PODCAST: Why more companies are working with Indigenous suppliers
Companies are using their buying power to drive social change
Large organisations are increasingly working with Indigenous suppliers in Australia to woo customers making decisions on social values rather than just the bottom line.
Governments and major companies including ANZ Bank, Medibank and Australia Post are among groups using their buying power to deliver social change. This is a stark shift from a decade ago, when many firms would have dismissed Indigenous businesses as contenders for facilities management and other building services contracts.
The number of Indigenous-owned businesses is growing as a result. Registrations of businesses at least 50-percent owned by Indigenous people grew 180 percent between 2017 and 2020.
One high-profile benefactor is Mick O’Loughlin, a former footballer for the Sydney Swans, in Australia’s Aussie Rules AFL league. He’s also the founder and managing director of commercial cleaning business ARA Indigenous Services.
“Growing up we were always waiting for funding to come from somewhere to play sport with other communities, but as a business owner now I can just say ‘we’re sponsoring this and everyone gets a jersey, everyone gets a netball uniform’. We work extremely hard, but nothing makes me more proud to be able to do that,” he says.
Hear from O’Loughlin, Laura Berry, the chief executive of non-profit Supply Nation, and Robin Burton, senior supply chain diversity and sustainability specialist at JLL, in this episode of JLL’s Perspectives podcast.
The property industry is the biggest direct contributor to GDP in Australia, which gives it huge sway when it comes to making society better, and business better.
One way the industry is doing that is by procuring business from Indigenous companies. Every dollar of revenue earned by these companies generates about four times that in social return within Indigenous communities. The commitment by corporates, and the government, to build on that is increasing massively, but the potential is still huge. I’ve got some great guests to talk about this – one being someone you may already know pretty well.
I’m Rebecca Kent, host of JLL’s Perspectives podcast. For this episode I'm joined by three outstanding guests. We're all sitting in different buildings, but we are all in Sydney. And so I'd firstly just like to acknowledge the traditional custodians of the land we're on, the Gadigal of the Eora nation. And I pay my respects to elders both past and present.
Now, let me welcome our guests Laura Berry, the chief executive of supply Nation. Hi, Laura.
Hi Rebecca, lovely to be here.
And Mick O’Loughlin, former Sydney Swans Aussie Rules footballer, and managing director and co-founder of ARA Indigenous Services. Hello!
Hey, guys, how are you?
Great! And Robin Burton, senior supply chain diversity and sustainability specialist at JLL.
Hi, Rebecca. Thanks for having me.
Awesome. All right. Laura, tell us about Supply Nation and why it exists.
Yeah, look, Supply Nation has been around for 11 years now. And we originally started back in 2009 off the back of a parliamentary inquiry into indigenous economic development. The model that our council is based on is actually a model that has existed in the United States for just over 45 years now. And that was about bringing underrepresented minority-owned businesses into mainstream corporate America at the time - and now Australia - and into government agencies to give those business owners the opportunity to compete for contracts. These were marginalised groups who had not previously been able to access or even get a foot in the door to have those meetings to see whether they could sell their goods and services.
So we've been around now for 11 years and we've seen really substantial growth over that time. If you think back to when we started we had about 13 indigenous businesses on our books in 2009 and about 32 corporate and government members. If you fast-forward to today, we have almost 2800 indigenous businesses on our national directory called Indigenous Business Direct. And we have almost 460 corporate and government members. So quite a huge amount of growth. And a lot of that has been driven by the adoption of policies at the federal and state government levels, but also very largely driven by the corporate sector as well.
Thanks, Laura. And Mick, ARA Indigenous Services is your commercial cleaning business, but the group provides many other services as well. Tell us how it came about.
Yeah, look, thanks for having me. I think starting a business was always going to be a very big step for me. CMC was the original business. I went into business with my business partner, then we merged with the ARA Group. So we are now ARA Indigenous Services. And that journey has been an incredible one. I'm the first business owner in my whole family. I've come from a sporting background, where I've learned a lot of really humbling lessons along that journey. And it's been an incredible one.
So Mick how do you transition from celebrated AFL footballer to business owner?
As soon as I left the AFL with the Swans, I started the Go Foundation with Adam Goodes. And the Go Foundation was one of the things that Adam and I had done throughout our whole careers: going into Aboriginal communities go into schools, going to hospitals, doing community visits. So the foundation was basically just taking it to another level and having some structure around it. And it's something that is really close and near and dear to both Adam and my hearts. The foundation is still thriving. We've got over 500 kids in schools, and we provide scholarships and help and mentoring. So that is just incredible. Being able to put that together, I'd never in my wildest dreams think I could do something like that. And Adam's in the same boat.
So the next plan is for me, I was running the Institute of Sport for the AFL, and then left there and then was running the Sydney Swans Academy with about 570 kids and about 85 coaches around in New South Wales. I knew a very good friend of mine who owned a cleaning business and we just got talking. I basically said to him, you're going to mentor me and show me all about this business world. Because I guess the next step for me was becoming a head coach of an AFL team. Which I did, I won't lie, had aspirations to do. But I saw the stress that those guys went through and still do to this day on television, they're pulling their hair out. I love the game, I love everything about it, but I just knew that was not something I wanted to do for the next 15-20 years.
