The burgeoning trend of Executive Coaching in Australia is tapping in to previously unrecognised levels of personal development for business people. No longer must career-focused business people wait patiently for their opportunities to become executives.
The trend taps into the new business need for mental toughness, an area of strength identified by psychologists who believes that it is no longer enough for business leaders to be merely resilient.
Mental toughness helps individuals focus on making things happen, without being distracted by their own or other peoples’ emotions.These individuals are generally more engaged, more positive and exhibit a “can do” attitude.
Mental toughness can be measured using the MTQ48, a reliable psychometric tool which is quick and easy to complete and provides a profile of overall mental toughness, as well as providing scores for a number of other characteristics.
This is where Executive Coaching comes in, a process which helps executives focus on their own individual traits. Coaching is most successful when undertaken as a personal project and not necessarily as a business requirement.
The best candidates are those looking for the next stage in career development, those willing to take charge of their own careers going forward. These kinds of people will benefit tremendously from a coaching setup in terms of personal development.
It is now fairly common across Australia for CEOs to have a coach as part of their own personal development, but the growing trend is seeing people earlier in their career paths with aspirations to get to executive level engaging in some form of coaching.
Many people at this stage in their development would once have been expected to wait until they reached a certain level before being offered coaching in a professional capacity by their company, but are now taking matters into their own hands.
A coach can be equally useful for these people as they are for a Chief Executive. They will often act as a sounding board for ideas, to offer support in dealing with roadblocks and challenges and to help navigate the next career step.
First and foremost, Executive Coaching is not comparable to therapy, or a relationship where the coach tells the client how to go about doing things. It is more commonly an equally supportive and challenging relationship.
In an Executive Coaching relationship, the client is the expert, not the coach. A coach will not know all the details of what a client needs to reach their particular goals, and is present only to offer support and expertise in helping those goals be achieved.
Unlike a relationship with a therapist, the results from coaching can often happen very quickly. Most importantly, coaching is about looking forward to the future rather than assessing past failures.
An Executive Coach provides a confidential thinking space which can prove hugely beneficial to a client. It is usually the case that the more senior the client, the more benefit they gain from the process.
This is often a response to the amount of time available for a coach to just listen, something which is often a rare luxury for executives. In addition, the asking of questions helps clients mobilise their inner resources and solve their own problems.
The key is finding the perfect balance between support and challenge, nurturing clients to solve problems and meet goals whilst at the same time pushing them to better themselves in as many ways as possible.
There are certain requirements one should be looking for in a coach that will help executives reach their maximum potential. Probably the most important is for someone with a strong track record in business.
In addition, somebody who has an approach which is designed to support and guide rather than lecture and tell is essential. The best kind of coach will be there as a nurturing presence, encouraging others to find their own answers to problems.
Equally, a good coach will be interested in collaborating with their clients, forming a partnership that will ultimately help executives build successful foundations to set them up for further career development.
The job of a coach is to work with people to establish a personal vision for themselves, developing goals and actions which will ultimately help flesh and out and finally to deliver that vision.
In the same way corporations spend time developing visions and working towards achieving them, prospective executives should look at themselves as being their own CEO, and work towards delivering the same success as a company would.
There is no doubt that Executive Coaching represents a huge investment of time. Results show that the investment put in is resoundingly worthwhile, with typically 5-7 times of the initial investment returned.
It is little wonder then that many more people are choosing Executive Coaching as a way of forwarding their careers and fulfilling their business goals. The hope is that it will improve Australian business and the economy for future generations.
There is a familiar myth emerging in Canberra and in many other parts of the nation that seeks to frame small business and big business as natural enemies. It is both unhelpful and damaging; we are better served by co-operation rather than conflict.
The narrative is politically easy. For politicians and ideologues who oppose moves to enhance economic growth, it is the big end of town versus everyone else.
This David and Goliath narrative might be politically expedient but it isn’t borne out in the reality of Australia’s dynamic, trade-driven economy.
In fact, together business across the country employ 10 million of the 12 million working Australians. Around 45% of these jobs are in small enterprises with 20 or fewer employees, while the other 55% are in medium and larger businesses.
The private sector itself, that is the business community, generates 80% of Australia’s economic output.
The real story here is one of interdependence. Smaller businesses need big business and vice versa. It’s a complex ecosystem in which each member plays its part.
Some businesses are naturally smaller, catering to local niche markets while larger business that forms the backbone of industries like mining and manufacturing, serve large global markets and require large capital investments.
Small businesses that want to take advantage of major emerging export markets often need to partner with bigger companies.
Each of these businesses play to their own strengths – whether that is specialized knowledge, skills or processes. Businesses enhance their own competitiveness by sourcing the intermediate products and services they need from each other.
For this reason, where the system is not functioning as well as it might the best solutions will be collaborative and flexible – allowing individuals the capacity to find solutions that work for their specific needs.
That’s exactly what the Business Council and the Council of Small Business have done by launching the Australian Supplier Payment Code, which will see some of Australia’s largest companies committed to fair payment times for small suppliers.
Despite payment times already becoming shorter across the economy, larger businesses understood that progress needed to be faster. So, businesses came together to develop the code which provides for fair payment times but also for the flexibility needed to meet the demands of each specific business.
That means that while businesses are committed to paying correct invoices within 30 days, they are also free to come to agreed terms that work for both the organisations involved.
Signatories are also pledging to work with their suppliers to innovate and institute newer, more efficient invoicing the methods – gone are the days of the carbon paper invoice book.
This industry-led initiative is already having an impact, with over 50 companies signing, representing business revenue exceeding $370 billion. These are some of Australia’s most prominent companies including the big four banks, Qantas and Virgin Australia, BHP and Rio Tinto, just to name a few. The voluntary approach has also attracted the commitment of some local councils, providing benefits to small and large business providers alike.
Of course, there were some whose first call was for heavy-handed government regulation, but in truth, this option would have been costly, and may not even have worked.
More measured voices know that this kind of blunt intervention is fraught, all too often have unintended consequences and depriving businesses, large and small, of the flexibility they need.
There is far more to be gained by a culture of co-operation than one of compliance. Businesses have more to gain by working together to drive better outcomes, rather than being simply compelled to do the minimum.
Both the federal opposition and the Turnbull government should be commended for giving the industry led to approach the best chance at success.
This knee jerk resort to regulation is often aided by the faux David and Goliath myth, and it has led to myriad ill-conceived and, in some cases, absurd regulations.
The myth’s persistence is not only frustrating, but it has a considerably adverse impact on the development of economic and business policy in Australia.
Our nation sits adjacent to the increasingly competitive economies of Asia, and the signs for our future competitiveness are worrying.
This year was the first since 1996 that Australia was not included in the top-20 nations for competitiveness per the IMD World Competitiveness Centre. We are losing our edge to nations like Iceland.
The World Bank says that while we are still one of the easier countries for aspiring entrepreneurs to get started, we are lagging our smaller neighbors like New Zealand.
And, our tax system is far more difficult to navigate than that of other comparable nations.
Of course, where it serves a legitimate purpose and is proportionate and well targeted, regulation is sometimes necessary. But, for small and large businesses alike, ill-conceived regulation and red tape is not only stifling, it can seriously restrict their ability to take risks and grow.
The trouble with many regulations is that the hidden costs push up prices for goods and services Australians consume.
Not to mention some of these interventions which simply defy logic – why are hardware stores in Western Australia allowed to sell outdoor lights but not indoor lights before 11am?
Businesses hire workers in the expectation that they will contribute at least as much to the business as it costs to pay them. Every additional restriction or cost imposed on an enterprise – particularly a small one – limit their capacity to take that risk.
Our complex tax system and a wealth of inefficient regulation, however well-intentioned, adds to that risk.
While there has been some improvement in unemployment numbers recently, there is no question we need faster jobs growth.
To encourage that growth, we need to be careful when it comes to regulation, we must be systemic, evidence based and never create “set and forget” regulatory frameworks.
Fostering new investment and jobs growth is also reliant on the maintenance of a fair and internationally competitive tax system – one that recognizes that larger businesses generate most of Australia’s investment and jobs growth. The reality is that big businesses accounted for all net job creation in 2015-16, while small and medium businesses collectively shed more jobs than they created.
Here again, we see the David versus Goliath myth playing out in Canberra in the Senate’s reluctance to pass the government’s full Enterprise Tax Plan. This is a modest proposal to reduce the tax rate on company profits from 30 to 25 percent over the next decade.
While nobody would refuse tax cuts for small businesses, big business tax relief would make new investments in Australia more attractive to global capital markets, sucking in billions of investment dollars that would otherwise flow to other countries.
Ultimately we do not want to discourage small and medium businesses from expanding and becoming bigger businesses — a suburban cafe becomes a franchise, or a vineyard expands and exports its wines around the world.
