21/05/2008 - 22:00

Businesses built on tenacity

21/05/2008 - 22:00


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Tenacity and perseverance are words that we often associate with battlers – those we admire, who get through life despite the odds.

Businesses built on tenacity

Tenacity and perseverance are words that we often associate with battlers - those we admire, who get through life despite the odds.

These terms are less often used to describe those who are successful.

Yet, when you examine our list of wealth creators this year, the names of two very different achievers stand out - and last week they both hit milestones that underscored that success and signalled that they had really made it.

One is Andrew Forrest.

Some time last year, his shareholding in Fortescue Metals Group Ltd took him to the position of Australia's richest person.

As I write this, his wealth has climbed to almost $10 billion.

While that is on paper, of course, it became more real last week, when FMG started shipping ore - something his doubters never believed possible.

On the flip side of this coin is another of Western Australia's wealthiest people.

While iiNet's Michael Malone is not in Mr Forrest's league when it comes to outright wealth, he does share some of the mining magnate's characteristics.

Last week, iiNet paid $81 million to buy its biggest local rival; proof that it had emerged from a period of pain that could have taken it down.

Both these men have proved the worth of never giving up.

Before comparing their stories, it's worth looking at the contrasts of these individuals.

On the face of it, they could not be more different.

Mr Forrest is flamboyant, almost ocker, in the way he sticks himself in the limelight just for the sheer heck of it.

Last year he claimed that executive director Graeme Rowley would now speak for the company, yet as success neared we saw more and more of FMG's founder - standing on the front of ore trains waving flags, arm in arm with his billionaire mates or hugging the premier.

He's made for the spotlight and he knows it.

Watch out for the political career once he's bored with digging up ore and shipping it to China.

From what I hear his leadership style is evangelistic; it's about getting people to take on the impossible.

Mr Malone is very different.

Unassuming and quietly spoken, his leadership style appears to be by way of example, seemingly to prove that anyone can do this stuff.

Like an accidental leader.

Mr Malone will readily admit he's king of the geeks, very happy to be locked away with his computer writing some code or figuring out some software issue.

Both are being 'one of the boys' in remarkably different ways, perhaps best suited to the sectors they are in and the cultures they have built.

Their stories of tenacity are different, too.

Mr Malone's is more of the Australian success tale. The survival against the odds. To me, Mr Forrest's has taken the American pathway, by starting again from apparent failure.

Let me explain.

In the US, business failure does not carry the stigma that it does here.

While that has its positives and negatives, it does mean that someone can get off the floor and start again with fewer barriers than they might find here.

Americans will often back a loser because of the belief that their previous loss was simply an experience in their business journey.

Mr Forrest's previous enterprise, Anaconda Nickel Ltd, which is now Minara Resources Ltd, was a disaster.

He was ultimately pushed out and a lot of people lost money, even though the company is now performing very well.

In typical Australian style, he became an investment pariah and many who were burned that time would not back him again.

Yet he found a way and, with more than just those odds stacked against him, he has emerged not just successful but as arguably greatest entrepreneur from a state that is known for producing them.

In the shadow cast by FMG, iiNet is barely visible.

Yet the magnitude of Mr Malone's achievements during the past two years should not be ignored.

A tech-head whose timing and nous created Australia's third biggest internet service provider - in itself a remarkable achievement out of sparsely populated WA - Mr Malone ran into serious trouble in 2006 when poor business systems failed to show him how badly his company was running after an indulgent period of takeovers.

This is a common story.

A smalltown company tries to grow scale rapidly by acquisition and ends up unable to handle the results.

Companies like this fail regularly.

If Mr Malone had sold up and walked away, no-one would have blamed him.

He still would have been a wealthy man by anyone's standards.

Yet he didn't.

I spoke to him often during that bleak month when trade in his stock was halted and he was doing placements at half his shares' previous valuation.

Not at any stage did he seem forlorn or defeated.

Clearly, he sought help and white knights, but he did not abandon ship.

Last week, his purchase of Westnet was a signal that iiNet has recovered fully and re-emerged.

Both these businessmen have big competitors that dwarf their size, but both of them will remember this week in May when they showed their big rivals that they never give up.


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