Nous Autumn 2013

Waikato’s business innovation and insight | Win an iPad mini inside

AUTUMN 2013

Berry Evolution: BBC Technologies’ world-class processes

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builds Community builds Business builds Community

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“ The BNZ Partners Centres have given us an environment and facilities conducive to doing work.

The coffee’s not bad, either.”

Warahi Paki, Chairman, Ngati Tamaoho Trust

builds Family builds Community builds Business builds Community builds Family builds Community builds Business builds Community builds Family builds Community bu

The activities of the Ngati Tamaoho Trust are varied and widespread. A typical month could encompass anything from Treaty negotiations to business dealings. A growing challenge, however, was a suitable venue. The iwi’s premises had served well in the past, but progress now demanded a larger, better equipped alternative. The solution was close at hand. As a BNZ customer, the Trust had complimentary access to the BNZ Partners network of Business Centres. Utilising both Pukekohe and Highbrook addresses, the Trust subsequently enjoyed modern meeting spaces as well as full facilities, including wireless internet, conferencing equipment and even free coffee. Says Trust Chairman, Warahi Paki, “The ambience is relaxing, yet professional, enabling us to be productive in an environment that is extremely conducive to doing work.”

To find out how our Business Centre network can enhance your success, talk to us today.

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welcome

The saying goes that “no man is an island” and, in today’s increasingly connected world, the same can be said for countries. New Zealand may not fit the description physically, but metaphorically it is no exception.

As a small, geographically isolated country, we need the rest of the world. We need their imports, their knowledge and their much larger markets – businesses, government organisations and consumer markets – in order to thrive.

Exporting products or services is the most traditional way to go about it, but, as we found out while putting this issue together, engaging with international markets can come in many forms. It’s a fast-moving world and things are changing in every sector. The old rules either don’t apply any more or soon won’t, so it’s necessary to look beyond them – both for the

enduring success of individual companies and the national economy.

Ben Buckland is skipping the conventional first steps in business by taking his company PagePulse global from the beginning (page 10). The need is there, as is the technology, so why not? Today’s world moves fast. Wait for the “right” conditions and someone may beat you to it.

Wintec also isn’t waiting for the future to hit, they’ve recognised that change will come and they’re laying the foundations for it right now (page 24). We can’t simply rely ad infinitum on attracting students to study at our institutions here in New Zealand, but what if our teaching methods and courses were on offer over there?

It’s early days, but it looks like our mature vocational training industry is getting its time in the sun.

Of course the international route is not only for new businesses or initiatives, we also profile two established businesses, each with a wideranging international client base. Gallagher Group is celebrating its 75th birthday this year (page 27), while BBC Technologies has reached at least four of the world’s continents in the 13 years it has been manufacturing and selling berry sorting machinery (page 14).

Both businesses started with a simple but ingenious idea, but it was their ability to capitalise on those theories that helped create such enduring businesses. That’s not as easy

Brooke Baker

Global village as it sounds and we don’t do it as well as we need to. Waikato Innovation Park deputy chief executive Peter Maxwell lays out his blueprint for successfully commercialising our research and development (page 34).

That’s by no means everything we’ve packed into this issue, our first for 2013, but it’s a good little taster!

On a completely different note – it’s been a year since we changed our name from Scope to Nous, so we thought it was about time we asked for your help. We don’t like standing still, so on page 17 you’ll find our first reader survey. It won’t take long to fill out – whether you stick with pen and paper or head online – and will help us make the magazine even better. Plus, everyone who participates goes in the draw to win an iPad Mini or one of five double movie passes.

As always, if you have any stories of your own that you’d like to share with the Waikato business community, drop us an email at editor@nousmagazine.co.nz. We always love to hear from you.

In the meantime, read on, enjoy and pass it on when you’re done.

We’ll see you again soon.

Ellie van Baaren EDITOR

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contents

Publisher Ian Cassels

Editor Ellie van Baaren

Design Rebecca Walthall

Contributors Brooke Baker, Greg Bruce, Anne Challinor, Peter Maxwell, Jason Lewthwaite, Dawn Tuffery

Printing Colorite

Web Crescendo Multimedia

Free subscriptions editor@nousmagazine.co.nz

Advertising enquiries advertising@nousmagazine.co.nz

Feedback editor@nousmagazine.co.nz

Nous Magazine PO Box 11808 Wellington 6142 www.nousmagazine.co.nz Published in partnership with IN-Business Media Ltd www.in-business.co.nz ©IN-Business Media Ltd reserves the right to accept or reject all editorial or advertising material. No part of the magazine may be reproduced without the written permission of the publishers. Letters and emails addressed to the magazine will be regarded as for publications unless clearly marked not for publication. All rights reserved.

While the publishers make every effort to ensure that no misleading claims are made by advertisers, responsibility cannot be accepted

by Nous magazine, IN-Business Media ltd or any of the publisher’s related entities for the failure of any product or service to give satisfaction, inclusion of a product or service should not be construed as an endorsement of it by Nous magazine, IN-Business Media Ltd or any of the publisher’s related entities.

ISSN 2253-2374 (Print) ISSN 2253-2382 (Online)

ROLLING WITH THE PUNCHES The Gallagher Group celebrates 75 years at the top

p.27 4 NOUS AUTUMN 2013

contents

BORN GLOBAL Hamilton’s PagePulse takes on the world from the start.

