Welcome to October 2022. Many good folks have been asking what I am now doing, and I trust that this release of The Martin Haese Report amongst other things provides some answers.
I’m not quite sure where to start, but it’s fair to say that the last three months have been extraordinary. After three and a bit years with Business SA, I successfully completed my contract as CEO at the end of the financial year where I handed over the reins to Andrew Kay. What a privilege it was to guide, support and advocate for the business community during the global pandemic. A big thank you to the Chair of Business SA Nikki Govan, the Board of Directors, my former team of 60 talented individuals, many valued stakeholders and most importantly, the Chamber of Commerce’s 4,000 members.
Having finished up with Business SA, I made my way to Singapore to visit my wife’s family, reconnect with business associates and meet new ones. All was going to plan until I contracted a roaring fever and a very nasty case of Cellulitis that put me in a Singaporean hospital for a week followed by a long couple of months of recovery. If you, like me, have not heard of Cellulitis, I hope that you never have cause to. In summary, it’s bacterial skin infection and in my case, a serious one.
Returning to Australia to recover from my ailments, this brush with the potential loss of my right leg has had an impact on what I consider is important and how I intend to spend my time and set about designing the future. Although confronting, I like to see the good in everything and this has certainly made me reassess.
Having recovered to the point where walking was no longer painful, Genevieve and I made our way back to Singapore and then on to London where we had planned to tour the UK. Our travels took us to Windsor and while coincidently sitting in the charming Royal Adelaide Hotel we heard the unfortunate news of the death of Her Majesty Queen Elizabeth II.
Royal Adelaide Hotel Windsor, United Kingdom
Our travels then took us to the university town of Oxford in England and to Edinburgh in Scotland where we again coincidently arrived late the night before Her Majesty’s cortege was due to travel along the Royal Mile of Edinburgh with King Charles III and the Royal Family walking behind.
Our accommodation was 200 metres from the Palace of Holyroodhouse gates and once we had made our way through an amoury of security personnel, we had a few hours sleep before joining many others to pay our respects to a dignified lady and much-admired Monarch. To say that this was a truly unforgettable experience would be an understatement.
On a brighter note, as a former Chair of the Bay to Birdwood community event in South Australia, current Chair of the Adelaide Motorsport Festival Advisory Board, an inaugural Board Member of the State Government of South Australia’s new SA Motor Sport Board and a long-time historic motoring enthusiast, I was excited to attend The Goodwood Revival in the UK in September. This was a bucket list item and I hope to visit again. After battling the seemingly endless traffic from London and securing accommodation an hour away from the Goodwood Estate where the event is held, we were more than rewarded for our patience and perseverance.
With 50,000 highly enthusiastic people arriving from across the UK, Europe and beyond, the Goodwood Revival is to be seen to be believed. Since 1998, this event has celebrated and re-enacted the glory days of British motor racing. The event includes racing cars and motorcycles that would have competed during the Goodwood Circuit’s original motorsport heydays of 1948 to 1966. With almost all of the 50,000 attendees dressed in period attire (mostly 1940s), it makes for quite a spectacle.
The Goodwood Revival is unique. While most vintage festivals focus on looking back, this event is trying to move us forward. With a focus in honouring the quality of items and manufacturing practices of the past, this year’s theme was ‘Make Do and Mend’. In a world where too many things are disposable, the Goodwood Revival challenges us to take a cue, recycle more and secure a more sustainable future. I admire the values of this event.
With South Australia’s rich automotive manufacturing heritage, amenable climate, many active car and motorcycle clubs and an attractive historic vehicle registration scheme, I have long believed and advocated that motoring tourism has significant upside unrealised potential. Thankfully, the Malinauskas State Government seems to heartily agree. This is why I have stepped up over many years to contribute significant amounts to own time to help realise this potential, often on a pro bono basis. In addition, with the imminent growth of electric vehicles the automotive industry is undergoing a not so quiet evolution and I want to be a part of it.
The Goodwood Revival, Goodwood Estate UK
The Goodwood Revival, Goodwood Estate UK
The Goodwood Revival, Goodwood Estate UK
Twenty-four hours later we arrived at JFK in New York City. In my role as Chair of the Premier’s Climate Change Council in South Australia, I was registered to attend Climate Week 2022. Held annually, this is where politicians, policy makers and global business leaders converge to discuss and take action on climate change and explore economic opportunities in the low emissions economy.
Having attended and delivered a keynote speech as Lord Mayor of Adelaide at COP21 in Paris in December 2015 and presented online at Climate Week last year, it was an honour to represent the Premier’s Climate Change Council, Deputy Premier/Minister Dr Susan Close MP and the State Government of South Australia at this conference. With Australia’s Federal Environment Minister Chris Bowen, former Prime Minister of Australia Kevin Rudd and former Premier of South Australia Mike Rann all playing prominent roles, our nation and state were well represented.
I look forward to continuing to work with my fellow members on the Premier’s Climate Change Council to strengthen and accelerate South Australia’s national leadership in climate change adaptation and mitigation and enable the further growth of the low emissions economy. I believe that this is the biggest challenge of our time. However, it is also a huge economic opportunity for South Australia and again I want to be a part of it for our great state.
Climate Week Manhattan New York City USA
As I have shared with you before, I believe in education and its ability to transform lives, including my own. With my insatiable thirst for lifelong learning, I am now studying a Real Estate Diploma, learning Indonesia Bahasa and soon to brush up on my French. This month, I am working with the University of Adelaide and Her Excellency the Governor of South Australia to fulfill my annual obligation on the Rhodes Scholarship Selection Committee where we carefully review scholarship applications for Oxford University. Having been on this committee for four years, I cannot tell you how much I look forward to this as it always restores my faith in the brilliance of South Australia’s youth.
