn’s company pages - FactorONE

BUSINESSFIRST MAGAZINE

75

BFM | PROFILE

CHANGING THE CANDIDATE EXPERIENCE With fellow executive director and co-founder Greg Madden, former accountant Greg O’Shea leads [axr], a specialist provider of search and selection recruitment services.

He speaks with Business First about why the company is so determined to change the recruitment candidate experience.

T

oday, multiple careers seem to be the norm rather than exception. However, it is rare that an individual well entrenched in accounting would turn his attention to recruitment.

Yet that is exactly what Greg O’Shea did.

“I had been in the accounting industry for some time and was questioning my next move,” O’Shea says. “I’d had mixed experiences as a candidate dealing with recruitment firms and was starting to become disenchanted with my treatment.”

“It was at this time that I met

Greg Madden, who was working with a major recruitment company, Michael Page. Greg motivated me with his insights into a dynamic and rewarding profession – “where exactly what you put into the profession you get out.”

O’Shea joined Madden at Michael Page, but 15 years ago the pair decided to branch out on their own.

“It was exciting. A chance to control our destiny and change the candidate experience,” O’Shea says.

“We knew we didn’t want to become a large, multi-disciplined business. Whilst we enjoyed

Michael Page, we wanted the flexibility to adapt processes and develop new, innovative solutions for clients. When you are large and have a big cost base you can fall into the trap of trying to be all things to all people. When you are niche and have a unique value proposition, you can choose who you want to work with.”

The pair set about creating a business that would deliver a whole new experience in recruitment.

“Greg Madden and I have always had a unique relationship built on trust and respect. We created a ‘values’ based business that

L to R: Greg Madden and Greg O’Shea

76 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au

PROFILE| BFM

provides genuine business solutions to clients problems. We had worked in systemised and fairly regimented organisations and whilst they gave us the understanding of the disciplines required to be successful, we also believed we could add further value from building niche IP and tailored solutions.”

A key part of that value system was to create an environment where [axr]’s employees have the opportunity and flexibility to work in a way which encourages them to build a personal relationship that goes beyond a single business interaction.

The pair has always taken a controlled approach to growth with a focus on sustainable markets.

They were also lucky to attract a number of key clients who supported the company and helped them get through the first two years.

CREATING VALUES IN A GROWING BUSINESS A major factor in [axr]’s success has been the underlying values supporting the business.

“On day one of our business, both Greg and I wrote down separately the five things we wanted to achieve with the business. Interestingly enough, both lists were virtually the same. “We may have had some different ordering and specific wording, but it largely came back to flexibility, focusing on a single market, having fun, operating with integrity and ethics, and reward for all employees. We thought it was pretty amazing at the time but, even more importantly, we still hold them true today.”

These values are demonstrated in [axr]’s approach to clients.

As O’Shea notes, the art of good recruiting is having the skills and network to really understand a client’s needs – and that relates to both the employer and the employee.

“We work really hard with our clients to build a competency profile based off some fundamental questions,” he says. “Once you have that profile, you’re in a position to market the opportunity with a compelling offering. Many of the best people are already entrenched in an organisation, so if they’re going to make a move, www.businessfirstmagazine.com.au

it needs to be attractive and a step up. Most people don’t want the same role under a different company name.”

Having access to the best people to present potential ideas is critical. This is the real value of market longevity and specialisation, fostering personal networks and a trusted brand. O’Shea says, “you can’t underestimate the importance of a candidate knowing and trusting your brand and who you are. Importantly if they are not interested it accesses the power of personal referral to other potential candidates.”

This approach positions [axr] as a genuine business partner with its clients and candidates, representing a point of difference in the market.

FOUNDATIONS REMAIN AS TIMES CHANGE Given its unique perspective and values based business philosophy, [axr] remains a stable force in an ever-evolving industry.

“We have seen the rise and fall of small and large recruiters, the development of internal recruitment teams, offshoring of skills and emerging technologies.

These have all created a much more fluid recruitment environment,” O’Shea says.

However the key to the company’s success has remained the same over its 15-year journey – never straying from the importance of the client relationship.

“Whilst technology has improved efficiency the key success factors have not changed a lot. Our business is based around relationships; building trust, treating people with respect. As a business we have over 70 years recruitment experience in just three of our key people. The IP and networks these individuals have is invaluable and offers both clients and candidates a fantastic platform for recruitment advice.

Technology has been an enabler.

It has made information on people more available through the likes of Linkedin and candidate engagement more immediate through job boards.

THE ART OF MATCH MAKING Personal chemistry is a key

influence in matching employee with employer. Whilst there are many other factors, O’Shea says if you know the client and candidates well it does make it easier.

“This is the art, knowing both parties very well, which takes a lot of time and experience. Our years of building networks also plays a key role and the “six degrees” of separation means you always know someone who knows someone.”

So how does [axr] go about match making?

“We are very big on competency profiling. If anyone out there is looking to recruit, there are a number of questions you need to ask. The two most important are 1. What challenges will the person face in this role / organisation?

2. How are you going to measure their successful delivery? If you can answer this, you are in a strong position to know what you are looking for. With the client we partner to develop a compelling value proposition to market to candidates. The client wants the best person – who is usually highly recognised, challenged and rewarded in their current business.

To attract them you really do need to offer a compelling career move.”

This is particularly true in the very competitive fight for talent in the Accounting & Finance sectors.

“In Australia, we are fast approaching a skills shortage.

There has been a decade of under investment in graduate programs coupled with offshoring of roles. If we are not careful we will need to import talent for the more senior roles.”

That is a concern in itself, so O’Shea believes it is important to develop key relationships to create barriers to entry, which in turn puts [axr] in a stronger position moving forward as a niche provider.

“As the market becomes more skills short, we do believe that clients will need to migrate more and more to niche specialist service providers – to secure their best talent,” he says.

“To us culture is king. If the chemistry isn’t right the recruit is destined to fail. Our experience shows that great people pick up concepts quickly, look to contribute proactively and become long-term

BUSINESSFIRST MAGAZINE

77

BFM | PROFILE success stories. We also feel in Australia there is a fear of hiring someone who is a little “outside” the box. People tend to love the safe, easy hires – same industry and role. We believe this is at their peril and our job is to open up their thinking and focus on competencies and fit rather than just a skills ‘plug and play’.

This leads to the concept of market mapping.

WHAT IS MARKET MAPPING? As part of its service offering [axr] offers market mapping.

