This is part two of a transcription of episode 13 of the “No Limitations” podcast with CEO and managing director of Cleanaway Vik Bansal. To read part one, click here.
Vik Bansal discusses sustainability as the forefront of Cleanaway’s agenda, sharing his belief that a clear national waste and climate policy is needed in Australia and the ways in which technology can provide solutions for the world’s waste management problems. Bansal also discusses leadership, looking to the “moments of truth” that drive business forward and why humility is one of the most important qualities a leader can have.
In episode 13 of the “No Limitations” podcast, Blenheim Partners’ Gregory Robinson spoke with Vik Bansal, CEO and managing director of Cleanaway Waste Management Ltd. In part one of the transcription of this episode, Vik and Greg discuss how his willingness to tackle difficult or new territories saw him go from electrical engineer to executive, his evolving leadership style, and the underestimated value that is placed on good leadership in today’s society.
Greg Robinson: How would you describe Cleanawy?
Vik Bansal: Oh it’s a great organization. It’s an amazing organization. I mean, people call it a waste management company – it is absolutely a sustainability company. It’s all about environmental sustainability. Just to give you a scenario: there is nothing we do, any single minute, any single day, which does not help planet earth. There’s nothing we do Greg, any single minute, any single day, our six thousand employees, which does not help planet earth.
Greg: Good reason to come to work.
Vik: Think about that, right? I’ve always said it, climate change is the biggest topical issue, you agree?
Vik: We all have targets, countries have targets, the Paris Accord has a target, all this stuff. The world is now realizing you cannot get to your climate change targets by just tinting your windows. Those days are over. The only way society is going to get there is by managing its waste. It has to have a circular economy. Which basically means, you cannot do that without companies like Cleanaway. We are at a cutting edge of something which is so critical for human species, and everything we do helps that.
Greg: So where do you see us where we are on this journey, are we just right at the beginning?
Vik: In Australia we are probably right at the beginning. I think there is an absolute emotional understanding that we need to do something, forget what politicians are saying. Generally, society absolutely understands we need to do something. There’s a lot of interest in it, right? But we don’t know as a society what we don’t know. That’s where we come in. That’s our job. So we have education officials going to schools, we did a container deposit scheme in New South Wales [where] we are collecting 3.5 – 4 million containers a day. A day, Greg! Now, that tells us how much we drink every day, but that also tells you people are wanting to participate. I would never have thought twelve months ago that in rich suburbs of Sydney, people would put their cans and bottles in boxes and take it to the nearest vending machine to get ten cents. They don’t do it for ten cents, they do it because they believe in something. That was an eye opener for me. That’s the kind of response we’re getting. So society’s moved on. Society’s moved on to the fact that we need to do something. And that’s why we’re trying to do a lot.
Greg: What’s the next part of the journey then? Talk to us a bit more about the innovation, the thinking at Cleanaway.
Vik: So there’s a couple of things. In a waste management company there is a value chain. There’s collections when we come to your home or your shops and we collect the waste, and then there is resource recovery, where you actually take resources out of it. The rest could go to landfill, could go to waste, to energy, whatever it is – our game is all about playing with that value chain. So first of all, coming and telling you as a society ‘listen, manage your waste, sort it out at your home. If you can’t sort it out, we will sort it for you,’ but our idea is to make sure it’s a circular economy. That as much as possible, the resources are getting reused. That’s what it’s all about. Now, in Scandivaian countries there’s no landfills, so what they actually do is they sort it at home. So if you go to countries [like] Japan or Scandinavian countries and you go outside their home on Monday or Tuesday, they have small little bags. What’s happening is, Mr. and Mrs. John Smith in Denmark [are] actually sorting out bottles and glass and plastic and everything at the home and then put it out there. In Oz, what we do is we give them massive bins. So what we do is we put everything in a bin, which basically means you can’t use that [material], you have to sort it out. That’s where we come in so we lift it, we sort it out and then sell plastic, containers, etcetera all over the world or in Australia. The challenge in Australia is manufacturing is not growing so the use of that recycled material is not enough so we have to export it to Asian countries.
Greg: Which is disappointing.
Vik: It is disappointing. But, having said that, the world is a global economy now so it is quite doable.
Greg: Talk us through technology.
