The Australian Business Executive - Q1 2017 by The Australian Business Executive

Contents REGULARS 5

Publisher’s Note

News in Review

COLUMNS 10

How Red Tape Almost Killed Me Deborah Sims, Director of Relationships and Engagement, Institute of Public Affairs

Where to from Here in Australian Politics? James Allan, Professor at QUT

Sensing Our Way to a Brighter Future By Professor Benjamin Eggleton FAA FTSE

What’s Ahead for the Minerals Industry By Denise Goldsworthy FTSE

FEATURES

Defence Bank Ethical Banking

COVER: Steve Baxter TV’s popular investment guru offers advice on growing your business and how he identifies investment opportunities

Premium Strata Diamond Guarantee

National Fleet The Engine of Change

Alupole Australia Expert and Optimised Design

The Australian Business Executive - Q1 2017

The Australian Business Executive A division of Romulus Rising Pty Ltd ABN: 77 601 723 111 w: www.TheABE.tv t: (02) 8091 1410

Publisher’s Note

e: communications@theabe.tv Publisher Jesse Landry Writers Nicholas Paul Griffin Raul Betancourt Editorial Contributors Paul Amatril Arnie Taghoy Michael Hebron Design & Layout Bien Swinton Jr. Web & Digital Raizwan Butt Joed Locson

017 is going to be an interesting year with Donald Trump now the President of the United States. While the world waits to see what changes will affect it, we’re making our own here. This year we’ll be profiling more exciting ASX listed organisations to tell their stories. It means our content will be supplemented with our new podcast series for listeners interested in investment and lessons from the decision makers themselves. In our f irst edition for the year our guest editorials look at traditional conser vatism and efforts to reduce red tape including how this assists not just business, but life itself. In our cover story, popular TV show panelist Steve Baxter offers his insight into how to grow your business and strengthen your offering when trying to attract the type of investment he can provide. We speak with Defence Bank CEO Jon Linehan to find out why Defence Bank attracts some of the country’s youngest banking customers and his personal beliefs on ethical banking. Co-Directors Leanne Habib and Inger Brettle of Sydney based Premium Strata discuss what makes their organisation different in the strata sector via their ‘diamond guarantee’. National Fleet have ramped up their marketing activity with CEO Junies Lim launching a new female oriented vehicle offering detailed in our interview. Since deciding to set up their business in Australia after their success in Malaysia, Alupole MD Albert Lim discusses the company’s ability to manufacture unique pole solutions for the government sector. Until next time,

J. Landry Publisher The Australian Business Executive

Published quarterly, The Australian Business Executive (The ABE) provides an in depth view of business and economic development issues taking place across the country. Featuring interviews with top executives, government policy makers and prominent industry bodies The ABE examines the news beyond the headlines to uncover the drivers of local, state, and national affairs. All copy appearing in The Australian Business Executive is copyrighted. Reproduction in whole or part is not permitted without written permission. Any financial advice published in The Australian Business Executive or on www.TheABE.tv has been prepared without taking in to account the objectives, financial situation or needs of any reader. Neither The Australian Business Executive nor the publisher nor any of its employees hold any responsibility for any losses and or injury incurred (if any) by acting on information provided in this magazine. All opinions expressed are held solely by the contributors and are not endorsed by The Australian Business Executive or www.TheABE.tv. All reasonable care is taken to ensure truth and accuracy, but neither the editor nor the publisher can be held responsible for errors or omissions in articles, advertising, photographs or illustrations. Unsolicited manuscripts are welcome but cannot be returned without a stamped, self-addressed envelope. The publisher is not responsible for material submitted for consideration. The ABE is published by Romulus Rising Pty Ltd, ABN: 77 601 723 111.

The Australian Business Executive - Q1 2017

News In Review

Recruitment Program of Betchel in in Saudi Arabia, UAE

echtel, a global leader in engineering, procurement and construction, has launched a major new graduate recruitment program with the Riyadh College of Technology (RCT) in Saudi Arabia. Through the joint initiative, Bechtel will train and subsequently hire 75 RCT students who are pursuing careers in civil engineering, architecture, or survey technology. The first group of students will start the three-month training program in March 2017 which will include work experience at a Bechtel project in Saudi Arabia. “Bechtel’s partnership with the Riyadh College of Technology shows our commitment to the community and to improving workers’ skills in Saudi Arabia,” said Abdulrahman Al-Ghabban, Bechtel’s Deputy Country Manager. “Together we are creating better career opportunities, quality infrastructure and economic growth.” “We are delighted to have partnered with Bechtel on this unique program, which will see 75 graduates receive practical training, develop and improve their professional skills and then be hired by Bechtel, one of the world’s leading engineering and construction companies,” said Dr. Abdulrahman Al-Ghanim, Dean of the Riyadh College of Technology. “Our ambition is to see our students contributing towards Saudi Arabia’s 2030 vision. Developing their skills and careers at this prestigious company will help them to achieve this success.” Bechtel has worked in Saudi Arabia for more than 70 years developing megaprojects from large oil and gas facilities to airports and other critical infrastructure. The company is currently working on lines 1 and 2 of the six-line Riyadh Metro and providing program management services at Jubail Industrial City, the largest civil engineering project in the world.

About RCT The Riyadh College of Technology (RCT) is a technical college in Saudi Arabia. It was established in 1983 as the first college of technology in the Kingdom. The RCT’s objectives and priorities are to graduate the qualified technical cadres scientifically and practically to work in technical areas, especially those which contribute to directly building the national economy. www.rct.edu.sa/ 6

Amcor’s Pharmapack 2017 celebrate a milestone

mcor Flexibles, a world leader in flexible packaging for the pharmaceutical sector, will celebrate a major milestone on the occasion of Pharmapack 2017. The exhibition is now in its 20th year, and it will also be 10 years since the development of Amcor’s award-winning Dessiflex Blister System for ultimate moisture protection. Dessiflex Blister System, which is covered by a granted EU patent, is a ground breaking cold form blister material boasting an integrated desiccant solution in the sealing layer. It offers unrivalled protection against moisture ingress from cross-diffusion through the lid seal, avoiding the need for desiccant sachets or wads within the pharmaceutical package, and enhancing patient safety by removing the risk of desiccant consumption. It is also impermeable to light, oxygen and other gases. Since its launch in 2006, Dessiflex Blister System has been adopted by some of the world’s largest pharmaceutical brands. Dessiflex Blister System features desiccant particles that are integrated into the sealing layer using a solventless coextrusion coating process. The product holds major commercial and quality benefits: it is ideally suited to highly moisture-sensitive molecules as well as hot and humid climates where pharmaceutical degradation can occur quickly. For manufacturers seeking to launch new drugs, Dessiflex Blister System maximises stability and accelerates stability testing, so reduces costs, shortens time to market and dramatically improves drug development ROI. Avoiding the costs and complexity of overwrapping or extra blister cavities, the technology helps to maintain quality and significantly extends shelf life. Tests have shown that Dessiflex Blister System can delay all moisture ingress into blisters for over five years. As well as its ability to keep tablets and capsules dry over an extended period, Dessiflex Blister System offers energy efficiency thanks to improved sealing temperatures, higher yield and lower manufacturing costs – the tablet drying process can be completed within the blister, during storage. Following its introduction ten years ago, Dessiflex Blister System has been repeatedly recognized by the international packaging industry. Since winning its first major industry recognition in 2007, an Alufoil Trophy from the European Aluminium Association (EAFA), it has gone on to win the WorldStar Packaging Award from the World Packaging Association (WPO), a DuPont Award for Packaging Innovation, and another EAFA Alufoil Trophy. Amcor’s technical experts will be on hand at stand D25 to demonstrate the cost savings and quality improvements that Dessiflex Blister System offers to pharmaceutical manufacturers. Visitors will also be able to learn more about the company’s other advanced packaging solutions, including pulmonary services and thermoforming films.

The Australian Business Executive - Q1 2017

News In Review

Handford Site’s enhancing safety and efficiency

RESTON, Virginia - January 12, 2017 echtel National Inc. and AECOM today announced the formation of the Waste Treatment Completion Company LLC (WTCC) – a company that will complete construction and lead the startup and commissioning of more than 20 facilities to safely treat low-activity nuclear waste at the Waste Treatment and Immobilization Plant. The plant is located at the Department of Energy’s Hanford Site in Washington state. “This new company is the next step toward starting up and commissioning facilities that will safely and efficiently vitrify millions of gallons of nuclear waste,” said Barbara Rusinko, president of Bechtel’s Nuclear, Security and Environmental business. “We are now within the timeframe where nuclear facilities typically begin transitioning from construction to startup activities, so the time is now to implement these organizational changes.” WTCC will be subcontracted to Bechtel, which will continue to provide project leadership, engineering, procurement, and other key functions. The new structure represents no new costs to the taxpayer and will deliver the facilities, management systems, and trained workforce to demonstrate turning waste to glass by hot commissioning the Low Activity Waste facility as early as 2022, as required under the WTP contract. The initial workforce will be composed of employees already on the project. During commissioning, the Low-Activity Waste Facility and its support facilities will be handling radioactive waste in close proximity to construction occurring on WTP’s Pretreatment and High-Level Waste facilities, in a sequenced approach to startup that requires extra care. Scott Oxenford, a veteran WTP leader named president and general manager of WTCC, said “Having an active nuclear facility within a construction site creates additional environmental and safety challenges. WTCC provides a single integrated team with line of sight to both startup and commissioning and construction and enables consolidated decision-making.” Peggy McCullough will continue as the overall WTP project director. The new project structure takes effect March 27, 2017. Bechtel retains full accountability for all project deliverables.

Preliminary Agreement of Samarco and with Federal Prosecutors

amarco Mineração S.A. (Samarco) and its shareholders, Vale S.A. (Vale) and BHP Billiton Brasil Ltda (BHP Billiton Brasil) have entered into a preliminary agreement with the Federal Prosecutors’ Office in Brazil (Federal Prosecutors) in relation to the Fundão tailings dam failure on 5 November 2015 (Preliminary Agreement). On 2 March 2016, Samarco, Vale, BHP Billiton Brasil and the Brazilian Authorities (as described in the Note below) entered into a Framework Agreement (described in the Note below) for the remediation and compensation of the impacts of the dam failure. The Federal Prosecutors are not a party to the Framework Agreement. The Preliminary Agreement outlines the process and timeline for negotiation of a settlement of the BRL 155 billion (approximately US$47.5 billion) Civil Claim relating to the dam failure. The Preliminary Agreement provides for the appointment of experts to advise the Federal Prosecutors in relation to the social and environmental impacts of the dam failure, any revisions to the social and environmental remediation programs under the Framework Agreement (Programs) and for the ongoing assessment and monitoring of the Programs. Samarco, Vale and BHP Billiton Brasil will provide existing studies and research to the expert advisors. The expert advisors’ conclusions will be considered in the negotiations of a final settlement arrangement with the Federal Prosecutors, which is expected to occur by 30 June 2017 under the timeframe established in the Preliminary Agreement. Under the Preliminary Agreement, Samarco, Vale and BHP Billiton Brasil will provide, subject to Court approval, total security of BRL 2.2 billion (approximately US$675 million, 100 per cent basis) to support the payments for the Programs (Interim Security). The Interim Security comprises a charge over Samarco’s assets of BRL 800 million (approximately US$245 million), insurance bonds of BRL 1.3 billion (approximately US$400 million), and liquid assets of BRL 100 million (approximately US$30 million).

