United Nations COP26

United Nations COP26

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
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.
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.
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.

Thank you for reading my Blog : The Martin Haese Report.

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With kind regards,

Martin Haese MBA

Climate of Fear or Climate of Opportunity

Climate of Fear or Climate of Opportunity

In my role as CEO of Business SA, the Chamber of Commerce and Industry for South Australia, I remain close to those who take calculated risks to better themselves, their organisations, families, employees and South Australia. After the seismic turbulence of the last 18 months, who could blame the owners of many small to medium sized business for thinking about packing it in?
However, have we ever stopped to think what would happen if business owners lost their individual and collective appetite for risk? Have we even dared to quantify the dire economic and social consequences of a scenario where hundreds or even thousands of business owners pulled up stumps because it is simply too difficult to earn a living, let alone build any meaningful wealth? Personally, I don’t even want to consider this scenario as it is not a pretty picture on so many levels.

All I can say is kudos to the business community. You are the true heroes of 2020 and 2021.

So, let’s consider why so many business owners have kept on keeping on, even when things have looked so bleak. In my own experience, it sometimes comes down to a conscious and personal choice about whether to live in a climate of fear or a climate of opportunity. Let’s face it, over the last 18 months, we have all seen examples of both and have probably even experienced both ourselves.

This is not about being Pollyanna and ignoring the sometimes seemingly insurmountable challenges of operating a business in a global pandemic with disruptions, lockdowns and restrictions. Quite the opposite. Instead, it’s about being extraordinarily resilient. It’s about having a very different mindset, one that keeps telling you that there is always a way forward no matter how bad things may appear.
Again, kudos to the business community. I am in awe of your strength and fortitude.

If this conversation resonates with you, I now encourage you to think about another seemingly insurmountable challenge. Climate change.
With the recently released United Nations Intergovernmental Panel on Climate Change (IPCC) report stating that planet earth has entered “Code Red for humanity”, we have every reason to be fearful. Very fearful. However, it’s that very fear that will motivate us to act. Also, are we asking ourselves the right questions? Maybe, just maybe, there is an opportunity here.

As a jurisdiction, South Australia has one of highest uptakes of renewable energy on the planet. We are also leaders in everything from container deposit legislation, single use plastics, waste and recycling, battery storage technologies, wind farming, blue carbon innovation, sustainable water management and agricultural practices. We have real opportunities for green minerals, green steel production and green hydrogen, and the State Government has a plan to reduce carbon emissions by 50% by 2030 (based on 2005 levels).

Let’s consider why? Well, that takes me back to South Australia’s entrepreneurial spirit and the creativity and resilience of the business community.

Ahead of the COP26 UN Climate Change Conference in Glasgow in November, Business SA will host its very own Climate of Opportunity luncheon in Adelaide to explore the challenges for international trade and growth in the low emissions economy.

Guest speakers will include Hon David Speirs MP (Minister for Environment and Water, South Australia), Steph Lysaght (Consul-General of the UK), Akhil Abraham (Head of Climate Diplomacy at the British High Commission, Canberra) and a panel of South Australian business leaders who will discuss how we can position our businesses for future success in a changing world.

Thank you for reading my blog : The Martin Haese Report.

If you haven’t already joined my network, you can sign up for free. Please do not hesitate to recommend my blog to any of your friends, family or colleagues who share our common interests.

With kind regards,

Martin Haese MBA

We need a Bigger Budget for Small Business

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
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
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
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
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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Martin Haese MBA

International Women’s Day

In my role as CEO of Business SA, the Chamber of Commerce and Industry for South Australia, and my former roles as the 78th Lord Mayor of Adelaide, General Manager of Rundle Mall and as a national retail entrepreneur with over 200 employees, I have never taken for granted the talent, commitment and contribution of the individuals and teams that I have either employed or worked alongside. The majority of which have been women.

On Tuesday this week, Business SA celebrated International Women’s Day with a 300-person event in Adelaide’s CBD. It is timely to reflect on what this day means and why it is important.

To go back to its earliest days, International Women’s Day was born out of the USA and Europe. The first National Women’s Day was held across the United States on 28 February 1909. In 1910, when the then leader of the Women’s Office of the Social Democratic Party in Germany tabled the idea at the second International Conference of Working Women, a unanimous vote was secured, and the first International Women’s Day was officially celebrated the following year on 19 March 1911. The date was then moved to 8 March in 1913.