Clients utilise it for a number of reasons; part of a mandated search process, to talent pool for future requirements, and to benchmark and understand what their competitors are doing.

“Market mapping helps a business understand what their competitors do and what their talent pools look like. This helps question their structure and put strategies in place for the future.

They are important differentiators

and key to our business service offering,” O’Shea says.

LOOKING FORWARD There is a lot in the pipeline. [axr] has developed a number of programs to mentor candidates and work with them to progress through their careers.

“We have developed a number of key programs aimed at educating future finance leaders on successful career management. Both our CFO Incubator and Finance 2 Leadership programs have been well received.

The market has been very good to us, so this is a way in which we can give back,” explains Greg.

“We have grown a successful Transformation business in 12 months and will be looking to grow this business further. Many senior Accounting & Finance professionals play a key role in the management and delivery of organisational transformation programs. We were receiving more and more requests from clients to assist in securing Transformation professionals. It

has been a natural fit.”

Finally, they are also exploring stronger international partnerships particularly with a focus on China and India. These are the emerging demand areas on the Australian business landscape.” [axr] is focused on evolving, not becoming complacent and will work with its clients to improve their talent pools and help professionals successfully manage their careers.

Having worked with each other for 20 years and been in business together for 15, this pair of Gregs have a relationship still steeped in mateship.

“If I look back at the five things we wanted to achieve, we can tick them all off. To me the biggest success has been to build a business that gives people the freedom and support they need to be successful.” Says O’Shea.

That success all comes down to trust and respect – built off five fundamental values that hold true 15 years later. BFM

ENHANCING PERFORMANCE WITH TALENT FINANCE, ACCOUNTING & TRANSFORMATION RECRUITMENT | SEARCH | ADVISORY SEARCH

RECRUITMENT & SELECTION

INTERIM & CONTRACTING SOLUTIONS

MARKET MAPPING

TALENT DEVELOPMENT & INSIGHTS

TEAM STRUCTURE ADVISORY

For further information on [axr] contact our Directors, Greg O’Shea or Greg Madden (02) 8243 1317 or email info@axr.com.au

www.axr.com.au 78 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au

FINANCE| BFM

WHY AUSTRALIAN SMALL BUSINESS LOANS ARE BEING REJECTED BY BANKS When it comes to acquiring finance for your business either for start-up or expansion, traditionally banks have been the popular option, however with more than half of SME loan applications being rejected by banks every year, bank loans are proving to be yet another hurdle for small businesses. By Mark Hearl, finance expert and CEO of Sprout Funding

W

hether it is to fund start-up costs, support business growth or tie you over when trading through rougher times, businesses have conventionally turned to banks as a trusted and known source of additional finance. However, securing supplementary finance is not always an easy and straight forward process with the big banks.

The market for SME lending in Australia is widely regarded as being potentially $150 billion a year, however only $77 billion a year is lent to SMEs in Australia with the big four banks lending the bulk proportion at $70 billion. This indicates that only half the market is successful in accessing capital each year. Even more frustrating is that banks will not always disclose why the loan application was rejected.

So why are these institutions adding to the rollercoaster ride that is starting a small business? Below are some of the most common reasons as to why Australian small business loans could be rejected by banks.

1) Poor credit - Poor credit is often taken as a sign that the applicant either doesn’t take their debt www.businessfirstmagazine.com.au

obligations seriously, or takes too many risks. Unfortunately for small businesses, credit evaluations extend beyond the scope of the company and into the personal life of the business owner as well. For that reason a company that has a good reputation of paying its bills on time can still be rejected for an SME loan if the business owner has a history of poor personal finance.

2) Poor documentation - Small business loan applicants often struggle with providing sufficient documentation in the following crucial areas – cash flow and an insufficient business plan. While established businesses have tax returns, years of sales and a reasonable realistic projection of future earnings based on their history, a new business, however, is commonly unable to provide proof of earnings or demonstrate that a year of good sales was anything other than an anomaly.

Meanwhile a hastily thrown together business plan may not address critical issues the bank will look for in its evaluation, including how the applicant will address the industry competition or what sets the business apart.

As a small business owner you are accountable for presenting these ideas articulately to be eligible for consideration of a loan.

3) Not enough collateral - A common mistake that business owners make is attaching a higher value to their potential collateral than the bank is willing to accept and therefore applicants may not have enough resources to secure a loan for the desired amount. Business owners need to be realistic in what the bank can provide for them, often it is wise to make a compromise here in order to be approved.

4) Start-up business with no track

record – Seeking bank finance with no past financial history or credentials to prove can be a significant hurdle in SME loan approvals from banks in Australia.

However, a positive tip is to exude passion for your business in the process in order to boost the likelihood of a loan approval.

5) Existing High Debt Levels – Outstanding debt obligations can indicate that the business owner is not proficient at managing money, or the business is struggling with cash flow. Similar to bad credit this demonstrates that the applicant either doesn’t take their debt obligations seriously, or takes too many risks.

For SMEs wanting to maximise their chances of gaining finance, other finance options like exploring alternate small lenders, can help business owners regain control over their financial situation. Alternate lenders can provide fast turn-around time for approvals and capital, efficient online application process, flexible loan terms and cash flow based repayments, which is empowering for business owners and ensures they aren’t feeling pressured by banks. BFM Sprout Funding provides funding for small businesses in Australia. Sprout Funding is a different kind of finance company, designed to meet the specific needs of small businesses.

The difference is noticeable right from the start. From having flexible terms, to approval criteria tailored to small businesses the company champion growth by securing funding easier, faster and more manageable. Sprout Funding has two main products; revenue based funding and small business loans.

Both products are designed to better represent the needs of small growing businesses.

BUSINESSFIRST MAGAZINE

79

BFM | INNOVATION

WHAT INNOVATIVE BUSINESSES DO DIFFERENTLY Innovation has been at the forefront of the national agenda for some time, increasingly so since Prime Minister Malcolm Turnbull ushered in the “Ideas Boom” in late 2015. At every level of every business, whether SMEs, not-for-profits, start-ups, sole traders or Fortune 500 listed companies, innovation is essential to stay relevant and keep ahead of competitors. By Chris Brell

T

he 2017 GiveEasy Innovation Index was released in May, supported by Westpac, Australia Post and the Australian Graduate School of Management (AGSM). The Index measures innovation in the not-for-profit (NFP) sector, assessing eight vectors of innovation: internal collaboration, organisational velocity, culture, rewards and recognition, technology, external collaboration, innovation focus and stakeholder centricity. Based on self-assessment of these eight pillars, a total innovation score is calculated. While the Index focuses on the social sector, its research is useful to all industries.

