Former Minister for Economic Development and Trade Western Australia
In the 1980’s Mr. Julian Grill was the world’s highest ranking politician to implement a program of Enterprise Facilitation. At that time Mr. Grill was the Minister of Economic Development and Trade for the federal government in Australia. The following interview took place in the summer of 1996 while Mr. Grill was vacationing with his wife in the United States. Michael Utter, CEO of the Sirolli Institute, caught up with Mr. Grill in Custer, South Dakota. The following is a transcript of that recorded interview. Mr. Grill chronicles his experience with Enterprise Facilitation, beginning in Esperance, Australia, and spreading throughout the nation.
MU: So you had mentioned some 320 jobs that had been created...
Mr. Grill: Some 320 new businesses. In the first year it was 29 new businesses that were created. I can’t tell you how many jobs that was but I know that in the first year 29 new businesses and in the first 10 years, 320 new businesses were commenced and that translates into several thousand new jobs.
MU: And what was the cost?
Mr. Grill: Well the initial cost was quite minimal indeed. One of the beauties about this particular theory is that it engenders an enthusiasm not only in the individual who sets up the business but it engenders enthusiasm from the community itself. And there’s a huge amount of community participation and a lot of the cost is born by the community. A lot of volunteer boards and ultimately local government and state governments have decided to fund the project. It’s a low budget theory and to date it has worked on that basis.
MU: Esperance was the first place in Australia Enterprise Facilitation was used as a model for economic development. Was that an isolated example, or did the model transfer with equal success in other communities in Australia?
Mr. Grill: Well, the Esperance [ed. a rural agricultural and fishing town of 10,000 in western Australia] experience was outstanding and people tended not to believe it and thought that it was probably isolated to that area and those personalities. However, we did transfer it to another community, a similar sort of city, only bigger, the city of Geraldon, another port. And it worked there just as well and then the federal government became interested. They sent across two auditors from the federal capital, that’s in Canberra. And those two auditors audited the two programs, both in Esperance and in Geraldon and they verified the results. In fact, the results that they audited were better than the claimed results by Ernesto Sirolli.
MU: And how many communities has this been operating in Western Australia now?
Mr. Grill: Well its been developed by both liberal governments and by conservative governments since then. The government in that one third of Australia at the present time is a conservative government. They’ve continued on with the program. It operates in 36 cities and its been highly successful.
MU: Could you talk a moment about what you think is the importance of Enterprise Facilitation as a social technology?
Mr. Grill: It’s important because it’s a new theory. Well, it was new in the 1980’s in Western Australia. But it’s now new to America. It focuses on individuals. It’s low cost as I’ve already mentioned, but it has a whole degree of community participation. It’s a partnership, really, between the bureaucracy at a state level and individuals and community at a more local level. So it draws in both levels of participation and at the micro level, there’s a situation where there’s a one-to-one situation where you have a generalist in terms of employment facilitation or creation working with a person that has an idea or a dream. It draws upon that individuals motivation, that individuals dream and it turns that dream into reality. It’s the antithesis of bureaucracy. So it deals with individuals, with their deepest and most intimate thoughts and aspirations and helps them to turn those aspirations into reality.
MU: We live in an era of shrinking government resources, the downsizing of government and budgets. Do you see some application of Enterprise Facilitation in this situation?
Mr. Grill: I do. Don’t get me wrong about what I said before. I also had under my jurisdiction a small business development corporation who considered employment facilitation to be their own special job. And I had a department of industrial development, so had a finger in that particular pie. And I had a department of regional development which was doing a five-year plan revolving around employment generation. But the theory that Ernesto brought forward filled the gap. It bridged those agencies and individuals and it allowed a generalist to work on a one-to-one basis with the individual or the partnership or the company. And then it allowed that generalist to call upon the specialist services of our small business development corporation or our department of regional development or our department of industrial development. We’ve gone through that process in Australia too, where we’ve had to downsize those departments. And the theory that Ernesto put forward with Enterprise Facilitation and these enterprise centers that were set up as a result, which were based on the community, have now filled a big gap, an important gap. So they were not only a bridging agency they also filled a gap as we downsized some of those other bigger agencies.
MU: Would you say in a very cost effective way?
