Business First Magazine - Oct/Nov 2015 by Associated Media Group Pty Ltd

BUSINESSFIRST for Business Leaders

October/November 2015

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GJ Gardner

Building a better business

RICHARD MALOUF

All in the family

FROM LONDON TO SYDNEY

THE IMPORTANCE OF CORPORATE RESPONSIBILITY

Howard Collins’ public transport mantra

Empowering women in business

JAGUAR HUMS ALONG BUSINESS FIRST MAGAZINE Vol 2 Issue 5

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SPECIAL FEATURE

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How to sell your business tax free

LEADERSHIP

FRANCHISE CULTURE MANAGEMENT PROPERTY TECHNOLOGY and more

BF | CONTENTS

BUSINESS FIRST CONTENT 4 5

Editor’s Desk News

Special Feature: Leadership 8 Compassionate leadership: 5 ways to lead with a difference 10 Why contractors fail 12 Q&A: What does leadership mean to you? 13 The top contributors to organizational development & change

CONT

COVER STORY 18 How to build a better business GJ Gardner managing director Darren Wallis speaks about the builder’s ever expanding international footprint and the value of franchising.

PEER TO PEER 14 Apple’s win, android’s loss as Sony mobile faces extinction by Paul Lin 15 7 Reasons why ASIC’s $200,000 minimum for an SMSF is not in the client’s best interest by Brian Hor 16 Employee empowerment creates innovation by Mark Pope 22 5 tips to help you start your journey as a new business owner by Stan Gordon 30 Why workaholics don’t always make high performers by Cholena Orr 32 Gaining competitive advantage through service excellence by Matthew Lewis 38 How to sell your business tax-free by Mark Champman 44 Women in the workforce: confronting the pay gap by Jack Delosa 50 The science of app marketing in the age of instant gratification by Vincent De Stefano 56 The art of franchise engagement by Sadhana Smiles 62 How to effectively run your business from afar by Sharon Zeev Poole 68 Keeping selling agents honest by Patrick Bright 74 Four warning signs your business may be in crisis by Roger Mendelson 78 Real value innovation by Stuart Payne 85 Giving your customers what they need by Nick Bell

LIFESTYLE 90 92 94 96

The Leader’s Bookshelf Holiday Gifts: The gift of giving Destination: Santa Barbara The American Riviera® Fastlane: The all-new Jaguar XF

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CONTENTS | BF

ENTS

BUSINESS FIRST LOUNGE 24 Traditional service in an ever-changing industry The world of pharmacy has changed enormously since Richard Malouf first started working; however it is a traditional philosophy of old-fashioned support and service that has helped make his company so successful through more than 50 years of business. 34 Centres of excellence Following Emerson Power’s success in helping roll out Australia’s NBN, the business then set its sights on implementing Integrated Modular Solution and the disruption of that sector.

40 People power in fast food fast lane After 20-plus years with Yum! Restaurants International, Tony Lowings still has the same passion for the business as he did when he began with the company as a planning director in 1994. 46 Diversity creates better community For 140 years, Hyder Consulting has been delivering design and consultancy projects to help improve natural and built assets. Australia Pacific CEO Greg Steele talks about change and engineering a better environment.

52 Long train running Howard Collins the Sydney Trains CEO has dedicated his life to making public transport an enjoyable experience. 58 The modern world of modular buildings As the executive general manager of CIMC Modular Building Systems, John Zendler is leading the charge in changing the way we look at housing. 64 Building communities and housing Steve Bevington is one of Australia’s leading experts on housing affordability, yet unlike many ‘experts’ in this field Steve’s knowledge is based on real life experiences.

70 The matchmaker Matchboard’s Sharon Melamed speaks with Business First about intelligent matching: bringing workforces together to solve every recruitment issue from sales and service to back office needs. 82 A community approach to success Infrastructure projects are the lifeblood of community growth. Business First speaks with Abergeldie Managing Director Michael Boyle about bringing communities together.

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86 Do it for the kids Leanne Warner, the CEO of Sydney Children’s Hospital Foundation, the primary funding body for Sydney Children’s Hospital, says Amber Affair is a unique event that engages groups of friends and colleagues with a great cause in mind.

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BF | EDITOR’S DESK

The workplace puzzle

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Business First contributor Jack Delosa writes: “encourage business leaders to define the vision, mission and values of their business. Then, employ and nurture team members that are naturally, and passionately, aligned with those qualities.” Jack is referring specifically to women in the workplace, however the sentiment is universal and it is reflected throughout many of the executive profiles in this issue. Take Yum! Restaurants International MD Tony Lowing for instance. The staff he has managed from Australia to Latin America and the Carribbean have all had two crucial things in common: a nurtured passion for the business and a feeling of inclusiveness. Tony says, “We always talk about the fact that we are a people business. We employ large numbers of people... and we put a huge amount into training them. Through this we can engage with people and create an environment where they enjoy coming to work... We make sure that it’s as fun and enjoyable as possible and we give people the opportunity to grow and progress within the environment.” As do GJ Gardner, NZ’s largest home builder franchise. MD Darren Wallis takes the approach that if the franchisees are growing, so too is the business as a whole. For Darren, it is about giving franchisees the right systems to help them achieve their goals. “It is rewarding to see a small builder follows the systems and become successful. We have had builders who have been following our systems and within a few years they are the biggest builder in their town.” I won’t harp on any longer about this, suffice to say that the way you nurture staff and give them the tools to grow within the organisation is imperative because their success informs your own. Also in this issue we speak with Steve Shelley of Emerson Power about technological transformation and the NBN, train man Howard Collins who has brought London Rail and Sydney Rail into the 21st century, Sharon Melamed explains disruption in the recruitment industry, Greg Steele gives us insight into architecture, Richard Malouf talks about family business and John Zendler gives us the lowdown on modular construction. These are all great leaders, with insightful stories to tell. However the one that resonated most with me this issue was Leanne Warner.

PUBLISHER Alan Hyman EDITOR Jonathan Jackson SUB-EDITOR Judy Hyman MEDIA & COMMUNICATION Khan Izaac Jake O’Donnell EXECUTIVE ASSISTANT Victoria Wilson DESIGN Gino Hawkins 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 Contributors: Nick Bell, Patrick Bright, Mark Chapman, Stefan Crisp, Janine Cox, Jack Delosa, Stan Gordon, Brian Hor, Matt Lewis, Roger Mendelsohn, Cholena Orr, Stuart Payne, Sharon Zeev-Poole, Sadhana Smiles, Vincent de Stefano, Rob Zazuetta. Associated Media Group Pty Ltd ABN 68 123 058 926 Copyright ©2015 Associated Media Group

Publishing, ad CILTA AWARDS by Associated

Leanne is the the CEO of Sydney Children’s Hospital Foundation. It is a rewarding, but difficult role as she must understand the needs and priorities of the hospital and then match those with funding.

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“It is always challenging to fundraise and the number of non-profits emerging is on the incline. There are smaller foundations who set themselves up every day of the week, but our brand is well known and we have legitimate needs which people recognise.”

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.

However with more and more non-profits emerging, the fight for dollars becomes increasingly hard. It is therefore imperative to support a cause and if you are not doing anything on 22 October head to the Argyle on the Rocks in Sydney for the Amber Affair and pledge some support.

Jonathan Jackson

Jonathan Jackson Editor, Business First Magazine

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NEWS | BF

Flexible working hours key for staff retention Over a third of Australian employers believe that offering staff flexible work arrangements is the best way stop them searching out alternative employment. According to figures released by Employsure, employers found that work-life balance ranks highest for staff retention, overshadowing pay rises and training. Edward Mallett, Managing Director of Employsure, says, “Our research clearly shows that staff often need to organise working hours around family commitments

and they appreciate the opportunity to do so. This is seen as more compelling for staff retention than remuneration, training, and often costly enticements such as staff events.” The survey polled 461 small to medium businesses and the findings put staff retention in the spotlight at a time when, according to recent statistics from consultancy firm Accenture, one in five employed Australians are looking for a new role at any given time. Keeping staff happy should be a focus for SMEs, Mr Mallett says, as replacing people is

costly and time-consuming. “Costs can add up with recruitment advertising, and there’s so much time invested to hire and train new employees. If it’s a sudden departure, other staff need to step in for their colleague, compromising their own workload. “Considering our new research, employers should approach requests for flexible working arrangements with an open mind. Addressing this real-world issue will help managers retain staff and make their workplace more desirable to new recruits.” BF

something. You can get the experience needed to apply for jobs by making, building and publishing yourself!” Jo Cranford emphasised the need for more female tech workers in senior positions “More women are needed in senior leadership for diversity to happen the whole way

down [the management chain]. Many companies are desperate to address the issue of tech’s diversity problem, and are aware of the benefits of a diverse team, yet there is still an ongoing problem. It was highlighted by the panel that it is important to remember that men are also part of the solution; it’s not the 1% of women who are going to have all the answers so it is important we work together as an industry to drive this change. Johana Foster advised that this culture change begins not in the office, but in learning environments; stating it’s important to have lecturers and teachers that don’t discount your thoughts and opinions because you’re female. Giselle expanded the need to bring code classes into the curriculum at Primary School level for all students, and it should be taught as something everyone should know, concluding “code is not maths, code is not science, code is a language and a language that is universal. Framing coding as a language can help the barriers for girls who think they’re not good at maths or science.” BF

Code like a girl ‘Code Like A Girl’, a digitally led initiative to help inspire and support women in code, hosted their official launch event in Melbourne recently. During the event, an industry panel of female tech leaders discussed key topics including solutions to tech’s ongoing gender divide, how we can help women currently in or pursuing careers in the tech industry, and what they want the future to look like. Networking is critically important for women across all industries, but especially tech where they are in the minority. Culturally, women have a tendency to talk themselves down. When discussing this imbalance of confidence, Giselle Rosman enthused females in tech need to realise “you’re good at what you do and you deserve to be here.” Rosman advised female students and women looking to get into the industry highlighting the importance to “put yourself out there, network and showcase your work.” She emphasised that when starting out, “you don’t have to be employed or paid to build www.businessfirstmagazine.com.au

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BF | NEWS

Baskin-Robbins Best Brand

Telstra CEO Andy Penn awarded Honorary Fellowship The CEO of Telstra, Mr Andy Penn, was recently awarded an Honorary Fellowship by the Australian Institute of Project Management (the AIPM). Mr Penn was bestowed the honour for his leadership and support of the profession of project management in Australia. The Telstra leader becomes the first Australian-based Honorary Fellow of the AIPM, and in doing so his efforts to promote and acknowledge the importance of project management in the delivery and implementation of successful business strategies has been recognised. Mr Penn has been a vocal advocate for the profession of project management throughout his career, and has led some of Australia’s largest organisations in their implementation of project management principles in their

day-to-day dealings. In his previous role as CEO of AXA Australia Group he also led a turnaround program, which signified the important role project management plays in the implementation of an organisation’s strategy. Upon receiving the award, Mr Penn said “We are investing in our project managers across the (Telstra) organisation. As part of this we have appointed a Chief Project Officer to lead our community of project managers. “Each and every Project Manager is critical to the success of their own organisation. I believe that project management is truly a very important profession, and one that can make a profound difference to the success, or otherwise, of the companies that project managers work for. Put simply, a good strategy expertly managed and delivered is one of the keys to organisational success.” BF

THE SQUARE Small business owners can’t always be on site at their business, which comes at a cost to growth—Australian small business owners lose 250 productive work hours each year by being unable to progress work and keep in touch with the business while they’re away from the workplace*. It’s a scary statistic— and highlights how important it is for small business owners to be able keep their finger on the pulse. Square is making it easier for small business owners to keep track of their business performance with the global launch of the free Square Dashboard app. The Dashboard app gives small business owners using Square Register access to real-time reporting and analytics about their business at the touch of a button—users simply open their iPhone, log in to their Square account and get a snapshot of real-time business performance. Some of the unique features available in the Square Dashboard app include:

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• Monitor how the business is trading: Watch live sales, with a real-time summary of what’s been sold, hour-by-hour. • See what’s selling, and what’s not: Break down sales by item and category, and make real-time decisions about what needs to be to stocked up on to ensure sales are never missed. • Sales trends and comparisons, on the go: Compare business results by the hour, day, week or year. Decide when staffing should be increased to better service your customers. • A powerful team: Combined with the powerful insights and analytics available in their Square Account, users are given a full view of how their business is performing. • Open to all: For users of Square’s free point-of-sale app, Square Register, the Dashboard App is another powerful tool for small businesses to use to better understand their business. BF

Baskin-Robbins have been recognised as Australia’s premium ice-cream brand at the inaugural QSR Media Awards at the Hilton Hotel, Sydney, winning the award for Best Brand Transformation. Baskin-Robbins, through the guidance of Australian General Manager David Jordan and his team, have made dramatic improvements to the Australian business model and operational practices over the last 18 months. The brand transformation process began with the appointment of David Jordan to Australian General Manager in February 2014. A record 14 new stores opened the same year which was recognised by the Chairman And Chief Executive Officer of Dunkin’ Brands, Mr Nigel Travis, and International Directors as the most successful year in the history of Baskin-Robbins in Australia. Jordan said, “18 months ago we began a journey with our Franchise Partners to re-build this brand through the implementation of a strategy that together we all had input and ownership in. The alignment between our Franchise Partners, support centre team and owners has been critical to ensuring engagement and execution of our collective vision. “The strength of the Baskin-Robbins brand is a testament to the leadership being shown at every level within our Brand, a shared vision and a united passion for making our guests smile. “We have seen increased satisfaction from Franchise Partners, with recent Franchise Partner survey results showing a significant turnaround in engagement and satisfaction at record high levels. This in turn has generated an improved guest experience and increased guest frequency rates.” “This award is a reminder to all of our team members, store managers, Franchise Partners, and Franchise Support Centre team members that together, our strategy is delivering. The most exciting part is that this journey has only just begun, and we are even more excited about what lies ahead, as we know we still have so much more to do to continue to exceed all of our stakeholders’ expectations,” he said. BF

Greg McMurray, David Jordan, Justine Charlton, Zoe Detmold at the QSR Awards

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NEWS | BF

Unfair dismissal blamed for 1 in 3 disputes with staff Unfair dismissal is the main reason employees make a formal claim against their employers, and of these claims, nearly a quarter centre around serious misconduct (12%) or misconduct (12%). Edward Mallet, Managing Director of Employsure, says, “Disputes between employers and their staff occur when an employee’s conduct is called into question, but they feel wrongly accused. This is a difficult situation, and usually the employer has no official guidelines on conduct in place.” In 2014, 17,806 unfair dismissal claims were lodged by employees with the Fair

Work Commission, the highest number of annual claims ever recorded. The figure amounts to 70 claims a day. “There is no doubt this is a major issue for employers,” Mr Mallett says. “Unfair dismissal was brought about to protect employees from unjust employers, however the number of claims has blown out. The actual figure is considerably higher as not all claims are taken to the Commission, some are settled internally by the company concerned. Because it is such a prevalent issue, employers need to ensure they have robust policies in place to be clear and equitable in these matters.” BF

Car donation to fuel WA automotive industry With more than 10,000 Western Australian businesses and 70,000 workers dependent on the automotive industry1, Kia Motors has joined forces with Vocational Education and Training provider Careers Australia to help upskill and train the State’s next generation of automotive experts. The South Korean car manufacturer will donate two cars to Careers Australia’s Belmont campus to help students get handson experience with the latest technology employed in car servicing. According to Careers Australia’s Automotive Trainer, Stephen Jones, the practical experience will help fuel new skills required to service the growing number of vehicles in Australia. “Nationally Careers Australia’s automotive training centres are reporting signifwww.businessfirstmagazine.com.au

WYNDHAM HOTEL GROUP ADVANCES GROWTH IN SOUTH KOREA

icant course interest as new entrants and existing workers look to develop specialist skills to meet the growing demands of the industry,” Mr Jones said. “That’s particularly the case here in Western Australia where we have predominantly low density suburbs and are highly dependent on our cars. While our population density might be lower than other states the Western Australian motoring industry accounts for more than 13 per cent of the national automotive sector.” The donation is part of a partnership agreement between Kia Motors and Careers Australia, signed in 2014 that will see Careers Australia’s national automotive centres take delivery of cars progressively as technology is introduced. BF

Wyndham Hotel Group is set to expand its presence in South Korea by more than 200 per cent over the next three years thanks to the signings of 12 new property franchise agreements so far in 2015, including agreements for three Howard Johnson® hotels, marking the brand’s entry into South Korea. This year’s signings build upon another 14 franchise agreements in South Korea executed by Wyndham Hotel Group in 2014, bringing the company’s pipeline in the country to more than 7,550 rooms within 26 new-construction hotels under the Ramada®, Days Inn® and Howard Johnson brand flags. Currently, Wyndham Hotel Group has 13 properties and more than 2,800 rooms open and operating in the country. The new properties, consisting of 17 Ramadas, six Days Inns and three Howard Johnsons, are expected to open by 2018. They will be located across South Korea, including Seoul, Pyeongtaek and Jeju Island, a stunning volcanic island and one of the country’s tourist hotspots. The first of these new locations, Ramada Encore Jeju Seogwipo, opened on June 30, 2015. “With its increasing popularity among tourists, natural beauty, trend-setting technological marvels, and upcoming world events like the 2018 Winter Olympics, South Korea plays a key role in our growth in the region,” said Barry Robinson, President and Managing Director, South East Asia and Pacific Rim, Wyndham Hotel Group. “There are great opportunities for economy and midscale hotel development throughout the country and we will continue to look for ways to capitalise on the impressive growth in both visitor arrivals and visitor spending to provide guests with world-class properties and service in exciting, desirable locations.” BF

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BF | LEADERSHIP

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LEADERSHIP| BF

Compassionate Leadership: 5 Ways To Lead With A Difference T he modern day leader needs to operate from both the head and the heart, with emotional intelligence at the helm of all decisions being made. The days of ‘command and control’ style leadership are numbered, with more and more top executives and leaders choosing to invest in people, recognising the benefits of developing a leadership style of consideration and care: compassionate leadership. Compassion earns the respect and discretionary effort that creates high-performance and high-trust cultures. Neuroscience has shown that we have unspoken communication with others through the sub-conscious activity of our mirror neurons. We are continually broadcasting our own emotions, reactions and undisclosed judgements of others. For a leader, this has huge implications. Compassionate leaders integrate and synchronise values, thoughts, emotions, expressions and presence. The Resilience Institute Australia is one organisation helping to bridge the gap between the workplace and humanity, training organisations in resilience, stress management and effective, sustainable leadership. Some of the greatest social transitions made in the past two centuries have resulted when compassion and courage were applied to overcome fear adversity, looking at Gandhi and Mandela as prime examples. So what is compassionate leadership? “At its core, compassion is caring for self and others in pursuit of the greater good. When applied to leadership, this creates a calm culture; not breeding fear through punishment of performance gaps. “Performance gaps are viewed as learning and coaching opportunities. The compassionate leader appreciates the talents of their team members and seeks to liberate their potential. Individuals with a poor fit may be assisted to find their passion in other roles or

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organisations,” says Taylor. Compassionate leaders are mindful and manage their moods, are connective and receptive, take positive and affirming action, say what they feel and show sincere, heartfelt consideration and put people before procedures. This builds resilience and energy for the individual, leader and organisation. It creates a high-performance, hightrust culture, where teams are engaged and aligned with organisational goals and values. “Compassion can be cultivated though mindfulness meditation and learning the mental habits of empathetic listening ,and becoming aware of your thoughts and adopting an optimistic outlook, assuming that the vast majority of people are coming from a good place,” says Taylor.

The Resilience Institute Share 5 ways to inspire a more caring culture: Start with Empathy. Listen deeply to

others. Be interested in their emotions and perspectives. During interactions, tune in to their facial expressions and body language.

Emotional Intelligence. Build emotional self-awareness, compassion and love for self. Practice humility and forgiveness when you make mistakes. Meditate. Meditation is one way to

build compassion. During your meditation, reflect on compassion and experiencing care for the people around you and the broader community. Google trains 2,000 engineers in meditation each year. Start a compassion project. Get involved in a community project for those less fortunate.

Practice Compassionate Leadership with a staff member. This could be

addressing a performance issue, or recognising when to support during a challenging time. BF

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BF | LEADERSHIP

Why contractors fail E

very time we see a headline about another big construction firm failing, it comes as something of a shock, when in reality we should be used to it. Why does it happen? Who was at fault? Why does failure so often follow initial success? Construction companies have a higher rate of failure than most other kinds of companies. Those that have been in business for only one to three years are at the most risk. Yet history shows that even long-established companies with the best leadership structures can go to the wall as readily as new ones. Why? When rubble is cleared away and the causes analysed, some common mistakes can be seen. Almost all of them relate to risk. And sadly, these mistakes are being made over and over again. In the strategic area, we can often blame a lack of research, beginning

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with unfamiliar new markets and startups in new kinds of construction. Along with these unknown territories, both contractors and clients often fall prey to unrealistic promises and unfortunate project selection. Some companies become obsessed with volume. They leap into unrealistic growth in the type or size of work they are undertaking, or move into a new location and fall into the trap of over-expansion. This results in an increased backlog of work and a shorter time for preparation of bids. When coupled with a lack of organisational capability and inexperienced project managers, collapse is inevitable. So how do you know if poor project management is having an adverse effect on business? Surprisingly, many people are unaware of the signs. They include: • projects not finished on time • inadequate project supervision

• constant litigation • backlog without the resources to complete • safety concerns onsite • little time to prepare bids • poor communication • egos out of control Construction isn’t simply about constructing. Organisation underpins ongoing success. Too many contractors don’t seek the right kind of advice, and so lurch into business with poor sales skills and insufficiently directed marketing. Top that off with poor financial management coupled with poor leadership and you have a recipe for disaster. Then there are the uncontrollable aspects that companies can’t change, like weaknesses in the industry or specific economic forces. These factors will cause unprepared companies to fail more quickly than seasoned performers. www.businessfirstmagazine.com.au

LEADERSHIP| BF

The construction industry, perhaps more than most, is quickly affected by: • leverage • changes in jobsite conditions • rising interest rates on bank loans • workforce issues • fluctuations in demand • problems of establishing bids that accurately reflect construction costs • project timing • response to opportunities • excessive competition • sub-contractor problems • oil and material price rises • loss of skilled staff • too-tight completion schedules • environmental issues Clashes in corporate culture can affect the financial discipline of a company, particularly when the financial people aren’t involved with the decision-making. If adequate capital reserves aren’t maintained by a professional, a downward cycle is inevitable. Some of the ways in which financial management problems can happen are: • a lack of adequate and appropriate insurance • improper accounting practices • inadequate cost tracking systems • debt burden • under-capitalisation • poor cash management • tight cash flow • unpaid bills • problems with suppliers

Many companies don’t have a clearly defined process for decision-making. In fact, some companies don’t have a person or group clearly responsible for the important decisions. It only takes one bad decision to fall into unprofitability. Succession planning is critical for when it’s time for the leader to move on. Construction is one field where a company can’t be seen to falter, or the business may never recover its momentum. Strategic planning determines the future of a company. It’s not a process for catching up with what’s gone on before, or fixing things up or who got that wrong. What kind of company do they aspire to be? Where are they headed? What are their strategies for getting there? Innovative thinking is a must when it comes to strategic planning. Nothing stays the same in business, and construction companies need to win profitable contracts to stay viable. And remember, innovative thinking is attractive to forward-thinking clients. Some people forget that it’s the CEO’s job to run the business. They don’t run the projects. It’s a fact that most construction industry leaders originate from the operational side of the business. They’re used to making rapid, on the spot decisions. Sometimes a more considered approach is needed when finding the next project. Finding the most volume is not necessarily the way to go. Construction is a volatile, high-risk industry. Outsiders can often see the risks more clearly than the operators do. Sadly, those people running construction companies are often blind to the risks they are taking, believing they’re able to minimise risk with bond guarantees and bank loans. Confidence is great, but not at the cost of running a formerly profitable company into the ground. BF Peter Mason is the Managing Director of Ducon, an award winning builder based in Melbourne, Australia. Peter is a third generation industry leader known for his empathetic yet ‘getting it done’ attitude who finds relaxation from the hectic building design world sailing the cool waters of Port Phillip Bay.

