All the benefits of business class
Where you live matters less and less in a digital world. Quality of life and personnel are paramount and Adelaide has that in abundance as three chief executives testify. Leading a world class operation from South Australia? No problem.
words RICHARD EVANS
Dr Deborah Rathjen is emphatic. “Adelaide is one of the great undiscovered places in Australia,” says the chief executive of a biopharmaceutical company with a current market capitalisation of $137 million and expanding fast. “You can run a global company from Adelaide.”
Dr Rathjen was at her Bionomics headquarters in Adelaide when we spoke last month. Her timeslot was brief, the day before she was in Melbourne, two days later she dashed to New York to present new clinical trial data to help combat Alzheimers and other chronic and neuropathic atrophies. “I go to the US six times a year, often I’ll bolt on a trip to see shareholders in UK and France, I just try and keep ahead of the jet lag,” she says.
The volume of travel hasn’t changed in tandem with the expansion of her company she says, but the nature has. “We have international investors, there is a very globalised ownership of the company,” she says.
Indeed, the ability for leaders to adapt and innovate constantly are, it seems, prerequisites to heading up any go-ahead and growing concern while remaining rooted in South Australia. Common threads are easily identified. Time away plays a major part, and a good chunk invariably, with Ms Rathjen having been based in Sydney for about 15 years before returning to Adelaide where she had been a Flinders University student, to head up Bionomics in 2000.
Google’s chief engineer Alan Noble, an Adelaide engineer at the forefront of change in digital technologies, was based in Silicon Valley for several years before realising where home is. “Growing up in Adelaide I didn’t have a great ambition to stay,” he says. “I did electrical engineering at the University of Adelaide, graduated and promptly left. That wanderlust to see the world was typical but mine lasted for 20 years.”
Three years in Japan and a further 16 in California followed, pre dotcom crash, says Mr Noble. “Slowly the penny dropped that Adelaide actually was a pretty good place to live, growing up here you take it for granted,” he says as a relocation with his American wife and children ensued. “My wife often said ‘If there’s a place I could see us moving to one day’ … it was almost a flippant remark. I’d sold a start-up company in 2000, the next two years were very difficult in Silicon Valley, I grew less enamoured with living in that part of the world. My parents, brother and sister, were all in Adelaide, that was 2002.”
Google, in Sydney, came along four years later and a family pow-wow led to Mr Noble commuting. “Lo and behold, I have been living that experiment for nine and a half years. I never expected to commute this long, never.Now it’s much more reasonable, we have wonderful technology, video conferences around 8.30am and a good US overlap. Sometimes I can be more productive working here, I’m doing personal appraisals this week. Flying to Sydney is now ‘just’ two or three times a month, technology the game changer. Once upon a time I was flying every Monday and Friday. Video-conferencing is the biggest influence, you all had to be in a room to do it before, now we dial in, at strange times maybe. Google Docs also means working in real time collaboration, reviewing is really powerful.”
Chief executive Frank Grasso took an arguably even more intriguing route to South Australia. His business, Dynamic Creative, has its headquarters on North Tce in Adelaide, and offices in Melbourne and Sydney. The award-winning company is a digital market leader in ad automation technology for inventory driven businesses that gives you more bang for your online ad spend, and is much quicker in effect.
One of the more revealing stories around the requisite drive to success, comes from his wife Narelle, co-fulcrum of Dynamic Creative. Ten days after their first child ⇐ was born, in 2002, she had to interrupt a pitch to the Victorian government to feed her baby. Building a successful business has few bounds.
It was the year too that Mr Grasso moved his digital marketing company to Adelaide, the prospect of on-hand babysitting a temptation for many. Melbourne and Sydney were the focal points then. “We used to promote Sydney as our headquarters” says Mr Grasso, location loading important early on when perceptions can stop a start-up dead in its tracks. “We’re more in Adelaide now, we used to have more on east coast.”