So I spoke to my guy. He said come back to me with a business plan and let's work from there. And I had a really great guy who mentored me through that process. He taught me everything about invoicing and relationships with partners and how to actually do the job. So I'm a very quick learner. And I learned a lot in a really short amount of time. And I had great support through the Supply Nation guys that were fantastic in terms of helping me set up and making sure I had all the pieces in place. That was really important instead of just jumping in, starting a business and not knowing anything about the business world. It was a big learning curve. But again, surrounding yourself with really good people that are there to help you was a really important key for me.
Great stuff. Robin, you procure facilities management services from Indigenous suppliers on behalf of JLL's clients. Who are these clients and what’s JLL's position on Indigenous supply chains?
JLL is definitely in a unique position in the market. We conduct billions of dollars of procurement on behalf of our clients every year, and so do our competitors. So real estate businesses are in a unique position to act as intermediaries and advocates on behalf of our clients and on behalf of diverse suppliers.
So for us, we started on this journey five years ago, and have built up a network of over 50 Indigenous vendors that we regularly work with today, and have a number of amazing clients - federal government clients, state government clients, ANZ Bank, Medibank, Australia Post, to name a few, who are really working collaboratively with us to push this agenda forward.
We recognised five years ago that we needed to be ready to work with Indigenous businesses. But also that we had an opportunity to start sharing our objectives in this space with clients who weren't yet on the journey of supplier diversity - and that's leveraging our unique position in the market.
A key thing that we try to do at JLL is make sure that we're putting forward targets within our bids to new clients so that we are demonstrating that we can really move the needle on an Indigenous procurement. So when we're pitching work, we'll say we can achieve 10 percent Indigenous procurement across the portfolio, for example. And that sort of proactive approach really hypercharges the program. For example, last year we spent for the first time over A$100 million with Indigenous vendors. So we achieved A$116 million with Supply Nation-registered and certified businesses, which is something that we're really proud of. But to be honest, it's because of the work that our amazing vendors, like ARA Indigenous Services do. But then also the work we do with our clients that give us the space to be able to really drive innovative relationships.
How do you ensure that all parties - both clients and the suppliers - are getting the best value from each other?
That's a fantastic question, because at the end of the day we still have to meet our savings targets, we still have to deliver on service and quality and all those commercial aspects, which are crucial to our business model and crucial to our own reputation when we're delivering to clients. And so those elements are the baseline that we have to work from. We won't work with Indigenous vendors that aren't delivering on those key metrics. And what we found is that there are numerous Indigenous businesses out there that can deliver all those things. They can still deliver the savings targets, they can still deliver the quality, the innovation, the technology, fantastic relationship-building, all of those things. So for us, commerciality is key. And we've found that there are plenty of Indigenous vendors out there that can work with us on those terms.
And Laura, I’m curious, how do these efforts ultimately benefit Indigenous communities?
We did a study quite a number of years ago around the social return on investment for indigenous communities. And on average, we found that for every dollar of revenue that was generated in a certified Indigenous business, about A$4.41 of social return was generated.
What we know from multiple other studies is - and what we what we can see from the businesses that are listed on our database - is overwhelmingly, Indigenous businesses employ more mob.
If we look across our database of businesses, the average employment rate for Indigenous employment sits at about 35 percent across the Indigenous businesses. When you compare that to the non-Indigenous business sector that are probably sitting at about one or two percent, you can see that's a really great game-changer for Indigenous employment, which of course gives people autonomy and gives independence and is able to then generate money back into communities. That is, better education outcomes, better health outcomes. There are multiple flow-on effects from that.
You also heard Mick talk about the fact that he is a first-time business owner in his family. And we see that a lot now across our sector. So you've got people like Mick and others, business owners, who are role models for the community.
Mick, have you got people banging at your door for your support and guidance?
It's, it's been amazing. I've actually got a lot of family who work for me as well. I've got two brothers who I just put on. They've only been working for three months, but they already want to raise. It is incredible. To be able to, as a business owner, make decisions about who you align yourself with and who comes into your business is incredible.
I grew up in Adelaide and one of the great things about being a business owner and having the freedom to make decisions on how you can support community has been incredible. I remember growing up and playing in football and basketball carnivals, but always someone had to pay for that. So we were always waiting for funding to come from somewhere so we can all get all the kids together so then we could play sport at a carnival level with the other communities. Now I just make a decision and go 'we're sponsoring this. Everyone gets a jersey, everyone gets a netball uniform'. That's incredible. That is unheard of. And being a successful business, you're able to do that. We work extremely hard. But nothing makes me more proud to be able to do that.
And Laura's hit it on the head as usual. The spend that goes back into community is four times. So amazing. Both brothers, one has been out of work for about six years. I said ‘alright, I'm giving you a chance here but you have to prove yourself like everyone else does, and here's the opportunity’. He's taken with both hands. He's now an auditor for our business in South Australia. He's great at relationships, he's great at what he does. And he just needed a cuddle. He needed someone to have some faith in him, and show him how to do it the right way.
