Ep 24: How Gen Z is driving Indigenous business success

Rebecca Kent

It’s National Reconciliation Week in Australia, which aims to promote unity as well as participation from all Australians to respect native land and recognise the heritage of Aboriginal and Torres Strait Islander people. In this episode of the Perspectives podcast, I’m discussing with my guests how that can be achieved through business, specifically through spending and employment. And what’s Gen Z got to do with it?

I’m Rebecca Kent, host of this podcast. But before I introduce my guests, I’d like to acknowledge the traditional custodians of the country, the Aboriginal and Torres Strait Islander people, and their spiritual and cultural connection to the land, sea, and community. I also pay my respects to their Elders past, present and emerging leaders.

And now to my guests, here’s Stephanie Roache, sustainability manager at Australia Post

Stephanie Roache

I too would like to acknowledge the Wurundjeri people of the Kulin nation. I'm here in Melbourne today and where I sit on Bourke Street, it's always been an important meeting place for the people of the Kulin nation, the first Australians. So, I'd like to pay my respects to their Elders past, present and emerging and extend that acknowledgement and respect all about First Nations people that might be listening.

I’ve worked at Australia Post for over 13 years now. And I do a lot of work around our social and indigenous procurement programs and our modern slavery programs work, so really the social side of sustainability.

Rebecca Kent

Troy Rugless of the Indigenous-owned construction and cleaning company PSG Holdings, and part Indigenous-owned Evolve Facilities Management.

Troy Rugless

My name's Troy Rugless. I am the CEO and owner of PSG holdings and a director and part owner, along with JLL, in Evolve FM. I decided to start my own business 10 years ago now. In a previous life, I was a footballer and I worked in the fire brigade and all the good things that come with your youth.

Rebecca Kent

And JLL’s Henri Fadli

Henri Fadli

My name is Henri Fadli. I am the executive director of supply chain and procurement at JLL for Australasia. I've been with JLL for three years. But I've been in the industry for probably over 25 years, which shows my age. I work mostly on procurement, change management, transformation, and consulting.

Rebecca Kent

Troy, the theme of this year’s National Reconciliation Week is ‘More Than A Word’. How do you interpret that?

Troy Rugless

I Probably interpret that as doing more than talking about reconciliation. It's actioning it and putting some meat on the bone, doing what you say you are going to do, and reconciling with your First Nations people. I always reflect on things like this when they come up. I'm looking at my mother, and my grandfather who was half Wiradjuri, half Torres Strait Islander. The lives they had compared to now is just completely opposite. I mean the opportunity that is arising through the IPP and work, and people's understanding of what happened - the real understanding, not what we thought happened.

I find that through business the reconciliation process has been fantastic. I speak to Henri all the time. The relationship grows and we understand each other and from there you reconcile. You form great relationships and friendships.

Rebecca Kent 

The IPP I should clarify is the Indigenous Procurement Policy, introduced in 2015 by the commonwealth government. And it sets targets for the number and value of contracts that must be awarded to Indigenous businesses.

Troy, how much is reconciliation a driver of what you do?

Troy Rugless

It’s always at the forefront. It can be at the forefront of Indigenous businesses, but it must be in the forefront of non-Indigenous business too. You need those partners to give and understand and take a breath. Instead of just cutting the head off the snake, they should try to understand why there are differences. Also reflecting and understanding what they are and how we work together. As well as having a bit of empathy and understanding about why an Indigenous business is a little bit different. The same goes for Indigenous business understanding non-Indigenous businesses. So, it's a give and takes sort of thing. And if we can do that, we get results. great results.

Rebecca Kent

Steph, what’s Australia Post’s approach been to Indigenous procurement and tell us about the outcomes.

Stephanie Roache

Absolutely. What Troy said resonates with me.

I think where we've had the most success is where we've built the relationship first. And with building that relationship becomes trust. And when you have a trusted partner, you're going to have a successful partnership. And that's when you're going to get great procurement outcomes.

