In 2016, Brisbane entrepreneur Kate Middleton earned the distinction of being the only female CEO of a major player in the Australian Insurance Adjusting and Engineering industry. It’s now her personal mission to blow the floodgates wide open and make the sector a much more attractive place to work for other enterprising women.
Last year, Middleton – already the founder and CEO of Career Oracle, an employment services start-up – took the reins of Censeo, an embattled structural engineering and building consultancy firm. Established in 2005, Censeo had persevered through multiple take-overs but in early 2016, it began to free fall when one of its sister companies went into liquidation, costing it many of its big accounts. Consequently, Censeo’s parent company – ASX-listed conglomerate Stream Group – began to weigh up whether the firm should be salvaged, sold or shutdown.
Middleton, a veteran of the insurance and investment realms at age 35, had a good rapport with Stream Group at the executive level, having recently consulted to one its entities, lending it her management expertise. Consequently, she was engaged to help decide Censeo’s fate in consultation with its non-executive board, global venture capital firm Neiser Capital and insurance market leaders. Instead of signing Censeo’s death warrant, Middleton secured investor backing and instigated a management buy-out in June 2016, becoming its CEO and major shareholder.
Since then, Censeo has won back key accounts, expanding its pool of clients from two to nine. In addition, the company has won a contract for a large government account until 2018 and its earnings before interest and tax (EBIT) have grown at least 27%, month on month. For her efforts, Middleton was named Emerging Entrepreneur of the Year at the 2016 Women’s Agenda Leadership Awards.
Middleton spoke to Dynamic Business about inheriting and restoring Censeo; juggling commitments to two companies; shaking up the status quo of an industry and competing motivations for launching a start-up.
What is the core service provided by Censeo?
Censeo completes high-volume, fast-turn around residential, commercial and industrial building inspections and provides impartial engineering/builders reports for the Insurance and Government sectors. In addition to diagnosing what has caused damage to structures, we’re in the business of signing off on the various stages of a build to make sure the project meets the Australian Building Standards. We have in-house engineers and sub-contractors working remotely all around Australia and service major clients including IAG and the NSW Government.
How – and why – did you salvage the company?
On a personal level, I was compelled to save jobs. I also knew something great could be salvaged – the company’s value proposition was unique and it had a solid 10-year record within the industry. Prior to the buy-out, I was given a mandate by Stream Group to clean up Censeo’s client relationships, team morale, brand reputation and operational spend to make it attractive to buyers… I just didn’t think I’d be the buyer! The role was very demanding and required me to balance some exceptionally complex and not-easy-to-solve financial, compliance, people and brand issues.
Over a 3 to 4-month period, Censeo experienced a remarkable turn-around. I managed to decrease operational spend by 40% with no engineering job cuts; move the business onto a cloud-based job management platform; and improve cash flow functions by setting recovery processes in place. This left the investor, Neiser Capital, and I confident that, under my continued guidance, Censeo could grow and grow. It wasn’t long before the idea of a management buy-out was floated. The rest, as they say, is history.
It was a huge risk joining a company that was in turmoil but it’s paying off. Negotiating with clients, creditors, auditors, debtors has made me a better leader and I now have the benefit of foresight that many executives wouldn’t gain until much later in their career.
What hurdles come with reprivatising an established firm?
It’s certainly not for the faint of heart. Entering a company that’s in freefall takes bravery. There were cultural issues both internally and external to the company. The industry is very small and personalities and legacy branding sometimes get in the way of business. It is a strategic manoeuvre of mine to focus on building interpersonal relationships to build the company.
Turning things around with staff, clients and suppliers required tapping into the huge reserve of courage within the company, having some very open conversation and, most importantly, renewed team unity. We had an amazing off-site strategy day in August where we defined our vision and ‘the way we roll’. I am so proud of the way everyone has banded together. Now that we are unified, it’s easier to overcome external challenges.
How do you find the time to run Censeo and Career Oracle?
It’s no small task balancing both. I’m very proud of the methodology, products and services I created at Career Oracle. They’ve genuinely helped people from all walks of life to advance in their career… but I knew there would come a day when, having built a team, I’d step away to take on an executive role or pursue additional business interests.
Removing myself from the day to day operation of Career Oracle – and viewing it more as an investment, rather than my brainchild– was difficult at first, but it has allowed me to focus on Censeo while being pragmatic about high-level decisions concerning Career Oracle.
If you want to be a successful serial entrepreneur, it’s important to view your businesses as a portfolio of investments. I am big on bringing emotion and heart to business but equally, as an investor/entrepreneur, sometimes you have to de-personalise and think about what’s best for the brand, the customers, and at what point you take some money off the table (one of my favorite points from ‘The Intelligent Entrepreneur’ by Bill Murphy Jr).
Can you share some of your plans for the year ahead?
With a view to doubling Censeo’s revenue within 18 months, we’re focusing on building trust and brand loyalty among existing clients, accelerating new accounts and expanding our team of engineers across Australia. We also have world class engineering technology being trialled in Queensland which will provide genuine point of difference and capture a whole new push for the insurance and real estate industry. Our end-game is bedding down the model in Australia – we hope to have 20% market share by 2019 – and entering new markets. At a higher level, I want to demonstrate to the sectors we operate in (Finance & Heavy Industry) that a values-led business can succeed.
Does your industry require greater gender balance?
If you had asked me a few months ago I would have rattled of indisputable global statistics relating to the financial and social benefits of having not only diverse workforces but a diverse executive team. However, since completing my Strategic Decision Making course at Harvard in October, I’ve realised that the focus shouldn’t just be on improving the gender mix, but seeking out emotional competence in executives.
Over 40 years Harvard Business Review (HBR) has tracked the methods and behaviors of the most successful CEOs and businesses in the world. They have quantified that financial success comes down to 8.9% IQ, 8.9% technical skill, and the remaining 82.2% is attributed to emotional intelligence – the ability to build relationships, show kindness and empathy, and recognise and set aside negative emotional tendencies to manage teams and suppliers more effectively.
As a whole, if emotional intelligence was viewed as favorably in my sector as strong technical skills, invariably workplaces would become far more attractive to women, and productivity and profits would soar – you can’t argue with 40+ years of Harvard data! This is something I’m personally trying to inject into the insurance, engineering and construction sectors. I want to disrupt from the inside out and show my peers that the status quo of rude emails and macho vitriol are more than just unacceptable, they are destructive in terms of long term business success.
What advice do you have for budding entrepreneurs?
1. Start with the end in mind: Is your goal to create a sustainable level of income and employment for yourself (in other words, you’re content running a small operation) or do you aspire to launch an amazing online proposition, fulfil plans for world domination and become a leader in your field? Understanding your lifestyle and economic drivers will help you shape how much – and how aggressively – you invest in marketing, PR, automation, labour and so on. Being mindful of your desired ‘end game’ helps keep you accountable when making commercial decisions because you can ask yourself: ‘Is this actually important? Does this serve my purpose?’
2. Build your systems and processes for scale: Even if you’re happy keeping things small initially, there may come a time when you want to sell or expand your business. Having excellent financial, client and marketing data and a CRM already set up (even if you don’t fully leverage the platform) will mean that if you choose to sell, partner or take on investment, you’ll be rewarded for your hard work, long nights and intellectual investment. Having the numbers and data available is a Godsend. I guess this point ties into point number one a little. Dare to dream big and dare to expect a return on your time and money. After all this is your business, not your hobby!