Times were certainly different then, including in Australia where it had been only 9 years since the Australian Commonwealth Parliament passed an act enabling women to vote in Federal elections.

How times have changed, and mostly for the better.

International Women’s Day was first held in Europe in 1911
International Women’s Day was first held in Europe in 1911

In local history, Dame Nancy Buttfield became the first SA woman elected to the Federal Parliament in 1955. In 1966, the first woman was sworn in for jury service. In 1969, women were awarded equal pay for the same work as men and on 24 June 2010 Adelaide expat Julia Gillard was sworn in as the 27th Prime Minister of Australia, the first woman to hold the nation’s highest office.

There are so many more examples I could list including my own godmother Dame Roma Mitchell who was Australia’s first female Judge, first female Chief Justice of the Supreme Court, first female Vice Chancellor of an Australian University and the first female Governor anywhere in Australia. Dame Roma was also a strong advocate for social justice who backed her words with action.

Dame Roma Mitchell AC, DBE, CVO, QC (1913 – 2000)
Dame Roma Mitchell AC, DBE, CVO, QC (1913 – 2000)

I now encourage you to consider your own workplace and take some time to appreciate the extraordinary achievements of so many South Australian women, past and present. In fact, dating back to the pioneering days through to today, my wife Genevieve has devoted her energies toward uncovering and sharing the stories of many great South Australian women. These stories have been recorded in HerStory, a project supported by the City of Adelaide and the History Trust of South Australia.

Genevieve Theseira-Haese, Lady Mayoress of Adelaide 2014-2018
Genevieve Theseira-Haese, Lady Mayoress of Adelaide 2014-2018

Age and experience are not prerequisites for making a difference in society. With social entrepreneur Isobel Marshall named as Young Australian of the Year for 2021, International Women’s Day takes on extra significance for younger women across our nation. Bravo to Isobel and to her business partner, Eloise Hall.

Isobel Marshall, Young Australian of the Year 2021
Isobel Marshall, Young Australian of the Year 2021

It’s important to remember that although significant progress has been made since 1911, this work is far from over. Equal opportunities are still being fought for in some industries. In many countries, women’s rights are vastly different than our own and in others, almost non-existent.

As a man, I cannot understand on a personal level every struggle that women encounter. However, I can lead by example. As a former business owner, former Lord Mayor of Adelaide and now CEO of Business SA, I value the equal contribution of women in commercial and civic life.

Over 75% of the workforce of my own company were women, I led the first gender balanced Council in the history of the City of Adelaide and Business SA proudly has a 65% female work force. Business SA’s Chair, Nikki Govan, is a strong leader and successful businessperson and many of Business SA’s senior team are qualified, skilled female professionals who add value to the organisation every day.

Business SA team members
Business SA team members

Let’s aspire to a time when a nominated day representing the achievements of women in business may not be entirely necessary, as they will be celebrated every day, with fair conditions, safe working environments and equal pay.

Let’s also aspire to a day where for every single organisation it’s not about filling quotas, it’s instead about filling the organisation with hard working, capable employees that span genders, preferences, ethnicities and religions.

While we work towards these important outcomes, I encourage you to watch the following stories that were shared at Business SA’s International Women’s Day luncheon event held in the SkyCity Ballroom in the City of Adelaide on Tuesday 9 March 2021.

Thank you for reading my Blog : The Martin Haese Report.

If you haven’t already joined my network, you can sign up for free. Please do not hesitate to recommend my blog to any of your friends, family or colleagues who share our common interests.

With kind regards,

Martin Haese MBA

Did you find your purpose in 2020?

Did you find your purpose in 2020?

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.

Thank you for reading my blog : The Martin Haese Report.

If you haven’t already joined my network, you can sign up for free. Please do not hesitate to recommend my blog to any of your friends, family or colleagues who share our common interests.

With kind regards,

Martin Haese MBA

Environmental Leadership

ENVIRONMENTAL LEADERSHIP

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.

Over the ensuing years as Lord Mayor, I focused my energies on translating South Australia’s renewable energy leadership into practical actions within the City of Adelaide. These included the City of Adelaide’s Carbon Neutral Strategy 2015-2025, the Carbon Neutral Adelaide Action Plan 2016-2021, Sustainability Incentives SchemeSolar Savers Adelaide, the roll out of electric vehicle charging infrastructure and many tree planting, waste and water management programs.

