PODCAST: A smooth transition to defence industry – Colin Thorne, partner, engineering and asset management, KPMG

Colin Thorne joined KPMG Australia’s management consulting division in November 2015 to lead its engineering and asset management advisory business – a diverse entity that aims to support Australia’s defence sector.

An electronics engineer with more than 30 years’ experience in the defence sector, much of it specialising in the acquisition and sustainment of airborne surveillance systems, Thorne shares the story of his transition from the military to the corporate sector – and his views on the opportunity for defence industry in the years ahead.

Having retired from the Royal Australian Air Force in 2013 at the rank of Air Vice-Marshal, Thorne was responsible for the acquisition and sustainment of all Australian Defence Force fixed wing aircraft. Speaking to Defence Connect’s Phillip Tarrant, he gives insights into his time in the military leading these major programs, the skills garnered to support his career in defence industry and the key priorities for KPMG.  

Enjoy the podcast,
The Defence Connect team.

 

 

 

Listen to previous episodes of the Defence Connect podcast:

Episode 106: PODCAST: The critical role that academia plays in the future of defence, Professor Colin Stirling & Tony Kyriacou, Flinders University
Episode 105: PODCAST: SEA 5000 and SEA 1000 creating multiple opportunities for Australian SMEs, Adam Waldie & David Eyles, Thales
Episode 104: PODCAST: Revolutionising the efficiency and cost effectiveness of naval shipbuilding, Richard Price, Defence SA
Episode 103: PODCAST: Recruiting the Australian defence force of tomorrow, Sue McGready, Department of Defence
Episode 102: PODCAST: Maintaining a strong Australian identity within defence, Vince Di Pietro and Neale Prescott, Lockheed Martin
Episode 101: PODCAST: Australia's history and future within the space sector, Robert Brand, ThunderStruck Aerospace
Episode 100: PODCAST: The freedom that a start-up space agency presents Australia, Dr Jason Held, Saber Astronautics
Episode 99: PODCAST: Defence industry’s communication opportunities in the digital age, Brendan Maxwell, The Decisive Point
Episode 98: PODCAST: How geospatial imagery is aiding US border security, Patrick Stewart, US Border Patrol
Episode 97: Technology is changing the face of border security: US Border Protection Chief

Announcer: Welcome to the Defence Connect Podcast with your host, Phil Tarrant.

Phil Tarrant: G’day everyone, it's Phil Tarrant here. I'm the host of the Defence Connect Podcast. Thanks for joining us today. We're going to roll up our sleeves and get stuck into some interesting conversations around the world of consulting and defence right now. Obviously massive amount of investments being earmarked for defence acquisition, sustainment over the next decade, $195 billion. That's attracted a lot of people into defence. We've spoken about it significantly over the last sort of months or so, about new entrants into the marketplace, but there is some firm stalwarts within defence sector from the consulting end of things, KPMG being one of them. So, what I've done, I've asked one of their senior guys into the studio to have a chat to us about the type of work they're doing right now, and just the way they see the world. I'd like to introduce Col Thorne. He's the partner-in-charge, engineering and asset management. Col, how are you going?

Col Thorne: Well thanks, Phil.

Phil Tarrant: Thanks for coming in. It's relatively new in the new year, so it's good to see you back in the office. Is this your first day back, or have you been back a little while?

Col Thorne: No, I've been back a week, unfortunately, yeah.

Phil Tarrant: Yeah. Oh, okay. How did you find the new year period? Did you get some time to sit back and take some time off and reflect and enjoy life?

Col Thorne: Yeah, yeah, mostly. What we had found, is that we were working pretty heavily up to Christmas Eve. There was no petering off of activity in the lead-up. Like most years, we've got the odd proposal that's due over Christmas, so we had a little bit of work to do.

Phil Tarrant: Keeps you busy. Your career, and we'll have a quick chat about it, you're ex-Air Force. You've now moved into a management consulting business, so obviously a period of time in-between with the DMO, but we'll get to that. But just talking about sort of planning and strategizing for the year ahead. A lot of people use the Christmas, New Year's period to look at what going to happen the next year, but defence is an interesting beast where if you're only thinking a year ahead, you're probably leaving it to the last minute, right? You need to be thinking, two, three, five, 10 years ahead. Is that the sort of KPMG mindset? Are you looking at those big projects into the future?

