The Australian Business Executive - Q1 2016 by The Australian Business Executive

CONTENTS REGULARS 7

Publisher’s Note

News in Review

80 TRAVEL New Zealand’s North Island Uluru: Australia’s Red Centre

FEATURES Special Report: Victorian Housing Issues 10 Victorian Minister Martin Foley Victorian Housing is on the Move 14 HIA Victoria Executive Director Gil King Victoria: A Leader in Australia’s Housing Sector 16 Hamlan Homes Geelong’s Niche Builder 24 Zuccala Homes Displaying Exceptional Quality 32 Fasham A Design for Life 40 SCA Victorian President Julie McLean Building a State: Strata Leaders Laying The Groundwork For Victoria’s Vertical Future 46 Network Pacific Strata Management Franchising Success 54 Srata Data High-Rise Living 60 COVER STORY: Max Markson From Bournemouth to the Big Time 65 Event Coverage Money In Sport arrives on the Gold Coast 66 Hockey Australia A Model Citizen 74 Monash IVF Growing Families

The Australian Business Executive - Q1 2016

PUBLISHER’S NOTE

n this edition’s cover story we speak with Australia’s best known publicity guru Max Markson. Max discusses his industry experience and provides some insider knowledge on what’s required to contact and work with personalities as powerful as Bill Clinton & Tony Blair. We take a special look at the Victorian housing sector with an introduction by Minister Martin Foley on affordable housing initiatives followed by editorial from the Victorian HIA division. Among the topics addressed are the opportunities in the state compared to the rest of the country. As new home developments continue to flourish across the state, we profile builders Hamlan Homes, Fasham, and Zuccala Homes.

The Australian Business Executive A division of Romulus Rising Pty Ltd ABN: 77 601 723 111 w: TheABE.tv e: communications@theabe.tv t: (02) 8091 1410 Publisher J. Landry Lead Writer Nicholas Paul Griffin Editorial Contributors Michael Hebron Brendan Traya Hiro Morita Publication Layout Bienvenido A. Swinton Jr. Website Raizwan Butt

Equally impressive is that units are being built at almost twice the rate of houses. With many investors looking to smaller dwellings for investment properties in urban areas, we’ve worked with SCA Victoria President Julie McLean to discuss the strata issues facing the state. In sport, we speak candidly with Hockey Australia CEO Cam Vale, followed by event coverage of the recent Money in Sport conference on the Gold Coast. We also introduce our readers to our Short Breaks features which will look at travel spots both domestically and internationally - for when you might be able to arrange a few days out of the office! Hope you enjoy,

J. Landry Publisher

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 rights reserved. Reproduction in whole or in part is strictly prohibited without written permission. Opinions expressed in The Australian Business Executive are not necessarily those of the editor or publisher. 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 Australian Business Executive is published by Romulus Rising Pty Ltd, ABN: 77 601 723 111. The Australian Business Executive - Q1 2016

News in Review

Holden Delivers Strong Q4 2015 Growth

olden achieved solid sales across 2015 to consolidate its position in the top three automotive companies in Australia. The recent official Federal Chamber of Automotive Industry (FCAI) figures show Holden finished the year with 102,951 sales – translating to 8.9% percent market share for the year. This solid result was driven by strong SUV, pick-up and VF Commodore sales. In calendar year 2015, Holden saw growth across a number of key models lines, including the Spark, Trax, Captiva and Colorado model lines. Holden Chairman and Managing Director, Mark Bernhard, said that while 2015 had been a challenging year for Holden, the Lion brand remains focused on building a building a bright long-term future through a focus on three key business pillars: brand, product and customer experience. “While we saw a slight decrease in overall sales compared to 2014, there are many positive trends and several key model lines performed strongly. Holden will continue to face challenges in 2016 and we have a lot of work to do, but our long-term strategy to modernize and evolve our brand, put the customer at the centre of everything we do and completely overhaul our vehicle range is beginning to pay dividends, step by step. “Particularly encouraging was our sales performance across the final four months of 2015. From September, for four straight months, Holden increased its sales year on year. In fact during those four months we sold 3,755, or 16.3 per cent, more vehicles than in the corresponding 2014 period. This represents the second highest growth figures during this period of the Top 10 automotive brands in Australia. Holden finished 2015 with four straight months of year-on-year growth. “After launching some fantastic new models in 2015, including the Astra hatch, Cascada convertible and Insignia sedan, Holden’s new product onslaught will continue this year. We are launching 24 new models by 2020, refreshing or replacing every single model in the Holden line-up. We are paying particular attention to the key growth market segments in Australia and will have an all-new world-class SUV line-up, an outstanding pick-up truck and industry-leading small cars. Holden is becoming much more than the Commodore car company. 8

“We will bring the right products from across GM’s global portfolio to give Australian customers the best line-up ever, including smart technology like Apple Car Play and Android Auto available in every Spark and Captiva model from 2016. And this is just the start, we will also launch the all-new, worldclass Astra hatch later in 2016 and have a few very exciting surprises up our sleeve.”

Management Change at ANZ

ndrew Géczy has stepped down from his role as CEO International and Institutional Banking to seek new opportunities.

ANZ Chief Executive Officer Shayne Elliott said: “Andrew has worked tirelessly over the past few years to transform our International and Institutional Banking business. “This includes strengthening ANZ’s institutional client franchise, improving the performance of our Asia Pacific retail business and consolidating the leading position we have in Australia and in New Zealand and our position as a top four corporate bank in Asia. “I want to thank Andrew for his significant contribution and for the personal support he has given me during the transition to my new role as chief executive. On behalf of everyone at ANZ, I wish him every success in his future career,” Mr Elliott said. Mr Géczy said: “It has been a privilege to be part of ANZ’s leadership team over the past two and a half years and the timing is right for me to pursue new opportunities. “We made significant progress during my time at ANZ. We created a stronger international network based on regional trade and investment corridors. We also improved our risk and control management, built a high performing team and completed our footprint in Asia with new banking licenses in Thailand and Myanmar,” he said. Mr Géczy joined ANZ in 2013 following a distinguished career in wholesale banking, markets and asset management including senior executive roles at Lloyds Banking Group and Citigroup.

The Australian Business Executive - Q1 2016

News in Review

Marcus Pearl is the New CEO of Primacy

arcus Pearl is the CEO of Primacy Underwriting Management, succeeding Bernie Mayers.

Mr Pearl will assume responsibility of Primacy’s Australian and New Zealand operations as well as assisting with the implementation of Allianz’s broader Regional and Rural Strategy and report to Brett Williams, Head of Regional & Rural. Mr Mayers is stepping down after 8 years as Managing Director and over 20 years of service with Primacy and its predecessor, Agricola Crop Insurance, since 1995. Niran Peiris, Allianz Australia’s Managing Director, said “Bernie’s leadership has seen Primacy continue to grow market share in Australia and establish a diversified business model delivering value to Primacy’s customers and shareholders.” “Bernie led the successful merger of Agricola Crop Insurance and Primacy Underwriting Agency in 2012 and has built and developed a high performing team at Primacy.” “Bernie’s contribution to the agricultural sector across our region over the past 30 years has been outstanding and we look forward to benefiting from his experience and continued support in the future.” David Hosking, Allianz’s Chief General Manager Broker & Agency, said “Marcus’s experience across commodity markets, business development and strategy makes him the ideal candidate to succeed Bernie”.

Woolworths Limited Announces Holly Kramer to the Board

oolworths Limited (Woolworths) has announced the appointment of Ms Holly Kramer and Ms Siobhan McKenna as Non-Executive Directors and the resignation of Jayne Hrdlicka from the Board with immediate effect. Woolwor t h s’ i nt e nt ion t o appoi nt Ms K r a me r wa s previously announced in November of last year. Ms Kramer is a non-executive director of Nine Entertainment Corporation, Australia Post and AMP Limited and was previously the Chief Executive of apparel retailer Best & Less and Group Managing Director / Chief of Marketing at Telstra. Ms McKenna is a non-executive director of Ten Network Holdings Ltd, Nova Enter tain ment, the Aust ralian Ballet, and is a Trustee of the MCG Trust. She is a former Commissioner of the Australian Productivity Commission, a former Chairman and Board Member of NBNCo, and a former Partner of McKinsey & Company. Chairman Gordon Cairns said: “Ms Kramer and Ms McKenna are experienced and accomplished in their areas of business and I am pleased to welcome their appointment to the Board. Their expertise will be invaluable to us, particularly during this challenging time.

During his professional career, Mr Pearl has worked with Aon Underwriting Management and the ANZ Bank in a number of roles within their Global Markets division. The majority of his time with ANZ was spent based in Singapore building their Commodities Trading and Risk Management Sales operations across Asia Pacific.

“I would like to thank Jayne Hrdlicka for her five and a half years service to Woolworths. Regrettably Ms H rd l ick a ha s conclude d t hat t he dem a nd s of t he Woolworths Board at this time are too significant in balance with her commitments as the Jetstar Group CEO and member of the Qantas Group Executive Committee. As a consequence she feels there is no choice but to resign as a Director of Woolwor ths. She has made a significant contribution to the Board over her tenure and we wish her well for the future,” Mr Cairns said.

Marcus Pearl has a Bachelor degree in Commerce (First Class Honours) from Deakin University and is currently completing a Masters of Business Administration at the University of Melbourne.

Stay up to date with all the latest business news at: www.TheABE.tv

The Australian Business Executive - Q1 2016

Martin Foley is the Victorian Minister for Housing, Disability and Ageing and Minister for Mental Health

Victorian Housing is on the Move By Martin Foley, Victorian Minister for Housing, Disability and Ageing and Minister for Mental Health

year into the Andrews Labor Government, Victoria’s prosperity is powering ahead of all other states. We’re not content with winning the title of world’s most liveable city for the umpteenth year, or continuing to hold the title of the cultural and creative capital of the nation, as our stateeconomy enjoys an unprecedented run of continuous economic growth. This government has locked in strong surplus budgets into the future and achieved welcome drops in unemployment, especially in rural areas, as the new government gets more Victorians than ever before back to work, with 91,600 new jobs as at December 2015. The government is building city shaping infrastructure like the Melbourne Metro Rail, while building approvals power ahead of other states. The Melbourne skyline of 2015 has moved on a long way from the one I knew well as I entered the workforce. Back then, I found myself climbing some of our tallest buildings speaking to some of our least well-connected people. Back in the 1980s I worked as a community development worker on the Horace Petty public housing estate in Prahran. The Horace Petty estate stands as a testament to a time when inner city ‘slums’ were cleared to make way for high-rise towers that housed lower income working families. Today, those big public housing towers are still ringed by stately Victorian terraces, but dwarfed by the new high-rises that sell for record prices, and the hundreds of shops, bars and nightclubs of Chapel Street. When I visited Horace Petty as Minister for Housing, Disability and Ageing, it was a bittersweet return. Many of the problems I had seen back in the 1980s were still there. A community cut off from the suburb they lived in, struggling with a range of health and social issues brought on by economic disadvantage, with little opportunity for meaningful employment.

I saw then that our own achievements are best reflected in what we have helped others achieve in their lives. That is why I am especially proud to be Minister for Housing, Disability and Ageing and Minister for Mental Health. The combined portfolios need to drive coordinated, integrated responses to disadvantage where housing needs are met alongside the needs of the person that shape their lives. We need this in order to enable people to achieve their goals. Victoria is facing a significant challenge in addressing homelessness, housing need and disadvantage into the future. The number of people experiencing homelessness or in housing crisis is escalating. More than 22,780 Victorians were counted as homeless at the 2011 Census, a 31 percent increase from 2006. An independent forecasting study has found that homelessness could rise by more than 100 per cent between 2011 and 2021. On top of that, the waiting list for publ ic housing continues to be of great concern. There are around 35000 people of the public housing waiting list, and almost 10,000 of these people are in what is known as ‘early housing’ which includes people who are homeless and women and children escaping family violence. Most concerning of all, the last four years have seen a 275% increase in the Segment 1 waiting list. These are people who are in desperate need of safe, secure and affordable housing. It’s unfathomable, as our state’s prosperit y has driven ahead, and in a time of consistently low interest rates, such acute housing need has emerged. One of our government’s highest priorities is to see an increase in the number of safe, secure and affordable properties available for disadvantaged Victorians. In September I announced that the outdated public housing at the Markham Estate in Melbourne’s east would be demolished and a mixed social/private housing redevelopment will be built in its place.

The Australian Business Executive - Q1 2016

Victorian Minister Martin Foley

HOUSING NEEDS TO BE SEEN AS A PART OF PROVIDING SAFE AND SECURE OUTCOMES FOR ALL VICTORIANS – ESPECIALLY THOSE IN NEED AND THE VULNERABLE THAT LOOK FOR A HELPING HAND UP.

There will be an increase in public housing homes on site and the homes will all be built to modern standards, including a proportion that will be fully accessible for people with a disability. More developments like this will be announced to meet the growing need for affordable housing across the state. And I have been unequivocal. Every one of these redevelopments will result in an increase in social housing. Thinking innovatively and working with sector partners, we should be able to ensure that the profits from the sale of the private homes that will be built on-site in mixed social and private developments can pay for the public housing homes. This is how it should be, with more homes for everyone, but for those of us that can afford to buy our own homes, our purchase can also help those less fortunate than us. This is a principle that drives another innovative idea that the government is supporting, the Big Issue’s ‘Homes for Homes’ project. The Victorian Government has contributed $500,000 in seed funding to this innovative and worthy project which sees homeowners making a commitment to donate a tax deductible 0.1 per cent of their property price to Homes for Homes at the time they sell. For example, an $800,000 property transaction would mean an $800 contribution to Homes for Homes to fund new affordable and social housing. I also want a more streamlined and transparent allocation process for social housing. That’s why I have announced the introduction of a common housing register. Applicants will only need to fill out one form, allowing for every community housing organisation to allocate vacant properties from the state-wide register according to need. The Victorian Government has also been making good on the promises it took to 2014 election. We’ve committed to a comprehensive review of the Residential Tenancies Act 1997 which is now well underway. The Plan Melbourne Refresh has also gone out for consultation and we are moving forward on piloting inclusionary zoning as a new affordable housing initiative for land sold by the government for development, requiring a share of new construction to be affordable for low income families.

There are undoubtedly challenges ahead. The mining boom is over. The Commonwealth Government is providing clear indications that new federal funding for housing, especially for capital growth, is unlikely to be forthcoming. It is therefore more important than ever to think innovatively and grab opportunities wherever possible. The Victorian Government is also taking action to improve access to a broader range of housing options, reviewing current policies affecting housing affordability, including taxation, regulatory settings and the suite of grants and concessions available to different categories of property purchasers. This review will guide reforms to improve housing affordability in Victoria. The Victorian Treasurer, Tim Pallas, is also chairing the national affordable housing taskforce. Being part of the national dialogue is essential if we are going to effectively advocate for Victoria’s position. It’s also crucial that we act in a coordinated way with planning, taxation and housing policy. It’s about ensuring that the housing responses we provide are developed alongside mental health, disability and other social service needs. Housing needs to be seen as a part of providing safe and secure outcomes for all Victorians – especially those in need and the vulnerable that look for a helping hand up. The Federal Government hasn’t made any significant commitment to housing and homelessness under either Tony Abbott or Malcolm Turnbull, indeed they have continued to cut support through National Partnership Agreements, defund national housing bodies and threaten further cuts. When thousands of Australians cannot get a roof over their heads, Australia cannot be the agile, innovative, competitive nation Mr Turnbull desires. 2016 serves as an opportunity for the Federal Government to play a constructive partnership role with the States in tackling housing as a social and economic challenge. I look forward to Victoria continuing to lead our nation’s long economic boom. But our least well-off have not just missed out on the boom, indeed their disadvantage has grown further. This gover nment is deter mined that the next wave of economic growth must not leave them behind again.

The Australian Business Executive - Q1 2016

Victoria: A Leader in Australia’s Housing Sector By Gil King, HIA Executive Director - Victoria

he prodigious rise in residential construction in recent years has been a major source of support to the broader Australian economy. Critically, this support has come at a t i me to of fset t he w i nd i ng dow n of Aust ralia’s unprecedented mining investment boom, with new home building increasing its contribution to overall domestic economic growth since 2012. Latest figures show that in the year to September 2015 the Australian economy grew by 2.2 per cent and that growth in new home building accounted for nearly one quarter (0.4 percentage points) of total growth. New home building has not only supported headline economic growth, but critically, the nation’s labour market. Having risen to about 6.5 per cent a year ago, unemployment appears to have peaked with strong jobs growth now starting to help bring that rate lower. The latest read of unemployment showed it to be just below the 6 per cent threshold. The labour-intensive nature of the residential construction sector means that the rise in activity has translated into significant growth in construction jobs. After sliding for almost a year, the number of construction jobs resumed a trajectory of growth in late 2012. At the end of November 2015, those employed in the construction industry reached some 1,046,557 persons. This means that 88,000 more people are employed in the construction industry compared with the mid-2012 trough. These are obviously compelling rewards from the national new home building boom, within which Victoria has been a key driver. Indeed, Victoria’s housing sector has consistently rated as one of – if not the strongest – across Australia, with the state’s housing affordability advantage over its main rival New South Wales key to its success. Latest (albeit somewhat dated) official data show that growth in new home building on the mainland was strongest in Victoria. The 65,240 homes that commenced construction in 2014/15 represented a 26.3 per cent increase on construction activity compared with the previous year – growth in the other mainland jurisdictions ranged from a 21.2 per cent uplift in Queensland to a contraction of 12.7 per cent in the Northern Territory over the same period.