Anne Challinor

p.10

REGULARS

PROFILES

FEATURES

OPINION

SHORT CUTS

BORN GLOBAL Hamilton’s PagePulse takes on the world from the start. p.10

NOUS READER SURVEY 2013

DRIVING CHANGE

The latest business news from the Waikato area. p.8

GALLERY An evening with the Chiefs, Hamilton Gardens Arts Festival, New Zealand Business Excellence Awards, Ranfurly Shield visit. p.32

FROM THE DESK OF… PEPPER CREATIVE Filming international show Catch n Cook takes this company around the world. p.12

BERRY EVOLUTION BBC Technologies takes its machinery from Ohaupo to the world. p.14

ROLLING WITH THE PUNCHES The Gallagher Group celebrates 75 years at the top. p.27

We want to know what you think. p.17

BEYOND IDEAS Commercialising our R&D is key to the New Zealand economy. p.20

CUTS BOTH WAYS

Jason Lewthwaite says New Zealand needs to be looking to the future, now. p.30

GIVE AND TAKE Peter Maxwell goes through what it takes to successfully exploit R&D. p.34 Waikato’s business innovation and insight | Win an iPad mini inside

Wintec looks beyond attracting international students to New Zealand. p.24

AUTUMN 2013

Berry Evolution: BBC Technologies’ world-class processes

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NOUS AUTUMN 2013

1

On the cover: BBC Technologies’ Geoff Furniss photographed by Brooke Baker.

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in partnership with

Nous magazine is a quarterly publication focused on leading edge technology and business innovation in the Waikato region. Our purpose is to provide insights, connections and inspiration to business decision-makers. This is a unique initiative supported by partners with a shared goal: to stimulate and support Waikato business growth.

We acknowledge our foundation partners – Wintec, BNZ and Gallagher – and associate partner Prolife Foods.

Foundation Partners “To be an integral part of the community, we partner with many different organisations and businesses throughout the region. Nous is about showcasing innovation in the Waikato and providing credible insights, connections and inspiration to our businesses, industry groups and organisations. Having a wide range of stories to inspire people and stimulate growth in our region is key to our commitment to this magazine.”

Mark Flowers, CEO, Wintec

“Large, small or in-between, Waikato BNZ Partners offers businesses the support they need to grow and prosper. We believe there is no substitute for local knowledge and experience, which is why we provide access to local business specialists who can help you expand into new markets, manage foreign exchange, or simply enhance your cashflow – amongst many other things. Because, like the publishers of Nous, Bank of New Zealand is dedicated to the growth and success of the Waikato business sector.”

Mike Frew, Managing Partner, BNZ Waikato

“We’re strongly of the belief that this particular medium reaches all organisations with a passion for doing the best in business, and we’re delighted to be involved. We see sponsorship as one of our core principles. It’s our commitment to the community. We’re always delighted when we find a sponsorship that fits all our criteria: the community, our staff and our stakeholders.”

Margaret Comer, Corporate Services Executive, Gallagher Group

Associate Partner

“Prolife Foods is a Waikato owned, Australasian Food Company, with well-known brands such as Alison’s Pantry, Mother Earth, Value Pack and Donovan’s. We believe, as we obtain our revenue from the greater community, we have a social and commercial responsibility to invest back in that community. Accordingly, Nous magazine is a tremendous opportunity to communicate with the Waikato (and New Zealand) business world by celebrating Waikato successes and promoting topical commercial issues.“ Bernie Crosby, Prolife Foods

We also appreciate support from: New Zealand Trade & Enterprise, SODA Inc, Opportunity Hamilton, Global Entrepreneurship Week and Colorite.

NOUS AUTUMN 2013 7

short cuts

New man at the top Former Hamilton International Airport CEO Chris Doak is taking on a new challenge as Waikato University’s first executive in residence, a new role created as part of a push for more engagement with the business sector.

Doak, who spent seven years at the airport, has previously worked at WEL Energy Group for nine years and has experience in manufacturing, energy, telecommunications, property, tourism and airport sectors.

As part of the role, he will be lecturing stage two students in supply chain management and logistics, as well as assisting with research outcomes associated with the Institute of Business Research. > www.waikato.ac.nz

Chris Doak , Waikato University’s first Executive in Residence

Women’s winner Emma Crum

On two wheels Thousands of cycling enthusiasts made the most of the beautiful weather in February when they headed to Cambridge for the Avantidrome REV Cycle Festival.

Established in 2006, the festival looks to promote quality cycling experiences for a broad range of ages, skills and fitness levels through rides of varying lengths – 18km, 55km, 100km and 135km.

The elite race attracts some of the country’s best riders and this year Emma Crum placed first in the women’s race for the second year in a row, while Karapiro’s Shem Rodger stole first from Te Awamutu’s Hayden McCormick in a tightly fought men’s race.

The festival moved from Hamilton to

In the kitchen Celebrity chef Josh Emett will be entertaining and educating the crowds at Fieldays this year with four days of cooking demonstrations in the Fieldays’ Kiwi’s Best Kitchen.

Currently on our television screens as a judge in the fourth season of Masterchef New Zealand, Emett will also be exhibiting Chef Series, his own range of slow cooked meats, in a kitchen that occupies a prime location at Fieldays. The specially designed venue showcases quality food, beverages and cookware from New Zealand and features a themed cooking demonstration area with grandstand seating plus a Kiwi’s Best Kitchen café and bar.

The Michelin star chef was brought up on a farm outside Hamilton and visited Fieldays when he was younger.

“My Father used to work in a burger van at Fieldays with Ohaupo Lions Club so I’d go every year when I was young and I absolutely adored it. It’s a hugely iconic New Zealand event that has gone from strength to strength. I’m very excited about coming to Fieldays and looking forward to meeting some good rural people; it’s going to be spectacular.”

Sites are nearly all sold out ahead of the 45th Fieldays, held this year from 12 to 15 June at the Mystery Creek Events Centre. > www.fieldays.co.nz

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Cambridge in 2012 and added a new title rights partner when The Home of Cycling Charitable Trust signed on late last year. The Trust is currently building the Avantidrome, a facility that will feature a world-class 250m UCI Category 1 track and will be linked to worldclass facilities for mountain biking, BMX, road and trail cycling.

While the adults competed for the various titles, a record number of under-12s got a special treat when world champion and Olympic cyclist Alison Shanks opened the REV Mini and then completed three laps of the circuit. > www.therev.co.nz

short cuts

Family-owned meat processing company Greenlea Premier Meats was the big winner at the 2012 Waikato Business Excellence awards, taking out the supreme award at the end of last year. The company was started in 1993 and, with a reported annual turnover of more than $30 million, it has become a serious player in New Zealand’s meat industry. It operates plants in Hamilton and Morrinsville and employs 380 staff across the two sites.

