The strengthening of its board has been a key priority, in line with a focused strategy to deliver value to defence customers. Join Defence Connect as we speak with key board members, including Rear Admiral (Ret'd) Raydon Gates, Air Vice Marshal (Ret'd) Margaret Staib and Air Vice Marshal (Ret'd) Mark Skidmore, and uncover opportunities for the business in the period ahead.
Enjoy the podcast,
The Defence Connect team.
Listen to previous episodes of the Defence Connect podcast:
Episode 77: PODCAST: Driving Australia’s defence industry at home and abroad, The Hon Christopher Pyne MP, Minister for Defence Industry
Episode 76: PODCAST: Fixing veteran unemployment, Tom Moore, WithYouWithMe, co-founder and CEO
Episode 75: PODCAST: More than just a builder of tanks and trucks, Gary Stewart, managing director, Rheinmetall Defence
Episode 74: PODCAST: Building a sovereign space capability – Rod Drury, managing director Australia and New Zealand, Lockheed Martin Space
Episode 73: PODCAST: Building long-term capability for defence and industry through LAND 400, Brian Gathright, vice president of business development, BAE Systems Australia
Episode 72: PODCAST: Shaping the conversation in defence industry, Kate Louis, head of defence and industry policy, Australian Industry Group
Episode 71: PODCAST: Technology transfer in naval shipbuilding, Sean Costello, director, Fincantieri Australia
Episode 70: PODCAST: Taking the reins of a defence prime, Gabby Costigan, BAE Systems Australia, CEO
Episode 69: PODCAST: A smooth transition to defence industry – Colin Thorne, partner, engineering and asset management, KPMG
Episode 68: PODCAST: Leading from the front in defence industry, Warren King, chairman, Navantia Australia
Speaker 1: Welcome to the Defence Connect Podcast with your host, Phil Tarrant.
Phil Tarrant: Alright everyone, Phil Tarrant here, host of the Defence Connect Podcast. We are recording from Pacific 2017 at the International Convention Centre in Sydney and today, I am joined by three people I've been looking forward to catching up with while at Pacific. Part of the board of QinetiQ Australia, Raydon Gates, Margaret Staib, and Mark Skidmore. Guys, how are you going?
Raydon Gates: Very good, thanks.
Margaret Staib: Thanks, Phil.
Mark Skidmore: Thanks, Phil.
Phil Tarrant: So, Raydon.
Raydon Gates: Sure.
Phil Tarrant: I've been thinking about how we can run this particular conversation. You've all got a lot of talent that you brought to the QinetiQ board and I'd like to really dig down into the work that you're doing individually and collectively to support QinetiQ as it continues its drive forward in defence. But, before we get there, you all have ex-Services background.
Raydon Gates: Correct.
Phil Tarrant: You're quite well-known, you're an ex-Navy man. You've been out of the Navy now for nine years?
Raydon Gates: Nine years now, Phil. Yeah.
Phil Tarrant: How's life after Navy?
Raydon Gates: Well, it was pretty hectic because you'll recall I went straight on to Lockheed Martin at that stage and that was a very hectic six years. Successful, I think. I retired from that, as you know, in January this year. Now I'm looking for not quite so full-on, but other ways to contribute around the Defence Industry in Australia. With QinetiQ, I think there's a great opportunity to help them take the step forward for their plans to expand in Australia.
Phil Tarrant: I've run into you a couple of times over the last couple of days. Interestingly, my observations were that I see you chatting with the CEOs of the primes, but yesterday you were really involved with getting excited about some of the work that SMEs were doing over in the New South Wales Government stand.
Raydon Gates: Absolutely.
Phil Tarrant: There's some great work happening that you guys are doing.
Raydon Gates: It is indeed and I think that is, again we’ve spoken in the past about that, e've certainly been part of the primes, you realise that the whole crucible of ideas, the innovation that the government, particularly, is talking about so much now, yt comes from the SMEs, not necessarily from the primes. The primes get advantage of that and then hope to commercialise it, et cetera. But, that's where I think we, particularly as ex-Service People, can contribute very much in the SME space. I'd certainly put QinetiQ at the higher end of the M's and it's a great opportunity contributing to them as well. But any opportunity where we can work with SMEs,
particularly, Margaret, for example, is the advocate for the northern territory. There's a lot of SME's up there in that space as well. They've got the expertise in what they do. All we can do is just guide them into the labyrinth of the political way things are done, even into the Department of Defence sometimes. So, our contribution's just guiding.