Westpac is dedicated to supporting businesses and individuals to embrace innovation, including through its support of the Innovation Index to help the NFP sector and its Businesses of Tomorrow program, which is supporting 200 businesses to shape Australia’s future.

The 2017 Innovation Index saw a significant increase in innovation performance in Australia’s NFP sector, up 9 per cent since 2016.

Since the first Index in 2015, innovation has increased each year, demonstrating how the industry is deepening its understand of the value of innovation. The greatest growth was seen in Stakeholder Centricity, which rose by 11.5 per cent since 2016. Our vision is to be one of the world’s greatest service companies, and as customer expectations morph, we aim to harness innovation to find new and meaningful ways to address their needs. Stakeholders should be at the centre of all businesses and it’s impressive to see NFPs have embraced this.

80 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au www.businessfirstmagazine.com.au

INNOVATION| BFM

Within the NFP sector, the key barriers to innovation were identified as Access to Funding, Culture and Organisational Velocity. The NFP sector faces intense competition in a crowded marketplace, as is the case in many sectors. Innovative ways of thinking to set the business apart from competitors is often the key to winning business and attracting new customers. Being innovative in regards to stakeholder centricity can be the difference in

www.businessfirstmagazine.com.au www.businessfirstmagazine.com.au

maintaining those customers.

Innovation is often not seen as a business priority as it can be perceived as costly and timely with a low return on investment.

Yet, innovation is essential for preservation and to adapt and thrive in the new economy. Too many businesses and industries have been left behind by digital disruption as they underestimate the risk that new ventures present.

Businesses that scored low across measures of innovation reported an absence of a clear strategy and senior leadership vision as a major barrier to innovation, the greatest barrier after inadequate funding.

This demonstrates the importance of executives to prioritise innovation, and make innovation central to the businesses core strategy. However, innovation should not only be implemented top-down but also needs to come from the bottom-up, creating a workplace environment where staff at every level feel empowered to do things differently and present their ideas. This is where the culture of the organisation is critical.

Creating the right environment where collaboration and innovation thrives will foster a sustainable innovation agenda creating value beyond immediate needs. Staff who feel encouraged to think laterally and take calculated risks feel more satisfied, reducing turnover, and ensuring collaboration thrives.

Often when businesses consider improving innovation, the starting point is upgrading technology, which is quickly dismissed for being too expensive.

It is, however, also important to consider technology as an enabler of innovation, not the sole or key driver. Yet, there are many cost effective ways to implement innovation which are often overlooked. Culture, collaboration and customer service can be the difference between a business that remains stagnant and falls behind competitors, or the business that expands into new segments and reaches more customers.

Business collaboration can create new opportunities to drive shared innovation and can be an important source of support, advice and access to new networks.

Westpac’s Businesses of Tomorrow

program is designed to help 200 Australian businesses network and collaborate, as well as benefit from the opportunities that Westpac’s connections can provide.

An example of a business that incorporates innovation into every aspect of its operations is Thankyou. Thankyou was recognised for its innovation as it was ranked the top innovator for 2017 based on peer review in the GiveEasy Innovation Index.

Thankyou was founded on an innovative philosophy; what if the profits from purchasing everyday items like bottled water, food and body care products could go towards the millions of people living below the poverty line?

Nine years later and Thankyou has continued to think differently, and has now expanded to produce over 50 different products and has launched a baby range to help fund child and maternal health programs around the world.

“Innovation to me means challenging the system; the way things have always been done before. We see a lot of people making ‘improvements’ on ideas but true innovation is about forging a new path and going boldly where others haven’t before,” said Thankyou co-founder and Managing Director Daniel Flynn on how Thankyou stays ahead through innovation.

“To innovate you’ve got to be prepared to go big and fail hard, then learn and go again. You need to remove the culture of fear that sits around failing, and as a team be prepared to live outside your comfort zone every day,” said Daniel.

Innovation is a constant learning curve. At Westpac we’re offering support to businesses through our Businesses of Tomorrow program, grants for NFPs through the Westpac Foundation and the Davidson Institute produces resources to help businesses expand their innovation capacity.

We look forward to continuing to support the GiveEasy Innovation Index and hope to see even greater increases in innovation in the NFP sector in 2018.BFM Chris Brell is Head of Industry Innovation at Westpac Group

BUSINESSFIRST MAGAZINE

81

BFM | FEATURE - FRANCHISING

Getting the Right Franchisee, Look for Character Rather Than Skill Set In the age of mobile food vans, home service products and an army of redundant employees looking to buy a job, Australia is going through a franchise boom.

T

here are 79,000 franchise units in Australia and that figure is growing. Nearly half a million Australians are employed directly in franchising and the annual sales turnover for the country’s entire franchising sector is estimated at $144 billion.

While the franchise market is flourishing, there are still plenty of disgruntled franchisees who have entered a legally binding franchise arrangement only to find that it didn’t work for them. The question then becomes, is it the system that didn’t work, or did the franchisee think the system would do ALL of the work and perhaps wasn’t cut out for business ownership in the first place?

An industry survey in 2015 suggested that the

82 BUSINESSFIRST MAGAZINE

number of franchises who sell up because it’s not working out as they hoped is between 11 and 18 per cent.

Research also shows that half of franchisees go into a business based on their ‘gut feeling’ without seeking any legal advice. Franchises can fail more often than independent small businesses and that’s why website based support groups have been set up for angry and frustrated franchisees such as the American based http://www.unhappyfranchisee.com/ Whether they’re unhappy with the system simply because they want more freedom, or their business is suffering and they don’t know why, disgruntled franchisees aren’t good for the franchise. That’s why www.businessfirstmagazine.com.au

FEATURE - FRANCHISING| BFM

it’s important for any franchisor to check the integrity and character of a potential franchisee. This can be more revealing in terms of whether or not they’ll be successful than the skill set of the individual alone.

Who is Most Suited to be a Franchisee?

Franchisors often believe that the more franchises they sell the better off they are. That kind of thinking can be short sighted and cause issues in the long run. Franchisors would be wise to take a more analytical approach and focus on the longevity of the enterprise rather than clocking up sales of another franchise. The way to do that is to ensure you only bring on individuals who are suited to the role.