The Australian Business Executive - Q1 2017

News In Review

The Preliminary Agreement also requires Samarco, Vale a nd BH P Bi l l it on Br a si l t o a dva nc e BR L 20 0 m i l l ion (approximately US$60 million, 100 per cent basis) of the funding obligations u nder the Framework Ag reement to Programs for the municipalities of Barra Longa, Rio Doce, Santa Cruz do Escalvado and Ponte Nova. The funds are to be advanced within 90 days after signing of the Preliminary Agreement. During the period that the Interim Security is in place, it will, subject to Court approval, replace the BR L 1.2 billion injunction (approximately US$370 million) issued in the BRL 20 billion Civil Claim. In addition, the applications by the Fe de r a l P rose c ut or s for t he BR L 7.7 bi l l ion i nju nc t ion (ap prox i m at ely US$2.4 bi l l ion) in the BRL 155 billion Civil C l a i m a n d the BR L 20 billion asset freezing order (a p p r o x i mately US$6 billion) in the criminal proceedings com menced by the Federal Prosecutors in Brazil against Samarco, Vale, BHP Billiton Brasil and others will be suspended. The parties have agreed that the Interim Security will remain in place until the earlier of 30 June 2017 and the date that a final settlement arrangement is agreed between the Federal Prosecutors, and Samarco, Vale and BHP Billiton Brasil. If a final settlement arrangement is not agreed by 30 June 2017, the Federal Prosecutors may request r ei n st at e me nt by t he C ou r t of t he BR L 1. 2 bi l l ion (ap prox i m at ely US$370 m i l l ion) i nju nc t ion. A ny restar t of operations at Samarco is subject to a separate set of negotiations with relevant par ties and will occu r only if it is safe, economically viable a nd h a s t he s up p or t of t he c om mu n it y. Re s u m i ng op erations would require gover n ment approvals, the granting of licenses by state authorities, the restructure of Samarco’s debt, and the completion of com mercial a r r a n g e m e n t s w i t h Va l e r e g a r d i n g t h e u s e of i t s inf rast r uct u re.

Stonewall named Macquarie Groups in top 100 employer list

acquarie Group has been named a top 100 employer in Stonewall’s Workplace Equality Index 2017 for the second consecutive year. The Index, an annual audit of workplace culture for lesbian, gay, bisexual and trans (LGBT) staff, is a tool that helps organisations measure performance and progress on LGBT equality. Rankings are based on policy, staff engagement and career development.

Ju mping to 51st place, up f rom 93rd in 2016, Macquarie has demonstrated its commitment to diversity through inclusive programmes and events, senior leader sponsorship and resources aimed to educate and support LGBT employees and their colleagues in the workplace. Macquar ie also works with other f inancial ser vices organisations to promote and share LGBT equality best practice, learning from and contributing to the broader community. Over 430 employers submitted entries to the 2017 Index in total, the highest number since the Index first launched in 2005. David Fass, Chief Executive Officer, EMEA, Macquarie Group, said: “We’re proud to be a top 100 LGBT employer for the second year in a row. Creating a truly inclusive environment, where each person can bring their whole selves to work, is paramount. We value everyone’s contribution and want to empower our people to be fully engaged in their roles, whatever their background. D u nca n Br a d sh aw, D i r e c t or of Me mb e r sh ip P rogrammes, Stonewall said: “Macquarie Group and all those who have made this year’s Top 100 Employers list have done a fantastic job, and really do put equality and inclusion at the forefront of their work. We were thrilled to have 439 submissions for this year’s Index, one of the most competitive yet, and I would like to thank each and every organisation that took part. With your continued efforts and hard work, we will continue to work toward a world where all lesbian, gay, bi and trans staff are welcomed and accepted without exception in their workplaces.”

The Australian Business Executive - Q1 2017

How

RED TAPE Almost Killed Me

The Australian Business Executive - Q1 2017

How Red Tape Almost Killed Me

Deborah Sims Director of Relationships and engagement at the Institute of Public Affairs

o be told you are suffering from terminal cancer is a traumatic experience in itself. Discovering that life-saving medicine is beyond your reach because of government red tape is devastating. Yet this is the reality facing so many cancer patients in Australia, and I am one of them. In August last year I moved to London in the hope of getting on a clinical trial that would potentially cure my leukaemia. This was the only way to guarantee access to a new drug producing remarkable results with little or no side effects. And in a cr uel case of irony, the dr ug was created in Melbour ne. Venetoclax has been described as a ‘miracle treatment’ and a ‘magic bullet’ for certain types of blood cancer. I can vouch for that. But it has come at a huge personal cost thanks to Australian red tape, and if it weren’t for the fact that I have a British passport, I wouldn’t be here at all. It was just before Christmas in 2011 that I was diagnosed with Chronic Lymphocytic Leukaemia (CLL), an incurable form of blood cancer that would kill me in about five years’ time. My little daughter was sitting on my lap as the news was broken to me. I hugged her and thought: ‘But she’s only two’. I was 38. CLL is rare in someone my age. Almost 80 per cent of all new cases are in people over the age of 60, and the average patient is a 72-year-old man. It occurs more frequently in men than women, and very few are under the age of 40. The diagnosis came totally out of the blue. I mourned myself for two weeks and went into my shell. I was in ‘watch and wait’ mode, so I launched my own in-depth research into CLL while continuing to work full-time. I’m a journalist and I needed information. I joined forums, subscribed to medical journals and was referred to a number of specialists for second opinions. This included paying for a genetic test that is not the standard of care in early diagnosis. I wanted to know how bad my markers were, and I found out mine was the type of CLL you don’t want. It’s an i nsidious and clever cancer that relentlessly crowds the bone marrow and lymphatic system, becoming resistant to treatment. By October 2012, I was really sick and very tired. I couldn’t schedule afternoon meetings at work. In January 2013, I started chemotherapy.

Chemo is the standard treatment when patients become sick enough, and sometimes that’s enough to gain a long remission. I had no side effects apart from a sudden feeling of wellness. Three months later I returned to ‘watch and wait’, with three-monthly bone marrow biopsies, but at six months it was clear the disease was slowly progressing. Most patients who relapse after chemotherapy as quickly as I did have less than two years to live. My specialist talked about me getting ready to undergo a bone marrow transplant. I have a perfect match in my younger sister, so I knew it was a definite option. But the more you know about such transplants, the less you want one, and I’m always doing risk assessments to give myself the best chance of being here to care for my children. By my next appointment, in December 2014, I was starting to feel sick again. Symptoms included bulging lymph nodes (so very unattractive), night sweats, weight loss and recur ring infections – this is a cancer of the immune system after all. Pneumonia is the biggest killer. A transplant was earmarked for early 2015 and I had my hair cut short in preparation. Before the transplant was scheduled I dipped into my superannuation fund in April 2015 to attend a patient conference in the US on CLL clinical trials. While there I had a consultation with Professor Thomas Kipps, an inter national expert on this type of cancer. ‘You should not have a transplant,’ he said. ‘We are on the verge of a cure. We just have to work out what the best drug is. You need something to buy yourself time.’ The next day by sheer chance, one of the guest speakers, Dr John Gribben from the UK, sat next to me. As we struck up a conversation, he told me about a clinical trial in London that he believed would be the best possible treatment for me at this stage. It was trialling Venetoclax, developed in Melbourne. The irony wasn’t lost on either of us. I returned from America thinking it would be ridiculous to travel 17 thousand kilometres to get a drug that came from my hometown. But that’s when I came face to face with the reality confronting many cancer patients in Australia—the life or death battle through a complex maze of red tape. This isn’t about risk aversion or rules that are in place for good reasons, such as restricting access to new medicines that are still under investigation. I’m talking about a needless burden of regulations blocking innovation and keeping Australia two years behind countries like Britain and the US. Cancer patients have to deal with layers of bureaucracy, not just at the federal level, but with each state. Hospitals and research centres are not immune, with unique rules at each facility and a frustrating clipboard mentality.

The Australian Business Executive - Q1 2017

How Red Tape Almost Killed Me

This confusing and complicated barrier forces people to go to great lengths to gain access to life-saving medicines, from fundraising to media campaigns to going overseas to join clinical trials. Some have to sell all of their assets. For many ill Australians, if they fail to beat bureaucracy, they die—killed in effect, not by cancer, but by toxic red tape. It’s a nightmarish absurdity worthy of Kafka. Kafka’s book The Castle contains the scenario. A man tries again and again to overcome bureaucracy blocking his entry to the Castle, and therefore his salvation. The inevitable outcome is that he dies before being granted access. It’s a fate familiar to families of cancer patients. The only chance I had of gaining access to Venetoclax in Australia was through a randomised trial. That meant a 50-50 shot at getting either the new drug or chemotherapy. I’d already had chemo so I couldn’t take that gamble. I asked one of my Melbourne specialists what he would do if he were me and he answered: ‘I’d get on a plane to London.’ It knocked me that the best treatment was on the other side of the world, but I used my super again to go to the UK, even though there was no guarantee I’d get on the trial. I had to be sick enough to qualify and well enough to tolerate phase one protocols. I also had to find a job in London (where I’d previously lived for 10 years) and get a National Health Service number before gaining a referral to St Bartholomew’s Hospital, known affectionately to Londoners as Barts. And, of course, there was a lot of paperwork. There were only 40 places in the world for this trial—two at Barts and none in Australia—which was very frustrating. According to my risk assessment, this could buy me a long remission and possibly a cure. I went back to work at the BBC as a freelance reporter, started writing a blog and waited. When I heard the news that I was accepted for treatment I was so excited, it felt like I’d won the lottery. Altogether, I was away from Australia for seven months. The good news though was that I suffered no side effects and a CT scan in February showed I was in partial remission. Since my return to Melbourne my blood work has got better and better. Now I’m back to working and going out, with my life ahead of me again. In April I got the fantastic news that I was in complete remission and in the very near future I’m hoping to have no detectable disease (molecular remission). I’m loath to come off the drug, but because I can’t have Venetoclax dispensed in Australia, I have had to travel to London every three weeks. It’s part of a treatment odyssey that has cost me $500,000 in lost income, f lights, accommodation and living expenses—so far. And all this is so I can receive an Australian-created drug that is available to me in Britain, but not here, and has been 12

a p proved i n A mer ica , but not here. T h is cr uel a b s u r dity puts life-saving dr ugs out of reach and must be dealt with. Ultimately, I’m waiting for a dr ug that is already regulated in one of the largest economies in the world to be reregulated here. T he Aust ralian gover n ment has made a c o m m i t ment to ensu re new medici nes are made available. Last month it conf i r med plans to overhaul the r igorous reg ulator y approach and fast track the process to slash the waiting time for patients. Reform can’t come soon enough. Au st r alia mu st cut t he t a ngle of red t ape i m pedi ng breakthrough treatments and clinical trials by i nt roduci ng a ne w n at io n a l f r a me wor k . For eve n t houg h we have a g l o b a l r e p u t a t i o n f o r g r e a t r e sea rch scient ist s a nd s p e cialists, the burden of reg ulations ma kes us less competitive for clinic a l t r ia l i nve s t me nt c om p a r e d t o ot he r r eg io n s , s u ch a s A sia . T he me d ic a l s y s t e m he r e mu s t ge t u p t o s p e e d and a d a pt t o t he r a pid ly evolv i ng world of a n t i - c a n c e r t h e r a p y. I f I d i d n ’ t h a v e d u a l n a t i o n a l i t y , I wou ld n’t b e a l ive.

