Ed (00:04):

I am Ed Cowan, and this is Scaling Up

Grant (00:15):

Where I feel happy is where I feel I’ve got a big goal and I’m going after it and it’s hard, and I’m pushing through it, and I’m finding ways to grow and be better. The satisfaction of getting to the other side of that beats anything that I’ve experienced in my life. So that kind of is where I like to live.

Auto (00:33)

This podcast aims to educate and inspire by telling the stories of great growth companies as told by their CEOs and founders. TDM is an Australian-based investment firm that invests globally in fast growing public and private companies. For more insights, visit our website, tdmgrowthpartners.com.

Ed (00:56):

Today on Scaling Up, we’re joined by someone who has climbed two very different mountains. Grant Hackett is a three-time Olympic gold medallist, and undoubtedly one of the greatest distance swimmers of all time. But since stepping out of the pool more than 15 years ago, he’s crafted a second chapter as an Executive, and now CEO, of Generation Development Group, a diversified financial services business that has grown 15-fold under his leadership to now become an ASX 200 company. Investment bonds are a wealth management product many listeners may not know, but they’re becoming an increasingly important tax effective solution for an ageing population in an ever-changing superannuation landscape. GDG is now the dominant market leader, and under Grant’s leadership, has strategically transformed from a niche investment bond player into a diversified wealth platform for advisors serving a market of about 1.5 trillion dollars of private wealth. It’s fascinating to learn about an industry transformed so quickly over the past five years, and how GDG has positioned itself to capture value in a space once dominated by the big four banks. Grant, of course, is a unicorn leader; his experience is not just as an elite sports person, but one of Australia’s greatest, gives him a very unique perspective on leadership, motivation, discipline, and resilience. He’s definitely not someone you’d want to back against, and that mentality has flowed into how GDG has intentionally scaled its culture as it’s grown. This is both a personal and business story of reinvention, drive, strategy, and thoughtfulness. I hope you enjoy this episode of Scaling Up – our last for this year – with Grant Hackett, CEO of Generation Development Group.

(02:44):

Grant, welcome to Scaling Up. Now, before I started the research for this podcast I must admit I wasn’t all that familiar with investment bonds, but then I went deep on Generation Development Group and I think I’ve been your best Business Development Manager since then. Espousing them to anyone who will listen to me. It’s a fascinating product that Generation Life sells, just one division of Generation Development Group. Now, a mutual friend of ours described you as a triple threat in sales: technical, disciplined, personable, and this is how you first made-

Grant (03:20):

Jeez, that’s nice. Well, I’ll take that. I’ll take that home to my wife, actually.

Ed (03:24):

That’s how you made your mark, of course, at GDG. So, I thought I could learn a thing or two from you when it comes to selling investment bonds, so I thought I’d start in a bit of a different place and ask you to maybe try and sell me an investment bond.

Grant (03:36):

To put simply, an investment bond is just another investment structure like superannuation, like a trust. like your own personal name, like a company, so it’s just another structure that you invest through but it’s the most tax effective structure outside of superannuation. So, if you’re maxed out on super or you’re seeing preservation age or rules change in super all the time, people use this as alternative, and there’s probably two other big benefits to an investment bond: the other one is you can set it up to have binding nominations. So not one of these have ever been overturned, so if you want to set it up for estate planning purposes and got a high conflict family, or estate equalisation, or other permutations that a lot of wealthy people have, this is a great vehicle to be able to leave those funds through. And then the third part is I go tax arbitrage, estate planning, also credit protection under the Bankruptcy Act; section 112D, I think it is.

Ed (04:24):

There’s the technical skills coming through.

Grant (04:26):

There you go, there it is. So me and numbers, I think it’s because of all the times from swimming all those years, I tend to remember quite well, but we actually named our business Generation Life because there was a solution for each generation. So a lot of people use this as a tax effective structure to pay for private school fees. So – save for a young child – people on high marginal tax rates right in the middle of their working career in their forties, still a long way from touching their superannuation, so it’s a great tax arbitrage for that particular generation, but you’ve also got access to the vehicle at any point in time, unlike your super. And then for estate planning purposes, obviously end of life, great for wealthy grandparents that might have their kids who could be divorced, but they want to leave something to the grandchildren and know that it will get to the grandchildren. So yeah, that’s why I always love the name Generation Life because it’s got true meaning to it. And I sat there with my Chairman in his beach house and we actually came up with that one, which was a bit of fun.

Ed (05:22):

It does feel like the investment bond needs a little bit of a rebrand because my mind obviously automatically went to fixed income rather than a tax advantage investment account.

Grant (05:33):

A hundred percent. It’s quite common as soon as you hear the word “bond”, you think of fixed interest products. So you think you got to get- put your capital in somewhere, get a coupon every month, every quarter, whatever the payment duration is, but it’s not like that at all. It’s actually just a structure. The reason it’s called a bond is because it’s an investment-linked life insurance policy, and that’s why you get the benefits of credited protection, You also get binding nominations like a life, traditional life insurance that you would normally receive. However, this is your own money going through another structure that has pros and cons depending on your situation. So yeah, you’ve got to remove that, I guess, common association that you have with a fixed interest product and hearing the word “bond”. So the actual name of the product, as part of the act, is called an insurance bond. We actually renamed it an investment bond because we felt like that was even more misleading than what it was and can often turn people away from the first interaction. Because they think they understand it, but they really don’t.

Ed (06:28):

Yeah. So in short, just to make this super clear to the audience, essentially as a customer I would choose from a menu of funds or ETFs and the earnings of that investment are taxed inside this wrapper, effectively at 30% if I hold it for 10 years that is, all withdrawals from there are tax free.