Phil Tarrant: Mmh. And Margaret, you're relatively new to the board, I think you're only a week or so old. So, congratulations.
Margaret Staib: That's right, yes. Yes. Thank you.
Phil Tarrant: Obviously, the powers that be within QinetiQ have been very deliberate about bringing ex-Service People onto their board for that connectivity with government, but also business. What excites you most about the board appointment and what do you hope to achieve?
Margaret Staib: Well, QinetiQ is doing some fabulous work here in Australia and, as Raydon just said, it's very much a growth path. So, I'm looking forward to contributing, certainly, my experience. My background is Air Force, but in the logistics field; the supply chain. So, it's really important that we integrate our SMEs in Australia to the global supply chains. QinetiQ being owned by a UK parent, we have that opportunity to bring that expertise to Australia and contribute to the national agenda around defence and national security.
Phil Tarrant: And Mark, you've been on the board since April now. Have you enjoyed your time?
Mark Skidmore: I certainly have. It's been an interesting time, especially with the opportunities that are out there at the moment, Phil. I really see that there's strength and growth that we have in the Australian industry and it's like Raydon was saying. It's really about growth and development for the SMEs, but QinetiQ can bring a lot of the power of Europe back over into Australia and we can grow and help develop it over here. I'm ex-Air Force, but test and evaluation. And I really see a synergy with test and evaluation and the powerhouse that QinetiQ has in the UK and bringing that down to Australia and seeing where we can go and grow that sort of capability in Australia.
Phil Tarrant: When did you leave the Air Force?
Mark Skidmore: 2012. I had the best job in the Air Force when I left, as Air Commander of Australia. It was a wonderful time, but it was time to move on at the same time.
Phil Tarrant: How have you found life after Air Force?
Mark Skidmore: Hectic!
Raydon Gates: Easiest way to say it.
Mark Skidmore: It's not a case of retirement, I've actually been doing a bit of work with different industry around the place. I went to CASA for a couple of years as CEO. That was an interesting time. Enjoyed it, they were good people, but it was challenging at the same time. Now, I'm on the QinetiQ board and a few others and just looking forward to helping industry out there and passing on my experience and helping them grow and develop.
Phil Tarrant: Obviously, the defence industry is a nice home for a lot of ex-Service People. Particularly, officers at the singular. But, what would be your tip for people considering an exit into the defence industry post-Service? How do you get it right?
Mark Skidmore: That's a very good question. I think one of the first things you should do, and it's something that I didn't do, is actually take some time. So, take some time to ease out of the Services. Relax a bit, maybe take a good three to six months, and then have a good look around and decide what you actually want to do. There's a lot of opportunities out there for defence personnel. The skills they've grown and developed inside the defence force are fantastic and we really need to transition those into defence industry and help support defence industry.
I see where the government's going right now and it's just wonderful; the words that are coming out.
Raydon Gates: Can I add to that, Phil?
Phil Tarrant: Sure.
Raydon Gates: There are a number of us now, right here, who have done that transition. Some successfully. It's the idea of talking to the people that are already doing it. My experience was buying that cup of coffee for someone who had been there before me was money well spent, just to get an understanding of what life is like in industry and how different it is to life in the military. And then, again, what skills you bring, particularly in leadership; organisational skills, et cetera, learned in the military that you can bring into industry.
Mark Skidmore: Raydon's a very good mentor, actually. We had a couple of cups of coffee.
Raydon Gates: He still owes me for a cup.
Phil Tarrant: Well, you get to spend some time now, you're on the board. How often do you formally meet as a board with QinetiQ?
Raydon Gates: We meet quarterly. We've got a board meeting coming up just next week. As Mark said earlier, it's a UK-based company. So, the Chairman of the Board is in charge of international for QinetiQ, so he's down here at the moment, at the show. So, hopefully you might get a chance to talk to him as well.
Phil Tarrant: That'd be good.
