Family Biz: Grollo's baptism of fire

Between an ongoing CFMEU brawl and two tragic accidents costing four lives, Daniel Grollo's first year at the helm of his family's $800 million dollar construction company has been what CEO nightmares are made of.

The Grollo family’s third generation succession was completed in March last year, with full ownership of the main construction business, Grocon, passing to the youngest son, Daniel. 

Within three months the Gillard Government had abolished the Australian Building and Construction Commission, and three months after that the 42-year-old Daniel was slugging it out with the CFMEU in the first big, violent stoush with the unions in the company’s history.

And then, exactly a year after he formally took over, Daniel Grollo had the shocking news that a wall had collapsed at one of his Melbourne sites and killed three passers-by. He is now co-operating in three official inquiries into why it happened.

Next Tuesday those two things will come together when CFMEU holds a protest march at the scene of the tragedy to try to use it to regain some leverage over Grocon. Clearly both the dispute and the consequences of the wall collapse have a long way to play out.

Grocon under Daniel’s father Bruno has had a long history of peace with the unions and a good safety record. In Daniel’s first year the business has gone to war with the unions and suffered two tragic accidents – last month’s wall collapse, and also the death of a crane driver in February this year. As they say, it’s all happening.

The Grollo family construction business, Grocon, has now had three textbook successions: when the patriarch, Luigi Grollo passed the business on to his two sons, Bruno and Rino, in 1968; when those two split the company between them in 2000; and when Daniel took over Grocon last year while his siblings Adam and Leeanna took over property development business and other assets.

The Grollos have been one of Australia’s greatest family business success stories.

Luigi Grollo emigrated from Treviso in Italy’s north in 1938 and got work as a concreter, living in a tent and travelling around Victoria picking up jobs. Monday to Friday he was an employee; on the weekends he worked on his own jobs, and gradually that business grew until he was working entirely for himself.

Bruno was born in 1942 and Rino a few years later, and both joined the business as soon as they could leave school, at the age of 15. In the 1960s the business grew rapidly because of the rapid growth of municipal swimming pools and petrol stations in Melbourne, a lot of which were concreted by the Grollos.

In the 1970s Bruno and Rino moved into concrete construction, building shopping centres and skyscrapers and before they long they started developing the projects themselves. In 1975 they won a big contract for rebuilding Darwin after Cyclone Tracy and Bruno and his family moved to Darwin for 18 months.

It’s clear that the Grollos were very good builders. They were well connected with developers and architects and also had a loyal staff and a good relationship with the unions.

Daniel was born in 1970 and, like his father, joined the business straight out of school. During the 1990s, in his 20s, Daniel was forced to go on a steep learning curve and take on more and more responsibility for the construction side of the business when his father was charged with tax evasion and spent years fighting the ATO and the Director of Public Prosecutions before eventually winning the case.

During the same time, Daniel’s mother Dina became very ill, suffering both a heart attack and a stroke, so Bruno spent a lot of time away from the business, fighting the tax charges and looking after Dina. By 2000, and at the age of 30, Daniel was formally in charge.

That same year, because of Daniel’s succession as MD, Bruno and Rino agreed to split the business in two: Bruno and Daniel got the construction business, Grocon, and Rino got the property development operation, including the family’s half share of the iconic Rialto building in Melbourne.

Daniel continued to grow Grocon under Bruno’s ownership and guidance until, in March last year, the second Grollo Split occurred – once again between construction and property development, with Adam and Leeanna sharing the latter while their younger brother Daniel got Grocon.

Daniel says the terms of the 2012 split were basically dictated by Bruno – “in the way that patriarch does”.

As 100 per cent owner of the $800 million a year construction business, Daniel is not only taking a tougher line with the unions and trying to, as he puts it “get control of the sites”, he is corporatising the business under an external board chaired by Rowan Kennedy, a former partner of legal firm, Mallesons.

Other directors are Hugh Thorburn, ex finance director at Stockland Trust and Karyn Baylis, CEO of Jawun Indigenous Corporate Partnerships, and a former executive at Qantas.

Daniel says he thinks about the sustainability of the business and the next succession a lot, although that’s a long way off: his two children with wife Kat are Finnegan, 13, and Matilda, 10, and they’re unlikely to join the business straight out of high school, like their father and grandfather.

Like a lot of family business owners, Daniel and Kat feel strongly that their children should only do what they love. “We’ll never put it on them to go into the business unless they are passionate about it.”

And watching the baptism of fire that their father is now going through, as he commutes between their home in New York and the office in Melbourne, fighting pitched battles with unions and appearing before inquiries and inquests over the three deaths in the Melbourne wall collapse, maybe they’ll think about a different career. Anything.

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