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BF | FEATURE

Q&A Steven and Chutisa Bowman

Benevolent leadership is beyond mindful leadership. It is the future of business. When business executives only focus on the short term of what they can actually create for themselves instead of a sustainable reality for the world, they deny themselves a sustainable future. Businesses must measure their success not only by their financial performance but also on how they are being a contribution to society and the world, as well as by the impact on the environment and on the society in which they operate. The Benevolent way of business goes beyond philanthropic thinking . It goes beyond social enterprise, corporate social responsibility and conscious capitalism. Benevolent capitalism creates an entirely new system for businesses, based on the four priorities of: generating a sustainable future, doing no damage, maximising possibilities not just maximising revenue, and personal empowerment through benevolent leadership. Yet most leaders and managers do everything they can to keep their timeworn conventional business models in place. However, if leaders choose to align the capitalism maxim with the maxim of a sustainable future for people and planet, there are still abundant possibilities and revenues to be actualisedâ&#x20AC;&#x201D; revenues made in ways that generate a sustainable future rather than damage the planet and endanger our future. This is benevolent capitalism.

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What does leadership mean to you?

Hamish Hogben

Understanding future trends in industry and management are vital for ensuring a business remains wellrun, competitive and productive. In todayâ&#x20AC;&#x2122;s global climate, this is truer for Australian companies than ever before â&#x20AC;&#x201C; particularly for those operating in once-vital manufacturing industries that are now largely in decline. It has become more important for corporate leaders to take heed of lessons and experiences from similar companies and executives in other mature markets, which can provide a leadership blueprint for how we approach these new challenges. The keys to helping challenged sectors continue making contributions to the national economy are effective leadership built around detailed understanding of important meta-drivers (both at home and abroad), proactive decision-making based on intricate knowledge of macroeconomic factors, encouraging growth in the people around you, and adapting as necessary to succeed. All of these are founded on local action being informed by global perspective.

Mark Pope Culture is delivered from the bottom up. When people take on a new job, they look for money and opportunity. When they leave a new job, it is because of culture, management or lack of opportunity. Managers need to be more aware of this in their planning. They need to engage. And by doing so, they will retain their top employees, they will encourage new employees to speak about improvements and thus stay and they will minimise any damage to their bottom line. Research conducted by world-renowned psychologist Dr. Martin Seligman around positive psychology focuses on the scientific study of the strengths and virtues that enable individuals and communities to thrive. The field is founded on the belief that people want to lead meaningful and fulfilling lives, to cultivate what is best within themselves and to enhance their experiences of love, work and play. Thus we find that to lead a more fulfilling life in the workforce requires management to create a culture of autonomy and responsibility.

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INFOGRAPHIC| BF

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BF | TECH ANALYSIS

Apple’s win, Android’s loss as Sony mobile faces extinction

Paul Lin is CEO of Empirical Works

hen the BBC asked about Sony’s five-year plan for its mobile division in March, chief executive Kazuo Hirai responded, “There is no guarantee that we will be in any business in five years’ time. That’s just the nature of the electronics business,” implying that Sony may be exiting the mobile phone business in the near future. Mr Hirai is clearly a realist when it comes to the landscape, and the profit-driven move in February to reduce Sony to a company with just three core offerings is reflective of that. Traditionally, this was a company associated with TVs, audio, and cameras – as of now, the focal points are Sony Pictures Entertainment, PlayStation, and image sensors (which are used in iPhones). Of particular interest is that the former consumer electronics juggernaut will assumedly cease to produce phones. Sony makes great phones, so it’s a shame to have to eulogise them. Tech-wise, some of the features, like waterproofing, camera quality, screen quality, and even the design, are Apple-level or better. The problem is that no one knows this, and no one is buying them. In fact, nobody besides Apple is making money from high-end smartphones. If you want an expensive, fancy

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phone, an iPhone is first choice for the majority. Sony obviously doesn’t make any money, and surprisingly neither HTC nor Samsung are generating much revenue from their high-end, feature-rich flagship phones. In Q4 2014, Android accounted for just 11.3 per cent of all smartphone profits, as per Strategy Analytics, and most of that comes from the mid or low-level Android phones. Apple clearly dominates when it comes to marketing, brand message, and consumer perception. Sony’s tech is brilliant and they’re diligent with research, but do you feel cool when you go into its store, as you do with Apple? Why are you paying almost $1,000 for a Sony phone? When was the last time you saw an ad for a Sony phone? The problem with Android has always been Google’s philosophy and approach, which has never been about making money or being first-to-market. It’s about pushing a platform that is open and free to its hardware partners, which sounds noble, but what has happened is that companies have taken Android, modified it, and cheapened the brand and product in order to grab the lower end of the market. As a result, what you now have is a litany of cheap Chinese knockoffs

that run Android, some of which are actually quite decent for knockoffs, but have vastly undercut the market for sophisticated Android phones, like Sony or HTC’s offerings. It has achieved Google’s goal of flooding the market – Android accounts for 80% of all shipped smartphones in Q4 2014, but at the cost of only making 11% of the profit despite the market share. It’s akin to what has already happened with laptops and PC. People will pay good money for an Apple MacBook, but who would pay more than $1,000 for a desktop PC or PC laptop these days? The sad corollary of this is an across-the-board decline in quality and prestige, which is the first step in a race to the bottom i.e. the precise situation desktop PC and PC laptops are in these days. This oversaturation will also stifle Apple’s creativity, since Android doesn’t challenge them. So they could just settle for minor updates to the iPhone every year if they so wished, as they’ve been doing with their own MacBook laptop lines. In the tech world, you want to see things improve, evolve, and continue to be innovative. With Sony exiting the Android phone market, this is a threat to all three. BF www.businessfirstmagazine.com.au

SMSF| BF

7 Reasons Why ASIC’s $200,000 minimum for an SMSF is not in the client’s best interest

Brian Hor Special Counsel – Estate Planning & Superannuation

hile there are a number of useful features of ASIC’s new guidance papers on SMSF advice (Information Sheets 205 and 206), comments relating to the preferred minimum for an SMSF of $200,000 are not among them. We quickly came up with seven reasons why ASIC’s view that an SMSF with a starting balance of $200,000 or below is unlikely to be in the client’s best interests is completely incorrect, arbitrary and deeply ill-informed. 1. Certainty – particularly regarding what happens to their super when they die; they get the ability to make a specific type of BDBN that may not be allowed via a public offer fund (eg non-lapsing with multiple cascading classes of beneficiaries) and / or ensure that their death benefit (which may be well over $200k after a life policy payout) does not become subject to a public offer trustee’s payment policy (eg see case of Stock (as Executor of the Will of Mandie, Deceased) v N.M. Superannuation Proprietary Limited [2015] FCA 612 where the public offer fund trustee submitted that in general it would not pay a death benefit to an estate unless there are no dependants (including adult children of the deceased fund member as non-financial dependants), with the result that 2/3 of the death benefit went to estranged adult children). 2. Investment Strategy – given the current very strict rules about how much money you can contribute to super, there are certain strategies that are not available via public offer funds (as they lack the agility of public offer funds) that can give a massive boost to long term retirement income such as LRBAs to buy direct shares and property, even where the starting balance is well under under $200k since that is just the deposit. 3. Estate Planning – there are many estate planning reasons for having a SMSF irrespective of balance, eg you can do a non lapsing BDBN or a SMSF

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Will or impose specific conditions to reflect a blended family situation. 4. Choice of Life Insurer – only via a SMSF can you decide which life insurer you want to use and pay via tax deductible super contributions. 5. Long term focus – it’s not about how much is in the fund now, it’s about how much will be in there long term for retirement, plus where the fund holds life policies clearly the balance of the fund on a member’s death is potentially going to be much more than the starting balance. ASIC’s focus on short terms costs is simply naïve – it effectively says it is better to pay 2% fees in a public offer fund that yields a 5% return in the long run compared to say 7% fees in a SMSF that yields 20% returns over the same period.

6. Client’s Best Interest – only via a SMSF can the client take advantage of certain strategies that are not practically available via a public offer fund, such as the ability to jointly invest in an asset portfolio with a related party via a reg 13.22C unit trust – the starting balance again is not relevant. 7. Control – most SMSF members go into an SMSF for the control (“I’d rather lose the money myself than pay someone else to lose it for me”). They want that control irrespective of the balance of the fund. That desire for control is as valid a reason for having an SMSF as any other. Unfortunately, it is ASIC’s pronouncements about minimum balances that may not be in the client’s best interests. BF

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BF | CULTURE

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CULTURE| BF

Employee empowerment creates innovation An empowered workforce is one that is successful, profitable and usually content. However the art of empowerment is one that eludes many leaders writes Chase Performance CEO Mark Pope.

Mark Pope CEO Chase Performance

study of 64 organisations conducted by officevibe.com, found that organisations with highly engaged employees achieve twice the annual net income of organisations whose employees lag behind on engagement. While that seems fairly straightforward, the problem is that despite 90% of leaders believing that an engagement strategy has an impact on business success, barely 25% of these leaders have a strategy. So why don’t leaders walk the talk? According to Forbes it is all due to the difficulty of transforming the employee mindset. The article states: “You ask an employee to carry out a task that has enough flexibility for creative input. Rather than making their own decisions, the employee comes to you with an onslaught of questions, trying to pin down the exact parameters of the task. You become exasperated, wondering why the employee has to ask you permission for every tiny detail. “This isn’t an unusual phenomenon – it can be difficult to break out of the leader-follower mindset at the workplace. In fact, researchers from Penn State, Claremont McKenna College, and Tsinghua University find that only rare, ‘transformational leaders’ are able to prevent employees from being excessively reliant on their bosses, cultivating instead a staff that feels empowered and self-guided. Trust and business acumen are some of the cornerstones in building this type of work culture. We can use this wisdom to train informed and decisive teams that we can trust.” Workplace empowerment urges employees to take on more responsibility, show initiative and be innovative.

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These employees share something in common: a positive psychology. Yet, leadership must nurture positive psychology. Dr Martin E.P. Seligman, Ph.D., is one of the most widely know psychologists of our time. Since 2000, his mission has been the promotion of the field of positive psychology in which he discusses happiness. Seligman believes there are three sources of happiness: pleasure, excitement and gratification. Pleasure and excitement are unsustainable and reliant on extrinsic sources for internal, sensual experience. Gratification, however, comes from internal satisfaction and focuses on actions, principles and people. This relates to some of the work conducted by Daniel Pink around motivation. Pink is the author of several provocative, bestselling books about the changing world of work, including Drive: The Surprising Truth About What Motivates Us, in which he uses 50 years of behavioural science to overturn the conventional wisdom about human motivation and offer a more effective path to high performance. Pink discusses the three real drivers for motivation as being internal; they come from having a sense of autonomy, purpose and mastery in our activities. Both Seligman and Pink’s ideas connect at a very fundamental level. For instance, when we connect to the purpose of a business and feel that we are contributing to the business overall, then we are more focused, motivated, engaged, happier and ultimately gratified. Leaders should connect their staff with the strategy and overall performance of the business. By giving them more direct responsibility to business outcomes and opportunities to work on

the business, employees feel empowered to design and implement ideas to improve operations. This creates a sense of gratification. Problems occur when managers don’t trust the business enough to promote this activity. However, managers must throw away their mistrust and their fears to support and promote their staff. They must give them extra responsibility, empower them to think innovatively about where the business is heading and give them some latitude to help move the business forward. Forbes offers six ways to do this: 1. Encourage in the moment feedback. 2. Cultivate the executive mentality. 3. Present new challenges and opportunities. 4. Respect boundaries. 5. Offer flexibility. 6. Don’t babysit. One way employers may implement this type of strategy is through building a lean culture. The term ‘lean’ was coined to describe Toyota’s business during the late 1980s by a research team headed by Jim Womack, Ph.D., at MIT’s International Motor Vehicle Program. For Toyota the goal is always to be the best at cost, quality, delivery, safety, and morale through engaging people in continuous improvement. Lean culture brings together process, people and purpose. Overall efficiency is measured by examining values and culture, engagement and ownership and accountability. The more accountability leaders create in their staff, the better positioned they will be to drive the company’s vision. However, leaders must jump on board. And while this may be difficult, it is a necessity to encourage further development and innovation within an organisation. BF

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BF | PROFILE

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PROFILE | BF

How to build a better business When a franchise model is implemented correctly, it can be a powerful thing. So powerful in fact that even small independent builders can successfully expand beyond their original borders. Jonathan Jackson speaks with G.J. Gardner Homes CEO and Managing Director, Darren Wallis, about the builder’s ever expanding international footprint.

he most successful businesses are the ones that seize opportunities. Sometimes those opportunities come as a surprise, other times they arise through the hard work of everyone involved in a business. For G.J. Gardner Homes its success has been due to a mixture of both. Darren started at G.J. Gardner Homes’ in 1994 as the company’s accountant, involved in the daily running of the business and working closely with founder Greg Gardner. Together, they helped grow a well-respected home building business with six regional offices in South East Queensland. At the time, they were proud at what they had achieved and the future of G.J. Gardner Homes, but it wasn’t until one gentleman walked through the doors with an out of the box query, that a whole new perspective and consequent opportunity was revealed. “This gentleman had been speaking with someone at the Housing Institute of Australia (HIA) enquiring about how to set up a franchise in the construction industry; they advised him to seek out a large building company to talk about franchising. So, he came to us,” Darren says. That chance meeting and unexpected query, gave Mr. Gardner something to think about. He and Darren approached the other office managers at G.J. Gardner Homes to vet their opinions.

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“We spoke to six other managers and all bar one said that if we were to go down the franchise path, they wanted in. So we franchised the business and within three months we went from being a corporate builder to a franchisor.” Darren says the fundamental change to G.J. Gardner Homes was that employees essentially became stakeholders with a great incentive and vested interest in growing the business. “We had stakeholders and we could expand quicker, but we could also give back to the industry by giving small builders the opportunity to grow their businesses from building three houses a year to 150 houses or more. This was a great growth strategy, particularly as it was our aim to become a national business.” It wasn’t just domestic plans that were on the agenda. An international viewpoint was also put forward. New Zealand was a logical move. “We placed an advertisement with a New Zealand paper and we were inundated with people wanting a franchise. Greg said we needed a master franchise to look after them, so that same day I rang a mate of mine, met him in Noosa and we sat down and worked out the deal on the back a napkin.” Some of the best deals are worked out on the back of a napkin and G.J. Gardner Homes is now the biggest builder in New Zealand, developing 1000 houses a year. Once they saw what could be done in New Zealand, Darren

and Greg knew it could be done around the rest of Australia. “At the time, we didn’t have brand recognition outside of QLD, so we thought if we could emulate the brand throughout Australia, we could then grow in the US. It came down to implementation.” US Calling

Darren became the Director and Partner of G.J. Gardner Homes in 1996 and in 2000 he went on to take the top job, appointed as the Managing Director of the company. He has spearheaded growth and expansion in Australia, New Zealand and the United States and in last financial year alone, his company sold more than 4000 homes achieving more than one billion dollars in sales. “That was always our plan to go to the US,” Darren says. It wasn’t easy, however. Apart from uprooting his family, he faced regulatory and compliance issues, problems such as changing the modeling from metric to imperial and dealing with a whole new industry. However, the same altruistic sentiment to help small builders develop the skills and strategies to grow their businesses remained. “In 2008, I jumped on a plane to the US and said ‘we are here now, let’s set up’. My wife and two kids were in tow and I began to modify the plans and systems to meet US requirements. It was a step-by-step challenge, but I felt

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BF | PROFILE if we could make it in California where building regulations are some of the strictest in the world, we could make it anywhere. I helped write a lot of the agreements and worked closely with franchisees to help them understand the process and get it running. It has definitely been worth it in the long run.” The expansion across the US is one of Darren’s proudest achievements and he is over there half a dozen times a year to ensure things are going smoothly. “From being a small builder in South-East QLD, to go across to the US and have over 30 offices building a few hundred homes is quite an achievement,” he says. It is a particular achievement because when Darren went over in 2008, with his family, a dream and a two-year visa, the world was turning. “The crash had happened, so I decided to support the team. I lived in Denver and there were hundreds of builders going broke over there. “We went into the GFC with 11 offices and only lost one with one other changing hands. All the rest were able to batten down the hatches during that period and ride out this financial storm.” Darren says it was in part due to the systems that G.J. Gardner has in place. Building a connectivity solution

The technology system G.J. Gardner has implemented for its franchises covers everything to do with con-

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struction. Darren can see exact sales and start dates and what the company needs to do about jobs. Darren played a fundamental role in developing this program, working closely with a computer programmer until it met their business needs. “We looked at estimating systems, scheduling and CRM but there was nothing that effectively linked everything together. So we decided to build our own system and we continued to rewrite it over the three-year period coming up to Y2K. We invested heavily into finding this solution due to a vital business need. We needed a system that would support a franchisee rolling out 150 houses each year; logistics are streamlined, there was no double entry and it is simple to create balance. “We have always tried to be at the cutting edge with our software. In the past not many builders were using

technology, it was all spreadsheets and basic programs; but we wanted a key resource to give to builders to monitor their jobs and now we have software that talks and applies to each of the regions we occupy.” The face of the franchise

As a franchisor, when looking for builders to join the business, Darren wants people who have passion and attitude. They need the determination to do what it takes to grow their business and change their lives. In fact, he is looking for people who mirror his own entrepreneurial attitude. “It is rewarding to see a small builder become part of our team, follow the G.J. Gardner system and become hugely successful,” Darren says. “We have had builders join the family and within a few years, have become the biggest builder in their town. I had one

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PROFILE | BF franchisee say to me, ‘you said if I follow the system I would earn x amount of dollars, well guess what? I earned double that’.” G.J. Gardner Homes system are the product of years of meticulous planning that are proven to work. Their growing team of builders and franchisees are a testament to the company’s success. “The ability of our systems to change and adapt has been invaluable. When our expansion begun, there were too many overheads; but after looking at the affect this was having on franchisees’ profitability we were able to quickly make changes to rectify and improve our systems in no time. We steered clear of the spec market to ensure we have contracts enabling our builders to know exactly what a customer is paying.” That is the type of systemisation and dedication to business and customer that has won G.J. Gardner Homes so many accolades. In 2013, G.J. Gardner Homes won the award for Excellence in International Franchising from the Franchise Council of Australia (FCA) and this year, Darren represented the company on the round table at International FCA Conference in Las Vegas. About 17 new franchises have opened in the past 24 months – with more than 4000 homes sold for a gross sales value of over $1.2 billion in the 2014/15 Financial Year, the company is going from strength to strength. Darren himself has also shared in several accolades. In 2001, he was awarded the prestigious Young Accountant of the Year Award and in 2012 was listed in the CPA’s ’40 under 40 Young Business Leaders’. Yet he is humble. “The awards are mostly a result of our franchisees. We look for franchisees with passion and attitude; guys who are proud of what they do and put effort into their housing. Most of the awards are at that franchise level. Winning International Franchisor of the Year has led to recognition from the franchise industry and has meant a lot for G.J. Gardner Homes. “It is a great achievement for any Australian company to be recognised for our strengths in franchising on a global scale. As a homegrown building company, that made the transition to franchising; we are so proud to represent the construction and franchising overseas for Australia.”

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Looking to the future

Darren says there are good times ahead for the construction sector. The market is booming in Australia, solid in New Zealand and on its way back in the US. “Looking at Australia, if you are not busy now you will never be busy. There is a cyclical nature to the building industry; NSW was undersupplied for 10 years and it has finally come back and there are now a lot of major infrastructure projects that are being pushed through.” The franchisees of G.J. Gardner Homes will pounce on this opportunity as the company looks to further expand across the US and eventually into Europe. “We specialise in taking each

franchisee and giving them the tools to become the biggest builder in their market. If we continue to implement this strategy across the globe, we will, one day, be the biggest homebuilder in the world.” This is a lofty ambition, but it is being overseen by a man who has a hand in a number of businesses including renovations, fit-outs and even coffee and donut franchises. He is the kid who would mow lawns, breed pigs and birds and chase any business opportunity presented to him. G.J. Gardner Homes is in the hands of a goal setter who achieves remarkable results, day after day, year on year; which is the best place for any franchisee to be. BF

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BF | FRANCHISE

5 TIPS

TO HELP YOU START YOUR JOURNEY AS A NEW BUSINESS OWNER

S Stan Gordon is CEO, Franchised Food Company.

tarting a business can certainly be risky and challenging, but armed with the right tools and information your path to ‘entrepreneurship’ should be the start of a very fruitful journey. Before you take the leap, there are many things you should consider to get your business off to a flying start. Here are my five planning tips to help your business not only survive, but thrive for the long haul.

TIP #1 Decide if you’re ready to start your own business

So, you’ve made the decision to start your own business. While initially it may seem like an easy question, you need to ask yourself – “Am I truly ready?” There is a long road ahead and much more to owning a business than just working for yourself. Before you dive in, here are a few questions to ask yourself and be truly honest with your responses: • What are the reasons for getting into

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my own business? • What is my level of skill? • What is my business goal? • What are the advantages and disadvantages for my family and for me? • How much time and commitment is needed to succeed? Someone once told me as the boss you get to choose which 50 or 60 hours a week you want to work. Your business has a better chance of succeeding if there are clear and cohesive goals between your ideas, skills, interests and motivations. You need a reason and passion to achieve and succeed! TIP #2 Research your business idea

Before you venture into a new business, first and foremost, it’s important to conduct some research to see if your idea is actually feasible. Is there a need for the product or service you propose to offer? Who are your competitors and what are your strengths in comparison? Why would consumers choose you

over someone else? Is it because you can deliver the same thing but faster or cheaper? Determine from the outset your point of difference... your Unique Selling Point. Once you have done some research and you’re still feeling confident you can deliver something others cannot, you’re onto a solid idea and ready to move onto the next necessary steps: a business plan. Not all businesses start with simple concepts or ideas; they start with problems that need to be solved or opportunities to do things better. TIP #3 Build a business plan for your new venture

Now that you’ve vetted your business idea, it is crucial to build a detailed, well structured plan around it, so as to give a clear direction of where and what your business needs to succeed. Creating a business plan is a necessary evil: a good plan is not easy. It takes time, focus and energy… but www.businessfirstmagazine.com.au

FRANCHISE| BF

it’s worth it in the long run. You must provide yourself time for adequate planning. My father taught me that, “the future belongs to those who plan for it”. And today I live by that motto. Question what success will look like and how you might overcome any difficulties that arise. What will be the key things you need to sustain to make your business viable? A business plan should be a fluid document, something that you constantly review and keep up to date; like life itself. Business is forever changing and so too should your business plan. Keeping your strategy up-to-date will help keep you focused on where you’re headed and avoid any unnecessary bumps in the road. As the saying goes, if you fail to plan, you’re planning to fail. TIP #4 Brand yourself and advertise

It’s simple; a great start-up idea won’t succeed if people don’t know about it. While traditional word-of-mouth is www.businessfirstmagazine.com.au

still the best form of advertising you will need to have a marketing plan to really grow your business. Some of the things you need to consider are: • Branding: ensure your business stands out and is not a ‘me too’ brand. Consistency in your image and messa ing is crucial. I like to use the KISS principle: Keep It Simple Stupid. • Online: your business needs to be seen, and in the digital landscape we’re living in, not having an online presence, is ill advised. • Social Media: in today’s times the plethora of social media platforms available is huge. People check their smart phones several times a day. It’s a very cost effective medium to use and is hugely powerful. • Forget traditional media: Try and give the customer an experience. TIP #5 Grow your business

Your official launch and very first sales

are only the beginning of your new job as a business owner. In order to make a profit, you always need to be growing; you will only get out of your business what you put in. Keep your finger on the pulse and keep abreast of trends in your industry. Never sit on your heels. Be proactive for every, and any, opportunity. Read what other brands are doing, attend seminars and conferences, talk to other business owners and lead the way with your ideas by taking on-board info and insights from other industries that might provide you with the next big idea in your space. No idea is a bad idea unless you don’t give it a chance to be explored. BF Stan Gordon is the CEO of Franchised Food Company – the umbrella organisation encompassing the brands Cold Rock Ice Creamery, Trampoline Gelato, Pretzel World, Nutshack, Europa Coffee drive-thru and Mr Whippy.