The ideal franchisee is someone we would consider to be a cross between an intrapreneur and an entrepreneur. What that means is that they have similar characteristics to a traditional business owner, and a similar way of thinking about things, but are happy to do their work within a system, as opposed to creating their own system All too often people will buy into a franchise because they have concerns about starting their own business and think that the system of the franchise will make them successful. They’re looking at the system as a safety net and risk not taking as much responsibility for the results they do or don’t create; this is one thing www.businessfirstmagazine.com.au

that can create the disgruntled franchisee. They’re blaming the system for not working; when the reality is they weren’t prepared to be a business owner. Successful franchisees are those who see the opportunity as a way of leveraging the established system of the franchise but will take full responsibility for growing their business.

RECRUITING ADVICE FOR FRANCHISORS Anyone can display their best side during an interview, so I suggest you set up several hurdles for the potential franchisee to jump over. Specifically, get them to make commitments and then observe whether or not the person does what they say they are going to do. Are they honest? Ask questions to gain an understanding of their underlying attitudes; this is a valuable skill in interviewing that I recommend you practice and seek training to improve. It is very easy to make mistakes in communication, and a mistake in interviewing can allow real problem people to get in the door of your business.

In addition to a traditional style of interview, there are a number of tests and assessments you can use in order to increase the data you have to support your decision. These range from simple personality tests of 25 or 30 questions through to thorough behavioural assessments of 300 or more questions. Do a bit of research and find one that you believe to be thorough; some tests are better than others. The important thing is your understanding of what they tell you about the person.

INDICATORS TO SUGGEST SOMEONE MAY NOT MAKE A SUITABLE FRANCHISEE During the selection process, agreements and commitments will be made by the potential franchisee. It could be to call at a specific time or attend a meeting or to review documents for a discussion.

If the potential franchisee shows up late or hasn’t done any research they said they would do, these are what I call ‘red flags’ for a potential franchisee. This person hasn’t done what they said they would do. This is an indicator that you ignore at your peril. It doesn’t tell you definitively that they are not suitable. It does show you that it’s worthwhile observing if this is a consistent behaviour. Maybe draw the process out a bit so you can see if it is normal for them. Then you can decide if that is ok with you.

Throughout the entire process, including during the interview, be an observer of the potential franchisee.

Do their actions line up to the common goal which has been agreed upon within the franchise system? If not, then maybe this isn’t the right opportunity for them.

Remember an ideal franchisee will have good communication skills, be willing to reach out for help and cooperate with the main franchise organisation. BFM Mike Irving offers unique and practical insights into leadership, communication, HR and recruitment processes. For information on Mike Irving’s workshops covering these topics visit www.advancedbusinessabilities.com

BUSINESSFIRST MAGAZINE

83

BFM | PROFILE

Grow Capital managing director Gus Gilkeson

BRIDGING THE KNOWLEDGE GAP In a time where tailored solutions and bespoke services are part of many business operations, the process for securing funding can seem broad and generic – often causing difficulties for those looking to grow their opportunities.

G

row Capital is a family owned Australian business which aims to bridge the information gap between the funders with the people who want that finance. In the process, Grow Capital is linking business owners and individuals with appropriate funding opportunities that may not easily be known or considered.

“We build personal relationships with our clients and do what it takes to find the best growth solution, even if we need to negotiate on their behalf with suppliers to get an outcome,” explains Grow Capital managing director Gus Gilkeson.

“We work to educate our audience with tailored finance knowledge to help them make better financial decisions for their business, wealth and lifestyle.”

Gus has an extensive background in strategic business development and has seen the challenges faced by small businesses first

84 BUSINESSFIRST MAGAZINE

hand. Firstly by watching his parents work the land on the family farm and then by working in a traditional business in a small town. He balanced these experiences by entering into specialist studies in finance.

These experiences combined eventually led to his subsequent employment with several major banks and lenders, where the ideas for Grow Capital first seeded.

Working in these institutions, Gus saw the difficulties SMEs had in securing business finance and believed he could make a difference.

“At Grow Capital we want to make the lives of SMEs easier,” he says. “It’s common to see an SME that needs a specific type of lending, but doesn’t believe their current bank or funder can provide it. In which case they either have to go without or try to find it elsewhere. So there was capability to create this service.

“That’s where it pays to have the education and knowledge.

That business may have an opportunity with their current funder and not even know how to go about researching or securing it. Equally, they may want to go to a competitor, or possibly find a combination of different solution providers. It’s about working towards a solution to get the mutual outcome that they all want.”

Of course, this problem is not unique to SMEs. As Gus notes, there is currently some two million actively trading businesses in Australia and it is believed that approximately 35% of those are dissatisfied with their financial arrangement.

While those numbers may be significant, Gus doesn’t seek to blame any individuals. The process of understanding the financial needs of a business or individual takes time and resources, and is www.businessfirstmagazine.com.au

PROFILE| BFM

something of a specialist skill.

However, without that intimate knowledge there is a knowledge gap and disconnect between the two parties.

“We saw the opportunity to use our experience and skills – along with some new technology in the space – to assist clients and funders from a variety of sectors to get better outcomes. It’s a challenging area without that knowledge, and it can consume a lot of time that would arguably be better spent actually growing the business.”

The value of technology is clearly important in this space; yet Gus says the ever-changing needs of the sector means they are continually building and adapting product to better suit the clients.

At last count, Grow Capitals uses more than 15 different technology solutions to cover everything from background checks and marketing communication through to data collection and validation. Even then there is a need to custom

integrate and develop to ensure it provides a useful format that can help make decisions faster.

While the technology sphere is complex and continually moving, the approach to the client is established and strong.

“We have a simple four step process in order to get to know our clients and be able to better match them to the right solution,” explains Gus. “We start with the word ‘understand’. We talk to the client, collect data and find out what they are really after. We move to ‘arrange’ at step two where we go out and seek offers for financing – and that leads to step three where the client chooses the most appropriate ‘fund’. We then stay with the client to review the business as it grows and changes – which we like to call ‘nurture’.

“In short – we understand, arrange, fund and nurture.”

Underpinning these steps is an extensive amount of skill, knowledge and industry contacts.

Grow Capital works hard with the client, asking the right questions and collecting the right information to take to market – while their access to a full range of banking products from traditional banks and second tier regional banks right through to funds’ managers and private and specialised lenders ensures choice for the client.

It is a personalised and clientcentred approach built off family business values – something that drives Gus’ decisions into the future.