Greenlea also won the Tompkins Wake-sponsored award for businesses employing 50 or more full time equivalent (FTE) staff.

SODA Inc was also recognised, taking home the Wintec Special Award for their contribution to building up small and medium business enterprises. The business incubator was set up in 2009 as joint venture between Wintec and Hamilton City Council and is one of eight incubators around the countries with New Zealand Trade and Enterprise accreditation. The panel of 10 judges unanimously agreed that SODA should receive the award for the 1-5 FTE category.

The award ceremony was held at the Claudelands Events Centre in December.

And the winners were …

• WESTPAC WAIKATO BUSINESS OF THE YEAR:

Greenlea Premier Meats Ltd • WAIKATO MANAGEMENT SCHOOL LEADER OF THE YEAR:

Dick Breukink (Novotel & Ibis Tainui) • WINTEC SPECIAL AWARD FOR SERVICES TO START-UP COMPANIES:

SODA Inc.

flickr user nooccar

Regional business excellence

Imagination stations Two Waikato University teams competed in the final of the 2013 New Zealand Microsoft Imagine Cup held in Auckland on 24 and 25 March.

One team has designed an app to bring families with one parent working away from home closer together, while the other has a mobile app aimed at helping people in third world countries keep up to date with their vaccinations.

My Storyteller has been created by the Cold Studios team of Ersin Buckley, Shawnee Kitson, Brian Cole and Marcel Beetz. It allows caregivers to record themselves telling a custom story while overseas or away from home, that is then sent home via the internet and can be played back for their child at any time.

The second app has been created by Jess Howse, Michael Watson, Haley Littlewood and Keiran Thomson. It keeps records of vaccines and will notify the user or other family members via text message when they’re due for a booster shot. It will also notify the user of any updates or new vaccines when they’re connected to wi-fi.

The Microsoft Imagine Cup is the world’s largest technology competition and invites tertiary students from around the world to create software using Microsoft applications to find real solutions to real-world problems. Twenty-five finalists competed for the chance to represent New Zealand at the worldwide finals in St Petersburg, Russia.

More than 1.65 million students from 190 countries have taken part in the competition over the past 10 years and app proposals for the 2014 competition are currently being accepted. > www.microsoft.com/nz/imaginecup/

• DELOITTE AWARD FOR BUSINESSES THAT EMPLOY 5-14 FTES:

More4Apps Ltd • WEL NETWORKS AWARD FOR BUSINESSES THAT EMPLOY 15-49 FTES:

Anglesea Hospital Ltd • TOMPKINS WAKE LAWYERS AWARD FOR BUSINESSES THAT EMPLOY 50 OR MORE FTES:

Greenlea Premier Meats Ltd • MYSTERY CREEK EVENTS CENTRE AWARD FOR NOT FOR PROFIT BUSINESS:

Child Matters

flickr user eggplant

> www.beawards.co.nz

Getting on board The Hamilton Science Awards Trust has a new face on its board – Hill Laboratories’ managing director Dr Roger Hill.

The Trust runs the Kudos Awards, an annual gala event that recognises scientists working on a wide range of research projects throughout the Waikato region. Chairman Bob Simcock says the trust is honoured to have Dr Hill on the board.

“He is an inspirational leader in our region’s science community and someone who has a real passion for recognising the world-class research performed throughout the Waikato.”

Dr Hill started the soil, plant and watertesting laboratory as a young soil scientist in 1984. The company now employs more than

New appointment Dr Roger Hill

300 staff throughout the country and won a Deloittes Fast 50 award for the fastest growing mature business in the Central North Island in 2010, as well as the Westpac Waikato Business of the Year supreme award.

The nomination period for the Kudos awards opens on 1 May. > www.thekudos.org.nz NOUS AUTUMN 2013 9

profile

Born global Page Pulse started life in 2003 as a small New Zealand company, but the GFC hit hard, and it ‘rebooted’ as a global company with big goals.

Greg Bruce

PHOTO BY

Anne Challinor

Anne Challinor

WORDS BY

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t sounds like common sense: build your business at home before going global.

But if Ben Buckland’s experience is anything to go by, restricting yourself to your home country in the early days, especially when it’s a country as small as New Zealand, isn’t common sense at all.

In 2003, Ben Buckland was working in the software space for a local finance company when he overheard a colleague saying: “If we find out from a customer that our website is down before we know, I’m going to start firing people”.

“I went, ‘Wait a minute, I’m a bit of a techo, how hard can it be to simulate somebody using a website?’,” Buckland says. “I put together a prototype and showed it to this colleague of mine and said, ‘Hey I overheard you make this comment, what happens if we could do something like this?’.”

The response was enthusiastic, so Buckland spent the next year building the product in his spare time, then thought it was time to go to market. His employer transferred him to Australia and he took PagePulse with him, started making sales and gaining momentum.

He quit his job and things were going well for about a year and then the global financial crisis hit.

“It was like overnight somebody turned out the light,” he says.

The bank hired him back and over the next three years gave him the contracts to work in Vietnam and Indonesia. He maintained PagePulse with an attitude of: “We may not be able to get new customers, but let’s make really, really sure we don’t lose any customers we do have.”

Having successfully achieved that goal over the following three years, he completed his contract in Indonesia at the beginning of 2012 and came back to New Zealand with one thought on his mind: ramp things up and begin the second coming of PagePulse as a global player.

“It was almost like a reboot,” Buckland says.

“We sat down and really focused on analysing the business from beginning to end – these are the things that worked, these are things that didn’t seem to work, these are the market forces, this is what’s going on in the industry as a whole, this is where technology’s shifting.

Is there still a strong viability for a service like PagePulse? And we’re like, yeah there absolutely is and how do we make the most of that opportunity?

“We wanted to do something a bit differently I guess. We wanted to sell to all these countries

and create an ecosystem where everybody’s able to feed off and add to everybody else as well as sharing in global experiences.”