This latest growth spurt follows previous years of still very healthy levels of new home building – Victoria sustained more than 50,000 new home commencements per annum during each of the previous five years, a streak unmatched by any other state or territory. Key areas driving the latest round of strong level of building include Inner Melbourne, as well as the city’s Inner East and Western suburbs. Moreover, approvals data (the closest indication of actual construction activity available) out to October 2015 indicates that these areas will continue to experience strong levels of activity into early 2016, with Melbourne City, Essendon, the suburbs within the City of Whitehorse and Maribyrnong showing especially strong approvals results. Regional Victoria, led by the Geelong and surrounding region, has also been part of the strong growth. Furthermore, approvals activity in the Latrobe-Gippsland region has slowly started recovering from previous weakness. The strong level of new home building that has been sustained in Victoria represents a supply of much-needed housing to underscore a housing affordability advantage, critically, over the state’s northern neighbour and main rival, NSW. Homepurchase affordability in Melbourne, as measured by the HIA Affordability Index, has consistently been more favourable than in Sydney. The latest read of the data (the September 2015 quarter) shows that in Melbourne, to affordably purchase a median-priced dwelling requires 1.47 average weekly earnings. The equivalent requisite number of average weekly earnings in Sydney is 1.74. Moreover, the advantage is not limited to Melbourne, with affordability in regional Victoria also outperforming regional NSW. To affordably purchase a median-priced dwelling in regional Victoria requires just over one set average weekly earnings (1.04), while the requisite number of average weekly earnings in regional NSW is 1.25. Victoria’s housing affordability advantage over Australia’s largest state economy, NSW, makes the state very attractive as destination to relocate to from the perspective of Australians living interstate.

The Australian Business Executive - Q1 2016

HIA Victoria

Combined with a labour market that is also healthier than in other states and territories, this has seen Victoria experience the largest inflow of net interstate migration among all the states and territories. In the 2014/15, there was a net inflow of 10,190 interstate migrants to Victoria. Queensland received the next largest net inflow, but the 6,417 net interstate migrants to Queensland during the year falls well short of the wave into Victoria. Population dynamics across Australia, including in Victoria, however, take place against the backdrop of slowing population growth generally, due to a declining level of net overseas migration. In 2014/15, Australia’s population grew by 317, 080 persons, which compares with the 346,730 persons added to the national population in the previous year. Similarly in Victoria, the state’s population growth of 99,370 persons in 2014/15 was short of the 105,200 persons added to the state’s population in the previous year. Looking ahead, this slowing in population growth along with a number of other key factors – a gradual tightening in credit conditions over the past year and decelerating housing price growth in key markets for example – is likely to curtail the growth in new home building. Over the next few years, new dwelling construction nationally is projected to decline quite significantly from the record levels of 2014/15. As one of Australia’s key markets, Victoria will see its fair share of reduced activity with new home commencements in the state forecast to fall by around 34 per cent between 2014/15 and 2017/18. Multi-unit activity will bear a disproportionately large share of the burden, while the reduction in detached house starts is predicted to be a little more measured. In this context, there is an onus on policy makers in the state to support the industry as conditions become more difficult. For example, the stamp duty burden in Victoria is the highest of any state so much would be gained from reforming inefficient taxes like this. Other risks to the home building industry exist as the Victorian government struggles to shore up the Victorian Building Authority’s role in regulating its constituents. In the wake of damning reports by the Victorian Auditor General and the Ombudsman, the industry’s (then) regulator, the Victorian Building Commission was abolished and the Authority was established. Some four years ago we were told that the home building industry was a mess. In the words of the Auditor General the building regulatory system was “marked by confusion and inadequate practice, including lack of transparency and accountability for decisions made”.

The suggestion was that some 96 percent of building permits did not meet the minimums standards required. No one, except those with an axe to grind, believed that figure. In the years since, we have witnessed a range of failed and misguided attempts to get the Victorian Building Authority’s own house in order culminating in a failed attempt in 2014 by the former government to introduce radical changes to the legislative controls. These actions raised more questions than they have answered and that proposed legislation would have caused major disruption to the businesses of many home builders. We read in the Auditor General’s latest report of 2015 that “the existing consumer protection framework for domestic building does not adequately protect consumers who experience problems and there is a pressing need to improve consumer awareness and understanding of the framework”. How does one then determine whether we are better off now than we were four years ago? The Andrew’s government introduced new legislation into parliament at the eleventh hour last year. Some of the previous government’s proposal remain in this new bill; many have been removed or mod i fied. T h i n k i ng about t he contribution the home building industry makes to the overall state economy, there is a need for perspective. The industry provides consistently excellent outcomes.Like all sectors there can be problems and these need to dealt with in a rational and well-informed manner. Scrapping what is good and working well and replacing it with grater bureaucracy and regulatory roadblocks does not serve anyone well. Consumers have a right to have every confidence in the home building industry to deliver high quality and safe homes. Restrictive legislation and over-governance will not provide this outcome; what it may do is escalate the fall in housing start numbers that is already on the horizon and approaching fast.

The Australian Business Executive - Q1 2016

Hamlan Homes: Geelongâ&#x20AC;&#x2122;s Niche Builder Editorial by Nicholas Paul Griffin

Hamlan Homes General Manager Andrew Carroll 16

Hamlan Homes

orn out of the 1983 Ash Wednesday fires, Geelong-based builder Hamlan Homes originally assisted in re-building cedar-clad homes in Anglesea and along the Surf Coast, and has since played a significant role in various new communities throughout Victoria.

“From those coastal towns, there was a long time where it was mainly the timber-clad houses trying to accentuate the views. This design aspect was a main factor in the growth of Hamlan, making sure that we had suitable products to maximise the views.”

Tod ay, t he locally ow ned a nd operated busi ness has established itself as the region’s preeminent builder with a particular niche for stunning coastal homes, split-level homes and custom builds, as well as everything in between.

“From there, when the urban subdivisions started to grow around Geelong, we slowly moved into those sort of parameters. The long term relationship we’ve had with the government was probably one of the biggest drivers of our volume.”

Over the years, Hamlan has been involved with various government projects, including revitalisation projects at both Norlane and Heidelberg, as well as multi-million dollar development projects for some of Geelong’s elite.

To cater for the influx in government work, Hamlan began to work with smaller product, and from those beginnings the company started to push into developments in the Melbourne area, as well as into Ballarat and regional Victoria.

At the helm of Hamlan Homes is general manager Andrew Carroll. After completing his Bachelor of Building and Bachelor of Construction Management, Mr Carroll began his working career with Hamlan back in 1997.

“It was probably a stepping stone,” Mr Carroll explains, “capitalising on the rebuilds after the unfortunate Ash Wednesday, and as that got built out, and continues to be built out now, we then began to move into other types of development.”

Gaining experience with several building companies over the years, Mr Carroll has worked in various roles within the construction industry, including production estimator, project manager, site supervisor, construction and building manager.

Looking to the Future

In 2013, Mr Carroll returned to the company as building manager before moving into his current role after just six months. Since then, he has overseen a brand facelift, driving Hamlan towards becoming a diversified builder, while remaining loyal to the local community within which it has successfully operated for over 30 years.

he company’s plan is to launch an exciting new range of homes in early 2016. While not considered a volume builder, Hamlan is the largest locally owned and operated builder in the region. The new designs are set to keep the company ahead of the building game.

Stepping Stone

Over the last 25 years, the business has been very much driven by the market, as developments have become available. In the last three years, since Mr Carroll has re-joined Hamlan, the company has restructured its business in several ways.

hen the bushfires went through Ash Wednesday in 1983,” Mr Carroll says, “that was the beginning of Hamlan as a bigger business. It started to grow with the rebuild of Anglesea and Aireys Inlet and surrounding coastal towns.”

“We’re releasing new product in 2016,” Mr Carroll tells us, “for Hamlan Homes, this is a whole new design range, and we’ve been working hard on it the last eighteen months to two years.”

“

Today, the same family owns the business as began it three decades ago. As a Geelong family, they have always tried to be a big part of the city, especially in terms of embracing the coastal sporting environment and actively supporting the community.

The company continues to work with valued clients through its architectural-design service, a core part of the business. With its dedicated team and personalised service, Hamlan has designed and built some of the most breathtaking homes in the Geelong region from scratch.

The Australian Business Executive - Q1 2016

Hamlan Homes is recognised for their stunning coastal homes

Internally, Hamlan Homes has recently re-structured personnel to increase productivity and keep the business moving forward, and recent investments in construction and core management systems will allow the business to capitalise on growth efficiencies.

With an excellent track record of sales over the years, Mr Carroll admits the key is keeping the standard products that clients have been satisfied with in the past, offering custom homes whilst still working within standard parameters to achieve efficiency.

The company will also be expanding its corporate social responsibility efforts in the region, as well as partnering with not-for-profit organisations to ensure that the business is contributing positively to the local community.

“In doing that,” Mr Carroll explains, “we can then capitalise on the growth of the Geelong region, and into the west of Melbourne, where there’s been a lot of growth over the last two years.”

The growth plan for the next five years involves being more selective with custom clients, ensuring the company has the capabilities to service those clients that want to spend the right amount of money and receive the level of exceptional quality they require.

After dying off a little half a decade ago, prices in west Melbourne are becoming affordable again, with competition for land increasing. Hamlan intends to return to the market next year to capitalise on the change.

“We’re not trying to be everything to everyone, but we understand that clients want options. Our new design range is looking at the development of standard plans, but having expanded options that can be bolted onto these homes.”

“We’re a Geelong-based business, and we want to maintain and grow market share in this region, growth largely made possible due to the expansion of Armstrong Creek, the biggest growth corridor in Australia. This is a great opportunity for our business to capitalise on.”

The Australian Business Executive - Q1 2016

Hamlan Homes intends to cement its status as Geelong’s preeminent builder

These growth initiatives are intended to help the company continue to perform well in the area, whilst also competing with bigger builders. As a medium-sized builder, the company wants to make sure not to lose touch with Geelong-based customers, whilst still growing. “Geelong is a small city in itself, but it still maintains the small town mentality. Our clients are looking for local, knowledgeable and friendly customer service. Price is still an important factor, but it isn’t the number one factor.” The company’s long term relationship with the government has seen Hamlan look to create efficiencies in its offerings t o t h e gove r n m e nt , m a k i n g s u r e t h a t t h e s p e c i f ic requirements for affordable building are adhered to and work is delivered on time. “The quicker we can build the homes,” Mr Carroll says, “the sooner the tenants can move in. This helps the government, but also helps us to tr y and be on the cutting edge of development, and service a niche market.”

Industry Issues

ith focus firmly on volume building and a large number of residential land lots set to title over the next five years, Hamlan Homes plans to capitalise on unprecedented growth in Geelong and the surrounding regions, cementing its status as Geelong’s preeminent builder. The company has earmarked opportunities for subdivisions in more established areas of the region, presenting the chance to re-invest in the local area. This is parallel to recent council support for inner-city living and plans to upgrade local infrastructure and amenities. Furthermore, recent statistics have shown a shift towards home build prices upwards of $400,000. This market popularity lends itself to Hamlan’s coastal, split-level and custom products.

The Australian Business Executive - Q1 2016

Hamlan Homes

The amount of lots opening up in subdivisions has been a significant issue in the region, especially as the standard lot size block has changed, and is continuing to change. A normal 16 by 32 block size is considered big in today’s terms.

The industry itself has also struggled to adapt to this change, Mr Carroll suggests, with the exception of the bigger builders, which have a better stance in the market, as they are more needed by developers and therefore afforded more opportunities.

“As developers want to establish a niche market themselves,” Mr Carroll explains, “they are trying to cut up blocks in a different fashion, so we have to keep abreast of these changes, whilst still adhering to council regulations.”

“The good thing about it is that the industry is more open, the developer and the builder. So we need to be smarter with our product, and we need to align ourselves with our developer to make sure that they’re selling land, and we’re selling houses.”

This means the company’s product needs to be constantly changing to meet the demands of the industry, something Mr Carroll admits Hamlan hasn’t done particularly well in the past, but is now seeing a great improvement in. “That’s why we’ve really worked hard over the last eighteen months to make sure we have the right contacts w it h developer s, a nd bei ng close to t hem g ives t he i n d u s t r y a n d o t h e r b u i ld e r s t h e a bi l it y t o h ave a n offering for the client that is best suited to the block size.”

This increased communication between parties means developers will have less opportunity to procrastinate over a block, because the product will be provided more easily, mea n i ng bot h bu ilder a nd developer ca n work more efficiently. “In that sense I think the industry’s changed a little bit,” Mr Carroll adds. “Smaller builders have more of a chance than the bigger builders now, and we find that we can move quickly with the market because of our size.”

FAGG’S

“the y work harde r for you be c ause it’s their busine ss”

Se rvicing Ge elong sinc e 1854

PROUDLY LOCAL

HELPING

LOCALS

SUPPLIERS OF HAMLAN HOMES FOR OVER 25 YEARS

e lo n g South Ge

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1-9 BARWON TCE PH: 5221 2899

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The Australian Business Executive - Q1 2016

Torquay 11-13 BAINES CRES PH: 5261 3855

Hamlan Homes

Bigger builders that are doing around 1,000 homes per year are finding it more difficult to push this change because of their size, whereas Hamlan’s output of about 200 homes per year has put the company in a better position to capitalise on the change. These increased opportunities for smaller builders have coincided with a fresh enthusiasm for investment in the area, especially coming from groups such as ‘Mum and Dad’ buyers, who are looking for new ways into property development. “Because of inner-city living, not everyone wants to go out to a new estate, even though they are nice places to live, they’ve got their gardens, they’ve got their lakes, they’ve got their shopping centres, but they’re all new and they’re not established.” “So, the Mum and Dad buyers are starting to look at knock-down rebuilds, as well as sub-dividing larger lots, while still maintaining a three-bedroom home, but compromising on the garden space.”

Mr Carroll believes that there is an opportunity here, similar to the work Hamlan is doing with the government, to get better yields on current stocks for investors, who are creating new assets as well as turning over market funds by selling a product. “Mum and Dad investors are exactly the same. They’re buying a corner lot, or a long block, and then knocking the house down and putting two to three homes on it, or using a side driveway, so there’s an opportunity on both ends.” Mr Carroll admits it is great to have diversity and depth in the company’s development in regional Victoria, but it is also exciting to see Mum and Dad buyers coming back into the market and sensing an opportunity to make some money in addition to their everyday jobs. In order to push understanding of its work in investments, the company tries to create opportunities on REA, through property websites, getting Hamlan’s name out there so clients know that it will work on investment opportunities to earn them maximum yield. “We’ve got about 6 to 10 plans that actually work really well as standard plans, on these types of subdivision lots,” Mr Carroll says. “So it gives our clients the opportunity to simplify the process.”

The Australian Business Executive - Q1 2016

Hamlan Homes

Major Projects

being 91 homes. There are lots of opportunities like this one in the Armstrong Creek area, and off the back of the Star of the Sea success, we get good referrals from them and a happy client.”

ne of the company’s major recent projects was the Star of the Sea development in Torquay, where Hamlan partnered with Villa Maria Catholic H o m e s , a n o t - f o r- p r o f i t o r g a n i s a t i o n , t o b u i l d a r etirement village.

The village boasts first-class facilities and amenities within the renowned lifestyle destination of Torquay, with architecturally designed homes featuring gourmet kitchens, spacious living, plus quality fixtures and fittings, making them a highly desirable option for seniors.

“That’s been a great project because it’s been in progress for five years. It’s seen capital growth within it’s own delivery, and they’ve had generous increases in their sale prices, which is great for them.”

A further key project, the Bancoora series, is a modular project designed two years ago, which was set up for the coastal market. The series incorporates two stunning d isplay homes at A r mst rong i n Mt D u need , plus a n additional two-storey home at Zeally Sands in Torquay.

The program was design and construct, meaning Hamlan worked closely with the developer, selling on the plans, which were tweaked depending on client needs. This was facilit ated by Ha m la n’s posit ion as a qu ick , small company capable of delivering in this way.

“The intent was when we look through any window in the home that we see a vista,” Mr Carroll says. “They’re all based on an internal courtyard, so going back to the 1960s Californian style of home, that were very simple.”

“That project has recently finished, with the whole build

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The Australian Business Executive - Q1 2016

The Star of the Sea retirement village in’. Replacing the traditional Australian backyard is a framed internal yard that the whole house points to, with all bedrooms, dining and family rooms looking into a central courtyard. “That’s been a really good product for us. It’s a f lat roof coastal home, and it picks up a lot of timbers both inside and outside of the home. The feature timber panelling is definitely a highlight.” Quite often, high concepts like this one might prove too expensive for some clients, who will take from it certain features and leave the rest. Mr Carroll says it is comforting to know that clients have seen the design and want to have all of it, regardless of cost. “From a locational design point of view, it’s been a success, and we’ve seen that being pushed into urban env i ron ment s, i n t he k nockdow n /rebu ild scena r io. Clients have then picked that whole feel up and moved it around to suit their needs.” Raised ceilings, pop-up clearstories, expansive glass façade and extended vistas are just some of the architectural design elements employed to capture the essence of a beach house, showcasing Hamlan’s architectural, custom design-and-construct service capabilities. Hamlan has established itself as the master of split-level homes that work with the lay of the land to minimise site costs and maximise views. Offering short f lights of

stairs and zoned living for noise control, Hamlan’s splitlevel homes can be found dotted across the region. No project showcases Hamlan’s particular talent for split-level designs more than a recently constructed home in Newtown, a project which presented many challenges, including more than 9m of fall over the site. “Split-level product is something that we do a lot of,” Mr Carroll explains. “With this particular product, it was not just the fact that it was split-level, but it also had budgetary constraints as well.” In Newtown, Hamlan faced a tough build. The clients had a budget, but owned a whole block, meaning they went back and forth on what they could afford. Hamlan had to deal with the constraints of the block, while also designing around the family’s distinct requirements. “We had strict design issues in regards to the slope of the land,” Mr Carroll adds, “but it was also imperative to ensure the home was functional for the family and had a striking street appeal.” Hamlan Homes stands out as a local business that is genuinely passionate about the community in which it operates, having formed strong partnerships with various local community groups, sporting clubs and charity organisations. With over 30 years of experience in the local market and a proud history etched along the Great Ocean Road, Hamlan Homes has played a substantial role in the evolution of Geelong and the Surf Coast region, and will continue to do so well into the future.

The Australian Business Executive - Q1 2016

Zuccala Homes: Displaying Exceptional Quality Editorial by Nicholas Paul Griffin

s a competitive builder offering an extensive and generous list of inclusions, Zuccala Homes takes pride in providing real value for money in terms of design f lexibility, quality materials and award winning building processes. Zuccala has been building quality homes si nce 1957, est ablish i ng for it self a st rong reputation for providing quality builds and ser vice. Australian Business Executive recently spoke with managing director Greg Zuccala for an insight into what will keep this historic business moving forward into 2016 and beyond.