It was an unlikely shift. Mr Grasso’s Sicilian family arrived in Melbourne in the 1960s and threw themselves into the car industry, setting up a gearbox company, with Mr Grasso a core component after quitting school in Year 10. He took the practical view immediately, trucks and commercial vehicles the target. “A gearbox change in a tipper truck is a higher cost,” he says. “It was a family business, like doing a mini MBA.” Remarkably, he stayed there until he was 33, before adapting his mechanical train of thought to computer coding. He started his search career in Melbourne in 1999, consulting to early adopters of search engine marketing. He moved to Adelaide in 2002 to form e-channel Search. Three years later, he undertook his Masters in marketing at Uni SA while setting up a research and technology team and developing the Dynamic Creative software. The speed of growth of his business has been phenomenal. Four graduates a month are taken on via an intern program at the North Tce headquarters. A chance last year to become a Google channel partner, sharing stats, hiring and sales procedures added a stratospheric credibility boost.
Re-positioning Adelaide as the fulcrum of Dynamic Creative necessitated a personal shift too. “I think I resisted living in Adelaide for a while. I think the fact it takes me 10 minutes to take my son to soccer … and park at the front of the oval. I can’t put a dollar figure on that. We used to promote Sydney as our headquarters, had seven staff there but the customers don’t seem to care, as long as you are there. Melbourne and Sydney are really big cities, people don’t realise. People here, we have the cream of the crop also. We are committed to Adelaide, we are not shrinking.”
Distance, maybe, is the mother of invention. “We are getting better doing things on the phone. We’re looking at New Zealand, India and Indonesia,” Mr Grasso says. He travels nationally just once a month now with long haul flights quarterly. Reduction counts but better prioritising and a better life balance is the consensus.
Appreciating what you have around you pays dividends, and not merely socially, says Dr Rathjen. “We have to be able to do video conferencing, three geographies. We have a major relationship with Europe and the US and it’s important we maintain a face-to-face contact through video conferencing,” she says. “We encourage our partners to visit Adelaide. Once they have paid their first visit they are really fans.”
Mr Noble concurs. “You can do lots in Sydney but everything is miles away from each other. We are no longer the 20-minute city but we are the 30 minute city. When friends and colleagues from Sydney visit, they can’t believe we have all this, Kangaroo Island, McLaren Vale, the Flinders Ranges. I sail, and take Google employees to KI once a year. Everyone who comes here loves it.”
No city stands alone though. Sydney beginnings still play their part for Mr Grasso. An apartment purchased to cement the Dynamic Creative Sydney arm now operates as a cost-cutting business stopover and a reminder that Mr Grasso has come some way since his gearbox days. “We’ve got a flat overlooking Paul Keating,” he says. “I’ve waved at him but he’s yet to wave back.”
Seeing chief executives making the move to Adelaide is no surprise if the latest report by KPMG is anything to go by. Adelaide was ranked as being more cost competitive than Melbourne, Sydney and Brisbane in the biennial Competitive Alternatives Report, based on the cost to businesses in a range of areas, including tax, labour, commercial rent, transport and utilities. “Among these major cities, Adelaide and Melbourne are the cost leaders and appear to be in constant competition for the title of ‘lowest cost city’ in Australia,” the report says. “These two cities have alternated between first and second place among the Australian cities compared in each edition of Competitive Alternatives since 2008.”
The independent KPMG study measures and provides insight on the impact of 26 key cost components, across seven business-to-business service segments and 12 significant manufacturing sectors. All locations are compared to the US baseline, which reflects average business costs for the four largest US metro areas: New York City, Los Angeles, Chicago and Dallas-Fort Worth. The report also found Adelaide’s cost advantage is particularly strong in the research, development and digital services sectors.
The findings are music to the ears of South Australian Treasurer Tom Koutsantonis who attributes the results to the Labor Government’s tax reforms. “These findings show that our tax cuts in the 2015 State Budget designed to make South Australia the cheapest place to own and run a business worked,” he says. “Our unprecedented tax reforms will make South Australia the lowest taxing state in Australia for business.”
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