Derek Handley has big dreams for a small planet

Derek Handley wants to develop a better version of capitalism.

Handley, 36, made millions but is now using his business smarts to make something more meaningful.

This article is from the May 2014 issue of INTHEBLACK magazine.

It might be argued the world needs more aspirational 30-somethings like Derek Handley. Yes, he’s an entrepreneur, and yes, he’s made his millions. But Handley is a learner and a thinker; he’s open to new ideas and is keen to collaborate with the experts to bring his own ideas to life.

What’s captured his imagination over the past two years is the more responsible role that business could play in the world and how it can change things for the greater good. In that time Handley has been exposed to some of the greats of the corporate, philanthropic, entrepreneurial and governance worlds through The B Team, an organisation designed “to make business better” and the world a more equitable place.

The B Team was the brainchild of Richard Branson and European businessman Jochen Zeitz, and they assigned Handley the task in 2012 of setting it up in his role as founding CEO. By taking into account an enterprise’s social and environmental impacts, The B Team aims to make business about more than just making money.

Branson has attracted some big hitters to the organisation – Unilever’s Paul Polman, Huffington Post founder Arianna Huffington, India’s Ratan Tata, communications billionaire and governance advocate Mo Ibrahim.

Handley donated two years of his life to the project, which he now describes as a “movement”, and in January this year became its “Entrepreneur in Residence”.

He shared his ideas on changing the way business does business with former CPA Australia’s chief executive Alex Malley, and they found a common thread in the critical role accounting can play in that transformation, particularly around integrated reporting.

Alex Malley: I see that you spent quite a bit of your childhood in Hong Kong. [Handley’s family moved from Hong Kong to Auckland when he was 13.] In terms of its business culture, how did that impact on you?

Derek Handley: Hong Kong is an interesting place. From a business perspective, it’s ambitious, materialistic and very competitive. You can see that in the way that the city changed as I grew up. In the late 1970s, Hong Kong looked very different. The city transformed through pure relentless drive and ambition. That had a huge impact on me. Plus, as a family, we were business people: my father was, my grandfather, my uncle, a lot of my friends’ parents were from business, so it was ordinary to think about business as a lifestyle.

Malley: Towards the end of your schooling, what was going on in your mind about what Derek Handley was going to do with his life?

Handley: Until about 11 I was going to be a soccer player, but then I didn’t make certain teams! As a child I really loved putting things together and designing them so I thought I’d be an architect. By my late teens I was experimenting with doing business and entrepreneurial things. At university I read a few books that really changed the way I thought about business. One of them was Peter Drucker’s Innovation and Entrepreneurship. He broke down where the patterns are to be found, where are the opportunities, and that every time there’s a problem or complaint about something that’s actually a business opportunity.

Malley: You had a chance meeting with Kevin Roberts, the chief executive of Saatchi & Saatchi, during the early days of your business The Hyperfactory. Do you think that as hard as you work, sometimes you need a lucky break?

Derek Handley (left), shown with his wife Maya, was asked by Richard Branson (right) to join The B Team.

Derek Handley (left), shown with his wife Maya, was asked

by Richard Branson (right) to join The B Team.

Handley: Exactly. You have to work to get those breaks though. They don’t just appear. People like that need to be open to giving those breaks, too. It’s something that I’m incredibly passionate about now because, a few years earlier, I had contacted other business icons and people who are far less busy and far less important than someone like Kevin Roberts, and they wouldn’t even meet me. I know those people today. I think how wrong it is that when a young kid who is trying to create something asks for a few minutes of your time and you can’t find it… those breaks are really crucial.

Malley: When you think about the growth of The Hyperfactory, what were the two or three game changers that allowed the business to be as successful as it was?

Handley: One was that we were very early. We were one of the first people in the world to be out there telling everyone that this was going to happen [marketing through mobile phones]. But equally that has its risks because it means you have to survive long enough for it to actually be true. We started in 2001 and it wasn’t true until the iPhone launched in 2006. We knew that mobile as a device would change everything, the way brands and media companies interact with everyone. Secondly, the iPhone changed people’s perceptions and they understood [what we were doing] immediately. Once Steve Jobs released that device, the whole world got it in an instant and then the business and the market in America just exploded.

The third element was going to America. It’s the market of dreams. Once people get it they dive in. You have huge opportunities. Revenues are all so much bigger. If The Hyperfactory hadn’t gone to America, if the iPhone had taken another couple of years, we probably wouldn’t have made it through.

Malley: I read that you said if that’s all there was [The Hyperfactory], you wouldn’t be happy and there was a wider context that you wanted to delve into.

"Having Richard [Branson] in the room is like an equaliser for having plain English conversations." – Derek Handley

Handley: Yes, that’s when I started to think about what is the role of business in the world and, if these are my skills, what is the biggest impact I could have on other people, on my environment, as opposed to just for myself?

I still love entrepreneurship, I still love the idea of having a vision and creating an entity and then pursuing it. That is part of my DNA. But I think the end goals now are slightly different. They’re how do you use that skill set to achieve something that’s more meaningful than just what’s traditionally thought of as business success, which is financial outcomes.

Malley: Talk to me about the B Team projects and your initial impressions of Richard Branson.

