It’s no secret that Michael Hill has lived and worked through tough times before. What is different about the current economic meltdown, he says, is that people have “bought into it” more and are letting themselves get spooked. It’s not path he’s following.
“It is quite unknown really, which can be unsettling but everyone is so negative, so spooked,” he says, adding that for reasons unknown to him, New Zealanders seem to be taking it worse than our cousins across the Tasman.
“We’re going into uncharted water but there are different ways of approaching that. The 1987 slowdown had very little effect on us really – we just took no notice of it. This time we’re trying to take no notice, it doesn’t help to get too carried away with it.”
That said, he acknowledges that fluctuating currency and gold prices have made it harder to plan and forecast. And he is keeping close eye on expenses, saying “It’s one thing to be making the money but you have to be careful as it can easily flow out again. If you have big head office, for example. Ours is pretty lean.”
A lean head office fits with his philosophy of concentrating on the things which matter – for jewellery retailer that’s obviously the shop.
“If the absolute worst happened and sales went down 70 percent then you could probably just about do without most things in head office but you can’t do without the shops. You don’t need your CEO in great big plush office that’s detached from the rest of the organisation,” Hill says.
His head office has few glass walls but overall is an open plan office design.
“The CEO should be right there in the middle of all that but still going down regularly to the shops. Otherwise he’s relying on what he hears from managers and they might be saying whatever they think he wants to hear.”
Genuinely modest, Hill says the key to the success of his business is having people who get involved at all levels and know, first hand, what’s going on. He doesn’t see why that basic model should vary across any business, saying that if you get too detached from what you’re there to do, that’s when problems come up.
“I think some banks have got like that – they look so boring on the shop floor and they’re so impersonal that I would wonder when the CEOs of those organisations ever went down and licked bank notes and got behind the counter and returned to where they should have started from.”
Starting at the bottom of business and working your way up is Hill’s recipe for business success.
“At MHI we nurture from within our company. It’s pretty difficult to actually grasp our business and the situation fully unless you actually started with us and literally swept the front of the shop out. And by doing that you then understand what the business is about. It’s quite simple. We’re actually just buyers and sellers of jewellery. We’re like that programme Open All Hours, like Arkwright’s shop, he’s the best seller there is when he puts the pound notes in the till and the spring snaps it shut. That’s all part of the mana of selling,” he says, lamenting the fact that he thinks the art of selling is lost one.
“The art of selling is the most magical thing so it’s shame that, particularly in New Zealand, retail is classed as last resort. There’s nothing more fulfilling than being able to create sale out of nothing, and have an amazingly satisfied customer who wants to come back time and time again. sale should never appear like it’s pushy because if it does that is unprofessional. It can be hard sell but they don’t know it’s happening. That is the skill of it – understanding what your customer wants so usually good sales person doesn’t chatter too much, there’s an awful amount of listening going on.”
There’s real skill in the whole pro-cess, the art of the sale, how the jewellery is presented, how it’s got out of the case, how to slow your customer down and how the piece is handed to them so they pick it up. If customer doesn’t touch piece, they’re never going to buy it, he explains.
While these days it’s the bigger picture and issues of management and governance which occupy Hill’s time, he still keeps close eye on the retail outlets.
“It’s up to my CEO to run things the way the board thinks they should be but if he was just telling the board what they wanted to hear, they could get completely different feeling of the business. So chairman who can’t get behind the counter and sell something occasionally, if he’s in retail, and be at the coalface of the business, to me would be lacking vital ingredient of being able to chair that company properly.”
He is also not fan of independent directors: “I personally don’t believe so much in that because independent directors, particularly ones who are on lot of boards and are just paid directors who go to board meetings, really won’t have any understanding or grasp of the feel of what makes our company unique and different. Unless those differences are nurtured, I don’t feel our company could run as well as it is.”
Hill says his move from manager to director hasn’t been huge shock to the system because he has “always been the master of delegation”.
In 2001 his contribution to New Zealand business was recognised when he received the Companion New Zealand Order of Merit. In the same year, his lifelong passion for the arts, and in particular the violin, led to the establishment of the Michael Hill International Violin Competition, biennial event for emerging young violinists from all over the world. But wait, there’s more – Michael Hill’s private golf course, The Hills, carved from former deer farm near Arrowtown, was selected in 2007 to host the prestigious New Zealand Open for three years. The inaugural event was an outstanding success attracting worldwide international television focus. The Hills clubhouse, an innovative underground bunker-style building, was named Supreme Award winner in the 2008 New Zealand Architectural Awards.
Keeping up his award-winning
endeavours, Hill’s luxury super yacht, VVS1, which operates charters around New Zealand and the South Pacific, has been acclaimed for its outstanding design features, and has won three international design awards.
His family life is entwined with his business endeavours: wife Christine is trustee of the violin competition and on the Michael Hill board. She has regular exhibitions throughout New Zealand of her original paintings. Daughter Emma has worked her way up Michael Hill Jewellers in many capacities; she opened up the shops in Canada and sits on the Michael Hill board. Son Mark is professional sculptor and photographer residing in Queenstown. His images are used for the violin competition while his wife Monika designs all of the graphics for the competition and The Hills.
The Hills – something he says he probably should never have done. “It was more of folly really but I’ve built it anyhow. It was very costly exercise but we’ve got there and I must say that it’s pretty amazing course.”
True to his retail business acumen, staff at The Hills must not be afraid to step in at any level of the business – the greenkeepers moonlight as bar staff and waiters, and the manager can park people’s cars.
“I like people there who multitask – we try to encourage that in all our business and it’s very difficult for some people to understand that. We had one of the world’s richest men from Russia in the other day – we put him with one of our greenkeepers to play round. This client just thought it was amazing. So what we’ve done is that we’ve got all these people to get involved in all aspects.”
Hill believes that is good lesson for life as well – not to get too stuck on the main thing you’re doing.
“We never look outside the box or at other things. But our people do and they love it. How many people are in these great big offices and go in and do the same thing every day and then they go home a