Not one to rest, I have more exciting projects in store. But more about that another time.
Welcome to 2022. May you live in interesting times. While there is conjecture as who authored this quote, it remains true today.
This edition of the Martin Haese Report explores the relationship between change, evolution and progress and given that these have been the hallmark of the human condition for ages past, let’s first consider what history has taught us. The most tumultuous periods in modern, medieval, and ancient history are filled with upheaval. Ironically, discomfort and disruption have been the catalyst for progress on many of these occasions. Although stories of plague, insurrection and war can provide compelling reading, those living through these momentous events were undoubtedly experiencing considerable trepidation and pain.
It was however those experiences that built resilience, not always by choice but more often by necessity.
As a student of political history, I am fascinated by how nations have evolved. Russia is case in point as one could be excused for thinking that it epitomises the very definition of upheaval and change. With the Tsars ruling Russia from 1547 to 1917, followed by the Russian Republic from 1918, Soviet era from 1922 and the Russian Federation from 1991 until today, the Russian people have defended their homeland from invasion on more than one occasion and have suffered and prospered at the hands of their own leaders. Russia is however only one example of a nation that has been shaped by upheaval, yet has endured and prevailed. There are many others.
French Emperor Napoleon invaded Russia on 24 June 1812. After waiting for a surrender that never came, Napoleon’s starving troops faced the onset of a Russian winter and retreated out of Moscow. There was no victory here for the French, only a devastating long march in perilous conditions.
Two years into this global pandemic there have been few victories either. However, one thing is for sure, we are still living in interesting times. How have you endured and prevailed? How has the uncertainty of the last two years impacted upon you personally? Have you processed the relationship between security and change?
I encourage you to watch this short video which contends that “you need to dispense with the idea that you have any permanent security outside of your ability to content and adapt.” It’s a confronting statement, but nonetheless quite true. As counter intuitive as it sounds, the truth of the matter is that the only real source of security we have is our ability to adapt.
Now that we acknowledge that change is at the core of evolution and progress, let’s consider why.
In his book first published in 1859, On the Origin of Species, Charles Darwin wrote that the theory of evolution is the process of natural selection by which nature selects the fittest and best-adapted to reproduce, multiply and survive. While some have debated Darwin’s theories over the years, they are a plausible explanation for explaining that evolution is far from stagnant and that nature, the environment and everything that lives in it are in a fluid, constant state of flux.
Come for a ride with me, my entrepreneurial friends, and let us now look at some developments that will shape 2022 into a year not looked upon with trepidation but with giddy anticipation.
The lessons are learned, it’s now time for implementation.
2020 and 2021 were years of reaction and pivot, years where some innovated and some faded away. Every one of us has done something new, many for the first time. 2022 is the year that we put into practice the lessons learned over the last two years.
By very definition, an entrepreneurs’ glass is always half full and 2022 is a year to dispel the voices trying to sell you on the idea that the glass is half empty. Let’s remember that luck is nothing more than preparation meeting opportunity. The last two years of this pandemic have prepared the entrepreneur, and 2022 is the year to claim your opportunity.
Trends for 2022
Having spent the last couple of weeks reading widely about the most likely business trends for 2022, I credit Bernard Marr, contributor to Forbes, as authoring the following insights. In sharing these with you, I have added my own anecdotes.
Trend 1: Sustainable, resilient operations
“Every organisation must seek to eliminate or reduce the environmental costs of doing business. Decarbonising the supply chain is a sensible place to start, but forward-thinking businesses are looking beyond the supply chain to improve sustainability across all business operations. And of course, sustainability is linked to resilience, as resilience means being able to adapt and survive for the long term. Any business that ignores sustainability is unlikely to do well in this age of conscious consumption.”
As Chair of the Premier’s Climate Change Council, I see firsthand the competitive advantage that South Australia has in climate change adaptation, mitigation, renewable energy and circular economy. However, what is sometimes overlooked by entrepreneurs is the megatrend of the low emissions economy that is being driven by customers, financiers, insurers, policy makers, regulators and governments. This is an opportunity rich environment for entrepreneurs and business owners.
Trend 2: The balance between human workers and intelligent robots
“We now have increasingly capable robots and artificial intelligence systems that can take on tasks that were previously done by humans. This leaves employers with some key questions: how do we find the balance between intelligent machines and human intelligence? What roles should be given over to machines? Which roles are best suited to humans? There’s no doubt that automation will affect every industry, so business leaders must prepare their organisations – and their people – for the changing nature of work.”
Having spent some brief time in Singapore over Christmas and being served by a robot in a restaurant, I can certainly relate to this. The future has arrived. Are you ready?
Trend 3: The shifting talent pool and changing employee experience
“The way we work is evolving, with more younger people entering the workforce, more gig workers, and more remote workers. In their book The Human Cloud, Matthew Mottola and Matthew Coatney argue that traditional full-time employment will be a thing of the past, as organisations shift to hiring people on a contract basis – with those contractors working remotely.”
Trend 4: Flatter, more agile organisations
Traditionally, organisations have been hierarchical and rigid in their structures. But that is changing, as leaders recognise the need for flatter, more agile structures that allow the business to quickly reorganise teams and respond to change. It is also, in part, a response to the changing nature of work, particularly the proliferation of freelance and remote workers. This is the age of flatter organisational structures, which are more like flexible communities rather than a top-down pyramid structure.”
Trend 5: Authenticity
“Today’s consumers are seeking a more meaningful connection with brands. And this need for connection has given rise to authenticity as a business trend in its own right. Authenticity helps to foster human connections – because, as humans, we like to see brands (and business leaders) display important human qualities like honesty, reliability, empathy, compassion, humility, and maybe even a bit of vulnerability and fear. We want brands (and leaders) to care about issues and stand for more than just turning a profit.”