PagePulse is effectively a digital mystery shopper, allowing businesses to keep tabs on their websites and to get a customer-eye view as to how they are working. It’s software as a service and, as such, lends itself to being set up anywhere. In fact, by going international from the start it’s possible to eliminate a range of potential future issues including having to re-engineer software for multiple markets, something that can be a drain on time and resources.

But there are also issues to be overcome.

One of the key ones is knowing your market;

“It’s a big prize out there and I think you should think that way. It’s a global economy. Why would you limit yourself to just New Zealand and Australia?”

understanding what unique needs your customers have in each location and then being able to take care of those needs. Nothing yet beats feet on the ground for that.

Buckland used his contacts from his previous roles in Indonesia and Vietnam to find trustworthy partners who could help him build those markets and simultaneously began tapping the skills of locals to help further build the overall business. He also began exploratory work in the Philippines.

“We went, OK there’s this emerging offshore business, how can we really make that work?

Rather than essentially selling product, how can we set up an ecosystem that spans all those countries and, for lack of a better word, create centres of excellence in each of those countries that everybody was able to feed off.

“If the Philippines was good around service support, then as well as selling the product maybe we could set up a support centre in the Philippines. If Indonesia was really good at cutting code, why couldn’t we get Indonesia to cut code for all those other areas?”

The countries that Buckland targeted had a number of things in common: they were emerging markets with rapid growth in internet penetration and a large population that was relatively technology savvy even if the country’s infrastructure was not yet quite up to the standard of more developed markets.

There was also an emerging affluence and opportunities for people in those countries to create the centres of excellence that Buckland hoped to feed back into the wider ecosystem.

Back in New Zealand, he approached SODA Inc, the Waikato-based business incubator, and through that quickly made connections in the Czech Republic. Although it’s quite a different market from the Southeast Asian countries he had first established himself in, Buckland felt was a good fit for PagePulse.

Things are now happening quickly and that has been intentional, Buckland says: “I didn’t want to incrementally grow the business – x plus 5 per cent, 10 per cent – I wanted substantial increase.”

Using online tools like Yammer, PagePulse is now harnessing discussions across its growing global presence, so somebody in the Czech Republic might now say: “Here are some things that hit the mark for this potential customer, you might want to try that.”

Buckland’s aspirations are obviously far bigger than just Australia and New Zealand second time around and he’s determined to make the business work. The business is still small in terms of employees but he’s aiming for 1000 per cent growth in the next 24 to 36 months.

“It is ambitious, but we’ve got a very scalable business, so as long as we get the package right, there’s no reason we shouldn’t be able to hit those figures.

“If you have to touch, tweak and tune vast parts of the system, and I’m not just talking the technology system but the business system, then that really limits your potential to get out there.”

With a more efficient product that can be applied to multiple international markets without major tweaking and tuning, PagePulse’s potential has grown dramatically from its first incarnation.

“You can visit as many customers in Sydney as in the whole of New Zealand,” Buckland says. “You can visit as many customers in Jakarta as in the whole of Australia … It’s a big prize out there and I think you should think that way. It’s a global economy. Why would you limit yourself to just New Zealand and Australia?” n

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profile

From the desk of…

Pepper Creative

When the company he was contracted to for producing adventure cooking show Cook n Catch pulled out not long before shooting was due to start, Lance Bauerfeind had two choices: find another project or go it alone. He took the second option.

AS TOLD TO Ellie

van Baaren

T

he show is the brainchild of Aaron Carotta, an American producer/ presenter who plays the “average Joe” who has to source the items on an ingredient list handed to him by a master chef. This is no ordinary shopping list; he has to literally catch his dinner, whether that’s by spear fishing, pig hunting or jumping out of a helicopter. All in the name of entertainment for us at home.

Which is where Lance Bauerfeind comes into the equation. The cameraman/editor/ motion graphics artist owns Pepper Creative, a company that produces corporate promos and television programming, and was originally contracted by another production company to work on the first series of Catch n Cook. When the company pulled out just before shooting started, Bauerfeind decided to take it on himself.

The first series was based entirely in New Zealand and screened on Food TV late last 12 NOUS AUTUMN 2013

year. It proved popular and has now been sold to networks in Russia, the USA, India and Hong Kong. Work has now started on a second series which starts in New Zealand and makes its way to exotic locales around the world – South Korea, Colombia, Thailand and more.

The difficulties of turning ideas into reality.

[South] Korea was interesting. The second recipe called for pork and ideally, in order to catch the pig, we wanted to go out and shoot it. But you’re not allowed guns in South Korea.

Nobody hunts over there. We asked about wild pigs, thinking we could catch one, but you just don’t do that there. That does happen a lot – you go in with these ideas and then “oh no you can’t do that”. We just have to look for other ways to get the adventure into the show.

Crazy antics down the mountain. We went down to the Southern Alps to catch a Chamois [goat-antelope] and actually got a hunter,

one of the old school guys who used to do live catching, and he actually dived out of a helicopter onto the Chamois. I mean down the mountain. Those helicopter pilots are insane.

Where they put things is unbelievable. You hear them over the headsets saying ‘oh I found

“I mean, it’s reality TV so we go in blind. There’s just the two of us on location – we get in there, we film and we’re out again. We do it in two days.”

a spot to put it down’, you’re looking around and there ain’t no spot. You’re sort of flying over the mountain and there’s a literal edge that you can sort of hover and hop onto. That was really adrenaline pumping!

This isn’t quite what I’m used to. I had done a bit of broadcasting in the past, but this level was more than I had done before so it was a steep learning curve. Even now … the different broadcasters have different standards, from an electrical perspective, so if you don’t have a certain tolerance then it can’t play through their circuits and on their satellites. But apparently Russian networks have some of the highest standards in the world so if you meet them then you’re covered for whichever networks might want to screen it.