In 2005, Greg Zuccala became chairman of the Housing Sector Committee for the Master Builders Association of Victoria. At that point he joined the board of the Master Builders, where he sat for several years, before serving two years as president from 2012. “I’m currently still on the board as the immediate past president at Master Builders Victoria,” Mr Zuccala tells us, “and I have also just joined the national board of the Master Builders Association in Canberra.”

Greg Zuccala Mr Zuccala has been involved with the company since 1984, when he joined as a director. It was nearly thirty years earlier when Zuccala first began, under the watchful eye of a man who still takes great pride in the company, Mr Zuccala’s father, Vic.

Medium Sized Builder

pec building is where a company buys a block of land and builds a home on it, before selling on the individual property. In its early days, Zuccala would buy 30-50 lots at a time, building homes on each individual lot and then selling them.

As a European immigrant, Vic Zuccala came over to Australia, beginning his working life as a carpenter’s apprentice at a mature age. Once the apprenticeship was finished, he went straight into building spec homes, which is how Zuccala Homes started.

After Mr Zuccala began with the company, Zuccala Homes started to branch out to building display homes and order jobs. The company now does around 200 residential constructions a year, with its main business coming from its display homes.

“He’s now 91 years old and still comes into our office every day,” Mr Zuccala says, “because he still has a passion for this industry and this business, a business that is now almost sixty years old.”

“We do work including unit developments for small developer s a nd la rge developer s, we do k nock dow n-rebuilds, including the inner city, and we do our own projects, so we’re fairly f lexible in the work we do.”

“I started out doing pretty much everything in the field, and then the office, and that gave me a broad range of experience in residential construction. My dad has a domestic builder unlimited license, and so do I, and the business grew to about 80-100 spec homes a year.”

With its modest yearly out put, Zuccala operates as a med iu m-si zed bu ilder. La rger bu ilder s w ill bu ild typically in the high-hundreds, or more than a thousand homes per year. There are probably little more than half a dozen larger builders working in Victoria at present.

The Australian Business Executive - Q1 2016

Greg Zuccala became chairman of the Housing Sector Committee for the Master Builders Association of Victoria 25

Zuccala Homes

“

e custom-design homes based on our display homes or the owner’s plans,” Mr Zuccala adds, “and we source a block of land for the owner to purchase, on which we design and plan a custom-design home.” Zuccala sees itself as a niche volume builder, meaning that the company does some amount of volume, but has a fundamental difference from the major builders by offering a more flexible approach, being able to both custom-design or design from scratch. “We focus also, very importantly, on the process, not just the product. Whilst we believe our product is a quality product, we use quality tradespeople that have been with us, some of them, for forty years, and some of our tradespeople’s children have taken over the business.” The company has a specific group of trades-people that it uses for its builds, people who have proved loyal to the company for many years. Likewise, there are suppliers that have worked with Zuccala for fifty years or more. “We build long, loyal relationships with our tradespeople,” Mr Zuccala says, “and with our manufacturers and suppliers. That ensures that we get constant, good quality work. We deal with trustworthy tradespeople and with trustworthy suppliers and manufacturers.”

This list includes most of the major Australian manufacturers, companies which will backup and guarantee the work. Zuccala doesn’t deal with cheap imports, which don’t offer service or warranty backup. Even though they may prove to be cheaper, the company stays away. For Zuccala Homes, providing the right product is only half the story. The other vitally important factor is in providing the right process, a process which is all about communication and making sure the customer has all options available to them when designing their home. Once the construction process is underway, communication with the customer continues, making them feel like they are part of the process. Office availability, as well as that of the construction supervisor, is essential to nurturing this feeling of inclusivity. “Construction supervisors are regularly on site, and they are able to talk to them, request any changes, and meet at critical stages during the construction. So, that communication process goes hand-in-hand with the product, and that’s where we see our point of difference.” Part of the company’s commitment to communication involves Mr Zuccala personally surveying every customer from the initial deposit stage to gauge the customer’s experience with the company.

The Australian Business Executive - Q1 2016

Zuccala Homes

Mr Zuccala’s hands-on approach to service continues throughout the entire build. He makes contact a second time, once the contracts have been signed and all the colours and specifications have been chosen. “Our customer service administrator in the office here also contacts them formally, midway through construction, and then I’ll contact them at the end of construction to see how they’ve found that process, and this is all confidential and direct to me.”

Any site costs involved in the construction of the home are determined throughout this process, and are therefore not a surprise to the customer. The customer is then taken through the process of designing the home, selecting colours and specifications. “We take them right through to contract signing and the process for contract signing, and then more often than not there’s finance involved, so they will organise finance approval, or we can recommend them to a finance institution or a finance broker if they don’t have one.”

Zuccala services first time home buyers by providing a thorough document explaining the whole process, from day one. This means customers are fully aware of the details of the process, and the time it will take, from initial deposit right through to completion.

This whole process, when working efficiently, normally takes around 8-10 weeks. The importance here is making perfectly transparent to the purchaser exactly what the process entails and how long it will take.

“From the first time they express an interest in a home,” Mr Zuccala explains, “and commit a deposit, we’ll tell them the process of how long that block will take to settle, including the surveys and the tests we do on the block of land.”

“That process may take longer depending on, if the customer takes a little longer to do things, or if their land is not titled, or if planning permits are required, or special dispensations for councils are required. So, we make that very clear to the first home buyer.”

The Australian Business Executive - Q1 2016

Sienna 325, a double-storey home design.

Master Builders Association

r Zuccala’s position within the Master Builders Association has lasted for many years, and the work he has been a part of since joining represents a great success both for himself and Zuccala as a company. “I’ve been on the board for the last ten years. I started out as chair of the Housing Sector Committee, where we focused on residential issues. Master Builders is representative of residential builders and commercial builders in bringing building and construction issues to the government.” The Master Builders Association of Victoria is a not-for-profit organisation with almost 9000 members. Its primary role is to represent its members to government and the community, and provides considerable support services for its members in the form of training, industrial advocacy, and legal business and financial advice.

“It’s useful for experienced builders like ourselves to have some input into gover nment policy before its actually legislated, so that government and its bureaucracy is aware of the industry’s view, and it can make an informed assessment on proposed new legislation.” Mr Zuccala has recently been nominated to the Building Appeals Board of the Victorian Building Authority. If appointed, he will have input into how the industry interacts with the government going forward. The industry has recently suffered from a lack of quality tradespeople, as new blood and apprentices have proved difficult to recruit. There has been a concerted effort from the industry, and Master Builders in particular, to try and change that. “The other thing is, it’s important that we have skilled trades, and that the trades have integrity and pride in their work. Victoria is one of the few states that don’t have registered trades-people, as opposed to Queensland and New South Wales.” In Victoria, the only registered trades are electricians and plumbers, whereas in NSW all tradespeople are registered. This has created a significant shortage of quality trades-people available to builders like Zuccala to employ for important work.

The Australian Business Executive - Q1 2016

Williams Landing, display centre in Victoria

“Major trades such as carpenters, bricklayers and concretors should be registeredthat brings accountability to a tradesperson’s work, just as a builder is registered and is policed by the Victoria Building Authority, then so should a tradesperson.” Master Builders has been lobbying government to introduce trade registration for years, and Mr Zuccala admits that it appears that the state government is beginning to act on the issue, with a new bill submitted to parliament recently, the Building Amendment Bill. The bill seeks to improve consumer protection, and has been greatly influenced by Master Builders, which has been able to have a significant input to government in regards the welfare of the industry and to the community. “Registering trades is certainly one of those things, and the other thing is that, in an effort to reduce disputes, a proper disputes resolution procedure has now been proposed in this bill, and we’re pleased that that’s the case.” Current procedures for disputes can become costly and time consuming, and the bill aims to force compulsory mediation before an issue goes to court.

Master Builders is confident that it is moving in the same di rection as gover n ment and consu mers i n seek i ng improvements.

Showcase Homes

n terms of the company’s major projects, Mr Zuccala highlights three that have represented significant achievements in Zuccala’s portfolio. Two of these projects are situated in display villages, each of which showcases two of the company’s homes. The third project involves homes currently under construction, within an exciting and innovative project based in Cranbourne. The project developer is Investa Property Group, which is planning a combined business and residential development. “This is a unique product,” Mr Zuccala says, “which is the next step up from the home off ice, and it displays a contemporary development which looks residential, but also caters for the business that can be run from home.”

The Australian Business Executive - Q1 2016

Zuccala Homes

The project design has integrated both residential and commercial use, whilst also clearly, though discreetly, demarcating between them, allowing home and office lives to remain separate whilst also being intrinsically linked. “We’re the preferred builder in that development, and we’ve just started construction of five homes there. The home designs suite is called DuoDuo because, it’s dual purpose business and residential. Four of those will be display homes, the other is for a client.” The plans were the brainchild of Investa, and Zuccala was brought in to refine and develop them so they are functional and suit the purpose for a two or three-bedroom residential, as well as the opportunity for business and employment. The development is called the Evans Park Business Village. Despite the name, it’s not an industrial estate, but rather has the feel of a modern, contemporary residential estate, where people can work from home. Zuccala hopes to have its homes open early in 2016. “The buildings look essentially like contemporary two-storey townhouses or residential homes from the front, so it’s not a factory type setup. The residential portion is on the top level and they’ll have a rear access, which is the business component.”

The homes at Evans Park will be available between the $400-500k range, making them very affordable. Zuccala expects to build around 350 homes in total during the current phase, creating an extensive residential setting, and will be offering a fully-finished turnkey product. “It suits not only those working from home,” Mr Zuccala stresses, “but it also suits the tradesperson who’s going to store material. So it can be an office-warehouse combo, so its quite flexible.” The concept on display at Evans Park is something very new to the Australian market, representing a significant project for a company of Zuccala’s size to be involved in, and the beginning of something that promises to be quite special. “It’s absolutely new, it’s the brainchild of Investa, and we got in on the ground floor with them, and helped them design that product. This will be the first development, the first display homes, dedicated to this product. It’s a ground-breaker.” Typically, the major developers such as Australand, Stockland and Investa, will buy large plots of land, with thousands of lots on them, with the plan being to build a display village. The developer will then invite builders to participate in the project.

The Australian Business Executive - Q1 2016

Zuccala Homes

“There may be 10, 12, 15 builders, in a large development, of which we might be one. In the case of this one with Investa at Cranbourne, with this new product, we are the only builder displaying there, because we’ve developed that product in conjunction with Investa.” The Zuccala product is the only one being sold on the site, proving the level of confidence Investa has developed in the company to build and supply the product. This is a slightly more unusual case, and one where Zuccala act as the preferred builder. The two other main display homes are situated in display centres, one of which is Williams Landing, probably the best performing display centre in Victoria. The homes have been open for while, a large two-storey and a single-storey home. The Hawthorn 265 home, on display at Williams Landing, is exceptionally zoned, with all living requirements taken into account. Open-plan living flows easily to the alfresco area, and a separate living-room caters for all occasions. Similarly, the Oxford 330 harnesses form and functionality, offering all the vital ingredients for a comfortable modern lifestyle. A combination of private and communal space is set over two sizable storeys, and the alfresco area provides another place to unwind.

“There’s another 4 or 5 display centres where we’ll be opening up early next year. We’ll have 6 or 7 centres at any one time, and that’ll bring in new home buyers, where we custom design, or they’ll design or amend from our display plan, whichever they wish.” These projects include two homes at The Address in Point Cook, in conjunction with the property group Stockland, and two more at Bloomfield, Diggers Rest, which is another Investa development. Added to these are two homes at Woodlea, Rockbank, developed by Mirvac/VIP, as well as the company being in the planning stages of two new display homes at the Cloverton Estate in Kalkallo, another Stockland development. Zuccala makes sure to foster good relationships with major land developers regarding display centres, bringing a more personal, flexible, customer- orientated aspect to a display village, thereby complementing volume builders, which bring a lot of traffic. “Our pitch to our developers is that, no we’re not a large volume builder, rather we’re a medium sized, family-run organisation, that brings a more holistic dimension to the display village, and that attracts a broad range of customers to the village.”

“That’s our bread and butter,” Mr Zuccala says, “open for display seven days a week, where we sell our order jobs and find people land and custom design a home for them. The other one is in the Aston display village in Craigieburn.” At the Aston Estate, the Marina 225 is both a stylish and functional home, suited to the family that loves to entertain. The kitchen, with its large walk-in pantry and meal areas, opens out to an undercover alfresco, creating a seamless blend between indoor and outdoor. Its counterpart, the Sienna 325, is a double-storey home designed to cater for the needs of the whole family. Equipped with a delightful and luxurious kitchen, and complete with a large walk-in pantry, this home has a truly big heart. The Sienna 325 has been perfectly zoned to offer both space and privacy to everyone in the home. This home offers a truly stylish and sophisticated design, created for the enviable family, and can also be viewed at the Aston Estate site.

The Australian Business Executive - Q1 2016

Fasham Co-Managing Director, Melanie Fasham

Fasham Homes: A Design for Life Editorial by Nicholas Paul Griffin

amily-run residential builder Fasham Pty Ltd has been designing and building in Victoria for almost half a century. At the beginning of 2016, the company is thriving, run by a second generation of family leadership, with sisters Emma and Melanie Fasham at the helm.

Trevor Fasham, Emma and Melanieâ&#x20AC;&#x2122;s father and the companyâ&#x20AC;&#x2122;s founder, remains actively involved in a business committed to delivering the benefits of contemporary design to new homes and the way of life of its clients.

Fasham

Modular Beginnings

What developed from this change was a new model, starting with taking a brief from the client, before going on to complete the design and pricing separately. With t h i s m o d el , t h e c o m p a ny n ow sit s f a r clo s e r t o a n architectural solution than that of volume-builders.

ounded as a family company in 1972, Fasham’s h istor y of bu ild i ng contempora r y homes for Victorians is long and stable. The business started with a range of designs that were modular in nature, allowing cer tain modules to be added or removed for design purposes.

Fasham’s building philosophy was always to cor rectly orient the building to the specif ic site, paying close attention to the way a home’s inner spaces sit in the sunshine, the f low from one area to another, the view looking out, and the sense of light and space.

Ea rly houses were f lat-roofed homes, solid br ick contemporary construction, with a strong emphasis on orienting the northern aspects of the house to the path of the sun. Since that time, the business model has been adjusted to incorporate completely individual designs. Rather than offering the clients a solution and manipulating the design to fit, all homes are now designed entirely from scratch to suit both the site and the client’s needs, differentiating the company’s offer significantly from those of its competitors.

This unique philosophy has remained vital to the business over the years, a fact that becomes abundantly clear on visiting the company’s website, which proclaims that: “The path of the sun across your site is the single most impor tant inf luence on home design.” Fasham’s vast experience of building for individual clients, each with different requirements and lifestyles, stands as proof that this natural factor has a greater impact on the lives of those within than any view from the street may offer.

The Australian Business Executive - Q1 2016

Fasham

elanie and Emma have now been joint managing directors at Fasham for just over a decade, having both previously held executive positions with multi-national companies, bringing a wealth of experience across several industries to their roles. Emma came from a marketing and sales background, having worked in sales in London before stints in both IT and Real Est at e. She ha s si nce complet e d a n M BA i n Bu si ne ss Administration, during which she came to work for Fasham. Melanie’s background is in chemical engineering, where she worke d i n heav y i ndu st r y for nea rly t e n yea r s, before going on to work in logistics. After the decision had been made to join the family business, she also went back to school to complete a Diploma of Building.

The changes that have been made and are continuing to be made by local and state governments means this number is increasing, as more and more sites will be subject to town planning legislation. This legislation can create problems for the company, since it will often mean a longer wait for the client to start construction. Problems such as the surrounding houses, bushfire issues and heritage issues all have an effect on the granting of a town planning permit. One significant problem is the enormous amount of power that lays in the hands of the neighbourhood and its individual owners to object or comment on a design, even though they may not be directly affected by a build.

Since joining Fasham, Melanie has gained her Domestic Builder (Unlimited) registration, as required by the Building Practitioners Board in Victoria.

Statutory regulations state that the issuing of a town plan ning per mit for one house should take 3 months. Realistically, it can take between 6 and 9 months, having a huge effect on productivity, as well as creating substantial costs for both businesses and landowners.

The sisters have clearly demarcated roles within the company, corresponding to their specific skill sets. Emma runs the front end of the business, including clients, contracts, permits a n d m a r ke t i n g. M el a n ie i s i nvol ve d w i t h ove r s e e i n g construction, suppliers and pricing.

For companies like Fasham, town planning requirements seem to be always increasing, often requiring independent reports on a variety of topics to be commissioned for land management or existing conditions for the site, which can substantially delay building work.

The Market

Fasham has recently had to complete reports considering the amount of wallabies in the area on one site, and one tracking a certain beetle’s migration across another site.

asham currently completes anywhere between 45 and 55 homes per year, taking f ull advantage of its individual model to ensure each house is given the design and building attention the client requires.

The suffocating nature of the industry’s red tape doesn’t just affect builders, but can prove equally frustrating for clients, who buy land and might be asked to sit on it, unable to commence the build for an unknown period of time due to an often over-regulated process.

Due to its commitment to individual design and build, Fasham deals first and foremost with people looking to build a new home on a site they may have recently purchased or owned for many years, builds that often involve working within a council’s town plan ning guidelines. Depending on where the land is situated, certain legislative requirements will need to be met, which will determine whether a town planning permit is needed or not. Currently, around 70% of the company’s business is affected by the need to meet town planning regulations.

Fasham generally offers homes costing between $500k and $1.5m, including both design and construction. The company has a high-service, individual model, which sits somewhere between the architect and the project home builder, giving it a unique position in the market. Clients come in for colour and detail meetings, where they are provided with plenty of discussion time to find the right fit for them. Standard packages are not on offer from Fasham, as clients are encouraged to bring and discuss their own ideas for the build.

The Australian Business Executive - Q1 2016

Fasham Co-Managing Director, Emma Fasham 35

Fasham

Ideas are often based on what is on show in the display houses, and this f lexible approach has resulted in the company gaining enor mous appreciation f rom the market, appreciation ref lected in the amount of repeat client business the company receives.