Col Thorne: Yeah, not necessarily, given that we're what defence tends to refer to as above the line. We tend to be a little bit more beholden to the battle rhythm or the business cycle pace of defence. It tends to be a little bit more looking at where the bulk of the work is likely to be. For example, it doesn't take a rocket scientist to work out that there's quite a bit of work to be done in the shipbuilding and submarine building business going forward. It's probably fair to say that our organic capabilities within defence and within Australia is not particularly high in that particular area. So there's this capability gap, and that's obviously an opportunity for firms like ourselves, both from our Australian firm and also alliancing with firms from overseas to bring that on board.

Phil Tarrant: We spoke really quickly before we come on air, and I was hoping to use that information to summarise what you did at KPMG. I'm not going to tackle that, I might leave that one to you. So partner-in-charge of engineering and asset management, that's quite a big portfolio that you look after. Could you give me a bit of insight into the department that you looker after within KPMG, and how much of that is defence industry-orientated?

Col Thorne: Yeah, maybe I'll talk about that by way of our origin. I came to KPMG a little over two years ago to start up an engineering advisory business. I think the business case for KPMG around that was looking at some of the reforms that were coming down the pike with the First Principles Review of Defence, and the associated work and reform that was going on the Capability Acquisition and Sustainment Group. You mentioned before that KPMG's a relatively big player in professional services in defence, that's true, but we hadn't won a lot of work in the CASG space. In fact, if you were to put pins on a map of defence, you'd find the pins fairly thick in some areas and very, very thin the CASG space. Part of that was a sort of recognition that CASG is an engineering-led organisation really from top to bottom. In order to sort of speak the language and have an affinity for your professional services, you really needed to have an engineering-led capability.

Part of the business case that we had, was to stand up an engineering advisory capability, one, to catch that increased amount of work that we expected to be outsourced as a consequence of the reforms, but also to help lead in some of our other excellent capabilities that have been readily accepted by elsewhere in defence, Federal Government, and corporates, but had not had residence with defence.

So that was the Defence Advisory. We were an investment case. And then in July, which is our internal word for a gestation opportunity, in July of 2017 just gone, it was decided that we would become a fully-fledged service line. As part of that, we also took on the asset management part of our organisation, which was a small team focusing on asset management, but not restricted in defence. We also took on a small infrastructure group, about 20-odd, mainly civil engineers who were working in the state and infrastructure groups space within defence, building business cases and doing project management and contract administration, PMCA-type work. So they came into our group as well.

Also significantly, just before Christmas, we finalised the acquisition of a small engineering firm called Relken Engineering, that is fairly unique, really. It's 40-odd engineers who are experts in asset management, and came out of the reliability engineering space, which we assessed as being fairly core if you wanted to be developing asset management in defence or elsewhere.

Essentially, long answer to a short question, but we've sort of built our asset management service line from that defence engineering core, added to it with the infrastructure piece, added to it with the Relken acquisition, and then also brought in that sort of asset management piece. We're predominately still doing 90% of our work in defence across the board from acquisition support to sustainment support, but about 10% of what we do is in support of other industries, significantly coal. We do work for Glenco and ACOR and others in the reliability of plant around extraction machines, and things like that. A little bit of work with oil and gas, and increasingly we're getting interest from power and utilities, particularly water.

Phil Tarrant: Okay. Coming out of uniform, Air Force, into DMO. Air Force a lot of work around aircraft, acquisition, sustainment, DMO, and then to KPMG. Was it the powers that be within KPMG saying, "We're not winning enough work in this space, let's find someone to help us do that," or was it you coming out of DMO saying, "I've got some skills and some utility here, and we can utilise that within a space of management consulting." What is it, chicken and egg type thing, that ...

Col Thorne: Yeah. Now, I have a bit of a smile when you asked the question. Some 12 months before I was approached by KPMG, I'd had a conversation with Steve Clark, who was the then Defence and National Security sector leader. Steve had come to me to talk about his aspirations to set up an engineering capability. Steve and I go way back. We played competitive volleyball with one another. We did our Master's in the UK together. Different Master's, but we were over there together. He sort of respected me as, I mean, I was at the time, as a Band 3 in DMO probably along with Sean McKenny, probably the most senior engineer in defence, so he sort of wanted to sound me out as to whether he was barking mad, or whether there was something in it. We both agreed that there was something in it. I gave him a long list of people who had recently left that I respected and sent him on his way to go and-

Phil Tarrant: Have a chat to them?