Mr. Grill: Extremely cost effective, extremely cost effective. I wouldn’t like to say we’ve done this on the cheap. It’s not a cheap program, but the cost of it is minimal. Initially we created the first 29 businesses really just for Ernesto’s wages and additional expenses and a few thousand dollars that we gave to some of the beneficiaries. But by and large it didn’t need a lot of loan money, it didn’t need a lot of additional capital to create these jobs. And that’s been the experience since then although we’ve insured that they’ve had access to money from banks. They have banks and government guarantees and things of that nature but nothing of any great consequence. It’s been a very, very cost effective program. [ed. emph.]
MU: You had to take some risks in order to do this. In order for this model to take hold here in America we are in the position of needing to go around to communities, state governments and federal officials and we have to ask them to take a risk. As an elected official from Australia what could you tell us about how you viewed the risk going in and whether that risk was worth it. And whether you have any recommendation as to whether politicians or local elected officials should take that kind of risk.
Mr. Grill: Well I really took a risk on the personality of Dr. Sirolli, and I gave him very much a free hand to begin with. The other members that were on my staff, and I had a very big staff at that time, were really much more skeptical than I was about his chances of success. But with a low budget he was able to engender success in the beginning at Esperance and as I said, he created about 29 businesses in that first year. The other thing about it was this, that we didn’t have a lot to lose in Esperance. It was a town where we were closing down the major industry and where the downside wasn’t great. So the risks weren’t tremendous to begin with. I might say to you that Esperance was a deeply conservative community. It was a farming community. It was to some extent as I’ve mentioned to you, a frontier community. That it was deeply conservative.
Now, I come from the other side of politics and I won that seat by the slimmest of margins at the first effort. It was a new seat and I needed to win it. Now as a result of, or partly as a result of the program that was put in place and its success I received, in this particular town in my electorate, overwhelming support at the next election. The vote actually doubled. My personal vote in that town of 10,000 people doubled. Now when other politicians and other members of the bureaucracy saw that success a lot of their concern or a lot of their cynicism about the project dissipated. That’s why the federal government came in.
I had to convince my colleagues in cabinet that they should go on to fund other projects. Initially I found the funding out of my own budgets from my own departments, for the first two projects. But as we expanded into five projects and then when federal government funding came in, they all needed to be convinced that there was a real prospect that this project would be successful. Not just in Esperance, not just in Geraldon but much more widely than that. And it has been successful. It’s been picked up right throughout that western third of Australia and now through the other two thirds of Australia.
MU: Would you discuss with me the federal auditing of Enterprise Facilitation in Western Australia and what was learned from that audit?
Mr. Grill: Well, federal government in Australia is run out of Canberra. Canberra is three thousand miles from this project. Canberra was interested in the project but they were still skeptical about it. And before they were prepared to put funds into it they wanted to audit it. So they brought in two auditors and those auditors audited the Esperance project and the Geraldon project, the first two initial projects, for some months. At the end of that period of time they said look, all of the claims that have been made for those two projects are great. In fact, we believe that the results are better than the claims that have been made to date.
MU: Can you address the fact that the program pays for itself through the return of tax revenue from the new businesses and jobs.
Mr. Grill: Yes, I can address that. The minimal up front cost and the picking up of that cost by government was repaid handsomely by the success of the projects. The taxation revenue, for instance, that was generated, more than covered the cost. The way in which these depressed communities were able to bloom as a result of these projects more than cover the cost. There was a knock-on [ed. domino] effect. For every job directly created by this program there were three or four other jobs created within the community. So it was a huge benefit and at the end of the day there was a plus, a bottom line plus in the treasury in respect to moneys invested.
MU: It seems to me the job of government is to foster a happy citizenry. Citizens are, in a sense, human capital. They are the real value of a nation. Address if you would how Enterprise Facilitation recognizes the value of each individual and his or her unique contribution to the fabric of society.