There’s more to it than being creative. You tend to think of cameras and television as being creative, and it is to a certain degree, but it’s a

lot more technical than what it’s given credit for. I mean, it’s reality TV so we go in blind.

There’s just the two of us on location – I’d like there to be more, but budgets don’t allow for it – it’s full on. We get in there, we film and we’re out again. Each episode takes about two days.

We think differently. There are definitely different mindsets between Kiwis and Americans. I’ll grab anything anywhere to make it happen. I’ll grab someone and say ‘can you hold this for me’ but Aaron will say ‘unless we pay them we don’t give them a part’.

It’s completely different to how things used to be. I think that the market is changing, in as much as the equipment is a lot more accessible. Camera companies are pushing out cameras that you could never get five or six years ago and we’re using software that would have cost hundreds of thousands before, but you don’t even have to have a dedicated computer system now. There is still a certain degree of high quality material that you need but it’s nowhere near what the BBC has – they have multi-millions invested in gear. Things are a lot more doable; a lot more cost effective.

International co-operation can open all sorts of doors. We were dealing with the government in Korea and the government has their tourism board, which works closely with large companies that they want to promote overseas, so there are great contacts. One of those companies does Pacific oysters, which are these massive oysters, and they organised access for us to octopus fishermen. They’re so well connected so over the seven days we were in Korea we really got to develop good relationships. From there came opportunities for Colombia and Thailand. > www.peppercreative.co.nz NOUS AUTUMN 2013 13

profile

Berry evolution Every summer, blueberry pickers follow the meandering road to Ohaupo’s Blueberry Country to enjoy fresh fruit or ice cream amid the idyllic rural surrounds. What they might not spot is a bustling global technology company at work just behind the scenes.

WORDS BY

Dawn Tuffery

S

PHOTOGRAPHS BY

mall fruit is big business for BBC Technologies. Their advanced processing equipment is exported to North America, Europe, South America and Australasia, and chief executive Geoff Furniss is openly proud of his staff’s success. “We have an incredible team.” Today, the engineers are working feverishly to get a machine assembled so it can be tested before the blueberry season finishes.

Thirty years ago, Furniss’ parents planted the first vines for Blueberry Country Ltd, now the largest blueberry orchard in New Zealand.

BBC Technologies developed initially to fulfill the orchard’s own requirements and is in its 13th year of selling machines commercially.

They have also diversified into processing machinery for other small food products such as cherry tomatoes, cranberries, and olives.

The Ohaupo site remains an important base for research and development, or what Furniss cheerfully calls “testing and busting”.

“Hopefully by the time equipment’s finished here it works in the real world.”

Twenty years ago, the automated sorting systems on the market for blueberries were expensive and sometimes inefficient. In true entrepreneurial style, Furniss’ father Greg decided to develop his own improved versions, with the help of an engineer. A connection in the USA industry also proved a valuable consultant. “They went round and round for a couple of years until the industry contact was 14 NOUS AUTUMN 2013

Brooke Baker

saying ‘It’s now a commercial piece’,” Furniss says. “That evolution they went through was really important and it took all three people.”

This collaborative process extends to the company’s current operations, he believes.

“No one person designs everything at BBC. You need a wish-list from sales and marketing plus the mechanical team who say what they can make happen in reality.”

E

quipment is initially designed in 3D modelling programme, Solidworks, with parts outsourced to specialist local fabricators such as Stainless Designs. “We don’t want to spend millions on that equipment if somebody else good has already got it. We have a finished welding bay at the far end and do the final testing and assembly of machines as they come through.”

A first rig will have as many ideas and concepts on it as possible. “It’s pretty Heath Robinson but it’s a way to find out what works,” Furniss says. The machine will then be tested extensively, potentially overseas, and developed into a pre-commercial release.

Once upon a time, grading fruit involved labour-intensive work by hand. Now the machines are intricate, precise, and fast. As we watch, blueberries are colour-sorted, air-cleaned, checked for disease, sanitised and inspected – at a rate of 1000 berries per second. They can then automatically be weighed, emptied into punnets, labelled and

sent off ready for market. The products can be configured in different ways for different customers, many of whom are running larger operations.

Core design principles include the need for easy cleaning and maintenance, no product catching points, longevity and ease of use.

Their improved Soft Sorter can physically feel how firm or soft a berry is without damaging it, something he demonstrates by touching the inside surface with his fingers – “50% softness level” flashes up on the screen.

Other machines are vision-based, sorting fruit on colour, diseases, and maturity.

“Historically, product was either good or bad but now it has more options. We take a shot, rotate the berry and take more, so we get a much higher level of accuracy.”

Principle concepts are developed from scratch, says Furniss. “In essence, we’re an R&D company, so we have an electronic design team, a software design team, and a mechanical design team. We get together and ask: what does the next generation look like, and what is the customer really after? How do we deliver it in an innovative way that beats competitors?

“Coming from New Zealand you’re not going to be the lowest cost producer. We’ve got to be smarter or we’re going nowhere.” >

“Coming from New Zealand you’re not going to be the lowest cost producer. We’ve got to be smarter or we’re going nowhere.”

GEOFF FURNISS

NOUS AUTUMN 2013 15

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imited opportunities in New Zealand mean that BBC Technologies have targeted an international market from the beginning. The first commercial sales took place in North America, which remains a core area for the company.

Working out a successful distribution and sales model has provided the primary challenges to date – the team all had hair once upon a time, Furniss notes wryly.

“We never stop, it just rolls. There’s North American cherry season or blueberry season in Florida. Five years ago it was more seasonal – you did a whole lot of work and then rested, but not now. If there’s a hole in the calendar we try and fill it; getting everything utilised makes more sense.”

One issue has been ascertaining whether, given the length of time it can take to train them, training sales agents overseas is a worthwhile investment. “We’ve gone away from that and have developed our own sales teams where we operate, working with local people that we’re directing.”

Speedy growth means that the Blueberry Country location is also becoming a squeeze, however, Furniss definitely intends to continue being based here in the Waikato.