I think that a big part of that is taking that time to learn and educate yourself more about Aboriginal and Torres Strait Islander peoples and the history. And through that, you'll be better able to understand not only some of the challenges in the space but the great opportunities too.

From an Australian Post perspective, we've had some great outcomes. But we're also falling short in some areas. We've come a long way. We started our journey back in 2010 when we first became a member of Supply Nation. And I remember at the time, there weren’t that many certified Indigenous businesses around. We were doing things like catering or printing jobs for our Reconciliation Action Plan. It was a good start, but it probably wasn't really pushing the mark so much.

But now our spending is closer to the $20 million mark per annum. And I think that’s a great achievement. We still have a long way to go. We have a $60 million spend target from 2020 to 2022. And we're on track to achieve that. But we also have a 2030 aspiration, which is to spend three percent of our spend with Indigenous businesses and three percent with social enterprises, and we see disability enterprises as a subset of that. We're a long way off achieving that, but I think that's a good aspiration because it pushes us to do more.

I guess just a couple of points to call out. I don't think it's all about spending either. Sometimes we can get a little bit caught up in targets. Some of our biggest successes have been some of the smaller engagements. We can't lose sight of the impact a small contract can have on small-to-medium business. Especially if it’s sustainable, and that you're going to support over the long term because it helps them grow and it gets their foot in the door. It’s great to have big spend contracts too. I think we need a bit of both.

So, I think where we’re seeing a lot of success in Australia Post is people are passionate about it. People want to engage in this space, they want to work with Indigenous businesses and social enterprises, it makes them feel good about their job, and Australia Post, I think really attract people that have that social purpose, too.

I know I remember having a bit of a chat about what we might talk about in this podcast, I reflected a bit on our employees. And I've heard so many people from our procurement team talk about when they're at a barbecue on the weekend with their family and friends. They don't necessarily want to talk about the big telco contract or the contract with their IT service provider. They want to talk about the contract they did with that Indigenous business. They want to talk about how they worked with one of their big suppliers in a fleet space to carve out a small contract to allow the Indigenous business Kooya Fleet an opportunity to get in the supply chain and grow with them. Because that's creating jobs. That's giving people a go and that makes them feel good about what they're doing.

Troy Rugless

I love what Steph said there. It’s fantastic to hear that there's still a long way to go, even though they’re already doing great things. It is just the beginning. It's been 10 years of Supply Nation now. I was on the Connect forum just before we got together. There were some figures that I heard Laura Berry the CEO splash about. Before the IPP, the whole Indigenous business spend was $6.3 million. We're only talking about 11 years ago. Now it's over $900 million. It’s all good, but let’s not stop. There’s much more to do.

Morally and ethically, as Stephanie said, there have always been champions within businesses that I think would like to try to do this anyway. And they're the people that we like to connect with. They've got that moral compass. They want to do this because it's the right thing to do not just because there's an incentive with the IPP to do it.

Rebecca Kent 

You mentioned Supply Nation there. For listeners who don’t know, that’s an organisation that helps connect Indigenous suppliers with businesses that have contracts to fill. We spoke to Laura Berry not very long ago on this podcast. So do check that out.

Steph, you talk about Australia Post’s employees getting more engaged in Indigenous procurement. At JLL we talk a lot about Gen Y, but particularly Gen Z, being driven professionally by values and purpose. Is that how you’d categorise the workers you’re referring to?

Stephanie Roache

Absolutely, I think it's a little bit multi-pronged. I think there are just people across the business who are passionate about it, and they pick it up and roll with it and run with it because they want to do it. We are seeing that the new generation that's coming through wants to work on purpose-driven initiatives like that, they want to have something positive to talk about and to engage with.

Where we've seen the biggest success is when we've brought in a beneficiary. We've brought in someone that is either in an Indigenous business or runs an Indigenous business, or an indigenous person that's been employed and given a go because we decided to procure from them.

That introduction is game changing because that puts a face behind why we're doing it. And it makes the person from Australia Post, impacted. They don't just go back to their desk and say, okay, I'm just going to do the easy thing and stick with my current supplier. They remember that person was given a good go and I have the opportunity to do more of that.