The Australian Business Executive - Q1 2017

Where to from Here in Australian Politics?

ot long after the July 2016 federal election the Coalition had run what, on any account, was a lacklustre campaign. The Coalition did not fight Labor on the unions, or on the boats, or on the need for significant government spending cuts. Instead, the Liberal Party made Mr. Turnbull By James Allan, Editor ‘Making Australia Right’ himself the focus of much of the campaign, Professor at QUT. and mouthed vapid slogans about ‘innovation’ at pretty near every opportunity. That is where the right side of politics chose to fight in the first post-Tony Abbott coup election. The results were far from pretty. Despite the loss of some million or so former supporters the Coalition did eventually scrape home with a one seat majority in the House, but with even more independents in the Senate. It was far from clear that the supposed or nominal cause for this July 2016 double dissolution election, the Australian Building and Construction Commission (‘ABCC’) Bill, would end up being passed by the Senate. At the time of writing it is still unclear. So the publisher picked up the phone and asked me what I thought of the idea of editing a book that would bring together some of this country’s leading right-of-centre writers who would then, in the light of the current political state of affairs in Australia, give the reader their takes on the theme – ‘Where to from Here? My job was to find the writers, give them their instructions, and put together the end result. The end result is this new book Making Australia Right. The first thing was to find the top notch authors. Then I had to agree a general topic with each, be it defence, health, the economy, the media and all the others that make up the themes of the thirteen chapters of this book. After that, and in keeping with the general philosophical approach of many of us on the right, I gave each author a very laissez-faire and minimal set of instructions. Take this assigned chapter topic of yours, together with the book’s overall theme of ‘Where to from here for the right side of politics’, and run with it as you see fit. There was no one-size-fits-all mandated approach, no cut-and-paste imposed uniformity. Some authors ended-up being free-ranging, others 14

more narrowly focused. Some looked at how we got to where we are; others were more concerned with where we need to go; some split the difference. What you will find is a variety of treatments on some of the most important issues facing this country. True, the overall tone is not one of bubbling optimism. How could it be with the current state of the Liberal Party in this country? But it does constitute, with the variety of views and approaches of the authors, a sort of handbook for how the right side of politics might get back on track in this country – at least for those of us who do not think that acting as the pale imitation of Labor is the way to go. In conclusion what you have here are top people in their fields giving you something you will not find on the ABC, namely an outlook and an analysis that is something other than the blog-standard left-wing perspective that dominates so much of the airwaves, the newspaper columns, what you find on social media – and these days, alas, even what some Liberal MPs will voice inside the party room. What you will find here is an honest and open way forward for the right side of politics.

The Australian Business Executive - Q1 2017

Sensing Our Way to a Bright Future By Ben Eggleton

multi-trillion-dollar industry â&#x20AC;&#x201C; and weâ&#x20AC;&#x2122;re right in the middle of it. A person with a casual interest in optical science could be excused for believing that it is a modern field of study, originating in the 20th Century. Although the invention of the laser and optical fibres dates only from the 1960s, the history of optical science actually stretches back for thousands of years. Most recently this rich history was explored in the International Year of Light in 2015, a celebration of both the history of optical and photonic research and the bright future offered by this important discipline.

The truly revolutionary inventions of the laser and optical fibres in the 20th century were a major advance in the field, continuously transforming our communication systems and the ways in which modern humans can interact as a species. Our 21st Century is poised to be an era of which will be defined by photonics and nanotechnology. It may seem that the global internet enabled by these technologies is already revolutionary enough, but we are only just at the beginning of the transformative opportunities offered by this technology. Australia is well positioned to play a leading role in this future, both in terms of our capacity for fundamental discoveries

The Australian Business Executive - Q1 2017

Sensing Our Way to a Bright Future

and translation into new real world technologies such as photonic sensing. We know that photonics is the linchpin of a multi -trillion-dollar industry and itself a 500-billion-dollar global industry and an essential part of the Australian research ecosystem. As well as underpinning the telecommunications infrastructure, photonics technologies are playing critical roles in other areas – health and medicine, defence and security, infrastructure and transport and energy and the environment. In these areas, photonic sensors are enabling new smart technologies that can sense and monitor the health of people, infrastructure and the environment. Photonics sensing has been around for a long time. There are numerous examples of highly successf ul photonic sensors that have been deployed extensively – fibre optics that run along railway lines to measure strain and inform maintenance planning; sensors that are deployed in the mining industry to detect toxins; and current sensors that are used widely in the power industry. Australia has a long history of leading-edge research and innovation in photonics sensors with numerous world leading groups and centres across Australia. With the advent of nanotechnology and the establishment of major nanofabr ication inf rast r uct u re in Aust ralia, the research impetus is to establish new smart sensors that are small enough and low cost enough that they can be dist r ibuted ever y where and can add ress the g rand challenges of the f ut u re. The NSW Gover n ment, th rough the leadership of ou r Chief Scientist and Engineer, Professor Mar y O’Kane AC FTSE, has invested in the NSW Smar t Sensing Net work ( NSSN), a collaboration bet ween the Universit y of Syd ney and the Universit y of New South Wales which I co-direct with Professor Justin Gooding f rom the Universit y of NSW. The Network will harness the state’s significant scientific, information communication technology (ICT) and engineering capabilities across academia and industry to provide state-of-the-art solutions in chemical and physical sensing to help address major societal issues: from the environmental impacts of the r e s ou r c e s i ndust r y, to secu r it y at ai r por ts and i mprovi ng quality of life for our aging population. We are cu r rently in an establish ment phase, which is emphasising f ive pilot projects to add ress key ch a l le nge s i n NSW. At t he s a me t i me, we a r e developing a net work of researchers, end-users and indust r y par t ners to be the basis of the next phase of development.

At the University of Sydney, we are focusing on air-quality monitors with an emphasis on developing photonic sensors to detect particulate matter and gases, particularly related to coal mining and the associated rail corridor in the Hunter Valley. The challenge is to develop low-cost and compact sensors to be the basis of a network of sensors that map the spatial and temporal spread of coal particles around the rail corridor in the Hunter Valley, to better inform residents, policy makers and regulators of air quality issues. This exciting project is applying photonic sensors to a real-world issue that is not only of local concern, but also has global applicability. We expect to apply this methodology to a whole range of pollutants. In the longer ter m, we will incor porate these photonic air-quality sensors on chips small enough to be part of a mobile platform, perhaps even a smart phone. This vision aligns well with the CUDOS research program which has spent the past decade developing a photonic chip based on silicon technology – the same technology platform that is the basis of the microelectronics platform in your phone. CUDOS, the Australian Research Council Centre of Excellence for Ultrahigh bandwidth Devices for Optical Systems, represents a consor tiu m of six Aust ralian u niversities and partner organisations all around the world, headquartered at the University of Sydney. We now have photonic circuits that are etched into silicon wafers providing the basis of highly advanced signal processing devices. We are fabricating these “chips” using lithography equipment already used in the semiconductor indust r y, meaning the tech niques developed can be translated to mass production using that same equipment. We are working with local companies such as Silanna, based in Sydney, whose silicon-on-sapphire technology is well-suited to photonic sensor applications. At the same time, CUDOS is commercialising many of its inventions through spin-off companies and partnerships with local companies. The most recent addition to the Australian photonics research community is the University of Sydney’s Nanoscience Hub, part of the Australian Institute of Nanoscale Science and Technology (AINST). This new facility incorporates more than 800 square metres of state-of-the-art clean room space filled with the tools that are needed to fabricate and prototype these photonic chips. O u r long-t e r m v ision is t o br i ng a c omplet e l a b o r a tor y onto the chip, incor porating light-based ci r c u it s (photonics) with acoustic functionalities for manipulating and actuating f luids on the microscale, in the silicon platform that allows a seamless interface with electronic components.

The Australian Business Executive - Q1 2017

Sensing Our Way to a Bright Future

Our future in our fingers – the silicon chip.

We are already building photonic spectroscopy tech niques into the same silicon chip that perfor ms ele c t r o n ic processing in your smar tphone. This will enable your smartphone to perform tasks such as medical diagnosis, including analysing blood or saliva, or sense pollutants in the environment via spectroscopic analysis. The ability to manipulate fluids will be the basis of a biological laboratory that is part of the photonic chip. Our approach is to use acoustic waves (sound) that can be generated on the chip. These are not the traditional sound waves that we hear or use in ultrasound, but ultrahigh frequency sound waves. We refer to them as “phonons”, which are particles of sound, just as photons are particles of light. We are talking about hypersound – phonons with frequencies from 100 megahertz to tens of gigahertz. Harnessing hypersound on a chip enables the manipulation of microscale biological and chemical elements, meaning we can mix, sor t and 18

select and even create a centrifuge on a chip. This laboratory-on-a-chip will literally be small enough to be part of your smart phone and built into the same silicon chip already performing digital operations, and with cloud connectivity it will allow wide-scale environmental sensing with local accuracy. Eventually we anticipate this technology will allow your smart phone to be transformed into a sensor that will sense your local environment and personal health. Think of it like a Twitter feed on your smart-phone, except all of the information is about you, your body, your health and your immediate environment – as much or as little information as you need instantaneously available. This will allow people to make informed decisions about their health or the environment they choose to live in. We really are sensing our way to a very bright future. This editorial has been reprinted courtesy of ATSE Focus magazine.

The Australian Business Executive - Q1 2017

Whatâ&#x20AC;&#x2122;s Ahead for the Minerals Industry By Denise Goldsworthy

What’s Ahead for the Minerals Industry

inancial margins will always be low and the increasing requirements of regulators and communities mean significant innovation is a must. If you put the themes of Blue Sky Future and mining together, many people will automatically think of the Midnight Oil song from 1990 – “Blue Sky Mine”. This song about the disaster of mining blue asbestos at Wittenoom provides a good reminder of the significant changes to the Australian mining industry over the past 50 years, as well as the challenges that must be addressed over the next 50 years to ensure mining remains an acceptable and significant contributor to the Australian economy. Australian miners are known for digging things up and shipping them overseas. We do it at scale, and in many cases at lower cost than our international competitors. However mining in Australia is becoming increasingly difficult. The large, low-cost, Tier 1 deposits are in some cases nearing depletion and the limited discoveries of replacement resources are bringing challenges of deeper, wetter and lower-grade ore. Financial margins will always be low as most are true commodities, early in the value chain, with minimal leverage outside periodic supply shortages to argue for prices much above cost plus margin plus sustaining capital. Combine this with a need for new commodities to support technological advances that are likely to be geologically rarer and more distributed, as well as the increasing requirements of regulators and communities, and significant innovation is a must. The industry represents itself as innovative, and while there are impressive examples, many opportunities are handicapped by the on-again-off-again investment strategies of the industry, its investors and financial backers, due to the swings in commodities prices. There is also a big difference between the ability of the majors and the small to mid-tier miners to access the latest innovations. This critical block to adoption of industry interoperability standards or shared platforms – to enable the industry to achieve its equivalent of the Internet of Things (IoT) – is currently preventing the mass use of technology, inhibiting adaptations from other industries and preventing removal of significant entry barriers for new technology suppliers. Australia is up to this challenge, with some of the best minds working in Australian research organisations, mining and the supporting mining equipment technology and services (METS) sector to make this happen. The shared vision for mining should be one of an industry that is physically invisible to the community, but at the front of minds for the contribution it makes to the economic and sustainable supply of raw materials necessary for a modern economy. Delivering on this vision will require major change in four areas.

