Chatting with the Defence Connect Podcast, Bernard Mills discusses the evolution of the business and opportunities within the reinvigorated defence industry post the delivery of the 2016 Defence White Paper. He also shares his key success factors for how systems providers can crack defence.
Phil Tarrant: Alright everyone, it's Phil Tarrant here. I'm the host of the Defence Connect Podcast. Thanks for tuning in. Always a pleasure to have you joining us today. Recording from Avalon 2017. We've got someone in the studio who we're going to have a chat about some of the good work they're doing and know some of the innovative delivery of capabilities into defence fields. I've got Bernard Mills who's the Regional Marketing Director Asia-Pacific for Ultra Electronics. Bernard, how are you going, mate?
Bernard Mills: Really well, thanks. Thanks for having me.
Phil Tarrant: How's everyone treating you? You uh ...
Bernard Mills: Good. It's been quite busy. We've got, you know, a busy agenda of meetings and activities here and also it's quite a busy growth period for the business overall, so it's been a good start of the year.
Phil Tarrant: That's good. So, we'll have a quick chat before we come on air around Ultra Electronics and how it's part of, I guess, a grouping of businesses.
Bernard Mills: That's right.
Phil Tarrant: What's the sort of depth of those different organisations and how're you looking to sort of end up to operating under a single banner at some point?
Bernard Mills: Yeah, absolutely. So, Ultra is a single banner but the history of the business is that it's been a fast-growing UK-based business. We started off with a group of 5 businesses which was a management buyout about 25 years ago. Since then, there have been acquisitions in North America, so both the U.S. and Canada, and on the back of Ultra coming into Australia and winning the Air Warfare Destroyer Sonar contract in 2008 / 2009. We acquired a really, already very high-performing SME called Avalon Systems and that's been a wonderful success story for us because we've obviously developed and delivered on the Sonar Contract but also that's given us an EW footprint that we've really worked well with the commonwealth in Australia and grown.
Phil Tarrant: So, I know on the way you've got the acceptance trial with the AWD and you guys got some pretty interesting kit on that. Can you, sort of, give me any details on it?
Bernard Mills: Well, look. The one that most people know about is the Sonar System, so the commonwealth made a decision to go with Ultra back in 2008 and, you know, we've worked with the AWD Alliance and under Raytheon on that contract. It's really exciting for us because it's been a challenging program as it has been for everyone involved in AWD but, you know, last couple of weeks in the water have been the First of Class sea trials for that Sonar. We've operated both the hull mount and also the towed array for significant lengths of time, gathered some very good data off it, had positive returns in terms of both platform targets and also in torpedo detection and we're working with the DST group, obviously with CASG and other parts of the commonwealth to analyse the data, making sure we continue working to tweak and work on those couple of thing that need work. But overall, it's been a good success for us.
Phil Tarrant: I imagine you can't go into too much details [inaudible 00:02:55] So you guys are pretty happy with the performance though, still doing everything you want do and more, yeah?
Bernard Mills: Yeah, absolutely. Absolutely. And I mean, you know, one of the things we have to be mindful of is that ASW is a capability area that's growing for the Royal Australian Navy and so at the same time as the sea trials are testing the capability from an operational acceptance point of view, you know, we're also thinking not just Ultra, but across industry and with the navy about how to sustain it into the future, all of the training and human systems to really bring the Australian Navy up in its level of capability on ASW. So, I think it's an area of where there's a bright future. Obviously looking forward, you know, the Collins enhancements and the future submarine gives, you know, a lot of activity on the subsurface level SEA 5000, the future frigate, will be a platform that obviously is very ASW-focused as well. And so, you know, rather than seeing AWD as a discrete project, it really is a piece in a puzzle that the Royal Australian Navy is building to really enhance the capability of that navy.
Phil Tarrant: So, still moving forward then the next, sort of, 5, 10 years given the Sonar onto the AWD, great success for the company. Well, what other are you chasing at the moment? Anything in particular?
Bernard Mills: Well, there's a range of different things. I mean, as you alluded to as the start of this chat, Ultra is quite a broad company so we've actually got 24 businesses around the world. Obviously, having the Sonar contract makes maritime support a major area and there's going to be continued growth, hopefully in Sonar, also in a lot of the countermeasures areas and we provide already across the navy in that space. Then other maritime systems such as maritime communications as well, we do some high-capacity radios that might be very relevant RAN operations, SATCOM, and then niche areas also like degaussing and some of the signature management, so we do both the magnetic treatment facilities and also some of the on-board signature management technologies that go on many naval ships, so that's that side.
Avalon Systems, as I mentioned before, is an electronic warfare business, so both in maritime land and also increasingly in the air. We do a range of EW things that's done in really close collaboration with the commonwealth, so quite often we're developing IP but we're also working with DSTG and other parts of the commonwealth to team together to bring Australian sovereign capability into service. And then there are other businesses from the U.S. and the UK, and so forth. Everything from crypto, to power systems, to a whole range of things that go on defence platforms, so they're kind of the 3 prongs of Ultra strategy in Australia.
Phil Tarrant: And how are you guys feeling at the moment in terms of just the overall health of the defence industry sector in terms of opportunities feel business, opportunities get involved, do you feel there's a high level of connectivity with government now?