Grant (06:28):

That’s correct, a hundred percent. So basically we set up the investment menu for our investors. A lot of our inflows come through financial advisors. You can do it directly if you want to. You’ve got every asset class in there, so you’ve got your global equities, your Aus. equities, your fixed interest products, you’ve got everything that you want to have access to. You can switch between those investment products at any point in time and if you’re inside the structure, you don’t trigger a CGT liability if you do do that. So that’s another big advantage. And to your point, once you get to 10 years, it doesn’t matter if you’re earning a million dollars a year and you’ve got a million dollars coming out of this of earnings, there is nothing to declare to the ATO, so it doesn’t add to your taxable income.

(07:21):

So it’s a very powerful investment structure. The best way to describe it if you know how to use it well, but the trouble was superannuation in this country has just been too good for too long and we’re now starting to see a lot of changes in super because that pool of money is now over 4 trillion dollars. You’ve got a government that’s in deficit, they want to get back to surplus in their budget, and so you can see double taxation inside superannuation for large balances above 3 million, which is proposed legislation at the moment. So all of these elements, just, we thought we should be getting into this product space. And I’d spoken about it with my – he was then the CEO of BT at the time, so  this is back in 2012, 2013 – about the potential of this product not really being harnessed. Then in 2017, many years later, we got an opportunity to buy into this listed business that was called AusStock at the time. And yeah, we went in and from there on we just really got stuck into it and sort of changed some of the elements of the way we sold it, the investment menu, et cetera, and just rebranded it and it kind of took off from there.

Ed (08:26):

We’ll come onto the Generation story more broadly in your relationship with Rob that you alluded to. While we’re just, kind of, on this thread talking to these three archetypes of selling: you can be the technician that knows every detail, the grinder who’s relentless with process, or the natural connector who can build trust in seconds. I’d be really curious, with your background, which of those did you naturally lean on when you came in as, as essentially the Head of Sales of Generation Life at the time, and what did you have to really work at?

Grant (09:03):

I think for me, naturally, probably the relationship side I always found quite easy and I think I’ve been able to build trust because I’d never sell a product through our business that I couldn’t sell to my own mom or dad. So I’ve always thought like that, and we always say this when we do presentations as a team: “give the opportunity for a client to our technical team. If it works, great. If it doesn’t, we’ll tell you.” We’re not in the business of doing deals that aren’t going to seek the outcome that you are looking for. So I think that relationship side first, but I also love technical. I’m a guy who loves staring at a spreadsheet, putting one together. I enjoy that sort of stuff. It’s not something that I would do all day every single day, but I enjoy that element and I found the real art of any good selling is going: “okay, I really need to understand the technical application of this product.”

(09:51):

Because If I understand that, I can then simplify it and get the message across. And also I think if you are good at relationships, you can sit there and listen and understand where you can apply value, and I think that’s one of the most important elements of the selling process. Often people go in there and they try and sell what they think someone wants – first, you’ve got to get the question answered of what are they looking for, what do they value, what’s important inside their business, what’s important to their client base? And once you’ve established that, you can actually just walk away and say: “Hey, this is what we can do. This is how we can help you. Give us a case study of one of your clients. We’ll see if it’s better, if it’s not: great.” So for me, I think the relationship came first, but I definitely love the technical side. I could almost rattle off every sales number of every single year. So for me, I do study that stuff a lot and it feels probably natural for me as well. So no, I like how you put those three characteristics. I think it’s true. I’m going to take that away and bring that to the team.

Ed (10:48):

You can steal it for sure. The history of Generation Development Group is interesting, and you alluded to it, AusStock – its history dated back to the early 90s, and listed on the ASX in 2007, and it was essentially a diversified financial services group investing in and developing financial services under tax efficient structures, but didn’t look anything like the business that Generation Group is today. So I really feel like this story starts in 2017 because in 2017, three things happened: you’ve alluded to one of them, but on the 1st of July 2017, super contribution caps changed. So, they were significantly lowered from 180,000 to a 100,000. So in layman’s terms, if you were to contribute more than that, you would have to pay extra tax later that month. You’ve mentioned Rob saw an opportunity to reinvigorate AusStock, which, at the time was floundering, let’s call it a 50 million dollar circa market cap. He becomes the Executive Chair, he brings you in as the Head of Sales, and then later that year the Hayne Royal Commission kicked off, went for two years, and it was the Royal Commission into banking, superannuation, and financial services, and it fundamentally reshapes the industry that you work in. So I wanted to lay those down, but let’s pick off number two to start with. Maybe you can give some background of Rob, you mentioned he was running BT previously and so he was perfectly placed in my mind alongside you to really exploit these opportunities that I’ve put down. So he comes to you and maybe you can pick up the story as to what he saw in the opportunity.

Grant (12:27):

Rob and I actually spoke about it initially on a surf trip. I think that would’ve been around that sort of 2012, 2013 time. And he goes, “oh, do you know about investment bonds?” I literally just did some study on them, so it was fresh in my mind. I was like, why aren’t people using more of these? Like, I just don’t understand. And we sort of came to that realisation: super – too good – preservation age then was 55, it’s obviously 60 now. So lots of changes meant people actually had to look at different solutions rather than just piling into principal place of residence, investment property, and maybe a heap into super. That was kind of –

Ed (12:58):

It’s very Australian.