Trend 6: Purposeful business
“Linked to authenticity, this trend is all about ensuring your organisation exists to serve a meaningful purpose – and not just serve up profits to shareholders. Purpose defines why the organisation exists. (Not what the organisation is or what it does or for whom. Therefore, purpose is different to mission and vision.) Importantly, a strong purpose has the promise of transformation or striving for something better – be it a better world, a better way to do something, or whatever is important to your organisation.”
Trend 7: Co-opetition and integration
“We live in a time where pretty much anything can be achieved by outsourcing. The global business world has never been so integrated. And it’s a good job, because the need to work together to solve key business challenges (not to mention humanity’s biggest challenges) is great. Indeed, in the future, it will become increasingly difficult to succeed without close partnerships with other organisations. In practice, this means greater supply chain integration, more data integration and sharing of data between organisations, and even cooperation between competitors.”
I subscribe to this notion as I built my national retail company based on the principle of collaboration, instead of competition. In fact, for fifteen years, I had little idea as to who my competitors were, let alone what they were doing. Instead, we chose who we wanted to collaborate with and ignored the rest. It sounds counter intuitive. However, it freed us up to set our own agenda, and to innovate and collaborate as we saw fit. It enabled us to become an industry leader, not an industry follower. I have no doubt that my business grew to $25m annual sales and challenged so many industry norms as a result of focussing on our own customers, not those of others. Not viewing other industry players as competitors proved to be remarkably liberating.
Trend 8: New forms of funding
“The ways in which companies can generate finance is also changing. New platforms and mechanisms have sprung up to connect businesses with investors and donors – think crowd funding, initial coin offerings (ICOs), tokenisation and special purpose acquisition companies (SPACs). Many of these new methods are driven by the decentralised finance movement, in which financial services like borrowing and trading take place in a peer-to-peer network, via a public decentralised blockchain network.”
When I look back on my time as a national retailer, I clearly recall my mentor telling me that I would never understand the business unless I was financially literate. It was the best advice I ever got.
With the United Nations Conference of Parties (COP26) taking place in Glasgow Scotland, and Australia’s recently announced plan for achieving net-zero emissions by 2050, Australia as a nation is standing at an inflection point as the world pushes towards a more rapid uptake of renewable energy.
However, this is an inflection point that South Australia has already confronted.
In my role as Chair of the Premiers Climate Change Council, I presented online on behalf of David Speirs MP, Minister for Environment and Water, at the United Nations COP26 on Thursday 4 November 2021. Some years ago, I had the good fortune of doing the same at the United Nations COP21 in Paris, where I presented in person to a global audience in my former role as Lord Mayor of Adelaide.
Much has changed over the last 6 years and for South Australia, much of that change has been resoundingly positive. Following is an extract of the speech that I recently delivered at COP26 where I acknowledge the valued assistance of the team from the Department for Environment and Water.
To learn more about the United Nations COP26, visit www.ukcop26.org
South Australia has a proud history of environmental protection and climate change action including energy transformation, circular economy leadership and sustainable management of natural resources. Adelaide was recently ranked the 3rd most liveable city in the world, placing it ahead of all Australian cities.
South Australians have understood the economic benefits of ‘clean, green growth’ for a long time and with the state’s emissions having reduced by 33% since 2005, our economy has also grown and prospered.
The South Australian Government has set clear policy targets to achieve net zero emissions by 2050, and to reduce net greenhouse gas emissions by more than 50% on 2005 levels by 2030. It was recently announced that the State Government will be legislating these targets, providing a clear market signal about the seriousness of the government’s intent to accelerate progress toward a low emissions economy.
Advances in clean energy provide a solid basis upon which to achieve our ambitious emissions reduction targets and to grow our economy. With world class natural resources in solar and wind, South Australia is ranked second in the world for the annual variable renewable energy it generates.
In just 15 years, South Australia has transformed its energy system from 1% renewable energy generation to around 60%. This is well on the way to achieving our goal of 100% net renewable energy generation by 2030.
By 2050, our state plans to be generating 500% more renewable energy than we need to meet current grid demand. This will make us a renewable energy exporter and allow us to help other states and nations to reduce their emissions.
One of the keys to our success has been to build on previous work, make new investments and provide opportunities for the private sector and regional communities to benefit from a low emissions energy future. Our last coal-fired power station, located in the state’s Upper Spencer Gulf region, closed in 2016 and there are now 14 renewable energy projects in this region, including Australia’s biggest wind and solar hybrid project – the 317 megawatt Port Augusta Renewable Energy Park.
At the same time, South Australia is solving the challenges of intermittent energy in renewables, through battery storage, interconnection with other states, and new approaches to managing demand. Initiatives such as large grid-scale battery storage help stabilise the grid. In its first two years of operation, the Hornsdale Power Reserve – the world renowned ‘big battery’ – saved the market and consumers over $150 million.
The State Government also supports a number of distributed renewable energy generation and storage projects which are important for South Australia, where one in three households have a solar photovoltaic system. South Australia has 7% of Australia’s population, but 29% of home batteries installed across the nation and this has been a result of our two world leading home battery schemes, including our $118 million Home Battery Scheme, which have resulted in the installation of more than 26,000 home batteries.
South Australia is also on track to becoming a world-class supplier of green hydrogen, with the government working with the private sector to facilitate investment in hydrogen infrastructure, establish export hubs, and integrate hydrogen into our energy system. The level of global investment interest in South Australian hydrogen projects has capacity to transform our state into a renewable energy exporter of world standing in the next decade. The South Australian Government also has a Memorandum of Understanding with the Port of Rotterdam to study hydrogen export from South Australia to Europe.