But imposing higher tax rates on larger companies discourage smaller businesses from expanding their operations out of fear that they’ll overstep the $50 million thresholds and face a much higher tax bill. The same is true of other taxes and regulations that come into effect at various thresholds.
Business people of all stripes have rightly resisted playing the politicians’ David and Goliath game because it is ultimately self-defeating. An attack on one segment of the economy ultimately is an attack on them all.
The Business Council is committed to working with the entire business community to see issues like supplier payment times resolved efficiently and co-operatively and without unnecessary intervention. We are also loud advocates for a fairer tax system.
Most Australian’s know that a thriving business sector – small, medium and large – is the best opportunity for Australian workers.
A cottage-industry economy would leave workers unprotected from the tumult of global change. There’s no use hiding from this change, and history will not be kind to countries that fail to think big and aim high.
The opening of our economy under successive Labor and Coalition governments unleashed our country’s energy and creativity, enabling real incomes per person to grow by three-quarters over the past 30 years.
Building on this achievement will require a collective effort from all businesses, and a relentless focus from government on providing the best environment for them to succeed.
Jennifer Westacott is the CEO of the Business Council of Australia.
As Australia’s best connected and resourced Equipment Finance Broking firm, Quantum Business Finance’s market position guarantees preferential interest rates on the full range of equipment finance facilities from every major bank and specialised lender in the market.
Director David Gandolfo spoke recently with The Australian Business Executive to explain Quantum’s position as a partnership of experts in the field, valuing outcomes and delivering an incredibly high standard of finance broking.
After leaving university in the 1980s, Mr Gandolfo was drawn to asset finance after a conversation with Peter McAdam, one of the foremost brokers in Melbourne at the time. He immediately went on to get a graduate traineeship in the industry.
After a few years, Mr Gandolfo found himself doing business with Mr McAdam in his new role in the industry. By 1985 Mr McAdam had made an offer of employment, and his career in finance broking began.
Thirty years later, Mr Gandolfo has amassed vast experience in asset finance. This experience has led to his roles as President of Commercial Asset Finance Brokers of Australia (CAFBA) and the Deputy Chair for the Council of Small Business.
“I’m very community-minded,” Mr Gandolfo explains. “If there’s an improvement that you can make, if there are things that you can see that are going to benefit the industry and its members, then it’s incumbent upon you to do that.”
CAFBA was formed in 2008 as a result of Mr Gandolfo and his industry colleagues knowing they needed a national body with which to attend and influence meetings that would have a significant impact on the industry.
“At its core, [CAFBA] provides minimum membership standards to its members. We have kept commercial finance outside of consumer credit regulations, and that hasn’t been easy, because of the distinctions we constantly need to make to regulators. We are primarily dealing with businesses and business owners, and not with vulnerable consumers.”
Through its rigorous procedures, CAFBA has succeeded in professionalising the industry, removing any poor operators previously practicing, and focusing on the 80/20 rule in removing companies who weren’t up to industry standards.
The Australian asset market has, at any one time, about $100 billion in receivables, in the form of loans that are on the books of banks and finance companies. Brokers and intermediaries hold about 68% of the market. These are the people CAFBA represents.
“When I started in this business a long time ago,” Mr Gandolfo says, “I had to explain to people what it is that a broker does, because people weren’t used to the concept of dealing with an intermediary or a third party.”
Mr Gandolfo’s professional focus is on providing clients the best possible outcome on the best possible terms, and he thrives in face-to-face dealing with business owners. His strength lies in the quality of service, and this is what attracts customers to Quantum.
A-List Broking Firm
Quantum was formed ten years ago by its four directors, one of whom was David Gandolfo. At the time, Mr Gandolfo was working for another company as an Executive Director, running the equipment finance department with another Quantum co-founder, Luke Silk.
“I was expressing frustration, saying—what if we just got rid of all those people? What if we started a firm and we got the best people from here, and we got the best guy from that firm and the best people in the industry, and we just put them all under one roof.”
The idea was not to spend time recruiting trainees and people starting out in the industry, but to build a firm of experienced, A-list brokers regarded by the market as the very best at what they do. The result was Quantum Business Finance.
“Quite unashamedly,” Mr Gandolfo adds, “we are not a firm for graduates or trainees. We are certainly not a learning ground for people who are not experienced. We are a firm of highly experienced, specialist financiers.”
This basis of expertise means, unlike many asset finance brokers, Quantum has never needed to join aggregation or buying groups—schemes where a business platform is shared in terms of volume and a single accreditation with a lender covering several broking firms.
“Quantum never aggregated under anybody else, because from the beginning we wanted to be big enough to achieve that on our own. But two years ago we were approached by some regional and agribusiness broking firms who were leaving another aggregation business.
“Just like the A-list philosophy that is central to Quantum’s core,” Mr Gandolfo adds, “these were highly regarded professional firms that were a perfect philosophical and ethical fit with ourselves.”
The firms that approached the company were interested in aggregating under Quantum itself, rather than with the aggregation business previously used. Quantum agreed, meaning it became the only broking firm that also operates as an aggregator.
Quantum Business Finance now writes $450 million worth of loans annually across the whole of its aggregated business, of which about 66% is written by Quantum alone from the original broking business.
The company’s aim is to place its customers with the best lender to match specific aims. This will often take into account several different areas of finance structure to ensure needs are met, and doesn’t always equate to the bank that is offering the best interest rate.
“In addition to the best interest rate, there will be the best ingoing fee, whatever the establishment fee is, the lowest exit fee and also the terms that are offered by that bank, the approval conditions that are offered—they are quite independent of the interest rates.”
Quantum’s job then is to negotiate the best terms, and to establish whether the deal is going to have any impact on the client’s borrowing arrangements from their own bank. Larger clients tend to have a portfolio of lenders, ensuring continuity of availability of credit.
This avoids a concentration of borrowing from one bank that could have the potential for a breakdown in relationships. In this respect it is similar to investing, where a portfolio is better spread around different parties.
“If we’re going to be good at what we do,” Mr Gandolfo says, “it’s not just about knowing the mathematics and how the banking system works. It’s understanding what your client does. I have to know a lot about manufacturing, materials handling, and a whole range of different industries that my clients are involved in.”
This need is the result of a general disconnect between banks and their customers. Quite often customers don’t understand what a bank needs in order to agree to lend money, and vice-versa. This is where an experienced intermediary like Quantum is invaluable.
“Our job is to fill that gap and provide information both ways, so that the customer understands what they’re entering into and the bank is confident enough to lend them the money in the first place.”
In covering the small business market, a lot of Quantum’s lending is done for investment in capital equipment. But Mr Gandolfo is keen to stress that the company’s client base is not just made up of small businesses.
“A lot of our customers are very large businesses,” he says. “For some of our customers the average transaction size is five million dollars, for some its fifty thousand dollars. The client base is varied.”
The range of Quantum’s clients therefore takes in both public companies and semigovernment authorities. For example, Quantum has been involved in financing a fleet of street sweepers for a local council.
“Regardless of how many different facilities we arrange, and regardless of how many different loans, lines of credit, they’ve got, and regardless of how many different finance companies and banks they come from—they have one source of information for all of them.”
A large part of Quantum’s professional responsibility to its clients is to have an awareness of available facilities and products that will solve problems that the business owner is not yet aware of.
“Because that’s our job,” Mr Gandolfo says. “If you’re a manufacturer, a food producer, a farmer, finance is not your prime area of business. It’s our area of business.”
For example, if a company is in an expansion phase and must pay for stock to be able to sell in 7-14 days to customers who will pay later, there can be a problem with cash-flow. Mr Gandolfo says, the bigger a company gets, the bigger these problems can become.
“We will identify a problem like that,” he explains, “and perhaps propose debtor funding, where the invoices that you raise are paid immediately, and as soon as the customer pays that cancels itself out.”
Debtor finance will always have a small fee attached, but it provides a company with cash-flow from day one. In this respect it is preferable to an overdraft, which can quickly become a core debt rather than just short-term.
“So debtor finance, trade finance, the ability to get your stock into your factory on terms that are not being offered by the supplier of your stock—we arrange that. Most of these things we arrange for our customers that are already our clients in the asset finance space.”
Beating the Competition
The key to giving the customer what they need is in distinguishing the company from its competitors. Quantum does this by the value proposition provided to existing customers, but the company often has trouble distinguishing itself to prospective customers.
“The only way that we can win new customers,” he says, “apart from explaining to them what it is we do and being in the right place at the right time—it usually comes down to the lowest common denominator, which is simply price.”
Not only must the company therefore provide its customers with a premium service, but the service must be offered at a discounted price. Problems can arise from the fact that these two offerings are not always compatible.