And the world is his oyster now. I wish I was lying about the raise. They did both bring that up. But your family, right?
Mick, what's your view on targets? Is that the right way to drive momentum?
It's an interesting one. I've grown up on KPIs and targets set by football coaches, because that's the way it's done. And if you hit those targets, you generally get really good results. But I'm always talking with our clients to find out what they're looking for and what they're wanting. Someone said to me 'how many employees do you have and how many are Aboriginal or Torres Strait Islander?' It's quite amazing because mops and buckets, arms and legs are really great. I can always give someone a job there. But I'm really pushing our guys to go into leadership roles within our business. We've got a number of great examples of cleaners just mopping floors and vacuuming and learning the trade, and then all of a sudden showing real resilience and commitment to the business, so we’re making them site supervisors, then all of a sudden, they're now running states and territories. It's been brilliant.
Robin, when you're procuring, how Indigenous does an Indigenous business need to be?
Sure. JLL as an organisation doesn't have the capability, nor would it be appropriate for us to be checking how Indigenous a company is, or how Indigenous a person is that is working in a company. That's why we rely on Supply Nation. We won't count a business a being Indigenous unless they are registered or certified with Supply Nation. So that's our ultimate benchmark and baseline from which we work. After that, there's a whole bunch of other standard due diligence processes, unique due diligence processes, that we undertake to get a better sense of who the business is. So we want to understand whether they can deliver on price and quality, for example obviously. But we also want to know more about the programs they're running in community. I want to hear more about their employment practices, how they're delivering on all the things we're talking about publicly to really get a sense of what makes that business tick. And then so we can build that mutually beneficial relationship that we want to build, that's built on respect and openness.
Great and Laura, what are the requirement for a business to be registered with Supply Nation?
For a business to be registered through our processes, they must be a minimum 50 percent owned by Indigenous people. Anything under that we don't we don't accept. That is the benchmark that is set mainly by government.
Supply Nation also has a second category we call our certified businesses. And those are businesses that are majority owned, controlled and operated by Indigenous people. We also apply those same criteria to incorporate joint ventures where we bring together Indigenous and non-Indigenous businesses, making sure that in those joint venture arrangements, that the Indigenous party has the appropriate level, at least 50 percent involvement, in the business.
There are some sectors in particular with high levels of subcontracting like facilities management, or mining. They have the ability to really move the needle on their spend. But what is their responsibility other than then spending? Is it being an ambassador and advocate?
We certainly see that with some of our members who are in the mining sector, for example. They really see it as an obligation, where they've been working with Indigenous businesses for a long period of time, to be an advocate in the sector with other corporations and be talking about their journey and their story.
I also think that particularly for the corporate sector, there is a great opportunity to bring businesses in under their wing and provide mentoring and capability-building opportunities for those Indigenous businesses that are already in their supply chain.
We've seen some great examples of programs out of places like the United States where corporations like EY or Accenture or IBM have got great supplier-development programs that they put their suppliers through. Then those suppliers wear as a badge of honor that they've come through the Accenture supplier development program, for example. They then use that as an advertising point to go out and say, 'look, I've done all this work with a great corporate who's helped me and so that's now setting me in really good stead to be able to service other clients'.
So we're starting to see more of that here in the Australian context. And I think where that differs from the government sector is that they're probably more likely to be looking for a contract-ready Indigenous business. 'Okay, who can do this work? It's very process-driven, it's government procurement and so businesses have to be ready to go'.
I think where the corporate sector plays a very different role is that there is ability to be more flexible in how they engage with Indigenous businesses. There is the ability to maybe better unbundle contracts to give businesses a shot. We've heard stories about a business who gets an opportunity to work in one particular area. It was a national contract, let's say, ‘but we'll let you work in Adelaide’, for example, ‘we'll see how you perform on that. And then if you do really well we'll actually extend your contract to other locations’. And that is about making sure that you're ensuring sustainability for that business, you're not setting them up to fail.
Mick, has your business been able to benefit from that type of engagement from the corporate sector?
I think you can tell I'm a little bit of a stickler for when I have these relationships that are really open and honest and really clear with our clients on what they're expecting, and what we can deliver.
As an Aboriginal business, we've got one opportunity to deliver on it, it's really important. Because when you when you think about people's perceptions of Aboriginal people, all they ever hear about is the mad, bad and sad about people. Never really do they put these success stories on the front page of the paper. It's always the mad, bad and sad. So, that's in the front of my mind always.
The same way that I was as a football player (and I'm so sorry about going back to my past. I sort of miss it, but I don't). But it was drummed into me really early. Some of the first conversations I've ever had with my teammates - and I've been their only Aboriginal person that they've had a long, lengthy conversation within the in the locker room. And it's same with the business here, I think. We're trying to do these incredible things and help community and help people with employment opportunities. But I've got a business. It's my reputation, it's my business, the buck stops with me. So I've got to make sure that I can take on these challenges.
That's a constant conversation with clients, government, whoever it might be, that we can actually do the job.
Awesome. Well, I wish you every success. Thank you very much. Laura, thank you so much for your insights. Great to hear about the incredible work of Supply Nation. And Robin, I’ll see you around the office.