A demonstration project comprising Australia’s largest electrolyser is a first step to decarbonising our gas network, beginning with 700 homes in a local area receiving gas blended with five per cent renewable hydrogen.
Climate change mitigation is a matter of choice whether to lead or follow.
To learn about the South Australian Government’s Climate Change Action Plan 2021-2025, please click here.
As CEO of Business SA, I am also aware of the role that business can play in influencing the market. Businesses in South Australia are engaged and understand the economic opportunity that comes with renewable energy and action on climate change.
In our state, there is a healthy relationship between government, business and community, with each party willing to play their part to meet our goals.
Martin Haese presenting at a recent Business SA Climate of Opportunity event held in conjunction with Minister David Speirs MP and Consul General Stephen (Steph) Lysaght of the UK Government.
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In my role as CEO of Business SA, the Chamber of Commerce and Industry for South Australia, and my former roles as Lord Mayor of Adelaide, University lecturer, GM of Rundle Mall and as a national retailer, I have always taken a keen interest in how State and Federal Governments craft their annual budgets to support those who take risks and make things happen in the economy. I am of course referring to entrepreneurs.
Over the years, I have seen some budgets hit the spot and others miss woefully.
With the vitally important 2021/22 State Budget for South Australia handed down on Tuesday 22 June, and with the end of the financial year now upon us, I reflect on what a different position the business community was in only twelve months ago.
Although many businesses were gradually returning to trade in June 2020, most were still riddled with uncertainty and hoping that last year’s State Budget would support them through the turbulence. Treasurer Lucas delivered the goods and as the peak body for business in South Australia, Business SA was grateful for it.
COVID-19 wreaked havoc across the business community in 2020
The bounce back following the first lockdown in 2020 was pleasantly unexpected and other than the disruption caused by a subsequent lockdown in November, business confidence has continued to build. As we learned from the results of the March 2021 Quarter of the Business SA William Buck Survey of Business Expectations, business conditions have again risen now to their highest level since just prior to the Global Financial Crisis, and business confidence was not far behind. Fingers crossed that this continues.
In valued partnership with William Buck, Business SA has published the Survey of Business Expectations every quarter for almost 40 years
Although the majority of businesses are doing better than expected, the survey also revealed that 21 per cent of businesses expect for their revenues to be below 70 per cent of pre COVID levels by the end of this quarter. That’s of real concern and why the recent State Budget needed to back all businesses, with a focus on initiatives that both grow our economy and support small businesses that are still experiencing hardship.
The unfortunate reality is that this pandemic is far from over. Although on a local level, South Australia is thankfully performing well, the risk of COVID outbreaks is still front of mind for many small business owners, as demonstrated by lockdowns in Victoria earlier this month and current localised lockdowns in Sydney and several other places.
In April this year, I handed our pre-budget submission to Treasurer Rob Lucas. It included a suite of 13 recommendations from Business SA. These recommendations are far more than hours upon hours of work from my expert team, let me tell you. Instead, these are genuine pleas from our members, the coal face of the business community across South Australia.
Small to medium sized enterprises are the backbone of the South Australian economy
We asked for the State Budget to address a funding mechanism to support South Australian SMEs through future periods of severe restrictions and why it MUST support the events, arts and live performance sectors who are still heavily impacted by restrictions.
We asked that temporary payroll tax waivers be extended for businesses most acutely impacted by ongoing restrictions including closed international borders, and that Adelaide’s CBD should have a bright spotlight shone upon it through a cold and dark winter, with hospitality, retail and accommodation sectors struggling to perform without international tourists and students. These things, along with a continuation of the incentives for employers taking on an apprentice and/or trainee, were mostly included in the 2021/22 State Budget. On behalf of the business community, we appreciate that.
We also hope for stronger measures in the future that enable the growth of industry, build local manufacturing capability, support jobs growth, fast track important infrastructure plans with more local procurement and capitalise on our state’s global renewable energy and circular economy leadership.
Business SA State Budget Luncheon on Friday 2 July 2021
Providing there are no monumental disruptions, Business SA will host Treasurer Rob Lucas at Adelaide Oval on Friday 2 July for our State Budget Luncheon with the Treasurer presenting a detailed business briefing on the 2021/22 State Budget. This event includes a response by Shadow Treasurer Stephen Mullighan and a budget analysis by an expert business panel. Limited tickets are available at www.business-sa.com or contact my team on (08) 8300 0000 today.
As they say in show business … “The show must go on!“
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Today, I write to you in my role as CEO of Business SA, the peak body for the business community in South Australia. When 2020 started, never did I imagine that I would be standing on a ladder in Adelaide’s CBD addressing a 150-strong crowd of business owners at breaking point.
In all the twists and turns of 2020, for myself and my team, this was THE defining moment.
It exposed the pure heartache and despair that business owners have endured in the wake of COVID-19.
This show of solidarity from the hospitality sector was raw and emotional. People were open and honest about their fears for the future and in many ways, this was the moment where Business SA, the Chamber of Commerce and Industry for South Australia, truly found its PURPOSE.
In terms of Business SA’s role to support business owners, not only in the hospitality sector but right across South Australia, this moment doubled our resolve to support those who take a risk.
It is the risk takers who will ultimately drive our economy forward from this pandemic. Not business associations, not Governments. Entrepreneurs are our largest employer. They are also creators and seekers of opportunity. It is our role to support them through the good times and bad.
This year saw pivoting, resilience and mental health become words that we have become all too familiar with.
However, these words are much more than cliches. They have helped businesses to survive … and, we say to you all, a very big WELL DONE.
As the State’s independent and local Chamber of Commerce and Industry, Business SA has played its role in supporting 17 different industry sectors in 2020.
When the Summer bushfires devastated South Australia, Business SA personally contacted and offered support to more than 100 businesses impacted by the fires.