One challenge for the industry is surrounding owner-builder activity, which is very high in Victoria, although thanks to a recent legislation change to the Building Act, these problems are now being addressed and are likely to show improvement for the industry going forward.

Repeat clients are an important source of both business and pride for the Fasham team. Being asked to build a second home for clients the company may have first worked with 10 or 15 years earlier is a testament to the strength of the company’s philosophy.

Another challenge is in harmonising local council rules, with the aim of assisting builders and, as a result, clients, to achieve greater productivity. Even something as simple as how to manage rubbish on site can be very different across councils.

O n t op of t h is sol id cl ie nt ba se, Fa sha m reg u la rly receives clients from referrals, an indication of the level of trust it has built up in its 45 years in the industry. This longevity is proof that high-qualit y const r uctions and individual designs are a defining feature of the business. When researching builders, a client will look at how many disputes a company has been involved in throughout the years, which for Fasham has been in very few, demonst rating that problems are solved quickly and efficiently, before they become a dispute. The current dispute resolution process in Victoria is very easy for clients to use, meaning it is not at all uncommon for a company to find themselves in a dispute with very little warning. Fasham works hard as a company to make sure its clients never have cause to do so. Many issues and disputes arise ever y year for builders across the count r y, f rom ban k r uptcy to qualit y issues, such as a buildi ng not bei ng i n accordance with reg ulations, all the way to clients feeling they have not received what they expected after seeing a display home. Fasham takes great care to avoid these issues, star ting b y w a l k i n g i t s cl ie n t s t h r o u g h a d i s pl a y h o m e a n d explaining ver y caref ully what is included and what isn’t, pointing out both standard feat ures and those available as an upgrade. In her seat on the board of Master Builders A s s o c i a t io n of Victoria, Melanie is directly involved with a p p r o a c h i n g t h e g ove r n m e n t a b o u t a v a r ie t y of i n d u s t r y i s s u e s , t h o s e a f fe c t i n g c o m p a n ie s r a n g i n g f r o m vol u m e builders th rough to smaller builders such as Fa s h a m .

Builders can find it difficult to follow different rules existing across multiple sites, an issue that can seriously complicate building work, affecting both volume builders and individual builders in different ways. Likewise, compulsory registration of trades in Victoria, as exists in NSW and QLD, if implemented, would benefit all parties. The more trades that are registered and have a tested skill base, the better it will be for clients, as an industry standard of quality will be reached.

Individual Designs

ontemporary design is a significant part of Fasham’s business, the utilisation of light and space central to its philosophy. Open rooms and high-ceilings with uplift invite more light into the rooms as well as providing a view of the sky. Houses built in suburban areas, close to the boundaries of other properties, benefit immensely from a roof elevation, which allows the homeowner to enjoy sky views rather than neighbours’ external walls, providing stunning, spacious living areas for Fasham’s clients. The consistent build methodology of its individual designs allows the company to cost quickly and accurately from a sketch plan, meaning it can offer a fixed price for the client based on the brief that is taken. Fasham is able to streamline many of the processes in the construction end of the business, with several consistent aspects to the work. The company values longstanding relationships with trades and suppliers, preferring to work with a limited number with vast experience.

The Australian Business Executive - Q1 2016

Fasham

Client Satisfaction Despite Fasham’s similarity to architectural firms in its approach to a build, there is still a big difference between its model and that of an architect, allowing the company to offer what it considers a superior service. An architect would work by completing the brief and the design before having the project priced by a builder. At this point a client may have invested between $15k and $40k, which can represent a large chunk of the budget spent before the total project cost is finalised. In Fasham’s model, the design and pricing are provided within 4 to 6 weeks of a brief, meaning the client can accurately assess their required investment without compromising on quality or efficiency.

asham’s recent achievements are best represented by the satisfaction gained by its clients rather than the houses it has built. With each house being individual, the importance of giving the customer exactly what they want is paramount to the company’s success. A recent country build is a perfect example. Originally comprised of a small house the clients wanted to use for a B&B, they believed they would have to knock the building down, erecting a new house for themselves and another smaller one for the business. Fasham’s designer suggested to the clients that they keep the existing cottage, a proposal that worked out extremely well for them, as they were able to get their business up and running more quickly, without the extra work of building the smaller house.

The Australian Business Executive - Q1 2016

Fasham

The new house is built into the land beautifully, nestled into the surrounding landscape and hidden from the view of the road. This elegant solution meant the clients not only got the property they wanted, but did so expeditiously, saving time and costs. Another project sees the building of a house for a three-generation family, running from children to grandparents. The design has provided the middle generation with a bedroom upstairs, the younger downstairs and the oldest generation having their own living space. This build is already a success for the family, who are incredibly happy with the design and layout. It is a design skill Fasham has used before, and this is not the first time the company has built a house to cater for the needs of a multi-generational family. The individual nature of the design process allows this kind of property to be built, a project that would prove much harder for volume builders. The company is currently talking to another set of clients who are looking for a similar solution.

The secret is to build for the three generations now, but to ensure that when there are two generations left, the excess rooms are still useful and the house still fit for the purpose of comfortably housing the reduced family. Satisfaction and trust can be seen in the case of clients who live overseas, having just moved into a house Fasham built without holding a face-to-face meeting until just before construction commenced, with design and contract work completed via Skype link ups. This kind of arrangement demonstrates exactly the amount of trust clients are prepared to put in Fasham to deliver the right build for them. Seeing this type of project through to completion is a significant achievement for the company. Similarly, another set of clients living in Sydney arranged for work to be done on a block of land in Melbourne purely by viewing the company’s website. Most of the early arrangements were done over the phone, until the clients could come for a meeting to finalise the plans.

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Fasham

These are all examples of Fasham’s success at building from a distance, showing that, even though the company works in Melbour ne, there is no reason why people f rom all over t he world ca n not benef it f rom it s individual design and build model. Another project has just been finished down in Por tsea, where a family subdivided their block, enabling a new home to be built next to the existing family home, with a contemporar y build complementing a proper t y that has been standing for nearly a cent ur y. The existing house is built out of limestone, and the new house in a beautif ul timber. It took 12 months to obtain town plan ning approval, which is not unusual considering the sensitive nat ure of the site and the su r rou nd i ng prope r t ie s. T he prope r t y it self t ook another year to build, and has already been lovingly embraced by the clients. There is no shor tage of client satisfaction stories when it comes to Fasham homes. One aspect of the design brief is to tap into the client’s passions, often done to great effect, as in the case of a passionate car ow n e r, w h o s e h o u s e w a s d e s ig n e d a n d b u i l t t o overlook the garage.

The houses are essentially there to provide ideas for clients, giving the company an invaluable opportunity to show what it is capable of and to get clients thinking about how they might want their own houses to look and feel. Fasham display houses are often used to host new client meetings and design briefs, giving the company the ability to deliver hands-on pitches to clients and discuss ideas about how best to reproduce certain elements of a build in a new design. Fasham uses photos taken from previous builds to highlight the array of possibilities for new builds and provide inspiration for its clients. After closing one of its older display houses, the two Alphington display homes will give a new lease of life to the company’s product. The future is exciting for Fasham, with several recent changes being implemented to move the business forward, including a new website and positive developments to the marketing area, all with the aim of inspiring its clients to imagine new ideas for their dream homes.

Another client wanted to begin lear ning the piano, and so Fasham made sure a sound-insulated room was built in the house, making it easier for the inst r ument t o b e l e a r n e d w i t h o u t d i s t u r b i n g t h e r e s t of t h e family. Another client, with a passion for breeding and racing birds, had almost a third of his family home given over to a breeding area for his birds, showing the diversit y of both Fasham’s clients and the designs the company are asked for. In addition to these projects for its passionate clients, the company has just recently completed two wonderf ul new display homes in Alphington, the f irst time they have built display homes in this area. This area of Melbour ne is going th rough a period of s i g n i f i c a n t g r o w t h , a n d Fa s h a m h a s l o o k e d t o capitalise on this with its display homes. The homes a re beaut if u l, t wo -storey hou ses, d if ferent but elegant, giving clients several options and ideas when viewing them.

The Australian Business Executive - Q1 2016

Building a State: Strata Leaders Laying The Groundwork For Victoriaâ&#x20AC;&#x2122;s Vertical Future

SCA Victoria

new year has a way of providing us all with a focus on the future, and perhaps no other group in Australia is looking forward more than those within the booming $1.2 trillion strata sector. Apar tments, units and town houses are being built at almost twice the rate of houses around the country, and with no sign of this trend slowing down; all eyes are on the rising skylines of our biggest cities. Strata has found a heartland in Victoria, and we recently sat down with the leader of the state sector, to speak about the work that’s gone into the recent progress, and what lies ahead in 2016 and beyond. “It’s pretty clear that Australians now want to live in or buy into strata title property, and as a result our sector in Victoria has experienced a phenomenal rate of growth that’s likely to continue for many more decades,” Strata Community Australia (Vic) President Julie McLean said today. “All of a sudden, it seems the suburban backyard dream has reached its expiry date in the minds of Australian home buyers, and that’s caused our sector to grow at an astonishing rate.” “10 years ago, the Victorian strata sector was valued at $50 billion in building replacement costs, now we sit at $300 billion, and with on ongoing development boom in tow, we anticipate that this number will double again by 2020.” In spite of this however, Ms McLean says growing pains have never been far away from the staggering financial milestones and that’s where much of the focus must go if Victoria can possibly hope to sustain a sector housing in excess of 1.5 million residents.

“I’ve been involved with the strata sector for 13 years, and there’s never been a more important time for us to take stock, and take a deep breath before starting again.” “26% of the Australian population now has a stake in the strata sector, so the platform that we lay for the future has to support more people than ever.” Ms McLean’s Strata Community Australia (SCA) is the peak organisation driving this goal of industry betterment, and its work touches every corner of the country. “Just like our office here in Victoria, there are chapters in every state and territory around the country, tasked with bringing professional progress and performance into this developing property marketplace.” “Our principles are the same, but we each face different challenges as our respective sectors, industry professionals and stakeholder base grow, and it’s that constant learning cur ve that’s allowed us to develop a radar screen for developing issues.” As each state undertakes strata law reform it is hoped that the state bodies look towards harmonising strata laws and terms across Australia. To help lot owners, managers and other industry stakeholders better understand their responsibilities when working and living in strata, SCA National has developed an introduction course called ‘A100’, as well as a ‘new committee’ pack designed to guide committees in their roles and responsibilities. Specifically relating to Victoria, Ms McLean says there are a number of issues that will require urgent attention as business kicks off in 2016. “The issues facing each of SCA’s regions are so diverse, and that’s no different for us here in Victoria.”

The Australian Business Executive - Q1 2016

Julie McLean - Strata Community Australia (Vic) President “One of the most publicised issues recently has been the spread of unsafe construction materials, including a flammable cladding product responsible for a multi-storey building inferno that lit up the Melbourne skyline.” “The Lacrosse Apartments fire, that continues to make headlines for its multi-million dollar rectification bill, was caused by the existence of an aluminium cladding product that failed to meet Australian construction standards.” “Experts have war ned that based on a cost over qualit y attitude in local constr uction, there’s ever y possibilit y that there are tens, hundreds, even thousands of proper ties f itted with this dangerous product and that gives us great cause for concer n.” “The problem is how late we’re finding out about these unsafe, often imported products and we’re hopeful that a Senate inquiry into the matter provides some solid measures

to limit their use and stop them from getting past the border.” Ms McLean says issues like building defects are those that typically illicit a reactive response from authorities, and SCA (Vic) is adamant this ethos must not be applied to another issue affecting Victorians. Renewal of the built form is the second emerging issue for the strata sector. Of the 88,475 Owners Corporations in Victoria it is estimated that 35% of all Owners Corporations will need to be refurbished or redeveloped between now and 2035. Walk-up residential buildings, typically built between the 1950s - 1970s, form a significant proportion of the residential buildings in Greater Melbourne. Many of these buildings were built at minimal cost during a period that had few planning controls and limited regard for aesthetics or internal amenity. These buildings have a 30 – 60 year life span due to poor design and maintenance.

The Australian Business Executive - Q1 2016

Apartments, units and townhouses are being built at almost twice the rate of houses around the country 44

SCA Victoria

Ms McLean says that many of these buildings are in crisis with underground sewers collapsing, long concrete driveways needing replacement, sagging roofs and beams, rusted window lintels resulting in large external and internal cracks.

“Although our legislation governing our sector is relatively new (2006), it has failed to keep up with the rate at which we’ve grown as a sector, and as a result the government has called for a review of strata laws in 2016.

“Throw in a bit of concrete cancer and we have all the ingredients for a building facing a large special levy to repair the problems or to take the opportunity to demolish and start again.”

“Issues like building defects, scheme termination and strata manager licensing are just a handful of those which we hope to see some real progress on over the next couple of years.”

Currently the termination of an Owners Corporation for any reason requires 100% of all lot owners (and their banks) to agree. Termination of Owners Corporations need to balance protecting a person’s home versus the economic and sustainable imperative of redevelopment.

“This progress is something we’ve been chief consultant to the State Government on, since engaging in meetings with them since August, and at this point it’s looking like we’ll see sweeping changes brought in by 2017.”

SCA (Vic) supports lowering the threshold based on sliding scale. For buildings older than 25 years the threshold for termination should be 75%. For buildings between 10 & 25 years, the threshold should be 80% and for buildings less than 10 years old the threshold should remain at 100%.

“New South Wales last year welcomed a strata reform package that’s set to completely modernise the laws governing their some 2 million stakeholders, and we want the same opportunity for Victoria, sooner rather than later.”

Linked to both these emerging issues is the current threshold for Maintenance Plans and funding, and the difficulties in recovering costs from defaulting lot owners. Currently the threshold for an Owners Corporation to obtain a Maintenance plan is 100 lots or an annual turn over $200,000. “Of our 88475, 1% represent properties greater than 100 lots. This means that the vast majority of properties do not have a maintenance plan or any funding in place to properly maintain, replace or upgrade their building over its life span.” SCA (Vic) suggest that it should be mandatory for all properties to have a maintenance plan and that a more palatable approach to achieve this goal would be to phase in the requirement over a 5-year period similar to what NSW has introduced. It would require properties with lots 80-100 to obtain a plan in the first year, properties with lots 60-80 to adopt a plan in the second year, lots 40-60 in the third year and 13-40 lots by the fourth year. “This is just another example of the diverse range of issues that we have to rapidly respond to for the benefit of our many stakeholders.” Along with these fast developing issues like unsafe construction products, and renewal for strata properties, “the biggest challenge”, says Ms McLean, “will be getting State legislation to evolve and meet the demands of 21st century living.”

About Strata Community Australia (Vic)

t rat a Com mu n it y Aust ralia ( Vic) is t he pea k i ndustry body for Strata and Community Title Management in Victoria. Supporting more than 80% of all owners corporation management firms, it is the only orga n isat ion solely focused upon re present i ng t h is i ncreasi ngly sig n if ica nt i ndust r y, a nd reaches a nd represents more than 530 owners corporation professionals who manage approximately 375,000 lots. It also represents industry suppliers and owners corporations, making it the voice of all with an interest in the management of owners corporations. Members benefit from representation, promotion, establishment of professional practice g uideli nes and ethical st and ards, and professional development through education seminars, conferences and regularly publishing bulletins on items of professional interest. www.vic.stratacommunity.org.au

The Australian Business Executive - Q1 2016

Network Pacific Strata Management: Franchising Success By Nicholas Paul Griffin

arket-leading Strata Management Company Network Pacific Strata Management began trading in 1994, starting out as a home operation. The group now operates as a successful and vibrant business, boasting multiple offices and managing strata properties across Australia. John Botha is the Managing Director of JFB Management Services Pty Ltd, which commenced trading as the founding Franchisee of Network Pacific Strata Management in January 2015. As a previous employee of Network Pacific, Mr Botha began running his own business after being given the unique opportunity to purchase his Network Pacific portfolio and set it up as a franchise of the group.

John Botha

r Botha has been with the Network Pacific group of companies since moving to Melbourne in February 2008, when he took on the role of Owners Corporation Manager. Seven years later, he was given the opportunity to purchase his portfolio and set up a franchise. “I own a franchise of Network Pacific Strata Management,” he says, “and I work closely with the franchisor, who was my prior employer. So I’ve gone from employee to franchisee within Network Pacific Strata Management.” Mr Botha emigrated from Namibia, in Southern Africa to New Zealand at age 15, where he later completed a Bachelor of Com merce degree at the Universit y of Canterbur y,

majoring in advanced corporate finance and investment analysis in 2005. After graduating, Mr Botha was employed in a Residential Property Management role with a company called Braziers in Christchurch, which he did for two years before looking to further his career in the property industry. The next step was a move away from Residential Property Management and onto Owners Corporation Management. To do this, Mr Botha decided to move to Melbourne and look for work, where within a week he was employed as an Owners Corporation Manager at Network Pacific. “I’ve been managing Owners Corporations since February 2008,” Mr Botha tells us. “Within a couple of years I moved up within the Network Pacific organisation, taking on the Senior Owners Corporation Manager’s role.” Stepping up into a team leader role, Mr Botha was now heading up the Owners Corporation department, working a s a n i nt e r me d ia r y bet we e n t he M D a nd CFO a nd t he Managers who t a ke care of the d ay-to - d ay client management services. Two years later, negotiations were underway for Mr Botha to purchase his portfolio and begin the franchise chain, the details of which were finalised in December of 2014, with the franchise officially commencing business in January 2015.

Network Pacific Strata Management

The Australian Business Executive - Q1 2016

John Botha, Network Pacific Strata Management Franchisee Director

Network Pacific Strata Management

“

ithin my franchise portfolio, I manage 20 Owners Corporations,” Mr Botha says, “thus 20 different legal entities, and they comprise about 1,600 lots under management, including residential apartments and mixed use commercial space.” The wider group of companies is about ten times the size of Mr Botha’s franchise, meaning he essentially bought 10% of the group’s business. When asked about the success of Network Pacific, Mr Botha is full of praise for his franchisor. “We are essentially, a specialist Owners Corporation Management Company, we’re not born out of some of the traditional models where you’d have a Real Estate Sales and Property Management Company who suddenly decides to start managing Owners Corporations as well.” Net work Pacif ic’s core business is Owners Cor poration Management.