“We compete directly against the banks with whom we’re introducing clients, but in order to win new customers we have to be better than, or cheaper than, whatever their existing relationship is with their own bank or broker.”
Quantum’s aim then is to win customers on price and retain them with great customer service. Most relationships will shift from price at the beginning to outcomes. Mr Gandolfo admits that this is precisely the way Quantum wants it to be.
“We’re not trying to be K-Mart,” Mr Gandolfo says, explaining the company’s approach. “We don’t offer a K-Mart service. We offer K-Mart pricing, but we offer a David Jones service.”
Some business owners will rely on their business banker instead of a broker. The average tenure for bankers is 18 months, during which time they will be responsible for a whole range of services such as overdrafts, home loans, general banking and merchant facilities.
“He or she has a very limited time to get to know literally thousands of customers,” Mr Gandolfo says, “and answer their questions about their day-to-day needs. They are sales people for a wide range of products, but their depth of knowledge is very shallow.”
By contrast, the depth of knowledge possessed by brokers like Quantum is significantly deeper. The difference is that Quantum does not sell a range of products, but is rather focused on fulfilling the commercial lending needs of the customer.
“We don’t get involved in their insurance, their home loans, their shares, their superannuation. We don’t get involved in it. We can, but we literally choose not to, because we want to be specialist and best at what it is that we do.”
Basetec Services specialises in designing chemical plants, water pipelines and desalination work, as well as oil and gas work requiring significant technical expertise. It sub-contracts out to provide these services to larger contractors.
The large projects are commonly government-listed, sometimes by private companies. Multinational firms can bid on the major civil engineering projects, anything from petroleum, oil and gas energy, as well as water and recycling plants and maintenance.
Once a large company has won the contract, they look for smaller sub-contractors to do the work.
“Smaller contractors only get given a certain area of work to handle,” explains Managing Director Charles Figallo. “So we work as what we call a Bottom Tier contractor, about four levels down [from Tier 1 companies].”
“The large companies go out on the market to find people that can do certain work on the jobs. They go to three or four companies and they look for the cheapest which is often the most vulnerable, not aware of what’s going on. They build up a trust with you.”
Main contractors are initially very supportive, praising infrastructure, technical know-how and finances. They make big promises about how much money will be involved in a project, all designed to get you to commit.
“Then they ask you to sign their thick contract full of fine print, giving them lots of rights and you very few, which you need lawyers to go through, for tens of thousands of dollars to hopefully protect you, to help you to try to understand and write up what you’re getting into. What they do is say ‘don’t worry about it, just sign it’. If you try to bargain too much, you risk losing out on the work opportunity. It’s a very fine line you have to walk and they don’t give you much time.”
“We need the work. When you’re in meetings with them to go through the work, all they talk about is how much more work and money they’re going to give you, how much they’re going to support you, everything like that, just to get your technical expertise.”
After signing the contract you start getting variation requests, and they don’t give you much time. These can change the scope of the original contract completely. Usually you get a very small deposit from the main contractor, and are expected to organise supplies and organise to complete the job.
“You start buying the materials, getting your manpower. You start spending hundreds of thousands of dollars. Then, in thirty days you’re supposed to put your first invoice in. Then in another thirty days they’re supposed to pay you.”
“What’s happening is you’re building your debts up like mad. You’ve got taxes to pay, you’ve got GST to pay, you have got a phenomenal amount of costs to cover. You have to pay them. You can’t delay them.”
“You’re not allowed to walk off the job. At that stage they’ve got all your technical know-how. You’re not even allowed to pick up your materials if you haven’t been paid. You’re not allowed to take anything off site.”
“[It’s] the small to medium-sized contractors that actually do all the technical work, all the planning for the main contractor. The main contractor leads you on until if you don’t agree to all their demands and contract variations, you get into a position where they can legally kick you off and take over the job.”
The law allows for clauses to be inserted into contracts preventing sub-contractors from stopping work if there’s a dispute, and lets main contractors and large companies take advantage of smaller companies.And this is where the law is wrong and it needs to be fixed. The main contractor is now very aware of this legal conundrum which tends to work in their favour.
“I’ve been fighting this for a long time, to protect our industry and to protect our country.”
“We need an enquiry into the way the law handles these things, allowing these powerful people to get rich by walking all over the guys who actually do all the work and just trying to make a living.”
“There are people out there committing suicide because they’ve had their whole lives ruined,” Mr Figallo says, “and their families. There are people that are basically totally ruined.”
“We’re not alone in what we’ve had to put up with, lots of people have been through what we have been through and we are lucky we are not bankrupt, we’re still going.”
These contracts put most of the risk on the sub-contractor’s shoulders.The big problem here lies in the way the law is set up to make it tough for smaller firms to fight back. Many legal people are realising the damage this is doing to small to medium enterprises and our country.
Large companies are able to manipulate the legal system so expertly that it becomes very difficult for smaller sub-contractors to receive payment due—firstly through the unfair contracts, and secondly through the legal system.
Charles Figallo is the Managing Director of Basetec Services.
Royal Institute for Deaf and Blind Children (RIDBC) is Australia’s largest non-government provider of education, therapy and cochlear implant services for children and adults with vision or hearing loss, their families, and the professionals who support them.
The range of specialist services available at RIDBC is unique in Australia and benefits thousands of people each year. Chief Executive Chris Rehn spoke with The Australian Business Executive recently to explain the aims of the organisation, to achieve the best outcomes for people of all ages with hearing or vision loss throughout Australia.
“When I first studied, I actually studied to become a registered nurse,” Mr Rehn says, “and found my way into hospital management, both public and private. In the process, I also did a business degree and an MBA, and found myself as an executive running private hospitals.”
Mr Rehn eventually left hospital work to become an accountant, which he says was an unusual choice for him. This career turn did not last particularly long, as he admits that he wasn’t particularly good at it.
“I then decided to re-enter and go into an area of health that I knew nothing about, and that took me to a very small start-up organisation called the Children’s Cochlear Implant Centre, and that’s where the cochlear implant technology was in its absolute infancy in Australia.”
This resulted in Mr Rehn becoming part of the evolution of an important service known as the Sydney Cochlear Implant Centre, considered the second largest of its type in the world, which became part of RIDBC under the new name SCIC Cochlear Implant Program in 2014.
“I had worked alongside RIDBC in my capacity running the Sydney Cochlear Implant Centre, and when the vacancy for Chief Executive came up here in 2010, I moved across with every intention of bringing my previous organisation into the fold in the years ahead.”
Mr Rehn admits that working in healthcare for so long has taught him many important lessons about how to go about running a business where the needs of patients are so great, and the outcomes so important.
“When I worked in corporate health,” he says, “I had to deliver on 70-80 KPIs on a daily basis. And what it taught me was, it gave me no freedom to design the care model which I thought was important, that would ultimately lead to the best possible patient outcomes.”
From this experience, Mr Rehn learned that a business putting its focus on superior client care can easily make a profit model work in conjunction, but a business focusing solely on profit will find it very difficult to deliver superior care alongside it.
“I’ve learned that. Obviously as a not-for-profit organisation our reason for being isn’t to make profit, but we have to be sustainable. We focus on getting it right for the client first and foremost, and make the business model stack up behind it.”
When this model is laid out in the best possible way, it can work incredibly effectively, but Mr Rehn admits it can diminish outcomes not only for clients but also for the future of the organisation itself if not.
“One of the great things about having moved from the corporate world into the not-for-profit space is, we get the ability to go into the areas and deliver care in a way that we believe is the right way. We really focus on getting it right at that client level.”
RIDBC is a growing organisation, seeing more clients and providing more services each year. The secret to this, Mr Rehn explains, is to make sure that the core services and activities offered to clients are of the very highest quality.
“The Royal Institute for Deaf and Blind Children started in 1860,” Mr Rehn tells us, “so it’s the second oldest charity in Australia. Our reason for being is to achieve the best outcomes for people with hearing and vision loss.”
In the past, the organisation was more centralised and focused particularly on education, but in recent years it has become a multidisciplinary service provider, looking after anything from education through to disability and health services.
“We operate out of eighteen sites across Australia,” Mr Rehn explains, “we’re in all states and territories, and where we’re not physically in those states or territories, we provide services remotely by leveraging technology.”
Changes in the running of the organisation since Mr Rehn’s arrival have been focused around a new strategic direction consisting of three main elements. The first of these elements is the aim to reach more people across Australia.
“We do that by building more sites and services across Australia. That could be physical shopfronts where we can provide a range of services from. We’ve also acquired, or merged in with, other organisations that perhaps are strategically evaluating their future.”