Mr. Grill: As you know, a lot of people are terrified by government agencies. A lot of people are skeptical about government bureaucracy. They believe that government bureaucracy is just there to create bigger empires for themselves. Now this particular theory [ed. of Enterprise Facilitation] is a grassroots theory that operates with individuals on an individual basis at a grassroots level. It involves the community. It’s something that people feel very happy with, very comfortable with. It’s done on an almost casual basis but it’s one-to-one, there’s no government red tape. And because there’s no government red tape, that fear and that skepticism that people have of government agencies and government bureaucracies diminishes dramatically. And there’s a friendliness and people need that friendliness so that dreams can be drawn out of them. Their aspirations and their motivations can be drawn out of them. If you do this in a highly bureaucratic environment they don’t have the same reaction. They don’t have the same enthusiasm and they don’t have the same passion about it. And this largely is about passion and harnessing passion and harnessing motivation. So to use a very much sort of shop worn term, it’s a user friendly sort of a theory which seems to work pretty well.
MU: Is it an important service of governments to deliver jobs? Is there something about this service delivery technique that is valuable to governments intrinsically, in the nature of it’s delivery?
Mr. Grill: I think it is. In Australia up until that point of time, employment creation had really revolved around the unemployed. Now this theory is different is this respect: it really revolved around people who wanted to stand on their own two feet and who had a theory and had a passion and wanted to make a go of it. And people we realized perhaps shouldn’t be in private enterprise, were told initially, look - perhaps you shouldn’t be in this. And that’s why this particular project has been as successful as it has. Not only has it created a whole range of new businesses, but the attrition rate has been much, much lower than jobs created by the normal bureaucracy or the normal bureaucratic process.
What we found in Australia and I think this is general right throughout the world, is that new businesses fail at the rate of about 80 percent over five years. So the attrition rate normally is 80 percent. The attrition rate which has been audited with this particular program is only 20 percent. They are matchable figures. The attrition rate I put down to the methods used and the way in which peoples passions and motivations and dreams are drawn out of them. And that’s what we are harnessing. It’s built around people who have a dream, who have passion, not around dispirited people that are unemployed. Now, those two groups of people can be the same but you really need to focus on the people that want to stand on their own two feet, who want to make a success and who have a dream that they want to turn into reality.
MU: And if they can stand on their own two feet then the government doesn’t have to support them.
Mr. Grill: That’s right. But those people who are not ready are told right at the beginning this is not for you. And a lot of them have accepted that advice. Some of them haven’t. Some of them go on and have made successes. But I think that a large part of the success has been the screening out of the dispirited right at the beginning, until such time at least as they do have the spirit; they can stand up on their own two feet; they really want to; they have the motivation to make a success out of it.
MU: How do you see the involvement of a steering committee or board of governors to the success?
Mr. Grill: Well, their involvement, I think, is absolutely critical. This is a community project and these people are not paid so they’ve got to be drawn from the community and they’ve got to have a fair amount of motivation themselves to go into it. Let me just give you an example. In Esperance where we got the first project off the ground, the initial chairman of the board is still the chairman. This is ten years later. They are having an anniversary and they’ve invited both Ernesto and myself to come back for the anniversary. Unfortunately, I’m here and the anniversary is in Australia and Ernesto’s too busy so we can’t get back for it. We’d very much like to be there. But that very first chairman or that very first board is still in place.
That’s the sort of fulfillment that that person and the rest of the board get out of the project. They get a huge kick out of seeing a new business get off the ground. And people who haven’t been in business before, in most instances, make a success in a new business and go on to make some money. So there is a lot of personal fulfillment involved in the process. But the general rule is people who have made a success, I’m talking about the board now, people who have made a success in their own lives, pick people who have been successful in business and pick people who have got something to give to other people. And they will be repaid handsomely in turn as these new businesses get off the ground and are in turn successful.
MU: Could you speak about your view of the facilitator himself. The person hired in the community to practice this technique with the support of the community. Anything you’d like to tell us about the personalities of these people, or their background or training.
Mr. Grill: As I said before, this needs to be a partnership between government and the community. There is a role for the bureaucracy. But the facilitator needs to be, firstly, a person who’s been successful in their own right, a person who is experienced, a person who is empathetic, a person who knows the local community and a person who can motivate other people. That’s the sort of person you pick. And we’ve found that if you pick those sorts of people, you’re bound to have success.