Mining will be considered an integral part of the community, with shared accountabilities that cross lease boundaries. This integration will be at a deeper level than just the infrastructure. Mining will become truly integrated with its neighbours to ensure efficient management of resources (including air, water, and energy), minimisation of waste and sustainable ecosystem management. High engagement will deliver net environmental and community benefits as regular markers of mining projects. We will take advantage of opportunities to link thinking about things coming out and things going into the ground – such as geothermal energy (heating and cooling), storage of non-mining wastes in mine voids (including carbon/CO2 sequestration, nuclear waste and current land-fill waste) and upgraded mine planning strategies, all of which will be enabled by increased data analytics capacity for complex modelling of these systems as well as the technologies to deliver repeatable performance. This will be vital to maintain the confidence of stakeholders. Failure to do so is likely to result in more resource nationalisation agendas, so is not an option for the industry. Mining will be optimised and integrated as a result of collaboration across the Australian value chains. This will come about from deeper connections with more of Australian industry – building on the relationships with the innovative METS sector and establishing new connections with the advanced manufacturing developments so that the smart technology products manufactured in the future Australia are matched with resources mined in Australia. We will have learnt from the Lithium experience, where it took a while for Australia to match its exploration and metallurgical development activity to the foreseeable growing demand. The “old” bulks such as iron ore, coal and alumina that are the basics for economic development won’t be the core source of GDP in a sustainable future economy. Australia doesn’t have big enough local markets to ensure competitive scale, and the tyranny of distance is another handicap to new industries. Manufacturing will be revitalised by new industries such as biotech, that create small, expensive components or items, that will potentially need new raw materials that will be sourced from Australia. This will create a high value-adding opportunity for secondary and tertiary processing in addition to the mining of the commodities of the future – all of which are likely to be at smaller scale than the current bulks. Within the industry, knowledge will be more integrated with reduced lease boundary limitations. In the case of geological knowledge, this will be facilitated by State and Federal Geoscience agencies, enabling extensive, complex modelling of geological and mineralogical systems for more effective exploration.

The Australian Business Executive - Q1 2017

What’s Ahead for the Minerals Industry

Cooperation to develop industry-wide step-change solutions will be facilitated through an increased role of METS-Ignited (the Mining Equipment, Technology and Services Industry Growth Centre), AMIRA (the minerals companies and suppliers’ research organisation), ACARP (the coal industry’s research program), the Cooperative Research Centre program and similar initiatives. Sensor a r r ays on mach i nes a nd i n t he g rou nd , automation, UAVs, virtual and augmented reality (VR and AR), robotics and big data analytics, often adapted from other industries, will all be widespread. These changes will be linked to the other dimensions, reflecting the move to more selective recovery of the most valuable ore, and fundamentally reducing the scale of many operations. These tools will eliminate human involvement in dangerous tasks, and guarantee more environmentally responsible and cost-effective performance by removing the variability inherent in people. Issues of interoperability and shared infrastructure, especially communications and data, will be overcome, with many tools developed using open-access software. Mining applications will be a sub-market of more global strategies for technology companies. The equipment will be remotely controlled and either remotely maintained or self-maintained enabling the workforce to live anywhere, providing more family-friendly conditions. One of the double-edged sword consequences of this change is that the high salaries of the last decade will be gone forever. The required skill set of future miners will be as deep in STEM knowledge as any other. Much of this innovation or adaptation will come from multi-disciplinary efforts, with the tools such as VR /AR complemented by data analytics allowing geologists and other professionals to explore options in every sense of the word. How we mine will be different. New metallurgical a nd m i ner al processi ng tech nolog ies t hat suppor t f u nd a mentally different flow sheets will be developed to respond to our unique geological and mineralogical differences as well as the need for new products and lower water and energy consuming methods that will leave a smaller global footprint. These will be complemented with entirely new methods for in-situ chemical or biological recover y of specif ic elements that eliminate the need to mine large volumes of waste to access the valuable reserves. All the foundation pieces are there for Australia to achieve this vision for mining. The biggest barrier to achieving the vision is not the technical or innovative capability of our people – it is the lack of the belief that such a vision is both possible and desirable.

This downhole sensing tool developed by Curtin researchers represents a step change in the quality and amount of data the minerals industry can now capture (Photo: Curtin University) Making the mind-set change starts with our ability to convince the younger generations at school that mining is a high-tech, challenging opportunity for them to contribute to. Engaging with young minds while they still think “how”, not “why not” will help us make the collective paradigm shift. This editorial has been reprinted courtesy of ATSE Focus magazine. Ms Denise Goldswor thy FTSE is a non-executive director and advisor on research, technology and innovation. A former senior mining executive, she is experienced in manufacturing, mining and the technology and innovation sectors. She is currently Chairman of ChemCentre WA; a Director of the Export Finance and Insurance corporation (EFIC); a member of the Edith Cowan University Council and its Commercialisation Advisory Board; a trustee for the Navy Clearance Diver’s Trust; and a judge for the Prime Minister’s National Science awards. She was named the 2010 Telstra Australian Business Woman of the Year, is a member of Ch ief Execut ive Women (CEW ) a nd was i nducted into the WA Women’s Hall of Fame in 2011. She chairs ATSE’s Minerals forum.

The Australian Business Executive - Q1 2017

Defence Bank: Ethical Banking By Nicholas Paul Griffin

efence Bank has been in business since 1975, when it was known as Defence Force Credit Union Limited, and is now one of Australia’s largest member-owned banks. In contrast to many financial institutions, Defence Bank is a profit for members bank focused solely on the financial needs of the customer, offering financial products and services to both the Australian Defence Force and the wider community. The Australian Business Executive spoke recently with CEO Jon Linehan to discuss growth, innovation and the importance of ethical banking. “I’ve held CEO positions since I was 38,” Mr Linehan explains, “in that I’ve been CEO of Hostplus, I’ve also been director and general manager of Australian Unity Funds Management, CEO of AustSafe Super and managing director and CEO of Defence Bank.” All these companies share an association with finance, although in the areas of superannuation, funds management and banking. It is fairly unusual for Mr Linehan to have worked across all areas, as many people in finance tend to work within only one of these areas. “Each of those companies respectively has grown significantly once I’ve been in that position. I had a range of qualifications, from law and economics, and I’ve had scholarships, been a fellow at Oxford, and also scholarships from Japan and elsewhere.” In the grander scheme, Mr Linehan has always held senior positions, being lucky enough to gain head operational and board experience in his 20s and early 30s at senior levels in both government and industry. “Since my 20s I have been on numerous government bodies and boards,” he says. “More recently, I’m obviously Managing Director/CEO of Defence Bank so I’m on the board, and when I was in Australian Unity Funds Management I was a director of that organisation.”

Defence Bank CEO Jon Linehan Over the years, Mr Linehan has been on around twelve different boards, spanning a career of 20-25 years. He admits that much of his work on boards is now in the past, the most recent examples coming about from his positions as CEO. Mr Linehan’s first big CEO role was for well-known superannuation company Hostplus, where he increased asset holdings from around $480m to $1.8bn and oversaw an increase in membership and a high-profile merger to create a high-performing superannuation fund. “[Then] I was headhunted into Australian Unity, where I was director and general manager of what’s called Australian Unity Funds Management. Also, I was a director of Acorn Microcap, which is a microcap investment company.

The Australian Business Executive - Q1 2017

Defence Bank

After Australian Unity, Mr Linehan spent just a single year in Queensland working as CEO for industry superfund AustSafe Super. He left the role after deciding to return to work in Melbourne, where he soon began his employment at Defence Bank. “Defence Bank, when I joined it, was Defence Force Credit Union,” he says. “It wasn’t a bank, it was a lot smaller, it was about $480-490m in assets. I decided that I liked the area it was in. It was an ethical company; it hadn’t been growing fast, but it was ethical.” The company’s strong association with the Defence Force presented a huge oppor tunity for growth, and having an established presence meant there was room for enhancement to help it reach its potential, something Mr Linehan has a track record in achieving. “You need to change the attitude of the organisation to focus on growth. Really, it’s ver y much a case of clearly understanding your market and picking your market, and not diversifying your energies into a range of places that mainly have no retur ns.”

I n a d d it io n t o c o n c e nt r a t i n g r e s o u r c e s a n d u n derstanding the market, the key to the process is to have competent employees who a re g iven a level of i ndependence that allows them to achieve success w it h i n t hei r roles, f ree f rom potent ially d isr upt ive m icro-management. “I spend a lot of my time listening to people,” Mr Linehan explains, “and I always say to them ‘I know what I know, but I don’t know what you know’. I’m trying to understand what they understand, and then see if we can utilise it.” T he C E O’s r ole i n t he g r ow t h p r o c e s s i s t o p r ovide leadership to a very good team and to reallocate capital, making assessments about where to place the energy and focus of the organisation in order to achieve the desired results. “I think if you get those points right—if you get good people, good strategy, clear focus, and concentrate in achievable areas of your market, don’t spread your energy too broadly and allocate your resources accordingly, then I think your organisation will grow.”

The Australian Business Executive - Q1 2017

Defence Bank

In addition to these factors, it is just as import ant for a c ompany to be in novative, to e n s u r e t h at i f p r og ress hits a road block, the organ isat ion has the abilit y to move a rou nd it rather than slam ming st raight into it. “Of ten thi ngs will change, markets will c h a n g e q u i t e d r a m a t i c a l l y. W he n we we nt t h r ou g h t he GFC , we h a d a l l s or t s of i s s u e s t o m a n a ge, a s eve r yo ne el s e d i d , a n d w e j u s t w o r k e d o u r w a y t h r o u g h t h o s e . We a c t u a l ly g r e w d r a m at ic a l ly d u r i ng t he f i r s t ye a r or t wo of t he GFC.” T his g row th was achieved when Defence was still a credit u nion. W hile ever ybody else was cont racting, the organisation reor iented all it s f u nd i ng forces a nd st r uct u res, i nt roduced new products, and navigated its way successf ully th rough the cr isis. T he organisation went th rough its change t o a b a n k a f t e r M r Li neha n ha d t a ken over at t he h e l m , t h e r e s u l t of a n o p p o r t u n i t y t h a t e m e r g e d la rgely becau se t he gover n ment wa s facilit at i ng t h e p o s s i b i l i t y of c r e d i t u n i o n s b e c o m i n g s u b j e c t to capital ban ks. “We saw that opportunity, and we were keen to seize it. We realised that in our position, par ticularly

w i t h o u r y o u n g d e m o g raph ic — Defence Ban k h a s a d e mog r a ph ic t h at ’s p r ob a bly t e n ye a r s you nge r t h a n a ny o t h e r b a n k— t h a t t h e w o r d s ‘c r e d i t u n i o n’ w e r e f a i r l y o u t d at e d .” Mor e i m p or t a nt ly for t he or g a n i s at io n , t he r e wa s a b r a nd i m a ge i s s u e, i n t h at m a ny p e o ple ju s t d id n’t k now what Defence Force Credit Un ion was. T he solution was to i nt roduce a much more power f ul name: Defence Ban k. “That was obviously all suppor ted by our staff and our members, because it was voted o n a c c o r d i n g l y , b u t m o r e i m p o r t a n t l y for u s , eve r si n c e t h a t n a m e c h a n g e , w e’v e n e v e r h a d a n i s s u e of p e o p l e u n d e r s t a nd i ng who we we r e.” This robust change has cont r ibuted to both t he g r ow t h of t he or g a n i s at io n a nd it s p e ne t r at io n , creat i ng a clean, st rong brand. It was vit ally i m p o r t a n t t o k e e p t he ‘d efe n c e’ p a r t of t he n a me, a s t h i s i s a cle a r i nd ic at or of t h e o r g a n i s a t i o n’s values. T he Aust ralian defence market is still relat ively big, serving uniformed communities such as those found in Tow nsville a n d D a r w i n , a s w e l l a s h a v i n g m a n y me mbers that are non-uniformed, these being families of defence workers.