By bringing other organisations into the fold in this manner, forming lasting partnerships beneficial to all parties, RIDBC has been able to increase its footprint across the country, helping it offer a greater range of services.
“The second [element] is, we’re in the process of designing a new future at Macquarie University. We’re going to relocate our Head Office, which is at North Rocks at the moment, and the HO of SCIC Cochlear Implant Program, which is at Gladesville.”
This relocation will help RIDBC become an integral part of the Australian Hearing Hub, sharing in work done by the university and other partners, building centres of excellence in hearing and blindness and deaf-blindness.
“The third foundation of our strategic plan is really about ensuring that we’ve got a vibrant brand,” Mr Rehn says, “and that we are a sustainable organisation and we’re here for the long run. We owe it to our constituents to be around for another 157 years.”
This is one of the most important elements, as Mr Rehn notes that issues relating to hearing and vision loss are not going away. RIDBC needs to make sure it continues to build its organisation to remain relevant and meet the community need.
The organisation is currently undertaking a brand review project as a response to the general misconception that RIDBC is only involved with helping children with vision or hearing loss, a misconception that has proved hard to shake.
“Within our name there is a whole heap of challenge points. The ‘Institute’ part speaks of our earlier days, where we were an institution where children lived onsite and received services onsite, which was the way disability was dealt with in a big part of our past.”
In the modern day, the way treatment is given is completely different, with almost all programs offered by the RIDBC now being day programs, and services provided in a school environment or in a as-needed, hour by hour basis.
“‘Deaf and Blind’ speaks to the problem. We’re more about hearing and vision, and equally we look after people with low vision or some levels of hearing who wouldn’t necessarily associate themselves with being blind or deaf.”
The most significant part of the name seems to be the use of the word ‘children’. Although the organisation deals with a significant amount of young people, it also services a large number of adults, especially those with hearing loss through its cochlear implant service.
“There’s a lot that isn’t current in our name,” Mr Rehn says, “and we’ve been very carefully going through a discernment process to work out whether a re-brand’s in order. We’re also conscious of not losing our identity with existing donors and supporters.”
In terms of hearing loss, Mr Rehn says Australia should count itself amongst the luckiest countries in the world, as it has the best services, technology, good levels of private health and government support. Yet not all Australians are using the services as they should.
“The amount of Australians that need hearing devices, be it hearing aids or cochlear implants, we’re really just scratching the surface. We’re seeing something like 8-10% of the known population that could benefit from cochlear implantation actually accessing one.”
RIDBC is focused on building the infrastructure around the country to make sure the technology is accessible, working with government, private health and philanthropic support to make sure there aren’t financial impediments for people needing to access the service.
“Australia,” Mr Rehn adds, “even at 8-10%, would be one of the highest uptakes of cochlear implantation around the world. I think, for me, the job is done on hearing loss when all Australians who need this technology have had access to it and are receiving it.”
National Disability Insurance Scheme
Similarly, in the new National Disability Insurance Scheme (NDIS) landscape in the country, it is important for RIDBC not to get lost in the mix with so many new brands popping up, and not to lose its status as a historically trusted organisation.
“The NDIS is a bit of a game changer, because it invariably removes funding from organisations that provide services and [puts] that funding in the hands of people who are users of the service, so it’s really about giving a person with disability choice.”
Mr Rehn strongly supports the commitment to offering more choice to disabled people, but admits that the reality of the scheme for many not-for-profit organisations is that they are now required to compete with lots of other services in a tougher environment.
“Instead of receiving block funding from government, then going and finding clients that need service, they have to compete in an open market environment for delivery of services, and only get paid at the point where the client has elected to come with that service.”
For a large organisation like the RIDBC, government funding represents just 25% of revenue. Although it will face significant changes due to the rigmarole of the NDIS, it won’t struggle as much as many smaller organisations, some of which just cannot cope.
“We will suffer as a result of a drop in block funding,” Mr Rehn says, “and having to establish marketing activities and a lot of administration that is required to deal with the NDIS agency, it certainly puts us through administrative difficulties.”
Smaller organisations, those looking at about 4 or 5 million dollars in turnover a year, are more likely to be 80-90% block funded by the government, meaning they must find and compete for clients in an increasingly tough market.
This change has meant many smaller organisations have had to look carefully at their future, faced with a choice between going it alone in the open market, winding up the business altogether, or merging with bigger organisations in order to stay afloat.
“We’ve seen, as an industry, a lot of organisations approach us saying would we consider their service coming in under our umbrella, and we’re looking at it very carefully. We want to make sure that there’s a high quality response to people where they fit within our mission.”
The unintended consequence of the NDIS is that it is likely to limit the amount of not-for-profits able to deliver service. According to Mr Rehn, some would argue there are too many organisations out there, and that a change in funding would be good for the industry.
“We’re probably blessed,” Mr Rehn says, “as a result of good governance, and I mean that at a board level, where in our 157 years we’ve actually accumulated a fairly healthy balance sheet, and we have a very strong donor base that supports our work.”
This means that RIDBC is in a good position to take on other entities, but the truth is that when merging with other not-for-profit organisations there is a good chance they will be companies that are making a financial loss.
“Loss in the not-for-profit world is not a bad thing,” Mr Rehn explains, “if it means a bigger impact on mission. But it’s got to be sustainable. If an organisation loses money every year, it won’t be around for a long time.”
This means one of the main challenges is that some loss making organisations are looking for some kind of rescue by bigger organisations, coming to the realisation that the business model is not sustainable in the long term.
“The challenge for us is, how do you re-calibrate those services to ensure their ongoing sustainability and viability, and most importantly, a high quality of service to the constituents who are reliant on them?”
For organisations like RIDBC, one of the most important considerations in acquiring not-for-profits is that the process is done entirely on good will, meaning the alignment of cultures and missions is absolutely vital to achieving a smooth process.
“You actually have to really be a trusted partner organisation, because essentially they gift their assets to you in the hope that you will take what they have developed over many years and further their work.”
This is in stark contrast to a commercial acquisition, where payment would be made for a business before the parties go their separate ways. Trust is therefore the most important aspect of deals where a not-for-profit is being absorbed.
“It is absolutely key to get the relationships between the two organisations—the management structures, the boards—well aligned on the intent of what would be a merger. We’re doing this at the moment, with a very good organisation in Victoria.”
The organisation RIDBC is merging with has been focused on hearing services for years. Its board has been strategic in looking at the future and identifying organisations that would be suitable for a merger, a process which identified RIDBC as the best candidate.
“It requires a lot of work, a lot of trust, but at the end of the day it’s a very efficient model of how to expand services, how to bring more high-quality services to more people, and not see that market failure that would happen should an organisation decide to close up.”
One of the key strengths needed in the not-for-profit space is to have serious, high-calibre leadership, and for there to be no excuses for second class business practice merely because there is no commercial profit being made.
“It is more important that we show full accountability for the uses of our funds. It is absolutely mission critical that organisations that are not-for-profits are better than corporate in terms of their responsibility to use funds wisely and achieve sustainability.”
Mr Rehn explains that a lot of the focus for the board and senior leadership team at RIDBC is to make sure it behaves better than corporate and commercial companies, making money go far and wide and having a real impact on its mission.
“RIDBC has a very comprehensive fundraising department, and it does everything from running a rainbow lottery, through to working with corporate Australia and partnering with them, to community events like City2Surf and the Coleman Greig Challenge.”
In addition to this, the department oversees individual donors that have been generous enough to leave money to enable the organisation’s work to continue past their own lives, which is a wonderful commitment to make.
“It’s a really diverse portfolio of activities,” Mr Rehn says, “everything from direct mail to corporate Australia to individual giving. It’s amazing, the types of levels of support we receive. Today, about 50% or thereabouts of our revenue has come from the community.”
Mr Rehn admits that the dynamic is changing, and many donors are now too spoilt for choice in the amount of organisations they can donate to. RIDBC is in a positon where, as a longer serving charity, it has retained many donors over the years.
“The giving patterns of Australians [are] changing, and the newer generations are not necessarily giving in the same way as their predecessors, so we’ve had to adapt and evolve to much more peer-to-peer fundraising activities.”
These activities seek support from a friendship network, with the charity often remaining in the background. Mr Rehn believes fundraising makes the difference between a good level of service and a great level of service, and will always be part of RIDBC’s activities.
“If you looked at children with vision or hearing loss, giving them the best start to life requires a lot more activity in those formative years, and fundraising really means that we can pull out all stops and give them the services they need in the most comprehensive of ways.”
Mr Rehn admits, despite being CEO of the organisation, he has been very lucky over the years to have worked closely with clients, and to have seen first-hand the kind of life-changing work RIDBC performs on a daily basis.