Grant (12:59):

Yeah, correct. That was kind of the plan where now people have got to think through it a little bit more: what structures do I need to use for tax efficiency, for estate planning, for all the various permutations that you can experience? Now, I’ll take it one step back with Rob. I met Rob at a lunch in 2003. I was studying commerce law at the time. I was always driven to do things outside of sport, but I knew I was at least five years out from retirement, but I needed to know what I had to do now to put myself in a great position to go into finance, and I was thinking investment banking. Another guy, Tim Bishop was at lunch who was the 2IC at Macquarie Bank, and then there was Rob who just became the banker’s trust at the time, CEO, and he was very young and I sat there and half an hour into the lunch, both extremely smart individuals, really enjoyed their company, but with Rob, I found I really aligned with Rob on values.

(13:52):

Rob was just so high performance-orientated – which, I love high performance, I love seeing what makes people great and understanding those characteristics, trying to develop them within myself. But the other part is I’ve always been against, and I use this as an analogy, performance enhancing drugs. I just can’t think of a worst way to ever win. And it’s like in business, you can take shortcuts, you can do the wrong things by people, but he had such high values. If you ever tried to take a shortcut in our business, you probably wouldn’t be there much longer. That’s the way that the DNA operates at the top, so you have to win the right way. So my values just aligned so much to his and I was like, “I’m working for that guy one day”, and I honestly made that decision in my head.

(14:37):

Then 2008 came around – I retired after Beijing – I worked for him at Westpac for a number of years. I ran all the growth portfolios at Westpac, third party distribution, was Acting Head down the state here for some time, as well in Victoria. So I really enjoyed following him because I felt like, you know, you just see easy partnerships with people and you just align values-wise and you’re trying to drive the same sort of outcomes. The guy will give up his own personal wealth in ways – he didn’t get paid as Chairman of our business for seven years, and this is a big listed company, but he just didn’t feel like it was the right thing to do at the time because the business wasn’t making as much money. We were barely break-even when we took it over so he didn’t take a wage. He worked full-time for the first year and didn’t take a wage and invested his own money in the business.

(15:24):

So it says a lot about the individual that you’re working with, and so I just loved all those characteristics. We all agreed in our contracts – just to give you a bit of insight – around long-term incentive schemes in 2018. It was still iffy, the growth of the business, so none of us took it on the Executive Team, and I kind of love those moments. It shows what you’re there for. You’re not just there for yourself, you’re there for the bigger picture. And that we’re fortunate because the bigger picture came to life, but back then there was no guarantees that we were going to be successful. So yeah, I struck a really strong relationship with Rob and I just knew I could learn so much off him, and that for me was just super attractive and the rest is history Now. I’m one of the survivors of CEOs with him because he’s unrelenting in the sense that it doesn’t matter what we did yesterday, it matters what we do today.

(16:09):

It doesn’t matter the level of success that you come in with, it matters the level of success that you’re bringing value on today, and what you’re thinking about tomorrow. Not everyone survives that sort of environment. Some people when they get to the top, they want to rest on their laurels a little bit, do it a bit easier. It’s not like that with him. And I love it because it challenges me every day to get the best out of myself and I live and breathe what I do. I did the same thing in sport. I do the same thing in business. So I’m at home and I love time in the shower – I’m probably one of these people that waste a bit too much water, I probably have my entire life actually, guilty of that – but I do a lot of thinking in there and I’m just constantly thinking about the business and what needs to be done, and how we’ve got to do it better, how are we going to get more operationally efficient, how a competitor’s doing something at the moment, and how we can supersede that, or predict that, and be on top of it.

(16:55):

So yeah, it’s been a great journey, but doing that journey with people that make you better is just such an important part of the whole picture.

Ed (17:02):

Couldn’t agree with you more. We’ll deep dive on people and culture and that level of mentorship and the degree of high performance that you’ve both given this business, because it’s been on an incredible journey. One thing I do want to touch on is the changing landscape. I did touch on the Banking Royal Commission and prior to the Royal Commission, the wealth management industry was dominated by the four big banks. The commission exposed an array of misconduct. We don’t necessarily need to go into the full degree of it, I think everyone is aware, but what emerged, I guess, was the banks spinning off their wealth arms – smaller, smarter, and decentralised network of wealth advisors that are essentially – as you alluded to earlier – your customers. So I think it went from 28,000 to 15,000 today.

Grant (17:50):

Yeah, that’s right.

Ed (17:51):

And they’re mainly independents and boutiques and small licence groups. So you’ve got this massive market that is highly fragmented, but I think the advice market is estimated to be between 1.2 and 1.5 trillion of private wealth. This is a big, big industry, and I guess why I bring this up is it’s important to understand the industry that you operate in when we talk about the strategic bets that you’ve made over the period that you’ve been the CEO. So the topic, I guess, is strategy versus opportunism, and I’m keen to unpick what was your five-year strategy when you came in as CEO and you took over that leadership role from Rob who then just became the Chair. Because since that time the market cap has grown 15 x, the business size has probably grown in line with that. What did you see around the corners of the industry, but also what fell into your lap?

Grant (18:47):

Yeah, it’s a really good question, actually, not one that I’ve probably received before. To give you a bit of an idea, when I first started, I mean you touched on is around a 50-mil market cap. We were less than 30 people in the business. Fast forward to today, we’re about 2.8 billion, got over 300 people in the business, and we’re growing rapidly at the moment which is a nice position to be in, but not something that you take for granted. I think for me, when I became CEO right in the middle of a very turbulent time in financial services, I remember talking to the distribution team and saying, “okay, we’ve gone from the big six, which was, to your point, the big four banks – IOOF and AMP – to now, the medium, medium-sized hundred. There was all these self-licenced businesses coming up, advisors were distracted, the education standards, all the other things that they had to adapt to.