Col Thorne: ... have a chat to them. It took him about 12 months to get around the list and back again, and he came cap in hand and said, "Well, actually having spoken to them all, it's probably actually you that we want to talk to." Serendipitously, it was about two hours after they'd announced the First Principles Review of Defence where the general manager levels, the Band 3s in CASG had been abolished, essentially. So I was of a mood to talk about new opportunities.

Phil Tarrant: It's all about timing, isn't it?

Col Thorne: It is all about timing, yeah. My background is probably a little bit unique in the sense that there's probably nobody without, I'm not one to blow my own trumpet, but there's probably not very many people around the organisation who's done everything at all levels, so I've been fortunate that most of my career from an early age as an engineer, has been either in the acquisition, I've been in acquisition projects, I've been in system programme offices running the sustainment of fleets at SPO  level, through branch level, through division level. And then of course on top of that with two years as General Manager Land and Maritime, I had the joys of shipbuilding and ship repair and all of the variety that is the land environment working for me too. So there's not too many, and I've got an electronics systems background. So there's not too many people with electronics, aerospace, maritime, and land, at all levels of the organisation. So I think they felt that by having me set up and lead, I'd at least had an appreciation of what was needed to do the job.

Phil Tarrant: Steve Jobs talk about in his book about joining the dots. When you get to a particular point, you can look back and reflect and work out how you got there, and you just told that story, that when you were a young Air Force officer, what did you want to do when you grew up? Was it to be what you're doing right now, or you thought it'd be a different path? Did you have it mapped out?

Col Thorne: Yeah, I don't know as a junior officer, whether you would've cast this far ahead. I probably exceeded my expectations for rank and level, because I was an electronic engineer, which was I guess in Air Force, there's sort of a hierarchy, and even amongst the engineers, aerospace engineers tend to have the lead, and to be an electronics engineer in that space ... So the electronics guys tend to tap around group captain or air commodore in my day, whereas the aerospace guys tended to reach the dizzy heights of air commodore or air vice-marshal. So to get to air vice-marshal and beyond was a little surprise to me. I always enjoyed what I was involved in, and I particularly liked as I moved through the ranks of the technical aspect of engineering or divining technical product through to getting more and more senior in that space, through to sort of being more, I'll use the word the architect of an acquisition, and a strategist and so on and so forth. I probably always sort of had that in me when I was a junior fellow and wanting to get involved in that.

Lots of people talk about getting posted around in the military, well, I can honestly say to you and I say it to a lot of my mentees when I'm talking to them, I think I only had one posting that I didn't somehow engineer myself, and that was my first posting out of university, and I was posted to a unit I wasn't even aware that existed. Pretty much after that, I was astute enough to know how the organisation worked. Not manipulated did, but I put myself in a good position to know where I was going next, and that that was-

Phil Tarrant: You can orchestrate where you go, right?

Col Thorne: You can. Yeah, absolutely.

Phil Tarrant: It's a skill set. So outside of the work you did in uniform within the DMO, what was the best thing you think you did? What are you most satisfied about your career in Air Force?

Col Thorne: I know you want to hear a single answer -

Phil Tarrant: No, it can be a collective.

Col Thorne: I think there's probably four jobs for different reasons that really define my career. I went to RAAF Frognall, an Engineering Cadet Squadron in Melbourne. It was an absolutely fantastic gestation opportunity for defence, a culture that's very different from ADFA that superseded it. I've got lifelong friends that I developed not only in my year, but years above and below, which I cherish the friendship but probably their network as well in the engineering space. I would always list my Frognall days as a highlight of my career.

My very first post was at the 114 Mobile Control and Reporting Unit, which was a mobile radar unit that deployed surveillance capabilities, land-based surveillance capabilities around Australia. Through that job, I had fantastic opportunities to do a little bit of design. We did things like allowed our controllers at Amberley to control aircraft in them within town airspace via some designs that myself and a small team put together. So there was some good hands-on design available.

And then quickly I moved into the maintenance engineering role, which as a young fellow out of university requires you to grow up quickly because you've got 60-odd technicians working for you, and often when you're deployed, you're it. And we deployed all over Australia through the Northern Territory, through up and down the east coast of Australia. I saw some amazing scenery that I would not have, and caught some amazing barramundi, and all sorts of things like that. I'd list that in my highlights reel.