“We are a very comprehensive service provider,” he says, “so we do everything from diagnostic work to running early intervention services, pre-schools. We run three schools, we run tele-practice services, we have a professional development arm.”
No matter the vision or hearing needs of an individual, RIDBC is perfectly placed to provide them, with the wherewithal to make a significant positive difference in people’s lives. One such case is that of a young girl called Olivia.
“I met Olivia when she was about three months of age, when she was diagnosed through screening as having a profound hearing loss. She was assessed for a cochlear implant, and received that as one of the youngest children in the world at eleven months of age.”
Seven years later, Olivia received a second implant, meaning she now has what is called bilateral cochlear implantation. With Australian technology and an extensive rehabilitation programme, Olivia’s hearing improved, and she developed age-appropriate speech.
“As she got into her teen years, she was diagnosed with Usher’s Syndrome, which meant that she would become legally blind, she would lose all peripheral vision and she would really struggle with things like crossing the road and mobilising herself.”
Once again, RIDBC was able to help Olivia, supporting her through its vision services to help her attend a regular school with itinerant support teachers. In 2015, she completed her HSC, achieving an ATAR of 97.5, and is now studying Arts Law at Macquarie University.
“Olivia was a very bright child, and despite the multiplicity of her disability, she applied herself very thoroughly. She had the support of a wonderful family, and we were able to journey with her at every juncture, with services from our organisation that supported her.”
Mr Rehn uses Olivia as an example to show how far the quality of service has moved on. In the 1960s, there was no expectation that children with these disabilities would have access to an education. RIDBC has been providing education to deaf children since 1860.
“Now we look at a child like Olivia,” he says, “who demonstrates that her disability has been no impediment for her reaching her potential, and that’s just terrific, and it sets the benchmark that we aim to achieve for as many of our children as possible.”
Not all children achieve this outcome, but the approach of RIDBC is to try and get the children to be the best version of themselves they can possibly be. With the support of families and the individual concerned, the organisation continues to push for this goal.
On the back of such a successful history, it is important that RIDBC’s success continues long into the future, and Mr Rehn admits that the advancements of the 21st century will be key to the organisation’s longevity.
“Technology is the real game changer,” he says. “If you look at the cochlear implant, one of the biggest challenges for a deaf child learning to speak was that it’s near impossible for them to repeat sounds they can’t hear.”
Even with high-powered hearing aids, which work like a microphone to amplify sounds to a point where those parts of the ear not damaged can still relay a message to the brain, there are some conditions that are so severe that they will never produce any level of hearing.
“No matter how much amplification you make you won’t get a decent signal to the brain in order to develop spoken communication. The cochlear implant, Australian-invented in the 70s by Professor Graeme Clark, really changed the world.”
In its early days, the cochlear implant was used primarily as a tool to help adults to lip-read. Through pioneering work at SCIC Cochlear Implant Program, they are used on children born profoundly deaf, changing the scene worldwide for perfect speech production.
“Whilst our organisation focuses on sign communication for a small cohort of children, the vast majority will be detected at birth with hearing loss, they will go through an early intervention program and receive cochlear implantation under 12 months of age.”
Children with cochlear implants are generally expected to reach age-appropriate speech and language by the time they reach school age, which is an incredible achievement and shows exactly how important the technologies are.
“On the vision loss side,” Mr Rehn says, “we don’t have a cure for vision loss. We don’t have a bionic eye in mass production at the moment, and generally speaking vison loss is usually a cortical issue as opposed to an eye issue.”
Technological changes in the vison loss field can be seen in areas such as personal navigation apps on mobile phones, and other accessible functions that come with new technology, which are changing the lives of those with sight loss.
“For instance, an iPad can be an interface between anything and anything. You can have a Bluetooth Brailler attached to an iPhone that will decode a text message and send it into braille, or it will read it to a person who has vision loss.”
Similarly, satellite navigation allows blind people to traverse cities without getting lost, a significant issue for many blind people that usually means they stick to routine and are unable to travel easily to different places.
Handheld portable devices and the technologies they provide are making a big difference in terms of accessibility. Even something like reading the newspaper can be made easy, through the online screen-reading technologies built into most media platforms nowadays.
“We have technology consultants here and one of them, Mike, he’s a person who was born completely blind—he will show you apps that tell him whether his tie matches his shirt colour, whether he’s left a light on at night before he goes to bed.”
Even something such as choosing the correct currency to pay for services has been turned into a mobile phone app, where the person can scan a note and have it read back to them what currency and denomination it is.
“This technology is making a huge difference in the lives of people with vision loss and hearing loss. Our job, increasingly, is to align the right technology with people as they journey through their educational years, and then beyond.”
Working out of rural New South Wales, Exclusively Strata is a boutique firm focused upon strata and community management services.
The company is run by Michele Hemmings, a CPA with 30 years of experience, who prides herself on being a body corporate specialist, offering flexible meetings and the best contractors engaged and arranged quickly to work onsite. Ms Hemmings spoke recently with The Australian Business Executive about her path into strata management, and the unique challenges faced in the Aussie countryside.
After 18 years working in academia, Ms Hemmings decided to take some time away from her career, for family reasons. It was during the following year that she began to get interested in working in her current field, that of strata management.
“I fell into it by chance,” she explains, “and also by choice. I was on leave from an academic post at the time, a second maternity leave, and attended an AGM of a strata property that I owned with my husband.”
At the time, members of the strata had been getting increasingly disenchanted by the standard of management they were receiving, resulting in the decision for them to try and self-manage the buildings.
“So, I go to my first ever body corporate meeting and come home as Treasurer and Secretary. That was my first strata management experience, in October of the year of 2003. Over the Christmas I thought: this is quite good, I’m enjoying this.”
Being a stay-at-home parent meant Ms Hemmings was able to achieve flexibility in taking on this new role. She admits that having children was a big change in her world, and the opportunity to take on work during leave from academia was a welcome occurrence.
“I said to my husband, I think I might study and find out what’s actually involved in this role, because I am handling other people’s money and know the significance of the fiduciary duty that’s involved. I enrolled then in the appropriate course in 2004.”
The course was the TAFE NSW Certificate IV in Property Services. Ms Hemmings studied by correspondence, completing assignments and exams for 24 units, half of which she received in credits from her previous three Accounting degrees and CPA qualification.
“I then applied to Fair Trading NSW for a licence, and after police checks I was a licensed Strata Managing Agent. In 2005 I opened up to the world and said: here I am. I knocked on a few doors, and put an ad in the paper, and the phone didn’t stop ringing thereafter.”
This was the beginning of Exclusively Strata. Despite a slow first couple of months, accompanied by some nerves about whether the business would get off the ground, by the spring of that year things were already starting to pick up.
“Every month it just became word of mouth. Fortunately, in a city like Wagga Wagga, with a population of 65-75,000 people, it didn’t take much to get around. I also visited selling agents to let them know where I was, so it grew very quickly, exponentially almost.”
Ms Hemmings admits that Wagga Wagga was not exactly underserviced in terms of strata management before she started her company, but that the services being offered were not up to standard.
“There was a disappointment that people felt with the service provided to the city,” she explains. “We had a case of a monopoly, there were two providers for several years and then one bought out the other.”
With the increased scale of just one large strata management company in the area, residents began to feel that their needs were not being met on a personal level. “Jobs weren’t getting done, owners told me,” Ms Hemmings says.
“Meetings were hurried as they were only able to be held in normal business hours [of that company]. All of those things made me think: you’ve got to go to your client, not the other way around.”
Without the constraints of regular employment, Ms Hemmings was able and willing to provide the kind of personal service people in the city were looking for. This was a big part of the reason why the business took off so rapidly.
“I wasn’t constrained in any way by the 9-5 mentality,” she goes on to explain, “and I would have meetings in the evening, Saturday mornings, lunchtime—whatever suited the new client.”
Having a background in CPA and financial reporting was particularly helpful in pushing the business forward, as it allowed Ms Hemmings to educate strata owners in how their money was being spent and what they should be expecting in return.
“If you’re a savvy investor, you want to know that the finances are accounted for with high proprietary,” she says. “The fiduciary duty I hold is key to this post when you’re looking after somebody else’s money. So, I believe that is a strength that I have.”
In addition, Ms Hemmings makes sure to provide a friendly, reliable and flexible service, going out of her way to be available to clients even at times that might seem less convenient, something almost impossible to find at the bigger firms.
“I try to capitalise on that availability, the friendliness I provide. The preparedness to sit and talk and listen, rather than have a limited time. It’s all wrapped up in providing good quality service.”
Ms Hemmings stresses there are three main areas of the business that are vital to be familiar with. These are logistics, financial management and people management, three skills all strata managers must excel at in order to get ahead.