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BF | PROFILE

Traditional service in an ever-changing industry The world of pharmacy has changed enormously since Richard Malouf first started working; however it is a traditional philosophy of old-fashioned support and service that has helped make his company so successful through more than 50 years of business.

alouf Pharmacies is the largest chain of privately-owned pharmacies in Australia, employing some 450 staff across the pharmacy business and another 150 through their cosmetic and fragrance stores. In an era of huge national chains and ‘discount superstores’ this is no mean feat. Richard Malouf started his journey with “one tiny little half shop” in Albert Street Brisbane in 1962, growing it into a $140 million business today. “That first store is probably my greatest achievement, in that I started it from scratch rather than taking it over from anyone else – and then it grew from there,” he says. However, Richard’s interest in the industry goes back even further than that first store, with a fond memory for a local pharmacy in Maxville, Queensland back when he was barely 10 years old. “I think I almost made my mind up back in those days when I would visit the store and felt like a great place to be,” he explains laughing. “My father had a very big fashion store, possibly the biggest in Australia. So I actually went into the fashion industry a little bit while I was studying pharmacy, working directly with my father where he taught me how to buy and how retail worked. It gave me an idea of trading, and it’s those skills that I still have in

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my business today.” Pharmacy was a very different retail offering to what we see today. As Richard notes, when he opened that first store in 1962, people bought toothpaste, toilet paper and more at the pharmacy, whereas the large supermarket chains now have a stranglehold on those goods. Equally, one of the roles of the pharmacist was to create the medications in the shop. “Every second prescription you got was a mixture that was made by adding various ingredients into an ointment, powder or sometimes into pills. You were a compounding pharmacist in the real sense of the title. Then the big drug companies came in to the game and were able to make the really common mixtures in bulk at better prices and supply it all as packaged goods until that became the standard process.” For a family business to survive such change shows a willingness to innovate and an ability to understand what the market wants. Indeed, even when Richard first started in the industry, he was pioneering the service offering to the market. “Having that fashion industry understanding made me look at things a bit differently,” he says. “Most pharmacies in those days were pretty basic in offering and look. I decided that we needed to make it quite glamourous,

so as I opened new stores I introduced new things. I think I might have been the first one to ever carpet a pharmacy – they were always vinyl floored places back then.” Richard also used those early days to venture into perfume and followed his father’s fashion store ideas to make the experience more exciting and enjoyable for the consumer. “They used to have live models in those days who would walk around the stores as they did in America. Everybody wanted to shop where the models shopped so it created a real presence about the place.” Another major step forward came when Richard’s younger brother Ian joined the business. Richard says it was something of a “natural progression” with Ian also studying pharmacy and getting a taste for the business whilst working through holidays. “Ian’s about 15 years younger than me and once he decided to study pharmacy he got a feel for the business and was obviously able to offer a lot as we expanded.” This natural progression extended to the manner in which the two brothers took the business forward. Over the years Ian focused on the actual pharmacy side, whilst Richard concentrated on the business side. Through the years it has extended, with nieces and nephews joining and bringing new skills and www.businessfirstmagazine.com.au

PROFILE | BF

Richard Malouf

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differing involvement. While it’s one thing to have the passion and spirit of family members to help drive the business, it still requires strategy and thought to keep relevant; particularly in an industry that has seen such massive change. With the large chains able to buy at better wholesale prices, Malouf Pharmacies decided they needed to focus on service. “We have a philosophy that people must be spoken to within a couple of minutes of walking in the door – or at the very least you must recognise them if you are too busy at the time. I would get three or four letters a week from people telling us that they’ve never had service like ours in any store anywhere.” “Conversely, I think we get about three complaints a year – but I will still deal with them all personally – and generally it is not much more than a misunderstanding.” Richard then makes an effort to pass on these good words to his staff – saying that the mutual respect helps build a strong and loyal workforce. “We expect a lot from our staff, but we also pay them well and hopefully build an environment where they enjoy work and get satisfaction from it.” While any form of retail will talk about the possibilities of providing quality service to differentiate from competitors, there is no doubt that pharmacies have a greater opportunity than most. Many people will consult a trusted pharmacy prior to going to the doctor, while a professional pharmacist can provide advice or recognise potential medication issues not obvious to the consumer – or even the doctor. Naturally, this involves having more staff than the competitors and ensuring that training and service standards are maintained – all of which costs money – however Richard believes that the customer will ultimately appreciate the service. NAB is proud of its long standing relationship with the Malouf family, spanning over 100 years. We look forward to continuing our relationship and wish Richard Malouf and his team every success for the future. Tim Passlow, Health Regional Banking Executive, QLD

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Ian Malouf

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This commitment to loyal customers extends to a rewards program which Richard believes has been very successful for the business. Growth has also come through building successful relationships with suppliers, noting that good partners recognise the quality service that the Malouf Pharmacies provide, and therefore want to work together for mutual benefits. The partnerships have even extended to store growth. “We’ve got a lot of pharmacists who are partners,” explains Richard. “The young guy today has no chance of getting into pharmacy unless he’s got a lot of money or he goes into a small pharmacy somewhere. Even then, a lot of those small stores are going out of business because of the reduction in the PBS schemes and the influence of the big chains.” While there is an obvious benefit to Malouf Pharmacies to see this growth, it is still done in a respectful manner to the young pharmacist who often retains a decent percentage of store ownership. What the future holds in the industry I am privileged to have been a partner of Richard Malouf for 25 years. Every now and then a rare person enters your life, Richard is that person. He is an honorable man and it has been a pleasure to be associated with him - his word is as good as his bond. Richard is an enlightened retailer, who exhibits great vision, and has a passion for his employees and partners. Frank Breen, Managing Director of Cosmax

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may be a little hard to predict. The large chains and discount superstores are certainly having a say in the industry and Richard may again need to tweak the business model to stay competitive. No matter what needs to be done however, you can guarantee that the customer and service will remain central to Malouf Pharmacies. BF

API has enjoyed a close partnership with the Malouf Group for over 30 years and their continued success is testament to the vision and unflinching determination of Richard and Ian. “We share common values that aims for better health of all customers and API is proud to be associated with the Malouf Group. Australian Pharmaceutical Industries

LEAVING A LEGACY As the Chair of the Board of Malouf Pharmacies, Michael Fitzpatrick (not the AFL Commission Chairman) reflects on the legacy that brothers Richard and Ian have created. As someone who specialised in family businesses, Fitzpatrick is in prime position to comment on how family has influenced the way Malouf Pharmacies has been run. “They (Richard and Ian) have worked together for many years, which in itself is no mean feat. To be in business as a family for that long, is really a big achievement. “The other thing that is evident is how they have worked to bring the next generation of family into the business and enabled their legacy to continue.” According to Fitzpatrick these family values filter through the long-standing partnerships they have and the staff who are frontline with customers. It is these values that have everybody involved, working towards the same goal: to establish a solid group of pharmacies renowned for quality service. “They have external partners in their stores and they look for solid reliable people who share their values. These are not just business relationships; they are long-term relationships with people. “ People matter to the Malouf’s. “Richard is very generous with his friendship. He likes people and he goes out of his way to do things for them,” Fitzpatrick says.

And this creates opportunities because the service model is so strong. “Malouf Pharmacies operate a full service model, where the pharmacists are all inclined to help people and the staff can assist in sales and with the more complex items a pharmacy offers these days.” It is no secret that the Malouf’s treat all people with respect and this generally results in loyalty from the people they are doing business with including customers. In fact Richard still loves to interact and engage with the customers. “He loves the idea of standing there and talking to someone and while he doesn’t do it as often as he used to, he is still focused on understanding their needs and delivering a personal service. “The Malouf’s are loyal to the people they do business with and that is reciprocated,” Fitzpatrick says. And that loyalty is part of the Malouf legacy. Another legacy is that the business has remained in the family and will continue to do so. “As Richard gets older, the fact the business is being transitioned to the next generation is something he would be happy with. The successful transition to their children is extremely important.” The Maloouf (Malouf) legacy of looking after people will no doubt continue and this is one family business that remains in safe hands.

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BF | HUMAN RESOURCE

Why workaholics don’t always make high performers

I used to be a workaholic. I worked long hours in the office and would then log back into my computer when I got home. People would receive emails from me after midnight and I was always tired. I wasn’t very nice to be around because I was always exhausted and preoccupied. I wasn’t healthy, and I certainly wasn’t happy. What I didn’t know then that I know now is that I would have been a much better performer for my employer if I had worked less. I wouldn’t have made so many mistakes, I would have been more influential internally and externally, I would have been more creative when problem solving and more importantly, I would have been happy. pac executive, Human Capital’s recent Workplace Productivity survey of over 1,300 Australians found that people who work long hours tend to be less happy, and less productive. In fact, the threshold that shouldn’t be crossed is 50 hours per week. People who work 50 hours or more per week are 10% less likely to identify as being productive and are less likely to believe they are happy at work. While we all have times when we have to put in extra hours, if you’re consistently working long hours, you’re likely to be harming your career rather than enhancing it. Here are three key reasons to get your workaholic tendencies under control.

People are avoiding you

You may be a hard worker and you may be entrepreneurial but if you’re not nice people will avoid you. Managers who are workaholics tend to have higher turnover in their teams. They may be a little rude (because they’re always tired) and more often than not they fail to delegate because they believe no one can do important tasks as well as they do. We all know how important relationships are in business. If you fail to build relationships because you are always tired and cranky you’ll soon find it impacts upon the bottom line. More than that, if you don’t delegate to staff, or retain talent, you’re missing an opportunity to build capability in your team and across your business.

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Your lack of focus is impacting the quality of your work

Our bodies and minds move from a high energy state to a low one in 90 to 120 minute cycles. Workaholics don’t take enough breaks to restore their energy. If this is you, you will find that your focus drops, your problem solving abilities decline and your ability to communicate effectively is lacking. Develop the habit of working in intervals, taking regular breaks to restore your energy between periods of high intensity. You’re inspiring no one

Are you an inspiration to the people you work with or are you a cautionary tale about what happens when you marry your job? When you look in the mirror do you see sparkling eyes staring back at you? Are they filled with enthusiasm? Or do the bags under your eyes have their own baggage? These days, an essential part of our Employee Value Proposition comes down to work-life balance. Your clients and employees want to know it’s possible to be successful and happy. As the saying goes, “happy employees lead to happy clients”. In the old days we used to think that success leads to happiness. It’s probably the reason why we all become workaholics in the first place. However, new research has found that happiness leads to success. If you are happy you are 23% more likely to be productive and successful. There’s also a kick back in that people who are productive are 14% more likely to be happy. So, next time you leave work at 3pm on a Friday so that you can do something fun don’t feel guilty. It’s your duty to be happy so that you can be more creative, build better relationships and ultimately be a better performer. BF Cholena Orr is a business builder who is passionate about mindfulness and lifting people up. She heads pac executive Human Capital - a training, coaching and consulting business offering a range of models designed to support Human Capital needs throughout the business lifecycle; from clarifying strategy and goals through to working with individuals to help them become more resilient. www.businessfirstmagazine.com.au

HUMAN RESOURCE| BF

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BF | BUSINESS

Gaining competitive advantage through service excellence

Matthew Lewis is Head of CMC Markets Asia Pacific.

efore becoming the managing director at CMC Markets, I worked in several teams within the global financial services business, building an exemplary knowledge of the products and services the successful company offers, and the industry it fits within. Understanding what our customers want is the first step to ensuring they feel a deep sense of satisfaction in their dealings with us. As a trading company we have a mix of customers with a

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diverse set of needs â&#x20AC;&#x201C; through understanding those individual client needs, we are able to build the company and a strategy around delivering outcomes that satisfy those needs, ultimately encouraging repeat business. I believe every business leader should ask themselves: is there an opportunity to increase revenue if we significantly improve our client service offering? In this article I will share how you can keep your finger on the pulse

of your business and future-proof it against competing forces, by putting the customer experience front and centre of your business strategy. Evaluate and improve

Feedback should always be considered a gift. It enables you to make informed choices about how you can improve aspects of your business that may need work. Most importantly you should take action based on that feedback. This is something that Iâ&#x20AC;&#x2122;ve recently www.businessfirstmagazine.com.au

BUSINESS| BF

own KPIs and measures of success, which fed into the overarching strategy of ‘making it easy for the customer’. This initiative was a holistic approach, which gave us the opportunity to fix the issues that were consistently stopping us from reaching our full potential as a business. The solutions we implemented ranged from geographical relocation of key teams in the service value chain; improved technical support; and, intensive product training. Most importantly we established a customer service manager to drive standards and benchmark staff against clear, personalised KPIs, which we’ve established above existing industry standards. Today, our customers are happier, our staff feel empowered, and the business has achieved stand-out performance status, all to the delight of our head office in London. Resourcing Change

undertaken, when client feedback reflected a need to improve our client service offering. What followed was an intense review process which led to the implementation of an 18-month service strategy that was designed to bring about customer-centric changes to all areas of our business. Essentially, we needed to make it easier for our customers to do business with us, or we risked losing them to competitors. Growing pains

The review focused on four clear areas of customer communication which needed to be addressed: written, verbal, visual and aural as this encompassed all mediums we used to communicate with customers such as website, via phone and emails. Each area had its www.businessfirstmagazine.com.au

Being an online business, our customer needs often change with advances in technology. Therefore, we consistently reshape our offering around those evolving needs. For example: after building a market-leading online trading platform from the ground up, we knew there was a growing trend for traders to use laptops, smartphones, or tablets to initiate or track trades through the day. For us, that meant further investment in mobile technology, which allowed us to further grow our market position and bolster our brand as the market leader in innovative solutions. Today approximately 50% of our trades are done over mobile and that will only increase. Another example where we have responded to the needs of a key group within our customer base is the establishment of our sales trading team, who assist high net worth clients via a ‘bespoke’ service. As an online value-based trading company this was a significant move for us, and one that has successfully met the distinct needs of these important customers. Industry barometers

I strongly believe industry trackers are a great tool to give companies vital in-

sights into brand health, customer sentiment and satisfaction. They provide early warning signs, tip trends and can demonstrate who is leading the industry. Whether they provide quarterly or annual updates on industry performance and competitiveness, they are a vital barometer for all stakeholders to understand the status quo. Naturally, companies that act upon analysis of these findings will be better placed to understanding their industry and its customer needs. Since our strategic review and suite of improvements, the business is in great shape when industry trackers shine a spotlight on our offering. In the most recent Investment Trends industry tracker report customers give us a large increase of 17 per cent in our net promoter score or advocacy rating, and there has been a significant reduction in the number of clients switching to another provider, assisting us to maintain our strong market share position. Importance of social media

A core component of our client service offering is delivering education tools and we do this very effectively via digital channels and social media, which are scalable and cost effective. We know education delivers a real need in the trader community. It provides us with an additional feedback channel. And, it demonstrates to our customers that we have the smarts to accurately analyse the markets to help them make good trading and investment decisions. This has a reaffirming effect creating stickiness, or loyalty with our current customer base, and it also continues to increase the number of traders who sign up for our service. Today, as a business, we are confident that our clients are happy with the service we offer – and the recent positive results speak for themselves. As a business leader, I am focused on our diverse set of clients’ ever-changing needs, so we can continue to go above and beyond their expectations and deliver service excellence. BF CMC Markets Stockbroking is a participant of the ASX Group and is regulated by ASIC in Australia.

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BF | PROFILE

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PROFILE | BF

Centres of excellence

Following Emerson Power’s success in helping roll out Australia’s NBN, the business then set its sights on implementing Integrated Modular Solution and the disruption of that sector. Business First speaks with Steve Shelley, Vice President Modular Solutions - Asia Pacific about the direction of this global giant and how technology is transforming the business landscape.

teve Shelley has been with Emerson for 22 years. He has held responsibility for finance, IT and supply chain across the globe. And he was at the forefront of the day-to-day, minute-by-minute decisions made throughout the delivery of the NBN TAN project. He has seen a great deal in his two decades with Emerson, including the company’s transition from doing business with America via fax machine. “I used to come into work in the morning and there’d be a fax machine beside my desk and six or 10 faxes from America which we would work through and then fax back. I guess they could be described as the good old days. Now, the expectation is that we’re available 24x7. There’s no time when you’re not available online. And I think in our business and personal life, we’re just always expected to be online.” According to Steve this 24/7 environment has increased hunger among businesses for data and analytics. “We get so much more data now to make decisions and we analyse so much more. If we’re offline, or the Internet’s not available, there’s a mild panic. If you leave your phone at home, you turn around and go back half an hour to get it because you can’t stand being a day without it. Business relies on the Internet for nearly everything.

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The days of simple communication are over, but now there’s so much business that’s transacted over the net that datacentres have evolved at a quickly increasing rate. And with the rise of cloud computing, that’s completely changed the way we transact. From the small one-man operator who mows the lawn to a multinational, everybody’s using the cloud or a datacentre of some kind to conduct their business.” It is the ability to influence this evolution that held Steve in good stead when he took the VP role in early 2014. The problem he has seen with this evolution is that businesses have issues cutting through the mire of information to find a solution that suits their needs. Emerson’s role is therefore to work with clients to find the most suitable technology solutions. “One of the key things that we see now is that the speed of deployment is more important than ever. From our point of view, we also see that some of the customers know they want something, but are not sure what they really want. There are so many options available to them. So we work with the customer to discover what exactly they want in order to best meet their current requirements. We then give them a solution that will be able to expand to meet their future needs.” Steve sites the NBN project as an

example of how this approach to customer requirements worked. The NBN project was a major milestone for Emerson in arranging their thought process to meet the customer’s needs. And through this Emerson evolved as the company developed engineers and project managers to facilitate the project. “We utilised those resources to come up with solution that gave the customer a lower total cost of ownership (TCO) and that matched their current needs with their capital costs. For us it’s about listening to the customers, coming up with an engineering solution and then implementing that solution in a very, very fast timeframe.” The success of the NBN roll out led to a major project with Facebook in Sweden, projects for Globe in the Philippines and three datacentres for Urdu in Myanmar, with the go-ahead just given for a fourth. Currently Steve is in the final stages of a negotiation of a client contract with a telco in Nepal to build a datacentre for them. They are also conducting a multi-site, multi-year rollout for another major telco in India. “From a local point of view, the NBN has clearly changed the way companies do business. We have more and more people who are now able to either work from home or from some other remote site. We don’t have to have people

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BF | PROFILE

coming back into the office all the time. But we also see that the demand on existing datacentres is increasing. If you have NBN at your home, or in your office, what you once considered to be an acceptable speed changes. “In the marketplace, we don’t accept things like buffering anymore. We can see that DVD shops have disappeared because people can just download a movie. In the old days when we downloaded something from Fox, we might start downloading it and then go and have dinner and then watch the movie after the meal. Now, you hit the button and expect that you would just start watching the movie straight away. In business we send many, many megs or gigs of files around and expect that people will open them and read them immediately. We have a very low tolerance for any of these things slowing down.” It is this understanding of what is happening in the market that has enabled Emerson to have such a large impact in the APAC region. This is partly due to the implementation of modular solutions, which can better tend to a client’s needs. “When we started our marketing education process, modular solutions

was seen as no more than an interesting alternative where we were having to sell the benefits and try and convince a customer that it was a viable alternative to a traditional datacentre. Now, the customers are coming to us and they see this as an important option. So the question now is not ‘will I get a modular datacentre?’ but ‘what kind of modular datacentre do I need?’ And so, our client levels are rising continuously.” In fact those levels are rising through Asia as the company further expands into this market. There is acceptance in India, Nepal, Malaysia, Myanmar, Indonesia and Thailand. These are places where Steve feels further expansion is going to be significant. This will have a great deal to do with economies and social infrastructure, but it is also likely that their demand will increase as they build on their data demands and realise that the total cost of ownership is minimised. This means lower capital. It allows a customer to be online and earning revenue up to 9 to 12 months faster that they would have had if they were investing in a traditional datacentre. With Emerson’s datacentres, the business has gone to a lot of effort not just to have a really good engineering

www.greenboxarchitecture.com From our Sydney Studio, Greenbox delivers design led responsible www.greenboxarchitecture.com solutions in Architecture, Interior Design and Urban Design on projects Fromtheour Sydney Greenbox delivers design led responsible throughout Asia PacificStudio, Region. solutions in Architecture, Interior Design and Urban Design on projects throughout the Asia Pacific Region.

solution, but also to make sure that when the customer is inside the datacentre, it looks and feels exactly like they were inside one that is traditional even though it is a movable structure that can be built anywhere to any specification. “We’ve developed prefab centres that will go three storeys high, so we can reduce our footprint considerably and we can make it so that we could do storey one on day one, storey two on day two and storey three on day three so the customer can match his expansion as his business increases.” Of course none of this could happen without the loyalty and hard work of suppliers. The number is small because Emerson’s Australian operations manufactures all key products that go inside the datacentre. Steve says there are about 10 key suppliers with whom the business has had long-term relationships. “We like to have long term partnerships with our suppliers because often there are high expectations surrounding our deadlines. We need to have partners who understand our expectations and understand that we can’t compromise on quality over speed. We have to have the quality and we have

PROFILE | BF

Having being involved with Emerson for over 20 years on a myriad of datacentre projects, we were delighted and honoured when they approached us to partner on the NBN fibre node and this nation building project. Andrew Owens Managing Director of Greenbox

to have the speed and I believe if we keep on changing our suppliers then we end up with mismatched quality and speed results. There’s a significant amount of education that we have to go through when we bring a supplier into the modular solutions space. And there are times where there are problems. If you have a supplier who walks away when there’s a problem, then that’s not the kind of partnership that you want, so we like to develop with partners who roll their sleeves up with us and get those problems fixed instead of pointing their finger and saying ‘well, it’s not us, it’s you. It’s not you it’s them’. That strategic alliance is where we all benefit and that’s what’s important to us.” It is those alliances and the Emer-

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son Asia Pacific staff that will help the company fulfil its short and long-term goals. “I want to build the engineering and project management skillset around the region,” Steve says. “So my goal in five years’ time is to have, not just the team in Australia, India and China but to have a team in Thailand and a team in Malaysia and a couple of teams that are under our guidance but can do local projects. I can see that in five years’ time we will be doing so many projects that there won’t be enough scheduled flights for my current team just to be able to get around to them. From that point of view, my internal goal is to have each small region sustainable and able to run itself.”