(19:36):

I think one thing that we did see when those, I think it was 63 recommendations that came down at the time, the broker industry really came together well at that time. I think financial services didn’t come together well to be able to go, “okay, some of these are reasonable, some of these are a little bit too far, the pendulum’s probably gone too far”, but I think what you learn is like, sport, like anything that is fast moving, is that the environment around you is always going to change. Sometimes it’s got to be slow change. Sometimes it’s got to be rapid and you have to move with that regardless of how you feel about what you’re doing. You’ve got to be able to pivot very quickly and you’ve got to be able to see what the outcome looks like. And I guess you’ve got to be 51% right perhaps on your information to get your calls on the better side of being more right than wrong.

(20:22):

And then you’ve just got to be very confident around the execution of that. So, we made a lot of calls very quickly. We reinvested back into our business. We made sure our sales team stayed very, very close to that fragmentation within the industry. And the ironic thing, it actually became easier for us, because to be able to crack those big six sometimes and build really tight relationships, to be on their approved product list – which you have to be – and have all the necessary research ratings, which is quite funny because I was told by all of them, “you have to have a Lonsec research rating to get on the APL” – the Approved Product List – and now we own that business. Yeah, it was a really interesting time and I think for me, when you talk about that five-year strategy, we really wanted to- we were fifth in market share and we were fifth in inflows.

(21:09):

So we had a very, very deliberate strategy in terms of what we wanted to get to in terms of numbers, which to be honest, my strategy event went even longer than that, it actually finishes at the end of this year, and I think we’ll actually hit the milestone, which was this 5 billion dollar investment bond number that we had. I think we finished the financial year, which is our last set of numbers that we’ve put out to the market, at about 4.4 billion. When I came in, we were doing just over around a hundred million dollars of inflows per year. We’re now doing that in less than a month, a lot of the time. So it’s been an awesome journey, and you hear those numbers transfer from one to the other, but there are so much stuff that happens in between, so many times where you’re unsure of yourself, “have I made the right call?”, and then you kind of got to double down or pivot quickly, like I said, and I think for us, the most important thing with any business is visibility and consistency and doing the things that you said you were going to do.

(22:01):

We continually did that. I’m not the only athlete in our business, actually the CEO of the Life Company, Felipe, was also an athlete. And there’s one thing that I do like about athletes that are really driven, smart guys. They love feedback, because in sport it’s not personal. When someone’s telling you, when you are out there in the middle of the ground, or someone tells you to do something, you’re doing it because it means you got to get the result that everybody wants. It’s the same in swimming: if your coach yells at you and says, “lift your left arm, you’re fatiguing, do this, do that”, you’re like, “okay, no worries”. You don’t even think about, “oh, I’ve taken that personally”. You’re like, “I want to win the Olympics. I want to win the World Champs. I want to break a world record, so therefore I’m going to take that on board and I’m going to implement it straight away and become better”.

(22:41):

And in business, we’ve had a bit of that psychology. We’re not rude about it, I wouldn’t say we’re ruthless in any way. We’re respectful in the way we deliver things, but we’re honest and we also want to receive that honest feedback the other way because if we don’t, and we don’t want to listen to it, we’re not going to improve. We’re not going to be number one. Now look, we’ve been number one in total market share. We’re number one in inflows. In fact, we just got our last quarterly results and we actually took 68% market share of inflows. So that was a really rewarding sort of piece of data to pick up recently. But it comes through all these little things that you’re trying to do, but then you get into the number one position, you realise people are trying to knock you off. People are trying to come out with new products. So you’ve got to be on the whole time. There’s no resting like in sport and business, there’s always someone else who wants to be number one just as bad as you. And you wake up knowing that.

Auto (23:28):

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Ed (23:39):

So from the outside in – I might put something to you and you can refute it or not – but my inexperienced lens here is you went from a niche and complex product, kind of debunked the complexity, and moved to a full scale wealth platform. And you did that through growth in your core product.

(23:58):

You then made, originally, a strategic investment in Lonsec, as you just mentioned – I think you bought 35 or 36% of the business – which is, most people know it as a ratings and research house. And then you fully acquired it in 2024. And people might think, well, that’s interesting. Why would they do that? Well, it’s super important after the Royal Commission because to justify any product recommendations under ASIC rules, it has to be rated, essentially, and so to do that in-house makes sense. And recently you bought Evidentia Group, which is, you could think of it as almost a mini platform business that, as I understand it, runs execution, compliance, reporting tools, portfolio construction. That has really strengthened a distribution moat for you. So was this always the vision or did these pieces of the puzzle come together in a different order in your mind?

Grant (24:50):

It was always the vision, and I’ll give you some insights around that. We were doing the investment bond. We always wanted to do lifetime annuities, which is another product because of ageing population, a government that’s motivated to see money come outside of super, money to be spent back into the economy to receive tax receipts, et cetera. So we always had the vision. The other part that we picked up very early – so Rob had been running Craveable Brands, which is Red Rooster, Oporto, and had been doing that for four or five years. And then we both came back into financial services together. I was doing some other businesses in between our stint at Westpac and BT together. And it was quite interesting because we’d go out there, we are never afraid, like I’ll go to every financial advice practise in the country if I need to, I don’t mind doing all the activity and working very hard speaking to everyone, getting the insights.

