Ex-Wallaby turned ASX listed CEO – Dan Crowley
In episode 40 of REDD’s Business and Technology Podcast, join our host Jackson Barnes and co-host Nigel Heyn, in this engaging discussion with Dan Crowley, the passionate managing director and CEO of Avada Group, as he delves into the world of traffic control and business expansion. Avada, a Queensland success story, has become the tech partner powerhouse in the traffic management industry. While discussing the company’s future, Dan sheds light on the significant role traffic control plays in enabling essential services, from upgrading highways to changing light bulbs. He emphasised the industry’s growing demand, especially with the upcoming Olympics and increased migration in Queensland.
Avada is on a mission to reshape the traffic management landscape by ensuring road safety and efficiency. They have expanded their operations, managing a growing portfolio of acquisitions, and are exploring opportunities in adjacent businesses. Dan emphasised the importance of technology, efficient systems, and cyber security in safeguarding operations. As Avada continues to build its dream team and integrate acquired businesses, the company’s commitment to safety and customer satisfaction remains paramount.
Dan’s journey as a leader, from a privately-owned enterprise to a publicly-listed company, showcases Avada’s dedication to excellence and its vision for a safer, more efficient future.
#AvadaGroup #TrafficManagement #BusinessExpansion #RoadSafety #QueenslandSuccess #Cybersecurity #Olympics #Infrastructure
00:00 – Opener
00:41 – Dan Crowley’s Background and Avada Group
07:13 – Key takeaways from the businesses Dan started
09:08 – The catalyst for Dan’s journey
12:37 – Expansion and Growth of Avada Group
17:35 – Dan’s overview of his companies and employees
18:18 – Avada as a “House of Brands”
22:52 – Plans for Olympics
25:22 – Handling the needs and challenges to deliver
28:12 – Finding and building the dream team
31:34 – Mental shift as a leader from a private company to a listed entity
34:49 – Hardest thing as a private-listed company
37:54 – Lessons from Acquiring Other Businesses
42:51 – Importance of Technology and Cyber Security
51:39 – The Future of Avada Group
52:58 – Closing Remarks
If you would like to discuss any of the topics discussed in this episode further with a REDD expert or if you would like to be a guest on the show, please get in touch either via our website, [email protected], or through any of the links below. https://redd.com.au
Hello and welcome to Redd’s Business and Technology podcast. I’m your host, Jackson Barnes and I’m your co-host, Nigel Heyn. Today we’re sitting down with Dan Crowley, who’s the managing director and CEO of Avada Group. Dan, thanks for coming in.
Jackson, Nigel, great to be here.
Beauty mate. Let’s start with a bit of a way back, maybe Wallabies days and then what you’d after that. Tell us a bit about your story and journey.
Well, I’m born and bred Brisbane boy, so I’ve ventured away and then always come back. So I did my time firstly with the Christian brothers over at South Brisbane and St. Lawrence’s over there for the whole of my schooling time a little bit with unfortunately with the nuns at St. Elizabeth’s for the first three years. So that was an interesting story in itself. But after that I joined straight from school. I went into the Queensland Police at that time and did then a dozen or so years with the police in a variety of different roles, which was a fantastic time. I enjoyed every minute of it and the people in the camaraderie and everything. I feel sorry for the boys these days compared to what we had and enjoyed back then. They don’t have the same latitude that we had back in the eighties and nineties, that’s for sure.
Yeah, all the rules and regulations and
Kind of stuff,
Cameras, that’s the big thing. Everything gets recorded and gets distorted
Unfortunately and can get manipulated, which makes it very difficult for everyone involved. During that time, I was very fortunate that I was able to play rugby union whilst in the police and fortunate enough to play a number of games for Queensland and the Wallabies and be involved with a group of players throughout a 10 year span, sat on the shirt tails of some really famous wallaby players and excellent wallaby players and to take some success through those 10 years was something to be very grateful for. Then I left the police in around 95 and amazingly enough, all by good luck, not by design the year after I left, it went from amateur professional in rugby union. So one day the thing you were doing for nothing and for love, you were getting paid handsomely to be able to do that. So that was able to supplement getting into business. So throughout the next 10 years or so, I started the venture into a number of different businesses, started a private investigation business so people think they see the movies and all that. So we didn’t venture into any of the private as in personal investigation works. All of ours is very unsexy. It was around insurance and
Compensation and all that sort of stuff. The boring
Yes, exactly. But pays the bills and so then from an entrepreneurial point of view, I suppose we started actually a debt collection business for a while. Built that, sold it off, had a process serving business, built that up, sold it off, dabbled in security, mobile security for a while. Oh, really? Didn’t know that. Then sold that business off and prior to the latest venture, I had a business that provided nurses, paramedics, and firefighters to the central Queensland mines. And so that was an interesting business, challenging business being dealing with the medical fraternity, that’s for sure. And then sold that off recently and during that time in around 2008, 2009, we actually bought a small traffic control business. Absolutely no understanding around the business or why, just drove through a traffic control site one day and went, Hey, I reckon we can do this. And so we bought a small business up the Sunshine Coast. It was about 20 cars or so, 50 people. Well run business, good systems, good processes and good people, which is what you look for in a small business. And then bought that up there. Then we were fortunate enough to, our first large contract in Brisbane was the construction of the airport tunnel, so that was a five year gig that we picked up on there and set us on our way to where we are today.