Steve is also looking forward to further developments in technology. “There’s a change in technology that’s within server racks. Currently the average Kilowatts per rack would be 5 kilowatts, but there are now suppliers that are making servers that will be 25 kilowatts per rack. That is a dramatic increase and we’ve had to develop products that rather than cool the whole aisle because one rack is hot, incorporates direct cooling. We’ve also had to develop software in our DCIM solution that detects when one server is running at 80% capacity and the server in the rack next to it is only running at 20% capacity, so we can move some traffic from server 1 to server 2 to optimise the experience.” Keeping up with technology can be difficult. However, Emerson has its finger on the pulse and is not only leading the way in modular datacentre design, but also in the technology that fuels these centres. As such, it is an exciting space to be working in and one that will continue to rapidly develop with Emerson at the forefront. BF

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BF | TAX

How to sell your business tax-free You’ve spent years building up your business and you’ve made it into a success, but now you’re looking to take your foot of the accelerator and take it easy for a while. Maybe you’ve received an offer you can’t refuse from a competitor or perhaps some of your staff is interested in buying out the business. Before you do a deal, you will need to understand the tax consequences of what you’re proposing writes Mark Chapman.

he good news is that for those disposing of a small business, there are a variety of concessions available which can help you defer, reduce or even eliminate any potential capital gains tax (CGT) consequences arising on the disposal.

The 50% discount

Before we discuss the specific small

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business CGT concessions, it’s worth mentioning the general 50% discount available against most capital gains arising on the sale of assets, including shares, property and business assets. The main features of the discount are as follows: 1. The discount is available to individuals, trusts, partnerships and complying superannuation funds but not to

companies 2. The rate of the discount is 50% for individuals, trusts and partnerships and 33 1/3rd% for superannuation funds 3. To qualify, the asset must have been owned for 12 months. Clearly, qualifying for the 50% discount is easy and it provides a very valuable relief. But if you also qualify for one or more of the small business

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TAX| BF

CGT concessions, you can potentially go one step further, even reducing your tax bill down to zero. In addition to the obvious tax benefits, the small business CGT concessions can also enable: • companies and trusts to distribute funds tax effectively to shareholders and beneficiaries; • some or all of the sale proceeds to be contributed to superannuation, with those contributions exempted from the standard non-concessional contributions cap.

The $2 million small business entity test is available if you fail the $6 million net asset value test. The $2 million small business entity test is a measure of your business’s turnover (basically gross sales) and is the same test used to qualify for other small business tax breaks like the $20,000 instant tax deduction for capital assets (so if you qualify for that, you’ll pass this test).

There are four CGT concessions that may apply on the disposal of a small business: • The 15-year exemption • The 50% reduction • The retirement exemption • Roll-over

3. Significant individual test: This only applies as a basic condition where the asset being disposed of is a share in a company or an interest in a trust. If it applies, there must be an individual who owns a minimum 20% stake in the company or trust. If you pass the basic tests, above, you’re then into the small business CGT concessions regime and can consider which concessions to take advantage of:

The basic conditions

The 15 year exemption

The concessions

Before you can even think about applying any of the small business CGT concessions, there are some basic conditions which must be met. These conditions are:1. Active asset test: This is the core test and must be met on all occasions. To qualify, the capital gain must be realised from the sale of an ‘active asset’ of the business. An active asset is one owned by the taxpayer and used, or held ready for use, in the carrying on of the business by the taxpayer, an affiliate of the taxpayer or an entity connected to the taxpayer. This includes shares in the business and goodwill. The asset must have been an active asset for at least half the ownership period (or at least 7 ½ years if the asset has been owned for more than 15 years). 2. Maximum net asset value test or the small business entity test: You must also satisfy either the $6 million maximum net asset value test or the $2 million small business entity test. To pass the $6 million net asset value test, your total CGT assets must not exceed $6m, including the value of certain assets of your affiliates and entities controlled by you. Personal use assets like your superannuation and family home are excluded. www.businessfirstmagazine.com.au

If you meet the basic conditions, a small business asset disposed of is totally exempt from CGT if the asset has been owned by the entity for at least 15 years. 50% active asset reduction

Where a capital gain is derived from the sale of an active asset (see the description above), a 50% reduction is available. That’s in addition to the general 50% discount, so taking the two together, the gain is reduced by 75%. This concession is typically applied where the asset hasn’t been owned for 15 years, so the full exemption outlined above isn’t available. Small business retirement exemption A taxpayer can choose this exemption to completely eliminate a gain up to a lifetime limit of $500,000. Although commonly used in a retirement situation, it isn’t actually necessary to retire to benefit from it. If the individual is less than 55 years old just before choosing the rollover, they must contribute the CGT exempt amount to a complying super fund or retirement savings account. If the individual is aged 55 or more just before choosing to use the retirement exemption, they don’t have to pay anything into a complying superannuation fund or RSA, even though they may have been under 55 years when you received the capital proceeds.

A common planning strategy for those aged 53 to 54 is to roll their capital gain over under the small business roll over relief (discussed next) and then access the retirement exemption once they turn 55. Roll-over relief

This relief allows a business owner to “roll” the capital gain derived from the sale of their business to one or more new businesses or business assets. The replacement asset must be acquired within two years of the original CGT event. If this doesn’t happen, the original gain crystallises. Even if this happens, the taxpayer has still managed to defer their gain by up to two years. Case Study Adam and Brian are 62 and 60 years old respectively and would like to sell their business and retire. They operate a freight business in Victoria which they purchased in 2002. They will make a $600,000 capital gain from the sale of their business. Both partners meet the basic conditions for eligibility for the small business CGT concessions. Total capital gain Reduced by the following concessions: General 50% discount

($300,000)

50% active asset exemption

($150,000)

Retirement exemption

($150,000)

Total remaining capital gain

$600,000

By combining three separate reliefs, they have eliminated 100% of their capital gain and have saved tax (at the top marginal rate of 47%) of $282,000 or $141,000 each. And finally….

The above is a very high level summary of an extremely complex area of the tax law. Make sure you take professional advice so that you get the best possible tax outcome for your situation. BF Mark Chapman is Director of Tax Communications with H&R Block (www.hrblock.com.au), Australia’s largest firm of tax accountants. He specialises in tax planning for individuals and small businesses and can be contacted at mchapman@hrblock.com.au.

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BF | PROFILE

People power in fast food fast lane After 20-plus years with Yum! Restaurants International, Tony Lowings still has the same passion for the business as he did when he began with the company as a planning director in 1994. He speaks with Business First about why Yum! has been such a joy to shape, guide and prepare for the future.

efore Yum! there were BOC and Lend Lease. Two major highly reputable organisations but according to Yum! MD Tony Lowings the culture that has been developed by the global fast food giant in which he has developed his business and leadership skills, is particularly special. That’s not to say that BOC and Lend Lease are inferior in any way, it is just when you compare internal cultures Tony aptly describes the environments as being chalk and cheese. “I worked for a few organisations,

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a couple of really globally renowned, good companies and whilst I enjoyed a lot of the work that I did, the 20 plus years that I’ve been with Yum! has just been amazing,” Tony says. “I love working at Yum! and we have a lot of people who share the same sentiment and who have stayed with us for a long time. So if I look at all my prior experience, it’s chalk and cheese in terms of the satisfaction and the joy that I’ve got out of it.” That joy has come through roles in finance. Through a leadership position

in NSW 12 months after joining the company, where he ran the KFC New South Wales market. Through his role as Chief Operations Officer for Pizza Hut overseeing Australia and New Zealand operations and his position of Chief Operations Officer for KFC for Australia and New Zealand. It also had an impact when he was given the opportunity to move overseas and run the Latin American and Caribbean business for the global organisation. “I was based out of Miami and I looked after a big region there. At www.businessfirstmagazine.com.au

PROFILE | BF

that stage we had five brands in the business: KFC, Pizza Hut, Taco Bell and two small brands, Long John Silvers and A&W. I think we had 39 countries in that region which I looked after for a while before moving into the Chief Operations Officer role for the international business. That role covered everything outside of China and the United States and even though I was based in Dallas, I had this global operations responsibility.” Tony moved back to Australia four years ago. It was less of a culture shock than stepping foot in a Latin America country for the first time. Yet it wasn’t only coming to terms with different cultures that he had to confront, it was also the different needs of multiple franchisees across 39 countries working across five brands. He had to learn everything about customs and manners that he could. Of course in Latin America there are two things that drive people: food and family. These are also the values that drive a fast food restaurant and Tony wanted to present these values to his staff. “What I did from an early stage is make sure that I got all of our employwww.businessfirstmagazine.com.au

ees and several franchisees one-on-one with their husband or wife and even their kids and they came and ate a meal in my house. So I brought the family in, then sat down and enjoyed a meal with them. It was amazing how that worked for me in terms of building relationships with people. The Latinos have great respect for people who go out of their way to show them hospitality and bringing someone into your own house and sharing food and family with them makes a great deal of difference. I think that probably leapfrogged my ability to make an impact in the region very, very quickly.” When he came back to Australia he was thus well prepared for the MD position. Tony was a leader who could relate to people. “Even though all of our franchisees and all of our people from different countries would insist their business is completely different from every other place, I found there were huge similarities. People love being treated with respect. They love food, and they appreciate it in their own particularway. Our brands actually work very similarly in different countries. People are important; they are at the forefront of operational and strategic decisions that have to be made to keep Yum! and indeed any other business profitable. When I came back to the business here in Australia, I was able to take a far more strategic, broad measured approach. I didn’t feel panicked into having to do short-term things. I felt comfortable that I had a lot of knowledge and a whole lot of weapons in my armoury that if we did the right thing we were going to put ourselves in a

strong position. I was able to bring a calmness and a longer term perspective which I think is probably the biggest thing that worked for me.” This is an important asset when running entities with vastly different operational models. However Tony says that at the core of the entire Yum! organisation is people. “We always talk about the fact that we are a people business. We employ large numbers of people. In Australia KFC employs over 30,000 people and we put a huge amount into training them. And we do the same with Pizza Hut and through this we can engage with people and create an environment where people enjoy coming to work, even if they’re doing what you and I might consider to be a entry level kind of role. We make sure that it’s as fun and enjoyable as possible and we give people the opportunity to grow and progress within that environment. All of those things are very common between KFC and Pizza Hut.” In terms of execution the chains are very different. KFC has multiple cooking platforms. It’s a complex business At Orora, we value our long partnership with KFC. As an innovative, customer-led company Orora strives to identify and deliver packaging solutions that meet the needs of KFC, assisting them to go that extra mile for the two million customers that visit their restaurants every week. Orora Cartons

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with regard to management, whereas Pizza Hut has a single cook platform through a pizza oven and is very heavily night and weekend focused. It takes an intense approach to operate a delivery business well. What they do have in common is a retail focus. “We always have been a retail business that sells products,” Tony says. “However what I feel we’ve done very well over the last four years is become a brand that people interact with and that has some stature in the community. Rather than just being a business that’s trying to advertise and sell products week after week, we’ve put a lot of effort into making people feel proud about the brand internally. With over 30,000 employees and a lot of those employees who are still young, it’s quite fascinating how they have this great desire, no matter what job they do, to work for an organization that has a social conscience and is doing the right thing in the community. We want our staff to feel good and proud about who they work for, but also to do the right thing in the environment.” Community initiatives include supporting the World Hunger Relief program. “I think we’ve raised over $80 million in support for this,” Tony says. “We do it at a global level. We also do a huge amount of it here in Australia. We raised over $800,000 just out of our KFC stores last year. And I think it’s amazing how young people get excited about being involved in these kind of community activities and seeing the difference they can make for other people. Locally, in Australia, we do other things. We support two organisations: Reach, which does a lot of work with youth and creating opportunities for empowering young people and we also do some work with Whitelion which is an organisation that tries to find opportunities for people who have slipped off the rails. We work with Whitelion and either try to find employment opportunities or training opportunities for them.” Certainly a community focus is part of what the brand stands for and this has contributed to a substantial growth in profits during Tony’s time in charge. And the KFC MD is looking to protect the 10 per cent share of the $14 billion quick-service restaurant trade that he has built as new players enter the market. One protectionist strategy has been www.businessfirstmagazine.com.au

to trial a new casual-format dining store. The fast-food giant opened a KFC Urban store in Parramatta in Sydney’s west earlier this year to test the small format environment. The store is just110 square metres, with 30 seats and is one-third the size of a traditional KFC outlet. It has no car parking or drive-thru and has a more upmarket feel. Tony told the AFR when the store first opened: “We are looking to see if there’s an opportunity to set up a contemporary version of KFC, which might compete more effectively for consumers looking for a more upmarket experience.” Although it isn’t a key component of the company’s growth agenda, it does reflect the innovative approach Yum! brands takes to build market share. Real growth, however, rests on the shoulders of the people who work in and with the organisation. From staff to suppliers, everyone has a role to play in the effective operations of the business. All staff, no matter what positions they hold, will work across the business and anyone who joins spends time working in a KFC store. “If it’s a receptionist, they might do two or three days in the field doing things like breading up chicken. If it is a more senior executive we will have them do a minimum of six weeks training in a KFC store. So, it doesn’t matter if you’re a marketing, supply chain, HR or development, there are no exceptions to contributing to the development of a rounded business culture.” And similar rules apply to the suppliers who work with the brand. There are 10 critical suppliers who

Cargill Australia has a proud history of helping customers thrive and this is demonstrated by partnering and supplying Australian sourced high oleic canola oil (HOCAN) to KFC Australia. KFC Australia uses Cargill’s HOCAN to cook its great tasting food and both companies are proud to support Australian farmers. Cargill supply chicken, French fries, seasoning, flour and beverages all of whom have strong, long-term relationships with the company. “I think our suppliers have a high degree of respect for us. We believe we have a win-win partnership with them rather than try and squeeze them on costs and such. . And as with the program we have for staff, our key suppliers also spend at least one day a year working in a store so that they know when their product comes into our store and what the store manager has to do in terms of receiving and storing the product. It just builds appreciation and engagement and facilitates a powerful connection.” As Tony plans forward, it is the people he relies on the most to help him achieve his growth targets. As such he believes that his role as MD is to create an environment where everyone loves what they’re doing every day and can be the best they can be. And that applies to people who directly report to him, down to the young 15-year-old team member who’s joining KFC for the first time. People are the backbone of a Tony Lowings run business because he understands that it is they who create exceptional culture. BF

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BF | WORKFORCE

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WORKFORCE| BF

WOMEN IN THE WORKFORCE:

Confronting the Pay Gap L Jack Delosa

Gen Y Entrepreneur & Investor

et’s talk about the pay gap. In November 2014, the average take home salary for Australian men was 18.8% higher than women. That means that in Australia – a civilised, democratic and egalitarian society – women in the workforce are currently earning nearly 19% less than their male counterparts. And this disparity is steadily increasing year on year. According to the Workplace Gender Equality Agency, the greatest contributor to the pay gap is the lack of women in senior management positions. Women have been prevalent in the Australian workforce for over half a century and currently determine 45% of the workforce. Yet only 26% of key management positions are held by women. More astonishingly, one third of all Australian businesses do not have any women in key management roles. None. But this is a global trend. A quick glance at the Fortune 500 will reveal that a meagre 23 of the world’s top companies (4.6%) are currently headed by female CEOs. These statistics are alarming on a number of levels. Firstly, in my view, they do not represent the true potential women have to be strong and charismatic leaders, such as the formidable Angela Merkel, Chancellor of Germany and Forbes’ ‘Most Powerful Woman on Earth’. They do not demonstrate the inherent ability of women to be inspirational and courageous agents of change, like media giant, Oprah Winfrey andte girls’ education advocate,

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Malala Yousafzai. And they do not signify the vital contribution that women have been proven to make in business teams, particularly regarding creativity, vision and effective problem solving. (A recent study revealed that a business team’s success at producing effective solutions was directly proportional to the number of women on the team1). What this shows us is that the true value of what women contribute to business is somehow being overlooked. It seems that (perhaps inadvertently) the conventional method of employing and promoting employees has harboured an innate inequality; one that should have been left behind in the last century. That leads me to my second concern. Small and medium businesses have long been the backbone of the Australian economy. Therefore, in my view, if we want to continue to thrive as a nation we need to ensure that we nurture dynamic and disruptive entrepreneurs, and we need them to build creative and capable teams. Successful teams. Driven. Inspired. Experience has shown me that women are incredibly capable in business. In my view, they tend to be highly intuitive and creative, and studies have shown them to be empathetic and highly attuned to vital social innuendo when working in a team. Therefore, the conversation needs to begin about how and why businesses are not recognising the value of highly capable female applicants and employees. For the sake of our ongoing economic success, the

focus needs to be on supporting women managers and leaders, and reducing the national embarrassment of the gender pay gap. Business Leaders

In my view, the traditional concepts behind employment and promotional opportunity are outdated and irrelevant. Instead of focusing on education, skills and other conventional criteria, I encourage business leaders to define the vision, mission and values of their business. Then, employ and nurture team members that are naturally, and passionately, aligned with those qualities. Women in the Workforce

Young Australian women are more educated than their male peers, and yet tend to earn less. In my view, tertiary education does not lead to a more meaningful or on-purpose career path. In fact, it’s usually quite the opposite as those with a qualification try to mould their career to their degree rather than their sense of purpose or internal drivers. I encourage savvy business women to either consider entrepreneurialism, or ensure that they seek work environments where they are valued in equal measure to what they add. Equal Pay Day marks the calendar date where women have earned equal pay with men for the previous financial year. In 2014, Equal Pay Day was on 5 September. BF 1 Evidence for a Collective Intelligence Factor in the Performance of Human Groups, Anita Williams Woolley, Christopher F. Chabris et al (2010)

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BF | PROFILE

Arcadis launches in Australia Arcadis the leading design and consultancy firm for the natural and built assets, has officially launched in Australia on 21 September 2015 with the re-branding of Hyder Consulting. The name Arcadis is derived from Arcadia, which, according to Greek mythology, is the finest place on earth to live. That philosophy is indicative of the companyâ&#x20AC;&#x2122;s aims to work systematically with clients to create places where people can live, work and thrive. Business First speaks with Arcadis Australia Pacific CEO Greg Steele about change and engineering a better environment.

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“

It’s an exciting time for our business, re-branding to Arcadis gives us the ability to call upon a larger group of global colleagues to help solve client problems. Whether the flood defenses in New York and New Orleans can be applied to the Brisbane and Sydney coastlines, or the specialist tunneling skills of the Metro de Santiago in Chile can be adapted to the likes of the Forest field Airport Link in Perth- we can tap into a wider network and share that knowledge with our clients to meet their needs,” Greg says. The re-branding also brings together over nine companies to create one global brand. “Over the last few years Arcadis has added well known firms such as EC Harris, RTKL, Callison and Langdon Seah to its global stable- so it made sense to create one global brand. Together we can offer clients expertise across the world including engineering and design, cost management, project and program management, business advisory, architecture and water and environmental solutions”.

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Focus on clients

“It’s been almost a year since we were acquired by Arcadis and during that time we have been familiarizing ourselves with the larger Arcadis team and talking to our clients about what the change might mean to them. Although it’s a big change, it’s been coming for some time. We’ve used this last year or so to talk to clients about it, and reassure them that they can continue to expect the same good quality services they have always received from us. The good thing for me is that although we are now part of a much bigger organisation- according to ENR Arcadis ranked third in the world for engineering- we have maintained our local independence and local management team. Importantly, this allows us to make quick decisions for clients on the ground. Many of our clients say they appreciate this aspect about working with us, so it was great to be part of a bigger company but still have this ability. In my opinion being successful with our clients is about delivering on your

promise to them and exceeding their expectations. That’s always been our approach in Australia for over 70 years, and that focus will not be changing any time soon. Global team brings local benefits

Greg brings a great deal of perspective to Arcadis. He is leading the creation and delivery of a future reality for Arcadis Australia Pacific and is one of seven regional CEOs overseeing the company’s operations. “One of the advantages of being part of the Arcadis team is the ability to share resources across the world to meet client requirements. As the world globalises, sharing skills has become necessary particularly for the sake of innovation and cost efficiencies, Greg says. “So as the jobs get bigger and more complex, for instance we’ve just won the design of the M4 East in Sydney which is a big tunnel, we’re able to bring the best tunnelling people from France, the Netherlands and the UK from the Arcadis global team. We can

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PROFILE | BF

bring the best skills from around the world to this Sydney project. So you can see the need for global consolidation. It allows us to be more competitive and enables us to become one of the ‘big four’ engineering organisations in the world.” A look at the projects

The Australian team has worked with myriad top line clients. The Dynon Rail Link, coined as a nationally significant project, helped secure Melbourne’s position as having the largest container port in Australia. The result of the project was to ease major road and rail bottlenecks and improve internal operational efficiencies across the precinct. Meanwhile 1 William Street in Brisbane has been developed for the Queensland Government as part of the government’s plan for a renewed Government Administrative Precinct and to meet its accommodation demands. Other projects include the Adelaide Desalination Plant to meet half of Adelaide’s drinking water needs. In fact Arcadis has a proud history of major Australian infrastructure projects including Sydney Harbour Bridge eighty years ago, the CentrePoint Tower (now known as Sydney Tower) and Federation Square. “In the last seven years we have worked on the Go Between Bridge in Brisbane, the Hunter Expressway in New South Wales and The M1 and the M80 in Melbourne; all were fantastic projects that change the way people commute and travel”. Greg puts the success of many of these projects down to building strong alliances. “We have a particular procurement model where the client, the contractor and the design consultant actually join together in a tri-party agreement. We have excelled at those alliances”. He says the root of these relationships lies in being open. “It’s that openness and sincerity that matters. We do a lot of work in the early phases of those relationships and we bring to the table how we are going to form a team, what the issues are and how to develop a charter. In my experience you have to plan for success and that starts with the relationship.” Due to that business mentality many of Arcadis’ partners and clients have been with them for a long time. “It’s particularly nice with some of our key www.businessfirstmagazine.com.au

clients to see their success and it’s great to know we are part of that.” A little bit of history

Looking back at Greg’s career it is little wonder he has found himself in the position he currently occupies. He began his career as an engineer with Department of Transport and Main Roads - Gold Coast and Cairns regions and then spent four years with Coffs Harbour City Council. Following his public sector stint he went to work in an engineering consultancy before joining Hyder in 2010. “I had really good grass roots experience with Main Roads. Then I thought I needed to expand my horizons. I needed a new experience and there was a job running at Coffs Harbour City Council. I found that fabulous, but that move from State Government to Local Government was more difficult than going from Local Government to Private Sector. I just realised how grass roots Local Government is and that there is no other interface – you really had to deal with community. You are the first port of call if anything is going wrong or there’s a complaint and you’ve got to have answers. Then dealing with a council, I thought I really learnt how to write and speak with a lot more clarity. I was also exposed to some good grass roots engineering and I was able to move into water and sewerage and other areas. With Coffs Harbour City Council I engaged consultants and I was the client and this is where I really formed some of my strengths in understanding what clients are really about.” Greg says that his direct experience working with the community instilled in him a belief that you need to be someone they can trust and rely on to be honest when they’ve got a problem. Greg’s philosophy is that business is based on professional relationships, not transactions between clients and consultants. When he eventually moved into the private sector, and with the empowerment that comes with private sector organisations, it gave him the ability to achieve and outperform competitors and really meet client expectations, delight them make them happy. “That’s the thing that still drives me and I still get a buzz when a client calls up and says, ‘Your team has done a fantastic job’. That’s the thing that probably drives me more than anything and you just have to have that attitude. I think the more successful businesses

and leaders are the ones who are really there to help their clients achieve what they’re after.” Creating positive change

In his current role, Greg has accepted two positions to bring about change within the industry; he has been appointed as Chairman of the Consult Australia’s Male Champions of Change Initiative and more recently was appointed as Chair of Engineering Aid Australia. “According to the 2011 census, only 51.2% of women with engineering qualifications work in engineering and women represented just 11.8% of the engineering workforce. Clearly as a CEO of a major engineering organisation in Australia I felt that I could play a role in bringing about some change”. In May, in his capacity as the Chairman of the Consult Australia Male Champions of Change Initiative, Greg officially launched the Strategy for inclusiveness, well-being and diversity in engineering workplaces. “This Strategy for inclusiveness is an innovation, developed specifically for our industry sector, and is the first of its kind in Australia and in the world,” Greg said. The Strategy has come about because engineering in Australia is a male dominated profession and the small percentage of women who study engineering, are more likely to leave their jobs than men. This usually occurs at a crucial stage of their careers, which means they fail to make it into the pipeline for leadership positions. Greg is also passionate about improving the participation by Australia’s indigenous engineers and in his role as Chair of Engineering Aid hopes to make a difference. Since its creation in 1996, Engineering Aid Australia has partnered with universities to bring Indigenous high school students to summer schools to showcase engineering degrees with the goal of increasing enrolment. Those who continue their studies and take up an engineering career are supported through a range of scholarships. “The aim here is to get more indigenous high school students interesting in engineering, and then as an industry come together to provide future work opportunities. For me personally, if I can be one small part of bringing about change in this area then that’s enough for me” he said. BF

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TECHNOLOGY| BF

The science of App Marketing in the Age of Instant Gratification

s the main source of growth in the economy continues to shift away from mining investment, Australia is taking advantage of a booming global app economy. At Appster we’ve had over 14,000 initial consultations with entrepreneurs and companies around the world to help bring their ideas to life. With over 1.5 million apps on offer for Android users and 1.4 million available in the Apple Store, the need for a robust marketing strategy to ensure you stick out from the crowd has never been greater. If you build something, will they come?