“Logistics means that you are responsible for getting a plumber when the downpipes are leaking on a unit, making sure that gardeners are doing a good job, and you have a regular handyman to deal with any repairs and maintenance to the buildings and common property.”
Coming from an academic background, where she mainly conversed with other academics and students, this was quite a new experience for Ms Hemming, and it took some while for her to get fully to grips with this new skill.
“Learning how those contractors operate and trying to get them to the jobs on time is a bit frustrating. If you’ve got a pergola that’s collapsing and you want someone to repair it and you have to wait for a builder to be available—that’s a difficulty.”
Excellent financial management means taking care of the funds paid by strata owners into the communal account of the strata, funds which are used to pay for maintenance, bills and everything else required to keep the building or buildings running smoothly.
“That fund management is critical, that you are keeping your reconciliations every month and you’re reporting to owners on a frequent basis, every six months. Making sure that everything is spot on with those finances is critical.”
The final important element is people management, something Ms Hemmings admits is absolutely vital to being a successful strata manager, and should be considered as the predominant skill to have.
It is important to be conscious of different personalities in the strata group, especially when it comes to meetings. Despite chairing many of her own meetings, some meetings are chaired by other people with particular characteristics.
“The person who usually puts their hand up to be Chair is quite the gregarious, dominating type of person. I have schemes where the Chair likes being the Chair and runs the Annual General Meeting with little input from the strata manager.”
In most other cases, the rural strata manager is expected to chair the meeting, as many of the owners do not know how or do not wantto do it. These meetings will generally be more relaxed and casual with Ms Hemmings at the helm, while still sticking to the agenda.
“Understanding those nuances in people, and if there’s any bitterness or carryings on between people, I won’t tolerate that. People management is understanding the way people interact with others, and making sure it’s all very civil and polite—and usually it is in rural strata schemes managed by Exclusively Strata.”
Growing a Client Base
Exclusively Strata now manages 38 schemes, averaging about 8-10 units in each. The largest has 39 villas or townhouses (a new scheme of 98 apartments in six buildings is currently under construction), and the smallest is a duplex of just two. The same standard of financial management is required no matter the size.
Despite the quick growth of the firm, it is by no means an easy task to pick up clients. Ms Hemmings admits that it takes quite a few events to get to the point where a strata group is prepared to make a change in management.
“You might have one or two people who are courageous enough to enquire as to another agency being in town, when they hear that there is,” she says, “they make that enquiry, by phone call usually.”
This would be normally followed by a meeting with a group executive or a subset of owners, a small number representative of those looking for change. In this meeting, Ms Hemmings puts forward what she is able to offer.
“It’s up to them to take my presentation and sell it on to the rest of the owners. Some owners may not even live there. It’s an advantage if they do, because they can just knock oneach other’s doors and say: shall we go and meet up with this potential new strata manager?”
This makes the process of finding new clients particularly challenging. In order for a contract to be changed, the new manager needs a majority of owners to agree to it at a General Meeting, meaning the benefits must be sold across the board.
“I can’t do anything more than have that initial meeting, and if they like me, they’ll go and spread the word. Unfortunately, they have to then approach the existing strata manager and say: could you give us the names and addresses of the other owners.”
Although this request may ring alarm bells for the current manager, the manager is compelled to release this information under the strata legislation. The next step is for a motion to be placed at the General Meeting.
“It could be a timing factor. It might be another 6-7 months, whatever it is. It also depends how urgently they want to change. If they were ready to change, they might seek to hold an Extraordinary General Meeting, and call one during the year rather than wait for the annual.”
Finally, the motion is put to the entire Owners Corporation. If a majority is reached in favour, then a change in management can be made. This formal process can take several weeks or months to complete.
Strata in the Country
The largest inland city in New South Wales, Wagga Wagga is a unique place to live, located under five hours South West of Sydney by car and the same distance from Melbourne, two and a half hours from Canberra and three from the NSW and Victorian snowfields.
The city is home to a significant proportion of transient home dwellers, with Army, Navy and Air Force members all represented, as well as a large cohort of Charles Sturt University students.
“It’s a very forward-growing city,” Ms Hemmings says, “and it’s been immune, in many ways, to the recessionary years since 2007. We are quite fortunate in that regard. Building is on a high and continues to be.”
The city has been so successful in growing and developing a host of top Australian sports personalities that it has become known as the ‘City of Good Sports’. It therefore has many sporting activities, teams and clubs, which have helped shape its culture.
“We have, I believe, somewhere in the vicinity of 300-400 strata schemes in the city. I spread to Tumut and Yass, two hours on the way to Sydney, and I’m looking at getting one at Leeton, a similar distance away in the other direction.”
These smaller towns outside of Wagga Wagga have fewer properties falling into the strata category, and most don’t tend to have professional managers overseeing the schemes. It is beneficial, therefore, for Exclusively Stratato spread further than city limits.
In rural areas such as Wagga Wagga, the growing strata industry still has several issues that Ms Hemmings admits must be rectified. The most important issue is the understanding of the strata industry itself.
“There is probably less knowledge about strata by the general population here than there would be in a major city,” she says, “as in, most people here have lived on a quarter acre block in a 3- or 4-bedroom home and moving to strata is quite foreign.”
“I would say the number one issue with country strata is the limited or lack of information or knowledge about strata or community living. That change of living is a shock to some people, they don’t necessarily understand it.”
In such a rural district, there are inevitably a lot of farms that are served. Farmers are retiring and moving into the city to apartments, and this can represent a big change in the type of living they are used to.
Much of this is to do with the level of architectural consistency expected across villas or units within strata complexes, where there is little opportunity to add to the surroundings with anything that isn’t in keeping with the other properties.
Ms Hemmings tells us how she once had to ask a lovely older woman to remove her gnomes from the front gardens of a community scheme, and the woman didn’t understand why they were not allowed.
“How I counter that [lack of knowledge] is to go round and visit the Real Estate offices and give them seminars. I also talk to solicitors, because even they don’t know all the strata management intricacies. I’m the one who’s specialised in that.”
With a recent change in NSW strata legislation, the next twelve months will be an important period for firms like Exclusively Strata to educate solicitors and agents on the changes.
Even more importantly, Ms Hemmings admits that meeting with owners and educating them about the strata law changes is a primary personal goal of hers. Once the teacher, always the teacher, they say.
The second significant issue of strata management in the country is the level of expectation on the shoulders of strata managers compared with those working out of large urban areas.
As a member of a board committee within Strata Community Australia NSW (SCA), Ms Hemmings regularly attends state meetings where this difference between rural and urban strata is very noticeable.
“The expectation of owners, I think, is higher on country strata managers than it is in the city. I get the feel that it’s extremely corporate, extremely time driven [in larger cities]. We in the country are much more relaxed, and free and open with our time.”
This may sound like a positive, but the mindset of the country strata owner assumes that small jobs should be done as part of the package. Ms Hemmings doesn’t add fees every time she is called out by a client to look at an issue. This is not the case in major cities, where jobs are billed in 15-minute blocks.
“The sense is that I can easily come around to visit and check everything out, or maybe spend two hours in a meeting instead of one to one and a half hours—owners don’t think twice about the time that it takes for managers to do these tasks.”
Ms Hemmings feels an element of responsibility in taking on day-to-day tasks herself, rather than outsourcing jobs and charging the client for extras. She admits to regularly thinking like a client, considering what will be best and cheapest for them.
“I’m probably my own worst enemy in that regard, knowing that the client wouldn’t like that. I have to change my thinking and perhaps be a little bit tougher with things, and I have begun to slowly invoice for extra meetings, because it’s in my agreement.”
The level of competition in Wagga Wagga means Ms Hemmings is particularly careful about offering the best financial service, as in the end she does not want to lose clients by appearing too willing to outsource and charge extra.
“Service is service is service,” Ms Hemmings goes on to explain. “So, if it does cost me an extra two hours in a day or a week, I will wear it, because I just want to keep my clients and keep them happy.”
The third issue of rural strata is the difficulty in getting staff. Ms Hemmings admits she is ready to expand her business, but that because the industry is not well-known, and still considered specialist, interested parties are hard to come by.
“It’s a very unique, specialised component of Real Estate. But it’s also an accounting exercise, it’s a logistics management exercise, it’s a people management exercise. Strata has a wide gamut of skills involved.”
In addition, there is a noticeable lack of academic intercourse in rural strata. Ms Hemmings admits she relishes the chance to go to Sydney for NSW SCA committee meetings or conferences to have academic discussions about issues facing the industry.
“Living and working in a rural city is the best lifestyle you can have. Strata management and strata living in general is a phenomenon that’s only been around for fifty years. It’s the way of the future, and I’m excited to be involved in an industry that’s so rapidly growing.”