So let’s answer that really quick then. Why did you start or buy into all these businesses instead of just chilling after your wallaby’s career? I suppose
When, as I was saying, I started my first five years with Australia as an amateur, and so you’re going around and playing and doing it, you love it, and at that time also was married, got married a couple of kids, and so we were struggling at that time to be able to afford to be able to do it because you’d use up all your leave. You could be away for up to collectively three months a year travelling around the world when you were playing. So it was quite difficult to be able to do that and as I said, it was so when I went from amateur to professional and I’d left the police and started working for myself, I still had that mindset this could stop at any day because you’re only one injury away or the selectors and a bad patch that your sporting career is finished, but also your employment’s finished. And so it’s not like normal employment where you can go and find another job somewhere in the same capacity.
It’s very difficult. So I always had that as a mindset. So I continued to make sure that I worked throughout the time that I had a professional rugby career where a lot of others don’t, and it was the start of professionalism as well. So it wasn’t as full on as it is today and the expectations of players and their employers are today than it was back then. So it was just naturally, I started obviously in investigations business because it was something I knew being a detective in the police, it wasn’t too far removed and a number of the businesses and I talked to a number of young footballers as well as that although I’d stopped playing football, I was very much every contact and every person that I was able to build my business was off the back of football and the knowledge of football.
So one of the things that I think was very handy for me and very helpful was the fact that a year or so after I’d finished playing, I actually started to work for Channel seven in their commentary team for the next eight or nine years. So that kept a little bit of relevance, I suppose, with the public in that side of things, and it was the ability to be able to get your foot into a door with a client, how you worked and what you provided and how good you were at your work would keep the door open. Unfortunately, some professional footballers think their name is going to do everything for them. It’s going to open the door and then the client is just going to continue to give them work because of their name, and it just doesn’t work that way in the real world. Definitely after a number of years, that’s for sure.
So what were some lessons learned from all the businesses you were starting while still in your rugby career and then commentating? What were some key takeaways from the businesses you started?
The number one thing is you just got to work hard. Nothing’s going to get put on a TER for you. So I still recall we were based in out at Acacia Ridge, so that’s probably 25 minutes from the city, 30 minutes away from Ballymore outside of Peak House. I don’t remember training wise, there was a stage whereby you’d go into work at 5:00 AM you’d have, you’d work for the first couple of hours, then you’d have to be able at Ballymore to train for your first session in the morning. You’d finish there by 10 30, 11 o’clock. Then you go back to work and continue to do work, be back at BOR by six o’clock, and then you’d train through five or six o’clock, then you’d train through for a couple of hours after that. Then we had a client whereby there was a matter whereby I had to get to Gimpy every second night for, actually in old days it shows you had to change tapes in a recording for some surveillance work we were doing up there. So every night I’d have to drive two hours to Gimpy every second night, two hours to gimpy, change tapes and then travel back and then get to bed, get up the next morning, rinse and repeat. And so unless you are willing to put in the hard yards, no one’s going to give it to you. So people talk about successful people, but they’ve taken most of the time it’s taken them 20, 30 years to be successful.
It’s definitely not an overnight success. So let’s talk a little bit about, so very fact the business you were speaking about with 20 cars and 50 good employees and good processes at the time, how many years ago was that? Sorry, when you bought
About 2008 I think. 2000, yeah,
- Yep. So you did that and then let’s speak a little bit about deciding to list and what was the catalyst for that journey turning into a barda?
Well, first of all, so Verifact had grown substantially to the largest traffic management business in Queensland, and then we also owned, had purchased another two smaller businesses and kept them under their own label and operating just prior to the listing phase, but it was actually a consultancy business called Coon Consultancy. Greg Kern, that’s his sort of forte, is looking at bringing businesses to the listing phase and he saw the Verifact cars going around. It didn’t take too much to find out who actually owned Verifact. And so I should also say that I had a two thirds owner, one third owner actually from the investigation days, and we continued on from there was my partner at the time, Jared. So he’d actually had recently at the time left the New South Wales police and had an investigations business down there. So we actually got together to be able to build the investigations business to be Australia’s largest investigations business nationally. And then obviously we stayed together and morphed into the traffic and so on. But getting back there to your question, Greg actually approached us, as I said, small world in Brisbane, tapped me on the shoulder, said, Hey, this is what we do. Is this something that you’d be interested in? And the one big thing for any owner of a business is as soon as you start a business, you should be looking at how you’re going to exit the business.
And so it’s one of those that you could build and we could continue to build Verifact, but at the end of the day, where’s your exit? Who is going to actually buy you? And in our industry, in the traffic industry, there’s only very limited opportunities to be able to look at that. So I drank the Kool-Aid from Greg and had a look at it and decided, I think this is a really great opportunity. So we brought together the three businesses that we had. We brought together another five, very difficult, we were still in that covid phase, so trying to get to talk to people and lift the bonnet on businesses and see what they were like. There was varying degrees of reality and truth I suppose spoken about all the businesses.