MU: Too often creative people are being underutilized. People with ideas who do not know how to implement them. They do not understand how to tap into the government programs set up to foster new economic development. So they end up doing jobs well beneath their abilities and potential. How does Enterprise Facilitation help these kinds of people?
Mr. Grill: Right. OK then. What we’ve found is that in our communities we have a whole range of people that do have aspirations, that do have dreams and do have passions but have never been able to be placed in a situation where they can capitalize on that. And largely, this theory allows that capitalization to take place. It draws those people out. It cuts through the bureaucratic red tape and it places them in a situation where they don’t have any excuses for not proceeding to bring those dreams to fruition. So that latent talent in our community is being tapped by this theory, by this particular project or by this series of projects.
MU: Why do you think it is that those people were unable to get it together before? And what is it about Enterprise Facilitation that helps them to bridge that gap from where they were to their new understanding that allows them to move forward?
Mr. Grill: A lot of them simply did not have the confidence. A lot of them simply didn’t understand the ways in which you go about setting up new businesses. They didn’t have the ability to deal with banks, they didn’t have the ability to go out and obtain the necessary licenses. They didn’t have the ability initially, or confidence, to deal with bureaucracy and the facilitators are mainly there to do that; to engender that confidence, to show them that they can deal with the bank, that they can deal with the bureaucracy. That obtaining the necessary licenses and approvals is something that they can do.
MU: Does it also give them a feeling of confidence having the support of the community board?
Mr. Grill: Well of course the community board vets [ed. handles] every project that comes forward. But having vetted it, their role isn’t finished. They then go on to give support and in that sense it is important to have that community support. By and large we’ve set these projects up in reasonably small communities. Sometimes small cities. And people know each other and the boards have been highly important in finding the right channels and the right avenues that people can follow to make sure that their businesses are successful.
MU: Discuss in more detail the chain reaction effect in community¾people who say he did it; maybe I can do it¾how success seems to spread so effectively on the local level.
Mr. Grill: Well, there’s lots and lots of success stories and people that were not seen as winners initially have emerged as such and it’s rather infectious. These people have engendered a new enthusiasm in the community. That’s why these projects have been so long lasting. That’s why we’ve been invited back to the anniversary. They’ve been ongoing and they just keep on creating new jobs, there’s a sort of ongoing ripple effect. And they are rather infectious, yes. Last year for instance, thousands of inquiries came into the facilitator in Esperance, he couldn’t deal with them all, of course. But, people from a long, long way away, bring in, write in, come to the community, ask his advice. It’s really a highly contagious process.
MU: And they’ve heard about it mostly through word of mouth.
Mr. Grill: Mostly by word of mouth. Yes. There is no advertising program. They see that other people have been successful, they hear about it and they ring up or they write in or they come in.
MU: And it multiplies in the community.
MU: We also are going to be addressing new facilitators, why don’t you address to them what they have to look forward to in terms of watching somebody flower, in terms of their new career choice as a facilitator.
Mr. Grill: Well I know quite a few of these facilitators, I don’t know them all of course, but I know quite a few of them. Most of them were in business in their own right before, in fact nearly all of them. But they get a greater kick out of this than they get out of setting up and running their own businesses. So there’s a great level of fulfillment at that level as well. The individual stories, they’re wonderful. I think you’re going to touch on some of those later on. But the facilitator is like a mother hen. He or she can see these new projects sort of hatch and come to fruition and then go on and prosper. So it’s wonderfully fulfilling.
I might say also, it’s a way of business men that have been successful in their own right to make a contribution towards the community. A lot of business people want to do that. They’ve made some money, they’ve built a business, they’ve educated their children. They’ve done a lot of things for themselves and then they want to make a contribution towards the community. And they see this as an avenue to make that contribution in a way where they have some expertise and knowledge and where they can really, really be effective.
MU: When this technique began to take hold in Western Australia, was there some sense of competition from agencies that were doing economic development?
Mr. Grill: Yes there was. I think we’ve got to be honest about this. As I said, there were a number of other agencies that came under my jurisdiction including a small business development corporation. And they initially came to me and said, look, that’s our job. We should be doing that. And I had to mollify their fears and concerns. So I said, well let’s have a look and see how it works. If it impinges upon your area of knowledge or jurisdiction, we’ll assist that in due course.
