23/03/2015 - 06:55

Business champions challenge the status quo

23/03/2015 - 06:55

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The energy and education sectors are going through a paradigm shift and businesses must adapt if they want to survive, let alone prosper, some of WA’s most successful entrepreneurs told Business News.

Business champions challenge the status quo
BROADER VIEW: Navitas group CEO Rod Jones (centre) with EY partners Peter McIver (left) and Grant Burgess. Photos: Attila Csaszar

The energy and education sectors are going through a paradigm shift and businesses must adapt if they want to survive, let alone prosper, some of WA’s most successful entrepreneurs told Business News.

Gordon Martin has spent more than 40 years building Coogee Chemicals into one of the state’s most successful businesses, but he admits to having made a few mistakes along the way.

“It’s a fine line between being tenacious and seeing it through, and realising you have to move in a different direction,” he said, reflecting on that time.

“If you’re passionate about something, you want to keep going.

“Most entrepreneurs don’t quit, and yet they have to confront the brutal facts somehow.”

One venture that didn’t work for Mr Martin was petrol retailing, yet another Western Australian entrepreneur, Fred Rae, has achieved outstanding success in the same industry.

The Rae family sold its Gull Petroleum business in WA in 2010 but still owns the Gull business in New Zealand, which Mr Rae said was achieving record results.

Messrs Martin and Rae were among six Champions of Entrepreneurship, from EY’s Entrepreneur of the Year program, who gathered last week for a lunch forum with Business News.

Their reflections are pertinent for business people grappling with tough business conditions and rapid change.

“I think a lot of it comes down to taking a really objective view as to what is happening,” Navitas Group CEO Rod Jones told the forum.

“And making sure you continually reposition yourself to adjust for those changes.

“When you get too subjective and get locked into your passion, to the point where you can’t see the wood for the trees, that’s when you get into trouble.”

Janet Holmes à Court said change could be driven by external developments, and in other cases by internal factors, like when her husband Robert “dropped dead in the middle of the night”.

“One of the things that was dramatically brought home to me then was that he was a one-man band,” she said.

“I always say the power of one is a complete nonsense.

“The company was no longer sustainable when he wasn’t there because he was basically the only profitable division, when he was trading shares.”

Mrs Holmes à Court said she had to go straight to work the next day.

“I didn’t have any choice because there was about $350 million of debt and no Robert to service it.”

Mr Holmes à Court’s death in 1990 precipitated big changes at family company Heytesbury, including asset sales and a greater focus on driving returns from businesses such as the Vasse Felix winery, which had been considered a lifestyle asset.

“The major change was buying something new, John Holland, and completely changing the nature of the company.”

Mrs Holmes à Court spent 23 years as chair of John Holland, even though Heytesbury sold most of its equity in the construction company in 2000, and described it as among the most exciting times of her life.

“I think I’m a frustrated engineer and architect,” she said.

Energy market

Mr Martin said one of the big trends affecting his business was the changing energy mix, including the surge in shale gas production in the US.

“There has been a paradigm shift that changes everything,” he said.

“It changes renewable energy, the whole energy mix, and virtually every business will be affected.”

NO QUITTER: Coogee Chemicals chairman Gordon Martin.

The rapid improvement in battery storage, which is making solar power and electric vehicles more viable, was another big factor.

“It’s the lateral thinking that entrepreneurs have, that see the opportunities in that change,” Mr Martin told the gathering.

Mr Rae said Gull’s success in NZ showed the opportunity for efficient and innovative operators to take on the big players.

Gull has more than 60 petrol stations in NZ, including 25 that are completely unstaffed, which he said the NZ public had embraced enthusiastically.

Education sector

Mr Jones, who has built Navitas into a major international education services business, said his sector was also facing big changes.

He said many students had already stopped going to lecture theatres, opting instead for online lectures, and suggested the days of going to one university to get a degree could disappear.

“Technology will mean you can take courses from around the world and put them together to provide a qualification that meets what you are trying to achieve,” Mr Jones said.

“Why do an economics unit, for example, from a local university when you can do that online, in an interactive way, with the best economist in the world delivering the course?”

He believes universities are struggling to deal with these changes.

“They’ve become moribund, they just don’t know where to go. The future of universities, as they exist today, just isn’t there,” Mr Jones said.

Mrs Holmes à Court agreed universities were struggling but noted that one thing missing from modern university life was “interaction with other people and learning how to be a leader, how to operate with other people”.

Mr Jones suggested universities should be focusing on how they can support online teaching.

“It’s about small classes, tutorials, back-up support, those sorts of things,” he said.

The people factor

The entrepreneurs at the lunch forum agreed that recruiting and retaining the right people was a critical success factor.

“I’ve built my whole business on good people,” said Stan Perron, who owns property and automotive company Perron Group.

“I’ve only got about eight senior people who operate my whole business.

“I can go away and I don’t have to ring the office, it goes on automatically.”

Mr Perron said he had never put great store in formal qualifications.

“It’s a matter of the person’s ability to do the job,” he said.

Mr Jones, whose business employs 6,000 people, said it was important to bring in people with new skills.

He said Navitas sought to find appropriate roles for all staff.

“For some people, their capacity to move to another level is just not there,” Mr Jones said.

“Sometimes they are relieved when you have that discussion because they know their limits.

“You find a job that fits their skill set, and bring in someone else who can lift you to the next level.”

The lunch participants agreed it was important to have people with new ideas and a willingness to challenge the status quo.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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