So what year was this when Greg reached out to you initially? When was that, and then when did you decide what kind of timeframe are we talking?
So we listed in December 21, right at the back end of December. It would’ve been about 12 months before that that Greg had spoken. So it had taken about a 12 month journey to be able to go through and they were all private businesses. We had to go through and have them all audited, so they had audited accounts. And so there’s very strict standards with regards from a listing perspective in what you have to do. So we had a lot of work to do to be able to bring these businesses along. We spoke to several others as well, but unfortunately at the time, their back of house, as I call it, their trusts and families involved and loans and different bits and pieces, I call it a bag of spaghetti. It was so hard to try and unravel in the timeframe that we just couldn’t do it. And so these businesses were the ones that got through the gate initially and put them together and then listed on the 17th of December 21.
Yeah. So what made you want to do it apart from you have to have an exit strategy, you could have kept running very fact, I’m sure it was profitable and you were going really well in Queensland. So what made you want to do it And then looking back now you’ve gone through that process, was it worth it?
Why? It is an interesting question. One of the things that someone said to me the other day, when are you going to look at actually retiring? And I answered them. I said, it’s funny when I left the police and when I finished football, I just knew and it was sort of the next day decision, that’s it. I’m finished. And so I haven’t got that feeling yet. I’m keen to continue to go. I think it’s a great challenge in what we’re doing. We’re the only listed traffic management company in Australasia and we can’t find anyone in that space anywhere else as well. So we’re the first ones to be able to do this. A lot of people underestimate the size of the traffic management industry in Australia and New Zealand. We put a little bit of a guesstimate and a wet finger in the air. We think it’s above 3 billion in revenue and people don’t understand the size. And so it’s a very fragmented industry. It’s a cottage industry or it has been moms and dads and running businesses, very good businesses and some not so good and some quite sizable. But again, they’ve got no exit strategy on where they go to next. It’s not like a civil company or a tech company where someone, there’s multiple opportunities to be able to sell to at the moment. So
We see the industry as something that we can bring together. And again, being a listed entity now that governance bar is significantly higher and than just a normal company. And what I find really strange is that we work obviously for government, we work for large tier one contractors, we work for councils and state governments, and a lot of the decision making about who they use in traffic control is actually left to the lowest common denominator as in the person who’s utilising that service out on the road or it’s a procurement person making the decision purely on a dollar value. And the reason why I find it really strange is that traffic control is actually one of the most riskiest occupations that there is going around, but they’re very underrated in, they’re the last thing thought of, we’ll just get traffic control, but they’re the ones who are actually keeping the public and the workers and themselves safe safety for anybody who’s involved in that area, although that it floats up, it flows uphill. It’s the only place that if there’s a safety incident, it goes all the way to the board for responsibility wise and criminal responsibility.
They just take it as an afterthought. And there’s been, unfortunately, there’s a number of significant fatal accidents that have occurred, but they still think of it as an afterthought. And we’re hoping that by where we are now and by lifting the bar because we’re forced to with governance, that hopefully that our clients will now start to realise that hey, we’ve got to take this, what these guys do on the road seriously, because it can really affect us not only from the person being injured, which is the most important thing, but reputationally and or criminally it can affect them at the board level.
We might unpack that governance piece being listed versus problem a bit later, and I’ll shoot you over to you in a second, ask a couple of questions, but was it worth
It? I’ll tell you in a few years time, look, it’s interesting thing. You’ve got share, you’ve got a completely different responsibility. One, I don’t own a business anymore, so I’m an employee, so if I don’t do what I’ve got to do, the board will shoot me. But my thought is I’m still thinking as an owner, and that’s what I want all of our staff to think of as being owners and custodians of the business because if they do the right thing, we’ll go in the right direction and if we go in the right directions, we’ll get rewarded by the shareholders
In what we’re trying to do. And all of our leadership team and everybody we’ve got, they too have drunk the Kool-Aid. They believe that we are able to build something special and something different because we’ve been speaking about traffic control, but we’ve got four, there’s three other pillars to our where we want to grow to Temporary traffic management is just the bedrock is the first pillar that we want to be able to build across Australia and New Zealand and build a substantial business off the back of that. But it’ll give us then the framework to be able to grow into those other pillars.
Okay. Do you want to give for people listening an overview of how many sites and companies you’ve acquired in your journey so far, and how many employees just from AM size perspective?
Yeah, so we started off, as I was saying, there was the eight companies that brought together. Then in the last 18 months we’ve acquired three more. So construct traffic down in Victoria. We’ve just settled on STA traffic in Victoria as well. And then the New Zealand South Island’s largest business, Wilton’s Traffic Management we acquired as well throughout that period of time. So Encompass with in line with our strategy of being able to go across Build Out Australia and build out across New Zealand is our first footstep in that temporary traffic management business. And the way that we operate is that we’re actually a house of brands. So a branded house, everything is branded, the same name, but Avada as I class it is the parent, we’re the back office parent. Each of the businesses operate under their own brand and so they operate anything that touches the customer or touches the traffic controllers in the operations that’s actually run by that business. And I think it’s really important from that perspective because each of those businesses and the people within them, they’re really passionate about their own brand and the shirt they’re wearing. And so like brothers we are looking to try and build to have two brothers in each area and like brothers, they fight against each other all the time. And that’s
So two brands in every state?