But what we found was this¾that this was complementary to their jurisdiction. It added a new dimension. It allowed small business development corporation to have a whole new feed stock. Ernesto’s theory operated at the grassroots, at the community level at a generalist level. Whereas the small business development corporation or the department of industrial development, or the department of regional development operated on another level, on another plane; provided both maxi services and specific services, special services. So they were, at the end of the day, complimentary to each other and the initial problems about questions of jurisdiction dissipated.
MU: Would you talk a little bit about Ernesto, the individual, his spontaneity, his humor, his ability to affect others and stimulate thinking and belief in a new model.
Mr. Grill: Well Ernesto is a unique individual. He’s got a unique background and no doubt you’ll go into that later on and of course he’s a creation of that background. He’s an Italian, worked extensively in South Africa and in Zimbabwe and then came to Australia and he has a very varied background. He’s a man of passion and he’s a man of great belief in other people and I could almost say that he’s unique but I’m not going to say that because we’ve been able to create another whole range of other Ernesto’s who’ve been able to motivate just as well and just as effectively. Perhaps they’re not everything that Ernesto is but they can do the job and they’ve done it extremely well.
MU: Share individual stories.
Mr. Grill: One of the interesting aspects about this that there were a whole range of people in our community that had no idea of the facilities and resources that were available at a state or federal level and therefore had never hooked into them. And this particular project allows linkages to be made between the enthusiasm and knowledge at a local level and those resources at a state and federal level. And its that linkage, that hooking in that’s been so important to the success of these projects.
Just one more thing too. These projects are now funded at three levels. They are funded at a commonwealth level, they’re funded at a state level and at a local level. And the local communities, or councils as we call them, make a contribution by providing the office, providing the telephone, the fax services and small amounts of cash. But by and large, at a local level, contributions are being made in kind.
MU: This model seems to work in all sorts of different environments. I mean it worked among the Aborigines as well as it worked among Caucasian born, etc. It worked with individuals with different levels of education and economic backgrounds. Could you comment on the universal applicability of the theory?
Mr. Grill: It was very pleasing that indigenous Australians were joining this particular project or these projects. They had been or they felt they had been locked out by the system. But because of the sort of casual nature, the informality of this particular system, and it doesn’t look like a bureaucracy, you see, and they are fearful of bureaucracies. But because this is casual and low key and grassroots, they’ve been happy to come through the door. And they’ve been able to turn a lot of their indigenous art and abilities into new businesses. Its been highly successful. And the projects have also captured a whole range of people right across the spectrum. But I suppose the most fulfilling has been that the indigenous Australians have come in and have been successful when people thought they would never be successful.
The pleasing thing about this first project in Esperance was that it was engendered around the local activities. This was a fishing and farming community and the first success was in respect to a friend of mine actually, who had been employed in a cannery. Right up until that particular time he had a vocation as a canner but he also had a hobby of actually smoking fish. And he was successful as an employee, but when the cannery closed down he didn’t have a job. And he came to see Ernesto and we set up this smoking of tuna enterprise which was highly successful.
Another farmer, for instance, had been allocated some very bad land by the government. You’d call it bad land here. It had to revert, unfortunately, from wheat growing and crop growing to ordinary bush. And he thought he’d like to do something with that. He came in and Ernesto turned that into a wonderful new business which was built around the wonderful wildflowers that were grown on this bad land--no good for crops but good for wildflowers. So he had this whole new business, export business into Japan and other countries.
And a feature about this whole thing is that many of the new businesses that were begun were export businesses. Australia doesn’t have a big market. We’re a large country with a small population so the new businesses, like most of the big businesses in Australia, I might add, really have to focus off shore and a lot of these new businesses that couldn’t find a market in Australia, found a market off shore. And that was part of the process. We helped them to get the export licenses, to find the markets off shore. So that was a further hooking into the resources of the big agencies, the big government agencies.
MU: Enterprise Facilitation has fairly simple criteria for being qualified as a prospect for help: a good idea and passion. Many existing government programs, micro loans for instance, require much more in terms of physical assets, feasibility studies, and various location or ethnic criteria. Many find that they can’t get past this when they decide they want to start their own enterprise. But with this model, these people find that the facilitator puts them in touch with a network of people who all work together to help them with their idea.
