It's prime time to stand up SMEs for independent success

Incubating SME’s sustainable growth and independence is essential for Primes committed to sovereign capability discusses Jacob Bonisch, Head of Downer Defence.

One of the biggest issues in Australia today is the human capital crisis. The gap between the work that needs to be done and the skilled labour required to do it is growing exponentially. I deeply believe that Australia’s Defence Primes have an inherent responsibility to be part of the solution through how we incubate and build capability and capacity in our Defence supply chains. This includes how we incubate and develop small and medium enterprises, veteran owned organisations and indigenous business.

The barriers that many of these smaller organisations face in trying to secure Defence contracts are real, and while Defence and organisations like ODIS and AIDN are putting great effort into unravelling these issues, the complexities are significant. There are none better placed than Primes to empower them to succeed, not as part of a tick-the-box compliance activity, but because it is the right thing to do to deliver the outcomes that Defence need us to achieve as an industry.

Downer Defence is on track to spend over $300 million with Defence sector SMEs and $50m with First Nations businesses across three different sectors of the Defence economy: Project Delivery, Estate Maintenance, and Professional Services. Some of these delivery partners were mature businesses with a strong depth of experience fulfilling contracts within Defence industry, but many required significant and varied levels of support to secure and deliver works in our unique environment. 

Success supporting SMEs is more than just awarding works to small businesses that will deliver for us.  It is a philosophy of incubating these businesses, so that once they’ve been nurtured through the challenges of being Defence Industry ready; gaining the skills, the processes, the policies, the security clearances and the contracts, they are viable, capable businesses that can independently deliver value to Australia’s sovereign capability. 

Downer Defence has over 900 SME and First Nations businesses that we partner with, and we’ve been investing in their growth, health and success via an incubation model we’ve been evolving for years. It hasn’t been a smooth journey and some lessons came harder than others, especially when it came to acknowledging many of our core processes were a barrier to SMEs. Once we started listening better, seeking feedback, and undertaking value stream mapping, we could identify, streamline, and automate our more problematic processes.

We also realised our incubation model needed a critical new step: a co-design phase, partnering with the SMEs to ensure the packages of work best fit their existing scale and capacity at a particular stage of their development. This is not always easily done, but it is an investment in setting them up for success. 

From consultants to construction companies, these businesses need our help to get a track record, take on more complex projects and successfully deliver them. The ultimate aim is to help them scale to the point where they can contract direct to Defence and grow their capability and capacity. Primes providing continuity of work is essential to this, enabling the SME to move from hired equipment to owned equipment, to move from day labour hire to direct employment, and ultimately have the confidence to take on apprentices or trainees. That is a true measure of success.  

We recently celebrated the first graduation of trainees from our Indigenous Ranger program that Downer Defence is running in partnership with Defence, TAFE, SME Ecosure and the local Darumbal People, the Traditional Custodians of Shoalwater Bay. This traineeship of young men from the Darumbal community in Rockhampton included a TAFE Certificate III in Conservation and Ecosystem Management, on the job training with Downer Defence’s land management team at Shoalwater Bay, and a broad array of success-enablement activities. 100% of this inaugural cohort successfully graduated and the next cohort, an all-female trainee group of Darumbal rangers has now commenced their program.    

These are programs that matter. These are the types of programs that Australia’s Defence Primes need to lean into.  These programs require money, time and resources that enterprises don’t traditionally build into their operating models, and they are programs that demand an intention to authentically develop deeper sovereign Defence capability that is synergistic with a diverse and inclusive Australian workforce.  

There is still much work to be done in our SME and First Nations engagement and growth programs. We are constantly learning and meeting new challenges, but we are clear on our intent: it’s an investment in regional Australian communities, an investment in partnering with registered training organisations (RTOs), an investment in ending multi-generational illiteracy and unemployment, and an investment in sustaining and growing jobs, apprenticeships, critical skills and trades.  

The nature of a great partnership with Defence is to be not only aligned with their priorities, but to have aligned values that build these capabilities and capacity. Ultimately, it is the intent with which we execute on these priorities that will make the difference to Australia and to Australians.  

Discover some of our SME’s stories here.