Yeah, two brands in every area.
There might be, in southeast Queensland we’ve got three. And so they operate differently independently. They have either share clients or have different clients and we’re very open with our clients, so there’s nothing underhanded from that perspective. The guys operate themselves behind the scenes. From a novar perspective, our job is to McDonald ize everything, so to have all our processes and procedures, our systems, everything exactly the same. So it then gives actually opportunity to these smaller businesses to be able to have a succession plan then and an opportunity to be able to grow so we can have a supervisor in one area if we want promote and he’s stuck behind people in his own business, well then we can move him to other businesses and other areas and give him a promotion because everything is exactly the same from an operational perspective. Just different customers and different tcs.
Yeah, one of the guys out in the field wants to relocate. You can facilitate that quite easily.
So across the eastern seaboard, New Zealand, we’ve, there’s actually, I’ll go to the 12th business in a second, but we’ve got 11 independently operating businesses across those areas. At present we’ve got about, I think there’s 31 depots we’ve got across those different areas, so spread out so people work out of the different locations. We’ve got just over 2,400 traffic controllers on the road and we try as much as possible to have every one of them out every day to give them as much work as possible. And then we have around 150 management staff from internal staff management in those operations or from the Nevada perspective.
And then the 12th business that we have is we as part of our ESG governance with regards to listed company and there’s the environmental, the social and the governance in the ESG we’re looking at, okay, there’s a multitude of different areas in those three that must be looked at. Governance is around modern slavery for an example, and making sure that you’re looking down the chain of what you are purchasing that it’s not into slavery in another country. For an example in the yes, the social responsibility one area, we want to look at picking things and doing them very well. So social, we’ve partnered now with an indigenous business and started an indigenous traffic control business called Bill and Garra. And so the started aim of Bill and Garra is purely from a project perspective is wherever we’re going to work on projects that might last a year or two years or whatever they are that we’re able to then identify, train, and then employ indigenous men and women within that local area. When that project finishes though, normally what happens is that people don’t have the job and the local mobs don’t want to move.
So instead of them being unemployed, we’ll then roll ’em over into one of our abda businesses so that we can, they continue to have employment in their local area.
Clever makes a lot of sense. Where’d you want to say this conversation? Yeah, so Dan, look, it’s interesting, love listening to your stories, really appreciate something you said earlier about hard work and doing things for the right reasons. You’ve always been the person that you’ve supported us and we’re very proud to be the tech partner power in Nevada. You’re a Queensland success story, but I wanted your take on the future. So Queensland, we’ve got the Olympics coming, we’ve got a really big road roadmap ahead. I think you said it earlier, you are providing an essential service that is actually underrated without traffic control. A lot of the initiatives and the world we live in just can’t happen, right? So can you share crystal ball in where the future’s going and what your world is?
Well, thanks Nigel. I think, well, the first thing is that people don’t realise that traffic controller is a highly regulated industry now they go back 10, 15, 20 years ago, there’ll be guys in a Jackie r t-shirt with thongs on walking out with a stop slow battle just putting their hand in the air and doing stuff. But this day and age, it’s highly regulated and so it should, because it’s a difficult job to be done and unfortunately the pace that everybody is at and the impatience that everybody is at these days, especially behind the wheel of a motor vehicle, makes it a dangerous place to be. So they have to regulate it. So as I say, whether or not you’re building a driveway or you’re building a highway, you have to have traffic control to be able to do that work. The electrical providers, they want to change a light bulb in the middle of the st.
They can’t just stop and do it. They need to have traffic control and make sure it’s a safe environment to be able to do that. So we have big projects that people talk about. The big upgrade and the M one highway for an example is one area, but it’s actually all the maintenance and the repeatable work that we do is our bread and butter stuff. So you talk about the Olympics for an example is that yes, everybody’s talking about building the GABA stadium, but they don’t realise Will and GABA is one of the oldest suburbs in Brisbane, so they have to upgrade all the electricity, all the data, all the sewage, all the water, and so they’ve got to rip up all the roads because they all run under the roads in that area like three years before they’re going to start building.