A particular focus on customer service is key to Network Pacific’s success, ensuring a high level of staff availability and endeavouring to make any client interaction as pleasant and seamless as possible. Network Pacific are problem solvers for any issue that may arise for its clients. “When someone takes the time to ring you,” Mr Botha stresses, “obviously they’ve got an issue they’d like addressed, and they’d like it addressed as soon as possible.” In addition, the company has always maintained a very high staff to property ratio, exceeding the industry standard of a single full time staff member to every 1,000 lots under management. “We operate a lot closer to 750 lots per full time employee,” Mr Botha says, “so when you look at it, we’re essentially 33% overstaffed, but we actually take pride in that, being able to deliver valued service to the clients by not having any staff member over-burdened, and there is always someone available to assist our clients.” T he compa ny pr ide s it sel f on a t ea m ma nageme nt approach to Owners Corporation management, ensuring there are always two people working on any portfolio, allowing for holidays, sickness and other commitments t o b e c ove r e d by a me mb e r of s t a f f f a m i l ia r w it h t he p or t fol io, wh ich e n s u r e s c o n s t a nt m a n a ge me nt . As a feature of its business, Network Pacific has also set up many sister companies that provide essential services to address clients’ most significant issues, ranging from fire and electrical services to other innovations such as the car park lock. “This is a common complaint within Owners Corporations, when somebody parks illegally in somebody else’s car parking space. The only legal way to deal with that is to deter people from parking in your spot, so we came up with the car park lock.” In addition, Network Pacific also offers a share car product, a tailor-made service for some of the larger properties that may want to establish a share vehicle within the building exclusively for the use of residents. Network Pacific endeavours to offer a range of services outside of its core responsibilities to owners, making the lives of their building residents easier by adding value and benefits to the management of the property.

The Australian Business Executive - Q1 2016

Network Pacific Strata Management maintains a high staff to property ratio

Founding Franchise

r Botha’s team has a strong and proven track record in successfully administering a portfolio of Owners Corporations, ranging from 5 lots to in excess of 250 lots per Owners Corporation, averaging in excess of 100 lots per plan under management since 2008. The team’s diverse exper ience and exposu re ensu res it is able to successfully attend to all Owners Corporation Management needs for var ious proper ties of any size and descr iption, including residential, com mercial, high-r ise, mixed use and many more. “ Si nc e pu r ch a si ng my p or t fol io” M r Bot h a s ays , “and set ti ng it up u nder the Net work Pacif ic ban ner, I h ave b e e n le a si ng of f ic e s pa c e w it h i n t hei r he a d of f ic e”. T h is a l lows t he f r a nch ise t o sh a r e m a ny b a c k- e n d r e s o u r c e s w i t h t h e c o m p a n y, s u c h a s r e c e pt ion , d at a e nt r y a nd a d m i n ist r at ion st a f f.

Within the next 12-24 months, depending on growth, the plan is for Mr Botha to set up his own office in an alternate location. “Setting up the first franchise, provided an opportunity to retain myself within the Network Pacific group,” he tells us, “whilst also catering for the organisation to continue to expand and grow through the franchising structure. At this stage, JFB Management Services Pty Ltd is the only franchisee of the Network Pacific group.” However, in time, Network Pacific will look to further expand the business by introducing additional franchisees to the program. “ Net work Pa ci f ic a s a g roup pu r ch a se d a n 1,10 0 m 2 of f ic e bu i ld i ng i n Bu r wo o d E a st , i n Ja nu a r y t h is ye a r, wh ich is t he c ompa ny’s new He a d Of f ic e whe r e a l l t he Vic t or ia n op e r at ion of t he Net work Pa ci f ic g roup of c ompa n ie s is ba se d .” T he c om pa ny a l so h a s br a nch of f ic e s i n Bu ndo or a Vic t or ia a nd Br isba ne Q ue e n sla nd . Fu r t he r mor e, Net work Pa ci f ic a l so h a s a n i nt e r n at ion a l of f ic e i n Ma lt a wh ich is whe r e most of t he a d m i n ist r at ive a nd ba ck of hou se f u nc t ion s a r e ca r r ie d out .

The Australian Business Executive - Q1 2016

Network Pacific Strata Management

The international office offers an excellent opportunity for streamlining the business, as it takes care of any process type work that comes in during the day i.e. accounts payable, Owners Corporation certificate preparation, financial support etc, which is turned over at the Malta office for the following Australian workday. “We’ve seen a good opportunity in efficiencies there, by moving that operation offshore, which is working extremely well thus far.” Hav i ng t he of fshore of fice al lows Net work Pa ci fic to dedicate more resources to the back-of-house operations on a similar cost base, which allows our Owners Corporation management team in Australia more time to focus on the relationship management aspect of the business.

Strata Management “

“At the AGM you would have a com m it tee elected, w h i c h i s a g r o u p of ow n e r s a n d /o r t h e i r p r ox y r e p r e s e n t a tives, who we would liaise with on a ver y reg ular basis concer n i ng any items per t ai n i ng to thei r buildi ng /Ow ners Cor poration.” T he com m it tee ma kes the major it y of the decisions on behalf of the Ow ners Cor poration members, and we would meet with them on a quarterly basis to present any quotat ions of s e r v i c e c o n t r a c t s a n d a c t o n t h e c o m m i t t e e’s i n st r uctions to car r y out any works. T here are several key issues that affect the r u n n i ng of an Ow ners Cor poration, highlighti ng the benef it of hi r i ng a professional St rat a Management company to oversee the needs of the Ow ners Cor porat ion and act as arbit rator for its needs. “Si mply put,” M r Botha says, “if you can get 10 0 people to educate t h e m s el ve s o n t h e l e g i sl a t io n a n d t h e n a g r e e o n a n y thi ng, if that was possible, then you would n’t have the need for professional Owners Cor poration Management.” The reality is that it is impossible to get

et work Pacif ic St rat a Management deals with any thi ng and ever y thi ng related to the d ay-to - d ay operations concer n i ng Ow ners Cor porations, which i ncludes ever y thi ng f rom the f i nancial management and ad m i n ist ration of that entit y; th rough to the d ay-to - d ay operations of organ isi ng repai rs and mai ntenance for any thi ng related to com mon proper t y.” A t y pical St rat a Management ser vice i ncludes the management of all facilities, the tendering of all relevant ser vice cont racts and the overall f i nancial modelli ng and forecasti ng for the Ow ners Cor poration. “T hat is approved by the ow ners at the AGM, i n ter ms of set ti ng the operati ng budget for the yea r. T hen, based on that budget, we issue Owners Corporation fee not ices to all of the ow ners on lot liabilit y basis, and we also deal with the collection of those fees.” Funds are collected and deposited into independent trust accounts held in the name of each Owners Corporation, as they are their own independent legal entity. The company then administers those trust accounts on behalf of the Owners Corporation. These funds are used to cover any maintenance or upkeep issues that arise within the communal areas of the building i.e. common area cleaning, maintenance, building insurance, electricity usage etc.

The Australian Business Executive - Q1 2016

Network Pacific Strata Management

perfect agreement between owners, meaning it is vital for services like those provided by Network Pacif ic to be available for the committee to take advantage of. “It is becoming a more complex and litigious landscape that we operate in,” Mr Botha adds, “and the demands on Owners Corporations are such that you really do need a specialist in the field to look after it for you.” “We obviously deal with the dispute resolution side of it as well, which is becoming more and more prevalent in society across the board. But where you’ve got ‘X’ hundred people living in one building space, for them to live together harmoniously you need a level of governance in place so that you don’t have anarchy.”

Building Defects

“ Pa r t ic u l a rly g ive n t he a gei ng bu i ld i ng s t h at t he r e a r e o u t t h e r e , t h i s i s a p o s i t i v e s t e p i n t h e right direction. Ultimately, it’s not just the financi a l bu r d e n ; it ’s a l s o lo ok i ng at t he s a fe t y of t he r e sid e nt s a nd t he o c c u p a nt s w it h i n t ho s e bu i ld i ng s.” T he r e a l it y i s a l l bu i ld i ng s h ave a f i n it e l i fe s p a n a nd t he “c o s t of r e p a i r s a nd m a i nt e n a n c e of i n f r a s t r u c t u r e i s out weig he d a l mo s t a g a i n s t t he c o s t of d i s s olv i ng t he pl a n , a nd r e bu i ld i ng it a g a i n . I t h i n k t he r e a r e p o sit ive s t e p s b ei ng t a ke n by t he i nd u s t r y i n t h at r eg a r d .” Credit should also be given to the legislators for sett i ng the wheels i n motion to d r ive this change. M r Botha refers to the model used i n Si ngapore, where it is more com monplace for an enti re buildi ng to be k nocked dow n and rebuilt. “Provided that’s handled appropr iately,” M r Botha adds, “ which I thi n k will come i n ti me, as Aust ralia becomes more and more exper ienced with it, as to how to

large challenge in the industry at the moment is the growing number of buildings across the country reaching in excess of 50 or 60 years of age , putting more pressure on those Owners Corporation members to plan and act on conti nui ng buildi ng mai ntenance issues.

“The industry is very slowly moving in the right direction i n t a k i ng away some of the histor ical bar r iers when it c ome s t o d i s s olv i ng a pl a n a nd k no ck i ng t he whole thing down and rebuilding it, which previously requi red a 100% unanimous resolution.” Steps have been taken in New South Wales to ensure this kind of action only needs a special resolution, 75% of owners’ approval, to go ahead. M r Botha believes Victor ia will follow suit i n the near f ut u re.

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“For anyone looking to purchase a property,” Mr Botha tells us, “there are already provisions in place under the Section 32 documentation, of sale of land, particularly for multi-dwelling sites where there is an Owners Corporation Certificate included, which actually contains a lot of very useful information.” Prospective buyers are therefore given an idea of how well run an Owners Corporation is before they buy, as well as the financial details and level of fees for the lot. Naturally, the older the building, the more repairs and maintenance are generally needed, as well as the day to-day operational costs, which also increase with the age of the building.

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The Australian Business Executive - Q1 2016

Network Pacific Strata Management

relocate all the residents f rom one building to another building, in freeing up that space.” The industry would need to work closely with property developers in order to facilitate this change, though Mr Botha doesn’t believe this will prove to be a significant issue. “If you have a site that has 20 or 30 apartments in it now, you could negotiate with a developer that those 20 or 30 unit owners would own a property within the new development on the site where their property was.” One of the benefits of this action is that there is the opportunity for develope r s t o expa nd a nd a dd u n it s t o t he new development, meaning more housing stock is made available as well as lessening the on-going costs per unit. “Then, rather than having a derelict property that they’re living in,” Mr Botha adds, “they’ve got a nice, modern, safe/compliant, high quality, new property.” One solution to the practical problem posed is for developers to acquire a parcel of land very close to the existing

property, with the aim of completing work on a new property and rehousing residents before the old building is taken down.

Owners Corporations

here is plenty of information available out there for people looking to get involved in an Owners Corporation, but Mr Botha believes it takes more than just a large amount of money to run a successful Owners Corporation. “Having a large pool of funds is impor tant on the one hand,” he admits, “but secondly you’ve got to look at whether the assets within the property are being maintained.” Some committees are very stringent on spending money, but equally very good at building up the pool of reserves, meaning when they really do need to use money they don’t have to call on additional capital levies as the funds are already available. “It’s a balancing act between having enough reserves in place for the long term capital maintenance required, but at the same time spending some of that along the way to preserve the capital value of the existing assets in place.” Keeping a close eye on the overall financial position of the Owners Corporation is therefore very important, as well as carrying out inspections on the property to assess the level of maintenance against capital reserves. Prospective purchasers will also have access to the previous year’s Annual General Meeting minutes, which can provide valuable insight into how well the Owners Corporation is currently being run. “If not,” Mr Botha adds, “any prospective purchaser can also contact the Owners Corporation manager and request to inspect and view the Owners Corporation register, which will include copies of all minutes of meetings, including committee meetings.” “You can gain a pretty good insight as to whether there’s a functional committee in place. Occasionally, for whatever reason, committees do become dysfunctional. The saddest thi ng to see is when an Ow ners Cor porat ion, and par ticularly its committee, loses perspective on their overriding obligations.” The job of the strata manager is to guide the committee and keep them focused, so they

The Australian Business Executive - Q1 2016

Network Pacific Strata Management

can continue to protect the interests of the Owners Corporation at large and act in good faith. “We can’t give legal advice,” he says, “but generally provide guidance to a committee and refer them to the relevant experts eg. Legal, engineering, etc who can advise them on what matters to consider in any dealings that they do have, so as to ultimately obtain a commercial outcome that’s in the best interests of all owners and the Owners Corporation.”

Counting the number of cranes dotting the Victorian skyline, as well as the number of proper ties in various stages of planning and constr uction, Mr Botha can see significant growth in the industry in increasing the volume of stock that will require professional management. “The challenge for the industr y is going to be having enough new people enter the industr y who have the right skill sets to be able to competently and professionally administer those additional Owners Cor porations/ proper ties that come online.”

Mr Botha uses the example of an Owners Corporation faced with a $100,000 building defect, which may be better served raising a levy of $2,000 from each owner and fixing the defect rather than going through the lengthy and expensive process of legal action. “To run any decent sized defect litigation matter through to the end,” Mr Botha says, “you are going to spend a significant sum of money in legal and expert witness costs in doing that, and I mean six figures plus. Not all of the costs are recoverable even in the event of a favourable outcome which in itself is never a certainty” “The constant challenge for us is up-skilling,” Mr Botha concludes. “As a professional manager you’re expected to know a little bit about ever ything, you’re expected to be a lawyer, a building consultant, but most impor tantly you’re expected to be a mediator and a peace-keeper.” Keepi ng up with the changes i n var ious legislation af fecti ng Ow ners Cor porations and k nowi ng how to apply them in each individual scenario is an on-goi ng challenge, especially with the i ndust r y evolvi ng i nto a more professional one. “We st r ive for the upmost level of professionalism and excellence in everythi ng that we do i n ser vici ng ou r clients, rather than a model where you just maximise the number of properties you’ve got u nder management.”

The Australian Business Executive - Q1 2016

Strata Data: High-Rise Living Editorial by Nicholas Paul Griffin

Marc Steen COO of the Terandi Group 54

Strata Data

s the main business in the Terandi group, Victoria and Adelaide-based body corporate management company Strata Data has nearly forty years of exper ience i n the rapidly g rowi ng st rat a i ndust r y. Australian Business Executive recently spoke with Marc Steen, COO of the Terandi Group, to learn more about the industry and Strata Data’s place within it.

Marc Steen

fter studying for his commerce and law degree, Mr Steen began his professional life immediately after graduation, starting work for a strategy consulting firm called Bain International.

“The main client group [for Trades Monitor] was strata management companies. 90% of our clients were strata managers. I used to go to all the strata conferences, the state conferences, the national conferences, so I know a lot of the people in the strata industry.”

Terandi Group

he Terandi g roup i ncor porates several other companies owned by Terry and Di Smith, Strata Data’s owners, who began Terandi together back in 1977. Those other companies are Rent All, Maintenance Matters and Credit Recovery Solutions.

Then followed a move to Europe and the completion of an MBA at the Insead Business School, just outside Paris, before a move back to Australia and New South Wales, where he worked for a number of years for Diageo at its head office in Bondi Junction.

“T here’s a nu mber of busi nesses that are par t of the Terandi Group,” Mr Steen says. “So Strata Data is the largest, and I guess was the first and is the focus, and Strata Data is a body corporate management business.”

Mr Steen held both strategy and marketing roles with Diageo before moving west to take up a position as general manager of South Australia and Northern Territory. In 2006, Mr Steen moved on from Diageo to start his own company, Trades Monitor.

Both Rent All, a property management company, and Maintenance Matters, which handles property maintenance and repair, operate exclusively in South Australia, whereas the main company, Strata Data, operates in Victoria and SA.

Trades Monitor turned out to be an extremely successful venture for Mr Steen, and was named by BRW as one of the ‘Fast 100 Growing Companies in Australia’. As a consequence of this success, the company was bought out in 2010 by NASDAQ-listed company Ebix. After the buy-out, Mr Steen stayed on with Ebix, continuing to assist the company. In 2015 he left to join Strata Data and the Terandi group. In several of his previous roles, Mr Steen had links to strata, making the move into body corporate management a relatively easy one. “With my family background, I’ve always been on the fringes of strata,” he tells us. “My dad, when I was born, was a strata manager. He was one of the first strata managers in New South Wales, and he set up one of the very first stratas in NSW.” Mr Steen’s father owned a business called Independent Property Reports, which took care of pre-purchase inspections for strata title properties. During university holidays, Mr Steen helped out at the company, gaining a wealth of valuable experience in the business, making strata management a natural progression from his previous roles.

Strata Data was formed at the same time as Terandi as a family business for Terry and Di Smith. The Terandi group focused on strata management to begin with, but over the following decades grew both organically and through acquisition. “As part of that growth, there was diversification into others areas. So, not only did the whole body corporate business grow, but that’s when the property management business was also started and the Maintenance Matters busi ness, and then the most recent addition, Credit Recovery Solutions, which started three years ago.” Terandi has experienced steady growth over those decades, creating the opportunity for the group’s biggest development, which came seven years ago, when the decision was made to take the business national, beginning in Victoria with the opening of an office in Melbourne. “That’s something we’re wanting to consolidate and grow,” Mr Steen stresses, “and once that gets to a scale that we feel is substantial and operating well on its own, we’ll then be looking at where to go next.”