We then “pivoted” ourselves, delivering more than 40 virtual events and webinars throughout the year while our Business Advice Hotline answered 12,800 calls from business owners.
We brought together 50 industry associations to discuss their concerns and ideas to assist economic recovery from COVID-19 and later launched a 9 Point Plan to Skyrocket SA.
We held South Australia’s biggest Mentally Healthy Business Breakfast, which was livestreamed across 10 regions and attended by almost 200 business owners and more than 3,200 people online.
Business SA also advocated consistently to Federal Government, State Government and even Local Governments to fight for more financial support for businesses.
But we know it has been you, the business owner, who has done the heavy lifting this year.
We have stood with you, but you have done the hard work and we thoroughly commend you for it.
We wish you and your family a Merry Christmas and success into 2021. We hope you have an opportunity to re-charge over the break and we encourage everyone to buy local this Christmas.
When you support local businesses, you are supporting local jobs. This is something we’ll need more of next year. Also, when you support others, your organisation’s PURPOSE all of a sudden has more clarity and becomes a lot more meaningful.
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Welcome to the Martin Haese Report, the sixth in my series of musings on entrepreneurial leadership. With COVID-19 having wreaked havoc across industry sectors around the world and in turn disrupting how many do business, a growing number of people are asking whether it’s time to reconsider the business community’s relationship with the natural environment. I am one of those who believe that it is now timely to discuss how entrepreneurial and environmental leadership intersect.
COP21 Paris 2015
Before we commence, some context that qualifies me to share my thoughts on this topic. In my former role as Lord Mayor of Adelaide, I was invited to attend the United Nations COP21 in Paris in December 2015 where I spoke at several functions including the Sustainable Innovation Forum. It was at COP21 that I grasped the significance and strategic importance of South Australia’s renewable energy leadership and the high regard in which the State is held on the world stage.
It was also in Paris that I signed the Compact of Mayors, met with world leaders who are committed to environmental and economic leadership, and committed to educating myself about climate change adaptation, mitigation, the growth of low emissions industries and the circular economy.
In January 2019, South Australian State Minister David Speirs MP appointed me as Chair of the Premier’s Climate Change Council (PCCC) where I have since worked alongside a talented group of fellow Council members to advise and inform the State Government on climate change adaptation, mitigation and the importance of low emissions industries in South Australia.
In September this year, I (virtually) attended a number of sessions at Climate Week 2020 in New York City where I watched HRH Prince Charles’ inspirational address;
Has COVID displaced climate change?
While the global pandemic continues to dominate the headlines, there is a growing anxiety that some other pressing issues are being neglected, most notably climate change. This is a topic that was swept to the top of the national agenda when the drought culminated in last summer’s devastating bushfires, but was quickly set aside with the onset of COVID-19 only three months later.
But rather than despair, I suggest that the pandemic may in fact provide an opportunity to reassess, recalibrate and refocus on climate change issues, as COVID-19 has resulted in many people developing a greater awareness and appreciation for the natural environment.
For many, COVID-19 has forced a rethink about how we consume, where we consume, and who we consume from. This is resulting in a protracted shift towards people wanting to buy from and do business with organisations that either have an environmental sustainability policy (ESP), a goal for carbon neutrality, are actively involved in the circular economy, or have greater transparency about their waste cycle.
Consumer behaviour is changing
Consumer sentiment and behaviour is changing and if businesses don’t respond to the needs of their customers then they are often not in business for much longer. With more organisations putting measures in place that govern how and where they invest, there is a stronger emphasis being placed on whether organisations are making investments into climate aware and climate appropriate companies.
Insurable risk is another key consideration in business decision making, and assessing climate risk is already driving behavioural change within the business community. To illustrate the point, in January 2020, the Vice Chairman of BlackRock discussed their plan to avoid investments with high sustainability-related risk as climate concerns are driving a sweeping change in the way the firm invests and manages its $7 trillion in assets.
An opportunity rich environment
With rapid advances in technology, changing consumer behaviour and new demands being placed upon institutional investors, the low emissions sector is clearly the next big thing. If the steel, plastic, aluminium, cement, food and agriculture sectors were each to adopt circular and low carbon practices, not only would 9 billion tonnes of carbon be saved by 2050, a multi-trillion dollar carbontech sector would be unleashed.
In the following video, I share my thoughts on how climate change and technological innovation are catalysing the growth of low emissions industries and greater innovation within the circular economy.
However, while the economy is clearly important, I caution you against thinking that every climate related problem or opportunity must be considered in pure economic terms. After all, it has been that very thinking that has got into the predicament we currently find ourselves. Sometimes doing the right thing should be justification enough.
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A quick lesson about the importance of being agile.
The inter-relationships between creativity, innovation and entrepreneurship are already well documented. With organisations operating in such highly competitive environments, creative thinking has become a crucial way to differentiate in a crowded marketplace.
Whether that manifests itself as the next big idea or as an improvement to an existing process, it almost always starts with creative thinking.
It is well documented that in order for an organisation to embrace creative thinking, management must tolerate failure. The old adage of ‘fail small and succeed big’ has never been more true when it comes to the application of creative thinking within organisations.
Welcoming creative thinking within organisations also requires a degree of agility. A few short years ago, I was asked to keynote a musical gala at Adelaide Town Hall. Prior to going on stage, it was brought to my attention that there were slight issues with the schedule as the next artist was caught in traffic and running late. This is how I helped the emcee get everything back on track before I delivered the keynote speech!
Welcome to Part Two of a series of musings on entrepreneurship.
The talent within: The ‘entrepreneurial employee’
Intrapreneurs, innovators and so much more …
Intrapreneurs are employees who search for opportunities and exploit them through innovation using the resources of the organisation they work for.