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.

Thank you for reading my blog : The Martin Haese Report.

If you haven’t already joined my network, you can sign up for free. Please don’t hesitate to recommend my blog to any of your friends, family or colleagues who share our common interests.

With kind regards,

Martin Haese MBA

ENTREPRENEURIAL LEADERSHIP

Welcome to Part Five in my series of musings on entrepreneurship. I dedicate this long overdue blog post to my friend and business co-collaborator Lincoln Schultz who recently and quite unexpectedly passed away. I can almost hear Lincoln saying, “Why haven’t you finished your next blog post yet?” Apologies for the tardiness.

 

Things are certainly different this year. How the world has changed since December 2019 when in my most recent blog post of The Martin Haese Report we looked at the vital role of Social Entrepreneurs. There has been no script for 2020 and today’s blog post is intended to help you consider the role that entrepreneurial leadership plays in pivoting your business, career or organisation as we slowly emerge from one of the most turbulent years in living history.

While sounding something like a spacecraft that has invaded earth from afar, COVID-19 has proven itself to be not only alien to our recent experiences, but a profound health risk and the ultimate disruption to business as usual. When you pause to think about it, you would not be entirely honest with yourself if you did not admit to having experienced a range of emotions over recent months including fear, frustration, skepticism, resignation, acceptance, hope or even positivity. Truth be told, I’ve felt them all, but it’s pragmatism that has won me over.

Irrespective of how we are each processing things, this is surely a re-set moment for the global entrepreneurial community.

 

 

So, what role does entrepreneurial thinking play in the current context of COVID-19, in an environment where an ever-increasing number of corporations and businesses are looking to government and government administrations to support them through the turbulence? Before we address that, let’s first acknowledge that we’ve all seen examples where business owners and entrepreneurs have already “pivoted” their business model to adapt to the current environment. “Bravo”, I say to those who have done so. Well done. However, not every business can manufacture PPE (personal protective equipment), digitise their services, re-set their supply chain or flip their channel strategy, so this issue runs deeper, much deeper.

 

Leadership

Much has been said and written about society’s cravings for political, cultural, environmental and commercial leadership and rarely does a day go by without someone, somewhere crying out for leadership as if it was something that could readily be downloaded on demand.

I have always been interested in what makes a good leader. I am equally interested in the difference between a good leader and a great leader. In my 25 years in business, I have met some impressive leaders. As Lord Mayor of Adelaide (2014-2018), I met many more.

 

 

Leadership is often defined as the ability to motivate a group of people or an organisation to achieve a worthwhile common goal. The link between leadership and motivation is not to be under-estimated.

I have come across many people who have either innate or learned leadership qualities, yet in my experience relatively few are prepared to step forward and pay the price for consistently applying them. Leadership involves both choice and sacrifice and the choices a leader makes are not often easy, and the sacrifices almost always include opportunity costs. However, irrespective of the circumstances, leaders do have common traits. They have vision, inspire trust, are good communicators and, most importantly, great leaders always accept accountability.

 

Entrepreneurial Leadership

Let’s now consider entrepreneurial leadership. What is it? Why is it different and is it any more or less relevant today than it was only a few months ago?

I recently read a meme that said, “entrepreneurial leaders work 80 hours a week, so they don’t need to work 40”. Although hard work is a given, I’m not entirely sure that this is correct as working hours are not a badge of honour, and results are a better measure on any level. The reality is that it sometimes it takes a monumental effort to achieve a result and sometimes it doesn’t, as timing and opportunity both play a role in determining many outcomes. Just ask a forex trader.

The key ingredient that defines an entrepreneurial leader is their ability to lead an organisation in a fast changing and highly uncertain environment. Entrepreneurial leaders understand ambiguity, and they realise that perfect decisions are not always possible because they are operating in an imperfect environment. Sound familiar? Yes, it describes 2020 to a tee.

Change and uncertainty impact each of us differently. Some of us shine and some of us shrink. An entrepreneurial leader has the ability to remain calm, deconstruct the situation and reconstruct it so that the organisation not only survives, it prospers. Most tellingly, entrepreneurial leaders are able to do this in an environment where the “unknowns” often far outweigh the “knowns”.