The Australian Business Executive - Q1 2016

Strata Data

Rise of Strata

“Our model is a high-touch, high-service model,” Mr Steen says, “so we make sure that we are staffed up adequately to provide that service, particularly as we’re not the lowest cost provider and we don’t tr y to be; we tr y to provide a high level of service to our clients.”

he g row th of Victor ian st rat a is par ticularly impressive going into the new year, with the industry currently growing quicker than anywhere else in the cou nt r y, a fact M r Steen sees represented i n the development visible in the Melbourne skyline. “I went to a talk from Bernard Salt, the demographer. He’s a well known futurist, and he certainly has made a point that the strata industry is a very high growth industry. This is not specific about Victoria, but people are moving more towards apartment living.” State government development plans have changed from spreading cities out, which requires increased infrastructure, to building up, by adding more high-rise living, which is better for the environment. All around Australia this new approach to living is being employed. “There have been lots of stats that have been done and research to show that this is actually much better, as far as not having to knock down forests or take out grazing lands to spread out; if you build up, it’s actually a greener way to house people.” Strata Data currently supervises around 1,400 properties across South Australia and Victoria, meaning they work with roughly 20,000 single unit owners. This works out at an average of 13 or 14 units in each block. The strata industry in Victoria does not have a particularly good reputation when it comes to relationships between managers and owners, so what is it that makes Strata Data stand out from its competitors and retain the support of its clients?

The company has established a number of innovative and accessible methods for customers to ma ke cont act, including increased availability on the company website in the form of an instant chat widget, allowing problems to be addressed in real time. In addition, the company makes sure it encourages people to attend either committees or annual general meetings, to get involved in the running of the building, which Mr Steen admits is the best way to make sure clients are onside. “Most of the unhappy clients that we getand everyone has some unhappy clientsbut most of them are people who haven’t been involved, so they say ‘we’re not happy with X,Y and Z’, but it’s usually not us that they’re not happy with.”

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“It’s an interesting question, and I think Melbourne particularly, compared to South Australia, has got another level of complexity, which is a lot of people are investors, especially in the big city blocks, and a lot of them can be overseas investors.” Investors from other countries, particularly China, are now moving into Australian strata, meaning maintaining good relationships is even harder. Differences such as time zones, language barriers and an understanding of the business must all be successfully negotiated.

The Australian Business Executive - Q1 2016

Your Compliance Partners

Victorian strata growth is the fastest in the country

Quite often the issues arise from the sub-set of owners who make decisions for the apartment blockdecisions which Strata Data duly follows and enforcesmeaning the blame is often wrongly attributed to the strata manager. “What we try and encourage people to do who might not be happy,” Mr Steen says, “is to get on the committee, speak to people on the committee, come to the meetings, b e c a u s e we’r e not t he o ne s t h at a c t u a l ly m a ke t he decisions, we follow owner or committee instructions.” Usually, when people realise exactly how the process works and what they can do to inf luence proceedings, a higher level of satisfaction is provided for the client and a smoother working relationship reached.

Industry Issues

orking for a higher-end strata company operating in Victoria and SA, Mr Steen recognises the issues surrounding price competition. “There’s a lot of talk of competitive undercutting in the Melbourne market,” he says, “it’s hard for me to gauge, really, how that operates.” “We don’t operate at that end of the market. We don’t try to be price competitive and provide minimum service, so we’re not really operating at that end of the market that gets so affected by that, but certainly we hear a fair amount about the tough price competition.” The competition Strata Data sees most of is less about pricing and more about relationships with developers, where the costs involved with forming alliances can often be subject to a similar kind of undercutting. “There’s quite a bit of competition there. So that’s the new buildings, for developers who are bringing new stock onto the market, they get to appoint the first strata manager and obviously if you’ve got a relationship with them then that’s going to put you in a pretty good place.” 57

One of the main issues affecting the strata industry is new building defects

One of the main issues affecting the strata industry is that of defects in new buildings. Another is around buildings across the country as they begin to reach half a century or more of age, where the question of what to do with them is becoming increasingly important. “With building defects, there has been an issue,” Mr Steen says, “and particularly one of the well known ones is, there was a large building that caught on fire because of some material that was used on the building which was not fire safe.”

“If you’ve got an apartment block for a hundred people,” Mr Steen says, “to get approval from everyone can be quite difficult. Some people may not disapprove, they just may not even turn up or vote.” New South Wales has recently passed legislation stating that in order to knock down and rebuild an old building, only 75% owner agreement must be attained. This kind of legislation hasn’t been implemented in Victoria, meaning a significant issue still remains.

I n re spon se t o eve nt s l i ke t h is one, t he i ndu st r y is beginning to look at a number of buildings across the region which may need to have changes made to make t h e m f i r e s a fe a n d e n s u r e s u c h t r a g e d ie s a r e n o t repeated.

“I do think the Victorian strata industry is really well-run; it’s almost the model of the strata industry across the country, in my opinion. So the industry body, the SCA [ S t r a t a C o m m u n i t y A u s t r a l i a] , r u n s v e r y g o o d educational programs and has a very good management agreement, that is well used.”

The other issue is to do with the problems surrounding knocking down and rebuilding properties that are now rea ch i ng f if t y or si xt y yea r s of age, problem s exacerbated by the need for 100% approval from every owner in order to do so.

Mr Steen believes the SCA has done an excellent job of r u n n i ng t he i ndu st r y i n Vict or ia , by br i ng i ng t he industry together, educating and professionalising the industry, and making the public aware of what strata is all about.

The Australian Business Executive - Q1 2016

Markson Sparks! founder Max Markson 60

Max Markson: From Bournemouth to the Big Time Editorial by Nicholas Paul Griffin

arkson Sparks is Australia’s premier publicity, celebrity management and events organisation. Having started operations in 1982, the organisation is now regarded as one of the most innovative and successful publicity companies in Australia. The man behind the organisation’s huge success is founder Max Markson, who is responsible for bringing a number of global personalities to Australia. The Australian Business Executive recently secured an exclusive interview with Mr Markson to find out where it all began.

Behind the Spotlight

r Markson grew up around his father’s profession, high-diving, where he spent a lot of time watching and attending the water shows his father put on. At five years old he began operating the spotlight in the show, and struggling to stay awake to watch it all. “My Dad died when I was fifteen,” Mr Markson says. “I was away at boarding school, so I came home to live with my Mum in Bournemouth (UK), and I got a job as the spotlight operator [at a club] when I was sixteen, still going to school.” From there he began working at a club in Bournemouth that had recently stopped putting on cabaret acts. Mr Markson filled this performance gap by working with a friend to hire BBC Radio 1 DJs and pop groups to come to the club and play.

At age 21, Mr Markson visited Australia for a holiday, and never returned. After nearly being forced out of the country three times because he didn’t have a visa, he soon started to make important contacts that would help him forward his career. “A federal MP who I knew arranged it with a minister from immigration and I was allowed to stay in the country as a resident. At the time I did t-shirts for the federal election in 1977, for the Liberal and Labor parties.” Soon after becoming a resident, Mr Markson began promoting products being brought in from an importer, and after that opened up his own nightclub, The Zoo, where he was regarded as “the head zookeeper.” The Zoo saw a new personality appearing each week as guest DJ, a role filled by such stars as Brooke Shields, Evil Knievel, George Hamilton, and famous cricketers such as Geoffrey Boycott and Dennis Lillee. “Then I went and worked at 2WS for two years as their promotions manager,” Mr Markson adds, “and then I started Markson Sparks in 1982, just doing publicity, which we still do today, for major corporations and companies.” “Then we started managing celebrities and personalities, probably in 1990, and then we started doing events, and we’ve now done over 200 charity events and given over $40m to charity.” As part of this charity work, Mr Markson has hosted tours for politicians such as President Bill Clinton, Rudi Giuliani and Tony Blair, as well as bringing entertainment figures in the form of Arnold Schwarzenegger, Mike Tyson and Pele.

The Australian Business Executive - Q1 2016

Max Markson

Developing a Network

ne of the most interesting aspects of running an organisation like Markson Sparks is the vast amount of networking that needs to be done in order to secure the level of clients it has acquired, something which appears to come as second nature to Mr Markson. Mr Markson’s ethos is to read the papers, where everyday there is some knowledge to pick up that will help those networks to grow. In the 70s, Mr Markson used the old media to identify which personalities were in town on which dates and to approach them. “In 1979, when I opened my discotheque and my nightclub, I knew during the cricket season that the cricketers would be in town. So I’d work out when they were in, I’d ring them up in advance and try and reach out to them.” Before the advent of the internet, this reaching out needed to be done by phone or let ter, but mostly i nvolved contacting a personality’s manager to try and arrange a meeting and begin a relationship. At the beginning of the 21st century of course, developing these networks is far easier and more convenient, thanks to the internet and advanced technology, avenues Mr Markson continues to embrace and use to his considerable advantage. “If I meet someone,” he says, “I always put them in the Blackberry, and then in the iPhone. I’ve got about 6 or 7 thousand personal contacts, so I think that’s important. Nowadays, in terms of networking, social media is very important as well.” Mr Markson admits to being an early adaptor to Twitter, which he began using 7 or 8 years ago, having now amassed over 21k followers. Likewise, he relies on a Facebook prof ile of arou nd 4k and Li n ked I n of 5k followers to further build awareness and make contacts. “One of the things I do now, which again I think is important from a networking point of view, is I do an email out every few weeks–sometimes its weekly, sometimes its monthly–and I’ve got maybe 20k people on there.”

“And I promote whatever I’m doing and tell them what I’m doing, so that’s communicating with people–so if you want to network properly, communicate, and stay in communication, stay in touch with people.” T he sa me ca n be said for a ny busi ness t hat has a n existing network of clients that need to be ret ai ned. M r Markson believes the key is work i ng hard to keep hold of the clients that are al ready sig ned up, si nce it costs much more to t r y and f i nd new ones. “80% of your business comes from 20% of your clients, right? So, I think keeping your business is i mpor t ant, and look i ng af ter them, and I always say I answer ever y phone call. I have no qual ms about my phone nu mber bei ng out i n public.” A not he r big d i f fe r e n c e i n t he mo d e r n cl i m at e i s t he monetised st at us of celebr it y, and M r Markson ad m its t h at eve r y a p p e a r a n c e u s u a l ly c ome s w it h a hef t y fe e at t ached. It is a far cr y f rom the $50 0 paid to Brooke Shields i n 1979 for her appearance at T he Zoo. “A nd how did I reach her?” M r Markson says. “A g uy called Gene Pierson was r unning a record label, Laser Records, and she was f il m i ng Blue Lagoon, and he wanted her to come i n and record a record, and he said do you want to have her as g uest DJ?” T he money provided helped to f u nd the record, and all parties went away happy, going to show that havi ng a positive prof ile can ma ke it easier to meet cont acts. M r M a r k s o n wor k s o n t he b el ief t h at a ny b o d y i s a c c e s s i b l e i f t h e r i g h t l e v e l of c o m m i t m e n t t o f i ndi ng them is given. I n t he i nter net age, per sonalit ies a re even more accessible, and as Mr Markson points out, just look i ng onli ne can of t e n o p e n u p m a ny o p p or t u n it ie s t o f i nd them. All personalities have some kind of onli ne presence, and this is the easiest way to reach out to them. “For example, Barack Obama, who lives at the W hite House,” M r Markson explai ns. “David Cameron’s the Prime Minister of England, he lives at number 10 Dow n i ng S t r e e t … y o u k n o w, i t i s n’t h a r d . Wa r r e n B u f f e t , Berkshi re Hathaway–you’ll f i nd hi m, just look onli ne!”

The Australian Business Executive - Q1 2016

Max Markson

Taking Risks

n inevitable par t of the PR business is put ting money up f ront and tak ing r isks on br inging potentially u n k now n qualities to a cou nt r y. For ever y major personalit y that is booked, there will be some who are not g uaranteed to d raw the same k ind of crowd. “I think you’ve got to have a gut instinct about something,” M r Markson says. “If you’re going to br ing over someone who hasn’t been here before, that’s a good thing because it means it’s the f irst time they’ve been over here, so it lessens the r isk.” If cer tain appearances are going to cost a lot of money, then the r isk needs to be offset by f u r ther work-selling tickets, get ting sponsorship, f inding people to get involved to spread the r isk a lit tle wider. For M r Markson it is the same as any other business proposition. A good example is the Sou ndwave rock festival, which was cancelled this year af ter nearly a decade of life, leaving behind sig nif icant ticketing issues. M r Markson has worked with such festivals in the past, and k nows how diff icult the process can prove to be. “The ticket agents don’t put any thing up. The ticket agents collect the money and hold it u ntil af ter the show’s done. Once the show’s done, then they pay the money to the promotor. There’s some that don’t do th at , a nd t hey ju st g ive t he money st r a ig ht t o t he promotor.” This last method can cause sig nif icant problems, as the ticketing agencies don’t have the money any more, put ting the whole enter pr ise at r isk of falling victim t o ca nc el lat ion is s ue s s uch a s ex p e r ie nc e d by Sou ndwave. M r Markson ad mits that paying a speaker or g uest upf ront is the only way to ensu re success, and this is what he’s always done. All other ar rangements have proven u nsustainable, meaning par ting with a large amou nt of money up f ront is par for the cou rse.

“If it’s eight months away, I might give them 50% on signing the contract, and the balance a month before they come. But if I was going to go to another country I wouldn’t get on the plane and go without having the money in my bank account, why would you?” This is a fate that has befallen many promoters in the past, having announced an appearance for a certain personality, only for that appearance not to become a reality because the artist has yet to be paid. “You pay them, they’ll come,” Mr Markson says. “All those pop concerts where they say, ‘oh they’re not coming now’, it’s not because of the artists, it’s because the promoter hasn’t put the money down.” One of the most important elements of Markson Sparks’ business is making sure there is good media attention surrounding an event. Mr Markson insists the key to this is content, ensuring there is enough intrigue to get the media interested. “If you’ve got a good story, the media always wants it. When I look back at my career, and it’s still going, my relationship with the media was to give them the stories, just keep feeding the stories to them.” Although a press release for an event may reach a thousand people, Mr Markson believes the key is to pick up the phone to half a dozen select people and place the story wherever you want it to be placed. Although much of his work is in events and management, Mr Markson’s main business is publicity, which creates about 80% of his income. This will involve sitting down with the client, writing a proposal and setting the plan for an event, and then finally executing it. “The first thing I do is pick up the phone and start placing stories with journalists. You have to do that. It’s not something that I invented. Steve Jobs was doing it with Apple; when he’d launch a new project, he’d ring up Time or Newsweek and give them an exclusive story.” In addition to handling large tours for high-prof ile personalities, Mr Markson is perfectly aware of the benefit of working with smaller organisations, highlighted by h is cu r re nt proje ct handling PR for Gour met Life, a medium-sized grocery store in Edgecliff.

The Australian Business Executive - Q1 2016

Max Markson

“That’s what I do all day long,” he explains. “I work on the start up of a new app, or if it’s a new company that’s about to explode on the stock exchange, I’ll do PR for them, for their new products that are coming out.” Mr Markson looks as far back as when he helped first launch Reebok in Australia, which began as a small company selling trainers, and has since grown to such a significant size as to have signed a huge deal with the UFC. “[Reebok] was just two guys working out of a lounge room,” Mr Markson explains, “and we launched it. For the first three years there was no ad agency, it was just me doing publicity to get the brand name.” Mr Markson believes there are three key points to business success: persistence, enthusiasm and focus. With these three attributes, any potential challenge can be overcome. “If you can do that,” he says, “you’ll get through the ups and downs of business and of life.”

A Story to Tell

n his years r u n n i ng Markson Sparks, M r Markson has been i nst r u ment al i n ar rangi ng for some well k now n n a me s t o v i sit Au s t r a l ia . Pe r h a p s t he biggest of these was President Bill Cli nton, who M r Ma rkson remembers as bei ng “fant astic”. “T hat was a r isk,” he says of the f i rst Cli nton tou r. “But I made money from it, and I made a lot of money for char it y as well. I n 20 01, the f i rst event was the 8 t h o f S e p t e m b e r a nd we cle a r e d $1. 2m for t he children’s hospital at West mead, which was fant ast ic.” President Clinton retur ned in Febr uar y 2002, t ou r i ng hospit als and char ities i n Per th, Adelaide, Melbou r ne, Br isbane and Syd ney. Once agai n this r a i s e d a lot of mo ne y, m a k i ng it a n ex t r e mely wor thwhile r isk for M r Markson to t a ke. T he ot her side of t he busi ness is br i ng i ng over top celebrities, sometimes done on behalf of a Markson Sparks client, as in the case of Arnold Schwarzenegger, who came over to do a tour, coordinated and executed by Mr Markson.

O n e of t h e b e n ef i t s of t h e s e c el e b r i t y t o u r s fo r M r Ma rk son is t he wealt h of st or ie s he ha s t o t el l about some ve r y fa mou s na me s, a nd he regale s u s w it h t he memor y of one of t he best n ig hts of my life d o i n g k a r a oke w it h P re side nt Cl i nt on.” M r M a r k s o n h a s n o p r o bl e m r e m e m b e r i n g t h e n u m b e r s t h e t wo p e r fo r m e d t o g e t h e r t h a t n ig h t , before goi ng on to fondly recall the time he t rained with Schwa r ze negge r, a s wel l a s sha r i ng a st or y about Tony Blai r re m i n isci ng about me et i ng Fidel Ca st ro. M r Ma rk son t el ls of how i nt e re st i ng it ha s be e n t o spe nd t i me w it h some of t he most i n f lue nt ial pe ople of ou r t i me, lea r n i ng a bit more about t he m a nd hea r i ng t he m spea k of t hei r l ive s, a nd t he hu m il it y so ma ny of t he m d isplay. “I host e d Nelson Ma ndela i n 20 0 0, a nd we d id t wo eve nt s i n t wo d ays, a nd at t he d i n ne r eve nt he ca me on a nd spoke a nd we ha d i n t he aud ie nce P r i me M i n ist e r s Fr a se r, W h itla m , Hawke, a nd t he re wa s t he P rem ie r at t he t i me, Bob Ca r r.” I n h is spe e ch , Ma ndela said t hat he wou ld nor mal ly on ly spea k for t e n m i nut e s, a dd i ng t hat t he pe ople i n t he r o o m w e r e s o i m p o r t a n t t h a t h e w o u l d s t a y a l i t t l e l o n g e r, d e m o n s t r a t i n g t h e g r e a t h u m i l i t y h e i s of t e n reme mbe red for. “ T h e o t h e r o n e w h o’s t h a t h u m b l e i s S i r E d m u n d H i l la r y, who wa s t he f i r st ma n t o cl i mb Eve re st. I did about half a dozen events with h i m, a nd I re membe r on t he 50 t h a n n ive r sa r y of whe n he cl i mbe d Eve re st , we d id f o u r e v e n t s i n S y d n e y, M e l b o u r n e , B r i s b a n e a n d Adelaide.” M r H i l la r y t old t he st or y of h is ret u r n f rom Ne pal, where he had recently been hospit alised. On his ret u r n t o Auck la nd , he re ceive d a let t e r f rom a ma n i n De s Moines, Iowa, saying that he was pleased to hear of H i l la r y’s sick ne ss, a s he t houg ht he ha d d ied yea r s ea rl ie r. M r Ma rk son re cou nt s t he se t ale s w it h t he wa r m joy of me mor y r u n n i ng t h roug h h is word s, laug h i ng out loud at recollect ions of havi ng sha red g reat moments with some t r uly g reat people, clearly de r iv i ng sig n if ica nt plea su re f rom h is ma ny yea r s of work.