The term intrapreneur was first coined in the late 1970’s by an American author, inventor and entrepreneur, Gilford Pinchot III.
Pinchot defined the term as ‘employees and leaders of large firms who bring to the organisation the traits of entrepreneurs.’
The concept of intrapreneurs is older than many think and an often-cited example is Lockheed Martin during WW2 when Kelly Johnson was tasked with developing what became the XP-80 jet fighter for the US Army.
The Lockheed Martin XP 80 fighter jet
Johnson recruited a small team which later became known as Skunkworks.
Given the escalation of the war effort, increased manufacturing output and subsequent lack of space, Skunkworks quite literally worked from a rented circus tent.
However inconvenient, being located outside of the corporate bureaucracy meant that Johnson was also able to work outside of its rules, traditions and hierarchies.
Johnson developed 14 rules and practices for intrapreneurship at Skunkworks and you can read them here
Skunkworks designed and delivered the XP-80 in only 143 days – a full week before the delivery deadline.
Post War Intrapreneurs
During the post war years, many organisations actively encouraged intrapreneurial ecosystems and subsequent new products and innovations made companies such as 3M, Xerox, HP (Hewlett Packard) household names. However, other companies hosted significant internal R&D programs but could not make the leap of faith that their intrapreneurs asked of them.
‘Talent hits a target no-one else can hit.
Genius hits a target no-one else can see’.
Steve Jobs presented the Apple iPhone to the public on the 29th June 2007 proving Arthur Schopenhauer right and every high school math’s teacher who ever uttered the phrase, ‘you won’t always have a calculator withyou’ wrong.
Twelve years on from that first smart phone, we are rarely further than arm’s length away from having the entire sum of all recorded human knowledge at our fingertips.
The impact of the iPhone on businesses and society in general cannot be understated.
It not only changed the way we communicate but also the way we listen to music, how we meet partners, how we shop, socialise, keep fit, take notes and stay on time.
The list of products, and in some cases, industries made redundant by the iPhone and subsequent technologies and ideas enabled by it, is staggering.
Disruption on an epic scale
While the iPhone changed the way we take photos and what we do with them, it might surprise you to learn that it wasn’t Nikon, Canon or Sony that developed the first handheld digital camera, it was Kodak and they did it way back in 1975.
Kodak is often used as the worst example of how to create intrapreneurial ecosystems and it still stands today as a cautionary tale for any business.
It was Kodak who had been at the forefront of new technologies including dry plates to film and black and white to colour who ran a large R&D department and employed a 25-year-old engineer named Steve Sasson.
When Sasson developed the digital camera for Kodak it was a little different to what we think of today.
His camera weighed 3.6kg and took 23 seconds to store a black and white 0.01-megapixel photo onto a cassette tape.
The cassette tape held 30 images and to put that into perspective, think of how many selfies you have on your phone today.
The world’s first digital camera
Most unfortunately for Sasson, Kodak’s executives were not as forward thinking as the young engineer. They saw, what seemed to them, an obvious threat to their 90% market share of film sales rather than a revolutionary new technology that could change society.
Kodak could not envisage a world without prints, photo frames and albums and certainly not one with Facebook, Instagram, WhatsApp, Snapchat and Tinder.
Kodak allowed Sasson to continue his work and retained the intellectual property, but they forbade him from going public with it.
The result was that Kodak filed for bankruptcy in 2012 while just two years later it was estimated that people took and uploaded 1.8 billion photographs per day or around 657 billion per year
In 2018, we collectively took an estimated 1 trillion photographs and only very few of them were taken using film and even fewer were printed.
Kodak got disrupted.
The late Twentieth Century
The eighties and early nineties were a bleak time for intrapreneurs.
A shift in corporate culture meant that many organisations became more risk averse and demanded a stricter adherence to top down management systems.
This was wonderfully parodied in the 1986 Michael Keaton movie ‘Gung Ho’ (released as Working Class Man in Australia). In the following scene, the new Japanese owners of a Pennsylvania car manufacturing plant insist that the local American workers perform morning calisthenics.
It’s curious to note that the top down, Japanese ‘salaryman’ culture that was the subject of ‘Working Class Man’ was, at the same time, laying the foundations for a multi-billion-dollar console gaming industry through companies like Nintendo and Sony.
However, at that time, these companies were the outliers and most CEO’s were turning their attention to increasing efficiencies, minimising risk and cutting costs.
Reducing input rather than increasing output is still sadly the established orthodoxy in some larger organisations.
No company, organisation or individual has ever become truly successful by reducing their capacity.
Enter the Millennials
Many Western leaders have been told, or are telling themselves, that we live in an ageing society. However, this statement ignores the impact that young people with higher disposable incomes have on the consumer economy.
Millennials are now the largest generation born in decades. They have seen advances in technology that have upended industries and broken oligopolies – just ask a Millennial when they last paid for music and they will almost certainly say a live concert.
Millennials also grew up during the global financial crisis and felt the effects of austerity measures introduced in its wake, leading many to question if there wasn’t a better way.
This is a generation that has known nothing but disruption, most accept it as normal, adapt and exploit it, so is it any surprise that they bring that same appetite for change to their workplace? And, is it any surprise that progressive organisations are recognising the value of their ideas?
I would argue that businesses that are embracing, encouraging and creating an intrapraneurial ecosystem for this new generation of employees and catering to a new generation of customers, are not the ones complaining about a downturn in sales.
That is not to say that all Millennials are intrapreneurs or that all intrapreneurs are Millennials. I certainly don’t think that other generations lack intrapreneurial spirit but Baby Boomers and Gen X’ers have lived and worked through the economic rationalism of past few decades and may be less inclined to put their heads above the parapet.