The Australian Business Executive - Q1 2017

Defence Bank

Formerly known as DefenceForce Credit Union, the rebranded Defence Bank has a strong regional footprint with some of the youngest customers in banking

“A r a n g e of p e o p l e o u t s i d e of d e f e n c e of t e n j o i n u s ,” h e s a y s , “ a n d o u r m e m b e r s h i p i s o p e n . S o , r e a l i s t ic a l ly, we a r e a lway s goi ng t o b e a he av ily concent red n iche market, but the n iche is quite broad.” T hese ver y clea r ma rket s have helped t he o r g a n i sation achieve its aim of double the market g row th for the past si x years. M r Li nehan doesn’t recognise any ceiling that might prevent them from continuing to do that going for ward. Defence Ban k’s i mpressive g row th is there for all to see. Si nce M r Li nehan joi ned the organ isation in 2006, asset and prof itability has almost quadr upled i n si z e, w it h t he c om p a ny at $1.8b n i n a s s e t s a nd ex pected to reach $2bn by the end of this f i nancial year. P r of it a bi l it y h a s a l s o r i s e n , wh ich h a s help e d f u nd f u r ther growth. Interestingly, this has resulted in employment nu mbers d roppi ng by about 30% , with the company now employi ng arou nd 240 st aff. “At the same ti me we’ve upsk illed st aff, and by that I mean we have an enor mous amou nt of t rai n i ng provided to st aff. We have engagement levels of a rou nd about 82% , which is consistently measu red i n a lot of organ isational change.” The intention is to keep training staff, but also to ke e p mov i ng t hei r job s i n l i ne w it h t he ne e d s of t he or gan isation. By automati ng some of the more back- end jobs, focus has switched to having two-thirds of staff in front-end, customer-impacting roles. Membership of the bank is now up to around 90,000, many of whom are based i n r u ral Aust ralia. T his has

b e e n s t r o ng ly i n f lu e n c e d by t he s t r u c t u r e of t he defence forces, which are generally concentrated outside of the capital cities. “It doesn’t mean that we don’t have membership in capital cities, we have quite significant membership, but the majority of it lies outside. In terms of that, we have to deal with an enormous geographical spread, so that’s why we focus heavily on technology.” Many members are not only young, but are also highly technologically literate because of their work in defence. Despite having 40 branches, most of the bank’s contact with members is made via mobile technology, the internet or through its video call-centre setup. “What we find in respect of that,” Mr Linehan adds, “is that it means that we want to keep cont act with people, be they on deployment overseas or be they based locally. A lot of our energies and time are focused on servicing those members.” The bank’s reputation for attracting a younger membership base is both a conscious decision and one that is somewhat inevitable, with much of the defence community b ei ng n at u rally of a certain age group, as it’s almost exclusively younger people who sign up. “That causes us, which is reasonable, to be quick moving in terms of particularly adaptation technology. We run a range of technologies; we run things like Apple Pay, which ANZ has but the other three major banks don’t have at this point.” In addition, Defence Bank prides itself on being a highly ethical bank with an ethical staff base, and this is shown in the deep structural way that the bank’s values serve its day-to-day running.

The Australian Business Executive - Q1 2017

Defence Bank

“Our staff vote on our values, and then they own the values. Because we are a cooperative bank, and we’re structured where the members are shareholders, we don’t have that dichotomy of ownership, in terms of shareholder versus customer.” With members acknowledging the positivity of the setup, the company has been able to achieve an impressive NPS (Net Promotor Score) of 24, where the major competitive banks are usually tracking at -15.5 to -16. “Most of that is driven by the culture of the organisation, which is very ethical. We rarely receive negligible complaints. It’s very common for us to receive emails of thanks from our members, or our branches often receive flowers from members, for helping them.” The bank continues to consider what’s best for its customers, ensuring that it has a local call-centre where staff are highly trained, but refraining from placing restrictions on the time of a call, preferring for staff to spend as much time as they need talking to members. As far as Mr Linehan is concerned, a bank only sells one thing, and that is trust. The current problem that banks have is in regaining that trust from customers after so much scandal over the past decade. “We see trust as the core thing that we do. Often our staff are based in defence establishments, many of those are spouses of defence force personnel, our board has a presence of senior officers from defence on them but has also commercial people as well.” Mr Linehan is therefore highly conscious of Defence Bank’s need to behave ethically, to make sure it has the confidence of its members and does nothing to break that all-important trust. The recent senate enquiry concerning some of the biggest banks in the country brought to light just how different Defence Bank is in terms of its relationship with customers than the supposed big banks. “On that day, in a Melbourne paper there were letters to the editor, and all of them were slamming the big guys. Right at the bottom was a letter from one of our members in Tasmania, saying ‘I love my bank, I don’t understand why you people don’t love yours’.” This was a surprise to Mr Linehan, as this was just an average member writing in. But the letter highlighted that the ethical standards the bank keeps have not gone unnoticed by members, and make all the difference. “If we do get a complaint,” Mr Linehan goes on to add, “which is very, very rare, it’s escalated, right up the tree. I will see it, or one of my direct reports will see it, and we’ll actually investigate it.” In addition to its ethical standards, Defence Bank prides itself on its business and innovation, which fits in with the organisation’s structure to enable sustainable growth, which many organisations do not manage. 26

“In that, we aim to keep, in an operational sense, in the top quartile in technology, but more importantly we build products that are specific for our market, and which ref lect the demographic and perhaps that regional spread.” Examples of this include the organisation’s innovative video call- cent re, as well as the shif t of the mai n customer interface to mobile and web technology. The main aim is for the ban k to build u n ique products out of these i n novations. “For example, we built deposits within superannuation when the GFC came through. We’re very conscious of building unique products, we have different insurance products in some aspects of defence, such as bar racks insurance.” Mr Linehan insists that the bank will always be ver y thorough when it comes to technology, and will always aim to be at the very top of the market, always looking for the next innovation. “As an organisation, we can’t innovate across the whole thing, so we will concentrate on one or two major innovations, but within that we will always be at the top through things like Apple Pay and Android Pay. These things are always operational with us.” In terms of staff engagement, it can be difficult to keep staff on the technological journey, because there is a lot of change running through the organisation. At any point there are major programmes of organisational change, staffing issues can arise. “We put a lot of resources into training, both online and directly, and across our branches, which are spread all across the nation. Further to that, we provide a framework where people understand why we do what we do, and they’re clearly committed to the organisation.” This means that staff engagement—which is measured by a standard, annual independent survey—currently sits at about 82%. T his is ext raordi nar ily high for any organ isat ion, but particularly for one that goes through the level of change seen at Defence Bank. The organisation has also been the recipient of the very prestigious Employer of Choice Award for 2016, which is awarded each year to an outstanding employer by the Australian HR Awards. “One of the programmes we’ve been running over the course of this year is what’s called an Appreciative Inquiry, a process based out of essentially the Positive Psychology school at Melbourne University.” The Appreciative Inquiry process involves using positive aspects of inquiry for the organisation to redirect it. Defence Bank began the process in June 2016 and is one of the very first Australian organisations to do so.

The Australian Business Executive - Q1 2017

Defence Bank

“My view is that people work for organisations for two reasons. One is an economic reason; because it’s a successful organisation, and there are opportunities for expansion. But the other is a moral compass, and that’s where ethics come in.”

The employment of ethical standards and innovation has culminated in a fantastic offering for customers and members, and has meant that the bank is able to do more to help out those in need, to reach out into the defence community and offer assistance. The organisation has always been an ardent supporter of social needs within defence, and in January 2013 setup what is known as the Defence Bank Foundation, which runs a programme known as Defence Community Dogs. “It’s major role is to raise money and sponsor welfare dogs for return service personnel with PTSD, and we’ve got a very significant presence now, we’ve got over 200 dogs out, and we donate money to and provide the programme [for Defence Community Dogs].” The main part of the bank’s involvement is the use of prisons, such as Bathurst in NSW, where the prisoners train the dog to a certain level, after which it is allocated to somebody with PTSD and the organisation provides ongoing training. “The purpose of the training is partly about the dog, to keep the training going, but it’s also about keeping the person with PTSD engaged as a part of society, and the dogs have been a great programme, they’ve been so helpful.” The success of the programme has been seen in testimonies from those people assigned dogs, many of whom have spoken about the life changing effect the scheme has had. The programme is supported by all of the bank’s 40 branches and its members.

“Our endeavour is to have people sponsor a dog—it costs $7,500 to sponsor a trained dog. But the cost structure and the admin is borne by us directly, so we want all the money to go through to the person with PTSD and the dog.” The bank sponsors a range of activities beyond this that help people with PTSD, including being actively engaged in the Soldier Recovery Centre and several other operations that it throws its weight behind. So, why should customers choose Defence Bank over others, especially the big four Australian banks? Mr Linehan says the bank’s defining characteristic is that it has a clearly defined moral compass. “My view is that people work for organisations for two reasons. One is an economic reason; because it’s a successful organisation, and there are opportunities for expansion. But the other is a moral compass, and that’s where ethics come in.” Mr Linehan believes that if people think they are working for an organisation that is ethically sound, then the organisation will always benefit from better results from the work and commitment of those people. “A lot of our job applicants that come to us mention that as one of the reasons they applied. What’s happened over my time is that the quality of people coming in has increased every year, and we always have a lot of people that really are keen to work for us.”

The Australian Business Executive - Q1 2017

Steve Baxter: Swimming With Sharks By Raul Betancourt

Steve Baxter

or those who have been watching Australia’s Shark Tank, Steve Baxter is a regular who has an eye for spotting a great idea and a tendency to really crunch the numbers before making a deal. Born in Cloncurry, a rural town in Queensland, Baxter was raised in Emerald until he joined the army as a teenager and began a career in electronics. In his early twenties, with just $11,000 of startup capital, he built his first company, internet service provider SE Net. From there, Baxter went on to launch several businesses, including PIPE Networks, and then eventually developed the co-working community River City Labs. One of his latest and most high-profile projects, however, has been his participation in the Australian version of Shark Tank, where he serves as a voice of experience and, at times, brutal honesty to the hopeful entrepreneurs who come knocking. “Six or seven times a day, the door opens and someone comes in and asks you for money. It’s really quite curious,” he says of filming the series. In contrast to other reality shows, Baxter maintains that Shark Tank is very simple and that what the viewers see corresponds closely with what is actually filmed. “What I would say is [that] what you see on TV is a very honest, compressed version of what we do. […] They [the producers] haven’t sensationalised it in that respect.” The compression is necessary, however, as pitches and negotiation can go on for much longer than the fifteen or twenty minutes that are presented on TV. So much so, that Baxter sometimes grows bored, especially when entrepreneurs can’t provide basic information to him about their own businesses. “I don’t like not having my questions answered,” he says. After a certain point when things seem futile, he starts “looking at the roof and twiddling [his] thumbs.” Some of it comes down to personality as well. He adds: “If I don’t like you, then I’m not going to want to invest in you.” Having values in common is an important factor for him, which is why he has yet to invest in a company attempting to sell vegan products, for instance. “In the same way that a vegan wouldn’t want a cold-blooded, fish-killer hunter like myself, I don’t necessarily gravitate towards that.” He also keeps an eye out for common mistakes that new entrepreneurs often make. Chief among them is the tendency to tr y to bring a product to market without investigating the needs of the market first. “So many people have a solution that they go out looking for a problem for,” he says. “You see it a lot with technology. Just because your Bluetooth phone can open your door, do you think people want to do it that way? The answer is no. Really what you need to find is that problem, and you need to understand the solution for it.” In Baxter’s view, starting with a solution and then tr ying to create a problem for it to solve is “backwards” and “very hard.” A better approach, he asserts, is to examine what problems