The Australian Business Executive - Q1 2016

Event Coverage: Money In Sport

When: November 17 & 18, 2015 Where: Jupiters Casino, Gold Coast Next Event: November 14 & 15, 2016

Popular personalities in attendance included Ricky Nixon and Max Markson, with top corporates including Twitter, Samsung, Chelsea FC, and Sydney FC to name a few.

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The Australian Business Executive - Q1 2016

Forescue Metals CEO Nev Power with Hockey Australia’s CEO Cam Vale (credit Dan Carson, DC Images)

Hockey Australia: A Model Citizen Editorial by Nicholas Paul Griffin

he Kookaburras and the Hockeyroos, Australia’s men’s and women’s hockey teams respectively, are both evidence of the consistent high performance of the game in the country. Cam Vale, CEO of Hockey Australia, wants this success to continue, as well as moving Australian hockey into the international arena and setting goals for financial development. Australian Busi ness Executive spoke to M r Vale recently about the organisation’s plans for improvement in 2016 and onwards. 66

Cam Vale

r Vale has been working in sport for almost sixteen years, having made his way through finance positions and into higher roles, such as a broader COO role in the AFL, before reaching the position of CEO at Hockey Australia.

The Australian Business Executive - Q1 2016

Hockey Australia

“The AFL background has certainly been a big part of that [development],” Mr Vale says, recognising the need to embrace a particular mentality in order to become a big part of any sporting community, not least an Australian one. “As I was saying to a new staff member the other day, sport is very much about the highs and lows, and they can be quite extreme, which can make the industry very exciting to work in at different times, and very tough to work in at other times.” M r Vale is of ten a sked about t he d if ference bet ween professional spor ts such as the AFL and those more Olympic sports like hockey. He admits that in many ways the disciplines are very similar, but with a few key differences. “Probably one of the main differences and learnings for me is that, when you come from a top-down funded sport like AFL, you’re funded on broadcast, entertainment value and fans, it is a different sporting-business model to one that’s funded in a large way, from grass-roots up, through our state bodies.”

Hockey Australia in particular is funded by the Australian Sports Commission (ASC), creating a business and funding model that is far more about performance than popularity and revenue generation. “Grass-roots participants are our fan base,” Mr Vale tells us, “and supporters in hockey are different to fans that follow a football club, who can love the sport as much but don’t actually play or get engaged.”

International Strategy

ver the two and a half years that Mr Vale has been working in hockey, he has recognised the enormous potential of what he describes as “a great sport”, and believes the game should be looking to grow significantly in the next few years.

The Australian Business Executive - Q1 2016

Hockey Australia

“In a lot of ways we should be one of the sports, not just in Australia, but internationally, that are ready to be the next big growth sport that we’re seeing… a traditional sport with maybe another version of the game that can enter into a real growth phase as part of our industry.”

The commercial target aims to achieve 50% of income that doesn’t come from the ASC going forward, a number that was at about 22% two and a half years ago. The final pillar aims to take the sport in Australia to the very top level.

Mr Vale likens this possibility to the growth of T20 in cricket, where a modified version of the original sport has been embraced with great enthusiasm by a whole new generation of fans ready to engage with it.

“They’re our four pillars,” Mr Vale explains, “but one st rateg y t hat suppor t s all fou r is what we call ou r International Strategy, and that includes a real focus on Asia. The focus on Asia probably falls into three or four key areas.”

On the international stage, hockey is beginning to see impressive growth as well as potential, with each continent embracing some form of the game. In South America, with Argentina, and across Europe in countries like England, Germany and France, the game is thriving.

Hockey Aust ralia recog n ises huge com mercial opportunities in moving into Asia, which are mostly around the hosting of events, as demonstrated in the success of having the Indian men’s team touring Australia for three years running.

“[Hockey’s big] in Asia, and has a very big presence through India and Pakistan and then, in the women’s game in particular with Japan, Korea and China emerging, and Malaysia… so they, with Australia and New Zealand, are probably the real strengths of the game.”

“This represents a huge commercial opportunity for Hockey Australia, creating broadcast and sponsorship and event incomes. Doing a deal with Malaysia is about that as well, they’re a very strong market commercially for us, but it’s about an area like grass-roots.”

Mr Vale explains how there are some more “bespoke” versions of the sport dotted around the globe. One of these is the women’s team in the United States, which has grown recently to be a top ten team. Another success story is South Africa, where the game is developing hugely.

The relationship with Malaysia sees Hockey Australia investigating ways to develop and utilise Hookin2Hockey (Australia’s grass-roots scheme) in an inter national c a p a c it y, b a s e d o n t h e p r og r a m’s s u c c e s s fo r t h e development of the game in Australia.

“Probably from a Hockey Australia perspective,” Mr Vale says, “like business and industry and government is now so aligned with this Asian Pacific Rim, if you like, that’s where Hockey Australia’s focus is, with countries like India.”

“That’s something that’s possible in Asia,” Mr Vale says, “but probably not possible in Europe. So, commercial focus is no doubt a big part. The second part [of the International Strategy], for us, is really about growing the game.”

Hockey Australia is currently developing partnerships with Malaysian and Singaporean hockey, both of which hugely benefit the sport’s profile in Australia. But Mr Vale insists the immediate interest still lies in “our friends and rivals over in New Zealand.”

T his growth will come about from Australia taking r e s p o n si bi l it y of its strong hockey infrastructure to drive the game through Asia. Both Malaysia and Singapore, particularly with the women’s teams, are still a little way off being major international forces in the sport.

Hockey Australia works strictly within an international strategy, which supports the four pillars of the organisation. Those pillars are high-performance and sustained success, growing participation, addressing commercial targets and gaining the status of a top 3 governed sport.

The signing of a Memorandum of Understanding (MOU) is used for Hockey Australia to develop relationships with Asian countries and form mutually beneficial partnerships to forward the regional and international status of the sport.

The high-performance pillar looks at achieving the goal of winning 12 out of 14 possible medals in key events in a five-year period, and in terms of participation growth, the aim is to double those actively involved with the sport to around 250,000.

“These countries have the ability, over the course of these MOUs, for us to be able to inf luence the game, through p a r t ic u l a rly c o a ch i n g a n d of f ic i a l s a n d s o m e h ig h -performance crossover, and really have these countries improving and developing.”

The Australian Business Executive - Q1 2016

Hockey Australia

For Hockey Aust r alia , it is becom i ng i ncreasi ngly important to be seen as a good “hockey corporate citizen”, a status which will see benefits flow into the country as well as out, giving Australia more influence internationally. “If you’re a country that’s leading and influencing success and good outcomes in some of your so-called rival countries, it can only strengthen your standing politically in the game, and they’re probably the two key reasons that we’ve entered into this International Strategy.” The third reason is that it ultimately helps the performance of Hockey Aust r alia , g iv i ng t hem excellent content organised with countries they want to be facing on a regular basis, as well as creating reciprocal arrangements by competing in major tournaments overseas. “The Indian example is a great one, where the Indian men touring Australia was a tremendous commercial opportunity for us, but the benefit for India is that we have, as part of the MOU, released our male athletes to compete in the Hockey India League for the next three years.” The India League is essential to the country’s commercial and high-performance aspirations and planning. The fact that Australia is now the highest represented country outside of India in the league helps the tournament to reach a higher level of performance. “In a lot of these cases,” Mr Vale says, “when you go down this path, they’re MOUs because you’re looking basically at mutually beneficial ways of helping each other, and at times we all bring different strengths to the table.” The relationship with Hockey India means Hockey Australia is able to secure a fantastic event and a key event-partner through one of the big event bodies in Australia, allowing it to put on a great spectacle to be broadcast not just nationally, but internationally as well. “There’s no doubt they’re a big draw card. They create a lot of economic activity for government, which is obviously a key driver, and exposure of a key Australian domestic market into India from a tourism and branding perspective is very high.” In addition to the commercial appeal of the event, this relationship helps to drum up sponsorship for the national teams and events, with the hope of appealing to some of the big multi-nationals in Australia looking for national and international exposure. 70

“It becomes a centrepiece, like so many sports need. Horseracing is a great example, where their business model around the Melbourne Cup and the major spring carnival sustains the whole industry. This event won’t sustain hockey, so to speak, but it will be a big, big driver for us to do other things that we would like to achieve over the next 3 to 4 years.” The TV deals for broadcasting these events are varied, incorporating both free-to-air and Foxtel in Australia, and the same in the international market. Hockey Australia controls the international TV rights to the event, providing it with a strong reach into Asia. Some of the markets in India are significant, providing audiences of around 10-15m for a domestic match, offering some huge numbers for Hockey Australia to look forward to, particularly if Pakistan joins the event to make it even more of a spectacle. “From an Australian perspective, hockey really hasn’t had a permanent broadcast footing for a long time. We’ve had mixed results, it’s fair to say, and we’re one of the higher watched sports for the Olympics and the Commonwealth Games, but because we haven’t had a sustained broadcast model… it’s very, very difficult to build a strong audience.” The bigger sports such as Big Bash Cricket are proving that it can be done, but benefit from a regular appointment for games, something which hockey has not had before. Mr Vale is hoping this event will signal the beginning of something similar for the sport. “This is the start, hopefully, of a week a year, there’ll be guaranteed coverage, it’ll be the same time, and then as we build the rest of our events around this one, it will hopefully open up greater broadcast opportunities.” Hockey already benefits from significant relationships with broadcasters, with networks such as ABC, Channel 7 and Foxtel having aired various games in the past, and Mr Vale is conf ident that a signif icant broadcast deal will be arranged for this event. “Ultimately,” Mr Vale says, “Asia and our international strategy is certainly very much about commercial. It’s about being a really good hockey citizen and leading the way internationally, and thirdly, for us, it’s about high-performance.”

The Australian Business Executive - Q1 2016

Kookaburras player Jamie Dwyer celebrates a goal (credit Grant Treeby, Treeby Images)

Corporate Governance

ne of the four pillars of Hockey Australia’s domestic policy looks towards a move away from such a high level of government subsidy for the sport, something Mr Vale admits is extremely important to the continued growth of the game. “That effectively means we would be 50% Australian Sports Commission,” he explains, “and 50% non-ASC. Two years ago, it would be roughly 75% ASC and about 25% commercial, so we clearly don’t want to lose our ASC funding, we would want that to increase.”

Mr Vale is clear that spor t needs to be commercially focused, creating a challenge for Olympic sports and those below the top-tier, which have been too commercially conservative in the past, struggling with certain issues such as lack of TV deals and exposure. “It’s easy to say all the reasons we shouldn’t be growing commercially, but you need to look at your business model and identify what does make sense, and we, obviously being a dual-gender sport, have been offered some great opportunities.” At the end of 2015, Hockey Australia benefitted from the involvement of Curtin University, which wanted to work with a dual-gender sport on research and innovation. This is a commercial partnership currently working very well for both parties.

The level of government funding is based largely on performance, and Mr Vale is clear about the fact that Hockey Australia does not want to cannibalise one to feed the other. It is about growing the non-ASC income and getting away from a model that it is mostly about winning.

Likewise, the Project Group, a Singapore-based company, was secured last year. It too wanted to get involved in hockey across two national teams and is currently building a profile in both Australia and Asia.

“We’re looking at the other areas where sports business needs to be: growing your events, growing your profile, growing your grass-roots and participation. Those are the things that drive and lead to commercial outcomes.”

“That’s where we want to be,” Mr Vale says. “So our government funding has traditionally hovered around the 75% mark, which sits at around $6-7m per annum, and we’ve been around $2-2.5m for non-ASC.”

The Australian Business Executive - Q1 2016

Hockey Australia

In a perfect world, Hockey Australia will look to increase commercial revenue to around a similar $7m mark to what it currently receives from the ASC, representing a massive increase, but one that is achievable and looks to be reached sometime before the end of 2017. Hockey Aust ralia is also look i ng to bolster it s posit ion by becom i ng a top 3 gover ned spor t, wh ich come s dow n t o a r a nge of self-a sse sse d c r it e r ia i nclud i ng f i na ncial st abilit y a nd complia nce w it h t he ASC cor por ate gover na nce st a nd a rd s. “We’ve been produci ng a prof it yea r i n a nd yea r out, a nd g row i ng ou r reser ves,” M r Vale explai ns. “A nd t h e A SC h ave a r a n ge of 2 0 + s t a n d a r d s t h a t t h e y believe all Aust r alia n spor t s should be meet i ng a nd exceed i ng.” These corporate standards include important barometers such a s hav i ng a boa rd t hat is 40% female, a h ig h st a nd a rd of re por t i ng of f i na ncial accou nt s a nd a h ig h level of gover na nce su r rou nd i ng t he boa rd a nd si m ila r processes.

“We also look at our standing internationally, how we’re received by ou r i nter nat ional gover n i ng body, t he Inter national Hockey Federation. But the best way to describe governance would be around the Au s t r a l i a n Sp o r t s C o m m i s s i o n’s b e n c h m a r k cr iter ia , wh ich t hey p r o d u c e a n nu a l ly t h r o u g h t h e Au s t r a l i a n Sp o r t s Performance Report.” There are a range of other smaller governance issues that are taken into consideration, including the engagement at state level in terms of aligning with state objectives. By t h e t i m e 2 018 i s r e a c h e d , M r Vale believes Hockey Australia will be very near the top. “To be honest,” he says, “we really don’t think there are too many sports that have the governance record that we have, and it does come down to the fact that this sport has not had the major negative issues so many other sports have had.” Mr Vale describes this as an intangible the organisation must take into account when moving for a top 3 place. Hockey’s record is exceptional in terms of managing gambling, poor athlete behaviour and other issues that can see a sport on the front pages for the wrong reasons. Through both the ASC and the Australian Institute of Sport (AIS), many great relationships have been formed which has seen hockey benefit from the experiences of other codes and sports. “I’ve found, in my time in sport, that the industry works really well informally, and being able to pick up the phone and ask a colleague about what their strategy or policy is around a crisis or an international travel policy or your benchmarking around financials, is great.” A lot of this networking involves very proactive conversations with colleagues, sharing confidential and sensitive information in a manner that is both responsible and actively beneficial to the growth of other sports. “In the AFL, even though you’re competing with other clubs, the business executives would look at ways of sharing good IP that basically allows us all to benefit from it. You hear the saying, it’s swings and roundabouts, and its very true in sport.” Mr Vale has found that giving good infor mation to somebody in another code or sport will be reciprocated at another time, when certain hurdles are hit that are new or require some further advice to navigate.

The Australian Business Executive - Q1 2016

Hockeyroos player Casey Sablowski in action (credit Grant Treeby, Treeby Images)

“You can ring your colleagues and really share information and learn off each other,” Mr Vale adds. “It certainly happens formally, but I think the real value at times is through the informal communication.”

Performance “

ne of the key things for us, high-performance wise, is that we are the only sport in this country that is equally a dual-gender, team-based s p o r t , t h a t b a sic a l ly h a s a centralised training and program.” Despite having all the hallmarks of the professional football codeslike centralised, full time programs the athletes in hockey are still at best semi-professional, relying on funding from many different quarters, including sometimes part-time employment. “It’s a really tough existence, if you’re in that middle ground of not being fully, professionally paid and not being in a true amateur or camps-based sport, so I think our sport at times gets overlooked.”

Mr Vale admits even the high level of integrity on and off the field can mean the sport gets overlooked, as a consistent expectation of performance has been established, meaning the teams can sometimes blend into the background. “It’s a fascinating part for me, as CEO, to see how often we’re just overlooked in issues we would hope we would have a higher profile when it comes to the discussion around gender balance in sport, I don’t think anyone can match our record.” The athlete agreement between the Kookaburras and the Hockeyroos is strong and unprecedented. In addition, Hockey Australia already has a board made up of six women and four men, and an executive team including four women. “It’s not because we force these things,” Mr Vale concludes, “it’s just the nature of our sport is so balanced. It sums us up in a lot of ways, and the ingredients of our business model are very good.” “Our challenge is to keep finding ways to turn that into something that represents a really high commercial and business outcome that rewards our athletes, that rewards grass-roots and supports what we do.”

The Australian Business Executive - Q1 2016

Monash IVF CEO James Thiedeman

Monash IVF: Growing Families Editorial by Nicholas Paul Griffin

Monash IVF

ith 1 in every 6 Australian couples having trouble conceiving children, the demand for IVF treatment in the country is growing significantly. Melbourne-based healthcare organisation Monash IVF Group, as one of the earliest pioneers of treatment in the country and the world, continues to innovate and investigate methods for providing safe, effective assisted reproductive treatment for those unable to conceive naturally.

James Thiedeman “

Over the years the demand for healthcare services in Australia, as tends to be the case with developed countries, has continued to grow at a rate generally far exceeding the expenditure being put into the public delivery of services. “Technology continues to have quite a profound effect on healthcare delivery,” Mr. Thiedeman adds, “particularly our ability to intervene and treat and manage diseases which in decades gone by we didn’t have the capacity to do.” This increase in technological innovation has had a clear effect on the escalating costs of healthcare delivery in the country. “It’s wonderful for patients and consumers who benefit from improved clinical outcomes; the challenge is how we continue to underwrite and fund these services.”

’m what you might call a career healthcare manager,” says group CEO and Managing Director James Thiedeman. “I started my career in healthcare over twenty-five years ago now, and I went into healthcare after completing a Bachelor of Business degree in Health Administration.”

Mr. Thiedeman believes the pathway forward is to make better use of the country’s broad spectrum of providers available to patients, suggesting that this will likely see a greater move towards the use of private healthcare services.

