If he’d known what he was in for, Andrew Downs admits he probably wouldn’t have given up his long-standing position at Bridgestone Australia to start his own company back in 1994.
“Ignorance is bliss,” he laughs as he recalls the early years of SAGE Automation. “Knowing what I didn’t know is probably the reason I took such a big leap,” he continues.
“When I walked out of my day job into the security of my backyard shed, I can honestly say that I had a good handle on the technical side of running a business, but I had close to zero knowledge of the aspects that really make a business, such as accounting, law, human relations, et cetera.”
Andrew Downs discovers industrial automation
During the 14 years Andrew was employed at Bridgestone Australia’s South Australian operations, the electrical engineer discovered a passion for industrial automation. “It got to the point where I could see what others were doing, and I just had the feeling that I could do it myself – and do it better. I just thought: ‘Why wouldn’t I start my own business?’” he says.
Within the first year, the fledgling business had a staff of 7 – mainly colleagues from Bridgestone Australia – and was operating a round-the-clock backyard operation. “Unfortunately, I wore out my welcome in the shed when the council caught on and started to chase me.”
Andrew was given a month to find new premises, a move that instantly stripped away the low-cost nature of his new venture. “But the story is a good one, because word of mouth spread and we kept growing. It was quite dramatic and exponential in the early years.” Of the 7 people in that shed, 4 are still with the company today, and each holds a senior managerial role. CEO until 2008, today Andrew is group managing director and majority shareholder.
He believes that the appointment of 4 “key lieutenants,” as he calls them, as shareholders in 2000 was the best decision he has ever made. All are longstanding employees of the company, and one of them even succeeded him as CEO: Adrian Fahey. He admits it’s a position that he never really liked. “I enjoy being freed up to focus on entrepreneurial projects for the business,” he explains.
SAGE Automation’s growth is tied to diversity
Andrew says the early days were very “South Australian-centric,” where the primary focus was on manufacturing. “Diversity has been the key to SAGE’s business growth,” he believes. “One of the best things we ever did was always to try to work in new markets. If you fast-forward to today, a lot of the industries we originally worked in have basically disappeared, such as tyre production.” Bridgestone famously closed its doors on its Adelaide tyre factory in 2010, after 45 years of operation. It was the last of its kind in Australia.
Diversity has been the key to SAGE’s business growth
The projects that Andrew identifies as particular favourites demonstrate the extent of SAGE’s diversification. “Getting into defence has been exciting. We’ve done a lot of work in runway lighting for the air force and we’re now tendering for all the work coming up on the offshore patrol vessels, submarines and frigates. I also love working in wineries because I get to see and taste the quality of the products,” he laughs.
Next for SAGE: global expansion and a strong M&A program
And while the scope of the state’s naval program and the class of its wineries need no introduction, Andrew emphasises that this diversification can also be defined geographically: today, SAGE has offices around Australia, and it also established a presence in India in 2012.
He has not ruled out further international expansion, but concedes that experience has taught him to be far more strategic. “At the beginning, if there was an opportunity we grabbed it. Now we are trying to do a lot more research around markets that aren’t going to disappear in Australia.”
Airports and aged care are two industries the company has flagged as having bright long-term prospects. Recently, Andrew found himself rubbing shoulders with billionaire business owners at Harvard Business School’s Owner/President Management Program.
A world away from the “school of hard knocks,” as he refers to his early years in business, Andrew came away from the experience transformed: inspired to embark on a strong mergers and acquisitions program.
“I think we have spent 24 years building a strong business with all the right systems and processes in place. We’ve got a great platform. Now it’s time to add smaller businesses to our existing operation and grow.”