Bernard Mills: Yeah, I do. I do. And you know, I've been around the sector for a decade and a half, and I think we've got a sort of nexus now with first of all, you've got a really engaged government that obviously is looking at AIC and looking at, you know, major platforms and making sure that those acquisitions, which are generational acquisitions are done correctly.
The second thing is, I think, within the defence organisation, well actually it's more than I think, we are engaged in a number of discussions about roadmaps, so not just looking about an acquisition or a sustainment piece but, you know, but where does the commonwealth want to go in electronic warfare over the next 5, 10, 15 years. Where does it want to go in ASW in the next 5, 10, 15 years? And so, I think, the combination of that political focus on industry but also the focus on developing capability with a longer term view puts industry in a good position. It also gives us responsibility that, I mean, we need to step up and meet that challenge.
Phil Tarrant: Absolutely. And what you're doing as a business is to make sure you can do that, you're always investing in people, you pay sort of, the war for talent to find the best guys to allow you to create the best kit to put into this process.
Bernard Mills: Yeah, I mean, that's a challenge and I'm sure everybody that speaks to you says that and the answer depends on what niche or area we're in. So obviously, we want to make sure that we have very strong in-country sustainment model, but in certain areas in EW is a good example, you know, the overall Australian talent pool is very strong in terms of its talent and the skill but it's a relatively small base of people so it's doing a combination of our own hiring and organic growth but also making sure that we don't, sort of, take just the selfish mentality that we work with the other place in industry, you know, both at our levels, so team horizontally, but also then work with primes so that we, you know, don't only rely on our sources to build capability for the commonwealth.
Phil Tarrant: And you talked, sort of, very briefly on this a little bit earlier but umm, and we reported on defenceconnect.com today, you secured a 1.7 million dollar, sort of, development funding for a commonwealth. Can you, sort of, run me through that a little bit on what you're going to do?
Bernard Mills: Yeah, absolutely. Absolutely. So, the guys at Avalon have been thinking for a long time about how to deal with maritime missile threats and what we have been developing for the last few years with a great support from the commonwealth is a technology that really detects and analyses launch events in a particular way and I think what's ... well there a 2 things to me that are good about it. First of all, that it doesn't compete or overlap with things like CEAFAR radar or so forth, so it's a capability that can go on vessels and the compliments some of the other great Australian innovations that are out there.
That's number 1, and then secondly is it can potentially be integrated across a variety of vessels including existing ones and some of the future programmes as well. So, you know, for me it's an ideal example of government industry collaboration. It's a, you know, it funds development of skills, it funds a new genuinely Australian capability and it really can be leveraged so that we, you know, we don't only spend the money that the commonwealth has granted us but it also opens our conversation with platform primes, systems integrators and so forth to really exploit that, which really is building the proper system that makes that a capability at the end of the road, so...
Phil Tarrant: And one of the, soft of, perpetual problems for SMEs in defence sector is this engagement of their customers so prime or the government. As a company that does it well, and I guess, contextually we're at Avalon which is about doing business. Well what are those 2 or 3 things that all SMEs should be doing, do you feel, to able to better project themselves in front of their customers and maybe some of the tools of the trade to get that level of engagement in to make the massaging or the cultivation or relationships better.
Bernard Mills: Yeah, yeah. In some respect, you know, the answer to that can sound cliché because it really is kind of Marketing 101 and also just building relationships and trust so I said, and this is why I'm so happy about what I've observed before in terms of the roadmap and the longer term view. It comes back to sitting down and understanding, you know, what the defence customers driver is and understanding that that's complex and there are commercial and risk elements that are mainly managed within CASG but then there are fleet managers that need to deliver an operational capability to the war fighters and, I think, the ability to sit down and say, "Well let's" ... you know, before you say "Let's make a sale" or "Let's develop a programme" and to say, well actually, "what is your requirement?", "What is your option set?" Start thinking much earlier than you did before, about, you know, how can you bring in those Australian content elements? What can we look at it terms of best-of -breed from overseas.
So, I think, the trick is that is building the trust to have those early relationships and then making sure that then internally, your business culture is aligned to those messages that you get rather than just going on another way and I think, that's been a large part of the success of the Avalon Systems business and the reason why we've been such a good acquisition for Ultra, we had those relationships and we've used that as a platform for growth.
Phil Tarrant: That's good. Pretty enjoyed the chat. Let's do it again. Let's get you into the studio in Sydney next time you're in town. But remember to check us out at defenceconnect.com.au or on all the social stuff if you'd like to follow us. Follow me if you like, see what I'm up to, @philliptarrant. Any questions for myself or Bernard of Ultra Electronics, you can contact the team editor at defenceconnect.com.au. Thanks for tuning in. We'll see you next time. Bye bye.
Listen to previous episodes of the Defence Connect podcast:
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
Episode 67: PODCAST: From the scullery to the Senate, Rex Patrick, senator for South Australia
Episode 66: PODCAST: Finding the right signal in Defence, Livia Brady, managing director, Rojone
Episode 65: PODCAST: Manufacturing the future for defence SMEs, Medhat Wassaf, Milspec Manufacturing & AIDN NSW
Episode 64: PODCAST: Unmanned surface vessels and the future of Navy, Robert Dane, OCIUS Technology
Episode 63: PODCAST: The art of influence, Nicole Matejic, Info Ops HQ