Professor of Prophecies

Tuesday, April 22, 2014 - 09:24

Australian demographer Bernard Salt has carved out a unique niche as the go-to man when managers or the media have questions about the forces shaping the nation, writes Leon Gettler

What’s keeping managers up at night? Australia’s most celebrated demographer Bernard Salt says it’s a completely different proposition from 10 years ago.

“The thing that used to keep CEOs awake at night were operational matters, like how do I reduce my staff turnover,” Salt says.

“What do I do if the dollar rises? What do I do if interest rates fall? What is scaring CEOs witless now is the possibility of a fundamental shift to the business model.

“We have always assumed that Australia was too small for a Wal-Mart. Who is to say they won’t just pop up in Australia?

“Here we are in 2014. What will the world look like in 2018, or 2028? What do we need to do now to position ourselves? How can we future-proof ourselves?

“Management or directors are interested in not just this year’s figures – what they want to know now is, ‘Are we going to be  relevant, what space do we need to be in?’”

These are the questions Salt faces from managers and directors when he speaks or when he is called in to brief boards. Salt has written and talked about many trends, from the sea-change phenomenon to the rise and fall of the baby boomers. He has forecast  what’s ahead for generations X and Y and he has answered questions such as, “What does the future look like for Tasmania?” and

“What is Australia going to be like in 10 years’ time?”

Known nationally as a property advisor, business analyst and demographer, Salt is a partner at KPMG, joining the firm in 1998. Before that, he was with Coopers & Lybrand for eight years, having moved there from a boutique consultancy that did feasibility studies for shopping centres.

In that role, Salt was involved in assessing the potential market share for an expanded Chadstone shopping centre in Melbourne’s south-eastern suburbs.

“I worked out very quickly that [market share] was entirely ruled by demographics, so the demand for a shopping centre worth $200 million to $1 billion was entirely driven by the number of people in the catchment area,” he says.

“So if you could forecast catchment area growth, you could forecast retail property demand.

“I then made the move into management consulting and took the same skill set into Coopers & Lybrand and started doing the same work, but by the end of the ’90s I was increasingly being pulled towards demographic commentary and speaking and writing.”

How did he start off? Salt, 57, discovered demographics when he was working as a geography and history teacher in his early 20s.

“I did school teaching as such, I went to a teachers’ college. I then decided I wanted to do a master’s and I did one in geography, which was on the history of Melbourne through numbers. So history, demography and geography was the thesis,” Salt says.

“I was teaching history and geography at high school, but never in a formal sense. I was doing emergency teaching. I never actually got a job. I only did emergency teaching to get money to do the next thing, which was that master’s degree.”

Everything changed for Salt when he produced his first big book, The Big Shift, which looked at how Australia developed, the impact of surburbia and what would influence Australian identity in the first decades of the 21st century. That’s been followed by other books The Big Picture,Man Drought and The Big Tilt, not to mention a regular newspaper column in The Australian. Salt is the media’s go-to man for demographic issues.

He says that with The Big Shift, he suddenly found himself on the speaker’s circuit. What set him apart was that he was the only demographer looking at the forces shaping society from a national perspective.

It’s a unique niche – no other demographer occupies that space. Salt says: “I started to get calls from journalists about demographic issues and there wasn’t anyone from a brand name who could talk about the northern suburbs of Perth versus the south western suburbs of Sydney. My area was the whole of Australia and my schtick, I suppose, was that I could talk about any suburb and any town. That to me was the unique selling point to journalists.

“There are people who can talk confidently about what’s happening in Queensland or what’s happening in Sydney but not many can talk about it nationally from a brand name that’s not some obscure planning firm or economic consultancy that no one has really heard of.

“It’s not so much a case of finding a niche as me always having a philosophy of doing what I enjoy and as a consequence, I have found myself in a certain space. I very quickly learned that the market will find you. The market thinks I am a better speaker and media commentator than a consultant. They don’t so much want my consulting skills, they want my speaking skills.”

How does he find the data? “I have described myself as a miner,” Salt says. “I’m mining for gems, little bits and pieces to actually put together a story but there’s an incredible amount of overburden [mining waste or spoil].

“Now there are two ways you can mine. You can go down in a shaft and then across to a vein of quartz. The other way to mine is to shift thousands of cubic metres of soil off the top in order to get down to the vein, and that’s what I do.

“I’m removing and filtering overburden all the time, so there is a mass of data that is coming at me all the time from the ABS and other sources that I scan to get information.

“For example, I am looking for a particular piece of information at the moment and I’m going through budget papers. There are about five volumes of budget papers, but there’s a particular piece of data that I want. So I have to sort through literally five volumes of data and pages in order to find this one piece of information.

“Knitted together in a broader argument, it will show a compelling shift in position for the Australian economy.”

How does he know where to look? “You need 30 years of obsessive interest in data,’’ he says. “So I have seen information tabled somewhere. I know it exists and I should have taken a copy of it at the time. That’s often the case, where I have seen something like that 15 years ago or five years ago. Or I could be watching television or reading a newspaper and see something off to the side.

“That plus something I saw on television two years ago, plus something I heard in a Q&A that I was in when I was in another city last week. I have knitted those together.

“It’s about being able to see patterns in information that’s provided.”

Salt says managers can see the markets are changing. For some it’s a threat – but other managers might see it as an opportunity.

“Players who traditionally don’t compete with you can now suddenly turn up in your space. A good example lies with the supermarkets, Coles and Woolies. Who would have thought three years ago that Coles or Woolies would go into the insurance business but in actual fact, that’s exactly where they are.

“Supermarket operators are now in the insurance business, Channel Nine has got a relationship with the Daily Mail, which is a newspaper, Frequent Flyer programs are now connected to credit cards, so there are all sorts of linkages and connections that in a previous era would not have been conceived of.”

It’s the same pattern being played around the world, he says, with the likes of search engine Google and computer company Apple now in telecommunications. As Salt sees it, this poses a number of questions.

“Could Google go into financial services? Are we going to see the emergence of 100 global businesses, conglomerates like Google, Apple and Microsoft, and the traditional businesses that made them successful are their core but they have actually leveraged it into a whole range of other areas?”

So how should managers deal with this?

“You should not have people advising you that are operational – people who worry about making the budget this year or next year are very short term in their thinking,” Salt says.

“They are very narrow, very operational in their thinking and they are not the people to think beyond next year’s financial results. They cannot let go of that thinking.

“You need people who are not connected to the operational side of the business. So strategic thinkers, people from outside the business, and there are often people inside the businesses. You can actually see the ones that are quite lateral and positional in their thinking.

“So it’s about encouraging a culture of lateral thought, of creative thought, of dangerous thinking, of left thinking and seeing if you can harvest those ideas – that to me is one way to do it.”

He says managers should set up processes for mining these ideas from the people inside the organisation. Managers have a role here, turning the company into an ideas factory and future-proofing it.

“Certainly I think once a year, if not twice a year, there should be a concerted focus on strategic positioning,” he says. “Where are we, how is the world changing, what sort of inputs do we need, what sort of culture do we need to identify left-field threats and left-field opportunities.”

This article appeared in the April 2014 edition of Management Today, AIM’s national monthly magazine.