Raydon Gates: And a couple of the senior executives in the areas, particularly where we're concentrating here in Australia.
Phil Tarrant: What's been your brief to deliver the board? What are those key sets of skills that you're going to provide to QinetiQ Australia to help it grow?
Raydon Gates: I think, for us, that all three of us will be bringing insight. We have QinetiQ Australia and Greg Barsby has been doing a great job as the managing director, but he needs a little support back from the Australian perspective that we can feed back to the UK masters, if you will. So, this is how it's done in Australia and we've all got that experience.
This is what you need to look for, this is what we consider areas to expand, this is where the government when it puts out the DIP [Defence Industry Policy] or the integrated plan or, coming up soon, the Export Plan, hopefully by the end of the year. This is what they're trying to achieve by that, this is what they mean by this document. And it might not be so clear to internationals, so we bring that sort of skillset.
Mark Skidmore: It's helping and strategy. Providing that strategic insight. This is the type of thing we've all done in our military career; planning and strategizing, so I think we bring that along to the table as well.
Margaret Staib: Very much from our collective experience, a deep understanding of one of the prime customers, which is defence.
Raydon Gates: Yeah, that's exactly right.
Margaret Staib: Understanding how it works, what the needs are, what are the challengers. And, I think we act as translators sometimes.
Phil Tarrant: I was just about to say that. How important for growing SMEs, and you guys are obviously at the top-end of the M's within QinetiQ, is that translation piece? Because, you know for the best product, the best service, the best salespeople, the best delivery mechanisms, if you don't actually understand what the client wants and needs and the science of understanding that it can often be a big disconnect, particularly within defence.
Margaret Staib: Absolutely. And, it's also understanding who the decision makers are. Defence is a very, very large beast. I often get "defence said this." Well, who in Defence? So, it's helping navigate through that bureaucracy and, as we said, talking about what the customer wants and understanding the connection between, for example, the Defence White Paper and what that means for the country going forward and how it can contribute to that piece of work.
Phil Tarrant: Last time we got together, Raydon, we spoke about the cultural shift in defence and defence industry as it embarks on this ambitious spending programme to equip us across all services for the period ahead. I don't wanna go into the rationale for defence spending, it's obviously a very evolving, strategic landscape at the moment and we need to ensure the security of Australia. This cultural shift, do you think government is reacting well to this ambitious growth plan? People talk about stovepipes all the time, very silo, protective people. Has that moved on?
Raydon Gates: I think it has. I think, to answer your answer your question directly, yes. I think government is on top of the cultural shift of how to put this together. It is, but it also, to pick out what Mark said a bit earlier, it’s a big beast. And that doesn't just mean the Department of Defence; the whole way that we go about defence acquisition. From the concept idea, the capability idea, the design; down to government making the final decision and, somewhere along there, someone paying for all this as well.
Which comes back to the taxpayer and the responsibility in that respect. That is still maturing and it will always be a maturing process, Phil. There's never gonna be a definitive answer to do this because the need is gonna change as well. What we have to be able to do, I believe, slightly better, is keep up with the requirement for the change that's coming into it.
Right now, acquisition process can be quite long. A decade. The strategic lead time that's required now in the areas that we live has to be shorter than that. So, let's get our equipment correct, but how do we get it faster? I think all of us, Defence and industry, are wrestling with that.
Mark Skidmore: Yeah, the Defence and industry both have to be agile. You gotta understand though, the needs are gonna grow and develop over time. You gotta be flexible, adaptable, and actually get out there and understand what's required. One of the strengths I think we bring to any of the industries that we work in, we all work in different environments, different industries as well, is that we have been out there in the defence force. We understand the warfare and what they require. It's very important to make sure that they're getting the capability that they need.
Raydon Gates: We have been the user.
Mark Skidmore: We've been the user, yeah.
Phil Tarrant: And do you think the users, you guys were obviously at senior level; the users, as in the guys and girls on the ground, the sailors and the airmen. And even the soldiers.
Mark Skidmore: And the soldiers, absolutely.
Phil Tarrant: Basic representation of Army on the board!
Do you think they have a voice to push that up and into defence industry and get those requirements in front of the people who can actually make the decisions?