(25:38):

And one of the things that we kept hearing as we were doing that was, “oh, you guys should start up your own separately managed account SMAs”. And we’re like, okay, this is interesting. Started doing some research. We were thinking about setting one up as part of Generation Life, wasn’t going to really work. And then we got this opportunity to buy Lonsec. Everyone thinks we bought Lonsec because it’s got this great cashflow business. To your point, it’s access to distribution. Because you need this research rating for your compliance. And it’s the number one qualitative research house in the country. Everyone’s heard of Morningstar in the industry, but it’s obviously Lonsec that’s number one. Then you’ve got Zenith, who’s number two, then you’ve got Morningstar, who’s number three, and it’s a real oligopoly market structure. So there’s a great business and they’re really dominating and continue to grow in that space. But they had this small managed account business, been going for five years, had 659 million in it. We thought that’s what we’re in it for, that’s going to be the turbocharge part of growth. And I went out there, I did capital raise, I didn’t think I’d be able to raise money because everyone is like why are you buying Lonsec?

(26:35):

And, look, some people got it, some people didn’t, but we got it away. You look back on it now, we completed that deal in September, October of ’20, 37%, two selective buybacks. And then we eventually bought the other half that we didn’t own last year in ‘24. And it’s grown organically now in the last four and a half years by 14 billion. So it’s been eye watering sort of stuff. Great team, sales execution was superb, just a recipe that we kind of used at the Generation Life business. We got some a great sales leader, very commercial CEO in there, Mike Wright. And then we saw this other business, and we were the biggest in the market in separately managed accounts because of that result, but there’s this other business, Evidentia, that was number two, but their net inflows was bigger than ours, which was killing my competitive soul because I’m watching this business and there’s multiple subsets in terms of products within managed accounts, and we had all three of them.

(27:36):

And Evidentia were just focusing on the main growth corridor in separately managed accounts. And they were going to a lot of self-licenced businesses and they would win the business of this practise that might have a billion dollars of client money that they manage, then they convert it over to fund in their business that they do the asset consultancy and portfolio construction around. And so what was really cool about that transaction is that Peter Smith, who was the Founder of that business – it was the same DNA around performance, and focus, and execution. It’s the reason he was doing so well. And so I was almost jealous of him because he was beating us in net inflows. So we were always talking through the negotiation, if this doesn’t work, we’re going head on together.

(28:16):

So I think he said he’d put me through his meat grinder, probably Pete White lightly saying that, but just to- I loved it though. I loved it. And then eventually we were able to make a transaction work and join the number one, number two businesses together. And now that’s over a 30-billion-dollar business and growing quite significantly every single week. And it really speaks to, probably that vision, that we spoke about. But we have a very clear investment thesis in our business. We’re kind of like: there’s three or four things that we look for: structural tailwinds, managed accounts – people going from unitised structure to managed accounts – legislative tailwinds – consistent changes to super and other structures that mean investment bonds can be a recipient of those changes – and also a disruptor in a space that could be quite mature with a few big ‘instos’ perhaps owning the market share. But if you’re coming in with a new model or a new platform – you’ve seen the platforms like Hub24 and Netwealth really disrupt that space – something like that we really like. And then if we can see 20% five-year CAGR around the earnings number that works for us. So that’s the kind of characteristics that we look for in any sort of M&A activity that we’re doing. And look, they’re tough characteristics to find. So I see a heap of stuff, but we don’t do many deals.

Ed (29:25):

And to play this out a little bit more, you have essentially vertically integrated to a degree, and really solved more problems for your customers, being the wealth advisors. And of course, with that comes better margins, you’ve diversified your revenue base away from what was a core Generation Life business, and with it your investors have supported you and done very well because of the strategy coming to life.

Grant (29:52):

You’re right though, spot on on the monoline product that we had. So we had one product, you’re subject to any sort of legislative change or other things that could take place, more attractive structure. So we really had to work on diversifying our revenue streams. We knew the types of revenue streams that we wanted, and it took a long time to do that. This was years in the making, and we slowly moved in on stuff that we knew made sense, developed the right relationships in the industry, which is a big part of it. People saw what we said we wanted to do, we eventually did. And I think that’s where a lot of the credibility has come from for us.

Ed (30:26):

You’ve built incredible credibility in the marketplace, but you both came with incredible credibility, so you probably felt like you had something to prove, no doubt. But I guess with the wealth advisors themselves, you came as a credible package.

Grant (30:39):

And I guess, particularly Rob, he’d done a lot of the right things in the past. There’s a lot of groups that I’ve worked with in banking and finance before that we had strong relationships with. So we knew a lot of the people I guess in the industry. But you still got to reestablish a credibility in a different part of that industry. And I think that takes time. And like I said, consistency. We all learn off each other, there’s no doubt about that. But, you know, like everyone says “what makes a business unique?” Well, it’s the right people. And that’s what we’re continually striving for, is just looking for the right people across all the parts of our business to be good leaders with similar DNA. And if you don’t fit within our group, we’re very honest like that too. It’s something that you’ve really got to protect. We’re very, very conscious of that and that leadership really obviously comes from the top.

(31:30):

You spoke about the discipline part right at the start. That’s a big thing for me because if your people don’t see that you are disciplined, you are willing to go out there, help ’em sell, help ’em do their jobs, support them in what they’re doing, they’re not going to bleed for you. So you’ve got to be willing to do that every single day you walk into that office and we are, I mean I’ve done a thousand podcasts to help the distribution team, so I’ll make myself very busy and very tired because I feel like it’s the right thing to do.