As users become more sophisticated and tech-savvy, they are on the lookout for apps that are relevant to their daily lives and in today’s age of instant gratification user experience testing and market validation are two key areas which with the proper attention invested, will ensure your idea stays on track to achieve its desired outcome. When it comes to user experience (or UX) testing, make sure you analyse the user journey; examine how users are behaving and how they are moving through screen to screen. A common error is to have a high value feature buried too deep within the app where the user will never encounter it. In light of this, you can then reassess and deliberately push users through each segment of the app to ensure they are being rewarded and gratified with a high value experience. If users aren’t getting instant gratification, they won’t think twice before dumping your app. Our studies show that 90% of apps that go to market without a strong and robust validation methodology or without a strong UX strategy are often deleted after first use. Users are becoming more and more impatient and placing high value on their time than ever before. www.businessfirstmagazine.com.au

Challenge assumptions and be open to pivoting

At Appster we get involved from a technical co-founder perspective, meaning we collaborate with our clients to determine the vision for the app, what it is they want to achieve and then we work backwards from there. Rather than focus on the semantics of individual outputs such as features, branding and screen colours, we focus on the outcome. Be open-minded to the possibility of pivoting your idea to ensure that users are able to achieve the desired outcome. 75% of our clients make some kind of pivot to their idea, whether that is tweaking the functionality, the design or monetization strategies. You’re setting yourself up to fail if you’re basing your idea on assumptions. To insure against this risk, insights and decisions should be data driven. Implement a model which allows for clients to make alterations and tweaks even if the end result is slightly different from your original vision. Allowing this flexibility will ensure that you achieve the outcome that customers are looking for and it provides users with an enhanced experience. For free or not for free?

When it comes to price consideration, it will vary from case to case as there isn’t a single formula you can apply. In some cases a combination of free and premium content can be the best solution. Offer a free version to get early adopters on board, and then provide premium content with a price associated to it. Test the acceptance in the market and always be prepared to pivot, for instance after your initial release (once you’ve been able to obtain some data insights), you may discover that some customers are prepared to pay for premium content. In light of

this, be realistic with your monetization strategy. It’s a long way to a million dollars if you’re expecting to get 99c for every download!

App Store Optimisation – make or break

App Store Optimisation will be the make or break of your app. There is a direct correlation between the rating of an app and the number of downloads it attracts. Take into account all variables – the handset device, platform version, RAM capabilities, Internet connection type, and even battery usage levels to ensure these are all optimised for your App. If a customer is using an obscure combination of the above, it will ultimately lead to a poor user experience and therefore a negative review. At Appster we help determine what combination your market segment is most likely to use, then we suggest validating, testing and if there is a specific combination that is resulting in less-than desirable effects then disclose this on the App Store. For example, say that if a customer is using an obscure handset brand with an out of date version of the Android platform then that combination may not achieve the optimum experience. Understanding this data and proactively announcing it safe-guards you from attracting a poor review. In today’s data-driven Digital Age, assume nothing, test everything. You’ve harboured this vision for your idea, you’ve been living and breathing it, now be open to being challenged, accept that the journey is never a straight line and that it is perfectly OK to pivot. BF Vincent De Stefano is the Head of Global Sales of Appster, a leading mobile app and product development company with offices in Melbourne, India and San Francisco.

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BF | PROFILE

Long train running As a child Howard Collins was interested in everything with wheels, from trucks, trains, automobiles and planes. Having lived in the West Indies he was also subjected to a lot of travel, which further broadened his fascination with the transport industry. So it no no wonder that the Sydney Trains CEO has dedicated his life to making public transport an enjoyable experience.

oward Collins has a long and distinguished career in the public transport industry. He spent 35 years with London Transport and can see the parallels between London and Sydney, as he sets about changing the fortunes of Sydney Trains, much like he did with England’s London Underground system. “What I saw over that 35-year period in London, I feel we are almost reliving the same experience here in Sydney,” Collins says. “In the late 1970s and the early 1980s, London Transport was a rundown organisation doing everything from making meat pies to

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staircases as well as running buses and trains. It had 60,000 employees and was very much an operational business rather than customer focused. But in the time I was there, we went from 2.5 million users on the Tube every day to almost 4.25 million and the transformation from a grotty affair to something people are proud to use is fantastic. “I came to Sydney probably at a time when the old rail system was thought to be a pretty rundown affair and we’re now seeing the transformation of the place.” Collins says there is a great amount

of focused investment being poured into Sydney Trains because people realise, as they did in London, that public transport is really the only way forward for growing global cities. “London changed from being a 9 to 5 sort of place to being a 24 hour global city. It is one of the best cities in the world and through better transport, Sydney will build on its reputation as well.” Collins is in a great position to turn Sydney Trains around. He has worked in every job imaginable on the rail network from sweeping platforms to driving trains and selling tickets. www.businessfirstmagazine.com.au

PROFILE | BF

“When you’re at the top of the organisation, you’ve got to have your feet firmly on the ground and spend some time understanding what it like is on that frontline. That’s really what attracted me to the job, not so much the technical stuff but actually how the organisation works and how people can change an organisation to become well respected and one of the best.” It is that attitude that saw Collins become the youngest Area Manager in London. “The area manager was really a shift boss. Most of my colleagues were in their 40s and 50s, they’d got there by time served, experience and campaign medals on their chests. I was a bit of an upstart. But let’s say I was someone who understood the operation side and enjoyed the frontline activities. I also had a little bit of experience in terms of how to get things done. The guys would www.businessfirstmagazine.com.au

say to me: ‘Howard you can write, you know how to get the arguments across with the managers’, so at 26 I ended up being the youngest ever area manager and I learned a lot from the experience from people who had been there for 20-30 years.” Collins says there are some great parallels between Sydney and London: both are global, multicultural, international cities with the same challenges any built up city has around traffic congestion and development. “London’s growing enormously at the moment with high-rise buildings and another million people joining the city in the next five years. The story is identical in Sydney. There are huge plans for London and Sydney in the next 10 years and people realise that the only way to travel in both cities is by utilising public transport. Sydney is not behind in terms of progress, but the difference is that in London the politicians and the Mayor have realised the only way to make London breathe and work is to make sure the Underground, buses and the public transport in general work properly and are well integrated. So what I’ve tried to do in the last two and half years since I came to Sydney is bring some of that simple customer service back to the railway industry and so far, progress has been good, if I may say so myself.” His team is determined to put the emphasis on customer service - keep the trains clean, make them run on time, improve announcements and do things which customers want. When he arrived that is what the minister was asking for and that is what Collins has delivered. Collins’ arrival was on the back of running a very successful London Olympics campaign in 2012 as Chief Operating Officer, London Underground. He had been in the job five years when someone asked if he would be interested in a challenging job in Australia. “I think it was the right time and the right place. My wife has plenty of family here and I enjoyed coming here as a visitor.” There was an enormous amount of media and interest surrounding his

arrival. The network was considered to be (and still is considered to be) behind some of the leading world-class metros. However the government made clear promises they were going to focus on public transport and dedicated funding to what became known as Fixing the Trains. Collins came in with a number of ideas that had been implemented in London. They included supporting the introduction of the Opal card effectively on trains (Collins had seen great success with Oyster in London), putting paramedics on the platforms and building a new railway operation centre to manage the operation of the railway in one place. “I’ve had great support both from the former minister, Gladys Berejiklian and also now, Andrew Constance, the current transport and infrastructure minister,” Collins says. “So that’s good news and certainly there is a real focus to do even more, run more services and get people out of their cars and onto a decent public transport system.” The good news, according to Collins, is that the government has set out a very clear, long-term plan backed by several billion dollars of investment. It is a joined up strategy for the future of Sydney and New South Wales. “In the past I don’t think Sydney or its politicians understood the importance of public transport,” Collins says. “Everyone thought you could drive straight into Sydney, park your car and InfraSol Group owners vision is to be leaders in delivering successful project outcomes, particularly the development and delivery of sustainable transport solutions to support the wider community and travelling public. We are proud to have been associated for over 15 years with Sydney Trains public transport infrastructure and are well positioned to provide expert support for the next 15 years. We are looking forward to developing the Sydney Metro transport solutions at Sydney Trains interfaces with Howard Collins and his team. Howard’s leadership and extensive London Underground experience will be invaluable in supporting the program of works implementation. Michael Flynn, Managing Director InfraSol Group

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InfraSol Group is an employee owned, independent, professional service organisation that provides strategic project management, risk management, project advisory, project governance and assurance services to client organisations seeking to undertake major and/or complex projects. Our personnel provide services across a range of industry sectors including transport infrastructure – rolling stock, heavy rail, metro and light rail, ports, freight and logistics, highways, motorways with tunnels and major bridges.

InfraSol Group Pty Ltd

The business is based upon the ‘hands-on’ capabilities and experience of high calibre professionals utilising a collective and collaborative approach to providing services to our clients with a focus on providing value and achieving sustainable outcomes. InfraSol personnel are currently playing significant roles on many projects as part of client-led integrated teams. These include the Rail Services Delivery for Sydney Trains 2018 timetable, Sydney Metro – City and South West planning and the Transport Access Program delivery; all Transport for New South Wales projects. We also support the WestConnex Delivery Authority and the Inland Rail Project for Australian Rail Track Corporation.

+61 (2) 92991274 www.infrasolgroup.com.au

PROFILE | BF

drive straight out again. The reality is this is not an American city and if you look at any city around the world, if they are really going to be attractive for people to work and live in, you’ve got to have that great ability to say, ‘hey, I’ll just jump on a bus, tram or train and get in and out of town and be guaranteed my journey time’. I think the frustrating thing for motorists is, you might have a great journey on the M5 for two days in the week and the next time you’re stuck on it for three hours and that’s never any good for businesses or for people who’re trying to work in the city every day.” Another innovation Collins is a fan of the many real time apps that display Sydney’s train, bus, ferry and light rail timetable data on your phone. It features a summary view showing your next services, as well as a full timetable viewer. Another is to take a different approach to running Sydney Trains.. “50% of my senior managers actually come from the private sector; from Qantas, CommBank, and Telstra and they are saying, ‘look, there are much better, more efficient ways of using technology’. So we are in the middle of not only looking at how we improve customer service on the frontline, but also having a leaner, more effective supporting function and bringing in new computerised systems for managing data. Every one of my staff will have access to an iPad or an iPhone rather than being tied to a desk. Even guards and drivers have that facility so www.businessfirstmagazine.com.au

that they can report delays quickly to the control centres. It’s also about the structure of the organisations - if you have more than six levels of management, you really are old school and it’s time to think about how we can improve the spans of control and what we do. We already use private sector suppliers in some of our engineering work so we aren’t just a bunch of guys who’re doing everything within Sydney Trains. We work very closely with our suppliers to ensure we get best value for money for the taxpayer and we can learn from their approaches too.” Collins has seen the relationship with suppliers turned around. “I’ve got some great people who understand how suppliers work and how they can work together in partnership. I think a lot of suppliers saw us as a government agency and thought this was a great opportunity to charge the highest price and offer the lowest quality, but we’ve driven that around. Now they enjoy the fact that we are working with them, but we are also demanding as a customer.” Collins has certainly turned the organisation around. He has brought in a customer service approach and introduced operational efficiencies and new technology, motivated by his fascination with and wonder for public transport. This augurs well for the city of Sydney, especially as Collins aims to improve the network even further for Sydney Trains customers. BF

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BF | FRANCHISE

The art of franchise engagement Telstra Victorian Businesswoman of the Year 2013, Sadhana Smiles speaks about on the art of franchisee engagement.

Sadhana Smiles is CEO Harcourts Victoria

ranchising is one of the worldâ&#x20AC;&#x2122;s fastest growing industries with the sector in Australia representing $144 billion in turnover according to the Franchise Council of Australia. It can be a great opportunity for someone with investment capital to craft a career through an established business model. Hundreds of businesses operate as a franchise model with the Real Estate industry being just one of them. But with so many options available, from food to power tools to property, how do you successfully attract and retain business owners to your own network? The Australian real estate market-

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place is a rapidly changing industry with over 8,500 real estate agents and business owners adjusting to increasing digitalisation and fluctuating markets while choosing between franchise and independent real estate agencies. Having recently conducted a third party survey on Harcourts Victoriaâ&#x20AC;&#x2122;s franchisee contentment that ranked them in the 96th percentile for general network satisfaction, Sadhana Smiles, CEO Harcourts Victoria and former Telstra Victorian Business Woman of the Year provides her top tips on successfully engaging a franchise network.

1. It comes down to face time

Most franchise networks offer training programs, intranet resources and marketing â&#x20AC;&#x201C; this is standard practice. What it comes down to is getting in front of your network to have the important conversations, see their businesses firsthand and offer tailored support. A good CEO prioritises the needs of their people to ensure smooth operations. In a franchise network, this is no different except that you have a network of business owners each in their own unique markets. Staying across the individual needs of their businesses, providing support where I can and understandwww.businessfirstmagazine.com.au

FRANCHISE| BF

as your senior level colleagues - these are important ears for the requirements of your network area to fall on. Listening to the needs of your network and acting on them in a way that propels the brand forward, from marketing, sales, HR or an operations perspective, will drive the success and positive culture of your company and your franchisees will know that they’re being heard. For any business to be successful, there needs to be engagement and just as you need to love where you work, you need to love the brand that sits on your front door 4. Be transparent Important for any business structure; franchisee/franchisor relationships need to operate on trust, honesty and transparency. Open and honest conversations allow me to be more hands on with business partners and ensure we’re offering the best support we can. Transparency allows businesses to pinpoint key learnings so they can be addressed, overcome and improved. At Harcourts, we view our ongoing relationships as a partnership. We all understand and know that in business there will be situations where we may not agree with decisions or a direction, however, what is important is the transparency in the process and the knowledge that you are appreciated and respected - this works both ways. 5. Benchmark your efforts

ing the individuals and how they like to work is a big part of successfully engaging a network. By putting yourself in front of your stakeholders, you can really gauge where they’re at, how they’re feeling and observe where the successes and challenges are in their business so you can provide the right support, coaching and training. 2. Stay on the front foot

Don’t wait for problems to arise - when you’re in constant contact with your franchisees, you’re a part of their process and able to guide and support senior management so that they never feel alone. Stay on the front foot and be proactive; when you see a business succeeding or on the flip side, numbers dropping, this is prime time to get out www.businessfirstmagazine.com.au

to their office, say hello and ask the right questions to see what additional support is needed. If you can’t be in front of your network, hit the phones and be available to your network and team as often and in as many ways as you can. 3. Pride in the brand

Our survey showed that 92 per cent of our network would choose Harcourts again. This was an inspiring response for me, as you often hear about franchisees and franchisors having ongoing issues. It’s important to share wins and challenges within your business with executive level management to help drive the development and evolution of the brand. As a CEO, you answer to board members and directors, as well

Harcourts Victoria’s personal relationships with franchisees are invaluable; we believe this is what makes us an attractive option for potential franchisees. Quantifying your efforts, especially via third-party surveys, can provide information that measures how your network rates in franchisee engagement, and the success of your network engagement programs and efforts. We benchmark ourselves against the following key areas; franchisee achievement, franchisor leadership, connection and franchisor support. Franchisors and their franchisees are in business together and engagement with the brand is paramount to success. We do this research so we can understand exactly what is important to our franchisees and deliver relevant services. We also want to know the key areas we can improve in, something every business can do regardless of how successful you are. BF

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BF | PROFILE

The modern world of modular buildings When John Zendler began his career as a carpenter at the age of 20, with a new wife and baby in tow, little did he envisage he would be at the forefront of the modular construction industry. Today, as the executive general manager of both of CIMC Developments Australia and CIMC Modular Building Systems, he is leading the charge in changing the way we look at construction.

ue to his early-life family circumstances, John Zendler took his career more seriously than most 19-year-olds. “I had to make every post a winner from day one,” he says. This probably set my mind towards moving through the industry in increasingly bigger roles.” John was also good at what he did. He attributes part of his fast rise to the fact that the companies that he worked for tended to make more money with him around. “As a consequence I haven’t applied for a role for a long time. My last few roles have been through companies approaching me due to the success I’ve had.” Of course there is a serious work ethic involved in that attraction. “When I embarked on this journey, we (his wife) bought a house at a very young age and interest rates were at 12%. You certainly weren’t going to pay that off on a $190 a week apprentice wage. So the beginning of my career, I was on the tools during the day and then spending 50+ hours working in hotels and bars at night. During that point I really learned the value of hard work. Then, as my career progressed I learnt success is a combination of hard work, but also working intelligently; finding the best use of your time.” John says in the building game that tends to come through innovation. “You need to innovate. It is innovate or die in the building game. You’ve

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PROFILE | BF

got to find a better way. So I’ve always worked at that. In the construction industry, I’ve always been drawn towards the aspects of the industry that are challenging the norm and pushing innovation.” Which brings us to the modular building industry: an industry that really does suit John’s passion for innovation. He wrote in an article titled Prefabrication Offers Relief to Construction Cost Crisis, “It is my recent observation that there are sectors within the Australian real estate development market that are becoming constrained in their ability to deliver assets due to the increasing cost of construction. “Project sponsors and developers are seeking new technologies to enhance and improve on traditional construction techniques to deliver projects at lower cost, in less time and without compromising the quality of the development. “In my opinion emerging prefabrication and modular construction technologies have the potential to play a significant role in helping to address this construction cost affordability crisis.” The global reach and influence of CIMC eases the burden of meeting this www.businessfirstmagazine.com.au

crisis head on. China International Marine Containers (Group) LTD. (CIMC Group) is a public listed company on China’s Shenzhen Stock Exchange, specialising in providing modern transportation equipment and services. CIMC was founded in Shenzhen, People’s Republic of China and celebrated its 30-year anniversary in 2012. In a few decades, CIMC has grown from a container business to one of the largest and most diverse manufacturing groups in the world. CIMC Group has diversified into other industries including modular building systems, containers, vehicle, energy, chemical equipment, food equipment, offshore facilities, airport facilities, track equipment, logistics equipment, and financial services. The Group has a global operational network throughout North America, Europe, Asia and Australia with over 150 subsidiaries and 70,000 staff. When John was approached by CIMC, he saw it as the perfect opportunity to join a global organisation with a multi-billion dollar balance sheet and the same time, well and truly embraces innovation. “We’re a company that is prepared to

do what it takes. We seek opportunities for growth and an opportunities to test new markets and we’re not shy about it. The CIMC Group has been incredibly supportive of R&D initiatives and the innovations that we’ve put through at CIMC Modular Building Systems Australia.” Whilst China CIMC is the engine room with a vast team of engineers, the western influence is strong. The UK and Australian design teams works collaboratively with China. “My design team has just come back from China recently from being over on a week-long R&D and design and engineering session. We really see ourselves as one global team. We’re playing a role in a global strategy. But from a China point of view, we love the fact that we can get a handle on the market,

To deliver the best development outcomes requires a complete knowledge and understanding of the total supply and value chains. In additional to providing the best design, DesignInc works closely with CIMC’s team of experts to realise the highest and best potential of modular building systems. Ron Jee

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BF | PROFILE

communicate to the team in China what we believe the product needs to do and that there’s opportunity here if we’re able to develop a product that can meet the market demand. We find a way to make it happen. We have some exciting projects going through our business at the moment: a 24 storey, 4.5 Star hotel, 330 room hotel that is being built by full volumetric construction coming out of China. It’s a unique challenge but one that we are embracing.” And this is occurring all over the world. Patrick Fitzgibbon, senior vice president, development, Europe & Africa at Hilton Worldwide said, “CIMC’s capacity to deliver modular sections of the building to the final hotel site offers an incredible opportunity to overcome many of the challenges faced during construction. Alongside potential time and cost efficiencies, CIMC’s ability to provide senior debt to developers using its modular building technique underpins its robust growth model, and we are seeing more and more opportunity for this structure in mature markets such as the UK, and developing econo-

mies, most notably in Africa.” CIMC is no stranger to modular solutions for hotels. It has delivered key structures for a number of budget hotel developments including several Travelodge and Premier Inn sites. Travelodges in Heathrow, Uxbridge and Warminster, and Premier Inns in Hull, Gatwick, Blackpool and Manchester have seen the construction method tested first for extensions, then for complete hotels. There are hurdles including funding. “The notion of building a 200+ room hotel which goes 20 storeys in the air out of volumetric modular construction rather than conventional construction is a new idea, so therefore the banks want to sit back and see what happens,” John says. “So, yet again, another example of CIMC’s commitment to this sort of innovation and development is that for the majority of these projects we are the senior debt providers. We negotiate our commercial outcomes in our global headquarters in Shenzhen and then down in the Guangdong province which is about two hours south from

there, is where our main manufacturing and design hub is. The facility covers over a million square meters with 6000 workers and with all of the supporting procurements and engineering teams, as well as some western supervision. So, we don’t see the Australian, UK and Chinese teams as individual teams, we see ourselves as one global team.” Modular isn’t quite the building design of choice just yet, but it is gaining traction. “The domain of the modular systems was predominantly mining camps and some areas like school buildings where classrooms needed to go up over the school holidays. However due to the nature of aspects within the Australian construction industry, developers are now very constrained in their ability to deliver assets because of the cost of construction.” Areas that are facing an affordability crisis include hotels. The cost of conventional construction is preventing their projects from stacking up financially. There is a very similar situation with student accommodation and aged care and multi-residential housing are

Architecture Architecture Urban Urban Urban Design Design Interiors Interiors Interiors Architecture Design

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DoubleTree DoubleTreebybyHilton HiltonPerth PerthWaterfront WaterfrontHotel, Hotel, toto bebecompleted completed ininMarch March 2017. 2017. DoubleTree by Hilton Perth Waterfront Hotel, to be completed in March 2017.