After completing his degree, Mr. Thiedeman was lucky enough to move into a policy and planning position with the Queensland Department of Health.

The Birth of IVF

“It was a period in time when the Queensland government was looking to put in place a more rational model for funding its hospitals,” he explains, “and it was going through a significant ideological transition.”

The government was moving away from a historical cost-plus funding model, and towards funding its hospitals on the basis of their outputs. Mr. Thiedeman’s early career was therefore primarily based in the policy side of health service delivery.

“Monash IVF really had its genesis with two visionaries,” Mr. Thiedeman explains, “Professor Carl Wood, who has since passed away… and Professor Alan Trounson… along with some very dedicated support people.”

“It was a period in time where healthcare in Australia was going through something of a transformation,” he explains, “and some of the well-trodden improvement pathways of other service sectors… were finding their way into healthcare.”

Professor Wood and Professor Trounson were responsible for innovating, researching and investigating some quite profound approaches to dealing with conception in the laboratory.

n the early 1970s, a group of well-regarded and inquisitive doctors, scientists and nurses began to look at the impact of infertility on couples’ lives, and started investigating how treatment options could help more of these couples conceive.

The benefit of being involved with Queensland Health was the chance to work with a large network of health services, and Mr. Thiedeman found himself witness to a period of large cultural change within the organisation and healthcare in general.

At the time Melbourne was a hotbed of activity in the scientific community. Though work continued around the globe to develop the science, Victoria is where it truly began in this country, leading to the team achieving the world’s first IVF pregnancy in 1973.

“I think that gave me an insight into what an exciting sector healthcare could be, but also some of the challenges associated with working with a range of different professional groups— doctors, nurses, allied health professionals and healthcare administrators, all trying to move them in a shared direction.”

“Since that time the company has been at the forefront of fertility care, and there are a whole range of both Australian and world firsts which were achieved by Monash IVF during those heady 15-20 years after the team achieved that pregnancy in 1973.”

The Australian Business Executive - Q1 2016

Monash IVF

The technology itself was very new at the time, and quite esoteric, understood by just a small number of people around the world. In that respect, it was unlikely that the idea of Intellectual Property was in the mind of those pushing this innovation.

“The way it works in the IVF process is, rather than one egg being produced by the woman, we use hormones to stimulate anywhere between about 8 and 15 eggs, and those eggs are then surgically collected from the patient.”

“The approach and the research they were doing and the clinical technology they were driving was moving so quickly,” Mr. Thiedeman explains. “That IP effectively was sitting in the heads of the team who were working on the new technology.”

A pick-up needle is inserted trans-vaginally, into the ovaries, where the eggs are effectively sucked out, before being transferred into a laboratory where the sperm is either left to fertilise or, if needs be, given a helping hand.

It was probably not until recently in fact, perhaps within the last ten or fifteen years, that the notion of trademarking or protecting some of the constituent processes of In Vitro Fertilisation was first seriously considered.

“We use something called ICSI—which is intracytoplasmatic sperm injection—where we take a single sperm and, using a very, very small needle, we actually inject it into each of the eggs, and that gives generally a higher chance of that egg fertilising.”

“Over the forty years or so that we have been providing care, we’ve been very much at the forefront of both clinical innovation but also delivering the best outcomes for our patients, and when we talk about outcomes, we talk about pregnancy success rates.”

Once fertilisation has occurred, the embryo is grown for five days in the laboratory, before one of those embryos is transferred back into the woman’s uterus. There is also the opportunity of preserving the remaining embryos that weren’t transferred.

Monash IVF remains an industry leader in terms of its pregnancy success rate, which Mr. Thiedeman stresses is the main goal, but the organisation also continues to explore new technologies it hopes will dramatically improve the treatment process. “In the last several years, we’ve embraced something called Pre-implantation Genetic Screening [PGS],” Mr. Thiedeman says, “a technology… that allows us to peer into the actual DNA of the embryos that are created through the IVF process.”

“We only put one embryo back,” Mr. Thiedeman says. “As you can imagine, if you put more than one embryo back, you get more than one baby. So the extra embryos we can freeze, and they basically go into suspended animation.” If it’s discovered later on that the patient is not pregnant after the transfer of that single embryo, they can return at a later date, when one of the frozen embryos can be thawed and transferred to the uterus in order to try again.

Steady Growth

PGS allows for the selection of an embryo most balanced in its chromosomes, and to move forward with the knowledge that those embryos are more likely to carry through to a full term pregnancy. “What that does then,” Mr. Thiedeman explains, “is give our patients a quicker path to achieving that pregnancy through a single embryo transfer, and that’s pretty important, as you can imagine.” Considering the substantial cost involved in IVF treatment, as well as the fact that the process itself can be uncomfortable for some, it stands to reason that the more expeditiously the process can be completed, the more beneficial it is to the patient. “In a normal ovulation cycle, a woman will produce one egg, and in spontaneous conception or natural conception… that egg gets fertilized within the woman’s body, an embryo implants in the uterus, and nine months later you have a wailing baby.” 76

“

e’re up to 22 clinics now,” Mr. Thiedeman says, when asked about the company’s growth, “and we also have 17 women’s imaging practices. Essentially what happened was, in the early days, the reputation of the organisation spread far and wide.” Additional doctors sought to become part of the organisation, prompting the group to work with those new doctors, training them in IVF treatment, and essentially helping them become part of the Monash IVF Group. “The organisation expanded, first in Victoria, and we opened clinics in Richmond and then in regional parts of Victoria. We then moved up into Queensland and opened clinics up there.”

The Australian Business Executive - Q1 2016

Monash IVF listed on the ASX in June 2014

More recently the organisation has acquired a number of independent clinics and brought them into the network, allowing them to grow into South Australia and New South Wales, as well opening new clinics in Darwin.

“A year and half ago we acquired a clinic called Next Generation Fertility, which operates out of the western suburbs in Sydney, in Parramatta, so we’ve retained that brand… we then say it’s a part of Monash IVF Group as a sub-brand.”

“We have an affiliation with a clinic in Canberra as well, so we have a very strong network, a strong footprint of clinics up and down the Eastern Seaboard, and about two years ago we acquired a clinic in Kuala Lumpur in Malaysia.”

In June of 2015 the organisation acquired a network of women’s imaging practices called Sydney Ultrasound for Women (SUFW), as part of a strategy to broaden the services it offers its patients.

This latest international acquisition was part of the organisation’s broader strategy to begin taking its services into South East Asia.

“For many years we have operated a women’s imaging network here in Victoria,” Mr. Thiedeman says, “called Monash Ultrasound for Women, and what that allows us to do is provide a more holistic service to our IVF patients.”

“Our growth has been through either starting up our own clinics,” Mr. Thiedeman tells us, “or 100% acquiring existing clinics, and then bringing them into the broader group. In some instances we have re-branded the acquired clinic.”

Part of the IVF process involves some monitoring and scanning of how the eggs are developing in the patient, and having its own imaging practice allows the organisation to achieve some synergy between the different stages of the process.

In situations where the clinic has an existing reputation or strong brand credibility, the organisation has retained the brand and begun to market the clinic as being a part of the wider Monash IVF Group.

“Once our patients achieve a pregnancy, and we pass them onto the obstetrician for them to manage their period of confinement, we then are able to offer them monitoring over the course of their pregnancy through our ultrasound service here in Victoria.”

The Australian Business Executive - Q1 2016

Monash IVF

This union, in terms of working with patients and delivering care all the way through pregnancy, has been priceless for the organisation. When the opportunity arose to purchase SUFW, it immediately seemed like a good fit to continue to drive synergies. “Also, broadening our income base to outside, solely IVF services. Sydney Ultrasound for Women has a long history of providing high quality care and high quality management of patients through their pregnancy, so it was an excellent cultural fit.” Additionally, the acquisition offered further scale in Sydney, where the group now has a fledgling operation of three IVF clinics, as well as one in Albury NSW. The acquisition of SUFW was therefore an opportunity to bolster its geographic footprint.

The Future “

ertainly one of the key drivers of demand for IVF services is this shift in the age of women having their first child… this is happening across most developed countries, and in Australia we’re seeing the age of first child for women shift from the mid-20s to close to age 31.” Chronological age is one of the single most important determinants of a woman’s fertility. 1 in 4 of Monash IVF’s patients are 40 or over, and though not all expecting their first child, many are conceiving for the first time at over 40 years of age. “So, what we see is, as people are leaving this decision to have kids until later in life, many of them unfortunately are struggling to conceive naturally, and heads are turning to IVF to start that family.” One of the most telling statistics is that 1 in 6 couples in Australia have issues conceiving organically, followed by the fact that one child in every classroom across the country is now an IVF child.

Medicare contributes about 70% of this figure, meaning the cost for a patient is around $3-3.5k, making IVF very affordable in Australia, particularly when compared with other jurisdictions such as the US or UK, where it can be 2 or 3 times the cost. In 2014 the organisation opted to list with the ASX, a decision driven by a number of factors, but perhaps most prominently the listing of one of its competitors the previous year, which gave an insight into how successful the process could be. “At the time… we were majority owned by a private equity firm, called Ironbridge Capital, and Ironbridge was five or so years into its ownership period… and typically that’s the trigger point that private equity firms look to exit their investment.” Given the financial environment at the time, and the way in which the capital markets were receiving floats, listing the company was deemed by Ironbridge as the most appropriate path to go down, as opposed to a trade sale. “One of the key aspects of becoming a listed company that we’ve noticed as an organisation is the additional reporting and governance requirements, given we now have a myriad of different shareholders and significantly more transparency.” This increased level of transparency and external reporting creates some internal challenges, but has also been very positive for the organisation, encouraging it to look deeper into a number of issues, such as risk management, and how they work across the organisation. “[It’s] probably forced us to be even more pragmatic about how we run the organisation and report on performance and report on outcomes, so in that respect it’s been a very positive transition.” With its extra responsibility as a listed company, and the continuing needs of couples across Australia for innovative, effective methods of in vitro procreation, the wheels of the Monash IVF Group vehicle appear to have a lot more spinning to do yet.

“So IVF has become quite pervasive in Australia,” Mr. Thiedeman says. “The other thing we’re lucky to have in Australia is a reasonably generous government subsidisation scheme via Medicare.”

“From a personal perspective,” Mr. Thiedeman concludes, “it’s certainly an extremely rewarding organisation to work with. There aren’t too many organisations that you can go to work everyday and know you’re doing something so special.”

“What Medicare does is contribute a significant portion of the cost of going through IVF, so that makes it more affordable for the community. Broadly speaking, the cost of what we call an IVF cycle is about $10,000.”

“It’s a very special group of people, all who share that vision and that view of wanting to do everything we can for our patients, and that’s pretty energising as a CEO of an organisation, working with such a committed team.”

The Australian Business Executive - Q1 2016

Monash IVF sponsored Brayden Hogan to compete in the 2013 World Sport Stacking Championships in Orlando, USA 79

International Short Breaks: New Zealand’s North Island

ometimes you need to get away. If you’re a busy professional though, taking more than a few days out of the office can be difficult to do. Luckily, you don’t have to travel far to access the exotic. For Australians, New Zealand offers reprieve from our climate with cooler weather, making it an excellent destination for those who want something a little different. With a flying time around three hours from Sydney to Auckland, the North Island offers the perfect short break that feels like a world away. The North Island has a population of just over 3.5 million, with Auckland being its largest city at just shy of 1.5 million inhabitants. A modern, clean and picturesque harbour city sharing visual similarities with that of Sydney and Vancouver. With only a little time, you can still experience the best that New Zealand has to offer. In this edition’s travel feature we spent only four days accessing the North with an itinerary that looked liked this: Night 1: Auckland Night 2: Waiheke Island Night 3: Bay of Islands Night 4: Auckland

Photo Credit: Julian Apse 81

New Zealand’s North Island

Auckland

Arriving on Waiheke Island you’ll feel it’s its own unique nat ion w it h a w ide ra nge of alter nat ive resident ial architecture, wineries and art galleries.

ur first night in New Zealand was at the centrally located Hilton Auckland in the Quay area. Built on a wharf with fantastic sea views, they offer 165 rooms with views of the Waitemata Harbour from both the balcony and decking areas. The hotel also offers a fitness center, and meeting space that can accommodate for up to 700 guests across seven meeting and banquet rooms. Their restaurant FISH also boasts New Zealand celebrity chef Gareth Stewart.

The first stop was our accommodation at The Boatshed. One of the island’s premium five star boutique options, providing a luxurious, down to ear th offering with stunning views of the nearby beaches from its location on the hills. With a casual and elegant atmosphere The Boatshed offers a five course meal served with local wines as well as a selection of home grown vegetables picked from their own garden.

Its proximity meant we were immediately able to access the heart of the city by foot, and even on a tight schedule we took in a range of activities including the Auckland Art Gallery, Auckland War Memorial Museum, New Zealand Maritime Museum, National Museum of the Royal New Zealand Navy, and the Museum of Transport and Technology. Dining options are immense in the CBD including the popular viaduct area.

Waiheke Island

uckland offers two options to access Waiheke Island by ferry including one centrally located in Wynyard Quarter. From here, the Sealink ferry will deliver you to the island in a little over an hour.

The rooms also provide louvered shutters - perfect to open up to the sea views while enjoying complimentary port by the fireplace. There are a number of tour operators available, but we opted to use our rental vehicle to ensure we had the f lexibility to view as much of the island as possible. The island is divided into two areas with one side featuring the gorgeous town village with its galleries, and the other side preserved and showcasing the nature on the island. If you opt to rent a vehicle, you’ll never be far from its white sand beaches, or secluded lookout points. There are a number of vineyards you can take in during you r st ay w it h ma ny of t hem prov id i ng a sense of seclusion and tranquility that can be elusive to find on other holidays. In addition to the many opportunities for wine tasting, Waiheke Island is home to over 100 artists offering a range of galleries to visit, and a perfect souvenir for art aficionados. If you have the opportunity for a longer stay, there are many other activities available including diving, fishing and kayaking to name just a few.

Auckland Harbour 84

The Australian Business Executive - Q1 2016

New Zealand’s North Island

Bay of Islands

Offering a truly classic feel with its colonial history, The Duke features waterfront views of the Bay perfect to watch the sunsets with locally produced wine and beers. It features a popular restaurant for dining, and its corporate opportunities can support up to 150 guests in The Duke’s grand ballroom.

aking the ferry back to Auckland, we continued our short break taking the highway northbound up to Bay of Islands. Depending upon the time you have available, the scenic drive can be a tight squeeze as you’ll need to allow four hours if you choose to use the byway to take in the longer coast road to the town of Russell. Alternatively, visitors can also access the car ferry between Okiato and Opua into town. The region has an interesting past, with Bay of Islands being the first area in New Zealand to be settled by Europeans. For many visitors, the small town of Russell acts as the entrance to Bay of Islands. Originally known as the “Hell Hole of the Pacific”, Russell features New Zealand’s first church, Christ Church, which had received funding from the one and only Charles Darwin. With its 144 islands, Bay of Islands is one of the most popular fishing, sailing and tourist destinations in the country, and has been renowned internationally for its big-game fishing and dolphin watching. There are many well-maintained walking tracks providing breathtaking views throughout the islands, with a range of tourism providers offering boat trips and a number of festivals throughout the year. When staying in Russell consider The Duke of Marlborough Hotel. Built in 1827 the hotel was the country’s first licensed venue.

Return to Auckland During the drive back to Auckland you’re reminded it’s one of the world’s most liveable cities, welcomed by the harbour and the city’s appropriate nickname, “City of Sails”. We made our way to the Sofitel Auckland Viaduct Harbour, checking in to their 5-star accommodation that provides a unique luxury experience with a modern feel. Offering 171 rooms with 8 suites, the location is slightly out of the CBD but makes up for it with its close proximity to Wynyard Quarter featuring many of the best restaurants and bars. Our day was spent taking a tour through the Domain and some shopping through the commercial area of Queen Street in the city. In the evening we enjoyed a wonderful dinner in Sofitel’s Lava restaurant. A terrific dining experience along the viaducts, we recommend matching some of NZ’s great wine with their fresh oysters. We enjoyed a few drinks at the popular bars in the Quarter before returning to our room for an early flight back to Sydney.

Photo Credt Chris McLennan 86

The Australian Business Executive - Q1 2016

Short Breaks: Australiaâ&#x20AC;&#x2122;s Red Centre

Photo Credit: Travel NT

The Australian Business Executive - Q1 2016

Australia’s Red Centre

his edition’s domestic short breaks feature examines the untouched beauty of Australia’s red centre.

Flying into Ayers Rock Airport you’ll realise just how remote you are, the airport acting as the centre of civilisation. The nearby accommodation offers luxury, mid-range, and even camping options for the more adventurous travellers. You’ll only need a couple of days to see Uluru, but if you want to truly take it all in, there’s much more that can be done. Here’s the best attractions in the region.

Uluru Catch the sunrise & sunsets, but be warned the early starts may make you want to nap during the day. Most of the hikes shut down in the morning so you’ll need to be at Uluru by 6am to see the sunrise, then start your trek before they close the tracks on hotter days. Kata Tjuta It’s almost like watching something out of an old Western, but more impressive. You’ll need to allow some extra time to reach Kata Tjuta from the resort as it can take up to an hour to drive. Luckily there’s a range of walking trails to uncover and it’s worth the trip.

The Australian Business Executive - Q1 2016

Photo Credit: Travel NT

The Australian Business Executive - Q1 2016

Alice Springs As the closest urban area to Uluru, Alice Springs is still a six hour drive away. If you only have a few days to spare, we wouldn’t recommend the drive, as it will surely take up most of your free time. If you do have the time, there will be plenty of chances to see the glory of the Outback.

Kings Canyon You’ll want a vehicle to get from Uluru to Kings Canyon as it’s a steady four hour trip. During the drive, we recommend pulling over along the highway to take in the views of Mount Connor. When you reach Kings Canyon the trek around the rim take a few hours but provides some amazing views and the opportunity to descend into the canyon.

No matter how you wish to do your Outback trip, there are a number of tourism options that will cater to your tastes including camel, helicopter, motorcycle and bus tours to take in the stunning views.

The Australian Business Executive - Q1 2016