“I believe there is a lot of growth to come in our business with a huge amount left to achieve – but we know we need to remain faithful to always putting the client first. We will always seek ways to improve systems – particularly in providing faster service and improved access to funding – but it will always come back to knowing the client and making sure the lines of knowledge and communication and clear and open.” BFM

Matching Business, Investors & Individuals With The Finance Solutions They Need To Grow.

Whether you’re a business owner wanting to survive or thrive, a tycoon seeking the next investment or you simply want to purchase your first home, we will help you find and fund your opportunities faster.

grow-capital.com.au

GROW CAPI TA L BUSINESSFIRST MAGAZINE

85

BFM | INVESTMENT

86 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au www.businessfirstmagazine.com.au

INVESTMENT| BFM

CAPTURING VALUE IN BLUECHIP MINING STOCKS

By Gabriel Yi, Managing Director of M3 Investment Group

I

nvesting in blue chip mining stocks requires not only a solid understanding of the supply demand factors of the underlying commodity but also significant patience. Investors and traders can all appreciate that equity markets are irrational at times and valuations can distort from changing sentiments. However, this distortion tends to be much more prominent in the commodity markets. Iron ore, Steel Rebar, Oil, Copper, Aluminium, Gold – they all tend to overshoot either to the upside or downside depending on sentiment. They are all so reactive to global data such as the PMI and GDP reads from China, the US stock pile data of crude oil inventories, OPEC movements, global uncertainty and foreign exchange volatility. With so many variables in determining commodity prices, it isn’t a surprise that distortion exists in the commodity markets. Now, the whole point of risk minimisation is to reduce the potential variables as much as possible before making an investment and one way to do this is to invest in companies with strong balance sheets, free cash flow and a proven track record of surviving through many troughs in the mining cycle. These are the bluechip mining stocks.

Some examples of blue chip mining stocks that the M3 team has targeted and continue to invest for clients include BHP Billiton (BHP.AX), Rio Tinto (RIO. AX) and Bluescope Steel (BSL. AX). Now before delving into the fundamentals of each company, we first evaluate the wider commodity backdrop and identify the drivers of commodity price movements, specifically iron ore and steel rebar.

We have seen iron ore hit US$94.50 a tonne in February 2017 but has since experienced sharp drops

www.businessfirstmagazine.com.au

due to fears of further tightening of credit in China, possibilities of a ramp up of production from global iron ore producers and the potential cessation of the restocking process amongst Chinese steel producers. The iron ore price has since dropped below US$55 a tonne. So, what could be the direction of iron ore prices in the coming financial year?

Well, the Chinese government has been active in its crackdown of pollutive steel makers since 2016. They have continued to introduce capacity cuts to control the smog pollution in China and their intention was reaffirmed in May when it was announced that Tangshan city in northern Hebei, the biggest steelmaking region in China, was going to conduct a campaign between May 9 to 31 to suspend and heavily fine the steel mills that fail to meet emission standards. This pushed steel rebar prices up on the potential of tightening supply, and iron ore prices followed suit. Amongst this tightening supply backdrop, the wider demand story seems to remain intact with China’s “One Belt, One Road” initiative and their ongoing infrastructure investments into urbanisation projects.

President Trump’s proposed “$1 trillion Infrastructure Plan” also adds to the demand story if it actualises.

Now, within the iron ore and steel sectors of the ASX, it is our view that BHP Billiton, RIO Tinto and Bluescope Steel offer positive long term outlooks due to their low cost, high quality assets and significantly improved balance sheets. After surviving the mining sector slump which culminated in multi-year low share prices in early 2016, the management teams have executed cost cutting strategies to substantially reduce the cost

of production. The free cash flow for BHP and RIO remains elevated which resulted in strong dividend payouts for H1 – FY 17 and we expect high dividend payouts again for H2 – FY 17. BHP offers the most diversified commodity exposure, leveraged to iron ore, copper, petroleum and coal. RIO has high quality iron ore, copper and coal assets, while BSL has restructured itself to become a low cost, high grade steel products company with strong global exposure.

Bluescope’s Northstar asset has maintained its foothold as a top steel mill in North America and it has continued to benefit from favourable US steel spreads.

At M3, we believe that a top down approach is the most effective strategy when investing in bluechip mining stocks. It involves first identifying the commodities that are likely to have positive tailwinds and then targeting the most fundamentally healthy companies within those sectors. It is important to remember that mining stocks are cyclical in nature, so just conducting company specific research can leave investors vulnerable to being caught on the wrong end of the cycle. BFM M3 Investment Group is a private wealth management firm specialising in Australian equities. The proactive investment approach implemented

by M3 has been designed to help investors capture value in volatile markets. Visit us at m3group.com.au for more information and register your details for a complimentary portfolio consultation.

The content in this article has been prepared without taking into consideration any individual’s particular objectives, financial situation and needs. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

BUSINESSFIRST MAGAZINE

87

BFM | ACTIVISM

Investors flex their muscles to shape corporate Australia A new wave of shareholder activism is sweeping investment markets globally with the aim of shaping corporate activity to better consider risks that, for far too long, have been considered non-financial. By Simon O’Connor.

W

hether it is to fund start-up costs, support business growth or tie you over when trading through rougher times, businesses have conventionally turned to banks as a trusted and known source of additional finance. However, securing supplementary finance is not always an easy and straight forward process with the big banks.

This next wave is not about aggressive board take-overs, but instead getting our leading companies to better consider the interdependence between their business and broader society, environment and economy.

At the May AGM of the world’s largest oil company, ExxonMobil, a majority of shareholders voted against the board in support of a resolution forcing the company to stress test its strategy against climate change. The company will now be required to report on how its strategy will allow the company to adapt to a world shifting towards a cleaner energy future, under the Paris Agreement ratified by 195 countries.

Institutional investors, including some of the world’s largest such as BlackRock, have decided it is time to push harder when companies refuse to acknowledge the very real risks to their business from environmental issues such

88 BUSINESSFIRST MAGAZINE

as climate change. Far from a soft issue at the periphery of investment market concerns, such issues have now moved into the direct sights of institutional investors concerned about the dramatic disruption occurring in the global economy.

Such is the concern by investors, that similar resolutions have been passed by companies’ shareholders including BP, Shell, Anglo American and Glencore.

This wave of investor activism is now hitting Australian share markets as well.

Many of Australia’s largest institutional Investors are increasingly willing to flex their muscles to ensure their long-term investment value is protected and grown in our increasingly uncertain world.