Raydon Gates: Well, I do. But Mark is the one who's latest out of the service.
Margaret Staib: I think so. One of the things you asked about was what's changed? I think it's a very express change around partnerships. Working with industry out of the Defence White Paper of 2016. We've actually said industry is the ninth FIC, or the Fundamental Input to Capability. So, that's a very clear signal about the change in culture, it's not combative, because we're not going to get the best we need. It's gotta be collaborative and that's where we get into the shorter cycle for actually producing what we need. I think that's one of the very clear changes that I'm seeing.
Phil Tarrant: Yeah. Let's get down to QinetiQ Australia's strategy. Mark? What are you guys hoping to deliver out of the next five years?
Mark Skidmore: Well, the big thing for QinetiQ Australia is providing solutions to complex problems. That's the real message we wanna get out there. The capabilities that we bring to bear, not only internal in Australia, but also leveraging globally in regards to the capabilities that QinetiQ Group has; we can use all of those. I think that's the important thing; understand what the requirements, what the needs are, and then assist the decision makers to actually come up with the right solution at the end of the day. We're looking at a number of various opportunities. Test and evaluation is one I mentioned, I think there's some real opportunities in the test and evaluation environment.
There's opportunities in underwater tracking range; those sort of areas. Things that QinetiQ is already doing over in the UK that we can look at and say, "actually, we can do that type of thing here in Australia." We can actually link it in as a system of systems and make sure that you're providing that whole capability to the defence force to actually bring it together. That's the type of area that I'd to look at and help Greg set that path for QinetiQ Australia.
Raydon Gates: And, certainly, we're looking for efficiencies. What we’re doing, most of the stuff that is already in the UK, rather than reinventing the wheel or starting right back at the bottom of the R&D curve, what's the ‘master’ doing and how do we bring that into Australia? How do we take advantage of that? Mark mentioned the tracking range. QinetiQ has a mobile tracking range. You take the range of the ship instead of the ships coming near. The savings, I think, in the UK, in the Royal Navy, is something in the vicinity of about 84,000 nautical miles. You turn that into how much does fuel cost for a ship? That's a great saving.
Why? Because we've got something that has a mobile range as opposed to a set range. Can we bring the mobile range down to here? Can we let the Royal Australian Navy make the same efficiencies? It's what the product line has already done for the Royal Navy, plus you bring on the R&D side, then you build on those skills, that Mark's already talked about in test and evaluation, for which QinetiQ has a tremendous reputation in.
Phil Tarrant: So, you're chasing revenue growth, but effective, efficient revenue growth. So, if you can apply some of this technology, these capabilities out of the UK into the Australian market, that's good business for you?
Mark Skidmore: Growing capability in Australia.
Raydon Gates: Yes, right. So, the product's in the UK, but what we want to do is bring it down to Australia and Australise it if you like.
Phil Tarrant: How big is the QinetiQ Australia workforce then?
Raydon Gates: About 350.
Phil Tarrant: Okay, and that's grown over since we've last spoke.
Raydon Gates: It has, it has. And it will continue to grow.
Mark Skidmore: It was established in 2008 and it's sort of grown over that time.
Raydon Gates: So, we're about a 62 million turnover at the moment.
Phil Tarrant: Raydon, you're an ex-Navy man. We're at Pacific, all of the talks are around shipbuilding at the moment.
Phil Tarrant: There was an announcement yesterday that they know what combat system is going on to these Future Frigates now. What's your read on this increase of naval capability moving forward? Are we going fast enough? Do you think there's a little bit too much talk and not enough action?
Raydon Gates: I think the decision yesterday was outstanding. Putting on my old hat from a Lockheed Martin perspective.
Phil Tarrant: He's the one with the big smile on his face.
Raydon Gates: But, if you think it through, it's a very logical decision. Our closest ally, our partner in the Pacific; I don't mean the partner we're gonna go to war with, hopefully the partner that we retain the peace with. So, you have to have the capability to be able to do that and back it up and that's the AEGIS system. The more that we can tie into systems that are in place already and stop reinventing ... Not stop moving forward, but stop reinventing in some cases and then grow on what sort of capability we have ... I think is to our advantage. The Pacific is going to remain a sea of not, conflict, but turmoil to a degree for a long time yet.
