Phillip Wing – The Renaissance Modern

Phillip Wing – The Renaissance Modern

November 23, 2016

For Phillip Wing, all creativity takes root from emergent qualities – and after an incredible thirty-five year career, spanning continents, communities and constructs – we spent a couple of days unpacking the meaning of a life well-lived according to one of Sydney’s most elusive, yet pervasive, private equity heroes.

By Joanne Leila Smith

For those who move in Aussie start- up circles, you may recall headlines in September 2016 that Medical Channel, a Sydney-based digital media content provider founded in 2012, raised AUD25 million through Sandbar Investments’ Darren Smorgon (the Smorgon family earnt the country’s richest title for the seventh consecutive year in BRW  Rich List 2015), Wingate Group’s David Jackson and celebrity entrepreneur Tony Faure (first Managing Director of Yahoo! Australia and NZ and former CEO of ninemsn).  The fourth chap whom was instrumental in this lucrative deal, is Phillip Wing, the seed funder, founding Chairman and largest shareholder.

Wing, 57, whom is currently an executive chairman of private equity firm Hammerfest Investments, is also a non-executive director of six investee companies; from an Binu, a smart phone in the cloud for developing countries, to Metminco – an ASX listed mining and exploration company that owns gold and copper mines in Chile, Peru and Columbia, to Silicon Valley based dynamic video, Playable (dynamic video content) and a health and fitness play – Maff Fitness.

He is a member of the Institute of Chartered Accountants, and is an adjunct professor with the Centre for Applied Finance at Macquarie University, and has taught Private Equity, in Japan, Singapore and at Beijing’s Tsing Hua university (ranked number one in China). He was previously an advisor to CSIRO to approve all major research projects in Australia, and the list goes on… seriously.

After growing up in Sydney, and graduating from Sydney University with a Bachelors and Masters of Economics, Wing got his big break as a young graduate working for one of the big eight firms in Sydney at the time, Touche Ross – a corporate advisory firm that was later merged into KPMG. While Wing says he was not interested in a career as an accountant or lawyer, he was looking for opportunities to be creative in the management consulting space.

“I always had broad interests, including artistic but I didn’t have that as a choice, so I made things as creative as I could.  Touche Ross allowed me room to move as I was interested in strategy and creative thinking.  I was fortunate that the partner who recruited me, Bernie Creenaune, was like-minded so we had a little group of grads doing some interesting stuff. Bernie was a great mentor to me. He was a hardworking, hard-drinking Irish guy. He’d sleep in the office on his lounge if he drank too much. He’d say, meet me in the office at 7.30am, and wake me up when you come in,” says Wing.

According to Wing, Creenaune was a smart, people orientated person who was all about shaping the environment to let people succeed – his commitment to giving colleagues opportunities to take a shot, no matter the challenge, shaped how Wing perceived tasks – that nothing was really beyond someone’s scope, but rather it’s a question of whether one is trying to solve a problem to a point of perfection.

“Bernie would just move things out of the way for you. He and I did some great work together.  We had a client that wanted to come set up something new in Australia – AustraClear. It wanted to create a bond market to trade and clear bonds but there was no market for it here. So Bernie and I had to work out how to create that market, and then it had to fit the regulators model and be secure.  It was incredibly complex but we did it. I was known as the guy to give the too hard basket, to have a crack at it. These experiences gave me a sense that there’s nothing that can’t be solved,” says Wing.

Wing felt that the culture at KPMG was not as fitting as he found in Touche Ross, so he packed his bags and joined Ernst & Young.

“I was the youngest partner at 28. Suddenly my salary tripled overnight. I was running the consulting practice and the money was great, but I wasn’t happy. I went to the managing partner, and told him I’m going to leave. In a partnership, you get to a certain level, your earnings plateau, and it can breed mediocrity. You get a lot of people earning big cash who are not that good. It’s just about protecting turf. There was only one other guy that I thought was smart out of more than twenty partners. It wasn’t the right place for me so I went to IBM,” says Wing.

Head-hunted by IBM in NYC by Joe Movizzo, Wing was recruited as part of a change management program, headed by the former CEO of Amatil, US businessman, Louis Gerstner Jr. who served as chairman of the board and CEO of IBM between 1993 to 2002 (Gerstner is largely credited as being central to turning a tepid IBM business into a global hothouse).