need to be solved in the market, and then introduce various solutions that can be modified over time until they suit the market. According to Baxter, another issue plaguing small startups are the many aspects of business such as marketing, sales, and accounting, which are difficult for beginners to grasp. Because of this, he stresses the importance of building a team. “Very few people are good at [everything], and that’s why teams are really good in business.” It’s also important, he says, to know when to cut one’s losses. “I’ve got some entrepreneurs [that] I’ve invested in that I have so much respect for, but sometimes I feel like their business is like the zombies on The Walking Dead,” he says, and he finds it difficult to convince them that they have no market. However, he prefers to back investors are not too quick to give up, either, ones that “will explore every last inch, maybe even to their detriment, to be honest.” When it comes to the need for constant growth in a startup, Baxter takes a more nuanced view, and says that growth can come in many forms. “Yes, growth’s important, but what kind of growth in the company are you measuring?” He suggests that the number of new users of your product or service is often more important than simple growth in revenue, a nd t h at m a ny t i me s e nt r e p r e ne u r s m ay h ave t o pu r p o s ef u l ly pause or slow their business in order to create better infrastructure that will make for a better business in the long run. After decades as an entrepreneur himself, Baxter has learned many lessons from his own companies. One of the major habits that he developed from this personal growth was to make hiring the right people a priority. “It doesn’t mean that everyone is going to be a world leader. They [just] have to be appropriate for the role.” He also asserts the importance of character, “I’ll take a good person with a poor idea anytime, as opposed to a poor person with a good idea,” he says. Above all, he stresses that one needs to be able to trust those with whom one works, both in the sense of being confident in their skills and also in the sense of relying on their personal fortitude as a human being. As far as the everyday processes of working, Baxter suggests that every business should have a plan for each procedure, and that employees should have the freedom and f lexibility to edit the manual when they are faced with contradictory real-world conditions. “It is about a mature approach, a systemic approach to business.” In addition, it is cr itical to caref ully select the r ight employee for the right tasks, and to not promote people simply based on their desires for advancement. “The best salesperson makes the worst sales manager, for example,” he says, “[and] every salesperson wants to be a sales manager.”

The Australian Business Executive - Q1 2017

Steve Baxter

He insists that it is important to be mindful of an employee’s skill-sets and to understand what drives them. Without a deep interest in the work, an employee is unlikely to produce at his highest level, and this can be one of the largest inefficiencies in a business. According to Baxter, the work itself should be the reward and other perks that the company provides should be incidental. In spite of these strong opinions concerning the way a business itself should be, Baxter says that he notices a few personality traits that successful businesspeople have in common, though there is one major pattern that he sees time and again: the courage to make hard decisions, even when others don’t agree. “You have to be forceful at times. You don’t have to be nasty, but you may have to make some pretty unpopular decisions.” In other words, the fortitude to be brutally honest about what should be done is a critical quality. On the complete opposite end of the spectr um, howeve r, Ba x t e r h a s not ic e d t h at s ome t i me s ne w e nt r e p r e ne u r s succumb to somewhat dishonest puffery while tr ying to impress investors. While he agrees that

it’s important to “play a bigger game” and to even inflate one’s own confidence in order to make the business look good, at the end of the day the numbers are what ultimately matters, and those cannot be faked. “This is why I like numbers, this is why I like facts about businesses,” he says. For many entrepreneurs, their ultimate goal is to one day sell their company, but Baxter asserts that this is the wrong strategy to take. “Should they have a plan? Yes. Should they build a business to sell? No. They should build a good business because a good business will be very sellable. If you concentrate on the exit, you’ve dropped the ball.” Another common concern for new business owners is where to get capit al if they can not conceivably bootstrap the company on their own. For that, Baxter suggests meeting with other entrepreneurs in your industry as much as possible and learning how they started their own businesses. “Go out there and get connected to different industry groups. You have to network. You have to get out there and do it.”

Steve Baxter has become a visible personality through TV’s popular ‘Shark Tank’

The Australian Business Executive - Q1 2017

Premium Strata: Diamond Guarantee

ydney-based company Premium Strata is proud to offer premium strata management services, tailored to individual needs and scheme requirements, as well as providing building management services through its sister company Premium Building Management. The company’s co-directors, Leanne Habib (CEO) and Inger Brettle (COO), spoke to The Australian Business Executive recently about the rise of Premium Strata and the challenges facing the industry today. “I am the founder of Premium Strata,” Ms Habib tells us, “back in 2007. It really came from a passion of wanting to deliver a service concept that competitors weren’t providing.” At that time, and even to this day, many strata companies were focused on quantity rather than quality. In response, Ms Habib came up with the name Premium Strata to indicate the exceptional quality customers could expect from her service.

Premium Strata COO Inger Brettle

Premium Strata CEO Leanne Habib

“Coming up with the name ‘Premium’ was all about providing that premium, high-end service. Since then, we’ve g row n the busi ness organ ically, based predominantly on word of mouth. Today we employ well over 20 staff, and are growing rapidly.” Ms Habib’s career began in real estate, before she moved on to working in strata management in 2000. Seven years later she was setting up her own business in the form of Premium Strata. “I’ve been with Premium Strata just under f ive years,” Ms Bret tle explai ns. “I had been i n the real estate industr y since 2000. I f irst started in property management, and subsequently managed properties held in tr usts and estates at Per petual.” Eventually, she received a phone call from colleagues suggesting she tr y her hand in the strata industr y. The Australian Business Executive - Q1 2017

Premium Strata

“I met Lean ne at the company where I gained my f irst exposure to st rata management. I then moved to other strata management companies, larger organisations, and eventually joined Premium Strata five years ago, becoming a co-director th ree years ago.” For Ms Habib, bringing another director on board was contingent on f inding the right person for the job. She found that they complemented each other in ter ms of skills and objectives, especially regarding customer ser vice. Premium Strata’s position in the high-end of the market is due to its unique setup, giving the company an edge over many of its competitors and a signif icant advantage in the market. Its Diamond Service Guarantee e n s u r e s t h a t a l icensed st rata manager handles all customer’s requirements, and avoids customers having to deal with different departments, which is t y pical in the indust r y. A strata manager manages the day-to-day affairs for a strata titled or community titled scheme or building. This includes the conducting of meetings, collecting st rata levies, arranging repairs and maintenance, managing a scheme’s financial affairs and insurance.

A st r at a ma nage r also ha nd le s issue s a nd complai nt s bet we e n re side nt s. T he sister company is Premiu m Buildi ng M a n a g e m e n t , w h i c h p r ov i d e s o n s i t e b u i l d i n g management ser vices. “Basically,” Ms Habib explains, “a building manager i s s o m e b o d y w h o i s u s u a l l y s t a t io n e d o n s i t e a t a b u i l d i ng a nd oversees t he d aily clea n i ng a nd m a i n t e n a n c e ser vices. The building manager repor ts any repairs needed and is the contact for any contractors pe r for m i ng work on com mon prope r t y. He or she t y p i c a l l y work s du r i ng nor mal bu si ne ss hou r s a nd reduced hours over the weekend.” The smallest building that the company provides b u i l d i n g m a n a g e m e n t s e r v i c e s fo r i s 6 6 u n i t s , b u t t h e s e r v ice is more com mon ly fou nd i n bu ild i ngs of o v e r 10 0 u n i t s . G e n e r a l l y, i t i s t h e s e t y p e o f d e vel o p m e n t s t h a t w a r r a n t s t h e u s e of a b u i l d i n g m a n a g e r. “If a building has a lot of common amenities,” Ms Habib says, “like a pool, sauna, barbeque areas, and communal gardens, then it is beneficial to have someone onsite who is pro-actively managing the use of those facilities.”

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The Australian Business Executive - Q1 2017

Premium Strata

“Exclusivity also plays a part.” Ms Brettle adds. “Smaller high-end buildings with units in the higher price brackets typically also have higher service expectations, warranting the appointment of an onsite building manager.” The building managers employed by Premium Building Management are dedicated to servicing just the one building. This is different to other companies that provide building managers on a more part-time basis, and have them look after several sites at once, floating between buildings. “Effectively, they’re only getting a limited service,” Ms Habib says, “and it’s very hard for building managers to deliver high quality service when they’re spread across too many buildings.” Premium Strata applies a similar concept to strata management. Its strata managers look after a smaller portfolio of buildings, which is a crucial difference, as it allows its managers more time to provide the best service for each individual client, be engaged and pro-active in avoiding issues before they escalate. It is often a difficult to quantify, long-term saving for the owners they represent. The old adage “you get what you pay for” comes to mind. This level of high-end service is hard to find in the industry, with the quality and expertise of most companies not matching that offered by Premium Strata.

“A lot of new strata managers in the industry are being thrown in the deep-end with a very large portfolio of buildings and without proper training. There are not enough well-trained, quality managers. It is a real skills gap our industry is faced with.” Ms Habib mentions the company’s mandator y r e c r u it me nt requirement: all new managers must be fully licensed strata managers. “Many of our competitors will hire anyone who holds the minimum qualification, the so-called certificate of registration. You obtain this certificate by completing a short course, whereas the licensing course is years of education, as well as years of on the job training.” With the new development application requirements for councils to provide adequate housing for the boom in Sydney, Ms Brettle admits that brand new developments are becoming more and more complex to manage. “These are not your traditional three storey apartment buildings.” she explains. “These are large, multi-level buildings that have shared facilities; buildings that are split into different segments called stratums or BMCs (Building Management Committees), or may form part of a Community Association. These are not stock standard, textbook examples.”

The Australian Business Executive - Q1 2017

Premium Strata

This means that managers require many years of experience in the industry to understand how to manage the separate entities to an appropriate standard. “If it’s not set up and managed well,” Ms Brettle adds, “you can put these schemes into a lot of trouble, and it could be difficult and costly to rectify.” Not only does a manager need to have an understanding of the legal side of strata, they also need to have people, negotiation, management and communication skills. All skills developed through careful mentoring, close management and nurturing over the years. Ms Brettle adds that the latest NSW government legislation reforms are making it more complicated for strata managers to do their job. “More and more responsibility is placed onto the strata manager,” she says. Ms Habib adds: “a lot of people burn out and as a consequence leave the industry, especially with these larger portfolios that many of our competitors are giving their strata managers to manage. It’s pretty much impossible to do your job and to do it well with such a large portfolio.” On 30 November 2016, new strata regulation was introduced in NSW. One of the improvements in the new regulation is the restricting of proxy farming, ensuring that the

use of proxies at meetings is better regulated. In the old legislation, owners were allowed to use as many proxies as they wanted. “Under the old legislation,” Ms Habib says, “a few people could have a disproportionate influence on the voting process through the use of proxies.” This kind of proxy usage typically happened in schemes w it h a sig n if ica nt nu mbe r of non-re side nt ow ne r s. I nve st or s often don’t show the same level of involvement in the running of the building and delegate their vote to others. “The new legislation has put a cap on how many proxies one person can hold.” Another change in the legislation stipulates that tenants are now allowed to attend General Meetings. This is a major change, because previously tenants weren’t even part of the OC. “They have no voting rights,” Ms Habib says, “they have no entitlement to address the meeting unless authorised by the meeting, but they do have an entitlement to attend a meeting of the OC.” Another significant change is the introduction of electronic meetings, meaning people no longer need to be present and can instead join remotely. In the old legislation, the only way one could attend a meeting was in person or by proxy.

The Australian Business Executive - Q1 2017

Premium Strata

“Now, it’s opened up so you can vote by any electronic means. Especially for large schemes where in the past achieving a quorum was difficult because of investor owners being overseas or otherwise not able to attend meetings. It has the potential to change the dynamics in terms of how buildings are managed.” Another significant change has come in the requirements for quorums, the minimum number of owners that must be present for a meeting to go ahead. At the moment the Owners Corporation has to wait 30 minutes from the start of the meeting in order to achieve a quorum. “Now, with the new legislation, it’s giving the power back to the chairperson to decide that if, after thirty minutes, they still cannot achieve a quorum, the chairperson now has the discretion to decide whether or not they proceed with the meeting.” This typically affected larger schemes which often struggled to achieve a quorum. The OC will now be able to have just the one AGM, as opposed to having several adjourned meetings over the year. Further industry issues addressed by the new legislation are centred on building defects, with fire defects and water penetration being the most common issues found in new developments. These are often just simple compliance issues for fire-related defects and failed membrane systems causing water penetration.