So, we have our own responsibility. The Australian nation has its responsibility; the protection of sovereignty and its own nation with our alliances as well. But I think where defence industry comes in, of course, is making sure that Australia does have that sovereign capability. I think that is not only a commitment, but a requirement of defence industry.
Phil Tarrant: It always comes down to people, so, here's a question for all the board: Do you feel that Australia has the inherent ability to deliver the people to create these or build these new ships and submarines? Or are we gonna have to find them from somewhere else? Any views on that?
Raydon Gates: Yeah, I've certainly got a view. I think we certainly do have the capability. We have to be smart about it. One of my other roles is the Defence Advocate for Western Australia and I'm standing beside the Defence Advocate for the Northern Territory. It is the smart way. What are the strengths of the states and territories? Can we grow on those? I think a lot of the competitiveness between the states has been removed, dampened down, and we're looking at a national solution to what is required, particularly in the maritime space.
So, what else has happened? Western Australia, for example, the mining side of things started dropping off. What do you do with that workforce? How do you transition it – not can you transition it. How do you pick up from other industries and move them into the defence space? The work is there.
Mark Skidmore: I think it's up-skilling, really. It's upskilling. We've got the workforce out there. Northern territories, South Australia; it's all around Australia. It’s a case of upskilling that workforce. We've got the workforce there, at least make sure that they're there and viable to do the job. But, we also have to look at our education at the same time, make sure we are growing those kids in the future to be able to do this work in the future too.
I think that's something that industry can help with assisting government by saying, "these are the type of skillsets we need to grow and develop, how can we get the kids working on these type of things?"
Phil Tarrant: Well, the STEMs, yeah. And, you know what, it is a motherhood issue for the industry. Everyone’s talking about it, everyone’s doing it, it's really getting into action. We need to do it. And Raydon, I caught up with Paul Papalia a little bit earlier this morning. He's only been on the job for six months now and he was saying all the right things, to echo your sentiments, about the capabilities of WA to deliver some of these programmes. They've got a workforce out there and unemployment is a bit of a problem at the moment; to transition some of the work over to WA. He was talking in a way that was very collegiate with these state-based colleagues to say, "let's not go out there and penny pinch and pick every single programme. Let's all bid for it, let's try and win it, let's go out and get it, let's be a lot more smarter around it."
So what sort of work up in NT do you think is gonna happen?
Margaret Staib: I don't think NT will be a shipbuilder, but certainly maintaining ships. And that's really important, the sustainment. And, similarly, up in the NT, there's a workforce that has come off the oil and gas projects and are ready to go. They've documented a lot of the skillsets we have up there where we need to grow some. It's about collaborating with the other states around making sure there's a national capability for the support of the Australian Defence Force.
Mark Skidmore: States and Territories, I should say, because I'm on the ACT Defence Industry Board.
Phil Tarrant: Here's a question for you. How do you balance all these different hats? Raydon?
Raydon Gates: I was just gonna say retirement mate, it's exhausting.
Mark Skidmore: It is exhausting, yeah. Don't rush into retirement too quick.
Phil Tarrant: Well, as we said there is plenty of opportunities for people to exit Services when they're ready and you all highlight the success of that transition. I hope you enjoy your time on the QinetiQ board and I look forward to seeing what QinetiQ does over the next period of time. It sounds like they've got some good minds to help steer them as they go down this path of growing. Thanks for coming on the podcast guys, I really do appreciate it.
Mark Skidmore: Thanks, Phil.
Raydon Gates: Thank you.
Margaret Staib: Thanks, Phil.
Phil Tarrant: Remember to check out defenseconnect.com.au. If you're not yet receiving our daily market intelligence news, please do subscribe at defenceconnect.com.au/subscribe. We're on all social media channels, if you'd like to follow us just search for Defence Connect. And if you've got any questions for myself or anyone here who we've just had a chat with today, the guys on the QinetiQ board; Raydon Gates, Margaret Staib, and Mark Skidmore, drop me a note and I'll connect you to an editor at defenceconnect.com.au. We'll be back again soon. Until then, bye-bye.