Today in Australia, 1 in every 2 dollars is invested by investors who are committed to considering environmental, social and corporate governance (ESG) issues and opportunities in their daily investment decision making. It has become clear to investors that for companies to survive and thrive in the 21st century, the consideration and management of sustainability issues – work force, community, environment, regulatory environment, supply chains, human rights and beyond

– is ever more critical. Companies that are poor at managing their work force, their customers and their environmental impacts, send a negative signal to markets that they may also be poor at delivering on a strategy that delivers future strong financial performance.

A strategy built on underpayment of workers is a flawed, short term business strategy. A strategy relying on concealing the emissions of vehicles to by pass regulations is one that can only pay off until revealed. A board of a fossil fuel company who remain in denial of the political shift towards stronger action to limit fossil fuel emissions present a problem for shareholders. A business whose products cause significant social harm or poor health and who pass social costs to governments are very likely to see themselves regulated in order to limit those harmful activities.

In the past, shareholders may have sat back and left matters in the hands of boards to direct such companies. Today we are witnessing significant growing attention by some of the largest investors globally, willing to flex their ownership muscle to ensure those directors are being managed in a way that is consistent with growing shareholder returns over the longer term, not just the term www.businessfirstmagazine.com.au

ACTIVISM| BFM

of the latest CEO. For these reasons, boards of Australia’s largest corporations have become ever more used to being questioned on the way they are considering these factors – traditionally seen to be nonfinancial issues – by institutional investors.

Board gender diversity, climate change, culture of an organisation, social license, political risks, occupational health and safety, appropriate protection for employees and beyond have become common speaking points at company meetings, analyst briefings and even AGMs. Recently, at the AGM of the Australian gas producer Santos, a climate change resolution was put forward, similar to the one recently www.businessfirstmagazine.com.au

supported at the ExxonMobil AGM. The resolution sought a commitment from Santos to stress test its operations under a scenario where the business’ fossil fuel based emissions were seriously curtailed in line with the Paris Agreement commitments.

The resolution was ultimately unsuccessful. But does this mean Australian investors are not concerned about how ASX listed companies are managing climate change risks?

Far from it.

In the weeks prior to this AGM, Australia’s largest investors met with Santos on numerous occasions to press the company on the need to do more to prepare for this inevitable shift towards cleaner energy sources. The pressure by

investors was sufficient that the company released a statement one week prior to the AGM committing to deliver the vast majority of what was asked for in the resolution.

Such corporate engagement on environmental and social grounds is the quiet rising tide in financial markets around the globe right now, and the boards of Australia’s largest companies are rapidly becoming aware that investors expect them to properly manage shareholders’ interests for the long term.

The lesson for business is simple – get on the front foot. Failure to consider a full range of long-term risks is bad for business, and will increasingly result in investors knocking on the door to drive action. BFM

BUSINESSFIRST MAGAZINE

89

BFM | HEALTH

90 BUSINESSFIRST MAGAZINE

www.businessfirstmagazine.com.au

HEALTH| BFM

SUDDEN CARDIAC ARREST IN THE WORKPLACE…WHAT WOULD YOU DO? For too many of us, the answer is “I don’t know” and the reality is that without a shock from a defibrillator (or ‘defib’) the outcome is most likely fatal.

T

here are some things you expect to see when you walk into your office in the morning. Stacks of paper cluttering up your ‘in tray’, notes about employees cleaning their dishes, and left over coffee cups. But imagine if you came in to see one of your employees collapse to the ground. As you rush to their side, you see that they are unconscious, not breathing and with no pulse.

Would you know what to do?

For any employer, the health and safety of employees is a top priority.

While you might be ready to treat small things like a standard paper cut, many workplaces may not be in a position to manage a major risk facing many Australians today – sudden cardiac arrest.

WHAT IS SUDDEN CARDIAC ARREST? Sudden cardiac arrest is caused by a malfunction of the electrical impulses that go the heart, stopping it from beating. This is different from a heart attack which is caused by a blockage of the blood flow to the heart.

Many people believe what happens in a heart attack is that the heart stops beating, but this isn’t always the case. A blockage does cause pain and serious symptoms, but it won’t usually cause swift death in the way that a sudden cardiac arrest can.

Estimates suggest that around 15,000 people die unexpectedly in Australia from sudden cardiac arrest every year, equating to approximately 10% of all annual deaths[1] in Australia.

Sudden cardiac arrest is far more dangerous and unpredictable than a heart attack. When somebody has a heart attack, the patient can be awake with their heart still beating, but a victim of sudden cardiac arrest will be completely unresponsive and with no breathing.

www.businessfirstmagazine.com.au

For the best chance of recovery from sudden cardiac arrest, CPR and a defibrillator shock needs to be administered within the first few minutes of somebody collapsing. For every minute that passes without defibrillation, the chance of survival reduces by 10% - potentially making a wait for an ambulance without treatment fatal for the patient.

CAN I USE A DEFIBRILLATOR? The defibrillators that you see on TV - with the metal paddles that need to be rubbed together and create a loud kathunk sound when administered - are not what you would be likely to use, despite at least 17% of Australians believing this to be true in recent national consumer research carried out by St John.

In fact, the defibrillators that you’re more likely to see in offices or public areas contain two electrode pads that are used to “sandwich the heart” and detect if a shock should be safely administered to return the heart to its regular rhythm. It might not be quite as dramatic, but we can assure you it is effective.

Despite the belief held by 42% of survey participants that you require expert training to operate a defibrillator device, they can actually be used by anyone - – most modern defibrillators have simple audio instructions that can be followed by anyone.

In the event of a sudden cardiac arrest the correct response follows the ‘DRSABCD’ (Danger, Response, Send for help, Airway, Breathing, CPR, Defibrillation) model with CPR administered prior to a potential shock from a defibrillator. This is why it is recommended that a person who is up to date with their First Aid training and confident in their ability to perform CPR first takes the lead.

WHAT YOU CAN DO If you’re surrounded by young, fit and healthy employees then it’s easy to think you’re not at risk, but sudden cardiac arrest can happen to anyone, anywhere, at any time.

It does not discriminate. It is not enough to cross your fingers and hope that it never happens in your office - being unprepared for sudden cardiac arrest can cost people’s lives.

Ensuring that a sufficient number of employees – or ideally, all – are trained in current First Aid practices is the first step towards having a prepared office. As such, it’s just as important to know that having a defib device in your office does not remove the need for adequate First Aid training.

By law, employers are required to provide a safe working environment – this includes having the correct equipment, procedures and facilities needed to uphold a safe workplace for all employees at all times.