Ed (31:55):

People and culture always starts with the CEO, there’s no doubt about that. And to unlock the scaling challenges of people and culture, it often takes the CEO to scale themselves. I mean, you talk about discipline, long distance swimming is the ultimate masterclass in discipline, routine, marginal gains, long-term horizons, so let’s try and pick apart your own journey in transitioning from an incredible sporting career. And it’s nice to get to ask the questions here rather than have to answer them. The role of a CEO in my mind is, as you’ve alluded to, more that of a coach than a player or swimmer or an athlete more broadly. What were the traits of great coaches that you admired, or that you were involved with that you might’ve adopted some of their philosophies or principles in terms of building a culture at Generation Development Group?

Grant (32:43):

The things that I often think back, ‘cause I probably reflect more on that now than I did at the time. You’re just in that environment, you know high performance, you know you’re doing everything to be number one in the world. You know, I think: “it’s over 2,700 metres, here’s less than a second between three Olympic silvers versus three Olympic golds”. So it’s like you can’t make a little mistake because it’s going to cost you a lot. And I look at all the athletes that I was up against, the Michael Phelpses, the Thorpes, their coaches as well, the commitment to performance every single day. I remember, just, I would watch the relationship between Michael Phelps and Bob Bowman and how they would operate together. The commitment to the craft for every individual that you had on the team: the physio was trying to be the best in the world. The masseuse was trying to be the best in the world.

(33:31):

The coach was trying to be the best in the world. So you’re constantly around people with these similar mindsets and you don’t realise it until you part ways with that environment. So for me, I just always think about “whatever you’re doing, just try and be the best in the world at it”. That’s honestly how I try and view it. And it’s the same in business: try and be the best in the world at it. What would that take? The other thing that I look back on when you talk about culture, that I realised, was I became National Team Captain in 2005, I was kind of doing the role, they reintroduced the role because I was already sort of doing it in the team. And I remember sitting down with my coach, he goes: “look, I’m going to be honest with you. You have a lot of events.

(34:07):

You’ve got the longest event on the programme, which is on the last day, you really committed to this team. I’m worried if you’re captain, it’s going to really distract you from your own performance”. And I was going into the World Championships over in Montreal in Canada and I finished that meet and I got World Swimmer over the year over Michael Phelps. I broke one of Ian Thorpe’s world records. I had won, first time, four world championships in a row in the 1500. It honestly couldn’t have gone better. And I remember sitting there saying, thinking to myself, “God, I’ve put more effort into this team and other people’s performances than I ever have before”. Well, I’ve at least tried to, and I genuinely wanted to see people do well. But it’s funny, you put that energy into someone else, often it comes back to you tenfold.

(34:52):

And that was a real lesson in leadership. It’s like, no, it’s not going to distract me. It’s actually going to support me. Every year I was Captain, I’d get voted ‘Swimmer of the Year’ and I’d stand up there every year and say: “I shouldn’t be allowed to have this award”. I’m doing my job by being up here receiving this, but it’s nice to know that it feels like my feedback’s half decent and I’m doing okay at it. And so that was a big lesson in leadership. Sometimes the more you put in people, the more it’s going to help your performance if you want to be super selfish about it. But people know the difference between someone who really cares, who’s really genuine, who really wants to see you do well, versus someone that’s doing it because they have to do it. And I think that was one of the big lessons in leadership I’ve always taken with me.

(35:31):

And I really, honestly, one thing I love in my job is when I see someone do better than what they thought they could do, and the good feeling that comes with that. Even paying a big bonus to someone that’s never been paid something like that because they’ve just worked so hard, done such an outstanding job, and really been able to drive performance in the organisation, and you know you’ve changed their lives with that. You’ve helped their family, their kids, and all that stuff’s super powerful. So I think for me, the CEO tag, yeah, it’s nice to have an opportunity to lead a business. I enjoy- they call me a control freak, but I enjoy making decisions. I enjoy having that responsibility. I really love those elements of the job and I’ve always wanted that, and I’ve always probably sought that, but I really love more than anything seeing people do really well.

(36:22):

And when you’re with like-minded people that want to do well together, there’s no better feeling in the world. And it’s just such a deep sense of purpose for everyone. And I think that part is really rewarding, but you’ve got to have a similar mindset. It was a culture I learned – probably if I took it- this is a really fast step back – I was in a nipper group in Surfers Paradise Nipper Club, and I actually learned, probably, performance there more than anything. I was at an age group where we had the national champion and the female athletes in there. We had David Rastovich who was going to be the next Kelly Slater, who was World Junior Surfing champion. He became, ended up just doing surf videos for Billabong, I think, and getting paid a small fortune. We had Trent Noble, became an AFL player, Courtney Atkinson, who went to two Olympics for triathlon.

(37:02):

It was just unbelievable. We were just little 10, 11-year-old kids at the time. No one was elite at anything. But there’s the psychology of that group I think taught me a lot. And I remember my mom saying to me, this would’ve been 20 years later: “oh, that nipper group, as soon as someone else would come in, they would just be spat out two weeks later”. I was like, “what? They came in?” She goes, “so you don’t even remember other people coming. You just remember that cohort”. And we went on – we were the first – that cohort of people went to the Queensland titles. We got selected on the Queensland team. The big thing was the National titles. I think we were the first team to beat New South Wales in like 20-something years, and we did it for three years in a row together as a group. So I think that set the foundations of being around the right people and performance.

Ed (37:41):

It’s amazing those formative years, learning to push each other and actually what performance look like. What a great life lesson. I mean a few things resonated strongly: to be world-class, you need to make your strengths stronger. Coaches that often push you to work on your weaknesses miss to be world class and to beat people. Your strengths have to be better than this.