 

Entrepreneurial Leadership and Adversity

Entrepreneurial leaders also have a unique relationship with adversity. They seem to see through it with a vision of what things may look like out the other end. That’s because change almost always brings opportunity. Whether that comes from changes in technology, markets, legislation, regulation or consumer tastes and preferences, change is an open door for entrepreneurs.

 

 

History is littered with stories about leaders and businesses born out of adversity. As I reflect on my own past experiences, two of my own businesses were born out of adversity, one of which was launched in a recession and went on to become a successful national enterprise. Although I didn’t plan to launch my business in a recession, it was a gap in the market and my frustration at not being able to secure the kind of job that enabled me to feel that I was contributing in a meaningful way, that motivated me to act.

The goal of this blog post is to share my own experiences in entrepreneurial leadership so I can assist you with yours. This blog briefly tells the story of my own retail business, a story that I have rarely if ever told until today. I now share it with you.

 

Youthworks Retail Co

After seeing an opportunity to capitalise on an emerging international streetwear trend, I founded the Youthworks fashion retail business in Adelaide South Australia in May 1993. I was inexperienced, under-prepared and under-capitalised. Coincidently, a good friend of mine had told me that if you over analyse every risk associated with launching a new business, you would probably never do it. Thankfully, I did not over analyse things. In this instance, my ignorance was my saviour. Instead, I had a huge amount of energy and I was very persistent. I asked a lot of questions and I was determined to find the answers.

When I launched the first shop, I had little idea how big it would become. At that point in time I was more focused on getting the formula right and more focused on survival than growth.

Some years later, as a lateral expansion of the Youthworks fashion business, I also opened the Sole Shoes “sneaker” chain. Both businesses developed a highly engaged and positive workplace culture, a strong track record for creativity and innovation and the company went on to win numerous industry awards, culminating in the Retailer of the Year Award in 2003.

 

Youthworks Retail Co, Rundle Mall Adelaide South Australia.

 

In the formative years of the business in the early 1990s, due to my own inexperience as a business owner, I employed an experienced and talented store manager and adopted a highly collaborative leadership style. In fact, over the years, I maintained that philosophy whereby almost everyone in the company was more skilled than myself in their own field of expertise.

I leaned heavily into my team and they responded. This is sometimes called “referent leadership” and it served me and my small team well. But, as the number of employees grew, my leadership style showed its limitations and I found it increasingly difficult to manage and lead a growing number of team members. I had to start working on the business as well as working in it. The need for policy, procedures, rewards and a more hierarchical management structure soon became apparent. As my own technical, financial and leadership expertise improved, I embraced the use of financial and non-financial rewards as a means of motivating and directing what became a larger team of over 220 employees. Occasionally, I also had to trust my instincts and make the hard call. When I later completed an MBA, I learned that the academics call these techniques “rewards power” and “coercive power”. Sounds a little sinister, doesn’t it? It isn’t.

 

Leadership Lessons

As the company grew to $25M annual sales across two states in Australia, I did not abandon the use of my referent leadership style, and along with a healthy dose of “gut feeling”, I embraced referent, reward and even coercive leadership as the situation required.

An example of rewards power was the development of a staff induction, training and development program where team members were rated on their participation in the training as well as their subsequent sales results obtained through applying their knowledge. These ratings were then used in assessing future managers and leaders within the company. This program resulted in lower staff turnover and a strong “promote from within the ranks” ideology where team members viewed the retail industry as a valued career and a promotion within the company as recognition of their efforts. I firmly advocated that the most important relationship that anyone held in the company (other than that with the customer) was with the person to whom they immediately reported.

With a workforce made up of full-timers, permanent part-timers and casuals, I also recall being entirely upfront with everyone about how retailing and customer service skills were a pre-requisite for success in almost any industry. Working with people and working in teams are skills not mutually exclusive to the retail industry, they are highly transferable and serve you well irrespective of the career path you follow. On of my other “mantras” was a total aversion to anyone who would even vaguely suggest that they would start to perform only when they were promoted to the next level. My immediate thought was “why would I consider promoting you if you are not performing now?”. Needless to say, those folks never lasted very long in my company. Lastly, the workplace needed to sometimes be spontaneous and fun. We ensured that it was.

These, along with other initiatives, developed a particularly strong company culture that could be considered customer-centric, action orientated and one that valued creativity, innovation and rewarded results.