I guess probably the two jobs for different reasons that I would list as important were my first command position, which was as officer commanding the Maritime Patrol System Programme Office in Adelaide. I was responsible for the acquisition and sustainment of the P-3 Orion fleet, which a lot of responsibility. You're in Adelaide, you're remote from the bureaucracy of Canberra. You've got an annual budget of around $200 million, with a fair bit of discretion as to what you do with that. You've got about 200 people, real people, who are crying on your shoulder and doing all of those things that people do. I enjoyed the challenge of that. Once I moved from there, I ended up back in ivory towers in Russell, where you're somewhat removed from real people, and you miss it. So that job was a highlight.

So that was a highlight from a command and people perspective, the other highlight would be as the lead engineer on the Airborne Early Warning and Control project. I actually had two bites at that project. I had 18 months on the project back in the late '80s when the then Defence Minister, Beazley, decided it would be a good idea that we had an airborne early warning capability, I think for a variety of reasons, not the least of which was budget. It never really went anywhere, and sort of after about 18 months of hard work and evaluating a proposal and whatnot, it sort of petered out.

But I was brought back into the project when it was re-energized as Wedgetail, and had the best part of six and a half years from more or less inception of the project through getting it to contract through to two years in Seattle working on the development with Boeing, Northrop Grumman, and BAE Systems. And that was just a fascinating learning curve, a lot of fun. It is far and away our biggest ever developmental aerospace project, probably is likely to be our biggest forever in that some of the risks we took to do that sort of project is probably beyond the risk appetite of people these days. So those are the four areas of my career that I'd highlight as absolute highlights. Yeah.

Phil Tarrant: The last thing you spoke about there is it's a good meaty project, something you need to be satisfied with, proud of. Do you get the same sizzle in management consulting? It's very much chalk and cheese.

Col Thorne: It's a different sizzle. I think the one thing I do miss in management consulting is the personal authority and opportunity to sort of lead those very, very big projects. I was blessed in my time as Head of Aerospace that there was a very major recapitalization that went through in my five years in the job, ranging from acquisition of Super Hornet fleets, to decisions on Growler fleets, to more or less personally involved in the acquisition of the C-27J Spartan fleet, to the leasing of Super King Air fleet, decisions on P-8 Poseidon and Triton, UAV and I've missed a couple in that. So there was a lot of really big projects that went on there. In the Maritime and Land space, LAND 400 was underway during my time. Trying to repair the Air Warfare Destroyer project was a really big and challenging and ... Fun's probably not the right word, but certainly I enjoyed the challenge of that, trying to fix some problems with the Armidale-class patrol boat fleet again.

I missed that really big project element, but there's some other aspects of I guess the culture of the firm and the organisation and whatnot that I very much enjoy.

Phil Tarrant: So the mechanics or the rigour of running those major projects and programmes within defence, the leadership skills required, the people management skills, the project management skills, the engineering skills, all these different components which turn into a successful project, how transferrable is that into corporate life within a management consulting firm or a large professional services firm? Is it all transferrable, or does some get lost in translation between defence and private worlds?

Col Thorne: No, people often ask me how hard was it to transition, and I'd have to say it was very easy. I'd have to say that KPMG is a fantastic firm. The culture is extremely supportive, and I take my hat off to the people around me that probably were a good part of me transitioning fairly well. You know, some of the skills I think that are pertinent to those big projects is having a, I'll say a God's eye view or a ... ability to be able to sit above it and sort of understand how everything fits together, and sort of being able to challenge how the various bits and pieces ... Many people are comfortable are in their stove pipes, but not necessarily able to see how those stove pipes well integrate.

So as you move into management consulting, you don't have total ownership of course, but it doesn't hurt to understand how all of these moving parts work together so that you can actually provide some thoughts and assistance about how that works.

Phil Tarrant: What's your greatest frustration? I often think about this when people come out of uniform into corporate Australia, whether that's defence industry or elsewhere, where do you think corporate Australia, so people without a military bearing or military background, really lack some of these skills, do you ever get frustrated going, "If these were defence people, they'd get that a lot quicker," or "This would work smoother," or "There would be a greater rigour to how something evolves and drives forward," or it is it doesn't really happen at all?

Col Thorne: I think it swings in roundabouts. I mean, I think defence people have a lot to offer corporate Australia. As we're indicating through our development of our service line, a lot of the things that we have developed as a service offering from our defence backgrounds are in high demand elsewhere, you know? People in rail particularly want aerospace things. There's not much difference between maritime and some of the oil and gas things, in terms of rigour that's required. Some of the big system of systems type projects demand some of the system of systems things that defence pioneered. So there's lots of those kinds of things.