G

etting into your target market and knowing its intricacies is crucial, he says – you can’t pretend. “We know our business intimately and

16 NOUS AUTUMN 2013

that’s been a big advantage. You understand what the customers need, intuitively. If we’re not at the front of the curve we get run over.”

Moving into new commodities such as cherries has sometimes been difficult as it involves re-learning those instincts and commercial drivers, however, consulting key industry decision makers can help bridge that gap.

“We ask where their value proposition works and what are they really wanting to make their business work better? The faster we can absorb that information, the faster we can develop a product they want. You try to shortcut where you can because that’s the most expensive part of the business cycle, but if you don’t do it right, you’ve wasted a lot of time.”

Furniss jokingly points out their “R&D graveyard” – an expensive but intriguing collection of discarded machinery. Short fruit seasons mean customers need to know any repairs can be provided immediately, so another key aspect in BBC’s success is providing strong international support.

“Ninety per cent of our customers will have a technician within three hours if they need it, anywhere on the planet.”

He says these global service teams also become a valuable feeding team for the rest of the business. “Those guys spend a couple of years on the road – their instincts are really good for what customers want. They often end

up going into the sales or the design teams, depending on their preference.”

In the near future the company will be looking to consolidate and stabilise the business, while expanding their distribution

“We know our business intimately and that’s been a big advantage.

You understand what the customers need, intuitively. If we’re not at the front of the curve we get run over.” and sales base in South America and Europe.

Furniss finds that doing things piece by piece and employing the right staff is key – ideally people smarter than yourself. It’s about aptitude and attitude. Developing machines for sorting blueberries could be seen as pretty mundane, he says, but the challenge of creative problem solving is consistently exciting.

“One of the differences with our business is that we can’t just be best in New Zealand. We have to be best in the world, which raises the bar a little bit higher.” n

reader survey 2013

WiPaIdNmini

An

READER SURVEY 2013 Hi there, It’s been almost three years since Nous was launched – although then it was under another name – and a year since we changed the name from Scope to Nous.

During that time we’ve been striving to create a magazine that supports and celebrates the Waikato business community. You, in other words.

Which means that every now and then we need to check that we’re providing you with articles that interest and inspire you. That’s where this reader survey comes in. Now that you’ve got used to us being around, we want to know what you like and don’t like about Nous, and what you want to see more of.

Be honest – we don’t bite!

We’ve kept this questionnaire nice and short – we know how busy you are – so if you could take just 10 minutes out of your day to give us your feedback, we’d really appreciate it.

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Nous Magazine IN-Business Media PO Box 11808 Manners Street Wellington 6142 So thank you in advance for your participation and we’ll see you soon.

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NOUS AUTUMN 2013 17

reader survey 2013

About us 1. I remember seeing the following issues of Scope or Nous magazine: Annabelle White : Local skills, extra value | Sir Robert Jones : Show-pony shame

7. I would like to see more content in the following areas:

startup

(tick as many as appropriate)

SUMMER 2011

Waikato’s business edge

Top crops

Inside : Win an iPad 2

The best of Waikato’s export food industry

Red tape wrangle: Untangling export regulations The milk of human ingenuity: Open-access dairy projects

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Formerly known as Scope | Business innovation, inspiration and insight

Formerly known as Scope | Waikato’s business innovation and insight

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WINTER 2012

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Exporting Agri-business Arts and culture Health Hospitality Tourism Manufacturing Finance/economy

Innovation Science and technology Leadership Regional current events Human Resources Education/Industry training Other

Collaboration:

Design: Putting design at the centre of your business Diversity: A variety of decisionmakers means more good ideas to choose from

The fastest path to innovation

Branching out:

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Intellectual property: Striking a balance between protection and exploitation

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Is New Zealand missing the boat?

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BBC Technologies’ world-class processes

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Strongly agree Agree Don’t know

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feature

Rebecca Walthall

“We do come up with good ideas but the world is littered with good ideas, it’s products and services that people pay for, not ideas.”

20 NOUS AUTUMN 2013

Beyond ideas Commercialising R&D is a term that gets a lot of media exposure.

Apparently we’re not that good at it. But what does it mean and why are we not doing it as well as we should be?

WORDS BY Ellie

I

van Baaren

nnovative. It’s a word we like to use to describe ourselves – as individuals and as a nation – as well as the way we think. We are constantly reminded of it via the media and at events, plus we use it as a macro and micro marketing tool. But is it really accurate?

The official definition of innovative is someone who “introduces new ideas; is original and creative in thinking” or something that “features new methods; is advanced and original”. Considering the number of firsts that New Zealanders have been involved in over the decades this seems on the surface to fit the bill. There’s no doubt we seem to be very good at coming up with original ideas.

Perhaps it’s product of our isolation – before technology gave us free access to the rest of the world, we had no choice but to make things work, whichever way we could.

But when it comes to business, ideas are not enough. What counts is how you capitalise on those ideas and, as the regular hand-wringing in the media shows, on the whole we’re not that good at that side of things.

Perhaps, a more accurate word is inventive – “having the ability to create or design new things or to think originally”.

One of the challenges, according to Waikato Innovation Park deputy chief executive Peter

Maxwell, is not to get too caught up in the technology itself.

“You need to be what we call technology pull, not technology push,” he explains.

“The challenge, especially with the research organisations, is that sometimes you have a technology that is looking for a home – ‘this is the best thing since sliced bread, you’ll want it won’t you?’. Technology should be meeting a need, solving someone’s problem.

“We do come up with good ideas but the world is littered with good ideas, it’s products and services that people pay for, not ideas. I don’t think we’re quite so good at the entrepreneurship side of things.”

The reasons for this are hard to pin down; attitude, support and resources all come into play. It’s essential that we start to get it right. Innovation – true innovation – drives economic growth and, as Maxwell points out, we need to have products that other people around the world want. “The world’s not standing still, if we’re not doing R&D, we’re standing still and people will stop buying our products and services.”