Grant (38:01):

Yeah, correct. That’s a big one. People don’t realise that. They think they’ve got to get their weaknesses up, so everything’s kind of average, but it’s not. You’ve actually got to make sure that your strengths are super, super strong and your weaknesses don’t cost.

Ed (38:13):

You touched on Rob as a mentor and athletes loving feedback. It’s always real time and it’s served up straight, and athletes respond to that as you rightly told us. Is there any feedback that Rob has given you that you can share; when you’re thinking about great coaching, giving great feedback, either him as the Executive Chair or now as your Chair, what kind of feedback does he give you and how do you receive that?

Grant (38:36):

He’s direct. So many things that just make you stop in your tracks and think, but you’ve got someone who’s had over 40 years of experience in business, seen so much change, being able to adapt to that. The foresight of trends that he’s able to see and just the way that he kind of views the world. And you could go into a conversation with some people and not be totally prepared. I would never do that with Rob. He’ll pick it apart. If you think he can talk through a board report and have something that’s weak in there and not addressed, it’s not going to be, he’s got to read every word. He’s got to critique it. He’s got to be across it. I remember one time, this was a few years ago, I put a strategy pack together. It was about 131 pages. I reckon I had five weak slides in there, and I knew they were weak slides, a little bit fluffy, probably not clearly defining success and failure to the degree that I needed to, but the rest of the pack was, I thought, it was pretty awesome.

(39:30):

And it was so funny. I had a conversation with him. I was sitting in the Qantas Business lounge in Adelaide, and he called me. He goes, “oh, I just want to give you some feedback on your strategy pack before it goes to the rest of the group board”. I said, “okay, yeah, no worries. Yeah, thanks Rob”. And he got straight into the five slides that were weak. I was like, “oh my God, I’m never doing that again. I’m never letting that slip through – your language: “to the keeper” – ever again because I just know it’s going to get called out”. And I really appreciate that about the relationship because I know it just constantly makes me better. Some people, they don’t like that. They won’t like being called out when they’re believing a bit of their own B.S., but Rob’s really good like that. And the thing is, what I love about his personality is he’s able to have that degree of intensity.

(40:12):

You go out then to dinner or social environment, he’s just one of the guys and he’s so relaxed, easy-going, can talk about anything, and it’s kind of like a really interesting personality trait to have that intensity in the environment that you need to. But then to walk out and to anyone else, he just seems like the world’s best bloke, but that’s cause he’s a good people person. He’s got extremely high IQ and EQ, and that’s a bit of a weapon when you’ve got someone out there who’s able to do that and then do it with the values that he has. One of the things I love about him, and this is, you know, I spoke about the values that resonated before – the number one thing outside of the high-performance element, which I really love, is the humility.

(40:51):

And so in our business, there’s one thing that we just have an allergic reaction to and it’s hubris. It’s getting ahead of ourselves. It’s thinking that we’ve got it made. Even now, it’s nice to talk about the success and growth, but that’s done. We’ve got to move to the next phase of what we’re trying to achieve and probably not good celebrators if I said, where do we have faults? You’ve got a business with hundreds of people. They’ve worked really hard. You’ve got to make sure you celebrate with them.

(41:25):

And definitely acknowledge what’s been done and what’s been achieved and our real high performers within the business. But internally, I am constantly dissatisfied and trying to get to the next phase. Wouldn’t matter the money I make, the size of the business, or anything, it’s got nothing to do with anything for me. I just don’t have a huge amount of value in that in terms of feeling happy. Where I feel happy is where I feel I’ve got a big goal and I’m going after it and it’s hard, and I’m pushing through it, and I’m finding ways to grow and be better. The satisfaction of getting to the other side of that beats anything that I’ve experienced in my life. So that kind of is where I like to live.

Ed (41:54):

It’s Interesting because I think people confuse reflection and celebration sometimes, and reflection cycles in sport are daily and in business they often happen around results or moments. How have you thought about bringing deliberate reflections into Generation in terms of as a practice to ensure that people are improving and getting better?

Grant (42:13):

It’s a constant part. We have a thing called ‘Operating Rhythm’, which in sport I’d liken to: what’s your training schedule and what are your rocks that you need to have every single day to be disciplined enough to drive the outcome that you’re looking for? And so for us, we sit down and we critique everything that we’ve done, critique the outcome. I like to debrief like we lost, because you debrief better when you lose, you often find more false mistakes, issues, challenges, things that you’ve got to overcome. It’s more honest conversation. So you’ve got to try and do that same style of conversation even when you’re winning. So that for us is constant. I’m finishing after this to talk to one of my CEOs about a competitive challenge that we’ve got at the moment. That’s not even arrived yet, but we know it’s going to come.

(42:58):

And he was on the phone to me before, sweating it like it was already here and costing market share. And I love that because you just know there is no resting on your laurels to sit there and think, “oh, we’re doing pretty well”. We just got this market share result a week ago, and it’s the best we’ve ever received. And the flows of the business have never been better than what they are today. But he’s sitting there almost, I’m not going to say panicking, that’s not the right word, but constantly thinking about where are the threats going to come from? where are the risks in the business? and what do we need to do better of what we’ve done previously? and we’re pretty tough on that if I’m being frank. We’re not sitting there having polite conversations and slapping each other’s back. It’s frank. I get excited by that because I just know we’re going to get better.

