Stars or Strategy? – Why the Innovation Industries need AVCAL to Stay Focussed

AVCAL, the Australian Private Equity and Venture Capital Association Limited, has announced a pretty interesting line-up for its 2015 conference in Melbourne this September. Interesting, in part because the theme they appear to be weaving through all their activities – Building Better Business – doesn’t really seem to be reflected in the choice of speakers; in part, because the star speakers have some serious wattage; and in part in the sectors chosen as the focus for Spotlight sessions. 

Working backwards, three sectors have been chosen by AVCAL for 45-minute Spotlight sessions. Giving these sectors prominence at such a high profile, members-only event would reflect the relatively broad base of interest for these sectors within the AVCAL membership, and could be seen as indicator the current taste of those members for potential funding opportunities. And while one should have predicted healthcare would be one of those sectors, and could have guessed education might make the cut, I have to admit I didn’t anticipate food services making the top three, particularly with the recent commitment of resources to fintech hub Stone and Chalk.

Which brings us to AVCAL’s featured speakers. You know when the media push is not being focussed on Steve Wozniak, the surviving co-founder of Apple, despite him speaking on global technology trends “direct from Silicon Valley” – if he came via somewhere else, wouldn’t his observations still be as prescient? – that the Conference Organizers are seriously chuffed with their headline speaker.

That speaker is General David Petraeus AO, Chair of the KKR Global Institute (KGI).  KKR, the American multinational private equity firm, established the KGI to be an integral part of its investment process, ensuring local decisions made in each of the 21 cities in which it operates reflect an accurate and current understanding of the world context formed through six perspectives, including the geopolitical, macroeconomic and technological.

General Petraeus would be familiar to many from his leadership of the International Security Assistance Force in Afghanistan in 2010-11, for which he was appointed an Honorary Officer of the Order of Australia, or his brief tenure as Director of the US Central Intelligence Agency. But in addition to a stellar public service career, he holds a PhD in international relations from Princeton University, and is in Australia to deliver this year’s Lowy Lecture, which focusses on Australia’s role in the world and the world’s influence on Australia.

There’s no doubt General Petraeus and “Woz” are great drawcards to get people through the door, but that hasn’t traditionally been a problem for AVCAL. As it reads – and it should be noted that the program is still listed as “indicative” – day one is effectively about the immediate and emerging state of the world for financiers ie the world the attendees play in daily. Day 2 is balanced between spotlights on sectors, and some very broad strategy topics being tackled by multiple voices in relatively short times, which is generally a recipe for superficial end result even when the topics are as compelling as they are here.

As intellectually engaging –even entertaining –  as some of these sessions will no doubt be, it’s hard to see how they serve to advance AVCAL’s “build better businesses”. Nor how they fit with its core objective to ensure the benefits of the private capital model and the “role it can play in contributing to investment and employment growth across our economy.” Admittedly, it will give attendees a lot of information about the global market for finance that they’ll be able to use in their jobs, which is a great thing for their ability to service their clients well, and a healthy and growing private equity (PE) and venture capital (VC) sector is a good thing for the innovation industries.

But AVCAL achieving its strategic objective would be great for both the innovation and PE/VC industries.  The innovation industries are often guilty of mistaking the role of PE/VC to them as being limited to start-ups and new ventures, but that’s like considering Clive Palmer primarily a politician.

According to the OECD’s Science, Technology and Industry Outlook 2014, untapped private wealth is an abundant and growing source of funding for innovation globally.  Private equity in particular has been integral to turnarounds and expansions in organisations in every sector of the economy, and many of the success stories have turned on deployment of innovations in processes, products and distribution channels. Realising this sort of return on investment on innovators’ hard work may not be as glamourous as launching a global IPO, but it arguably has more impact. Importantly the benefit is almost always more widespread: on workers, through secured and increased jobs; on supply chains, through continued and increased activity; on sustained local economic growth, through continued and expanded operations.  It also has a way better success rate.

Which is why I find this year’s AVCAL conference program interesting, rather than impressive. I like the way Stephen Covey, best known for his management and personal development classic 7 Habits of Highly Effective People, puts it: it is better to have an average strategy with superb execution than a superb strategy with poor execution. Covey’s number one discipline for execution? Focus on the Wildly Important, those goal/s which, if not achieved, will “render all other achievements relatively inconsequential.” (The 8th Habit – 2004; The Four Disciplines of Execution 2009)

And while Australia’s PE/VC market has grown and had significant successes over the past few years, it would not be unfair to say that observation, in itself, would not have been difficult. Our levels of domestic financing are notorious, particularly relative to our research spend and activity, and not in a good way.

Maybe it’s selfish – probably it’s selfish – but as satisfying as selling out may be, I’m not sure attendance levels and high satisfaction rates with a conference should be AVCAL’s Wildly Important Goal.  That said, if anyone needs someone to hold their papers during Woz or the General’s presentation, or for QANTAS Chair Leigh Clifford AO’s session on choosing projects, I think I see an opening in my schedule…..

For membership enquiries or more information on the AVCAL alpha conference 2015, visit avcal.com.au. Publications of the Organisation for Economic Co-operation and Development (OECD) are available on-line through their iLibrary.

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