“When I joined IBM, it was not doing well. Lou’s strategy was to go around the world, and recruit one hundred of the best people in management consulting firms and take back the boardroom with all these smart people – so I came in through that program, about 15 years ago. IBM spent a lot of money on us. Joe ran the consulting practice for IBM globally, which was a big deal as this was when IBM was going into managed services. At the time, IBM was a hardware /software company and it is now an AUD150 Billion services company. As a GM in Global Services, I was responsible for Japan, Taiwan and south east Asia. I learnt so much with IBM,” says Wing.

Movizzo was another great influence on Wing’s career – and he credits Movizzo for giving him the ability to ‘see the other’ which has become a central way of operating for Wing – both in the professional and personal space.

“Joe ended up being another mentor to me. I have kept the napkins we agreed my deal on when Joe and I had dinner. You could always have a conversation with him. At the time, I was based in Sydney but I was travelling a lot so it was difficult on my family.  I called Joe to ask his advice about taking the CEO role for IBM in Australia. Joe said, ‘I’ll make some enquiries’, he came back to me and said, ‘if you want the job, you’ll get it, but I don’t advise you take it’. He took me through his reasoning and I respected him for his honesty. He had a good sense for the other. He did well himself but he always saw the other person. The biggest lesson I took from Joe was about roots.  I was running Asia, he was running the world, and I took him home one day, and he said, ‘I’ve been at IBM for thirty years and I’ve never had a place I can call home.  I don’t have a home’. So, that was an interesting insight into the expat world. There’s a price to pay for it. Some people enjoy it, but I realised that I needed roots,” says Wing.

Sensing that it was time to move on, Wing joined Technology Venture Partners, an institutional venture capital firm in Australia.

“The guy that I’d worked with, Alan Aaron had set up a small fund with another guy and they wanted to raise a big fund. He called and asked me to join him and it took me two seconds to say yes. We eventually had AUD 300 million under management. Our mandate was to take Aussie ideas and internationalise them. We were on boards all around the world… but I found it restrictive because it’s other people’s money, so there was a lot of governance and reporting around it. Secondly we were restricted on what we could invest in, and thirdly I liked Alan, but not the other guy, so it was problematic…they wanted to raise a fourth ten-year fund, and I wasn’t prepared to commit to a decade so I left,” says Wing.

Ten years later, Wing has since invested privately and loves every minute of it.

“Multinational corporates can be very difficult to navigate. You have no idea how many people in large corporates are just hiding. Doing nothing and they get good at it too. Good business stems from good people. I can’t run every business I invest in myself.  I look for the people, or if it’s not the people right then, the idea needs to be strong enough to attract the right people,’ says Wing.

While taking a dispassionate view on investments is the dominant purview of his discipline, Wing argues that having strict criterion can be limiting, in terms of creativity and opportunity.

“Do I have a set criterion when I take on a project? Yes, but it depends on why I’m doing it. If it’s a project to make money, then there’s a whole separate criterion – how quickly can it make money, be profitable or is it already? How much capital, how much of my effort is needed compared to someone already there? But sometimes investment is about having diversity in your portfolio.  I don’t work to a strict standard. Some people do and if it doesn’t neatly fit, they don’t go. I tend to look at things by individual merit, where I am in my own investment cycle, and what I’m needing at the time,” says Wing.

After investing heavily into Medical Channel, Wing punctuates his point by giving an example where opportunity, rather than a clearly defined strategy, drove one of his most recent acquisitions, Vision Personal Training  Studio in Gladesville.

“I partnered with an enthusiastic, young personal trainer, Nic, and invested in a Vision personal training studio. When we bought the business, it was doing eighty personal training sessions a week, and now we are doing close to five hundred sessions a week. It’s small and low key, but if you get two or three studios you have a business producing one million profit per year… So, if we talk criterion, the venture needed to be a good cash producing investment. Professional investors will probably tell you that’s not the way to invest but for me it’s about the people. I never went into it thinking about franchising, strategically, whereas, with Medical Channel, I targeted that segment, so it was deliberate. Investing is a bit of both, but professional investors may say that’s just too random! I think there’s this perception that we think about investment as being a rational process – but I believe in the emergent quality of things,” says Wing.

For Wing, a business proposition may be incredibly lucrative, but if you can’t get along with the partner, then walk away.

