“I have lived and breathed the construction industry for many, many years. But there have been a number of senior members of the family that have been wanting to get out for many, many years.
“The industry has changed so much to the point where if everyone is in, it is time to get out,’’ says Lorenz Grollo, who for the past 4½ years has run the Grollo Group.
“You don’t have that entrepreneurial drive, the can-do attitude any more. In the commercial sector, in all the major capital cities, the industry has changed. When you are paying unskilled labour $150,000 and they are young kids who have never seen a downturn. They think they are God’s gift to their job. The reality is they are getting paid double what they were 10 years ago and they are half as productive.’’
Lorenz Grollo’s father Rino, said to be worth more than $460 million, took control of Grollo Group 17 years ago following a division of the family empire with his brother Bruno (who owns construction giant Grocon).
It now has interests spread across the property investment, sport, education, tourism and community sectors, including Melbourne’s Rialto Tower and the Mount Buller ski resort, and owns Equiset, a privately owned Melbourne-based property development and construction company.
But the real passion of Lorenz Grollo — whether his father likes it or not — is a technology company called Equiem that sells software to corporate landlords allowing them to communicate directly with the occupants of their buildings. Its known as one of the pioneers of the growing “proptech’’ sector and focuses on selling services, rather than space.
Its clients include some of the nation’s biggest property owners including AMP Capital, Charter Hall and QIC.
“Luckily for me I have been looking at the technology industry, the digital space for 10 years and actively for the past seven to eight years. I started to see the world shifting. I looked at construction and thought to myself it is only going to get worse and I looked at the digital sector and thought it is a really exciting place to be,’’ he says.
Equiem has grown from three staff in the back corner of Grollo Group’s office to 220 people, has offices in Melbourne, Brisbane, Sydney and Perth, and raised tens of millions of dollars in two capital raisings backed by Aconex founders Leigh Jasper and Rob Phillpot and Salta Capital chief executive David Tarascio. Seventy per cent of its staff are women.
But through Equiem Grollo wants to give new life to the entrepreneurial spirit of his family. “It is because of my experience at Grollo Group and living and breathing Rialto for 15 years that I crafted Equiem. So, I see the two as aligned. Commercial real estate is going to change. I am playing in a market where there are so many dinosaurs. They default back to the old leasing agencies to give them the answer and they don’t have the answer,’’ he says.
“I have taken something the family has been doing for a very long time and reinterpreted it and crafted a business around it. When I sit down with my family and talk about it, they see it as something over there. But I see it as totally aligned.’’
Grollo was speaking at a forum with The Australian convened by accounting and wealth advisory firm Pitcher Partners, of which he is a client. It was also attended by Cliff Benns, chief executive of the Sustainable Food Corporation — which operates in the Organic Food Waste Recycling market — and Rebecca Scott, chief executive of the social enterprise known as STREAT.
Earlier this year, Pitcher Partners launched the International Institute of Entrepreneurship to give professional services firms and their clients the skills to take advantage of disruption and change across the economy.
The IIE is launching a range of courses, workshops and in-depth programs for middle market firms with the flagship being the industry-focused Master of Entrepreneurship and Innovation, designed in collaboration with the Australian Graduate School of Entrepreneurship at Swinburne University.
“Those CEOs that I work with say there is now no gaps in disruption. There are no breathing spots, it is continuous. The world is coming at you from so many different directions,’’ says Frank Wyatt, the IIE’s academic director.
For Grollo, moving into the digital space has not been easy.
“There are pitfalls every month, particularly when you have a young team. There are also copycats our there — we have had a number who have come from nowhere. And in a digital business there is no copyright anymore. You just have to stay ahead and move fast and you can’t afford to be distracted,’’ he says.
“There is a lot of talent here in Melbourne. There are a lot of young people that want to have a crack but don’t have a great understanding of the tools of business. This is where a lot of them fall over. They are learning as they go. But you want to be able to prop them up and support them.’’
Many, like his, are also family businesses.
And breaking the mould of his family legacy has been a challenge.
Rino Grollo once said in an interview that the successful transition of his business to the next generation had been achieved by “making them feel part of the family business and working together and remembering the traditions’’.
Now his son wants to break with them, albeit in a way which is respectful of what the Grollo family has built.
Asked how he has managed the evolution of Equiem within the family, he replies: ‘’It is very difficult because the commercial office environment is going to radically change. In terms of understanding where the world is going, I look at what my kids do — they are 10, 11 and 12. And I look at the young people in Equiem. And I look at my digital capability and my parents’ digital capability, and they are worlds apart,’’ he adds.
“My father lives and breathes every bit of paper he can get his hands on. I tell him things and he says, ‘Sure’, but it’s only when he reads them in the papers that he says to me, ‘Now I see what you were saying’.”
He says you need a culture in a family business that supports entrepreneurship, knowing that 80 per cent of ideas are going to fail.
“That is one of the biggest challenges we have,’’ he says.
“How do you support those people who don’t want to be converters any more, who want to go out and do something different?
‘“How do you enable that to happen?’’
Find out more about the International Institute of Entrepreneurship here
Article origionally featured on The Australian 25 May 2017 written by Damon Kitney