However, the company’s growth trajectory was not always smooth. Having expanded into the Melbourne market in the late 1990s incurring substantial set-ups costs and trading losses in the early years of doing so, the introduction of GST in year 2000 saw a softening in consumer demand for several months. With flat sales and rising costs, I remember questioning my own sanity. Cash flow was awful. Thankfully, things improved.

 

 

However, one of my greatest lessons was the counter intuitive relationship between success and reinvention. I learned that the best time to reinvent the business was when things were going well, not badly. Although this sounds simple, it is not, as when things are going well, every fibre of your being tells you not to change anything. For businesses operating within fast-moving consumer goods sectors, this is especially relevant. When I look back, the Youthworks business successfully reinvented itself three times in twelve years. Starting out as a niche supplier of clothing and accessories for the underground dance club scene, Youthworks purposely evolved into a youth fashion lifestyle brand. It was both evolution and revolution as I was forcing change on the company as much as the marketplace was demanding and accepting it. In the highly competitive arena of youth fashion, it kept us out front.

The formation of a new Youthworks Group corporate entity in 2002 brought about several challenges. Some of those challenges were identified and openly debated by myself and my new business partner prior to the expansion, others were not. Leadership was always going to be a critical factor in determining the success of the proposed expansion program. My business partner had joined Youthworks with a proven ability to found, build, float and divest an international retail group with almost three thousand employees and along with his role as Chairman of the Board, my business partner had huge legitimacy. His track record of achieving results over many years was beyond repute. Youthworks was re-capitalised and plans were laid down to open another retail store every three-months and for the company to migrate more of its supply chain from Australia to various offshore destinations.

 

Leading Growth

The company moved into a period of rapid growth. We favoured the use of rewards power and the buying staff were soon individually signed up to an attractive bonus incentive program where financial rewards were levied on their ability to move production offshore and improve margins, mark-ups and gross profits. The sales managers and sales teams were similarly signed up to sales reward programs which incentivised them to lift sales in line with the budgets set. Youthworks embraced technology as a means of accelerating information flow and implemented new accounting, point of sale, payroll and inventory management software. The offices and warehousing were both relocated to larger premises.

In an environment of such rapid change, operational challenges were inevitable and some of those challenges were a consequence of our differing leadership styles. With heightened time pressures, managers and buying staff became less consultative which resulted in less buy-in from the sales team. With the sales team making up 80% of the company’s workforce, this provided new challenges and management needed to find more effective ways of communicating the decision-making process. Although Youthworks was by no means in a state of crisis, time constraints became a common excuse for lack of consultation on many issues. In some instances, this resulted in expensive re-working becoming necessary.

 

The very first store. Youthworks Retail Co, Regent Arcade Adelaide South Australia

 

Myself and my business partner had differing leadership styles, but not in all instances. I had long subscribed to “The Action-Observation-Reflection Model” and was uncomfortable about not having time to think before making large decisions. In this rapidly changing environment, I sometimes deferred to my business partner’s experience and relied less on my own instincts. This deferment had varied outcomes, some positive, others negative. Our strong focus on financial incentives brought about the rise of more of a “me” based culture, sometimes at the expense of teamwork. It created silos and cliques. While I did not disagree with the role that financial rewards played as a motivational tool, I believed that non-financial rewards were equally important.

I prided myself on being a consistent leader who trusted the company’s employees and applied change by securing buy-in and then empowering the team to deliver. I was not overly rigid in my leadership and management style; however, I was always consistent.

To secure a desired result, my business partner was more willing to attempt various courses of action to secure the best outcome. This leadership approach sometimes left team members not knowing where they stood on a particular issue. On occasion, this approach was viewed as inconsistent and brought about skepticism, discord and even de-motivation. However, as long as we applied our leadership to a situation that best matched our individual leadership styles, the outcome was positive and our leadership effective. If we inadvertently or even purposely attempted to play each other’s role, the consequences were almost always ineffective.

This was a valuable lesson for me, and I hope for you too, as role definition is critically important for any entrepreneurial leader in a fast-moving environment. So is communication, and lots of it.

Youthworks and Sole Shoes went on to achieve annual sales of $25M and sales per square metre measurably above industry averages. In 2005, Youthworks was sold to a publicly listed company and six months later Sole Shoes was sold to a private company. As I look back, the company’s most valuable assets were not its brand, stock, shop fittings or intellectual property, it was its unique culture and talented people. By good fortune, good design or both, Youthworks had an extraordinary workplace culture that undoubtedly helped the company maintain is market leading position.