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PROFILE | BF

also facing issues. “I think various forms of prefabrication, whether it just be bathroom pods or full volumetric modular construction, has gained enormous acceptance in the last three years and the market is starting to become very interested and far more open to the idea of volumetric construction. The predominant driver is usually the ability to reduce costs and create significant time savings. A modular development will get constructed in less than 50% of the time of a conventional construction.” Across the industry there are a number of projects in the pipeline all at various stages of design and construction. These include branded hotels in Perth, Melbourne, Adelaide, Brisbane and Melbourne for Hilton, Accor, Marriott and Hyatt, residential apartments in Sydney, Perth and Melbourne, student accommodation and high density aged care facilities in locations throughout our capital cities and regional centres. The industry is still in its infancy, but it is gaining traction and CIMC is at the forefront. However it does need more understanding from partners. “The industry faces a number of constraints some of which include the number of consultants who understand the modular building system,” John says. “Modular suppliers across Australia have been working with a number of consultants across all disciplines to ensure that there is a high level of www.businessfirstmagazine.com.au

understanding of the system. In turn this will reduce the likelihood of scope ambiguity and increased contingencies as well as broaden the number of consultants over the next few years with a greater proportion of projects being initiated. Similarly there is a small pool of local builders who understand the relationship between the modular and conventional works within a design. Working with a few select builders in each of the sectors we are active in has helped to create a greater knowledge of the modular system and confidence in

the cost and delivery of the projects.” Modular or volumetric building is a new phenomenon, however it is an innovative and sustainable way to breathe life into struggling developments, whilst reducing cost burdens. It is this sort of innovation and the associated hard work that attracted John in the first place and you get the sense that he is determined, much like he was when he was a 19-year-old apprentice, to really push this new phenomenon into something that is accepted on a much larger scale. BF

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BF | COMMUNICATIONS

How to effectively run your business from afar Managing a successful business can be difficult at the best of times, but what happens when you are managing one from afar? With the amount of technology at our disposal it has become apparent that businesses are increasingly being run out of the office; be it from across the building to across the world writes Sharon Zeev Poole.

T Sharon Zeev Poole

is the Director of Agent99 Public Relations.

his new trend is not without its challenges – managers and employers are now more than ever responsible for the success or failure of their teams, which means managers need to employ cohesive structures to avoid the pitfalls of leaving your team in limbo. Over time I have developed and established some key strategies as to how to effectively manage Agent99 from both in and out of the office, and to confidently execute processes that ensure the business continues to run smoothly while I’m absent for periods of time. Here are my top 5 favourites:

1. Trust your team

Having a strong team who you can trust to deliver your values and represent the brand, whether you are present or not, is essential to running your business. The relationship with your employees needs be based on mutual trust, and with this foundation, your employees should be able to navigate any issues or problems that come their way while you are out of the office. 2. Stay connected

Use technology to your advantage so

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that you can run the business from wherever you are. There aren’t many places left in the world where you can’t access the Internet so it’s important to set time aside either once a day or every few days to get an update on what is happening back at the office, and to see if the team are facing any challenges or problems that can’t be resolved without your involvement. 3. Have everyone on the same page

Make sure you have good systems and structures in place that all of your stakeholders are across so that when you are away, the business is still running like a fine tuned machine! It’s also imperative that the business’ direction is clear and all of your employees are on the same page in order to continue to produce a consistent quality of work while you are away. If possible, it’s helpful to have a few contingency plans in place for any potential situations that could arise. 4. Invest in training and mentoring

Long before you depart from the office, it’s wise to provide training for your employees and invest in regular mentoring so that you can guide and

shape their progression. As a manager, you’re only as good as your people can be! Introducing these opportunities to your staff should ensure that your team delivers a consistent message. 5. Stay involved

Whether you are near or far, it’s critical that you stay engaged with the running of the business. Just because you’re away from the office, it doesn’t mean you can take your foot off the pedal. It is your business after all! Employing simple strategies such as these is an excellent way to keep your business running efficiently while you are absent. Ultimately, with the right team and structures in place, the process should be seamless and hopefully a lot easier than you anticipate. BF Sharon Zeev Poole has worked in the Public Relations Industry for over fifteen years on high profile brands such as Starbucks and Warner Bros. Pictures. Eight years ago, she founded Agent99 Public Relations, a r esults driven agency specialising in traditional and digital PR integration.

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COMMUNICATIONS| BF

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BUILDING COMMUNITIES AND HOUSING Steve Bevington is one of Australia’s leading experts on housing affordability, yet unlike many ‘experts’ in this field Steve’s knowledge is based on real life experiences.

“

I guess you could say that the path was fairly straight forward, in that I encountered a period of homelessness myself,” Steve explains. “It started around 1975 and continued in one form or another through till about 1988. Not all of that was ‘living on the streets’ – although I did do that for a year or so – but it’s the combined experience of what we called ‘squatter housing’ through to unstable housing and being ‘displaced’ where I experienced the full effect out there. “A long period of homelessness and insecurity of housing allowed me to reflect on what that situation does to people and how it impacts your life – particularly if it is for sustained periods of time. I couldn’t really plan a career or consider professional qualifications as I was never in a position where I could spend two, three, or four years of my life working towards a long-term goal as there was no certainty in the immediate.” Steve did however become a trade qualified carpenter and joiner – working different jobs like a crude form of apprenticeship – building skills that would provide extremely useful in his later life and current work. The reasons behind Steve’s period of homelessness have frightening resemblance to modern Australia. Britain in the 1970s had low supply of private rental and supply of housing overall, combined with insufficient employment opportunities for young people.

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For many people in this situation, it becomes a difficult cycle to break: once you in the position of fighting for housing that is high on price and low on supply, it is hard to be in one place and from there hold down a job or study. When reflecting on his own history, Steve even laments the breakdown of a long-term relationship that he believes was destined for marriage, as both he and his partner were forced to move back with their respective parents in different parts of the country. “I feel for the young people today in a very big way,” he says. “I don’t believe that it’s as bad in Australia now as it was when it was in the 1970s in the UK but we are only a recession away from there same circumstances.” This time in the UK made Steve very determined, ultimately leading to work in housing activism, which led to politics and a position as the local councillor in the London borough of Camden. “My peers in the 1980s included people who ended up being Ministers in the Blair Government in the 1990s, and it felt like a political solution could

be achieved. I became the Head of the Housing Authority at about the age of 29, with 1200 staff managing 38,000 houses and 3000 families a year coming in to us as homeless. “However we had insufficient vacancies to meet their needs as the National Government had reduced capital funding for new public housing. We were housing them in all kinds of hotels around London’s inner city and it was a horror show to be honest. What really struck me during that time was that these people were utterly disempowered by their situation; they were just sitting in a hotel room without employment waiting for the opportunity of a vacancy which was never going to occur.” It was a challenging position, with housing development falling down due financial restraints and economic uncertainty. It did however provide a very quick learning platform and Steve acquired an extraordinary amount of knowledge in a short period of time – all of which he was able to bring with him when he moved to Australia. “I had a brief period of two and a

Propell – a JLL Company, is the national supplier of valuation and advisory services to Community Housing Limited. With our property intelligence, we specialise in social and community housing valuation and advisory needs throughout Australia. We provide a tailored service to help improve efficiencies with a focus on adding value through facilitating better business practices. Matthew Singleton – Head of Residential

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BF | PROFILE half years in Victoria in the Ministry of Planning – as it was then – where I coordinated and promoted their housing cooperative programs of the day. I am somebody with a lot of energy and vigour and managed to challenge the bureaucracy internally to really grow these programs with great success.” Following this period, Steve took time out to build a house for his own family, before returning to the workforce as an employment counsellor encouraging people to change their outlook and work towards new careers. Steve says he greatly enjoyed the work gained more skills and understanding but then an opportunity came up to start a greenfields operation and his interest was sparked. A grant of $63,000 to a start up organisation, Community Housing Ltd, was enough to buy a desk, connect a phone and work to set up the company as its first employee – Steve’s combined knowledge and skills from all his previous work and life experience put him in the prime position to make it work. “Having a lot of technical skills, my job was to assist groups get proposals together for funding projects for

SOCIAL AND COMMUNITY HOUSING EXPERTISE Propell provides a valuation service that is tailored to suit the social and community housing industry. No matter how large or how small a portfolio, Propell will work closely with you to ensure your property and valuation needs are covered. We provide valuation services for; • Mortgage Valuations: Valuation of housing stock for mortgage purposes. • Stock Valuations: Asset values for Financial Reporting purposes. • Market Rent Valuations: Assessing market rent for various purposes such as the National Rental Affordability Scheme (“NRAS”) to remain compliant with the program requirements. • Insurable Value Valuations: Meeting your Insurers requirements and making sure you are covered in the event of loss.

UNDERSTANDING At Propell, we understand that valuations are required for multiple purposes, as stated, and are therefore mindful of your time and the cost incurred using our services. This is why we seek to engage with you to ensure you are getting value for money. Consequently, we are able to provide valuations for various purposes in various formats. These are; • Full valuation: requires a full internal inspection of the property and can be used for any purpose; • Kerbside valuation: used for producing an asset value and a market rent estimates; • Desktop analysis: often used to assist with calculating the current book value of assets.

PROPELL NATIONAL VALUERS Property intelligence for today and tomorrow www.propell.com.au

PROFILE | BF people in need. From there, I was able to transition from that role, which was effectively almost a consultancy role, to develop Community Housing Limited (CHL). I could see all these groups were committed to help people in need, but didn’t have the capacity to develop the project or manage the rental housing.” The business ebbed and flowed with a number of government programs, with CHL continuing to focus on the support of disabled and disadvantaged people. When the business was officially contracted as a homelessness service provider providing specialised housing for the homeless and transitional housing, the business grew further, and later expanded from Victoria through to other parts of Australia. “In 1994 we procured our first house, and have been steadily building our stock ever since. We’re now pushing up to 5,900 across the country and quite a substantial proportion of the people who we assist are homeless people, people with disabilities, people who are from an aboriginal background and people just excluded from affordable and stable mainstream housing.” The CHL system is more than just ‘giving someone a house’. Steve is continually working with communities – utilising his experience from the dark

days in the UK and his knowledge in activism and education – to help people work towards a sustainable solution. This includes engagement with communities where there is housing need, project conception, securing finance, land acquisition, project design and construction supervision, and long term rental management of housing for low income people. It operates like any other limited company, but all financial surpluses remain in the company to be reinvested in quality affordable housing for people in need, wherever they may be. While CHL is making fantastic inroads for people in need around Australia, Steve has fears for the local housing market going forward. “The number of people entering home ownership has been dropping over the last 10 years – which obviously increases the percentage of rentals. The steady growth of housing prices is excluding a new generation from even entering the market and that puts demand on rentals. “We are seeing people increasingly pay more than 50% of their wages on rent or mortgage payments and the internationally accepted framework of affordability is that you should pay no more than 30% of your income in meeting housing costs. I believe that the political party that actually puts this issue front and centre will reap an electoral reward of significant proportion.” As for CHL, Steve says they are proudly in every State in Australia and have embarked on active housing developments in South America and

Bank Australia is proud to support Community Housing Limited. We are a 100% customer owned, responsible bank. We reinvest in the bank to provide fairer fees, better interest rates and responsible products for our customers. Customers look to us to be genuinely responsible and progressive with values that mirror their own. Bank Australia is a bank for all Australians. Bank Australia www.bankaust.com.au

South-East Asia. “We have incorporated new subsidiary companies in Papua New Guinea and in Peru to add to those we have in East Timor and in Chile and we are about to start major housing projects in India and have been examining entry into Africa,” he explains. “So our overall plans are to fully develop and expand dramatically in Australia to meet need and to expand out projects and affordable housing capacity in the four regions of the world where extreme poverty still exists which is South America, South East Asia, South Asia and sub-Saharan Africa.” It’s an issue of great need – and a credit to Steve that he has used all of his skills and experiences in life to help people throughout Australia. The rest of the world awaits. BF

Kinetic Information Systems offers a proven technology solution for the Australian community housing sector, a complete service-oriented ERP system that enables better management of the complexities of social housing. Our Community Housing ERP solution ensures that community housing providers are able to effectively manage tenants, rent, property maintenance, planned maintenance, Centrelink engagement and PostBillPay. Built on an ERP platform with more than 12,000 users worldwide, Kinetic’s solution also facilitates compliance with legislative and statutory reporting. For more information, visit: www.kineticis.com.au. Scott Graham, Managing Director

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PROPERTY| BF

KEEPING SELLING AGENTS HONEST Entrusting the sale of your home or investment property to a complete stranger can be fraught with danger. Vendor advocates are emerging to help guide sellers through the sale process writes Patrick Bright.

Patrick Bright is the Director of EPS Property Search

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s we move into the traditional spring selling season, many homeowners will be thinking of selling and upgrading to meet a change in their accommodation needs. The process of selling and buying real estate has changed dramatically over the past decade and when you don’t do something on a regular basis it’s always wise to seek independent advice. Choosing the right person to sell your home or investment property is an essential ingredient in obtaining a great price come sale time and that’s where vendor advocates come in! What are vendor advocates? To prevent costly mistakes, more and more sellers are seeking advice from vendor advocates to advise them on the sale of their property. A vendor advocate is usually an ex selling agent or current buyer’s agent. With such industry experience they can help guide and advise on key aspects of the sales and marketing campaign. A vendor advocate will visit the property and provide the seller with an unbiased appraisal, including where the property sits in the market and an indicative sales price range. They will also usually comment on positive and negative aspects of the property and where it might fall down in the eyes of buyers, and then give the seller advice on what improvements can be made to get top dollar. Many buyer’s agents offer vendor advocacy services drawing on their extensive and current understanding of the market. Given that they deal with selling agents in their respective areas on a daily basis they know which sales agents are the most professional, skilled negotiators who respond to potential buyers in a timely manner and really do genuinely work hard for their vendors to get the best price. They are also abreast of current market trends and can provide helpful tips on how to make your property more appealing to buyers.

Keeping selling agents accountable

Many sellers don’t have the time to do the necessary research to determine the most appropriate selling agent for the job, particularly if they are based interstate or overseas. Instead they often make the critical mistake of simply choosing the one that currently manages the property, offers to charge the lowest fee or simply promises to get the highest price. Like any service based experience you’re likely to end up getting exactly what you pay for. While you don’t need to necessarily choose the most expensive selling agent to achieve the best result I have found that those who are at the top of their game can and do command fees which reflect their skills and experience. Essentially sellers want confidence that their selling agent will: - Be readily available to potential buyers; - Respond quickly and efficiently to enquiries; - Put their client’s interests before their own; - Provide honest feedback at all times; - Have a solid and current understanding of the property market in their area; and - Determine the best sales strategy for their property. At the end of the day anyone can arrange to have a photo taken, have advertising copy written up and stand at a door and collect names. What you want as a seller is someone who is not afraid to be honest with you about price and buyer feedback, someone who is great at working with buyers, great at following up and most importantly who is a skilled negotiatior. It’s a personal service and If I could give you one tip right now it would be to always seek out a skilled individual not necessarily somone who works at what is perceived to be a strong brand. BF

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The matchmaker Digital disruption has affected almost every industry and every business sector within, but according to FindaConsultant founder and managing director, Sharon Melamed, the recruiting and consulting industries have been ‘laggards in this space and are being challenged by a range of more nimble start-ups’. Sharon speaks with Business First about intelligent matching: firstly, through her consultant match service (FindaConsultant), and secondly through a buyer-supplier match service called Matchboard, focused on the sales, service and back office space.

n 2013, The Harvard Business Review published, ‘Consulting on the Cusp of Disruption’. The article analysed changes to the business consulting industry based on an influx of disruptive models that were then beginning to have an impact. Whilst the article deals primarily with business consulting, its premise is very much true of any industry. The article states: “We have come to the conclusion that the same forces that disrupted so many businesses, from steel to publishing, are starting to reshape the world of consulting. The implications for firms and their clients are significant. The pattern of industry disruption is familiar: new competitors with new business models arrive; incumbents choose to ignore the new players or to flee to higher-margin activities; a disrupter whose product was once barely good enough achieves a level of quality acceptable to the broad middle of the market, undermining the position of longtime leaders and often causing the ‘flip’ to a new basis of competition.” That is the way of the world. Innovation and disruption influences future business decision and keeps business in its constant state of flux. Without that flux, businesses, products, services and consumers would be riding an eternal merry-go-round. Business requires disruption and entrepreneurs to lead the way. Sharon Melamed has offered this disruption

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through two businesses: Matchboard, for sales, service and back office sourcing and FindaConsultant, which connects clients with their ideal consultants. “Entrepreneurs spot gaps and fill them or spot problems and solve them. The one I spotted was that in every office, every day, people spend huge amounts of time searching online for suppliers of products and services,” Sharon says. “A search engine might bring up 300,000 search results for a given request (let’s say “call centre outsourcing”) – where do you start with a list that long to determine the best fit vendor for your needs? It literally takes days or weeks of time to research the market from scratch. My idea was to radically reduce this wasted effort and time, and help people get to a shortlist of between 1 and 5 ‘perfect match’ suppliers, just by investing 60 seconds in answering several filtering questions. Our matching software then locates the suppliers in the market that meet all the clients’ criteria (eg. product/service features, budget, location, industry specialisation, timeline).” It is a model that has already shaken the market. In essence, Matchboard simplifies the way companies find new suppliers, and suppliers find new clients. Under the mantra, “Smart sourcing for sales, service and back office”, the company matches the market for hundreds of products and services

that help businesses acquire or service customers – through call centres, the web, apps, social media or in person. What sets Matchboard apart is its business model built on trust. “We trust our suppliers to report their wins from the leads we provide, so we can claim the success fee which is our primary source of revenue,” Sharon says. “This model sends shivers down the spines of most businesspeople, but what I’ve found is that this honesty system works – the suppliers have a vested interest in being honest so they continue to get a stream of leads, and we monitor the progress of leads through buyer satisfaction surveys. Larger deals are public knowledge and can’t be hidden anyway. Last financial year, $5.9 million was invoiced as a result of our buyer-supplier matching service. “The second differentiator is that all our suppliers are screened, and only those highly rated by their clients are allowed into our community. Big online platforms, whether it’s Google or Freelancer, simply can’t compete with this high-touch service. The end result is that we minimise the risk of ill-informed purchasing decisions, as we only recommend suppliers with solid reputations.” Outsourcing has developed significantly since Sharon first started working in this sector. She says companies used to outsource either to save costs or as a means of servicing customers in www.businessfirstmagazine.com.au

PROFILE | BF

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foreign markets. “The outsourcing agenda still includes these drivers, but has matured, and is now just as much about accessing global best practice and talent pools, where there’s a skills shortage at home. Outsourcing used to be the domain of large enterprise, but thanks to new models of engagement, is now very much a strategy used by small and medium-sized businesses as well. Enabling this trend are countries such as the Philippines, where there are now a range of outsource vendors with models and tools to make life easy for offshore first timers. These vendors often have an account manager or sales representative on the ground in Australia; some are even owned and operated by Australian entrepreneurs, removing the cultural barrier that can thwart success. And of course, technologies such as those created by Sharon have enabled the sector to grow and impact all industries. “Technology has replaced human interactions in much of the ‘grunt work’

of front and back office operations, meaning that outsourcing is moving up the value chain, and outsource vendors are now managing more complex transactions than before. For example, whereas a call centre agent used to assist a banking customer with their bank balance information, of course this is now available through self-service online, mobile apps or IVR/speech recognition systems. Robots are automating back office processes in a growing trend. Outsourcers have had to move away from wanting to generate as many calls or transactions as possible (as historically this is how they have made money), to a mindset of adding value to their clients by proposing technology solutions to actually reduce volumes and improve customer experience.” It was the software behind Matchboard that was the key to get the business up and running and eventually making it the success it has become. “The hardest part of setting up was writing the spec for the matching software and finding developers I trusted, within a very lean budget. I was lucky

to find a fantastic strategic IT partner.” The other side of the equation was the supply side. With any online marketplace you have to balance buy and supply and if you have thousands of suppliers, and not enough leads to feed them, they’ll leave in droves. The flip side to that is if you have diverse buyer requests, but not enough suppliers to draw on to match them with, buyers will soon look elsewhere. Finding the balance is tricky. To bring suppliers on board, Sharon deliberately chose a niche for Matchboard: sales, customer service and back office. “I knew most of the suppliers from my 20-plus year career in this arena, so bringing them on was a breeze. Even though our matching service is free for the ‘buyer’, the biggest challenge is getting a constant stream of buyers to use the service. Once they use it, they love it, but it’s a general awareness issue, which we overcome through a combination of PR, SEO, social media, referrals and direct marketing.” That 20 years of experience contains 15 years with Prestige International,

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With consistent results, Aegis Services Australia delivers tailor made solutions for business outsourcing. With the demand for outsourcing ever growing Aegis is at the forefront of BPO outsourcing. Aegis is proud to service a leading organisation such as Matchboard. Aegis

an entrepreneurial-minded Japanese company that not only taught Sharon about cultural divide, but about long term relationships. She learnt that patience is a virtue and this is reflected in the strong emphasis she places on relationship development and building trust with her clients. She also learnt the power of leading by example and infusing her own ethics of integrity and transparency in those around her. It was this work environment that gave her the courage to follow her own entrepreneurial goals. Sharon did move into a more corporate environment with IDT, Sitel and Excelior following her time with Prestige, but in 2012, she was ready to make the move from corporate to private operator. “Ironically what held me back was that the Japanese company I spent most of my career with was so entrepreneurial itself, and gave me so much autonomy. It was only when I moved to the more traditional corporate sector that I felt something was missing and took the leap of faith to found a business and pursue the dream I’m now living. “People think a job in the corporate world is ‘safe’ but I see it as the opposite. As people move into their 40s and 50s, their jobs are more likely to be at risk. As an entrepreneur, owning your business, you can’t be fired, you’re not dispensable, and your fate is in your own hands. It’s a very liberating sensation not to be at the mercy of a corporate taskmaster! Of course that wasn’t the only reason I moved to start-up land. I wanted a more flexible lifestyle, where I could work from a beach in Sydney or a café in Tel Aviv, and manage my family commitments at the same time. I also had a burning desire to make a difference in the world www.businessfirstmagazine.com.au

with a service that didn’t exist before, a service that made people’s lives easier, and Matchboard was my idea for that.” Sharon was on the ball immediately. The matching software took a couple of months to spec and four months to build. The team got it right from day 1 with enhancements to the matching software made twice a year as the company takes on board customer feedback and suggestions. “Our analytics capability has also evolved to allow us to slice and dice all the data we’re collecting about buyers and suppliers, and action those insights in the way we approach the market,” Sharon says. This approach to the software made it easy for Sharon to launch FindaConsultant in September 2014, which is also a B2B matching site. Whereas Matchboard matches businesses with suppliers of sales, service and back office solutions, FindaConsultant matches businesses with consultants. “The idea came about from a number of Matchboard clients, who were happy with the customer experience consultant or contact centre technology consultant we referred, and now wanted consultants outside the Matchboard niche – marketing consultants, IT consultants, HR consultants, Digital consultants…I thought for sure they’d be an online consultant match service, but at the time, I couldn’t find one, so I built it.” FindaConsultant tackles the same problem as Matchboard (helping people find their perfect match suppliers of business services), but in a different niche – consulting, which is an A$8 billion market in Australia alone. The matching technology which powers Matchboard and FindaConsultant is the same, it is just the front end

is different. Sharon now has more than 1200 Matchboard clients, including more than 60 household name brands. For the small, low-value requests (someone wants to buy SEO consulting services), it’s all online, but with large requests (for example, a $10 million outsourcing deal), Matchboard typically hop out of online mode and meet the buyer face to face. “When large amounts of money are at stake, we take a very personalised approach and provide free value-added advice to clients to assist them with their procurement activity. No matter the size of the client, they receive our monthly newsletter full of thought leadership content and business tips, so that we’re front of mind for the next product or service they need to buy. As the business grows, Sharon’s goal is to stay true to the mission she started out on three years ago: to save people time in finding trusted, perfect match suppliers. She is also considering a launch into larger-scale markets like the UK and US, whilst also seeing the matching platform take on a life in other shapes and forms which make a meaningful impact in other industries, even in government or not-for-profit settings. In the meantime, she says she hopes to inspire others to take the plunge into entrepreneurship and follow their dreams because it is evident that we need more disruptors in the world. BF

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FINANCE| BF

Four warning signs your business may be in crisis Most business failures are swift and clean; with the business quietly closing down, the creditors being paid out and the business operator moving on to do something else. Invariably though, it involves a significant loss of money and also results in dreams being dashed.

here are also the failures where the effect on the business owner is catastrophic. It can include a creditor or the Australian Taxation Office taking action to sue the business operator or wind up the company. This may well result in bankruptcy, the loss of their home and will leave a black mark on their credit rating which will be difficult to overcome in the future. In my experience, business operators are, by their very nature, optimistic people. It is this optimism which drives them each day to work hard and deal with the many pressures and stresses involved in running a business. However, business optimism also has a negative side to it. Figures released in June by The Australian Financial Security Authority showed that in the June quarter 2015, 16.3 per cent of debtors entered a business related personal insolvency. This is a rise from 15.5 per cent in the March quarter 2015. Furthermore, 22.1 per cent of bankrupts entered a business related bankruptcy. This is a rise from 19.9 per cent in the March quarter 2015. With economic conditions cited as the most common business related cause for business related bankruptcies and business related personal insolvencies, knowing the warning signs can mean make or break for a business. It is common for business owners to miss the critical warning signs and focus on a turnaround when in reality the business may be heading toward extinction. There are four key warning signs to watch out for, highlighting that your business may be heading for trouble: You are falling behind in your payments to the ATO, whether that be GST or tax deductions from employees.