Mr. Grill: Yes, I suppose you could say that these people were now supported at three levels. They were supported initially by their facilitator, then they were supported by the board and on that board you had a whole range of expertise. You had as a result of that expertise an experience, a number of networks that they could hook in to, but then they could also hook into the resources of the bigger agencies. So when they needed to find a market off shore we went to the department of trade. The department of trade was then able to use their expertise to find the new markets overseas. The department of Industrial Development, they had the expertise to find manufactures that could manufacture some of the components in the new machines and new gadgets that were being promoted. We got a whole range of new inventions off the ground, so its been a wonderful process and its been a great big team effort - the community, the facilitator, government agencies and government all working together to help one individual.
MU: And that in a sense empowers an individual at a very local and sensitive level.
Mr. Grill: Well it empowers individuals that are fearful of bureaucracy and short on confidence. It empowers them in a way which gives them a wonderful confidence and allows that passion, that spark within them to blossom.
MU: The network of experts extends internationally. There is a value in linking international facilitators.
Mr. Grill: Well, there’s a lot of validity in that particular thought. In fact those sort of networks have already been created. In Western Australia, to begin with, there are 36 facilitators. In other parts of Australia there’s a growing number of facilitators. They do network. They get together once or twice a year. They certainly swap stories but they also swap expertise. So there’s a growing range of expertise. These programs have also got off the ground in New Zealand so you can hook into the expertise that New Zealanders have brought to it as well. And shortly, hopefully, those networks will extend to Bozeman, Montana and South Dakota and the United States.
MU: Talk about the importance of this network of assistance.
Mr. Grill: Well there is a lot of validity in the theory that networks are important in this region. The networks are important for this reason: A lot of the people that come to these projects lack confidence. They have the ideas, in many cases they have the expertise but they lack the confidence, they lack the contacts and they lack some of the expertise in terms of, for instance, marketing. Now what this theory does it allows linkages between a board at a local level, between a facilitator who operates on a one-to-one basis with the new project person, the state government agencies and the federal government agencies.
And in many cases you need to create a new market off shore, for instance, so the Department Of Trade comes in, both at a state level and at a federal level because they both have departments of trade, for instance. Or the Department of Industrial Development can come in and introduce manufacturers. So, whilst the local people have networks and expertise on a local level, we can tap into that. We can tap into their experience as business people. Then we can tap into the experience of marketers that have gone overseas but know what the local markets need and want. It’s a wonderful linking in of resources all around.
MU: It is important, I think you would agree, for the government to foster the personal growth of an individual. Someone who has been helped to create their own business will experience personal growth.
Mr. Grill: Well, it’s very important from a political sense. I mean I’m a politician. I’m elected to the position that I hold and I’ve got to see success at the end of the day in individual terms and it’s been great. And it’s been great to see the individual success on that individual basis.
And that’s the way I like to work, quite frankly. I like to see people come into my office and go out happy. I like to see people go into these projects and go out happy. And certainly in terms of political success, this project was largely responsible for an overwhelming political success that I had in the town of Esperance. It turned around the vote there. What was a deeply conservative community and who were reluctant to vote for someone like myself that came from, not quite the other end of the spectrum but from the other side of the fence. It was good to see them gain trust and it was great for me to gain credibility through this program and have all of these individuals out there as people saying how much the program had helped them and how successful they’d been and how they’d been able to throw off their lack of confidence and go into a new business in circumstances where they wouldn’t have dreamt of doing it in the past, or hadn’t been able to in the past. So it pays off on a lot of levels.
MU: What was your government position when you first met Ernesto and initiated the Esperance project?
Mr. Grill: Yes. I held a variety of positions, or portfolios or ministries as we call them, including Commerce and Trade, and Small Business and Industrial Development and Regional Development. Office of Agriculture and Minister of Tourism and Minister for Transport.
MU: [Laughs] That’s a lot.
Mr. Grill: These ministries change. You might have a portfolio for the first three years and then another portfolio for the second three years and another portfolio for the third three years. Probably the best description is Minister for Economic Development and Trade.
© August 1996