We have discussed several topics in this blog post, many under the auspices of entrepreneurial leadership. We have also touched upon the topic of reinvention. If you would like to learn more about reinvention, in my role as CEO of Business SA (Chamber of Commerce and Industry South Australia), I invite you to join me for the first of a new series of FREE webinars on the topic. Following on from the success of our recent business RESILIENCE and RECOVERY webinar series, REINVENTION is the third instalment in our regular webinar series where experienced industry practitioners will share their insight.

With restrictions slowly easing, now is the time to make sure your own goals and business model is robust enough to be sustainable and reinventing your products, services or your business itself may be amongst the most important actions you take to navigate the turbulence of 2020.

 

Our first live webinar event in the REINVENTION webinar series called “Will your business shrink or shine this year?” focuses on the key principles for personal and business success and I look forward to sharing with you my seven key principles for personal and business REINVENTION.

To register for this FREE webinar held on Thursday 30 July 2020 from 6:30 – 7:30pm (Australian Central Standard Time), click ‘Register Here’ below.

REGISTER HERE

 

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Vale Lincoln. This blog post is in honour of you my friend.

 

With kind regards,

Martin Haese MBA

Creativity, Innovation and Entrepreneurship

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!

Do Social Entrepreneurs create change?

Welcome to the Part Four of a series of musings on entrepreneurship. 

Do social entrepreneurs create change?

In last month’s blog post of The Martin Haese Report where we discussed Disruption, I described the ways that big companies such as Gillette, Michael Hill Jewellers and Nike have used social causes to disrupt their customer base and target Millennial consumers.

However, it should be noted that Millennials are not the only socially conscious generation and many large companies have been supporting worthwhile causes for decades. 

Some of this support has been overt as in the case of Ronald McDonald House and the Westpac Rescue Helicopter in Australia and some of it slips quietly under the radar like Bunning’s support for school gardens as well as community clubs and other causes through their regular sausage sizzles.

What has changed though, is that conscious consumerism, the idea that organisations have a soul and care about something beyond their bottom line, has been elevated up the list of things that customers consider when making their purchasing decisions.

When organisations use social causes as part of their marketing toolkit, we might see ‘buycotts’ and boycotts at the extremities but for the most part, consumers tend toward the responsible centre and an organisation's support for social causes has become a contributing factor to purchasing decisions rather than a deal maker or breaker. 

Having said that, any organisation that adopts a social cause or even a charity as part of their strategy must do so in an authentic way and become genuine champions for that cause.

The public are, quite rightly, unforgiving of lip service and publicly hostile to hypocrisy.

Social Entrepreneurs

Most people associate the term ‘entrepreneur’ with the world of start-ups, business or commerce, but if we go back to the first blog in this series, Are entrepreneurs born or made? I offered that entrepreneurialism is a mindset or modus operandi and entrepreneurs are people who;

1. Create and/or recognise opportunities

2. Assume the responsibility for the risk involved in new ventures, and

3. Have the managerial skills to gather and deploy the required resources

While these skill sets are particularly well suited to the business world, each is also transferable beyond. 

I would argue that social entrepreneurs require another skill, the gift of persuasion, because while entrepreneurs can promise a financial return on investment, social entrepreneurs often deliver less measurable outcomes.

Social entrepreneurs come in all shapes and sizes, from NGOs, micro finance, social enterprises, community groups and non-profits through to regular businesses that put social issues at the centre of their offer. In fact, the sector even has a name, as its often referred to as the ‘for purpose sector’. 

NGOs

Oxfam Christmas Catalogue

Oxfam Christmas Catalogue

Non-Government Organisations are some of the most visible socially entrepreneurial organisations and include global names like the Red Cross, Oxfam, Medicine Sans Frontieres, Sea Shepherd, Amnesty International and Greenpeace.

Just like any entrepreneur, each of these organisations has a driving purpose or ‘big idea’ that defines their organisation and their every action.

With regard to NGOs, some might argue that the first item on my list of entrepreneurial attributes, ‘Creates and/or recognises opportunities’ might read ‘recognises existing threats or problems’, but it largely depends on how you define ‘opportunities.’ Personally, I have always been inclined to think of opportunities and threats as two sides of the same coin. 

