The lessons of Mainfreight are many fold. That it should be chosen as the Deloitte/Management magazine Top 200 Company of the year could not be more appropriate. There are lessons to learn from this enterprise.
Mainfreight and its approach to governance, leadership and strategy might, in another time and place, have featured in the classic corporate text From Good to Great written by America’s leading enterprise academic and writer, Jim Collins.
Not for Mainfreight founder and executive chairman Bruce Plested the nonsense of importing executives from offshore and paying them morale-destroying and inappropriately high salaries. His company is now $1.3 billion global enterprise. But it is also home-grown and, no one knows the business better.
Not for him the putting of wise and experienced directors prematurely out to grass. Former chief executive and organisational mentor Don Rowlands stepped down from the board this year, aged 85.
Mainfreight does what New Zealand needs more companies to do. It has built business which it is now successfully taking it to the world. It does so by balancing its unique and non-negotiable in-house disciplines against an understanding of the benefits of incorporating aspects of the local business cultures in other countries. It operates 166 branches in Australia, through Asia, the United States and is now invading Europe.
“It is,” says Plested, “our intention to extend our footprint to be located in all the major trading nations of the world.”
And it is Mainfreight’s unswerving commitment to maintaining and exporting its corporate culture, people ethos and service standards that delivers its success – key lesson for Kiwi companies looking to tackle the world.
Mainfreight’s climb to the top of the Top 200 mountain has been sure and steady. It has been threatening to break through for years. It took world economic crisis to reveal the company’s true grit. Again in this year’s annual report Plested said: “… we have had great satisfaction in battling through the recession. Using every ounce of our ability and physical energy we have not only survived, but improved our market position…”
His next paragraph, however, best illustrates the Mainfreight motivation. In describing the company’s achievement of improved market position and an increased tax paid profit for the year he said: “there were no mass redundancies, or enforced reduction of ‘head count’,” description he called “revolting, uncaring, unfeeling” and one he thought would only ever be used by the “least successful of companies’ management”.
Mainfreight had not, in its 32-year history, ever had to “inflict large-scale redundancies”, he added.
Mainfreight is people business, in the true and most comprehensive meaning of the word. It champions its people, runs fair and rational remuneration policy, cares about education for its employees and the community at large, and cares for the health and safety of its people.
But it also stretches. The company lists annual targets and anticipated achievements for shareholders and employees alike. It publishes its “targets, aspirations, hopes and aims” to give “better understanding” of what the business plans to accomplish.
“The targets are challenging and have exposed us to some criticism in the past for appearing to overreach ourselves or, in some cases, failing to achieve the goals,” says Plested. “If we do nothing about goal setting, that is what we will achieve.”
Mainfreight exemplifies all the key practices and attributes that Collins identified as necessary to move good enterprises to greatness.
Their strategies suggest an inclination to promote executives from within their ranks, to develop executives, and recruit and use directors who know their industry deeply and are wise enough to take their own advice, to promote more people-focused policies and to make commitment to expanding offshore. M
COMPANY OF THE YEAR AWARD JUDGES’ COMMENTS
FINALIST
KATHMANDU
Kathmandu’s focus on quality products underpins the company’s growing local and global success. Record sales and earnings, strong margin growth, increases in the total number of retail stores, and growth in same-store sales illustrate what can only be described as stunning year’s performance. The company’s first full year listed on the New Zealand and Australian stock exchanges was both significant for the business and measure of its future ambitions. This is well led, innovative and focused enterprise. And its commitment to its brand development is helping to pushing its growth. Kathmandu is great business that is harnessing the great outdoors.
FINALIST
PORT OF TAURANGA
The Port of Tauranga last docked as finalist in the Deloitte/Management magazine Top 200 Company of the Year category in 2008. The fact only serves to show what an outstanding business this is. The judges said then, and repeated the comment this year, that the port is world-class performer. Once again the figures tell the story – with 24 percent increase in revenue and an almost 54 percent growth in profit. The company continues to focus on efficiency, employee safety and strategic investment. The combination of these and other key indicators keeps the port ahead of the fleet. The Port of Tauranga is an outstanding enterprise that knows its business.
WINNER
MAINFREIGHT
Mainfreight is driven to succeed. And what it has accomplished by turning itself into global New Zealand enterprise is exceptional. That it has accomplished its strategic objectives in the prevailing wilted world economy is testament to the leadership and commercial skills of it directors, managers and employees. Mainfreight is billion-dollar business that has worked consistently to achieve its global goals. At the same time it has maintained its business, cultural and organisational integrity. It is not just the Deloitte/Management magazine Top 200 Company of the Year; it is world-beater that New Zealand enterprises should seek to emulate.