There's a little bit of frustration going back the other way, that there's lots of innovation happening in corporate that I as a former card-carrying defence person, I get a bit frustrated that they can be a little bit closed to some of that innovation. I see some of the things, and one of the advantages of working in a firm as big as ours where I think we're only 7 or 8% in defence and the rest is elsewhere, I get to see lots of things happening in other corporates, banks and the like. Having spent 35-odd years in defence, I look at it and I go, "We could really could use that in defence, if only we could break down some of the barriers to getting it in."

Phil Tarrant: Barriers are breaking down though, aren't they?

Col Thorne: There are still some difficult things. Defence, and this is not a criticism of our good friends in CIO Group, but defence IT is working hard to come up to speed. It's a massive task. It's a huge network. But until the IT can become the enabler to some of these new things, we're talking about robotics and whatnot in processing, but I'm afraid that IT infrastructure just at the moment would struggle a little bit with some of that sort of stuff. So there's a lot of those kinds of things.

Language is a little bit of a barrier. Defence has a language all of its own, which I find myself constantly being checked to translate that from defence speak into other industry speak. Mind you, other industries have languages-

Phil Tarrant: Their own language.

Col Thorne: ... all of their own and you have to communicate it backwards and forwards. So I think the commonality between corporate and defence is far more than people would have you believe, and I think the barriers are really around language and ... in fact, the barriers around the barriers. I think we need to get some of those barriers down.

Phil Tarrant: This career of yours has positioned you very well to take this lead role within KPMG. What's your job there? If you were to summarise in a sentence what you've been tasked to achieve within KPMG, what would it be?

Col Thorne: KPMG is just under 7,000 people in Australia. People say, "Well, that's a big bureaucracy of an organisation." There's something like just under 500 partners. My observation is it's 500 partners, each with their own little business flying in loose formation in the sense of, and part of the organisation is to ensure that we don't sort of clack together as we're forming our businesses. I've got one of those businesses, which is engineering and asset management. I'm being challenged to build a business. My job as the service line lead is to build engineering and asset management capability to service the sector leads. The sector leads focus on, for example, defence and national security, might be energy and natural resources, it might be health and the ageing. All of those are reaching out for engineering and asset management services. I've got a stage in June with what the sectors are demanding, and I've got to build a capability around that.

Phil Tarrant: In a year's time when you start 2019 and you've got goals and objectives to achieve, at the end of this year, how do you measure whether or not you guys have been successful and done a good job? How do you gauge that?

Col Thorne: We have a strategy for our service line. Broadly speaking, our strategy for this year was associated with consolidating in defence, particularly with the acquisition of a small engineering firm, Relken Engineering. 40-odd engineers, but about half of our team are new and part of that organisation. I don't underestimate the challenges of bringing who've done things differently and so on and so forth. So we need to do that properly, otherwise we lose the intellectual capital that we've acquired under that.

So we're in a consolidation mode. We were hopeful of being appointed as a major service provider to CASG. Unfortunately, we learned before Christmas that we were shortlisted out of that, which was a bit of a shot in the pants. So to some extent, we're in a restrategizing phase right at the moment. We're just, well, if we're not going to be able to grow our engineering and asset management capability for defence, where else should we go? As I said before, we're already servicing other sectors, maybe we accelerate into other sectors.

Defence industry, we have tended to avoid. Obviously if you're providing a lot of support to the Department of Defence and allied agencies, you become conflicted if you're wanting to support some of the supplier firms. Maybe there's an opportunity here for us to be more involved in providing support to some of the bigger firms, providing services to defence.

Phil Tarrant: You spoke before about your life through Air Force, the architect of the strategy and demonstrating that on major programmes running the business that you now run within KPMG. You’re architect of a business case, a business strategy to deliver value to the firms, deliver value to the relevant stakeholders, chase the business. Are you enjoying the sort of chasing business side now? I imagine it's a big key part of your focus, to make sure that you've got, how do you run a successful business? You've got to get money flowing through the door, go out there and winning that. What's your approach to business development, and winning business?