Ms Habib admits that these issues often come down to the quality of the building, and that a significant portion of new developments experience building defect issues. “The government have recognised that this is an issue,” she explains, “and they’re making some useful changes to address this.” Under the new legislation, which will come into effect in July 2017, when a development is lodged for construction, a 2% bond will need to be paid by the builder on the construction costs. If the work is not done to standard, the Owners Committee has some kind of financial recourse to assist with getting defects rectified. There are many owners who feel they are not getting good value from their strata management agency. According to Ms Habib, the way Premium Strata’s pricing is set up ensures this doesn’t happen to its customers. “Our fees are capped,” she explains, “where most of our competitors provide you a base management fee and then charge you extra for all the disbursements, referred to as schedule Bs and Cs. This means that every meeting a manager attends, every work order raised, every compliance certificate applied for, every envelope and cheque used, every email and phone call made on the owner’s behalf is charged as an extra

The Australian Business Executive - Q1 2017

Premium Strata

The building managers employed by Premium Building Management are dedicated to servicing just the one building. This is different to other companies that provide building managers on a more part-time basis, and have them look after several sites at once, floating between buildings. item. This makes it difficult to get a clear upfront picture of their actual total cost for managing your building.” “Our pricing structure is completely different. We give you one capped fee for your disbursements and one capped fee for the base management. It covers all of those items that our competitors would normally charge extra for. There are no hidden charges.” This means the OC can carefully budget for these costs, avoiding surprises. With Premium Strata, clients can rest easy knowing that all services are included in the overall cost. Not only are meetings unlimited under the capped disbursement fee, but this structure allows the company to be very transparent. “On the Managing Agency Agreement,” Ms Brettle explains, “the agency needs to disclose what fee they’re going to charge the Owners Corporation. We simply list the base management fee and the capped fee.” Many competitors will list a lower base fee, giving the owners the appearance that they are entering into a lower cost contract, but because they cannot quantify how much work will be generated in the following year, they do not really know how much they will eventually be charged. “The other benefit of Premium Strata’s all-inclusive fee is that our staff are not spending all their time constantly trying to capture the cost of every phone call, writing of an email etc. Our managers are freed up to spend their time managing the portfolio and managing the individual schemes.” 36

Ms Habib says: “we don’t just simply refer issues to the committee to make a decision on. We suggest options and recommend solutions. We try and make their roles on the committee less complicated.” A lot of strata owners feel like they don’t get this kind of exper t ise a nd ser v ice f rom t hei r st rat a ma nager, b u t a t P r e mium Strata, staff make it their priority to provide this service. Some competitors have several different departments that need to be navigated by the clients depending on the specific issue being faced. This is not the case at Premium Strata. Ms Brettle says: “Our concept is that you have one point of call, and that is your strata manager, and your strata manager is then expected to provide you with the information during that call and not refer you to various departments.” This system is backed up by a lack of voice response (IVR) technology at the company. “This way,” Ms Brettle concludes, “when people call our off ice they speak to someone, not an automated ser vice.” In a challenging industry faced with legislative changes and customers who expect more, Premium Strata stands out by the quality of service it offers, achieved by working with a unique personal ser vice concept and management which is proactive rather than reactive. The company works hard to earn and maintain its excellent reputation.

The Australian Business Executive - Q1 2017

National Fleet: The Engine of Change By Nicholas Paul Griffin

ational Fleet CEO Junies Lim joined Australia’s largest After much success in business to business (B2B) sales, automotive dealership network back in 2010, at a time National Fleet has now set about improving its direct offering when the company was going through something of a to customers (B2C), prompting Ms Lim to think about the transition. Since that time, Ms Lim and her executive team needs of Australian women when buying cars. have markedly improved the fortunes of the company, bringing Research shows a high percentage of women in senior continued growth and a string of innovative projects. After roles, and as a result a change in buying behaviour of first meeting with Ms Lim back in 2014, The Australian high-value items. This, coupled with the intimidating and Business Executive checked in with her to discuss the latest male-oriented automotive industry, raised the possibility of a developments going on under the company’s hood. new direction for the company. This change of direction Ms Lim arrived in Australia has seen the inception of Female from Malaysia in 2006, having First Services, a niche market that gained sponsorship from UK makes the process of buying a car restaurant franchise, Wagamama, more accessible to women. The and fresh from having managed her switch of focus from B2B to B2C own restaurant business in Malaysia. means the company needs to After moving country, Ms undergo something of an internal Lim worked in hospitality from restructure. 2006 to 2008, at the same time as In the male-dominated undertaking full-time study. As a market, the entire operational migrant, she found herself needing process has to be changed to suit to start her entire life again, and this new approach, with changes began to forge her career anew. implemented in every aspect from This experience saw her type of language used, to email, to working as a business developer, test driving at dealer level, taking opening franchise stores for deposits, deliveries, insurance, Wagamama in Melbourne. From finance and more. there she was headhunted by a French In addition, the company restaurant in Melbourne, where she needed to do its homework and get spent several months before finding National Fleet Group CEO Junies Lim to know its clients extremely well. out it was a non-starter. National Fleet has employed a media marketing company There followed some years in financial planning, in Queensland and has also used IBISWorld to undertake during which she was introduced to her current business extensive research into the female market. partner, Shane de Gelder, and was tempted into the automotive In preparation for the upcoming launch of the business with National Fleet, a 45-year-old company project, Ms Lim recently went on a fifteen-week course without modern financing structures. Ms Lim was initially brought in on a year’s contract to to learn about working within and utilising knowledge of the digital marketplace, which is the most efficient way set up a finance division for the company, and began building to get this new venture noticed. finance products from 2010. After the year’s contract was The digital sphere is vital in the modern age for up, Ms Lim gained 46% shareholding in the business and creating promotion for a business, making sure that potential eventually became CEO. The Australian Business Executive - Q1 2017

National Fleet

customers know about the company, like the company and follow the company, but this approach can take some time to implement. Ms Lim’s idea is not to rush the concept by promoting everything immediately, but to test the market softly. The plan is to hold a big launch in 2017, with all the preparation done for staff to begin selling to women as B2B and B2C immediately. This has meant a six-month digital campaign, utilising Facebook and other social media platforms to select the right demographic, the female only market, and to target sections of the company’s existing customer business, much of which is already female. The aim of the project is to effectively help all women, in all walks of life and careers, to buy their next car, navigating finance packages with little hassle and finding the right vehicle for their particular needs. The service will be a one-stop shop for female buyers. Ms Lim’s desire to target the female only market has been naturally informed by her position as a female in a high-profile role, which has helped her understand the needs of the client base that National Fleet has begun to target. Research has shown that female consumers seek a good balance in the household, while also retaining an individual identity outside of gendered partnerships. She admits that she is very dominant at work, but often leaves decision making at home to her partner. Working in a male-dominated profession at such a high level has taught Ms Lim about showing strength in the workplace and not being shy in asking for help. This experience has helped her create a consumer platform that aims to empower women. The idea is not to separate men and women, to suggest that women don’t need men, but rather to give women a runway where they can achieve equal authority as men over their own consumer needs. The framework of the business allows men and women to work more closely, encouraging men to no longer second guess female ability. This creates a collaborative environment where men and women can achieve targets together. In the B2B environment, where women in higher roles such as CFO or fleet manager find themselves in charge of purchasing vehicles for a company, the Female First package offered by National Fleet gives them an unbiased route to doing their job effectively. Women buyers tend to do more research before purchasing vehicles, whether in the household or for a business. For B2C customers this tends to involve more realistic and rational considerations about budget and practicality. 38

All of this adds up to women being able to have more confidence in vehicle purchasing. By creating a space for female fleet services, the company offers something which belongs to women, providing them with overall ownership of the process. This is enhanced by a company telephone number specifically for women to call for any advice they might need, another way the Female First team shows that there is no bias between genders, and that all the tools will be provided for a successful transaction. Ms Lim admits that even as CEO of a fleet management company she does not have the immediate knowledge of all 35 brands of vehicle, and so she must rely on the exper tise and knowledge of her team, from dealerships to manufacturers. The automotive industry is going through a change itself, with many more companies now handling fleet management, but Ms Lim admits that many of them are merely following the others, not doing anything particularly innovative. One of the benefits of the fleet business is that employees can use some of their tax allowance to save money on purchasing a car, a service many businesses don’t realise they can use, thinking that as they aren’t in the public sector or a big company it isn’t applicable.

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The Australian Business Executive - Q1 2017

National Fleet

However, most employees are still eligible for the scheme, and National Fleet has capitalised on this by outlining the salary packaging rules simply to its customers, rather than the traditional method used by fleet companies of making it deliberately confusing. The platform is therefore designed for employees to be able to build their own package when buying a car, and see directly and in simple terms the tax benefits available from each new addition. This adds transparency and gives the freedom of choice for the customer. In addition, National Fleet looks to buck the industry trend of selling unnecessary insurance to customers, instigating a menu-type selection to the end-user, making it easier than ever to choose the right plan. Another part of the company’s package comes in the form of the Fleet Saver Fleet Management option for employers. Many businesses in Australia have more than one car, but there is really only one product on the market suitable for both bigger and smaller companies. National Fleet has changed this by offering functions such as running costs and tracking ability within the charter mortgage product, which is designed for smaller businesses, especially those with one or more cars, allowing them to handle their fleet more efficiently.

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All of these significant changes in the company have prompted discussions with Australian car manufacturer GM Holden, which Ms Lim has been in contact with for some while, having approached a sales director to outline the success of Female First Services. By bringing to light the high percentage of women buying cars in comparison to men, she prompted Holden to undertake its own research, which showed that many makes and models of vehicle were already perfectly designed for women. Many features like child safety, navigation and even colour have been designed with females in mind. This attention to detail from Holden is refreshing, and is helped by the fact that the company’s senior engineer is a woman. These facts have proven once more that the female market can be tapped into using a different approach, as National Fleet has already shown. Talks are now being held about Holden acting as brand ambassador for the company. If this partnership is finalised, it would represent a joint promotional relationship with the Female First campaign, and would see females given discounts from Holden, as well as significant changes such as female teams at the dealerships to offer test drives. Ms Lim has taken the idea a step further by starting a foundation, an idea which came about when she was building an IT platform for Holden, where she worked with Maggie Hu, the female founder of Lumi IT, and was inspired by their shared communication. The key to this good working relationship was Maggie’s understanding of the direction, attitudes and vision of the customer, developed through open lines of communication, which ultimately helped the platform to be developed to the highest standard. Ms Lim went on to invite Maggie to be involved in a new group, the Female First Foundation, which would allow professional women to work together in growing and developing their businesses. Maggie is now one of the committee members of the group. Ms Lim has benefitted equally from the advice of friend and fellow Female First Foundation member Natalie Taylor, who is a very inspirational person in her life, and helped her to firm up her interest and find direction when creating the foundation. The purpose of the foundation is to enable female individuals and businesses to succeed by facilitating relationships that are mutually beneficial, revolving around sharing ideas to help each business or individual grow and fulfil their potential. Ms Lim doesn’t want the foundation to function as some groups do, merely asking women for money and sponsorship in exchange for advertisement. The idea is much more about women volunteering to be involved in the project for mutual gain.