Collectively, New Zealand business currently spends the equivalent of 0.54 per cent of GDP on research and development (R&D) and the Organisation for Economic Cooperation and Development (OECD)

average is 1.62 per cent. Overall – across the public and private sectors – New Zealand currently spends about 1.3 per cent of GDP on R&D against the OECD average of 2.4 per cent.

The government is looking to change both statistics. It wants businesses to double their spending on R&D, and meanwhile it intends to lift its own spending from 0.6 per cent to 0.8 per cent. As part of that they’ve introduced new co-funding programmes that encourage businesses to spend on new R&D rather than simply reclassifying existing spending.

While Maxwell agrees there needs to be support, he says we also need to get away from the grant culture. “People come along and say ‘I’ve got an idea, I want money to go away and exploit it’, but they need to be thinking more commercially and also be prepared to put their money where their mouths are.”

Sometimes the best support comes in the form of finding someone with the knowledge and expertise to help business owners break down any roadblocks they come up against and to help them make the right decisions, especially in the early stages.

“Sometimes people do go ‘I’ve got a new business’ and develop it even though it’s never going to fly. They get emotionally involved in it and really need someone from the outside to NOUS AUTUMN 2013 21

Rebecca Walthall

look at it and go ‘whoa, you’re wasting your time here’. You need to have that sort of feedback at an early stage, and the earlier, the better.

“Companies also need to be prepared to go out and listen to the support they get and act on it. They can’t just sort of expect somebody to get out their chequebook for what they want to do and how they want to do it. They need to be prepared to be challenged and understand that that process is good for them.”

There is only so much central government can do. They’re performing a constant balancing act – giving more support at a central level costs more money, which can then have an effect on tax. Regional and local authorities also have a role to play, but while Auckland has ATEED and the capital has Grow Wellington, apart from the regional business partnership programme run locally

by Opportunity Hamilton, there isn’t a centralised economic development or support agency in the Waikato.

“It’s a great shame,” Maxwell says. “There is support around but it is very limited and disjointed. To be blunt, quite often I think it’s a hot potato that’s flicked from local authority to local authority. Regions say we don’t have the money to do that, and local authorities say it’s not our responsibility to do that.”

Waikato Innovation Park serves as a type of hub for technology companies. They rent space and work together collaboratively; creating a type of community that is mainly, but not exclusively, in the agri-tech space. Maxwell says the park is beginning to work with business incubator SODA Inc and WaikatoLink to look at trying to support commercial opportunities.

“It’s still early days, but I’d like to see more collaboration, which then would have more visibility across the region. We’ve connected companies from Mangakino to Opotiki and we need more of that happening, plus we need people who are prepared to work together in partnerships.

22 NOUS AUTUMN 2013

“You can’t do it all yourself. Sometimes if you want to start exporting to Chile, you might be better to go and find someone who is already exporting to Chile and go into some sort of agreement with them, because they’ve already got the structure, they’ve already got the networks, the name, the brand, the shipping, the warehousing … you can fly on their backs and it can help you to develop.

“New product development is a team sport; every part of the organisation has a role to play in this process.”

“Gallagher is a lovely example. Every new country they go into they sit down and have a look at what the best strategy is for them in that country. Sometimes they’ll do their own thing and put their own staff in there, and other times they’ll say we’ll go into partnerships with other people. People need to do that. It’s a strategic way of thinking – how will you actually develop the market rather than just jumping on a plane with some samples and trying to sell them to the first person who comes along.”

R

esearch and development executive at the Gallagher Group, Rob Heebink, says innovation and new product development is a core part of the business, not just of the R&D department. “New product development is a team sport; every part of the organisation has a role to play in this process. The sooner you realise that, the sooner you align the entire

organisation to that frame of mind, and the faster you will be able to innovate.”

It wasn’t always the case – “R&D was often treated as just another department or cost centre – but the D360 design review process the company went through with New Zealand Trade and Enterprise’s Better By Design turned out to be a real catalyst for change.

“That process was like putting a mirror in front of us and we came to the realisation that there were things we needed to change.

The value in our business comes from solving customer problems in a unique way, through innovative solutions. Now we have started looking at R&D in a whole new light. The competitive advantage doesn’t come from what we have now, but the opportunities that we create for ourselves in the future.”

Heebink mentions two slogans that underline Gallagher’s approach: doing the right projects, and doing the right projects well. The first refers to making well-informed decisions on what opportunities to pursue; the second involves continuously improving the company’s processes and capabilities for everything from design through to marketing plans and distribution channels. The inspiration behind all of it, and the key for commercialising on the company’s R&D, is the customer.

“You have to design with the customer in mind. Our ongoing challenge is spending enough time in the market to empathise with our end users and determine what really matters to them. By definition, innovation that does not create new value for the customer is not innovation.

“I can think of a few great examples of R&D and commercialisation in the Waikato region so I think we are doing a lot of things right. We should get better at telling our stories to raise the profile of this region and attract new talent.

There is no shortage of ideas or opportunities, but there is a shortage of capabilities to realise on the commercial value of those ideas.” n

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feature

Cuts

both ways The need to develop skilled workforces that can drive modern economic growth has thrust vocational training into the limelight, a development that offers New Zealand educational institutes – and the economy in general – a valuable opportunity.

Mark Flowers and David Christiansen explain.

Dreamstime

AS TOLD TO

24 NOUS AUTUMN 2013

Ellie van Baaren

T

he first thing that pops into most people’s heads when they hear the words “international education” is a mental image of foreign students roaming the halls of our tertiary institutions.

Which is true enough – in the 2011 calendar year almost 99,000 students paid international fees to attend institutions around the country – but there is more to this equation. A lot more.

Currently, the industry is one of the country’s top export earners. It contributes more than $2 billion each year to GDP and, in its leadership statement released at the end of 2011, the government has set an ambitious goal of doubling that economic value to $5 billion over the next 15 years. Attracting students to travel to New Zealand to study is just one part of the strategy to achieve that.

