2020 CEO Survey: Annette Kimmitt, MinterEllison

Heightened global trade tensions and COVID-19 have exposed the limitations of some supply chain models, says MinterEllison chief Annette Kimmitt.

What are the three enduring lessons or changes to flow from COVID-19?

The year 2020 has seen a fundamental shift in the relationship between employers and employees, with greater trust in remote and agile working arrangements and a much deeper emphasis on staff wellbeing, including increased focus on people’s mental health. This has inspired reciprocated trust and driven strong commitment from employers and employees to, together, staying the course across a very challenging year.

One of the striking features of the year has been the endeavour and agility of businesses and people. Throughout the year, they have been constantly forced to make innovative decisions on the run, pivot their business towards critical needs, adapt to lockdowns by shifting online, or they’ve had to quickly transform their work, education, health, communications and even social interactions to remote environments. This adaptability and accelerated digital uptake could be the necessary catalyst for new forms of sustainable and enduring innovation, productivity and growth.

We have been planning for what the future of work might look like around automation, machine learning and the possibilities of disrupting workforces. However, remote and agile working on the scale we have seen this year represents a paradigm shift. While there are some limitations, especially around in-person collaboration and social interactions, remote working has opened up our collective eyes to the future possibilities of agile and balanced working models. Some companies are shifting to wide-ranging remote working, while others are piloting hybrid models. These changes are permanent and will have considerable implications across workforces, real estate, business travel, public transport and even the future structure of our cities.

Heightened global trade tensions and COVID-19 have exposed the limitations of some existing supply chain models. In their place, we are seeing the first stages of a new trade era, where businesses and governments are exploring alternative markets, supply chain diversification and sovereign manufacturing capability investments to secure long-term medical, food and critical supplies. While these changes may impose challenges and initial higher costs, there are possible longer-term gains to be had from dependable supply, productivity enhancements, local job creation and potentially new opportunities in international markets.

How would you rate the shape of the Australian economy as we head into the new year?

While not trying to diminish the distress of many Australians in this recession, I think by comparative global standards Australia is in decent shape. The economy is starting to show some encouraging signs of a rebound – with higher consumer spending, job creation and strong spending commitments across government budgets. If the current film industry activity in Australia is any indication, I think that our COVID-safe reputation could be a spur for other industries. However, our economy is built around open international markets and our future growth across all industries will be dependent on the successful rollout of vaccines to facilitate safe open borders again. I am also mindful that there were some fundamental weaknesses in the Australian economy before this year – with GDP growth, wage growth and business investment all flat. I do worry that any premature withdrawal of government stimulus and safety nets in 2021 could exacerbate these challenges.

What three reforms are needed to sustainably grow the economy?

1 If we are to truly benefit from the road to recovery, we need to remove barriers impacting on people’s ability to work full-time. Removing the burden of childcare costs will eliminate one critical barrier for parents, especially women, in returning to full-time work. Numerous studies support the notion that this reform would increase productivity, discretionary spending, wealth, superannuation, tax revenues and ultimately the government’s bottom-line.

Australia needs a reliable and affordable energy system. While gas is now at the centre of the road to recovery, Australia needs pragmatism and certainty towards the inevitable transition to a lower carbon economy. A renewed climate policy push by the new US leadership and mounting pressure from the EU and our own region for action could see Australia become an international laggard and threaten our trade, investment and innovation reputations and arrangements. We need national legislation targeting net zero emissions by 2050 that will incentivise investment and R&D in alternative sustainable technologies, facilitate the reskilling of our workforces and create a sustainable legacy for future generations.

Our human capital is fundamental to our sustainable economic recovery and growth. The disruptions made to existing work models and the education sector provide an appropriate moment for reform that creates an ecosystem that facilitates not only training for jobs in demand now, but also build Australia’s innovation capacity and adapts to future technological and economic changes. Future students and workers will need to be well-rounded and agile and will require regular training and skills development throughout their careers to keep pace with the rapidly changing and competitive work environment.

What are the three best growth opportunities for your company in 2021?

2021 will see further pressures on companies to be across and respond to shifting regulation and policy. We anticipate that there will be some unwinding of the on-the-run COVID-19 related regulatory protections for the economy, businesses and people. There will be regulatory and policy responses to the royal commissions in ageing, disability, natural disasters and mental health. APRA, AUSTRAC, ASIC and the ACCC are likely to continue to be proactive with their agendas and investigations, and there is likely to be further regulatory scrutiny around foreign interference and foreign investment.

After the extreme economic disruption of 2020, there will be inevitable structural adjustments to key markets and industries. Distressed assets and perceived underperformance are likely to trigger a raft of M&A activity, with industry players and financial buyers seeking value and new growth prospects as economic conditions improve.

We anticipate further growth opportunities by sticking to our purpose, maintaining a focus on industry depth and providing commercial solutions adjacent to our core business. Healthcare, infrastructure and government will inevitably be bigger industries after this year and will continue to provide growth opportunities, while other industries will hopefully rebound as global economic conditions improve. Our consulting teams will be busy advising on ongoing challenges and expectations around corporate governance and accountability, as well as planning and implementing complex digital transformation programs as governments and business make further adjustments to keep up with advancements and shifting customer expectations.

What impact will digital transformation have on your company?

Over the last two years, we’ve centred our efforts on automation tools predominantly driven by AI, machine learning, workflow automation, document automation and robotic process automation. The value of this transformation has created tangible benefits to: our clients, by way of a quicker turnaround times, cost reduction and greater consistency; our staff, by empowering them to move up the value chain toward more complex and rewarding work; our sustainable environment, by removing process-heavy loads to machines; and our firm, by way of improved margins and increased competitive advantages.

How would you rate business, state and federal government performance this year?

In a year that has presented governments, business and community groups with unprecedented challenges, I would rate their performance highly. While questions remain as to our ongoing preparedness, they have all, by and large, heeded the lessons from past crises. They have taken a central co-ordinated and bipartisan approach, made critical decisions based on science and data, acted swiftly and decisively, and communicated clearly and regularly. Staff at all levels, especially the frontline workers and throughout the bureaucracy, have been remarkably responsive, dexterous and indefatigable in challenging and ever-changing circumstances. They should be proud of their efforts which will leave an indelible mark and create lasting impacts for generations to come.