For example, Oxfam’s goal might be to end world poverty which, at first glance, seems like a problem to be solved. However, one of the ways they have gone about this, is by recognising the opportunity to empower small producers in the third world and providing access to western households (via Oxfam shops and a wholesale arm) for their products.

Micro Finance

When I was the Lord Mayor of Adelaide, I had the pleasure of meeting Professor Muhammad Yunus who shared with me his extraordinary story of social entrepreneurship. He signed a copy of his latest book, ‘A World of Three Zeros’ for me. I have read it twice.

Professor Yunus - Grameen Bank

Professor Yunus - Grameen Bank

Professor Yunus began working on what would become Grameen Bank in 1976 in the wake of a devastating famine that struck Bangladesh in 1974. The idea was simple, a community development bank that could make small, low interest loans to impoverished families without collateral. 

His first loan of $27 (USD) was seed funding for a group of 42 families to make products for sale.

Professor Yunus expanded this micro finance concept to villages near the University of Chittagong and gained the support of the national, Bangladesh Bank. 

In 1983, Professor Yunus’ project was granted the status of an independent bank by the Bangladesh government and despite setbacks from natural disasters, it has grown to 2,600 branches, approximately 9.08 million borrowers and an estimated 97% of the borrowers are women. 

Professor Yunus was awarded the Nobel peace prize in 2006. He has written several best-selling books including one called ‘Building Social Business’. I recommend that you read it to further your knowledge on this topic. 

The success of Grameen Bank has inspired and paved the way for similar social enterprises such as Kiva. 

Where Grameen Bank raised funds from donor agencies, the Bangladesh central bank and later by selling bonds, organisations like Kiva raise money through crowdfunding.

Kiva has lent $1.3 billion to 3.3 million entrepreneurs in 78 countries. 

Not for profits

While the term ‘not for profit’ can, for legal and taxation reasons, define various types of organisations, I am using it here to describe charities and social enterprises.

Every charity has been set up for a specific purpose, be it restoring eye sight for children (Sight for All), alleviating poverty (St Vincent de Paul), or funding nurses for breast cancer sufferers (McGrath Foundation) however, the most successful charities use entrepreneurial skills and traits to serve their purpose.

Dr. Peter Pratje - The Orang-utan Project

Dr. Peter Pratje - The Orang-utan Project

For many not for profits, fundraising is an important part of their activities, but it is not always their sole reason for being. Countless organisations need our donations to continue operating, but their goal is behavioural change.

One such organisation is the The Orang-utan Project

The Orang-utan Project does all of the things you might expect of a not for profit dedicated to saving Orang-utans. They call for donations, take bequests and operate tours, provide sanctuary and prepare orang-utans for release into the wild, but all of this is somewhat insignificant to their actual purpose which is to raise consumer awareness of the destructive nature of palm oil production - the very reason they need to do all of those other things. 

It is estimated that 300 football fields of South East Asian rainforest are bulldozed every hour to make way for palm oil plantations – just allow that to sink in for a second.

The resource being gathered and deployed here is not anything as simple as finance or materials, but something much more elusive – the consumer’s conscience.

Given the sheer magnitude of food and consumables that contain palm oil, this is a big issue.  

For profit, social enterprises

The Bread and Butter Project - Tania

The Bread and Butter Project - Tania

For profit, social enterprises often begin as a philanthropic gesture but quickly discover, almost as a bi product, that their purpose and products are profitable

Such was the case with the Bread and Butter Project when Paul Allam convinced his business partner at the Bourke Street Bakery to help him set up Australia’s first social enterprise bakery.

The Bread and Butter Project is a successful, artisanal, wholesale bakery that trains and provides paths to employment for some of Sydney’s most marginalised and underprivileged citizens.

The Bread and Butter Project is able to boast that every one of their graduate bakers, since their launch in 2013, is sustainably employed.  

When your product has a social conscience

I recently listened to an audiobook called “The Magic of Tiny Business: You Don't Have to Go Big to Make a Great Living’ by Sharon Rowe. 

Don’t let the title fool you, there was nothing ‘tiny’ about Sharon’s business, she is the CEO and founder of Eco Bags - the original, reusable shopping bags.

Sharon, a young mother was working at a training company when she founded Eco Bags in 1989. It was a response to two things - the sheer waste of single use shopping bags and her desire to live life and run a business without compromising her lifestyle or the things she believed in.

Her ‘market research’ involved walking the streets of New York and taking note of compliments she received for shopping with reusable string bags.