With sales of apartments growing, exceeding those of houses over the last decade, strata has become a wonderfully exciting industry to be involved in. Ms Hemmings loves meeting all the people involved in the industry and seeing fresh perspectives.
“From a Professor from the University or a local doctor who owns a unit to live in or rent out, to the garbage collectors and cleaners—strata has the whole spectrum of demographics of the world. It’s just a wonderful industry. I really, really enjoy it.”
Direct Uniforms is a supplier of fine quality uniforms for businesses, schools and sports clubs. The company is young and innovative, with a focus on excellence.
Its motto promises to provide customers with quality, service and price, a philosophy that guides the company in all it does. Direct Uniforms understands that every business is different, with its own unique needs, and prides itself on the ability to work with clients to find a solution that will complement and enhance their business image.
After leaving school in 1989, Direct Uniforms founder and director Peter Cipolla started his professional career in the Real Estate industry. Uniform manufacturing was in the family however, as his parents owned a business that was beginning to see significant growth.
“The family business that my parents were running grew to a very big operation,” he explains. “We were manufacturing uniforms for King Gee and a few other large companies, doing all the specials for companies like StarTrack and Energy Australia.”
When the business grew too large for his parents to run on their own, Mr Cipolla stepped in to help out. The company cut, sewed and delivered uniforms all over Australia, employing around 50 people at the time.
“It was quite a large manufacturing company in the eastern suburbs of Sydney, in Botany,” Mr Cipolla explains. “We manufactured something like 1.7 million garments a year, so it was quite significant.”
It was at this time that Mr Cipolla decided to leave Real Estate and try his hand in a new industry. After a meeting with his parents, it seemed like a good opportunity to join the family business full-time as manager.
“I thought it was quite a good thing to get myself a bit of experience in managing a company, which I did with a lot of success for approximately 28 years. But unfortunately, later on in the gig the manufacturing started to dwindle a bit in this country.”
By 2008, many of the vendors the company had been dealing with were beginning to look at offshore options. Despite trying to organise offshore opportunities for clients, Mr Cipolla couldn’t persuade them not to do it directly themselves.
The company eventually had to shut down, and Mr Cipolla’s parents retired. At this point he decided to go in a slightly different direction, moving into the nationwide distribution of uniforms, selling product that is already made and ready to ship.
“I got in with a few conglomerates overseas, and brought in a few brands that were starting to form in Australia. We have warehouses in each state, we have an online presence, where companies and people place their orders online with us on our website.”
In 2009, Direct Uniforms was born. The company now boasts around 75,000 customers, having recently relaunched its website to ship product all over Australia, to companies ranging from smaller start-ups to larger blue chip clients.
“I still had an existing client base that can’t go offshore and buy their orders,” Mr Cipolla says. “So a lot of the suppliers now that came on-board with us have massive warehousing, and we’ve become a distributor of the brand names.”
Direct Uniforms is run to a model similar to that of retailer Harvey Norman, where branded product is distributed from Perth, Sydney, Brisbane and Melbourne. One of the major brands the company sells is JB Wear.
“We can also add the logos to requirements. We have all our catalogues on our website. We hold all those items in stock, and people choose their colour, or whatever product they want. We can deck out a brand new business with many employees within ten working days.”
In comparison to the original manufacturing business, the speed and timing is now key factor in Direct Uniform’s business. The company can supply a plain garment within five working days, in any quantity, and add logos within 10-12 working days.
Like its predecessor, Direct Uniform is also a family-run business, with Mrs Cipolla looking after the accounts and handling ordering responsibilities. Since 2009 it has continued to grow, and Mr Cipolla is clear about the source of its success.
“The reason why my business has grown over the years is that I’m not attached to any one particular sector. I supply product to the education sector, I supply product to the industrial sector, I also supply product to the mining sector.”
Mr Cipallo admits that if the business was supplying to only one sector, such as mining, it would quickly find itself in a position of exposure. It is inevitable for certain sectors to go through peaks and troughs, directly impacting levels of purchase.
“I’ve got a massive spread in my business,” he says. “Not all industries go into a black hole at times, but if I were to say I’m going to specialise in mining uniforms, well I’d be closing myself to everything else.”
The Garment Industry
“We tend to always follow the US and Europe as far as styles are concerned, and we pretty much seem to get it down pat pretty well. The client is very lucky these days, because they have a major amount of choice. These choices weren’t available to them fifteen years ago.”
Despite such broadly spread business, taking in many different sectors and industries, the importance of having a good grasp of advancements in the garment and uniform industry is essential in being able to give the customer what they need.
“I have a lot of knowledge of clothing in the uniform industry,” Mr Cipolla explains, “and there’s a lot of stuff out there. What a lot of people perceive as a cheap-priced item doesn’t necessarily mean it’s an inexpensive-priced item.”
Many cheaper items can be bought for $10, but need replacing around twelve times a year. The more inexpensive option is to buy an item for $15 that will last six times as long. Mr Cipolla admits many clients need educating on this distinction.
“Dollar value is the not end-all on price cheapness. It’s the durability of something, and that’s what I pride myself on in our business. We tend to try and tell our clients to be very careful, especially when it comes to high-visibility products.”
In today’s litigious world, many people are choosing cheap high-visibility products that are not up to Australian and New Zealand safety standards. The consequences for firms making these decisions can be very severe.
“If anything was to happen, the onus is on the owner of the business that brought that product. If someone gets killed wearing a product that’s not approved or not compliant, there are dire consequences. You need people like us who know the background.”
In Australia, safety regulations are pushed to the highest limits, making it probably one of the safest working environments in the world. This is in contrast to countries like China or the Philippines where standards are particularly low.
“The innovation of high-visibility technology has over the years jumped leaps and bounds. The most important thing is that the luminousness has gotten so high in product it sometimes goes beyond the levels that the Australian and New Zealand compliances require.”
Mr Cipolla knows that safety regulations are put in place for a reason, and that it is the responsibility of business owners to adhere to them, creating a safe environment for both staff and customers.
“As a company director,” he says, “in my company I take safety as my number one priority. I have children at home, and my children expect me to turn up back from work in a safe way, and I think all employers should be the same.”
Although promotion is focused more on the Australian market than international markets, Mr Cipolla has begun to see small amounts of business starting to come in from overseas. The ubiquitous nature of an online presence helps drum up business in other countries.
“I’ve had people from the Philippines and the US come and make enquiries as well, so you always get remnants from our website. If I was to probably push it into the US and Europe, I wouldn’t be surprised if I were to get more business.”
Mr Cipolla has noted a recent trend of UK companies ordering from Direct Uniforms, mostly because the choice is more limited in Britain than in Australia. Australia boasts particularly good designers, producing plenty of different styles.
“A lot of companies these days are changing their view,” he says. “A company used to be a colour, where these days they don’t care anymore, they just want to be fashionable. They’re not running their business like a football team anymore.”
In doing this, companies understandably have a much larger scope in the kinds of uniform they can opt for. Specific colour schemes often cause significant supply issues, as things might not be so readily available.
“If a client said to me, we really need turquoise and red shirts, I’d tell them that we can do that, but we’d have to bring them for you from overseas, because there’s nothing in turquoise and red available. Our products try to appeal to mainstream business.”
The company’s speciality is in providing a wide option of colour schemes, all held in stock for the client to view and decide upon in a quick and easy way. There are some companies, however, that still insist on a particular colour scheme.
“You’ve got your McDonalds and your KFCs and stuff like that, and we can do that for the companies, but it becomes an indent situation, where they have to order a certain quantity and we supply them as a whole.”
In addition to supplying standard uniform options to a range of industries, Direct Uniform has an interest in making sure the products it stocks are both of the highest possible quality and of the highest standards of innovation.
“Our Biz Collection brand has developed a product that assists in preventing the spread of infection. It’s called Advatex. It’s been majorly used in the US and it’s starting to come into this country now. It’s something very important in the healthcare industry.”
Direct Uniforms is focused on pushing this important product into institutions such as nursing homes and hospitals across Australia. The fabric includes a silver compound treatment that uses body heat to kill off infections.
Keeping Everyone Happy
The secret to any successful business is getting the best out of employees as well as offering the very best possible professional service. Mr Cipolla is proud to make his employees a priority in terms of the day-to-day business.
“I find in my company I always want my staff to be a happy lot of people. It disappoints me a lot to see sometimes where you get managers running businesses and showing high authority on staff and in a lot of cases the morale in that business is quite low.”
Mr Cipolla believes that if you show employees respect, more often than not that respect is given back. In a lot of cases, it also equates directly to sales figures those employees are achieving for the company.
“I always find that if you keep the morale up, you’ve got to have a happy workforce,” he says. “You don’t want situations where your staff is going home in a depressed state and coming back not wanting to be there.”