Col Thorne: I probably found that more enjoyable than I had probably thought that I would. I've always been, in defence I used to, I didn't invent the term, but trappers and skinners. The people who used to work for me are either a trapper or a skinner. You run fleet foot through the forest and precipitate things out of not much. You don't need structure, and you don't need deadlines and all those sorts of things in order to be motivated. Then you get the delivery of projects, which tends to be you know, people who need to patient and they rely on structure around them. My observation is that very few trappers are good skinners, and very few skinners are good trappers.

Phil Tarrant: I agree with you.

Col Thorne: You have to pick the people for the job. It's a little bit like that in, and I've always accepted that I'm a trapper in the sense that, I'm not, if you have a look at all the projects I was involved in, it was all that sort of crystallising the idea, getting it to contract, whether it's the P-3 upgrade project or the P-3 SM project or the Wedgetail project I mentioned before, or SEA 5000. It was all of that early stuff. So I think that bodes well for when you come to business development, because you feel comfortable in operating in an ambiguous environment where you haven't got a lot of structure and you've largely got clean sheets of paper.

When I came to KPMG, I was ... Not surprising that I was approached by quite a few firms. I was very adamant with KPMG and others that as a senior military person or an ex-defense person, I wasn't going to have one of those jobs that was you're hiring me for my address book and my contacts and my class. That's not the way sales tends to operate anyway in firms like KPMG. We tend to try to be astute to problems that clients have, and we try to match our capabilities to, "I see you're having a problem here. We've got something that's going on in the National Australia Bank that you might be interested in. Would you like to see something about that?" Or, "I've got a team that's just been doing that for the Federal Police, maybe I can help you do that sort of thing."

So it does to tend to be a little less hard sell than other ... Building out a business, it's one of those things that you are constantly frustrated in a mild way by. You can't deliver capability unless you've got the people. You can't hire the people unless you've got the work, so you get this sort of, and you have to sort of ratchet that up in a considered way, and every so often big opportunities come your way and you go, "Damn, if only I had hired that group or those individuals," but then they could've sat on the bench being unprofitable. So it's sort of one of those things that you have to do. But on the whole, I've enjoyed that aspect of the business. We're sitting at around a hundred engineers in the team that two years ago was yours truly. So yeah.

Phil Tarrant: That's good. How do you celebrate your wins when you do get these jobs on?

Col Thorne: KPMG is well-known for its celebration. We do celebrate amongst ourselves. That's one of the parts of the culture that I quite like, is that we're constantly bouncing off one another. We tend to hunt as packs and so on and so forth. We enjoy a meal and a glass of wine on occasion -

Phil Tarrant: So you still like to win?

Col Thorne: We do like to win.

Phil Tarrant: So you like to win. What's your thoughts, last year May budget, they came out pretty much saying, "Defence consultant's going to be the biggest losers," i.e. talking about work coming down the line to management consultant and other consultants. What's your view on this? Have you seen it filtered?

Col Thorne: We've not seen a tailing back of defence consultancy money or work. Last year we had another year on year uplift on our defence and national security business is, well, it's only really about 12 years old and is a fairly large business. We're constantly seeing, there's no shortage of work. One of the challenges that the defence and the public service has got, and I know this has been written around over Christmas and other times, is it has become over the years more and more a generalist service, and more and more reliant on firms like us to bring the specialist skills to the party. So I can't see, if you're wanting to acquire, the Defence White Paper's talking about $195 billion over the next 10 or 20 years. I mean, if you want to do that, there's a fair bit of heavy lifting that's required to do that, and they're going to need experts to do that.

Phil Tarrant: To help them out with that. And interesting, KPMG actually put a report out recently, it was called Keeping us up at night. What it was, it was pretty much asking business leaders in Australia what sort of industry areas most concerns them, and defence was out of the top 10, interestingly.

I'll run through the list that you guys found out, and I'm sure familiar with this report, Colbert. One was digital innovation. Two, cost competitiveness. Three, energy. Four, regulation. Five, government efficiency. Six, public trust. Seven, infrastructure. Eight, fiscal sustainability. Nine was big data. Ten was health. Defence was referred to within the report. It says it was one of the key areas mentioned by business leaders, but still fell behind climate change and these other ones. What's your views on this? So these are business leaders. They're obviously not worried about, by defence, what is defence? Is it are we safe and secure? Well, we're doing pretty well, so it doesn't keep me up at night that we're going to get invaded, or there's going to be any other threats coming through. What were your observations on this KPMG report?

