Why this CEO is bracing for Alfred’s aftermath

Cleanaway will have its work cut out in coming days and after being caught out in the last floods, this boss is not taking any chances.

Industrial waste major Cleanaway is bracing for a surge of activity after flood waters recede. Picture: Mal Dodt

Cleanaway chief executive Mark Schubert apologises as he is about to finish up a meeting with The Australian to jump on a crisis preparation call.

Sitting in his office on a calm Melbourne morning, Schubert is nearly 2000km away from Cyclone Alfred, but it’s very real for his business.

He’s got dozens of sites across southeast Queensland as well as thousands of employees, and he wants to know every one of them is safe. Cleanaway is in the waste business and Schubert is expecting a mammoth clean-up effort coming his way after the cyclone hits with damage from flooding likely to cause the most mess across Brisbane, the Gold Coast and into NSW.

Cleanaway CEO Mark Schubert.

“The No.1 focus is people,” he says. “We’ve taken the lessons of the 2022 floods, where we lost our whole South Brisbane fleet and 40-odd trucks.”

At the time, Cleanaway staff moved the distinctive blue trucks to what they thought was out of danger, somewhere never flooded before. “Now they have been taken higher ground,” he says.

Lismore is another place where Cleanaway was hit hard last time, even after more than a dozen of his trucks were shifted to the local airport to be safe.

“We’ve got emergency teams running in preparation to make sure our people are ready, and our sites are ready,” Schubert says. “We want to make sure they’ve got all the support they need.

“I think we are well prepared, and we know where the real watch points are.”

Brisbane City Council is one of Cleanaway’s big customers. The industrial giant carts and processes thousands of tonnes of post-collection waste from a depot once it has been picked up from the kerb.

There are other major customers. Supermarket operator Coles, with some of their stores at high risk of flooding. There are a myriad of building and construction sites expected to be hit. There are major hospitals with specialised medical waste. Then, thousands of Cleanaway’s small businesses customers face a big clean-up job in coming days.

“We are dusting off all the contingency plans, which involve 24/7 operations of the transfer stations, because there’s a lot of flood-related waste that will need to get sorted,” Schubert says. “We’ll open up the landfills 24/7. We’ll probably even look to open other landfills that are closed, like we did in the previous floods.”

Big test

Floods were the first major test for Schubert when he took charge in late 2021. Just a few months into the job, as he was developing a program to step up Cleanaway’s potential, heavy rains swept Queensland and northern NSW.

A landfill site in Ipswich was devastated as flooding collapsed a giant wall. This ultimately cost about $40m and forced the closure of the site, which remains in remediation.

Then there were the lost trucks that had to be written off. The biggest damage was in the aftermath, trying to continue business as usual for months with a handful of makeshift trucks.

Schubert joined the $6bn Cleanaway from Origin Energy, where he headed up the gas extraction operations. Before then, he was driving change programs inside Shell, including running the then owned oil refinery in Geelong – one of Victoria’s biggest industrial sites.

He’s two years into an ambitious Blueprint 2030 program designed to change the way investors think about the business of waste.

It’s about turning an old heavy industrial into a high-performance machine using digitisation and smarter ways of working. The program is about growing Cleanaway, that traditionally relies on the pace of economic activity to drive performance.

Gains from waste

Schubert describes Cleanaway as sitting at the “end point” of consumption. Recent half-year results show Schubert is bang-on at the midpoint of the program to hit about $450m annual earnings by financial 2026.

Measures so far such as fleet modernisation and smarter routing are already showing big fuel savings – fuel is the second-biggest cost following wages. But the biggest changes are coming from his big management bet that’s gone out of vogue in recent years – decentralisation.

It’s about empowering the front line, with the theory being financial returns will follow.

Given all of Cleanaway’s activity takes place at 330 depots across the country, including on remote Rio Tinto mining sites, this is where the real financial levers of the business lie, Schubert says.

To highlight how distributed it is, of about 8000 employees, the Melbourne head office barely takes out two floors of a low-rise building.

Schubert says it was clear on taking charge that a serious modernisation of Cleanaway was needed. This work fell into two pillars – the fleet transformation, and what he says is the operation excellence of the branches.

He calls it the branch-led operation model, dubbed BOM internally. This gives the local branch managers responsibility for their own earnings destiny, as well as driving a performance culture.

The outer fringe of Tropical Cyclone Alfred started to reach Coolangatta earlier Thursday. Picture: AFP

Cleanaway generates income from waste coming in or going out of a branch. That puts these branches in the best position to find better ways way of doing this. This ranges from automation of efficient route maps, rostering and ideal times for processing – even buying spot fuel on discounting cycles makes a difference. It also is about reducing waste. Branch managers are equipped with the right measurement tools and organisational tools to make the site work to its best.

The model is a nod to the extreme decentralisation of successful New Zealand logistics major Mainfreight that pushes all decision-making on to its far-flung global operations. Critics of the model say those on the ground don’t have a big enough picture of how the business is performing to make the best decisions, or make the call on the best allocation of investment. Schubert counters that the big decisions remain his call and his top managers have visibility all the way through to the frontline performance. However, he says the proof is in margin expansion so far.

“We were tracking around 10 per cent margins,” he says. “We’ve just passed 12 per cent now, and we can see that going to the mid-teens with this work. It’s all sustainable. It’s not pulling short-term handles to get there. And that’s really important as you set the business up for the future”.

Fleet modernisation is a big part. A new truck can use as much as 30 per cent less in fuel by volume, and that represents a major cost saving as it adds up.

This was the silver lining that came from the crisis during the last Brisbane floods.

“Now the new trucks have come, we’re getting all the great efficiency benefits of having a brand-new fleet,” Schubert says.

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Originally published as Why this CEO is bracing for Alfred’s aftermath