While a defibrillator unit is not required by law like fire extinguishers and basic First Aid kits, their benefits can literally be the difference between life and death.

You may never know when a sudden cardiac arrest will strike, but there are some simple steps you can follow to ensure your employees stand the best possible chance of surviving a workplace emergency. Don’t wait until it’s too late to make your move – install a defibrillator and train as many people in your workplace as you can in First Aid. BFM Anthony Hasphall is the Training Manager for St John Ambulance Victoria.

Businesses can visit the St John Ambulance Victoria website for more information. With defibrillators being fully tax deductible assets, there’s never been a better time to get prepared.

BUSINESSFIRST MAGAZINE

91

BFM | HEALTH

Gut health and smart decisionmaking When you make a call on a decision, choosing to “go with your gut”, it’s likely you’re getting signals from your second brain – the one that’s hidden in the digestive system.

By Jo Formosa.

T

he gut does more than just break down food, absorb nutrients and expel waste.

It’s a mass of neural tissues and important neurotransmitters, responsible for everything from determining mental health, immunity, weight gain, mood and so much more.

Some 80 per cent of the traffic along the vagus nerve is sensory information sent up to the brain by the body, rather than vice versa and the humble gut has the highest concentration of mood-altering transmitters than anywhere else in the body.

If your gut isn’t functioning properly you won’t be operating at your peak– not by a long shot. It’s not more time in the day, stronger willpower or more sleep that will do the trick either. To increase success, what you need is a smarter gut.

Just look at weight gain as an example of how this works.

When you bring the enteric nervous system (or the brain in your gut) in line, so it controls your food choices, it will make the right decisions. For example it will override sweet or highcarb food addictions initiated by bacteria in your gut. By fixing the digestive system, cultivating a gut environment that allows good

92 BUSINESSFIRST MAGAZINE

bacteria to flourish, improving nutrient absorption and reversing the brain’s neuro-adaptation to toxic or unhealthy foods, the enteric nervous system can heal and start functioning how it should.

As your gut becomes more intelligent, its communication with your brain becomes stronger and clearer. Then your conscious mind will begin to remember, and intuitively know, which foods are good for you, and which aren’t.

Meanwhile the enteric nervous system begins to reassert its

control and your body will respond appropriately when you fuel it with the wrong things. You might feel tired after a meal, bloated or even sick as your body will be rejecting the foods that aren’t beneficial for optimal functioning.

If the gut isn’t working properly, this doesn’t only mean poor nutrient absorption, weight gain and a weakened immunity, it affects everything from sleep patterns and mood, to the ability to shut off and make smart decisions.

When you’re not feeling as sharp as you once did, and decisionwww.businessfirstmagazine.com.au

HEALTH| BFM

mood) produced in the digestive tract, it’s little wonder that antidepressant meds, meant to cause chemical changes in the mind, can provoke GI issues as a side effect.

Irritable Bowel Syndrome (IBS), which now affects more than one in seven Australians, has been linked to serotonin in our digestive system. Symptoms include abdominal cramping and pain, bloating and gas, diarrhoea and constipation - with flare-ups stretching days, weeks or months.

Constipation tends to mean lower levels of serotonin, whereas people with diarrhoea like symptoms are more likely to have high levels of serotonin. Changes in your serotonin level affect your gut as well as your brain.

A new study published in the journal PLOS Biology backed up what has been known in Ayurveda for thousands of years – it shows how our gut bacteria communicates with our brains to change our food choices.

Specifically, the researchers from Monash University and Champalimaud Centre in Portugal found that when lacking in certain nutrients, animals would later choose foods high in those nutrients. They also found that the right balance of bacteria in their gut could tide them over when they were deficient, suppressing those cravings.

As I tell many of my clients, digestive problems arise when we don’t listen to how our body is feeling. Eating too much, or eating the foods that aren’t suited to your body type, will dampen your digestive fire. You want to be doing the opposite. BFM making needs a tune up, it might be time to look at improving gut health. Here are some tips to get you started: • Diet: The food that you eat has a major impact on the overall health of your gut. Go for alkaline foods like bone broth, lentils and steamed vegetables; if you want meat, it’s better to choose white meat over red meat. Also steer clear of highly processed foods, frozen foods, cold drinks and too many sweets.

• Listen to your body: If things aren’t quite right, you feel low www.businessfirstmagazine.com.au

on energy after an early morning meal or a heavy lunch – the key here is to listen to your body’s intelligence, there’s nothing wrong with skipping breakfast if you don’t feel like eating in the morning.

• Lay off the stimulants: Three coffees in the afternoon might charge you with the buzz to get through the day, but in excess it’s aggravating cortisol levels and not helping the gut flora.

With more than 95 per cent of the body’s serotonin (or happy chemical which controls your

Clinical director of Back to Health, Jo Formosa specialises in Ayurveda and neuro strategies. Along with a team of highly qualified Ayurvedic Dr and Practitioners, she offers a number of modalities to achieve optimal health in high-pressure environment.

Together with internationallyacclaimed wealth expert Roger Hamilton, she has created Health Dynamics - the world’s first health and personality test. To find out where you are on the health spectrum and enhance the gut-brain connection, visit http://healthspectrumtest.com

BUSINESSFIRST MAGAZINE

93

BFM | TOURISM

Tourism and conservation initiatives in National Parks across Australia

The SeaLink Travel Group nationally, including its Captain Cook Cruises brand, will partner with the Foundation for National Parks & Wildlife on a range of initiatives fostering sustainable tourism programs in National Parks around Australia of high tourism value.

S

eaLink is one of Australia’s largest tourism and transport companies, carrying over 8 million passenger trips annually in five states and the Northern Territory. SeaLink has been actively supporting a range of nature-based tourism initiatives around Australia including wildlife care and research programs particularly in the National Parks of Kangaroo Island in South Australia and in the Magnetic Island National Park in Queensland.

94 BUSINESSFIRST MAGAZINE

The partnership is a natural extension of SeaLink’s strong ties to Australian National Parks and its Corporate Social Responsibility programs.

Together, the Foundation for National Parks & Wildlife (FNPW) and SeaLink hope to strengthen tourism initiatives and infrastructure in National Parks and cultivate community relationships with environmental conservation groups.

“We have been searching for a national partner to support our work for some time and we wanted to select an organisation that had, at its heart, philosophies that tie in to what our brand stands for. Both SeaLink and FNPW’s vision is to link Australian icons and landscapes to the world.