There’s massive infrastructure that’s just the gaba, nevermind anywhere else, there’s a massive amount of work that needs to be done in that. You look at Asphalting for an example, people on average, I think it’s every seven years you have to asphalt the roads. How many roads are there across Australia that need to have that? So it’s that repeatable maintenance work that needs to be done is the stuff that people don’t realise that that is increasing. We’re seeing, especially in Queensland, not only we’re talking about the Olympics, but we’re talking about the migration. So there’s schools, there’s roads, again, there’s infrastructure, there’s so much that needs not only to be done to keep it up to standard, but needs to be built
And to that end to meet this demand. Dan, I know we’ve spoken before, obviously constraint on resources, people hiring, all of that. How are you handling the needs and the challenges to deliver really
Well? It is an ongoing challenge I think in every industry as you guys we were talking about before that have constraints as well. So we’re working very, we work closely with a number of training providers, so we don’t have a training business ourselves. We’d rather work with a multitude of different providers and let them do what they do and do it really well. And then we then bring the people in for further training and development. I’d rather bring a new person in with good attitude that we can train up than try and take someone who’s bouncing around everywhere and is just looking for the extra 50 cents an hour. We want to be able to build a good culture of good people. Our job from an no barta perspective, as I’ve said before to all the guys, is that our job is to make it easier for the general manager to run his business and his job is then to work for his managers below him to ultimately our job is to make it easier for the traffic controller on the road and for the customer.
And so if we’re doing that, we’ll naturally build, we’ll naturally grow, but we’ve got to make it a good environment. As I said previously, the problem is from the traffic controller’s perspective is they’re undervalued and that’s across the board. They’re undervalued for the importance of the work they do. So from our business’s point of view, and it’s a big ship to turn around psychologically, but we’ve got to be able to get it to understand that the traffic controller is the most important person in our business if we don’t have them and we don’t have safety, we don’t have customers if we don’t have them and customers, we’ve got no business and we haven’t got a job.
And just listening to you Dan, it’s interesting, we take a lot of things for granted here in Australia. I was in Minneapolis two weeks ago and what you mentioned before about changing a light bulb, I literally saw a man on a cherry picker changing a light bulb in the middle of the street on the way to the arctic wolf and the Uber drivers have to swerve around. There’s no traffic control, there’s nothing. It’s like we are genuinely in the best country in the world, Australia and companies like yours make sure that everyone’s safe and protected. So it’s
Good. Well, again, safety is the number one thing. If you haven’t got that, you haven’t got staff and then you don’t have customers, as I said, you don’t have work, but we’ve got to start to build across the board the public, and we’ve been working involved with the industry association, we’ve been working really well with the government departments, the Department of Main Roads in particular here, and they agree that our number one thing now is to lift the gravitas of what the actual traffic controller does because important.
So let’s pivot a little bit to want to pick your brain around building a dream team. When you decided to acquire the next five businesses and change your name to Avada and the restructure you did, what was your approach to, obviously you need a lot more people, you can’t just go do that by yourself. How did you go about finding a dream team?
It was really difficult, I suppose to start with. So we’ve pedalled really hard for the first 12 months and as I said, we are nearly into the end of the second, well I should say 18 months has been a really hard pedal. Basically Varda was a startup. We had obviously businesses that have been running for many years, but the Varda team was a startup, so we had to find a place to live, go and buy cups and saucers and knives and forks and seats and put ’em together and everything before we even started to look at how we’re going to try and structure a team. And then it was a case. We’ve got a good partnership from a recruiting C three, they’ve helped us really well and we put people together and it hasn’t been without its mistakes and this isn’t of the leadership team’s fault, it’s more that you go and pick a person for an example.
And we’ve had luckily only a few instances so far whereby we pick people who are really good at their craft and good at their role, but they’re not the right person for the journey that we’re on and you don’t find it until they get in there. So some of our leaders are very experienced in their roles, but they’ve gone past that journey of being the doer instead of being the strategy type person of putting things together. And so they struggled to the person being the doer because we had to put everything together, new policies, procedures, bring everybody’s policies and procedures and bring them all in and start to have a uniform policy. And so everything from starting a new business because of VDA is a new business, even though we own established businesses, makes it very difficult. And someone said to me a little while ago, I think it was a great way they put it, they said that you guys are a bit like the Dolphins rugby league team.
I said, why is that? And he said, because Wayne Bennett, the team Wayne Bennett has picked for the inaugural year, will not be the same team in three, four, and five years time, which is very true. He’s picked the people who he needs to get the job done in the first year or the second year, but he will start to need other people with different skill sets as he goes forward. So we see it at this stage. We’ve got a great bunch of people and so from Nevada perspective out, we want to keep a very lean head office team. And so other than finance which we’ve brought together, we want to have a specialist in each of the areas like safety people and culture, logistics, procurement and logistics. And then have a business partner in each state for each of those roles so that whether it’s two, three, or four or five businesses in that state, they can go back to that one business partner and they work hip to hip with those guys in those areas and being able to lift a standard and then the head who’s the expert, the subject matter expert, then his job is to inch by inch bring the ability and the sophistication of what we’re doing across the board and start raising at the bar.
Okay. Dan, to that end, can I ask another question in terms of the mental shift as a leader from a privately owned business to being the leader of a listed entity, talk us through that. I know there’s a couple of people I know in the past that have said, oh look, I’d love to IPO list my business. What can you share if you do it again, lessons learned, challenges like that, the mental shift from being an owner led of your own destiny to now be responsible for effectively shareholders and getting the best outcomes around.