The more that we see young people come through, the more they want to go out to do stuff in this space. It is so good for engagement. And we know how important that is too big companies. They want to have engaged employees, happy staff because then you have happy customers and you make money. Indigenous procurement just makes good business sense.

Rebecca Kent

Henri, Steph, and Troy have both outlined some great spending achievements. But, a long way still to go?

Henri Fadli

In recent years, most of our commitment in relation to Indigenous participation has been volume, or spend-driven, where we can go and commit a percentage of spend. We’ve achieved some great results there on behalf of the clients.

But I think there are still other aspects, as Troy said, we need to work on. For example, employment. We've seen a trend at the moment where some of our clients will be asking us targets not only related to spend but also to employment. In some aspects, this is difficult to achieve because of the simple fact that there is turnover, especially in the low paid and minimum wage roles. And the other aspect is there is not an Indigenous workforce large enough to be employed across all our client base.

So, from a JLL perspective, where we’re aiming is long-term employment and creating wealth for indigenous communities. What are we doing about it? Recently we’ve been partnering with some of our major vendors and committing apprenticeships for Indigenous communities. Because for me, committing to a program like that we can get in a lot more Indigenous people from low paid minimum wage roles into more technical and specialised roles. That way you're going to teach somebody a skill for life. Also, in the future, they can become their own contractor or subcontractor and therefore themselves hire an Indigenous workforce, or even open their own organisations.

Also, picking up on Troy’s comment that the current model is not enough. I completely agree. At the moment, we’re increasing the concentration of Indigenous businesses in the wrong categories, especially the hygiene and cleaning category. We've seen a lot of organisations there. We need to focus more on diversifying that footprint and making sure that we have more Indigenous organisations in trade services, a lot more fire organisations, HVAC companies and so on. We all have a responsibility to help grow that footprint. That is our target at JLL.

Also, if we have small vendors where they're doing services in one town or two towns, we think about how we can get that vendor to grow into 10 towns within the next six months, how they can do a region in the next year, how they can do a state and potentially how to grow them to be a national company. I think that's where we should be focusing our attention.

Rebecca Kent 

Okay, but how do you execute that next step?

Henri Fadli

We've been doing it already. If I look back two or three years when I walked into JLL, we were focusing on giving small accounts to our Indigenous partners. But also, in the areas where they were already providing services. We never tried to give them the opportunities to grow. We now commit to growing these companies, mentoring them, and showing them how they can do it.

So, for the past three years, we’ve completely changed our strategy. And we’ve said to ourselves, how can we achieve that, how can we commit to this organization? We’ve made sure we can find other partners to join them so they can enter some kind of joint venture. We've been very successful with that model and we have a lot of already established major national organisations entering joint ventures with smaller vendors. The larger organisations have been able to help them grow not only from a performance and quality perspective, but also develop systems and processes. Now we're in a fortunate position where in some categories, we have Indigenous-owned businesses. Some of them are 100 percent Indigenous owned, some are 51 percent. They can compete with the largest organisations out there, not only with regards to service delivery and quality but also pricing.

Troy Rugless

PSG is a perfect example of the fact that there are some capable Indigenous businesses around now and they’re quite large. We've done a job out at the Aboriginal Centre of Excellence. It was worth around $25 million. They asked me, ‘will you meet the target of three percent Indigenous procurement?’ I said ‘Meet the target? In a future job, I'll be able to get 100 percent’. For that project, we hit 50 percent. They said, ‘How did you do that?’. I told them we're an Indigenous business, which means we know the environment, we know the client, and I know what people can do. It’s so much easier for an Indigenous business to engage Indigenous businesses. It's 100 times more likely.

Henri Fadli

Troy, I completely agree. That’s why we're in a fortunate position. There are some major organisations right now that can compete with the big boys out there. But the question is, is there enough of them?

Troy Rugless

Yeah, that's right, maybe not. But for the ones that are there, there are opportunities for them to come through and become one of them. That's how it's going to happen.