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You are under increasing pressure from your creditors; their phone calls are increasing and they are becoming more strident and demanding. You are finding it hard to get credit; your existing suppliers are shutting the door and now demanding cash on delivery and new suppliers have become wary of you. You are under pressure from your bank; they will not extend your overdraft, are bouncing cheques and putting pressure on you to reduce your overdraft. If any of the warning signs are present, the worst thing you can do is put your head in the sand and think that somehow everything will come good. At this stage, the clock is ticking and you must act quickly if you want to avoid disaster. The first step is to call in an external accountant to carry out a cash flow review and assess whether or not your business is viable. Many businesses can be saved but require the advice of an experienced, accountant or adviser. If the accountant concludes that your situation is dire, the next step is to bring in an accountant specialising in insolvency to develop a future strategy. In the absence of this, you may well find that you have lost control of the situation and your personal assets are now likely to be at risk. If, however, the accountant feels your business can be recovered, they will work with you to develop a strategy for getting on top of what you owe. The ATO is the most dangerous enemy a business owner can have due to significant powers beyond those of other creditors. Ensure you manage your ATO obligations first; it is imperative you make contact with them to organise a payment plan. From there, contact your other

creditors and do the same. You would be surprised how often simply calling and showing you are making the effort to pay them will significantly help your situation. Ultimately it comes down to recognising the warning signs and being able to act early. The later you realise your businesses is heading in the wrong direction, the more difficult it will be to save. BF Roger Mendelson is CEO of Prushka Fast Debt Recovery Pty Ltd and is a principal of Mendelsons Lawyers Pty Ltd. Roger is also the author of The Ten Mistakes Businesses Make and How to Avoid Them and Business Survival.

NEW WAY OF DOING BUSINESS One way to keep your finances strong is to implement an effective ordering process. Taking customers’ orders is a critical activity for any business; if there are no customers, you have no business. Therefore, it is in your best interest to make ordering as easy as possible. If it is too difficult, time consuming or cumbersome to order from you, customers will simply go elsewhere to avoid the trouble. It doesn’t take long to set up a good ordering system and, similar to constructing a building, if the foundations are good, the building will last for a long time, if not, the building itself will never be any good. To simplify the ordering process, break it down into three stages and ensure all three work in harmony, starting with taking the customer’s order, confirming the order and confirming completion of the order to receive payment.

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Capify bridging the finance gap between traditional lenders for SME owners A global conglomerate of four companies, with a head office in New York, Capify (formerly AUSvance) has been operating in Australia since 2008. Capify are the pioneers in unsecured alternative business finance and has supported small business since 2002 with over $700 million globally.

he only alternative finance lender to have undergone the full credit cycle, Capify continues to be the industry leader having seven years of historical data, extensive knowledge of the Australian SME market and key industries to draw upon. Capify prides itself on being one of the responsible lenders in the alternative finance market, and over the course of its history, has collected invaluable data which forms an integral part of its decision process. Having experienced the GFC of 2009, Capify can confidentially say that its team is continuously learning and modifying its assessment and approval criteria in line with history and current market conditions. Its results in the number of businesses it has helped continues to be a testament to the credit model it utilises.

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Capify was the first company to introduce Merchant Cash Advance Loans in 2008, followed by the introduction of unsecured business loans in 2012. Continuing its reputation as the pioneers, earlier this year Capify introduced its Apply Online product, which allows a business owner to apply for finance 24/7 and receive a funding decision within 60 seconds. “43 per cent of SME owners apply for loans outside of normal trading hours, so having an apply online system with a response in under a minute works really well for our customers,” says John de Bree, Managing Director, Capify Australia. Through its two main lending products, Capify has helped thousands of Australian business owners achieving a 90 per cent customer satisfaction rate via Feefo. “Our customers seek out alternative finance for a variety of reasons, but the main ones are cash flow (paying bills, BAS statements and paying suppliers), purchasing bulk stock and growth opportunities which may include buying a new premise, hiring extra or specialist staff, or for expansion plans.” In just the past two years Capify has grown 400 per cent, and this growth is largely a result of its apply online engine, and being able to provide funding within one to three days. As a global company, Capify also has access to greater working capital and can lend up to $400,000 unsecured. “Through our seven years of experience in the Australian market, we have also found that SME owners are becoming more aware and educated about the alternative finance options available to them and realise that they’re not limited to traditional finance options. “We have customers who also take out an alternative finance loan for renovations or refurbishment, or if

they want to upgrade their e-commerce platform or undertake a marketing campaign. The reasons may be varied, but we enjoy a significant level of repeat business as we’re able to lend up to $400,000 unsecured and we can provide funds within a couple of days,” explains de Bree. Merchant Cash Advance

An innovative alternative to traditional finance, Capify was the first to market with this innovative product in 2008. A Merchant Cash Advance is designed to match the cash flow of a business. Rather than fixed daily repayments, a small percentage of credit card and EFTPOS sales is repaid daily for the term of the advance. A Merchant Cash Advance provides a business with the flexibility to make lower repayments during slower periods. The benefits of a Merchant Cash Advance include: • Unsecured funds up to $400k • Flexible repayment options • Terms from 3 to 12 months • 60 second online application decision • Typically no financials required Business Loans A Capify business loan is a simple financing solution that provides a business owner with the working capital he/she needs for their business. With high approvals and funding in days, it is the perfect loan for business owners looking for flexibility. Instead of monthly payments, the Capify business loan has a fixed, daily repayment schedule allowing a business owner to better manage their cash flow and budget more effectively. Capify’s ‘Flex’ program is tailored to suit seasonal businesses; it can be adjusted to the highs and lows of a business’ cash flow. For further information visit www.capify.com.au. BF www.businessfirstmagazine.com.au

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Real value innovation

liver North in his book Counterfeit Lies writes, “An easy life is rarely meaningful and a meaningful life rarely easy.” It is a sentiment held by every business owner as they battle the highs and lows of running a business, but what is a meaningful business? Is it one that has change-impact within an industry or sector; a big tech company that has changed the way we compute or bank? Perhaps it is the smaller, unheralded companies whose stories have had just as much impact in industries that we rarely think about. Take the fruit sorting industry for instance. All many of us know about picking fruit is how we choose our apples, oranges and cherries at the local greengrocer. We expect that the fruit shop owner will have a decent selection of fresh produce to choose from. The rare bad apple may surface, and one may even have trickled down the bay and hit the floor with a soft thud before being picked up by a consumer with a slightly guilty look on his or face. Behind the scenes it is much different. When my father Geoff Payne started GP Graders in 1963, with no formal engineering training, he set out to create machines that would more efficiently sort and pack the fruit that was being produced on the family farm. As surrounding farms in the region caught wind of the new technology they approached Geoff to supply the machinery to them. The business then expanded across country and by the mid-’80s he was providing grading and packing solutions for stone, pome and citrus fruit growers around the nation. An even bigger break came in 1987, when cherry growers approached Geoff to create a machine that would sort cherries. The delicacy of the fruit would

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make this task a challenge, but Geoff was up to it. The machinery, however, was still primitive and accuracy was questionable. During this time, I was a 17-yearold finishing up school. Yet the family business and culture of innovation was in my blood. When I joined the family business in 1998, I set out to build on the foundations of my father and set a path for further transformation. I looked at structure, administration, marketing and branding, staff remuneration, drafting and design. It was a complete overhaul. By 2000, I had embarked on a path of global expansion. I met agents and appointed them to sell the machinery. The breakthrough came the following year when I negotiated a distribution arrangement with a large French based company. This rapidly accelerated overseas sales and established the company’s brand internationally. In 2005, with my brother Ian, we identified a major future trend in the industry and began the development of a cherry grading line capable of grading produce electronically using cameras. I was in Spain and the Spanish were talking about moving to electronic sizing and grading of cherries. The technology was in its elementary stages but I became convinced that the future lay in a machine where cherries would pass under a camera system and be electronically sorted on the basis of size, shape and colour. This new technology would replace the mechanical grading methodology that traditionally had been used for cherry grading. It proved to have immediate success and led to significant and sustained growth for the company. Yet, a major challenge presented itself: cherries are delicate things.

We could never store them or test prototypes in our own facilities because cherries have such a short shelf life. What we did was ask our best customers to become involved in our R&D using their facilities. Once our customers were on board we developed a camera and software to make the electronic grader work. From this came the next big breakthrough. The camera technology was so good that it could identify defective fruit, allowing packinghouses to replace human sorters with more reliable cameras, thereby improving product quality and saving millions in labour costs. The technology was developed for a Chilean customer called Copefruit. It worked. The reject fruit was ejected and business began to boom with GP Graders securing global dominance.

How to create market dominance

GP Graders machines are now in 20 countries, so it is imperative that the camera technologies we use to grade fruit are the best in the industry. We plough a huge amount of resources into research and development into these technologies, ensuring that our fruit-sorting machinery is second to none. Any deficiencies in mechanised grading systems will be accounted for financially by our clients, either through decreased sales or through increased overheads as staff will be needed to rectify the errors. Therefore the entire culture of our company revolves around making sure we are on the cutting edge of technology and innovation. BF Stuart Payne is the MD of GP Graders the world’s leading manufacturer of cherry sorting and packing machinery.

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EDITORIAL| BF

MBA helps First Officer’s career take off Rising up the ranks to the captain’s position, First Officer Stuart Dunn knows that taking on more senior roles will require more than just experience.

aving worked at Qantas for the past seven years flying both domestically and internationally, Stuart’s new challenge – an MBA from the Australian Institute of Business – will be the key to opening up future senior opportunities in the aviation industry. “Many of the managers, project pilots, technical pilots and those working in recruitment and training have post-graduate degrees, so I see completing the MBA as a way to unlock further opportunities in my career,” he said. “Each subject gives me an overview of business, not to mention the

leadership and communication skills required for management positions. I’m only about half-way through my MBA, but I can already see it paying further dividends in the future.” Knowing that completing the fulltime MBA while flying Boeing 737s for a living wouldn’t be a simple challenge, Stuart chose a flexible option that would fit around his roster, which can involve up to five domestic flights in a day working anywhere between 12 and 20 days in each 28 day period. “Studying by distance was the only way I could conceivably do my MBA, but fitting the degree in around my roster is never too difficult, since I

An MBA provides the knowledge and critical thinking to open doors and management opportunities.

can take my course notes and journal readings with me wherever I go and work from my iPad between work days,” Stuart said. He has even recommended the programme to his colleagues on the basis of the practical skills it provides that can be applied to the workplace almost immediately, and the fact that it can be completed in just 12 months, making the rise up the career ladder even faster. “Within the next 5 – 10 years I’d like to become a captain, and the MBA provides the knowledge and critical thinking to open doors in areas that I wouldn’t otherwise have had access to,” he said. BF

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BF | PROFILE

A COMMUNITY APPROACH TO SUCCESS Infrastructure projects are the lifeblood of community growth. Business First speaks with Abergeldie Managing Director Michael Boyle about bringing communities together.

ack in 1994, when Michael Boyle started Abergeldie with a single office in Sydney, he had the same vision he has today: to deliver the complex infrastructure needed to build better communities. Community is close to Michael’s heart. Abergeldie has a long-standing relationship with the St Vincent De Paul Society, The Abergeldie-sponsored “free food, drink, chat” van helps the homeless of Parramatta and Penrith. Boyle himself is a regular participant in the annual Vinnie’s CEO winter sleep-out. “I have been involved in the CEO Sleepout since its second year,” Michael says. “That was nine years ago. I went to school with the founder of the event, Bernie Fehon, and I thought it was a great idea, on many levels, from the moment he first told me about it. “Firstly it challenges the most privileged, in our society to consider the plight of some of the most marginalised and vulnerable in our society – the homeless. It does this by asking them to experience what it is like to sleep rough on the longest and coldest night of the year. It is of course only a taste of what it is like to be homeless. You experience the cold and discomfort of sleeping rough without the hunger, the fear for your safety and the helplessness of night after night in that situation. It is just for one night. “Secondly it asks the same CEOs to consider how they can act on an ongoing basis to improve the plight of the homeless. At my company, Abergeldie, we sponsor the Vinnies van that operates in western Sydney. The van provides tea and coffee and sandwiches to homeless people 365 days a year. It is manned by volunteers and I am very proud that around 20 Abergeldie employees are part of the volunteer roster on that van. The most important thing I have learnt when I have been working on the van is the most valued thing you can provide anyone who is marginal-

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PROFILE | BF

ised, after some basic food and drink, is the respect of interacting with them in conversation. “Thirdly it challenges CEOs to raise funds to allow an organisation such as Vinnies to not only address the emergency situations that exist when people are homeless but also to address the fundamental causes of homelessness. The first year I was involved in the CEO Sleepout it raised around $70,000. Last year it raised over $5 million. Hopefully more this year. The event is becoming able to fund some significant projects that will make a real difference.” Michael says the whole concept feeds well into the Abergeldie aim to build a better community here in Australia – which is what he has been trying to achieve since the inception of the business. He formed Abergeldie after finishing his Civil Engineering degree and then spending ten years in the construction industry across Australia with stints overseas. “All that time, my aim was to learn as much as I could to prepare for starting my own business when the time was right,” Michel says. “I began learning about business early. My father owned a small construction business, ‘Boyle and Sons’, which I had the expectation of joining once I finished school. Unfortunately, my dad was injured at work and the business closed down. Thankfully, he made a full recovery and took up work again, for a former competitor. I was lucky that in the early days of Abergeldie my father came and worked for me. His experience, advice and work ethic were invaluable in those early days.” In 1994, with very little money and a whole lot of enthusiasm, Michael started Abergeldie. “The deal I worked out with my wife was that I could use $5000 on the Abergeldie business venture and when that ran out I would go and get a real

job. I had to buy a phone and a car with that $5000 but I didn’t ever want another real job. As a result I learnt quickly to be very good with cash flow, and wasn’t too fussy about my cars for many years.” One initial challenge was overheads, which were too big for a fledgling business with a small work force. To overcome that problem Michael hired himself out to manage other peoples’ contracts and managed Abergeldie’s work early in the morning or late at night. Good, hard work meant the market quickly accepted Abergeldie and Michael then set upon a carefully and deliberately diversified approach to growth, including investing in planned internal growth and by strategic acquisitions. “We invested in an innovative shaft sinking company, Ardent Under-

Randstad has been a strategic partner to Abergeldie since 2014 sourcing both their professional and skilled labour hire, enabling them to deliver complex infrastructure projects that build better communities. General Manager of Randstad’s Construction, Property & Engineering division Paul Stewart, says, ‘there is a great synergy between our two companies. Abergeldie has challenging talent demands based on the buoyancy of the civil and infrastructure market in NSW. Randstad has been able to harness the right talent at the right time by staying closely aligned to Abergeldie and the jobseeker community through our talent pooling process. Together we are able to truly shape the world of work in the construction sector’. Randstad

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ground, in 2001 and went on to purchase it outright in 2007. In 2008, Abergeldie acquired John Young (Kelvinhaugh) Pty Ltd, after a long period of association with them in joint venture and alliance project arrangements.” The acquisition of John Young meant Abergeldie could bring in-house a tremendous depth of expertise and experience in mechanical and process engineering. “The process engineering portion of the business, combined with the existing civil engineering capability, has since delivered countless projects for water utilities, ranging from belt filter press installation and commissioning through to $40 million plus upgrades of waste water treatment facilities including mechanical, control systems and civil design and construction work.” It is a long way from their first significant contract: the upgrade of Grahamstown Dam for Hunter Water. The 50% acquisition of ASM Fabrications was another important strategic move. “ASM were a good steel fabricator. We had worked closely with them for many years. The opportunity came to move them into the same building as we are in and acquire 50% of the business. We have a regular requirement for steel fabrication work. By owning a 50% share in ASM we get even better service and 50%

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BF | PROFILE

of any profit ASM makes is returned to the Abergeldie bottom line.” Michael is known for setting clear strategies and for understanding exactly where the business is at any given time. “When you understand where you are today the strategy is simply the guiding principles you use as you prepare a detailed plan on how you get to where you want to be. Abergeldie has had a strategy focus on the more complex projects. Michael says the thinking behind that strategy is that if you manage risk well the more complex projects tend to have more margin. “With that strategy it has made it easier to attract good people because complex projects are interesting to build,” Michael says. “It also allows you to develop relationships with clients, who rely heavily on contractors who can successfully deliver their most complex projects well. Another strategy has been to work directly with infrastructure owners.

“We very rarely subcontract. The thinking behind that strategy is to protect our margin because it can be difficult to get paid your full entitlements when you subcontract to the major contractors. Also most of the infrastructure owners are government and semi government authorities who are secure so we rarely have bad debts. Working directly with infrastructure owners also allows you to develop relationships with clients who are likely to have more complex projects for you to carry out in the future as well. It allows you to better understand the work pipeline ahead. We also have a strategy of paying our subcontractors and suppliers on time. This ensures we have a loyal band of subcontractors and suppliers who want to work for us and provide us with keen pricing. It also saves us time in accounts because we are not regularly fielding queries from people chasing outstanding money.” Michael has achieved a great deal in his 20 years as a business owner. It is a tough industry that goes through ups

and downs, but Michael says good people have allowed the business to grow. “Good people attract more good people to work with them. Somehow we have created that environment at Abergeldie. We have good people that care about doing a good job, about each other and the community at large. That is collectively our greatest achievement.” BF

Gain a true competitive advantage with a complimentary employer branding consultation Have you ever wondered what makes one company more attractive than another? Randstad is offering you the opportunity to find out with a free employer branding consultation that will reveal how attractive your company is to potential employees (valued at $20k).*

To find out how to enter, and to download a case study that reveals how Randstad helped Abergeldie shape their talent strategy, scan this QR code or visit bit.ly/randstadau *terms and conditions apply.

www.randstad.com.au

die y,

CUSTOMERS | BF

GIVING YOUR CUSTOMERS WHAT THEY NEED As Managing Director of WME – Australia’s largest SEO and web marketing company – Nick Bell has built his business on the premise of ensuring the highest level of customer service is provided by each and every member of the team. This is no mean feat and has meant a significant investment of resources such as time and education but the returns have been limitless.

o, here are Nick’s top tips to help you improve your business and have your customers raving about your services. Customer Satisfaction: We all know that this should unquestionably be a key measure of success but one of the challenges is instilling this onto your staff. What I’ve found to work best is to practice what you preach and treat all people in your business like ‘customers’. This includes staff, suppliers and your clients. It’s no use ranting about your efforts on being a true deliverer of service if you are not interacting with people in a polite and respectful way. Deliverables: In business people will seek out your goods and services if and

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when they need them. The important factor to consider is how do you ensure that you are providing your stakeholders with what they require. The first step is entrenching yourself in their business and understanding what they do, who they work with and the tools they need to succeed. You are not expected to be an expert. So ask questions and make the time to undertake product training, review their marketing and educational materials. Change management: Change is as good as a vacation, but this definitely does not apply to changes is your client’s management team or processes. So tread carefully. The overarching point here is to be open and transparent about upcoming changes that will affect or directly

impact the work you are doing for your clients. There is always a line that you need to define in terms of how much information you choose to impart with your customers. But in my experience, I’ve found the more info you can provide them, the better. If they’re made aware of any imminent changes well in advance, they are more likely accept them. Your role should be to guide them through the process and reassure them that they’re outcomes will not be jeopardised by changes which may include new contacts, new systems and procedures you intend to roll out. BF WME is an award winning Australian based business that is making waves across the country and internationally.