Yeah, I’ve seen from my perspective, as I said before, I’m still working as if I own the place. You know what I mean? And I think that if I lose that, it’s time to leave. So you work as if you own it. And I hope that we are picking people who have exactly the same sort of values within the business in what they’re doing. Some of the businesses that we have bought, it was a very difficult mental challenge change for them in the fact that they were working in the business but not 40 or 50 hours a week type working in the business. And so they would be able to come in, make sure everything’s going okay, and then wander out and do whatever a deal else it is and good on ’em that built their businesses to be able to be rewarded from that.
But the change from going from that to you are now back to being an employee and everybody wants their ounce of flesh was very difficult for a number of those people to be able to change. And we’ve seen a number of them haven’t been able to, so it’s been having a chat with them and them saying, look, that’s not me. I’ll go on to bigger and better things to do that. So I’ve always found personally that it hasn’t been an issue. The type of work I’m doing though is an issue and I’m still getting used to it about letting go, having other people hands on all over the operational side of things, the people in culture things, it’s keeping close enough to it to know what’s going on and keep understanding the pulse, but keeping far enough away of not sticking your fingers in and letting the people who are, we’ve got some great leaders in our business and they’re very smart and good at what they do, so hey, they’re a lot better than me.
And the other side of it is now getting used to investor land, what you can say and what you can’t say, the compliance side of things. If the financial compliance, the auditing that everything that’s expected of a listed entity and the governance around that is now we’re in our second year. The first year was a bit daunting. Holy mully, what is all this about? But we’re now starting to get that cadence and get that flow and understanding of what we require. It’s now evolving into that, trying to partner with our shareholders and we’ve got some great institutional shareholders who have said, want to be with, we believe in what you are doing. We can see the growth in the areas as we spoke before, we can see the opportunity. And so they’ve said we’re in for the long haul and we’re really grateful for that and we want to be able to build a business because as I mentioned before, the opportunity is immense.
Oh, fantastic. What was the hardest thing about, now you are listed versus private, was it having to update everyone? What’s going on? Was it the financial reporting side? What’s the hardest thing so far?
I think when you’re a private owner, you can have a good month or a bad month. You just shrug your shoulders and go, okay, well we’ll just see how we go. You don’t have that luxury in listed land. You’ve got certain targets you’ve got to hit every quarter. You’ve got to report on what those targets are. If you are off on those targets, you’ve got to explain yourself on the reasons why and you’ll be marked accordingly in the share price to start with, we could not have picked the worst time to list because we were right in the middle of, I think it’s lino. Yeah, and weather is our nemesis. The work doesn’t get cancelled, but it gets pushed down the road. Like we said, maintenance work and project work, they can’t just not build the road and they can’t maintain, they have to maintain their assets so the work gets pushed down the road, but it just doesn’t get done at that time because of the rain. And so I know this sounds brutal and brutal, but a cyclone will come in and beat up a place for two or three days and then leave, and then that’s whereby we get extra work out of that.
When a weather pattern, it sits over Queensland and New South Wales for six months and just continually just reigns enough to whereby you can’t work, then that was terrible from our perspective with regards to our financial performance. So the first six months of listing where we didn’t hit the targets that we said was pretty brutal on us with regards to our shareholders and the market itself, but we’ve now been able to show after that period that we’ve now come into normal weather patterns that we are now started hitting our run rates now and being able to report that what we’ve said we were going to do, they’re now going, oh yes, you can do that. And I think that going forward, as you mentioned before, people are starting to see from a traffic control perspective, they’re going, those guys are everywhere and motorists don’t like it because they’re getting held up all the time. But the amount of infrastructure and maintenance work that’s getting done across the country is phenomenal and it’s not going to slow down
Definitely in Brisbane. Yeah, thanks for sharing. I completely understand that if you weather push projects back, then you have the stuff you had to scheduled after you couldn’t get to, and then you’re obviously not getting collecting money because the weather, you can’t invoice people. So that’s a tricky kind of problem and no doubt would be stressful when you see that results from a quarter, then you check on the app and the stock prices down because of it, that’d be a pain. I want to shift gears a little bit to the m and a side. So what’s some lessons you learned from going to acquire other businesses and roll ’em up into Avada? What are the maybe top two lessons learned?
Well, as I was saying initially the difficulty was it was around covid times, so we didn’t get a good chance to be able to look under the bonnet and get a really good look at what it is. There’s a lady, one of the leaders who’s been with me for the last 20 years across different businesses, multiple businesses, but was across the traffic businesses prior to us listing. She’s now our group manager for integration and process improvement. So she’s really good from a point of view that before we take a business, she gets in there and lifts the bon and goes through every nook and cranny and she can come back and tell us, give us a really good view on what the positives and negatives are within the business. Sometimes a very strong leader or very strong owner can be actually a negative because no one below them. He’s got a very, very weak bench strength below him. And so that person is the one point of failure and that’s where we’ve got to ensure that we’ve got bench strength coming through.