In my experience, intrapreneurs come in all shapes and sizes, they exist in every organisation and they can be enabled.
When you consider that the chief difference between an entrepreneur and an intrapreneur is their employment status it should be easy to spot an intrapreneur within your organisation. They should be the ones displaying those entrepreneurial traits I covered in ‘Who and what is an Entrepreneur’ right?
I would argue that unless you create an intrapreneurial environment, most of your entrepreneurs will remain hidden and under-utilised – an incredibly useful resource left untapped. However, if you create the right environment, intrapreneurs will readily identify themselves.
10 things you can do to create an intrapreneurial culture.
1. Hire more intrapreneurs
Sounds simple doesn’t it?
Some creatives like to work in isolation (although they might credit a ‘Muse’) but creativity in business is more often a result of collaboration and inspiration and employing more intrapreneurs means more opportunities for both.
Have a look at your organisation’s last few job advertisements – do they start with a long list of duties and responsibilities followed by required formal qualifications?
If you want to attract cookie cutter candidates advertise a list of cookie cutter job descriptions, but if you want to attract intrapreneurs you will need to post more thoughtful job advertisements.
Try reversing the job description and matching the potential candidate’s strengths to the organisation’s needs. Eg;
‘the successful candidate will use the full Microsoft toolbox to engineer new solutions to old problems’
… sounds a lot more attractive to a potential intrapreneur than:
‘must be competent in Outlook, Word and Power Point, and proficient in Excel’
Remember that intrapreneurs are looking for a challenge, so appeal to their aspirations and intellect rather than their experience – try asking what they can do rather than what they have done:
‘we’re looking for someone who can take our customer service to the next level’
is better than:
‘must have 5 years’ experience in B2B sales’
2. Encourage employees to think of themselves as partners in the business
There are many reasons why intrapreneurs don’t become entrepreneurs and it is often personal financial circumstances. While it would be easy and uncharitable to define intrapreneurs as people with great ideas who don’t want to risk their own money, that definition ignores the experience, loyalty and entrepreneurial instinct that intrapreneurs bring to an organisation.
It could also be that while entrepreneurs are often driven by individualism, intrapreneurs are driven by collaboration.
If you want to develop an intrapreneurial culture, people need to feel as though they have a stake in the organisation and I think it goes without saying that this starts with trusting all employees, from the cleaner through to the Vice President. Nine times out of ten they will know how to innovate within their own area of expertise, but they must feel as though they are heard and trusted to make decisions as part of the solution.
The best way I have found to build trust is by being open and transparent with all employees by sharing relevant and important information.
I have seen company CEOs and senior executives try to hide the company’s financial position from their employees in a misguided attempt to calm fears about job losses. If you’ve ever been an employee, you will know why this is misguided.
Ask for feedback, but more importantly ask for recommendations. You would be surprised how rarely this happens, especially in large companies and rarely in organisations with a top down management culture.
Great ideas (and solutions to problems) often come from unlikely sources.
3. Enable people and encourage ownership
General George S Patton famously said;
“Never tell people how to do things. Tell them what to do and they will surprise you.”
Ownership of a project or role is one of the most important drivers of intrapreneurial behaviour. When you allow people to own their work, what you are really doing is giving permission for them to make that work the very best that they are capable of delivering.
Taking away the back stop, or reducing an employee’s reliance on it, means that the individual assumes responsibility for their successes and failures and both of these things are key to creating an intrapreneurial environment. In my experience, this is one of the hardest things for anyone to put into practice, but it is the main difference between being a leader and manager.
4. Provide opportunities for people to speak
This seems like an obvious thing to do, so it is surprising how few large organisations have a multi directional system of communication – even more surprising when you consider how many new ways of communicating there are. In the old days there might have been a suggestion box allowing at least bottom/up communication, but technology has made the suggestion box largely obsolete.
I will write further on the concept of a Social Enterprise Network (SEN) but for now, they are basically a social media styled intranet or a private Facebook page for all employees – allowing people to actively engage with other areas and levels of an organisation or within specific groups.
Of course, there are other ways to communicate, but make sure that if you have an ‘open door’ policy that your door is open. Quashing ideas and recommendations before they have been discussed and explored will lead to fewer ideas and recommendations.
5. Provide time, space and resources
In my last Blog post, I discussed entrepreneurs. If we look back at the definition of an entrepreneur, it’s someone who;
1. Creates and/or recognises opportunities
2. Assumes the responsibility for the risk involved in new ventures, and
3. Has the managerial skills to gather and deploy the required resources
It should be obvious, yet far too many managers of intrapreneurs stumble at this hurdle.
While entrepreneurs are able to gather and deploy the required resources, intrapreneurs are not as likely to have the authority to redirect resources such as staff and capital and likely to have less control of their own workload and time. This is an area where leaders can have an enormous impact in creating an intrapreneurial culture by simply making available the required tools.
6. Don’t try to design by committee
I spent many years in the fashion industry building a national retail chain. In the retail industry, there is a graph used to reveal the sales arc of products and it is often used by fashion buyers to determine product lifecycle and when to look for the next big thing.
The graph is called the ‘Rogers Adoption Curve’ or the ‘Diffusion Process’ and it was originally applied to agriculture and home economics. It has since been most commonly used to describe the adoption of new technology, but the principle can be applied to almost any new product or idea.
I present it here because intrapreneurs sit squarely in the 2.5% of the sample area designated ‘innovators’
The Rogers Adoption Curve – Diffusion Process
If you submit a new innovation to a committee of ten people, the best that you can hope for is that two of them (innovators and early adopters) will get it straight away and see the potential, three will understand part of it and the other five will be completely baffled.
The danger of ‘design by committee’ is when the majority are able to veto the minority but an even worse situation occurs when the majority aren’t able to veto so they compromise instead.