Vik: I think the biggest change in technology is around two things: one is sorting technology. So sorting where companies would give us mixed waste, and modern technology can sort it into glass, paper, cardboard, but it also can sort out glass with color, so you can have your green wine bottles and white wine bottles etcetera. So that is now quite actively available. The other technology is the waste which cannot be sorted out can now be shredded and created into fuel with the right calorific value, which can burn in cement kilns or something else. So that’s happening. We are doing that right now. So that’s quite advanced now, fuel technology is quite advanced. Truck technology is quite advanced, I mean if you’ve seen any of our trucks, we’ve got about four and a half thousand trucks now. Think about that. Four and a half thousand trucks. If you sit in any of our truck drivers’ seats right now, it’s sitting like a pilot. You have an iPad, you’ve got a screen, you’ve got eleven cameras – the guy can actually watch as he’s emptying his bin. He can take a picture in front of your house when the bin is not there, so if you complain we can say ‘sorry sir, we were there at 9am.’ It’s like sitting in a cockpit. So that technology has significantly advanced. The next stage coming through is connecting all of these technologies into one piece, the fleet technology, the internet technology, the sorting technology, where customers would have a view of what their waste is looking at. That’s what the next stage is, where if you are a customer you can say ‘show me my waste. Show me line of sight of what you’re doing with it. I want to be able to see absolutely 100% what’s happening.’ That’s the next phase coming.
Greg: Is that the analytics you’re talking about?
Vik: The analytics has to be part of it, but it’s all about connecting all of the individual pieces of technology into one.
Greg: Is anyone else doing that Vik?
Vik: The Europeans are pretty advanced in that, I mean Europeans are generally advanced in climate change as you know. Americans are not as far on this technology but they are pretty advanced in landfill technologies because the land is pretty abundant there. But I think Europeans are doing a pretty good job.
Greg: And Vik so you walked in and you said you’re up front and you’re honest to the staff when you started the role. The business has come on in leaps and bounds, we’re very well with the numbers and it may very well be an ASX 50 one day What’s your ambition?
Vik: Listen, as I said to you before at 27 or 28 when it becomes your first time as a general manager – whatever the title was – it’s all about yourself. Then you grow older and you become ambitious about the team. At my stage in my career now, my whole ambition is about Cleanaway . That is all I think about, that’s what my ambition is about, and I also know if Cleanway succeeds then the 6,000 people succeed. That is my absolute goal. I still believe we have an amazing runway in front of us. I can’t tell you whether that’s ASX 50 or not, but I can tell you in every other developed country there’s a waste management company in the top 50.
Greg: Is that right?
Vik: I mean look at Waste Management in the United States, Republic Services, Veolia in France. So my point is, why should there not be a waste management top now? I’ll be happy if it’s Cleanway, but there should be a waste management company in the top category. How far I can take it I don’t know Greg. We’ll say I’ll take it as far as I can, and I’m sure if I’m smart enough I’ll have some good successes to follow.
Greg: Vik, on a personal level, what’s your thoughts re: climate change?
Vik: Well listen, I am a firm believer in climate change. I think the world is changing, I think–
Greg: But hasn’t it been changing from day one?
Vik: Well it has been, but I think the speed of pace is quite frightening, and human beings have a lot to do with it. I’m fiscally conservative and socially progressive if I can mention it that way. On climate change, I’m a believer that human beings have absolutely done damage and I think in the next fifty years it is absolutely our job to get it back as close as possible to give it to the next generation.
Greg: Are you getting enough support from the government? What’s their position?
Vik: Look, I think it’s unfortunate at this point because there’s not a clear climate policy in Canberra as you all know, and it’s unfortunate because I think we’re running out of time – not as a country but just as a planet – and I think Australia has a significant role to play. And I’m quite dumbfounded by the fact that when society has moved on there’s a definite gap between the society in general and where politicians sit today, so we are getting caught up into that. One on one we get a lot of support, so when I go to minister we get very good support, they’re very good at hearing, they understand the issues. But I think somehow the whole system is letting us down.
Greg: And what about when I read about offshore in regards to China and the challenges there, what’s it called the National Sword Policy? How is that affecting opportunities?