Handley: I met Richard before The B Team, through the [Virgin] Galactic project. (Handley has bought a ticket to travel to space.) Regardless of Richard, I’d decided at the end of 2011 that I was going to experiment with donating a year of my time towards something really amazing that would help me learn and understand – how do we get ourselves to a better version of capitalism, a better version of business? What are the leading-edge thought parameters on each of these areas like investment, how you treat people, accounting, new corporate structures and forms? I told Richard about my plan and he told me that he had this idea of creating a collection of global leaders who believe that we need to change certain things. He didn’t have anyone to help drive it, so that’s where I came in.

Malley: Having dealt with him for a couple of years now, what have you learnt from him over time? I’ve read it’s about having plain language, clarity of vision, conversations not presentations.

Handley: Having Richard in the room is like an equaliser for having plain English conversations – being very simple and clear about what we are talking about, and being human about it. He would be uncomfortable in this room, for example. He’d want to leave because it’s a business boardroom. He’d want to go down to the cafe and talk about it there.

For the last 40 years Richard’s been famous for not taking himself too seriously and not taking others too seriously. At the end of the day, they are all people: parents, brothers, fathers, human beings, and that’s how we should behave.
He has a constant drive to do things on a grand scale but he also has the drive to get other people on board. When there’s a good idea he says: “We should call that guy and get him to do it.” Basically, he uses his privileged position for the most good: “How can I spend the days that I’ve got, the things that I have, the people that I know, to leave this world a much, much better place?” And that is super inspiring. Having now been in that environment with those guys, I want to do that for the rest of my life.

Malley: The interesting part is most human beings need someone to be able to tell them a story they can relate to, so you’ve done that. You’ve done that with your entrepreneurial skills. But you actually want to take them on a wider journey to more integrated thinking about a business’s value, both tangible and non-tangible assets. Is that a fair reflection?

Handley: For sure. The next three, five, 10 years are going to look for me very, very different from the last 10. They are going to broaden, deepen that story. You’re going to see a lot of the B Team come through in everything that I do. It’s this idea that you can use a lot of your energy and time and even money while you’re young, while you’re still building your life, to do things that are better for the community and the world, at the same time as doing amazing things, your passions and your work.

When I was young I thought the richest man in the world was the best business person in the world. Then as I became an entrepreneur, I thought the most innovative guy is the best person in the world – and now I’m totally convinced that for our generation, it’s going to be the business people who use business to make the world a far better place and who solve some of the biggest issues we’ve got. And that they get those two billion people who don’t have a decent livelihood up to a comparable standard as the rest of the world at the same time as not screwing the whole world up.

I think it’s really interesting that our co-founder [of The B Team, Jochen Zeitz] is a marketing person who ran a sportswear company [he was the former chairman and CEO of Puma], who shook the world up through accounting. At the moment business doesn’t measure many of the things that are actually important to the world, to companies and people. And as soon as it starts to, it’s going to start to change its impact. Even as something as simple as stress: Arianna Huffington [a B Team member and founder of the Huffington Post website and blog] is very passionate about the workplace, stress and wellbeing.

As a board member of companies I would be very interested to have a wellbeing metric. At the moment I’ve got occupational safety metrics which are 20 years old, right? What we need now is “How well are the staff, how stressed are they?” The metrics should be created for that type of measurement, in addition to the social wellbeing of the environments that companies work in. All of these things are really exciting things on the cusp of business, well, that businesses are on the cusp of.

Malley: There are a number of initiatives going on in the profession. I sit on the International Integrated Reporting Council in London which is driving the embedding of integrated reporting and thinking into mainstream business practices. It’s about communicating all the various capitals that an organisation controls and uses, and human capital is among them. It was a pleasure meeting you, Derek. I’d definitely like to talk to you some more.

The mistakes Handley had to make

"In 2003-04, I started a number of different businesses, ideas and experiments. I invested in different things and it’s not that I lost lots of money or failed at them (which I did – a lot of them didn’t work), but it was not a great use of my time. Being broadly stretched across a number of things that you’re not super passionate about or on target with is one thing I’m determined not to repeat. It’s a struggle that I always have, because I want to do everything and I want to be involved in everything.

"The other thing, which happens to a lot of people but it happened to me earlier: for a very long time I was working towards a point and I thought once I reached that point, I will then spend more time with my family. I will be happier, I will do less of this and more of that. There were years there where I basically put whole sections of my life on pause or at least on very, very slow play.

"You get through it but then realise you’ve got to do all these things at the same time. You have to live your life as you are achieving these goals. So that’s the one thing that I learnt through the journey that it is actually about the journey. But I guess everyone has to learn it for themselves."

About The Hyperfactory

Mobile marketing company The Hyperfactory was founded by Derek Handley and his brother Geoff in 2001 in Auckland, New Zealand.

It was one of the first agencies to recognise the power of mobile devices for connecting consumers, brands and mass media. It took off when the iPhone launched in 2006 and opened offices in New York’s Manhattan, Los Angeles, Sydney and various points around Asia.

In 2010 the brothers sold The Hyperfactory to Meredith Corporation in the US for an undisclosed sum, thought to be in the tens of millions of dollars. One of Handley’s latest ventures is mobile advertising network Snakk Media which listed on the NZX in 2013.

This article is from the May 2014 issue of INTHEBLACK magazine.

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