“I work with people that I like.  I don’t care how good I think the business is, if I’m not going to get along with the person, I don’t think there’s much point. You need to enjoy or believe in the venture at a basic level. Fundamentally, partners need to be good people, and it becomes quickly obvious if they’re not,” says Wing.

Wing’s interest in people, health and fitness was evident very early in his life. A semi-professional soccer player, Wing played for a NSW Division 1 until he was 25, and went on to become a martial arts champion in Karate, representing Australia for a tour to Greece.  His experiences as an elite athlete, informed his interest in his latest venture, a collaboration with US celebrity doctor Phil Maffatone and past coach to Mark Allen, six-time Hawaii Ironman Triathlon Champion.

“I was very interested in the Maffetone method, so I called him one day and told him so. I asked him if he was interested in partnering to get his knowledge together and put it into something practical. So, we have taken his thirty years of clinical practice and research and collapsed it in a mobile first application – the Maff App,” says Wing.

The premise of the Maff App is based on training the body to burn fat as fuel rather than carbs. According to Maffetone, having a more effective metabolic rate means the body is more efficient, which will reduce weight fluctuation.  For example, if you went out into the street and found an unhealthy person, they would most likely be consuming lots of carbs for energy and burning little fat. Whereas a marathon runner can run for four hours burning mainly fat for fuel. After two, one thousand-user trials, the Maff App is scheduled to launch in November 2016, together with a range of organic supplements (that will be launched in the US). Wing is also working on a portable medical device prototype that measures individual’s metabolism at a cellular level, which has never been achieved – until now.

“Phil had developed a set of organic supplements – because he was concerned that people take a lot of supplements that they don’t need, don’t understand what’s in it, and most of the dosages are way over efficacy level.  This range is totally organic, no fillers, no synthetics and has the right dosage. As for the device, I wanted to create a product where we could breathe into something and measure the metabolic rate at a cellular level. We spent the past 12 months solving that problem with Phil and professor of bio engineering, Geoff Parkin in Melbourne,” says Wing.

This collaboration is poised to transform the way people think about health and fitness. The idea that people count calories in an input/output way to manage weight speaks nothing to metabolism. According to Wing, weight management should be focused on this first. Wing argues that in hospitals, if a client goes into intensive care in each stage of client management to exit, the diet they are given is heavily dependent on the individual’s metabolic rate. Presently, hospitals use a metabolic cart which is about a AUD70K machine, or, they use heuristics i.e. height, weight etc to determine metabolic rate. Wing’s device is a cheap and accurate alternative to what currently exists – and the supplement range – which is based in scientific data, is bound to rattle a multi-billion-dollar industry that is mostly leveraged on marketing hype.

“I’d like people to have a much more effective way to manage and monitor their health and fitness, and if they use supplements, to use the right ones as they are heavily marketed with no method to determine if it’s working. The Michelle Bridges, 12-week weight loss plan – who knows if it works? The Maff App goes against current thinking. It’s anti-over training, it’s anti-no pain no gain and it’s scientific. In today’s age, to think about health and fitness as being totally market driven without science is beyond belief,” says Wing.

According to Wing, the trend in business literature when it comes to market demand, is a move away from the traditional mode of thinking about whether the customers’ needs and wants are being met/unmet. We are now seeing a trend around utility – ‘is this product I’m offering helping people get their job done?’ There’s a whole move away from needs and wants to enhancing the way we do things…’am I getting the job done as best as I can’, rather then, ‘I have a problem that needs a solution’ is the new modus operandi.  With the Maff App based in this philosophy, Wing is poised to explore this notion further with his latest venture due to launch in 2017, Project Grasshopper– an app which is about giving the user space to do their job better, in a broader sense – or what Wing calls – mindfulness.

“I’m interested in mindfulness. How to get people to be mindful in an easy, everyday way. That sense of what you’re doing in the moment, being with that thought or action, and using it as a tool to calm your mind, reset and create. We don’t start with an idea – it’s an emergent quality. Ideas are based on somewhat unrelated and counter intuitive things and what emerges from that is interesting… My ideas around mindfulness is this sort of emergent thing – connecting a few things and observing them. As things converge you can anticipate an outcome. On the tech side, there hasn’t been much thought to the human problem-solving side of things and I think unpacking this process – with the assistance of technology – is an interesting idea,” says Wing.