Vik: Well I think it’s the right thing. And let me explain for your viewer’s benefit – for everybody’s benefit – what that means. What used to happen as I was telling you is that developed countries – which are America, Canada, Europe – [became] consumer societies. In Australia, we would consume but we are cutting down on manufacturing so all our recycled products will go to China. Now that happened for ten, fifteen, twenty years, but what was happening was when we would send them one ton of cardboard, [but within] one ton of cardboard would be 100 cages of plastic, so some poor person sitting in China would sort it out. So fundamentally what was happening was developed countries were making China the garbage dump of the world. That worked for a certain time when the labor cost was low, but [because] China has now committed to climate change and all its policies, they cannot accept that [anymore]. So all they have said is ‘we are happy to have your recycled products because we don’t have enough. We want developed countries’ recycled products, but for God’s sake give us the good recycled products. When you tell me you’re going to send me one ton of cardboard, send me 99.9% purity of cardboard so I can take it straight from the ship dock into my manufacturing. What I don’t want to do is sort out your waste.’ Which basically means what has happened – and it sent shivers through the global waste industry – [is China] now expected the sorting to happen near the generation of waste. Now what a novel concept that is, right? That should have happened a long time ago! That changed the whole global supply chain. Everybody would say this is the right thing to do, this is absolutely long overdue – what surprised the world was how quickly China said something and then implemented it. Generally it has not happened before. So I believe we got all caught up into this Trump-China dynamic, and for the first time China said ‘[on] x-date we’re going to implement it’ and [on] x-date they implemented it. And that took everybody for a surprise. Good thing we were already planning our footprint strategy, we fast-tracked some of the investment and we’re sorting most of the waste in Australia now.
Greg: And you’ve done the recent acquisition with Toxfree. Why did you do that? What’s the synergy you’re seeking?
Vik: So that’s about a $650 million plus acquisition, that’s one of the largest acquisitions we have done. Toxfree was another listed company in Australia, a very good company that had some good assets. In our waste business it doesn’t matter how much money you have, you can’t go and buy assets, you can’t create assets from shelf, you have to go through a significant EPA permitting issue. So they had some fantastic assets, we knew the assets we needed and the timing was right, and we bought them and we got some fantastic people and assets. So we are integrating them now, we went after the market, we have $35 million worth of synergies, and we’re just working it through one by one. One day at a time.
Greg: So you made a major acquisition, you’ve got China which has changed the policy, and you’ve got an opportunity as an exporter. And the government is listening to a point. What would you like if you could wave the magic wand, what would you like to happen down in Canberra?
Vik: I think two things are absolutely necessary, I think good, bad, ugly – we need a climate policy. A very very clear, soundly thought through direction for where this is headed. We need a clear waste policy – the country has no waste policy. I think a clear waste policy is absolutely needed.
Greg: And what does that mean Vik?
Vik: I’ll give you a very basic simple example. In a suburb next to each other in Sydney, a yellow bin means [something] different to a blue bin in another suburb. The bin sizes are different. Each state in Australia has a different EPA with different environmental laws. So put yourself in a national position like Cleanway, and we are kind of managing six countries. So what we need is a national cohesive waste policy. It’s generally efficient, it cuts down traffic on the road, it actually cuts down fuel consumption on the road, it reduces the cost of running the business, and effectively servicing the consumer. Now I understand federation will restrict the things they can do and things they can’t do. But an overarching [plan] like the national energy guarantee policy with a clear focus [of] ‘we are targeting climate change and this is necessary’ is an absolutely necessary thing to do.
Greg: Where is that at the moment? Is that being debated?
Vik: Look I think we’ve been talking to ministers individually and like I said we get very good hearing one on one, but I think somehow in this whole system it doesn’t get the attention.
Greg: What else would you change Vik?
Vik: I think if we get that I’ll be pretty happy. That’s the start of it, so I think that’s a fair expectation on our part. I think that will be good. I don’t want to go into too much politics, but I think stability would be a good thing. Which is probably a topical issue for everybody else so –
Greg: Where do you see the marriage between business and politics at the moment?
Vik: I’m a firm believer people should ‘stick with their knitting,’ and they should contribute with the topic they can contribute to. So for example, as the CEO of Cleanaway I would love to participate and would jump over hoops to participate in the national waste policy, or national environmental policy because that’s my callout, that’s what I do. I understand that I have some contribution to add. I am personally – and this is a very personal view – I am not a believer of me commenting on social issues. And this comes back to the leadership issue we were talking about before. There is enough attack on leadership today anyways, I think opening yourself for attack is not actually good sound business sense. I get a voice or a stage to talk because I’m the CEO of Cleanway, not because I’m Vik Bansal. Which basically means when I’m talking to you, in front of you or in front of an audience, I’m representing 6,000 people, I’m representing a bunch of investors, I’m representing the company.
Greg: You’re also representing a potential opportunity with the environment as you say.