The Australian Business Executive - Q1 2017

National Fleet

If Ms Lim does manage to sell the Female First Services at National Fleet and become successful with her project, she will make sure that 10% of all proceeds go back into the foundation, in turn helping more women gain success in their businesses. All funding raised for the foundation via sponsorship or revenue will be used to help women who might need the money to set up a business or for education. The foundationâ&#x20AC;&#x2122;s primary revenue will come as passive revenue rather than active. This style of revenue creation is an important part of Ms Limâ&#x20AC;&#x2122;s ideals for the foundation, as she wants to run the project as a non-profit, with no intention of ever actively going out to ask for money. Those who donate will do so off their own backs.

Eventually, the foundation will act as an international project for any businesses wishing to establish a footprint in Australia. Ms Lim stresses that she will happily encourage male-run businesses wishing to help female-run businesses to become involved in the project. An important channel of the foundation will be the Active Business Relationship, which has yet to be formed. Most important is that members and contributors will become involved through good will rather than being actively approached. The level of support National Fleet offers women in purchasing vehicles, driven by the impressive Ms Lim, is truly inspiring. This step towards equality in the automotive industry is long overdue, and the company deserves great credit for its innovations.

The National Fleet Group is Australiaâ&#x20AC;&#x2122;s largest automotive dealership network

The Australian Business Executive - Q1 2017

Alupole Australia: Expert and Optimised Design By Nicholas Paul Griffin

lupole first began by supplying poles for street lighting, and has since acquired years of experience in handling dynamic customer demands. The company soon expanded its business to include the supply of large steel poles, and today designs and supplies telecommunication monopoles, transmission line poles and camouflaged antenna poles, along with telecommunications towers, transmission towers and substation structures in over 500 product specifications. Albert Lim has been working for Alupole since its inception, becoming 100% shareholder of the company in 2009. “Alupole started with three guys who were interested in manufacturing aluminium poles. For many years poles for street lighting had been mainly made of steel, previously they were made of wood, then it moved over to concrete, and after concrete it moved over to steel.” In 2003, this small group of investors were planning to move forward from steel to aluminium. The company founders were mostly working in finance, with one working in sales and one in production. What they lacked was a technical member of the team. “When they found me,” Mr Lim says, “I fit perfectly in that position. So in 2003, we started to look into the design on my side for the aluminium poles, and that’s when we started to manufacture.” Around 2004, one of the partners made use of a connection at a steel pole manufacturing factory in China, and invited Mr Lim to visit. He found that the factory was already employing equipment well up to standard for use in the western world. “For example, some of the equipment, like the brake-press, was from Switzerland, and the welding machines were from Lincoln, US, so they had very good equipment. The only issue with the Chinese factory was that a lot of times they did not know what they were doing.” This lack of knowledge meant staff were just copying other manufacturers, not exactly understanding the concept and design behind the work, merely manufacturing on the basis of duplicating the work of others.

Alupole Australia CEO Albert Lim 41

Alupole Australia

“That’s where I found that I could put Alupole as the desig n entit y to get projects and to do project management, and then to subcontract the manufacturing to the Chi nese factor y and have them become real manufact u rers for us.” From there Alupole quickly expanded, moving from aluminium poles to steel poles, which is the area Mr Lim had his core training in all the way back in 1988, when he began working with steel poles and steel towers. “We were doing very well and having about 8 million USD turnover, until the GFC hit in October 2008. Because we were in the infrastructure business, most of the infrastructure was funded by governments and with the GFC, governments and private entities slowed down.” This slowing down for global governments meant that the infrastructure business took a similar hit, and for six months in 2009 Alupole’s business appeared to have dried up in terms of projects and orders. “During that time,” Mr Lim says, “the partners that I had, who invited me in, decided to call it a day and leave the company. I told them that they could do so but that they need to hand over the company to me, and that’s when I took over the company 100%, in 2009.” In the midst of this hardship and a lack of projects, M r Li m persisted with the busi ness th roughout the remainder of 2009, managing to land a big job in Australia which helped change the company’s fortunes. After that, more projects started to come in, and in 2010 Mr Lim restr uctured the business to improve the r el a t io n sh ip with the Chi nese factor y, set ti ng up an of f ice i n Chi na to help desig ners and the d raf ters com mu n icate more eff iciently with the factor y. “That’s where the need for having a Chinese office came about, in 2010. As a foreigner I’m not able to easily register companies in China, but I could get around that by having a company registered in Hong Kong and then setting up the office in China.” Today, Alupole deals in the design and manufacture of what Mr Lim describes as ‘road furniture’, including steel poles and towers, which are the company’s core competency, and form the majority of its business. “Steel poles and towers are found in many industries, including highways. So, in highways you can have a lattice type of structure that holds up the sign panels on the highway, which is the sign panel gantries, so that’s where a lattice structure is used.” The design concept for these lattice str uctures is ver y similar to the design concept of a 300ft lattice tower that car ries microwave dishes, as well as being almost the same as transmission towers that car r y 220k volt power lines. 42

“So, with the same core competency that we have, we are able to do varied types of str uctures in different industries, but basically they all still come down to the same core principles that we have our expertise in.” The company has further expertise in the design and manufacture of poles, which are also being used as road or highway fur niture for street lighting, as well as ver y t all masts which accom mod ate lighti ng at about 30 - 40 met res high. “T he lights can be raised up and dow n with a motor at the base, and with a winch and wire ropes,” Mr Lim says. “So you can lower the set of lights down to the ground level for maintenance, and then you can activate the winches to bring it back up again.” The company’s design expertise lies in manufacturing transmission towers, which are essentially steel angles connected by bolts. The same str uctural make up can be found in telecom towers. “In substation str uctures, they are also the same. Smaller size, smaller angles, but basically they are just steel angles connected by bolts. So, across the board they are basically the same, it’s just that they have different users.”

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The Australian Business Executive - Q1 2017

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Alupole Australia

Alupole’s main challenge then is to understand the needs of the different users it services, as well as the different planning processes that go into the design. But Mr Lim admits that the final core design is still the same across users. “That’s why we concentrate on our core competency, and we look for products and industries that have the same core competency, and that’s where we can diversify. So it’s not a total diversification; we make sure we diversify within our core competency.” The strength in Alupole as a business is that it has a variety of products, allowing the company to navigate the inevitable peaks and troughs of any industry by transferring across industries to maintain a steady flow of work. “For example, you can have the telecommunications industry suddenly surge, but the transmission power industry may suddenly be in the doldrums. The company in that sense is able to continue to be busy, even though you have ups and downs in the different industries.” Utilising the many diversified products and industries that Alupole works within, it is able to keep its staff employed throughout the whole year, without having to suffer the declines that may befall some industries during that time. When it comes to lattice towers and poles, there are a lot of small details that many major consultants are not familiar with, meaning the kind of work Alupole undertakes is considered specialist and not usually handled by other engineering companies with diversified services. “The transmission line towers usually require the tower to be tested, full scale. This means that you actually take the one-to-one scale of the tower, put it up together and load it up to the full load within the specs that have the requirement for those type of loads.” In addition, the customer will normally ask for a destructive test to be undertaken, where the structure is pulled until it reaches 100% of the load it has been designed for, held for five minutes to check it’s still standing, and then has the load increased further until destruction. “The reason is that the customer who is ordering hundreds of these structures wants to know how much extra strength that the towers have, so that they can do some design tweaking in their transmission line to make use of that extra strength.” This is the key difference between Alupole and regular engineering consultants, which do not have the expertise to be able to ensure that the design is right on the spot. Sometimes a mistake will be made, and a tower will collapse before 100% loading. “Sometimes, when they are too afraid to have it collapse, they will over-design it, and then it becomes 30% or 50% over-designed, which means that after the tower is tested until 100% load, if you try to destruct it, you have to increase the load to over 30%.”

Alupole has expertise in the design and manufacture of poles for multiple industries

T he problem with this over- desig n is that a st r uct u re that is stronger by 30% adds 30% more cost into the design and manufacture, which means that the structure becomes too expensive for its use. This is where Alupole comes in. “We are able to be so confident in our design that we ensure that the design passes 100%, but when it goes to overloading it will be between 5% to 15%. Usually we try to meet at 5-6% and the tower comes down at that point. That is very difficult to achieve.” For tendering, this feature of the business becomes very important. Without this expertise, a company may find itself underquoting the job, meaning the final design will end up being more expensive than the original quote, resulting in a loss for the company. Alternatively, the job may be too expensive in comparison to other tenderers which are getting closer to the design specifications required, resulting in the company losing out to its competitors on jobs and potential clients. “That is where the expertise comes to be very important, in order to win tender projects,” Mr Lim says. “We are able to go into tenders and win them because of the core competency that we have to be able to design structures that are lean but pass the requirements.”

The Australian Business Executive - Q1 2017

Alupole Australia

One of Alupole’s major recent projects was for Sa rawa k state in Malaysia. Alupole came up with a very lean desig n for the 275k volt project, i nt roduci ng a completely new design, radically departing from those the state had been using for over 20 years. “The designs that they had been using for 20 years were, at that time, based on the power consumption during that time, and what they required in that particular tender was new industrial area explosion within the state.” This meant that the tender requirements i n cluded par ticularly high power, and therefore needed to include more cables. For that project then, rather than two conductors per phase, Alupole needed to provide four conductors per phase. “That required the whole power design to be changed,” Mr Lim explains. “So, in that tender, because there was nothing to fall back on, a totally new design had to be done, and with our expertise we were able to get a ver y lean design for the tender.” The company’s design tur ned out to be 10% cheaper t h a n t he nex t lowe s t bid d e r, a n I nd ia n f i r m . T h i s i s s i g n i f i c a n t because I ndian compan ies tend to offer extremely good design for a ver y low price, plus a ver y low-weight design. “During the tender evaluation, the [firm] said that there’s no way that Alupole can have this lower-weight tower design. In the end we won the tender, the towers were designed in the final stages, and we could even bring the weight down by another 5-7% and still the tower passed.” After moving into the Australian market, Alupole began to concentrate on the power industr y. However, b e cause of the mining downtur n, the countr y’s overall income has dropped significantly, and the expansion of power has likewise slowed down. “We want to work with the miners and the state utilities, using our expertise in order to come out with very efficient design, very optimal design, so that the overall cost that they had before can be reduced, but at the same time they are getting towers that are just as strong.” The company has recognised from the recent South Australian blackout that there may be insufficient strength in the towers, based on old design standards and codes. As a result, there is talk about re-looking at the designs and increasing the design loads. “Now, if you do that, you effectively have increased costs. What we at Alupole can do is to look at the increased loads, but with efficient design we may be able to maintain the same costs or minimise the increase in the cost for all the state utilities.” 44

The company has been engaged by a number of clients including Fortescue Metals In 2012 the company worked with Fortescue Metals on a project that had the initial design done by a consultant. Alupole re-looked at the design and introduced an optimised pole design, which saved significant costs for both the owner and contractor hired to install the line. “Because of our strong collaboration with the Chinese factor y, which is a ver y big factor y, we managed to complete the production ahead of schedule, which was about one month ahead of schedule, and to have Fortescue Metal’s mine up and running earlier than expected.” The company is currently undertaking a similar project for Dugald River Mine in Queensland, optimising the design in the same way and ensuring that the work-in-progress is already two months ahead of schedule. “For this project the timing is very important because of the end year weather in Queensland is usually wet, and also very high winds. Which means that if they are able to complete it early they will be able to do the job before the rain and the strong winds come.” Alupole’s optimised design and product expertise help increase productivity for many companies in many industries across Australia and the wider world, and look certain to continue doing so for many years to come.

The Australian Business Executive - Q1 2017