This sees a new idea stripped of innovation until it resembles an old and easily recognisable idea, then it will be held up as progress and proof that the committee system works.
I think you can guess how this impacts an intrapreneurial culture.
7. Cross functionality
Silos are the scourge of modern organisations.
Department A and B sometimes collaborate with C (usually because they have to) while department X, Y and Z have only limited contact with other departments.
While working on a previous project, a colleague described a large company who wanted to improve the organisation’s digital footprint – particularly setting up an online store.
A committee was formed with representatives from each department.
The chair of the committee was the General Manager of Human Resources while the Project Manager was a relatively junior from Marketing with little or no authority (either personal or official) to work across departments.
The project quickly descended into chaos as each representative was afforded an equal say in all aspects of the project including areas they had no experience or knowledge of.
In the end, the organisation built a portal with an online store added as an after-thought, resulting in a giant opportunity missed.
My colleague maintains that it could have been worse – they could have handed the entire project to the IT department and ended up with a website that no-one could use.
That is not to say that silos cannot be broken down to enable collaboration because a great idea or innovation in one area might have disastrous effects in another, but by the same coin, other perspectives can also add significant improvements to the original.
In my experience, the best way to smash silos is not with a sledgehammer but with a smaller group that shares a common problem or goal who is afforded the authority to work across all departments and pay scales.
8. Mistakes, I’ve made a few.
I don’t entirely subscribe to the mantra of ‘fail fast and fail often’ because it implies that failure is part of the original goal.
Failure is, by definition, the opposite of success and everyone should want intrapreneurs to succeed – especially the intrapreneurs themselves.
Instead, a better word is ‘mistake’ … mistakes happen and we correct them.
9. Collaboration or competition?
An intrapreneur is likely to respond well to both.
Collaboration is required for teams to work individually or across departments to draw upon collective knowledge and experience, but competition is just as important.
Healthy competition ensures that benchmarks are not only reached but reset.
10. What’s in it for me?
Recognise and celebrate the wins along the way. I have yet to meet anyone who doesn’t respond to recognition of their contribution.
Recognition amongst peers, raises, bonuses, promotions and even a share in the profits are all examples of rewards but not the only ones and they may not be the most effective in all circumstances.
Rewards for intrapreneurs should not only reflect what they have achieved but also how they would like to be rewarded.
Think of it this way, they have spent the last few days/weeks/months pouring their energy into understanding the problem and delivering a successful outcome. They’ve sweated the big and the small stuff, knowing that their reputation and status are on the line. At the end of it a pay rise might be welcome, but it could also seem impersonal to someone who has invested more than was asked of them.
If you are asking people to go above and beyond, be prepared to go there too – find out what motivates them and if you still don’t know, ask.
What’s in it for you?
When organisations create an intrapreneurial environment, where people are given a genuine opportunity to think, create and transform, employees become more enthusiastic and engaged which in turn leads to productivity increases. It’s then easier to attract and retain valuable people and skill sets.
Yet, there is another compelling reason why it’s important to embrace greater entrepreneurial thinking with your organisation – disruption.
I will cover disruption in my next Blog post but for now – disruption is the single biggest threat to every business.
For many years, the biggest threat to most businesses was competitors with cheaper prices – a relatively easy problem to counter, but over the last decade or so it has been competitors with better ideas.
Disrupting your own business (before someone does it for you) by attracting, retaining and enabling intrapreneurs might be your best option to survive and thrive.
Vision, strategy, communication, persistence and …
Having owned my own businesses, taught university students, held public office and led positive change for communities, I have appreciated and learnt from each experience. However, it was those years as an entrepreneur and business owner leading a large team of employees that reinforced in me the importance of vision, strategy, communication and persistence.
… an unwavering focus on the customer!
No matter what your industry or sector, customer centricity is vitally important. Customers are the very reason why we do what we do but nowhere are the lessons sharper or more immediately felt than the retail sector. It should therefore come as no surprise that I have taken a relentless, customer driven approach to everything I have done.
Change is the only constant
Technology is transforming the way that we work, communicate, live and recreate. Automation will even inevitably transform the way that we travel.
As Lord Mayor of Adelaide from 2014 – 2018, I delivered Ten Gigabit Adelaide; an ultra-fast fibre optic data network as a partnership between the City of Adelaide and TPG Telecom. I believe that digital infrastructure in a CBD environment has a transformative impact on underwriting the competitiveness of the city and the business community within it.
While disruption is frequently associated with new and innovative technology, this only tells part of the story. Technology is simply the enabler of new ideas and new ways of doing things, especially in business.
With change as the only constant and the pace of disruption accelerating as technology makes new things possible, many business leaders have identified the need to re-invent both themselves and their businesses. Most understand that if they don’t show leadership and disrupt their own business or industry, someone else will.
Embracing disruption is the only option for building sustainable enterprises (both financially and environmentally) and far too many businesses owners have already learned, at great cost, that standing still and trying to deny and defy change is no longer an effective strategy.
Having built multiple businesses, I know what it means to take a financial risk and I have great empathy, insight and support for those that do the same. The relationship between risk and reward strikes to the very core of being a business owner.
My future blog posts will focus on the three important themes of leadership, reinvention and sustainability.
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Premier’s Climate Change Council
Often, the reality of climate change is seen as an unsurmountable challenge or impost to be endured, however, this type of thinking ignores the opportunities and denies the potential of emerging industries. As Chair of the Premier’s Climate Change Council in South Australia, I will be looking at sustainable development from both an environmental and economic perspective.
South Australia is well placed to lead the world in providing solutions to address climate change and other sustainability related technologies. It is my personal challenge to identify and champion the innovative solutions created by South Australian entrepreneurs so that they can provide them locally, nationally and globally.
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