In her book, she describes how she started by selling reusable Eco Bag shopping bags from a stall at New York’s Earth day celebrations in 1990 and her success there led to more markets before becoming a wholesaler. 

In 2007, reusable shopping bags became subject to the ‘Oprah effect’ when Oprah Winfrey presented Eco Bags to her audience during that year’s Earth Day episode. 

This publicity led to a swift uptake in reusable bags and ultimately bans of single use plastic bags in some states and territories with Eco Bags riding the wave and reporting $16 million USD in annual sales. Coincidently, South Australia, the place that I live in, is also a leader in container deposit legislation and is progressively banning the use of single use plastics for certain applications.  

The ‘tiny’ in the title of her book does not refer to the size of her business but her approach and despite running a global company, she still makes time in her work schedule to swim every day.

The audiobook, written and read by Sharon Rowe, is available to borrow as a free download from the South Australian Public Library Service 

Social entrepreneurs creating employment

Sarah Gun - Founder of GOGO events

At a local level, I enthusiastically mention GOGO Events, an Adelaide based social enterprise that creates and manages magnificent events.

So, what’s the big difference?

GOGO events, founded by Sarah Gun, is an internationally award-winning enterprise that employs marginalised people and provides them with a meaningful path to sustainable and purposeful employment in the hospitality sector.

All of their events, big or small, corporate or community, create a positive social and environmental legacy.

Bravo!

 

Social entrepreneurs and the sharing economy

While organisations such as Airbnb and Uber are often cited as examples of how the sharing economy works, neither of them is, in the strictest sense, a part of the share economy - they are both service model businesses. 

Airbnb hosts rent their properties to guests while passengers pay Uber for their driver to take them somewhere. 

Better examples include Share Waste - an organisation that connects people with excess green waste to people who can convert that green waste into compost or Grow Free an organisation that enables a network of home vegetable gardeners to share excess produce through small carts with other gardeners and the public.

While Share Waste doesn’t say how many contributors they have, their members are well supported online with interactive maps and a smartphone app to connect people while Grow Free has in excess of 170 members carts in its Australian network with a few more springing up in New Zealand and the United States.

5 steps to introduce a socially conscious purpose to your company or brand

  1. Be authentic and select a cause or charity that you and your organisation can genuinely get behind, then make a long term and consistent commitment.
  1. Ensure that the cause is a good fit with your organisation’s values and target market. This extends to making sure that the products you sell are consistent or at the very least, not counterproductive or potentially hypocritical. I’m thinking, in particular, of a large chain of liquor stores in Australia who recently supported Dry July. I am also thinking of recent adverts from the world’s largest cola brand extolling their environmental credentials and hi-lighting their recycling efforts. 
  1. Involve the entire organisation. I know of at least one large company that takes gold coin donations for their casual days. The money is collected and donated to a charity or cause that every employee voted on at the start of the year. Other companies have recruited their customers, giving them an opportunity to decide on which charities they support through a percentage of their purchase.
  1. Understand that supporting a cause is part of your company’s marketing plan then immediately forget it and work generously towards supporting the cause. The general public can easily distinguish between genuine support and when you are just looking for a pat on the back.
  1. Extend your support beyond simply fundraising. Photos of the CEO handing over a novelty size cheque look fantastic on social media but their impact is limited. In my experience, it is better to be involved in many smaller and perhaps more meaningful projects throughout the year than a photo op at the end. That doesn’t mean you can’t promote your involvement, but reliable word of mouth and social media shares are much more valuable and effective than full page newspaper ads.

Social entrepreneurship is evolving and continuing to redefine itself. It is also growing. Cities such as Berlin are fast becoming global hubs for social entrepreneurs. There is also a strong relationship between a city’s start-up scene and the number of social ventures within it. 

While there are a number of similarities shared between commercial entrepreneurs and social entrepreneurs, there is one essential difference to consider - social entrepreneurs have the propensity to solve the problems that governments, small business and corporates can’t or won’t … and that makes them increasingly influential within communities.

Thank you for subscribing to my blog : The Martin Haese Report.

If you haven't already joined my network, you can sign up here for free. Please don't hesitate to recommend my blog to any of your friends, family or colleagues who share our common interests.

With kind regards,

Martin Haese MBA

Next blog post: Part Five – Hope for the best and prepare for the worst. What happens when things don’t go to plan?