Business

Is Australia really 'the lucky country'?

Media playback is unsupported on your device
Media captionWith the mining boom ending, has Australia's luck in business finally run out?

For anyone who enjoys shopping, Westfield will be a familiar name.

The shopping centre giant owns malls across the world and attracted some 400 million customers last year.

Westfield may now be a global brand, but the company's roots are in Australia, where it opened its first shopping centre in Sydney's western suburbs in the late 1950s.

It expanded into the US in the 1970s before moving into New Zealand in the 1990s and the UK the following decade.

Despite its rapid growth, when Westfield first came to the UK there was scepticism about whether its huge shopping malls would be successful.

Co-chief executive Steven Lowy, who runs the firm with his brother Peter, said the assumption was that Britons preferred the High Street and this style of shopping simply would not suit the UK.

It was a view that was swiftly proved wrong.

Image copyright Getty Images
Image caption Collectively Westfield customers spent some $16bn (£12bn) last year

"Westfield London and Westfield Stratford City - two buildings that eight years ago didn't exist - today can do twice as much business as Harrods and Selfridges and have 70 million customers through in a year," he says.

The firm's global operations became so large that in 2014 Westfield split into two separate companies to manage its domestic and international businesses.

Created by Hungarian immigrant Frank Lowy, the father of Steven and Peter, the story of the firm's rise from a single suburban mall to one of the world's biggest shopping centre operators is one that contradicts author Donald Horne's description of Australia as "the lucky country".

Image caption Westfield co-chief executive Steven Lowy says there's more to Australia than mining and commodities

Horne's book of the same name may sound like a compliment, but was actually an indictment of 1960s Australia. His criticism was that the country had mainly profited from its abundant natural resources rather than entrepreneurialism.

It's a description that Mr Lowy rejects: "I think there is a misunderstanding of Australia. We have a much deeper basis for economic growth than simply the commodities or mining cycles that take place."

Ahmed Fahour, boss of Australia Post, believes that the country's roots mean its people are inherently entrepreneurial.

"Only 2.6% of our total population is indigenous, everybody else is [descended from] a migrant to this country. People came into this country basically with nothing and they had to build something, they had to create something."

Image caption Farmers have to be able to adapt to change

As a result he believes Australians are naturally good at adapting to change, noting that farming - one of the country's original industries - has to deal with the capricious weather and global competition on prices creating a natural resilience.

It's a quality Mr Fahour has had to put to the test at the 208-year-old postal firm.

Like many postal services, Australia Post has seen the number of letters sent decline sharply as people use email instead, meaning the biggest part of its business is now parcels, driven by online shopping.

To help its staff cope with the transition, the firm has implemented a programme called Post People 1st, which means that divisions enjoying growth - such as parcels or retail - cannot recruit externally until they have considered colleagues working in shrinking parts of the business.

Image caption Australia Post, run by Ahmed Fahour, has had to adapt to a sharp decline in the number of letters sent

To help those who want to move it also provides training. The scheme has proved a great success, with some 6,000 staff - a significant number in a company of 50,000 - managing to switch into a new job in a growing part of the business over the past 18 months.

"That's the promise that we made. We said just because letters are declining it doesn't mean we have to lose our people," Mr Fahour said.

Similarly, Australian online recruitment firm Seek has continued to evolve from its 18-year-old origins as a marketplace for job hunters.

The firm now offers advice on education and online courses and has moved beyond Australia to several other countries including China, the Philippines, Singapore and South Africa.

Image copyright AFP
Image caption Seek boss Andrew Bassat says it made a loss for its first six years in China

Chief executive Andrew Bassat believes there is a risk that Australia's relative isolation geographically means firms' ambitions can be too local.

"So many companies try to have the small patch of turf in the Australian market. It feels like a zero sum game to some extent," he says.

When the firm started out in China it lost money for the first six years, partly because it took time to deal with the differences compared with the Australian market, says Mr Bassat.

Seek now works with local management teams in Asia rather than deploy its own Australian executives to improve its cultural understanding.

The company's perseverance eventually paid off, as its Asian operations are now profitable.

Mr Bassat believes with globalisation that more Australian firms will have to make a similar effort, noting that advances in technology have resulted in increased competition from foreign firms such as Amazon and Facebook.

"A lot of American companies and the European companies don't get Asia. They just assume that the model that will fly in the US or Europe will roll into Asia," he says.

"Australian companies understand you need to adjust to a much greater extent. And so Australians that have gone in thoughtfully have often been successful. I would like to see more Australians try."

Image caption Redbubble boss Martin Hosking says Australians need to be more ambitious

Martin Hosking, chief executive of online art marketplace Redbubble, goes one step further, arguing that Australians must be far more ambitious. He is critical of the country's so-called "tall poppy syndrome" - a tendency to disparage high achievers.

"There's a little bit in the Australian mindset about getting enough to go to Byron Bay and go surfing for the last 40 years of your life," he said.

"If you're trying to scale a global company you cannot be too big. A billion is not enough, 10 billion is not enough, 100 billion is not enough. You have to have the ambitions to be truly global and do it at a significant level ... it is something which Australia has to embrace."

This feature is based on interviews by CEO coach and author Steve Tappin for the BBC's CEO Guru series, produced by Neil Koenig.

Related Topics