Henri Fadli

I know PSG Holdings is a great success story. So well done, Troy. We need more of PSGH.

Troy Rugless

Thank you, brother.

Stephanie Roache

This conversation makes me so excited that we've got JLL on board now. Because there are a few things that I want to reflect on that covers off what both you've said. From my perspective, it took us a long time to achieve our three percent target for our Indigenous workforce. And what I'm probably prouder of is that we've got good retention. But then I look at what we want to do in our supply chain. And when you engage with Indigenous businesses, exactly to your point, Troy, they smash the target. It’s the engagement. They've got the trust and respect. And I think that we can just have such a huge social impact by working with more and more Indigenous businesses.

And another point I think that is important to touch on here and something that probably sat quite uncomfortably with me a few years ago is I was looking at the spread of the social enterprises and Indigenous businesses that we engage with. They were more in the lower wage space. I think it's fine to have the opportunities there. And that's where a lot of the large spend is. But we've really wanted to do a better job at getting a better spread of opportunities. We’ve had a couple of success stories: We've got Salvos Legal, the social enterprise on our legal services panel. One of my favourite stories as we got Inspire Travel Management to provide professional services to Australia Post. We had brilliant ideas around how we could train them off and move them into other jobs in different areas. Unfortunately, COVID-19 hit, and they went under.

The big focus I think is really on all of us to step up and say, if we really want our supply chains to be reflective of the community and society, we need to make sure that we give and find a better spread of opportunities. And it's the same within your books as well. Do you have enough representation at those more senior levels, and it's something that we should all sort of reflect on and make sure that we have a focus on.

Troy Rugless

Stephanie’s just reminded me. If I look at PSG, I'm close to 200 Indigenous employees without even trying. We sit somewhere between 25 percent and 45 percent Indigenous employment. Our engagement of female employees is more than half, about 64 percent. We honestly didn't even try to do that. I just think the person that was best suited for that job got the job. I think sometimes being an Indigenous business and growing up with women – there are a lot of women in my family – you don't even look at it. And that's where I’d like other businesses to be.

The IPP is here to help ensure an Indigenous business gets a fair go. Once they get that opportunity, they can compete on a level playing field. We win a lot of repeat work because of our performances. So, I think people might use an indigenous business to start because of the IPP – that’s a policy and there are targets. But the repeat work comes through you doing a good job and building those relationships. And that's what I think a lot of Indigenous businesses do well.

Rebecca Kent

So, Stephanie, a 2030 aspiration for Australia Post is three percent of all spending to go towards Indigenous businesses. What are your strategies to achieve that?

Stephanie Roache

I think where we’ve had missed opportunities or missed the mark a bit is not doing enough planning. The biggest success we've had is when we’ve had capacity-building projects and worked with Indigenous businesses to get them to a place where they're ready to tender for our business and have been successful. But too often, we're just going forward and procuring and just so time poor that we invite them to tender, but they don’t get the opportunity and they missed a mark and they don't get another opportunity for three years. It's not because they're not capable and not competitive. It's just that we need to do a little bit more work and mentoring upfront. They can deliver just good, if not even better because they have social outcomes too.

So, we're carving out some time to do some deeper thinking and analysis on future opportunities. We're saying to ourselves, what's our procurement spend going to look like in 2025? And even in 20 years, at Australia Post? Where are we going to be spending more money? And where are the biggest opportunities? And what foundations do we need to start laying now with Indigenous businesses so that we can help plan and do some preparation and whatever capacity-building we need to do so we can slowly bring them into our supply chain so they can grow with our business?

Rebecca Kent 

Okay Stephanie Roache, from Australia Post, Troy Rugless, PSG Holdings and Evolve FM, and Henri Fadli, of JLL, thank you ever so much. I wish you not only a successful National Reconciliation Week but also successful partnerships that help close the gap between Indigenous and non-indigenous businesses.

You’re listening to JLL’s Perspectives podcast, and I’m Rebecca Kent.