This is why Mr Cipolla believes he has a successful leadership style, because he always sees smiles and happiness from his staff in the office. It can also be seen in the very low amount of absence from sickness in the company.
“Everyone is entitled to a sick day when they’re sick,” he explains, “but I find that my staff tend to be at work a lot more than others who run businesses where their staff treatment is not up to scratch.”
Mr Cipolla knows that a business thrives on the attitudes of employees and customers alike, and he is the first to admit that financial success is contingent on creating a great atmosphere in the workplace.
“I run a business that makes people feel good. The most important thing to me in a business is their first impression. A clean and well-maintained uniform can mean the difference between securing a major contract and struggling to find business.”
Most successful businesses in the mainstream marketplace have uniforms, and Mr Cipolla doesn’t regard this as coincidence. Having a uniform demonstrates discipline, consistency and professionalism, qualities that help a business grow.
“Our slogan reminds people that if you run a professional business, we can give you the professional look,” Mr Cipolla concludes, “and we think that people take pride in their business and they’ve got to take pride in the way they look.”
While the drama about politicians not being eligible to sit in parliament might not be helping the reputation of the Government and parliament, it will probably have little real impact on either. The sooner we can refocus on the real issues facing Australia — like debt and deficit — the better.
It will be months before the High Court rules on whether the parliamentarians in question were eligible to win and hold a seat in the federal parliament. In the meantime, these politicians will attend parliament and continue to vote, except for those who resigned (‘Senators’ Waters and Ludlum) and Senator Canavan (who said he will not vote). The major parties will grant ‘pairs’ for these three, which is a gentleman’s agreement to ensure votes reflect the elected composition, and so the outcome will be unchanged.
If the High Court rules that Barnaby Joyce was ineligible, this would also have no bearing on the Government. There would be a by-election in his seat of New England which Joyce, fresh from renouncing New Zealand citizenship, would contest and probably win. He won comfortably at the last election and I doubt the locals would vote differently and risk seeing Bill Shorten as Prime Minister.
If the House of Representatives were to sit between the High Court ruling Joyce ineligible and his re-election, during which the Government would be one vote short, it is also unlikely Labor would move a vote of no-confidence in the Government. But even if it did, it would probably lose.
If the High Court rules that some or all the senators in question were not eligible to win and hold their seats, this would have no bearing on Senate votes or the balance of power. The names of the senators would be removed from the 2016 ballot papers and the results recounted. The replacement senators would almost certainly come from the same parties.
Regardless of what the High Court decides, I hope it spells out its reasons in detail. I won’t be advocating constitutional change, but we certainly need clarity so that anyone wanting to run for parliament in future will know what they must do to be eligible. Amateur opinions, currently in abundance, are no substitute for legal certainty.
If there are sound reasons to refer more parliamentarians to the High Court, I will support such references. However, I will not support an audit of all parliamentarians. It is a fundamental rule of Western civilisation that a person should not be compelled to prove their innocence. There is also no legal basis upon which a parliamentarian can be compelled to provide evidence.
For myself, despite my thoroughly ethnic name (which indicates I am a baron in Sweden, incidentally), my ancestors came to Australia five generations ago and I think I’m pretty safe.Unless North Korea grants citizenship to all senators and the High Court decides none of us is eligible, there’ll be no early retirement for me. Once we get back to business, I will resume my pursuit of lower taxes and less red tape. That’s what really matters.
David Leyonhjelm is a Senator for the Liberal Democrats.
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One common belief among people working their way into the boardroom is that they need governance training qualifications. While I don’t want to denigrate governance training courses or those who have qualifications, the notion they are a necessary prerequisite to landing a board role is, quite frankly, untrue.
Before we talk about why governance training isn’t strictly necessary for would-be directors, let’s quickly bust myths around this belief.
Many believe that without a formal qualification they’ll be overlooked by boards. However, the reality is boards value expertise and experience over training. Out of our program faculty (all of whom are non-executive directors), fewer than half have governance training; likewise, of the people who go through our programs and land a board role, fewer than 20% have formal governance training.
Another misconception around the need for governance training is that without it you won’t have the financial and legal know-how to be effective. Of course, the need for this in the boardroom is vital, especially as it relates to your duties, but this can be learnt without going through formal training. Also, if you are a new director it’s highly unlikely you are being hired for your governance expertise.
What’s more important than this knowledge and anything you can glean from governance training is your experience, how you work with others and your ability to think independently, question, challenge and be held accountable.
Perhaps the reason that so many people go through governance training is because they believe it will allow them to easily find board work. However, these courses fail to offer advice and tips on how to follow through and land a board role or the soft skills needed to excel once you become a director. We believe it’s important to show people the practical steps they need to follow to land a board role, and the skills they’ll need to succeed.
We encourage directors to include training in their career plan but we also encourage them to educate themselves in a range of topics to be better governors; digital marketing, crisis management and cyber-security. As non-executive directors you will be presented with strategies in these areas and you need to ensure you can assess the risks and opportunities for your company and its stakeholders.
Again, none of this is to say that governance training courses offer no value. They do. It’s just they’ll do little to help you find a director position in the first place. We believe they offer more for people already on a board, being more practical and less theoretical. But before you’ve even set foot into the director space, governance training can be a little abstract.
My advice is to understand what governance training courses can do for you specifically. If you spend time on research and you deem it a necessary step, then by all means go ahead. But if you sign up to a governance training course – even a credible and reputable one – without knowing all the facts, then you may be about to spend a large amount of money on something that doesn’t offer much in return.
Reputation is essentially the sum of others’ perceptions. The nebulous and hard to measure nature of the asset leads many companies, particularly those with strong balance sheets and robust value propositions, to neglect investing in it.
Tempting though it may be, there are many current examples of where indifference to the fundamentals of reputation has damaged individual companies before reverberating across entire industries.
For many years, Australia’s major banks accepted the post-GFC anti-bank zeitgeist as a phenomenon to be endured. Immensely profitable and consistently growing in value, the banks turned inward, focusing on their reputations in comparison to each other rather than on the industry as a whole.
As the decline of the sector’s reputation continued unabated, a perception began to build that the banks didn’t prioritise their customers, were run by ‘greedy’ executives and were uncompetitive.
Reinforced by regulator interventions, a series of high profile scandals and a rising disparity between official and bank interest rates, the banking sector’s reputation continued to diminish.
Year after year, record bank profits further embedded negative perceptions of banks while removing incentives to address the industry-wide reputational crisis. Profits were on the rise, why change?
The government sensed this reputational vulnerability and brazenly announced a $6.2 billion levy on the banks in this year’s budget. Tellingly, in this age of hyper partisanship the levy received almost unanimous political support. All sides of politics were content to bask in the prestige of positioning themselves as punishers of the banks.
When corporate reputation is low, companies and even whole sectors of the economy become vulnerable – and few are more reputation conscious than politicians. Gaining prominence by coming down hard on a sector with an image problem is an effective way for a politician to improve his or her own reputational stocks.
This reality is a serious concern for businesses. Governments have a long history of targeting organisations and industry sectors with poor reputations – often unfairly, and with potentially expensive and far reaching long-term consequences.
In 2014 the NSW government responded to public concerns about alcohol fuelled violence with legislation which dramatically reduced patronage of bars and clubs in Sydney and Kings Cross. The changes were rushed, and as a consequence many licensed venues with good compliance and safety records closed. Given the complex and multi-dimensional nature of the problem, many have identified the poor standing of bars and clubs as making them an easy target for a government keen to bolster its own reputation.
SenateSHJ’s Reputation Reality report found that corporate reputation may be an intangible concept, but senior executives appreciate it is a tangible asset. They recognise that reputation is a key component of their organisation’s success. Consequently, they are becoming more actively involved in building trust and putting systems in place to protect and reduce risks to their organisation’s reputation. As the examples cited demonstrate, this is rarely a straightforward proposition, and even the most sophisticated and well-resourced businesses and brands are not immune to missteps.
Over the years that SenateSHJ has worked with clients on reputation management, we have developed strategies and techniques which bring much needed order and clarity to the complex dynamics which feed into reputation. In our experience, starting simple is the best way to manage complex challenges and often brings other benefits. Stakeholder landscape mapping, for example, is a fundamental component of a reputation management strategy which many clients find provides invaluable strategic insights into their businesses.
If you haven’t already done so, take a step back and consider how your business is perceived. An interesting starting point is to empathise with the stakeholders who are not central to your business or organisation’s daily functions, but are familiar enough with what your organisation does to have a perception of it, and drill down from there. One thing is for certain: there are only upsides from gaining insight and understanding of your reputation and the reality.
Darren Behar is the Managing Partner of SenateSHJ in Australia.