Vik: Absolutely. So that is my subject matter and I want to actively participate in that conversation because we know what we’re talking about. On the other issues like social issues where business is common I normally keep reserved on that simply because who am I to represent 6,000 people on the social issues which they’re facing? But in my environmental and waste management I know exactly where we stand, want to contribute, want to participate.
Greg: If we talk out – let’s stick to that. Can you give us some examples or maybe some numbers or some sort of comparables of the opportunities missed from Australia’s point of view compared to northern hemisphere countries in the sense of efficiencies, outcomes, productivity, etc?
Vik: Well I’ll give you a simple example: waste-to-energy is a good example. Waste-to-energy now is a well-established practice in Europe. It’s a well-established practice in South Korea, Taiwan, and Japan. It is becoming more and more prevalent in the United States. And waste-to-energy is where the products that we can’t resource recover or recycle, rather than going to a landfill can go in a waste-to-energy incinerator. New South Wales in Australia has the highest waste levy, so there’s a tax when you put stuff into a landfill. Economically, it makes a lot of sense to have a waste-to-energy plant in New South Wales. Now, we would love to participate in that. But whenever we’re going to go there, or whoever is going to go there, we’re going to have to have a significant need for social licence to operate, because we’ll have to talk to communities and they’ll have to support all of this stuff. And at those times leadership is needed. At those times leadership is needed by politicians, saying ‘this may not be perfect but this is very good for this society.’ And I think companies should do a lot more to earn the social aspect, but sometimes leadership from politics or government goes a long way and I think that’s where it needs to happen – certainly with waste-to-energy.
Greg: Social media is obviously covering – I see you roll your eyes there Vik?
Vik: Well I have a daughter, so I have a very strong opinion on social media Greg. Listen I’ll come back to social media and business, I’ll leave it [alone] otherwise I think my daughter would hit me for saying what I was about to say. It’s one of those things – the world has changed.
Greg: But you could actively use social media. When you think about who’s across social media, people are very concerned about the environment. Is this something you guys could tap into in a sense of convincing or helping those ministers potentially come along the journey even faster?
Vik: I think what we are trying to do very hard and I think we are doing a good job, is push Cleanaway as an absolute thought leader in waste and the environment. So rather than being negative about it we are being very positive about it. We are saying, ‘if you want to understand anything about environmental waste, Cleanaway people are where to go.’ And companies who become partly involved in the space generally take charge of the conversation, so that’s what we’re trying to do actively, positively, and proactively. Don’t get me wrong, we are getting one on one a lot of attention, but I think it’s the system politicians are stuck in right now, with the way the system is with everything else going on. But when I speak to them one on one I don’t leave the room thinking ‘I don’t think they got it or she got it.’ They get it. They understand it.
Greg: Does the analyst get it Vik? Because you have the really difficult role of being a CEO of an ASX-listed company which is getting growth, which is doing acquisitions, and those analysts and those investors and those shareholders want returns, and yet it’s a bit of a long term play.
Vik: We have very good investor’s support and analyst’s support – I mean we wouldn’t be here without their support. They believe in us, and we just did as you said a Toxfree acquisition, we went to the market doing equity raising, and they gave us very good support. So we are appreciative of that and they believe in our story. They absolutely believe in our story. But I’m also pragmatic enough to understand that they have to do their job, they are investing yours and my super and if I don’t deliver results then they are in trouble. So I understand it’s a capitalist society, that’s how it works, and I’ve got to do my job and they’ve got to do theirs. But because we are delivering, we are getting very good support, and that’s all I can ask for.
Greg: In every discussion we have with chief execs Vik, Technology or the word ‘digital’ comes up. How has it affected this sector?
Vik: At this point, in waste technology is more of an enabler than a disruptor. But where that digitization is coming through is in the whole customer service process, where from what we call ‘call to cash.’ The ‘moments of truth’ when I call them, when a Cleanaway customer interacts with [someone] whether it’s a driver in the morning at 4AM, or a call service person, or an invoicing person, or a salesperson. Those ‘moments of truth’ that interaction happens between a Cleanaway person and a customer. Those moments of truth can be a lot faster, sharper, clearer, a lot more data driven through analytics. You still have a human relationship, but they can be a lot more qualitatively better by technology. So I don’t get hung up too much when people talk about digitization, about the cloud and all that stuff. That’s now like having tires on your car, I mean that’s just a given. What I am more interested in is what does that do for those ‘moments of truth?’ There’s no use having the best technology if the customer can’t be serviced better, if I can’t pick up waste faster, if I can’t resource recover better, if I can’t create better earnings, if I can’t service customers better. So to me, digitization as an engineer, and an electrical engineer, they are nothing but more an enabler to the ultimate role why we exist: to provide sustainability.