Investment into national parks of high tourism value is critical to the advancement of tourism in Australia. Our services link www.businessfirstmagazine.com.au

TOURISM| BFM

tourists from around the world to Australia’s wonderful national parks and therefore parks with visitor amenities, infrastructure and facilities play a vital role in the overall visitor experience” says Jeff Ellison, CEO of SeaLink nationally.

FNPW, a not-for-profit, nongovernment organisation, was founded in 1970 with a goal to protect Australian land, native wildlife and cultural heritage through conservation schemes and fundraising for environmental education. The Foundation’s partnership with SeaLink, will dramatically increase awareness of national environmental issues and ultimately result in more funds being raised for conservation projects. www.businessfirstmagazine.com.au

This partnership will allow SeaLink to co-ordinate conservation and wildlife tourism commitments through FNPW for greater efficiency and in turn will give FNPW a larger platform from which to fundraise, call for sustainability measures and invest into parks of high tourism value.

The partnership is part of a corporate responsibility program promoting ethical and environmentally sustainable business practices. The move also creates shared value for SeaLink, whose business model depends on environmental sustainability and prosperity.

“In partnering with SeaLink we are able to educate many more

people about our initiatives and are able to multiply the number of projects we undertake. Our collaboration also enables us to increase our coverage to raise funds for many more projects that benefit the Australian environment and all the people, creatures and plants living within it,” says Ian Darbyshire, CEO of FNPW. FNPW also hosts corporate days with a number of high profile companies including Qantas, Zurich, and BMP. These events aim to boost employee morale and raise funds for sustainability efforts.

FNPW benefits from its many business relationships, having worked with 50 different companies in the last 18 months. BFM

BUSINESSFIRST MAGAZINE

95

BFM | FAST LANE

THE ALL NEW 2018 HONDA CR-V WITH PREMIUM DESIGN The all new, completely re-designed and re-engineered 2018 Honda CR-V is the fifth generation of Honda’s best-selling SUV, goes on sale today from $37,900+ORC.

T

he 2018 CR-V boasts bold and sophisticated new styling, a more spacious and versatile premium quality interior, the model’s first ever turbocharged engine, and a host of new features and technologies for improved connectivity, comfort and convenience.

Based on an all new platform architecture, the new CR-V targets the highest levels of quality and driving refinement in its class, including cabin quietness, steering precision, ride comfort and body control, all designed to imbue the CR-V with a polished, fun-to-drive persona.

BOLD AND SOPHISTICATED NEW DESIGN The new CR-V styling heads in a fresh new direction with an aggressive attitude, thanks to crisp and sharp front end design elements, aggressive stylised headlights surrounded by a wing shaped LED DRL array on all grades with wide, muscular fenders. The long hood, longer wheelbase, short rear overhang and dual exhausts give the new CR-V a stronger stance and more athletic presence.

The CR-V’s new windswept front end appearance includes signature Honda LED Headlights, a Honda first Active Shutter Grille that lowers aerodynamic drag, new 18” Alloy wheels and narrower A-pillars for improved visibility.

Adding convenience is an Electric Power Tailgate, which allows

2018 CR-V Model Pricing

CR-V 2WD Touring $37,900+ORC CR-V AWD Touring $40,900+ORC CR-V 2WD Sport 7 $44,900+ORC CR-V AWD Sport Sensing $47,900+ORC

96 BUSINESSFIRST MAGAZINE

opening and closing the tailgate the remote or simple touching the rear tailgate handle.

NEW POWERTRAIN AND CHASSIS TECHNOLOGY The 2018 CR-V will feature CR-V’s first ever turbocharged engine, a more powerful and fuel-efficient 1.5-liter DOHC, direct-injected and turbocharged in-line 4-cylinder powerplant rated at 140kw of power with 240 Nm of Torque it delivers incredibly refined and responsive performance across the engine’s full driving range.

The new more powerful turbo engine, transmission and aerodynamic body combine to improve fuel economy to an impressive 7.3L/100kms for the 2WD models & 7.4L/100kms for AWD models.

The all new body and chassis design in the new CR-V provides more agile and confident handling, greater refinement, additional ground clearance and superior overall versatility. Its front MacPherson strut and rear multilink suspension utilise specially tuned low friction dampers, with both 2WD and AWD models including tubular front and solid rear stabiliser bars that promote quick turn-in and flatter cornering.

MORE PREMIUM, SPACIOUS AND TECHNOLOGICALLY ADVANCED INTERIOR The 2018 CR-V also raises the bar for interior refinement, utility and premium features in the medium SUV class. The more spacious cabin, with best in class interior space and rear legroom, features upgraded materials throughout, including a new soft touch instrument panel and more intricately stitched new seat design. A colour TFT driver

information interface (DII) center metre display adds to the modern new design aesthetic.

The CR-V offers the latest in vehicle connectivity and audio performance with a new generation of advanced technologies.

Available features include a 7 inch touchscreen featuring Advanced Display Audio interface with Android operating system as well as a built in Garmin Navigation App, with all the flexibility of an App, without the need to connect a smartphone.

Some of the key new comfort and convenience features available on the 2018 CR-V include dual-zone climate controls, an Electric Parking Brake (EPB), rear USB charging ports, and in the CR-V Sport models feature Leather Seats with driver’s seat with 8-way power adjustment and 4-way power lumbar support and heated front seats.

ADVANCED SAFETY AND DRIVER ASSISTIVE TECHNOLOGY Utilising Honda’s next-generation Advanced Compatibility Engineering™ (ACE™) body structure, the 2018 CR-V targets the highest available collision safety ratings.

The 2018 CR-V AWD Sport Sensing includes the Honda SensingÔ suite of advanced safety and driver assistive technologies which includes Road Departure Mitigation (RDM) and Adaptive Cruise Control (ACC) with LowSpeed Follow (LSF), Auto HighBeam Support (HSS) and the new Driver Attention Monitor, added to Honda’s Collision Mitigation Braking (CMBS) with Forward Collision Warning (FCW) and pedestrian sensing capability, Lane Departure Warning (LDW), Lane Keeping Assist (LKAS) and LaneWatch Camera System. BFM www.businessfirstmagazine.com.au

FAST LANE| BFM

www.businessfirstmagazine.com.au www.businessfirstmagazine.com.au

BUSINESSFIRST MAGAZINE

97

“ Bridging the gap between Business and IT by creating possibilities with innovative Strategy, Enterprise and Solution Architecture �

www.thearchitecturepractice.com.au

Designing Innovative Technology Strategies for your Enterprise