Ed (43:43):

I’m curious what you had to unlearn, perhaps, what did you have to stop doing that had previously made you great in the pool that may have cost you in leadership? If I think about my own journey, even talking about feedback, I probably had to unlearn how to deliver feedback too directly, for instance, or be more empathetic. What are the traits that don’t necessarily cross over to your role as a CEO that made you a great swimmer?

Grant (44:11):

Yeah, I mean, different environments have different ways of doing things, but often they’re looking for the same outcome. So sport and business, in my view, are exactly the same in terms of highly competitive environments: have to get all the little things, have to be forward thinking the whole time, have to be looking at improving and developing and growing and surrounding yourself by the best. So I think there’s a lot of consistencies. No one’s ever asked me the question, what did you have to undo before? So I’ve actually had to think a bit about that, and I’ve given myself probably enough time. To your point, the first thing I had to realise is that I’m not on a team where everyone’s trying to be the best in the world, so they’re not going to respond the same as if I went in with the same type of attitude and directed focus and drive.

(45:04):

Because a lot of people don’t like that, particularly if you’re a large company, you’ve got to work out, how do I get the population maybe from a five and a half to a six or a six and a half, and then that’s just got to drive the dial massively in a place like that. One thing for me, I definitely had to learn the different styles of people that I really probably didn’t see beforehand. I was probably a little bit ignorant to that. So now I realise the same outcome with that person is going to take three conversations, versus my CFO, who I can be extremely direct with and honest with and tell him, and he’ll get it and he doesn’t take it personally and move on. But if I had that same conversation with this person over here, I’m going to destroy my relationship and trust with them.

(45:38):

So I think there was a lot of navigating that I had to learn around the communication style, and adapt that to the different personalities that I came across. So that was probably something that I had to unlearn really quickly because the sporting environment, and you know what it’s like, it’s direct, it’s harsh, it’s brutal, it’s honest and it’s unapologetic. Business is not always like that. Sometimes you’ve got to do things in certain ways to be able to drive outcomes that you’re looking for and get people on that journey. And that journey is more difficult to get larger sets of population on as well. So there are probably not so much things that I had to unlearn, There’s elements I had to unlearn, but there was things that I just had to learn full stop and adapt to. I knew the outcomes we were looking for in sport and business are the same, but the way in which you get there is slightly different.

Ed (46:28):

You touched on trust there. You’ve done some acquisitions, you talked about the importance of having the same values and cultural implications with those businesses, but you came from an environment sport where trust is built very quickly and it goes from zero to a hundred just by the very nature of what you are trying to achieve together. Often in business that needs to be built up over time. So I guess as a leader, how do you think about regaining or building trust in situations that might need some time to get there, but you need to do it quickly?

Grant (47:01):

I think you’ve answered the question in one: it’s time and consistency. That’s probably why I’ve said consistency so much throughout the course of this conversation, because that is really one of the elements that you build trust with: time in business. And the reason is, and as you were saying that question, a few things popped in my head. The more high-performance orientated the environment requires, the more likely you got to build trust quicker. The reason that’s the case is, if I think of an SAS person, when they tell you something, they’re usually trying to save your life, probably if you’re in the heat of battle. So you build trust quickly. Someone says something direct to you, you don’t care if it came with a package of 58 different swear words, you are happy to listen to that. Take it on, and you’ll probably respect that person more than ever.

(47:45):

High performance sport is probably a step two, one or two down from that, where you know if you don’t receive the feedback, make the adjustments, you’re not going to get the results and you can be a hundredth of a second out from being- I look at James Magnuson in 2012, hundredth of a second out, was a guy was winning everything by such margins before and then lost the Olympics by hundredth of a second. And that’s the brutal reality. He’s an Olympic silver medallist and he never got that gold medal. So that’s how tough it is. But then when you get to business and you get to larger sort of groups in businesses, or particularly big, large cap companies, I mean, it is very difficult to build trust quickly because the environment’s not conducive to that. They’ve probably been through management layers that haven’t done the right thing by them.

(48:27):

So there’s almost distrust coming into it. And so I think if you’re consistent, you do what you say you’re going to do, you support your people, you lead from the front, and you just give that time, you’ll eventually build those relationships and also pick the right people in your team. And if you haven’t picked the right people, move on ’em. Because over time – it’s funny, now we can actually attract people that are like-minded, where beforehand we were just searching for them, almost pleading with people that we knew were really talented at what they did. And now you sort of build enough trust within the market and within the industry and sector that you’re in, that people actually want to join and be a part of that. And that’s actually quite a rewarding feeling within itself.

Ed (49:07):

I think they call that ‘culture as a competitive advantage’ and something that we deeply believe in at TDM.

Grant (49:13):

Oh, it is. It’s everything. And it’s funny, I think about it all the time because culture is not something that is set. It’s something that you’re influencing every day. And I often think: “God, if I lost that person or that person, how much would it change? How much of an impact would that have if I lost that Director on the board?” I know the culture that I want, but I can’t do it all on my own. Yes, I have probably the biggest impact on it along with my Chairman. At the same time, I need to have people where I’m not in the office right now, who’re there in the office, setting the tone, making sure that everything’s done properly, all the quality controls, all the checks, everything is in place, they’re taking pride in their work. Like you’ve got to instil that in part of the DNA and the DNA is everything in a business, and it’s just not a set and forget thing. It’s an everyday application, I guess you could call it

Ed (50:03):

Perfectly said, Grant. You were a huge inspiration to me in my early chapters of my sporting life and as a successfully transitioned athlete, a huge inspiration for the next chapter that I went through. So thank you so much for joining me on Scaling Up. It was a real treat.

Grant (50:19):

No, thanks for having me on here. It was a great chat.