After completing a PhD in Organisational Behaviour in 2001, Wing is no stranger to unpacking human motivation and communication. His thesis on Transformational Success: The Role of Communication – explores how humans communicate in informal social structures to determine whether there was any correlation between how people did things socially, impacted the outcome of tasks performed as a group.

“I was interested in the way groups interact. I used social networking analysis to map and measure informal social communication, which is much more persistent and structural than formal communication. My thesis showed that certain ways people communicate socially is strongly correlated to whether they successfully did things as a group. People are brought up on the idea to communicate in a structured, layered way, but this is unnatural. Project managers for example, are taught how to make a project successful is to break it into small components, and tightly control the information flow, and it’s not proven in the literature that that methodology makes any difference because people end up doing what they want anyway. We need to accept the idea that people work best in a social construct, not in a construct that people impose on them. Facebook is a prime example of this. In fact, my wife always asks why I didn’t invent it first,” says Wing.

Wing argues that in a social network, measuring what people are doing and whether it’s understood is simple. He gives an example of measuring how many people take steps to get something, so, when a person is not nice to them, they will work around that person – and take so many extra steps until the original intention may be lost. There is a lot of theory in the real world of the strength in the weak tie – whereby a person may have a weak tie with another because they don’t see each other often, but when they get together, it’s a strong communication. Social media is a rich platform to view these weak ties in social networks.

For Wing, communication is more about the articulation of intention. How we think about something and then express it is not communication. He argues that communication is fundamentally where you have a shared, meaningful exchange with someone. Passing information to someone is not communicating with them. Wing also posits that communication can be one way or two directional.

“If I have a need, and in one direction, pass it to you, that makes me feel better, then that’s okay – it’s meeting a need, but doesn’t mean it’s communication.   The modalities of how people express themselves are quite different between male and female. Social networks are different at one level, but to be social is a human thing, not a gender thing. The generalisation that women communicate better is not true – and we hear it in the counselling domain too. if you have a couple in counselling, when you start to unpack the complaint, it’s not about communication, it’s about being understood,” says Wing.

To demonstrate his point, Wing shared a private moment with his youngest son, on the impact of being understood – as a true expression of communication between human beings.

“I was at Maccas, Ash was 15. There was a homeless guy causing a bit of mischief.  I asked him if he was alright and if he was hungry and he joined us for a meal and we had a chat about his story. I thought Ash was embarrassed. As we walked home, Ash kept looking at looking at me, and he said ‘that was a really good thing you did Dad’ but I thought I had embarrassed him. I could see in his eyes, in his heart that he meant it. In that moment, I understood that even though we think someone has responded to something in a certain way, we don’t know someone’s story until its heard from their own mouth. It’s not about being proud, but about moments that speak to the best of the human condition. The bit that was striking for me was Ash’s processing of that moment. That at some deep level, he understood what was going on. In a moment, when someone you love, has a pure response, and you understand it’s pure – it makes me feel like that’s a metaphor for the face of God,” says Wing.

For Wing, life is about a collection of these types of moments, that cut through the noise to take us to new understandings – it’s all about trying to get to the essence of things. In physics, the world is dark matter – emotions are the same. We can’t see it, but we know, feel it and sense it all the time. For Wing, his greatest successes have nothing to do with business. It’s about the people closest to him, and, the value of learning a lesson over ‘an achievement’.

Mastering Private Equity: Transformation via Venture Capital, Minority Investments and Buyouts
Editor’s Pick: Mastering Private Equity was written with a professional audience in mind and provides a valuable and unique reference for investors, finance professionals, students and business owners looking to engage with private equity firms or invest in private equity funds.

“Yes, I’m a classical high achiever, but high achievement is not the driver.  I think my gift is a sense that I have of the other. It’s more about what other people get from me, than what I’ve got. I am interested in people. I think instinctively I’ve always known that. In the scheme of things, this is all just a pile of things I’ve done. There’s a great line from Johnny Cash, he talks about his life and he calls his wealth ‘empires of dirt’. I agree with him. I’m not worried about legacy. I don’t value it.  I think it’s hard to judge success from your own perspective because that is ego-centric.  If I say I’ve made money, done a good job, did this or that, what does it mean? It just means I’ve done stuff.  It may be perceived to be successful from cultural norms but, I think success is more about whether you have successfully helped others and been in a sense true to yourself. How other people perceive you is important. If I think I’m great, that means nothing if it’s just me that thinks it!” says Wing.

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