I can see how that would be a battle if that owner owned all the customer relationships and maybe some of the key staff relationships and then they’re gone because sell out to you for example. How’d you deal with that? Yeah,
And human nature is really, I shouldn’t be surprised, but I get surprised every time in the fact that we’ve had some whereby they’ve not only not wanted to be a part of it but have been toxic for whatever reason. It’s basically, if it’s not my way, I’m going to pour, try and pour petrol on it. So we’ve learned to assess the owner and the bench strength is really important. And in our latest acquisition, we had a really open and mature conversation with the owner who’s an entrepreneur and most of ’em are, he’s got an other business that he wants to go and focus on and he was quite happy to work with us to bring in a general manager prior to even taking over. And he was happy for that guy to take over because he actually knew him not well, but knew of him in the industry. He was well regarded and said, yep, I’m happy for him to be in. I’m going to work alongside with him. I’m going to hand over everything I’ve got with regards to the customer relationships and all that sort of stuff. He wants to see the business continue to succeed,
Know what I mean? And he wanted to see the best thing that happen for the people. Unfortunately, he gets some that say they care about the people, but they don’t really, they care about themselves, which is really unfortunate. And our job is to make sure that, obviously we talked about safety and all that stuff, but ultimately you don’t want people coming to work who don’t like going to work. You want a place where people are happy. I’m not saying they’re going to skip into work every day, but they like the place they go to work with. They’re not dreading to go to work. And the same from a traffic controller’s perspective, we want the people to work with each other and be happy in that environment and we want to keep them as fat and as happy as possible because they’re not the highest paid people in the world from an industry perspective. So we want to make sure that they’ve got plenty of hours and plenty of opportunity to be able to work.
So there’s that, sorry. So the bench strength I think is one of the important things, and the people is just as important as the bench strength to be able to do that. So I think having a look at the businesses in where they’re at and then having that conversation with the owner to make sure that they understand that, hey, when we get coming in, you don’t have these processes in or you’ve got a different system. We want to roll that system over. So we’ve got to be as open and honest with the people when we’re coming in to say, Hey, this is what we’re going to change. So there’s no surprises.
So that’s something you’re doing differently now when you approach a business is you are really trying to understand who are the key people they’ve got sitting there and that kind of thing?
Absolutely. And again, people don’t like change. And so we’ve got to make sure that they understand that it’s simply might be a rostering system, that they have something different and we want to put in a rostering system that we use across all the businesses, but they don’t want to change because that’s what they’ve used for the last 15 years.
How do you gauge that on initial conversation? Do you literally just ask them, if we were to change a process here, what would you say? Well,
We go through that, the process and be open with them with regards to saying, Hey, this is the systems that we use and we’re going to have to look at changing the systems over. We’ll have businesses. They’ll say, no, no, I think you guys all 12 businesses should change to us, not us change to the 12 businesses. So it is difficult, but that’s human nature that people don’t like change.
How important is technology to avada and how are you using technology as a differentiator with the scale you’re building?
Well, first it’s making sure we’ve got consistent systems. I think that’s important. And obviously working with you guys that most of the businesses had no protection from a technology perspective and working with you guys and Arctic Wolf, being able to put that in has been really important to us. And obviously from a governance perspective, it’s the number one to make sure that we don’t have those threats to a business that can pull us down and stop us working, which is super important. It’s also an area whereby, as I mentioned before from our client’s perspective, we want to be able to raise the bar from a technology point of view. And a lot of our clients are just so used to getting what they get from a traffic control business. And as I mentioned before, it’s so afterthought that it’s hard trying to drag them along on the journey to try and be able to give them something like an app to be able to book a job, they guys to be able to book a job. They’re going, oh, no, no, it’s all right mate, we’ll just ring up.
And they’re used to some people working in paper-based instead of electronic based. So being able to take the businesses on the journey and the clients half the time are the same to be able to take them on the journey. But if we look at temporary traffic management for an example, I think in 10 years time we’ll be a tech business. You think of where the autonomous cars are coming and rapidly evolving as they are. You get to a road site, every one of those signs will have some sort of technology on them to whereby we can change the speed of a car coming into that to change it. So it’s automatically slows it down or stops it at an intersection so you don’t need a person on the road and you’ll have a person in a room being changing the different speeds around on the signs and so on.
That’s where I think it will evolve too. So what we’re looking at is what are the things that we can start to do from one of the pillars? As I mentioned before, we’ve got four pillars, temporary traffic management, one technology is the second. So looking at what are those things around temporary traffic management, but then looking at the larger play, what is it with regards to traffic management as a whole for a city, smart city technology, running about the camera systems, the traffic light systems, all of that, how to move because government don’t really want to do it. They’d rather have someone else do it. You look at the camera and mobile phone and seatbelt technology now with cameras, that’s all being outsourced. So all of that sort of stuff is areas of technology, technology we want to look at from traffic. So there’s the tech play, then we have what we’re talking about the adjacency businesses.