Greg: When you discover those ‘moments of truth’ as the chief exec, how do you engage your staff to take them down that journey of solving these problems and where do you spend your time these days Vik? Is it more around the thinking? Is it more around the strategy? Is it building morale? Is it engaging with customers? Is it all of the above? Where’s the CEO of Cleanaway spending their time?
Vik: It’s all of the above .They’re all my stakeholders, employees, customers, investors, they’re all my stakeholders so I’m very mindful of not letting the ball drop. Yesterday I spent six hours going from one side to the other in Melbourne. We started at 5:30AM in the morning, did the first town hall meeting with a bunch of truck drivers in one site, then went to five other sites, finished at 3AM and all I did was talk, funny enough. I just talked between one group to the other group to the other group. And it’s fascinating, you know I find a lot of energy in that. I find a lot of energy when people ask a lot of questions and they are very engaging conversations, so I get a lot of enjoyment out of that. I get a lot of enjoyment out of investor relations because I get put on a spot. They ask some tough questions which makes you better and sharper. And the customers are good because that proves whether our ‘moments of truth’ are working or not. Those are the ‘moments of truth’ in which we either create value or destroy value. So I don’t prioritize that way. For me, my days are full and I go from one to the other consistently.
Greg: What do you look for in a leader Vik?
Vik: Humility. That’s a big thing for me. So the way we describe leadership in Cleanway is the ‘three Cs.’ What we call ‘three Cs’ are capability, commitment, and compatibility. There is no shortage of capable leaders in the world. Capability is education, your experience, your smarts, your intellect, all of that stuff. There is no shortage of commitment either. A lot of people are committed, they want to do the right thing whether they are driven by their own personal ambition or whatever the life stage they are in – they’re committed. The biggest rub is the compatibility. And the older I’ve gotten – it’s amazing I’m saying this, because my old boss used to say this ten years ago and I would have never believed him – but it’s amazing how values compatibility is so critical. I spend most of my time looking for leaders who are compatible with the culture. As for my hiring process Greg – so people interview people and I say ‘you check for capability, you check for commitment and you do all the questionnaires,’ but I want to meet a senior leader finally just to check on the compatibility. So I spend a lot of time on that. And I think at a certain stage in your life or in your career, as an organization’s life, when you’re moving fast, you’re growing fast, what you can’t afford to do is have a senior leader who has not emotionally surrendered themselves to the cause of the company. That’s where the compatibility came. You should intellectually challenge ideas, you should intellectually challenge concepts, and you should intellectually challenge the direction. But once it has been agreed, if you can’t emotionally surrender to the cause, you are consistently letting the team down. If you can’t emotionally surrender to the value system what we believe in, that fundamentally comes from humility. If you don’t have humility as a human being you are consistently challenging everything because you are challenging for the wrong reasons. And if there’s one thing I’ve learned absolutely in my career, it’s humility is just the core of a good leader. You’ll be smart, you’ll be intelligent, you’ll be the brightest man in the world or woman in the world. But without humility you can’t actually lead.
Greg: And where does the culture come from Vik? Start from the top and work it’s way down?
Vik: Oh absolutely. I think leaders set the tone of the company.
Greg: So is it the chief exec or the board or all of the above. Where do you distinguish? Bearing in mind all of the discussion going around at the moment.
Vik: I take personal responsibility for that. That’s my job to deliver. Of course I’m responsible to the board and it is my job and duty to show them what I’m doing, but I take full responsibility for the culture of the organization. That’s my job, as the chief executive, I am the custodian of the values of the organization. That’s where I draw the line, and humility is one of those in particular.
Greg: So what’s on the next five years agenda for Cleanaway?
Vik: We have a very very exciting strategic plan. We have a very clear view on it, we are working through that, day by day is locked in. In fact, we are working through a document for the October board meeting, this afternoon we went through that and I can’t stop smiling. If we can deliver it we’ll do another podcast in five year’s time. I’ll be a little older and smarter, but it will be good fun.
Greg: Vik, well I appreciate your time today. Thanks for sharing your thoughts, congratulations on what you’ve achieved. It’s been a fantastic journey, again thanks for coming in.
Vik: Thank you Greg, appreciate the time.