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BF | PROFILE

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Do it for the kids According to Forbes the top five companies practicing corporate social responsibility (CSR) are Google, Microsoft, Disney, BMW and Apple. However you don’t have to be a major conglomerate to build lasting value through responsible business strategies and productive stakeholder relationships writes Jonathan Jackson.

ost people associate fundraising affairs with snooty black tie events that attract society’s so called elite. And while these types of events certainly have a place in raising funds for worthy causes, it is a breath of fresh air when you encounter events like the Amber Affair. The 14th annual Amber Affair is an evening to celebrate beer appreciation and mateship – all while supporting a great cause, Sydney Children’s Hospital, Randwick. According to Leanne Warner, the CEO of Sydney Children’s Hospital Foundation, the primary funding body for Sydney Children’s Hospital, Amber Affair is a unique event that engages groups of friends and colleagues with a great cause in mind. “It is more relaxed than your usual society or black tie fundraising events,” Leanne says. “We understand that not everyone is comfortable at those types of events, so a night in which we can bring people together to sample emerging boutique brewers and wineries offers a more relaxed alternative to the big gala.” In its 14 years, Amber Affair has raised approximately $600,000 and is expected to raise $60,000 in 2015. It s an exceptional amount of money raised over four hours, particularly when you

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consider that the hospital cares for about 49,000 families from NSW and beyond, including rural families all with different needs. “The needs of the hospital are vast and complex and we work regularly with the hospital to try to understand what the priorities are: equipment upgrades, technology upgrades, imaging or surgical equipment for children with specialist conditions.” For instance the hospital doesn’t have individual rooms for times when families have to spend the night or even a week in a hospital waiting for the children to be operated on and cared for. Instead the hospital has big blue chairs to sleep in. The chairs cost $2000, which doesn’t seem to be much money until you think about the amount of families that stay with their children over night. It is therefore the task of the foundation, in tandem with the hospital, to target the hospital’s most urgent needs. When it comes to giving, Leanne says public generosity knows no bounds despite the competition and the rise of non-profits all seeking consumer dollars. “It is always challenging to fundraise and the number of non-profits emerging is on the incline. There are

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smaller foundations who set themselves up every day of the week, but our brand is well known and we have legitimate needs which people recognise.” Leanne has a background in recruitment, but working in that corporate environment has helped her understand that even though the corporate and non-profit sectors are vastly different, they can work together for a common good. Essentially both environments have revenue targets, are looking to minimise costs and attract great staff. The cultures may be different, but the drivers are similar. So having come from a corporate background, Leanne had an instant understanding of the business commitments required to bring greater awareness and capabilities to the non-profit sector. These skills are particularly indispensible when you could be running four events on any given day. She first applied this knowledge to roles with Camp Quality and Cure Cancer. It was Camp Quality that took a chance on Leanne’s corporate experience. “I am grateful that Camp Quality could see the transference of skills from corporate to non-profit,” Leanne says. “The difference is the pace and the understanding of different resource www.businessfirstmagazine.com.au

capabilities. Working with Adecco, I expected to be able to integrate solutions at speed and with consistency across the 14 offices I was managing. When I joined the non-profit sector, I realised that solutions come more slowly because the organisation is backed by hundreds of volunteers who are crucial to the infrastructure. They have to be motivated, encouraged and informed and that makes change management much harder. Having said that I learnt the value of volunteering and how to be clever with how you use resources. I learnt that you have to be more patient. I was like a grenade going off when I first arrived, but they made me appreciate how different things are and how to influence within a flatter structure. Leanne took the position with Sydney Children’s Hospital Foundation because it was a chance to support the infrastructure of a government run institution and to help to take the hospital from great to extraordinary. She believes that despite the restrictions of non-profit operations, she can help speed up the process with regard to upgrading equipment and family services. And although she is not empowered to set the direction of the funding, she can work with the hospital and donors to help them understand the most vital needs. “We are the communication hub back to the donor. Through us donors can see where the money goes and that is an important aspect in making them feel involved and giving them peace of mind that their money is doing some good. This type of communication makes it easier to engage them as we go forward.” Donor engagement has been a key priority for Leanne and she took it upon herself to revive what was a serviceable rather than exceptional

database and also restructure the organisation by building both horizontal and vertical groups with specialist skills who could really drill down into the hospital’s needs. “We now have a tremendous leadership team from within and outside the sector who have a great capacity to take us to the next level.” What this means is staying on top of the Foundation’s relationship with individual hospital areas and talking about new priorities. “Donors have needs and desires, the hospital has its needs and we need to follow the medicine. We have a privileged role to play and make the dreams of the hospital a reality by attracting the funders.” One of the unfortunate things however is a decrease in CSR, which is an area that needs to be addressed by all business. They need to be made to realise that hospitals do not have the luxury of making the decision to commit to a patient or not, or shut down a ward because they don’t have the money. Leanne’s message to corporate Australia is ‘if you are going to give, you have to mean it.’ Which is why events such as Amber Affair are so important. The people that attend this event want to help and have already made the decision to donate. So on 22 October at The Argyle on the Rocks, the 14th Amber Affair will bring together likeminded people who want to help the hospital achieve its very important aims. They will have a beer and their hearts will be warmed as their spend goes toward vital equipment and services that keep the hospital running. If you would like to attend or donate go to: www.amberaffair.org.au BF

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BF | THE LEADER’S BOOKSHELF

The Leader’s Bookshelf By Daniel G. Taylor

Humanise: Why Human-Centred Leadership is the Key to the 21st Century. By Anthony Howard John Wiley & Sons, 2015 Let’s start with an exercise. How many living leaders can you name that are of the same calibre as Nelson Mandela? Why are there so few great leaders today? In Humanise, Anthony Howard says we must return to the elements of leadership. Today’s leaders face three significant challenges. First, the impact of technology on how we socialise. Second, moral drift, a result of living in a postmodern culture. Third, “the convergence and crossover of ‘man’ and machine.” Next, he names the timeless foundations of great leadership. Building solid character and making wise decisions. Finally, he looks at leadership in action. In this section, he introduces some of the practices of human-centred leadership. For Howard, the reason we have so few great leaders is we’ve moved away from the bedrock of our culture. We’ve stopped valuing our Judeo-Christian roots. That foundation teaches us that character matters as much as competence. Character comes from having a changeless core of virtues you hold dear. Aristotle says those attributes define the behaviours that help you be excellent at being human. This levels the playing field. Anyone can develop character and moral authority. This leads to Howard’s optimism: we can find new Nelson Mandelas to rise to the challenges of today. You are the person who can become the next human-centred leader.

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THE LEADER’S BOOKSHELF| BF Daniel G. Taylor helps business leaders navigate the deluge of information to spot emerging trends, learn the latest best practices, and implement action strategies. Find out more at 52booksinayear.com/BusinessFirst.

The Real-Life MBA: The No-Nonsense Guide to Winning the Game, Building a Team and Growing Your Career. By Jack and Suzy Welch Thorsons, 2015

101 Ways to Save Money on Your Tax – Legally!: 2015-2016 edition. By Adrian Raftery Wrightbooks, 2015

The Warren Buffett Way By Robert Hagstrom Wiley, 2014

When wisdom speaks, do you listen? Jack Welch is one of the most respected CEOs of the 20th century. Any business leader who wants to succeed will consider what he has to say. In one sense, this book helps promote the Jack Welch Management Institute MBA program. However, don’t think that it focuses on selling the benefits of that course. The focus of The Real-Life MBA is on how to succeed in the business world of 2015. The authors start by looking at why to treat running a business as a game, and the specific elements of winning that game. Next, they look at how to lead and build wow teams. They finish the book with career advice. This includes a section on how to become an entrepreneur so you can do what you love. Despite his successful tenure as CEO, Jack Welch retired from GE in 2001. Are his views on leadership still relevant? Welch does several things to make sure that he is. The 79-year-old stays on top of tech and social media. Unless you do, you cease to be relevant to today’s marketplace. He stays current with the realities of demands made on managers today. Two of these issues are managing employees who have specialised knowledge and virtual workers. In essence, Welch stays relevant to add value. This book is compulsory reading for business leaders. It is the best business book of 2015.

Let me ask you two questions. Try to imagine I am keeping a straight face. (I’m not, but imagine I am.) Do you love how the government spends YOUR tax dollars? Do you think they should INCREASE taxes so they can spend more of your money? If you did not answer yes to both these questions, then you’ll want to pay no more tax than you have to. Every tip in this book will help you minimise the tax you pay or maximise your returns. 101 Ways is organised into eight sections: You and Your Family; Your Employment; Your Education; Your Investment Property; Your Shares; Your Superannuation; Your Business; and, Miscellaneous. In addition to tips, it includes tax facts, pitfalls, bonus resources, FAQs (based on questions from readers of earlier editions), and proposed changes. Way #100 says that tax planning is a 365day process. Too often, it is easy for us to leave thinking about tax till tax time. If we do that, we may miss out on getting the most from our superannuation. From the advantages that come from planning ahead. From creating and maintaining a system for our tax information. If you pay tax in Australia, this book will save you money (and it is tax-deductible!).

Warren Buffett is the most famous investor of all time and one of today s most admired business leaders. He became a billionaire and investment sage by looking at companies as businesses rather than prices on a stock screen. The first two editions of The Warren Buffett Way gave investors their first in-depth look at the innovative investment and business strategies behind Buffett s spectacular success. The new edition updates readers on the latest investments by Buffett. And, more importantly, it draws on the new field of behavioural finance to explain how investors can overcome the common obstacles that prevent them from investing like Buffett. New material includes: • How to think like a long-term investor just like Buffett • Why loss aversion, the tendency of most investors to overweight the pain of losing money, is one of the biggest obstacles that investors must overcome. • Why behaving rationally in theface of the ups and downs of the market has been the key to Buffett s investing success • Analysis of Buffett s recent acquisitionof H.J. Heinz and his investment in IBM stock The greatest challenge to emulating Buffett is not in the selection of the right stocks, Hagstrom writes, but in having the fortitude to stick with sound investments in the face of economic and market uncertainty. The new edition explains the psychological foundations of Buffett s approach, thus giving readers the best roadmap yet for mastering both the principles and behaviors that have made Buffett the greatest investor of our generation.

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BUSINESSFIRST MAGAZINE

BF | HOLIDAY GIFTS

The gift

of giving

As the holiday season approaches, it is time for businesses to start thinking about gifts for staff and clients. We spoke with Boxes of Babylon founder Julia Barnard about curating the perfect gift. What did you think was missing on the corporate gift market? We were faced with a challenge three years ago in our established Event Management Company where we just couldn’t find a thought provoking gift for 600 people. We needed a gift that represented the company, their values and most importantly a celebration in a box that demonstrated the nature of the event. Wine certainly didn’t represent that nor did a lot of the corporate merchandising we have seen so much of, so the challenge was met and we decided that a passion we had for design and bringing back the art of thoughtful gift giving was our next exciting venture. What types of gifts did you think would resonate with the corporate market? The corporate market is extremely design savvy. We quickly identified that our products needed to withstand a lot of wear and tear but also have form, function and most importantly a great design aesthetic. We wanted to find products that looked very different from your standard compendium or business card holder. We constantly travel, majority of the time to Europe, New Zealand and Australia finding out latest trends and delivering this to our market. Our favourite corporate gifts we currently have is the beautiful Italian leather, Japanese designed document holder with great pops of colour in a burnt orange or cobolt blue interior. It has been by far our most successful product to date and is paired

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with a portable phone charger for those meetings on the move.

How can businesses customise their gifts? We wanted to streamline the process and make it as simple as possible. Our gift box design represents quality and so we find many of our clients like to customise with branded ribbon, branded logo tissue paper that your gifts are wrapped in, company collateral can be placed inside the box. The box can be delivered in a bespoke corporate gift tote bag to your company branding. The options are limitless. How important do you think it is to personalise gifts rather than give something generic? The main challenge for many of our clients is there is no legacy of your brand when you give a bottle of wine, flowers or a consumable style gift hamper filled with the items that most people don’t end up eating. For large volume, a lot of money is wasted in trying to find a solution in a corporate gift and they end up with a product that doesn’t reflect their company and their values and many recipients have seen it all before. We wanted to give back the joy of gift giving; we want to help our clients and the public to create their own amazing gifts for their clients that represents them. We also have our stylists who can help create a thought provoking gift selection just for their brand at no additional cost.

What are the most popular gifts? Many of our collections we have been asked to tailor to represent a company and their global standing. We have beautiful products from around the world and have found that clients have loved the journey where we have created gift boxes that showcase products from destinations where their offices are located, this is then weaved into a bespoke gift card detailing to the recipient that each item represents the global reach of the company from the Umi Hand blown tea pot from Japan to the portable conference speaker designed in Europe. We have solutions for all. What has your ideal male and female curated business collections been? We have had a client engage us to create 1000 gift boxes for Christmas this year and their company values are heavily influenced by achieving balance and innovation. They have international aspirations and wanted the recipient being employees, clients and partners to be inspired for what lies ahead. With this in mind we created two ranges to cater to male and female; with every box including a Italian leather Japanese Document holder to ensure the receiver has consistency in the business products they use. As well as beautifully bound books from “Places to go People to see” evoking the adventurous spirit in us all. We also included a functional yet luxurious tea or coffee set which has been designed and made in Portugal. BF www.businessfirstmagazine.com.au

HOLIDAY GIFTS| BF

ESSENTIAL MAN TRAVELLER

1. Dapper & Hyde Wash Bag 2. Smart Power – Emergency Phone Charger 3. DriPouch Lite - Water Resistant Smart Phone Pouch 4. 10 in 1 Survival Tool 5. S’Well Bottle 6. Triumph & Disaster On the Road Travel Kit

HER DESTINATION COLLECTION

1. Campo Marzio Japanese Document & iPad Holder 2. Smart Power – Emergency Smart Phone Charger 3. Decorating with Style by Abigail Ahern 4. Archon Design Body Care Kit 100% Australian designed and made 5. Felt Wool Handbag/Travel Holder

Travel Man Mini Box 1. Ttriump & Disaster on the Road Travel Kit 2. DRIPOUCH LITE - Water Resistant Smart Phone Pouch 3. 10 in 1 Survival Tool

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Travel Her Mini Box 1. Frankie Toiletries Bag 2. Archon Design Body Care 3. Smart Power – Emergency Phone Charger

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BF | DESTINATION

SANTA BARBARA The American Riviera速

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DESTINATION| BF

estled between the Santa Ynez Mountains and Pacific Ocean on California’s Central Coast, Santa Barbara offers a mixture of Mediterranean architecture, 160 kilometres of sparkling coastline and countless sensory indulgences like world-class wine and farm-to-table cuisine. Known as The America Riviera®, Santa Barbara is just two hours north of Los Angeles yet feels like a world away from the hustle and bustle of Tinseltown. From foodies or wine lovers to film buffs or adventure seekers, Santa Barbara has something to offer every kind of traveller.

HERE ARE THREE REASONS TO VISIT SANTA BARBARA: Beautiful Beaches and Outdoor Adventure

When it comes to outdoor recreation, Santa Barbara is an equal-opportunity water, land and air destination. In just one day, you can surf, kayak or paddleboard over the waves; hike nearly 2,500 feet above sea level to Gaviota Peak and take a dip in natural hot springs; horseback ride in the Santa Barbara hills; or rock climb Lizard’s Mouth and the majestic Rock Playgrounds. If golf is your game, Santa Barbara’s many world-class golf courses will beckon with their rolling fairways and panoramic views. If you prefer a bird’s eye perspective, you can hang glide over Santa Barbara’s bucolic foothills. Or spend the day in the Channel Islands National Marine Sanctuary, where you can catch a glimpse of migrating whales, dolphins, marine mammals and pelagic birds. Of course, if you just want to lounge on the beach, Santa Barbara offers more than 160 kilometres of shoreline to enjoy with warm sunshine and refreshing breezes all summer. Epicurean Paradise

Whether you’re a wine geek, fervent foodie, seasoned chef of just someone with an endless appetite for great food, Santa Barbara offers an unforgettable taste vacation. Inspired by abundant, locally sourced, seasonal produce, seafood and meats, young upstarts and long-renowned chefs alike are making Santa Barbara’s culinary scene one of the most exciting in California. Forward-thinking mixologists are putting their spin on old classics and inventing new cocktails inspired by freshly harvested herbs, fruits and vegetables www.businessfirstmagazine.com.au

at local farmers markets. A great way to experience this bounty first-hand is to sign up for the Farmers Market Foodie Stroll, where Executive Chef David Rosner of the Wine Cask takes guests to the local market to pick ingredients and then transforms their selections into a delectable multi-course dinner paired with local wines. Made famous in the film Sideways, the area’s wine regions, which include five distinct AVAs, are popular with oenophiles and food lovers, who sip everything from world-class pinots to chardonnays and syrahs. Urbanites can savour the region’s signature libation along the Urban Wine Trail in downtown Santa Barbara or veer off the path for a cool glass of medal-winning beer at one of the area’s 18 craft breweries. Active types can bike their way through sun-streaked Santa Ynez Valley vineyards, pausing to taste along the way. And art aficionados may want to merge their appreciation for wine and art with experiences that pair the two. Learn about these options and more at http:// www.santabarbaraca.com/things-todo/food-drink/.

Unique Cultural Experiences and Attractions

Santa Barbara offers a canvas of experiences filled with unforgettable performances, artistic creations and cultural attractions that define its unique character. From the Santa Barbara Museum of Art and cool, contemporary art studios in the Funk Zone to soul-stirring performances at local theatres and sweeping architecture, inspired sights and sounds abound in Santa Barbara. Santa Barbara Trolley Company offers a great way to see some of the area’s attractions, with ongoing daily narrated tours to sites such as Butterfly Beach, Stearns Wharf, Old Mission Santa Barbara and the Andrée Clark Bird Refuge. Families shouldn’t miss the Santa Barbara Zoo, set on a hillside estate with ocean views, where they can hand-feed the giraffes. Or experience the region’s upscale cowboy culture with a stay at the Circle Bar B Guest Ranch and Stables, featuring horseback riding and gourmet dinners. Visit www.santabarbaraca.com/ culture-101/ for more ideas. BF

BUSINESSFIRST MAGAZINE

BF | FASTLANE

The all-new

Jaguar XF T

he dynamic, coupé-like design of the all-new Jaguar XF is formed around Jaguar’s aluminium-intensive architecture and combines the outstanding proportions, elegant surfaces and perfect lines which define all Jaguar cars. It has a longer wheelbase, more interior space and exceptionally low aerodynamic drag. The cabin is a seamless blend of contemporary luxury materials and finishes, traditional Jaguar craftsmanship and state-of-the art technology, with features such as a reconfigurable 12.3-inch TFT instrument cluster, laser head-up display and the InControl Touch Pro premium infotainment system – the all-new XF is the most connected Jaguar ever. “I believe the all-new XF is the best looking car in its class. Elegant, handsome and with proportions that imbue a great sense of integrity – the all-new XF is true to the great tradition of sporting Jaguar saloons while being completely of its time,” says Ian Callum, Director of Design, Jaguar.

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The 2007 XF was a radical step forward for Jaguar – and for the business car segment. Combining a sleek, coupé-like exterior and a luxurious interior, it set the class benchmark for aesthetics and driving dynamics. Features such as the rotary shift controller, rotating air vents and phosphor blue ambient lighting set the cabin apart from the competition and made the XF a highly desirable, aspirational vehicle. It was like nothing Jaguar had ever made before, and like nothing the competition could offer. The XF went on to become the most-awarded Jaguar ever. The all-new XF retains its predecessor’s core attributes, but uses Jaguar’s aluminium-intensive architecture to enable weight savings of up to 190kg – making the 163PS diesel model 80kg lighter than the nearest competitor – plus an increase in torsional stiffness of up to 28 per cent. The architecture also delivers dramatic improvements in packaging and the proportions so essential to Jaguar design. The all-new XF is 4,954mm long: at 2,960 the wheelbase is 51mm longer than before, the front overhang 66mm shorter. Though 7mm shorter and 3mm lower than the original XF, rear seat space is class-leading thanks to 15mm more legroom, 24mm more kneeroom and up to 27mm more headroom than before. Aerodynamics are also superior: the drag coefficient drops from 0.29 to just 0.26. The light, stiff body is also fundamental to the all-new XF’s vehicle dynamics. Double wishbone front

suspension and Integral Link rear suspension – combined with near-50:50 weight distribution – deliver the ideal balance between ride and handling. “From an engineering perspective, our targets with the all-new XF were bound by one holistic goal – it had to do everything better, and it does, says Ian Hoban, Vehicle Line Director, Jaguar XF. “It offers even better dynamics, even greater refinement for the comfort of its occupants, it delivers an all-new infotainment system, and it utilises every last mm of packaging to maximise interior space, while exploiting all the weight-saving optimisation offered by our new aluminium-intensive architecture. As a driver you will notice these benefits from the moment you sit behind the wheel.” Adopting Electric Power Assisted Steering (EPAS) maintains Jaguar’s leadership in steering feel but also reduces fuel consumption by up to two per cent and three per cent for diesel and petrol models respectively. EPAS also enables functions such as camber compensation and advanced driver assistance systems including lane-keep assist, driver condition monitoring and bay- and parallel park-assist. Advanced passive damper technology delivers exceptional ride quality as standard through an extra valve which reduces damping forces at low speeds. For even better control the Adaptive Dynamics system monitors body movement 100 times a second and wheel movement 500 times a second to determine the optimum damper www.businessfirstmagazine.com.au

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settings for the driving conditions. Jaguar Configurable Dynamics technology, optional on all V6 models, provides control and enables the driver to individually tailor settings of the dampers, steering, engine and eightspeed automatic transmission. All-wheel drive (AWD) was engineered into the vehicle from day one. The torque on-demand system is new, and the transfer case features a lighter, quieter, more efficient chain drive. Capability is also enhanced by the advanced control system first used in F-TYPE AWD: Intelligent Driveline Dynamics (IDD). This delivers reardrive handling with the performance and traction benefits of AWD. A first for XF AWD is the addition of the Adaptive Surface Response (AdSR) mode to Jaguar Drive Control. Leveraging Jaguar Land Rover’s unrivalled expertise, AdSR identifies the type of surface, such as snow or gravel, and adapts the mapping of the engine, transmission, steering and Dynamic Stability Control to make the vehicle even more composed in low-grip conditions. All-Surface Progress Control, developed for low-speed driving in adverse conditions, automatically manages the brakes and the throttle to deliver the best possible traction, enabling the car to pull away smoothly and without drama: the driver only has to steer. ASPC operates between 3.6km/h and 30km/h, and the desired speed is set by the driver using the cruise control switches.

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Infotainment and connectivity is the most advanced Jaguar has ever offered. The all-new InControl Touch Pro system builds on the intuitive user interface of InControl Touch, and supports all the same features – including InControl Apps, InControl Remote and Wi-Fi hotspot – but offers a 10.2-inch touchscreen. To enrich the experience there’s also natural voice control, supporting commands such as ‘more like this’ for track selection, and 10GB of the 60GB solid-state drive is dedicated to media storage, enabling Gracenote album art to be displayed. Audio systems include the exceptional 17-speaker, 825W Meridian digital surround sound system. Stereo camera technology enables autonomous emergency braking, lane departure warning and lane-keep assist systems. Adaptive Cruise Control with Queue Assist takes the stress out of motorway driving in stop-go traffic by tracking the vehicle in front, at a safe distance. The traffic sign recognition system brings Jaguar’s first application of an intelligent speed limiter. Once set, the system monitors speed limit signs, compares them with navigation data and, when a change in speed limit is posted, can regulate vehicle speed by either smoothly accelerating the car up to a higher limit or slowing it down to a lower limit. The all-new XF is also the first Jaguar to offer adaptive full-LED headlights. Featuring two banks of LEDs and

reflectors – one for dipped beam, the other for main beam – they generate light with a colour temperature closer to that of daylight than is achievable with Xenon lights, delivering better illumination. At the same time, energy consumption is reduced. So efficient are they that, unlike first-generation designs, cooling fans are not needed. If the high-beam assist function is specified, the stereo camera will detect other vehicles in the distance, and the headlights will be dipped automatically as necessary to avoid dazzling other drivers. BF

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RESOLVING COMPLEXITY Hyder is excited to announce that it has merged to become part of leading global design and consultancy firm Arcadis. Under this umbrella of world class engineers, architects, advisors and designers, will continueÂ to bring excellence to a broad spectrum of natural and built assets within the Australian landscape. For more information on this exciting entry into the Australian market go to arcadis.com

Incorporating

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