Col Thorne: Yeah, I did see that. I did see that report go out, and come in. It didn't come as a huge surprise to me because this was a conversation topic that I know inside defence, people debated about over the many years that I was either in the senior Air Force circles, or senior defence circles. Because when you're inside defence, it seems to be of the centre of your universe. It's only when you're outside that sort of people worry about defence when there's something on their doorstep. Outside of that, defence is sort of regarded when you sort of talk about it as a discretionary spend. You have to pay welfare, you have to pay health, you have to pay education, but it's a bit like, I'm out of insurances for your home insurance or so on and so forth. If you're skint and you need to make some compromises, well, defence is a little bit like that, it's a very expensive insurance policy. So it didn't come as a huge surprise that people wouldn't have put defence at the top of their list.

Phil Tarrant: I don't think it's a bad thing.

Col Thorne: No, not at all.

Phil Tarrant: If the defence of the nation or defence was keeping business leaders up at night, I'd probably be quite concerned about it. So on that base, everyone's doing a good job then, aren't they?

Col Thorne: Well, and Australia tends to be in a remote part of the world. Even though we're tightly connected into what ... through our allies and our broader national interests what's happening in the South China Sea, it may not be top of mind if you're a corporate here in North Sydney.

Phil Tarrant: Yeah, absolutely. Just I guess staying on a point you made, when you're in defence, defence is the centre of your world, but when you step outside of defence, for many people, it's just one of those things that's there. How would you explain your transition or shift from being part of that defence ecosystem firmly planted in programmes or projects which is about capability development, acquisition, et cetera, to help CEOs and executives sleep well at night, versus coming outside of that and looking at defence through the lens of a management consultant? Has there been a paradigm shift in your thinking at all, or is there anything that you've particularly gone, "Oh, I wish I maybe thought a bit like that back when I was back in uniform"?

Col Thorne: I think one of the things that we used to talk about in defence, but it's even more an issue when you're in private enterprise, is a term that I call valuing people's time. When you're in government generally, and defence specifically, you have a budget and you have a workforce, and the workforce tends to be a free good in the sense of the way it's accounted. Often there's not the mechanisms to capture effort, timesheeting those kinds of things that are largely an anathema to the public service kind of approach to doing business. Whereas when you're in private enterprise of course, accounting for your time down to ... not the four minute lot, but we certainly account down to the half hour. You start to become a lot more aware of what you're doing.

The frustration is when you observe back into defence how some of that effort is wasted through people just not sort of thinking about the consequences of doing something or not doing something, or taking a less than pragmatic view on something. We've been involved in a number of different consultancies where we've had to help referee or facilitate dispute resolutions, and ultimately you find out of that people not valuing each other's time. The fourth resubmit of a document because it's not quite right, is that really the best use of everybody's time and effort and focus? So that's one of the observations and frustrations when I look back into my old organisation.

Phil Tarrant: Interesting. You're not alone there. A lot of people sort of reference that as a big difference between working within government or uniform versus the corporate world. But I enjoyed, the chat, Col. It sounds like you guys will be busy. Plenty happening.

Col Thorne: We will be, yes, yes.

Phil Tarrant: We'll get you back in in a year's time. What do you think we'll be chatting about? What's going to happen for next year for your division within KPMG?

Col Thorne: Well, for us, we'll be I think steadily moving or rebalancing. I don't think the defence work will shrink, but certainly will be growing very rapidly in other sectors. It's not in defence, but a lot of the, I'll use the word paradefense, the police forces, the intelligence agencies and those sorts of things, are much more active in the market as well, so we're active in those places as well.

I think by next year we'll have seen some of the big shipbuilding projects move on another notch, they'll have downselected the frigate builder. They'll probably have some idea of how they're going to build the OPV and the frigate together in yards in South Australia. I think there's a lot of unknowns in that space that they'll probably have reached out to firms like us to help solve.

Phil Tarrant: Help us unravel this thing.

Col Thorne: Yeah. We've made the big muscle movements, but how do we actually make it work? I look forward to the challenges of a nation to build those ships and submarines that are immense and exciting. I look forward to that happening.

Phil Tarrant: Thanks, Col. Appreciate your time.

Col Thorne: Thanks, Phil.

Phil Tarrant: Remember to check out www.DefenceConnect.com.au. If you're not yet subscribing to our daily in the morning market intelligence newsletter, www.DefenceConnect.com.au/subscribe. If you'd like get your info from social media, just follow us on @DefenceConnect, you'll track us down. We'll be back again next time. Until then, bye-bye.

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