So in those adjacency businesses that would work alongside traffic. And for our clients, there’s areas around whether it’s lawn mowing, whether it’s arborists line marking water trucks, there’s a multitude of those types of businesses. People think of lawn mowing as Jim’s mowing, but there is massive mowing contractors that are needed and the industries are very similar to traffic management, all owner operator, all fragmented. And so looking at bringing those together, then we can offer our clients three, four, or five different lines of business. And then lastly is projects. The big projects on the highways, we’re seeing overseas that those big tier one contractors, they don’t want to manage all that rat and misers they call it, whether it’s the line marking, the traffic control, the water trucks and all that. They’d rather have someone be able to manage that for them so they can just focus on what they’re doing. So they’re the four pillars.
Yeah. The third one you mentioned, Dan, are you doing that currently providing the other services like lawn and line marketing and that kind of stuff?
Our big thing is to start with, so we’ll look at again, probably look at doing the same way that we did with how we got into the traffic business. We’ll probably go and pick up a small one or two businesses in different areas, make sure we understand the processes, the procedures, how it’s done, whatever. And then we’ll look at consolidating it and bring it together. But first of all, we want to get the traffic management consolidated. So that’s, as I said before, that’s our bedrock that’ll be able to build a framework for us because we can then we’ve talked about our safety specialist and so on, all of them would then be able to work across those different areas as well. So you don’t have to then build a whole new management team, you just have to expand your management team to be able to look at those adjacency businesses.
Makes perfect sense because you already out there, you already have the local presence in across Australia and New Zealand already a lot of customers are responsible for those things already. So it doesn’t make a lot of sense.
And we can cross utilise our staff,
Is great. So it gives them opportunities again to be able to be cross-trained in different areas and we can use that pool of staff to be able to push into different areas when we have high demand.
Makes sense. One thing we talk about a lot on this show is cybersecurity. Now as a listed business, there’s been some large entities that have had unfortunately breaches and significant impact. I think Latitude come out saying it was like $97 million. That was the financial loss to a data breach they had in the year, plus the reputation and loss of customers after that kind of fact. How important is cybersecurity to you and how does your board look at cybersecurity?
Super important and hence the reason why we work with you guys so closely because we can’t afford to be down today. And some of the systems that we have, they’re the nervous system of the operations. We talk about our rostering and asset allocation systems. We have to make sure that those things, because working within, we are doing bookings within 12 hours with our clients. So they’ll be doing a booking now for tomorrow morning or tonight. And so we have to have those systems. We have to know who’s available, what vehicles are available, where they are and so on. So it’s hugely important to do that. Privacy is just as important. We have to make sure that the information of our staff across the board is secure and they’ve got to understand and feel that it is secure. Again, we look at a number of those that we said, those smaller operators, they have the businesses that we’ve bought, they’ve had no even thought about cybersecurity or information security in their businesses. And again, that’s where our clients are now. Our larger clients are now starting to look at us and say, well, what contingency do you have? Because if you break down, all our work breaks down because again, as I said, they can’t get on the road unless they have traffic control.
So if we break down, Brisbane city council is one of our major clients, and so we will have hundreds of people out on the road with them in a 24 hour period and they have hundreds of their people out doing jobs and their trucks and assets and everything out on the road ready to do jobs. If it stalls and they get out and do their job, then there’s a lot of pain and money being wasted from their side of things. So from a board perspective, they understand the importance of the requirement of cybersecurity.
And Dan, to your credit, you’re one of the early adopters when we came to you and we said, look, we’re brilliant Arctic Wolf to Australia. It’s one of the best. You said, look, I want the best for my organisation. So I think Dan’s business was number two, I think in early adopters. So hats off to you. Well done.
No, thank you. It’s absolutely critical. Can’t, one of the things you talk about sleeping, what keeps you awake at night? And first one is our people on the road and keeping them safe and operationally being able to operate. They’re two of the biggies.
It’s interesting you mentioned the third party supply chain risk. We are definitely hearing that a lot now. Like Brisbane city Council and other state government agencies and that kind of thing. They’re looking at third party supply chain risk because I think it was it Woolworths and was it Telstra? Optus, one of those two actually. They had a breach from a third party who didn’t have good cybersecurity in place. So it’s good you’re
Of that and that kind of thing. Naji, any other questions you want to ask? If not, I wanted to ask Dan, what’s next for Avada? You mentioned you four pillars and wanted to expand. What what’s it going to look like in three years time?
Well, I’m hoping that it’ll be substantially from a traffic management perspective, it’ll be substantially bigger in the next 12 to 18 months in the plans that we do have. And to be able to bring the shareholders, the wealth that they’re after to be able to increase the value of our business and people to be able to see the value of our business, and obviously to see the opportunity that there is in the market being the only listed entity in our space. So I’m looking at us wanting to fulfil what we’ve said in our strategy to start with is to ensure that we’ve got Australia wide coverage and New Zealand coverage, and then have two brothers in each area to be able to fulfil the services for our clients, continue to grow it and grow our revenue at what we’ve said that we will do, and then build a good team. And above all, keep ’em all safe. It’s the number one thing in our industry because it is such a risky industry that we do it. We hit the targets that we want to hit and we keep our shareholders happy, but more importantly that we do it safely.
Dan, thanks coming in. Appreciate listening to your story and all the lessons learned along the way. I’m excited to see where you go in the next three years. Appreciate it.