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Ross Greenwood
Smarter Writer

Ross Greenwood is the Nine Network's business and finance editor and hosts Money News on 2GB

Ross Greenwood
Smarter Writer

Ross Greenwood is the Nine Network's business and finance editor and hosts Money News on 2GB

The firm that made the Hills Hoist is reinventing itself.

It’s true to say there has been a certain gloom around manufacturing in Australia. Ford, then Holden, then Toyota have announced they will stop making cars here. Electrolux is closing its only Australian factory. But one of Australia’s most famous companies is showing how a manufacturer can change and survive. It’s a company called Hills.

Lance Hill was the inventor of the Hills Hoist. He sold his first clothesline in 1945, and Hills Hoists are still in backyards across the country. But Hills, like many other businesses, really understood that it had to change. There’s not a lot of repeat business in clotheslines!

Hills went back to its roots and asked: “What the hell are we? We designed the Hills Hoist, what was that about?” Well, it was about innovation and technology. And that’s what the business is now focused on.

In February, Hills announced that they had joined with the South Australian government in a $5 million, three-year partnership to create two innovation hubs in South Australia: The Lance Hill Design Centre and The Digital Research and Commercial-isation Centre (The D-Shop).

Hills has done all this under its Chief Executive Officer, Ted Pretty. Recently I spoke to him about the company’s transformation.

A hills hoist on a blue, green and white background

Ted Pretty: I think for us, Ross, Hills had become too diversified. We were involved in a lot of businesses – from plumbing to water tanks to healthcare devices – but we weren’t leading in any particular one. So we asked, where’s the growth? It’s electronics and the communications base.

We decided to sell those other businesses and focus on electronics and communications, in healthcare, in education, in security. Results are looking good, but the trick for us now is to innovate, on top of that, or we won’t survive in a global market.

Ross Greenwood: Now here’s the thing. How do you go to your staff and say, “Righto guys, I want five ideas from each of you and they all have to ultimately make us some dough”?

TP: The reality of it is that we have to partner. We can’t think that we can do all of this ourselves. In South Australia, I’ve gone to the state govern­ment and said, “Don’t give us a handout. Instead, co-contribute to us to build a new design centre and a digital centre in South Australia. I’ll go and speak to the universities and I will find the right people to engage with.” And let’s try to incubate some new businesses that sit alongside our existing one, in South Australia, which is going through a tough time. We have to get development not only into these industries, but with the universities and in the states that need it.

RG: One of the impressions you sometimes get listening to people is that we are bereft of ideas that can compete on a global basis. What have you discovered?

TP: There’s a lot of ingenuity left in Australia. The issue is getting the attention and funding, and getting it to market. Some say that part of the reason is a disincentive by our tax structures, which don’t reward people for innovation – the capital gains tax, the tax on share options and things like that. We need to make things easier and we have to reward success.

RG: Do you believe the future for Australia is not only in innovation, but also niche manufacturing?

TP: I do think we need to get away from the thought that we’re going to jump from traditional manufacturing of cars to traditional manufacturing of something else. What we need to do is focus on those things we have a natural advantage in, and where we can develop niche markets. Now a good example is healthcare technology. We’re very good in the area of patient care, emergency assistance, point of care, specific things in the healthcare area. We don’t have to compete with GE or Philips, the global companies. We can find the niches that we need and develop specific applications in those areas.

Verdict

Ted Pretty has shown there is a different way and there are answers out there, if people are prepared to go and find them. And that’s exactly what Hills Industries, one of Australia’s most famous companies, has done, in a state which a lot of people have written off unnecessarily.

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