Two more goals in the government’s statement recognise the other opportunities on offer: increase the annual revenues from providing education services offshore to at least $500 million and; increase the number of international students enrolled in New Zealand providers offshore from 3000 to 10,000. The key word is offshore. Rather than bringing students to New Zealand institutions,

“I see it as a classic diversification or risk management strategy; one that’s important for the national good and international strength.”

they’re getting ready to take our institutions to overseas students.

Wintec is using relationships established over the past few years to kick-start several initiatives that set the stage for exporting not only the curriculum, but also the way they teach. Nous sat down with Wintec chief executive Mark Flowers and acting director internationalisation David Christiansen to find out more.

What’s the background behind this approach?

Mark Flowers: What you’ve got is a number of countries developing their economies – India, the Middle East, China – recognising that they’ve got a shortage of what you’d loosely call skilled technicians. Up to now there’s been an investment by these countries in things like Masters in Business, but they really also need people who are capable of doing the technical and professional jobs.

David Christiansen: I see it as a classic diversification or risk management strategy; one that’s important for the national good and international strength. Will the students still be coming in the same numbers in 10 years

as the various countries mature? With China for instance, as its systems mature they won’t need to keep pumping all their students offshore forever and a day. So we need to change in advance of that, otherwise you’ll find one day there’s not the numbers coming here and then there’s no Plan B. How does it work?

MF: It can take different forms; it’s not one size fits all. Firstly there is providing courses – you just sell a course and someone else delivers it and they pay us a royalty for it. Because so many education products are now open source, there isn’t a lot of opportunity in that. Secondly you can manage institutions overseas, including academic programmes, and finally there is the option where they manage their institutions but we do some teaching on their courses in order to provide certain programmes.

Nationally, Education NZ suggests the main candidates for NZ Inc are China, India, parts of the Middle East and possible Indonesia.

In terms of Wintec, we’re mainly looking at the Middle East, Saudi Arabia in particular, China because we have quite a long history of work there, and we’re doing some limited work

in looking at options in India, but that’s at a second priority level.

Why Saudi Arabia?

MF: The economy in Saudi Arabia is based on

immigrant labour, so in a strange sort of way they’ve ended up victims of their own success.

A lot of people who work in business, industry and healthcare are taken from other countries and that’s not sustainable in the longer run, so they want to train their younger people up.

It’s a multi-generational project in that they’re building some hundred or so institutions like Wintec, the difference being that each one specialises in a particular area, electrical engineering for example. They want those to eventually be run and taught by Saudis but they haven’t got anyone to do it, so they’re outsourcing all of that to international operators. We’ve put our hat in the ring for several contracts and we’ve already got one going at an electrical polytechnic in Southern Saudi where we are essentially providing the course information and to some extent the staffing. >

NOUS AUTUMN 2013 25

What’s happening in China?

Is it just Wintec?

MF: We’ve been forming partnerships with universities in China for maybe five or six years, but originally that was with a view to their students coming here. What typically happens is that the student at X university in China might do their first year or two of study in China and then come here to complete their qualification. The next step in that case may be for those students never to come here and just to deliver the whole programme through one of their models. We’ve got four or five ways in which we’re tackling it in China, all at different stages.

In Chengdu it’s been agreed theoretically that there will be some kind of international campus and if it gets a yes then we’d be looking to ultimately do about eight to 10 New Zealand degrees. The first cab off the rank is English teaching, then early childhood, construction management and innovation. It will be a surprisingly wide range. They’re doing exactly what we do here, which is trying to meet the needs of a city population. When I say city we’re talking 10 to 12 million people. We’ve had a lot of our staff visit there to look at different programmes and understand their university.

We’ve also had a lot of staff members from Chengdu coming here for six months each.

DC: While we are the partners with Chengdu, there’s a desire on both sides to have other New Zealand institutions involved. It’s much better from the Chinese point of view and from our point of view; the advantage is the programmes we can include. The animation programme we’re running is from Weltec because we don’t major in animation quite the same way that they do. Similarly the construction management programme is coming from Unitec because they have a degree and that’s what they want over there at the moment.

“I also happen to think that we’re well placed as a country to build a really good international reputation in education export and show the rest of the world how to do it.”

There are also Tianjin and Qingdao on the east coast. It’s a similar concept to Chengdu but more of a government-organised type of thing between the Chinese and New Zealand governments. They wanted what they described as a model polytechnic, sort of a working New Zealand institute of technology in China, but that’s at an earlier stage.

DC: The way it’s shaping up is that there will be two Chinese institutions involved – Qingdao and Tianjin and we’ll lead the New Zealand end of those projects. The trick there, if it all goes ahead the way we’re thinking, is that there will probably be New Zealand programmes taught to Chinese students but possibly in Chinese.

26 NOUS AUTUMN 2013

What are the biggest challenges?

MF: The biggest challenge is teaching a subject in a different environment. To pick an example, we operate a really good midwifery programme here and the midwives are committed to it and they understand the New Zealand system and culture. The Chinese view of childbirth is rather different. They don’t have a separate midwifery profession, it’s part of nursing and really it’s a hospital-based system. To think about it from the point of view of a customer who has a different culture is quite a stretch for an average staff member, so the question for us is whether you can do that or whether we need to take on different staff altogether.

DC: Their systems are different. Their technical colleges are a whole tier below university, so one of the challenges is getting the Chinese to understand that we run the full gamut of programmes. It’s an older model in China.

We used to have it here 40 years ago when the requirements for vocational skills were much less. Now they are complex, demanding jobs that require a higher level of training to do them properly and well.

Where is New Zealand placed internationally?

DC: It’s interesting what the markets are after. They’re looking for a skilled workforce and vocational training so we’ve sort of hit the limelight because there’s more focus on that than probably ever before. It’s a good time nationally and internationally to be in vocational training.

MF: It’s stretching ourselves and our staff in a good way. I also happen to think that we’re well placed as a country to build a really good international reputation in education export and show the rest of the world how to do it.

We are competing with some countries that are throwing a lot of money at it – the British for instance, the Scandinavians, the Germans, Australians… it’s quite competitive. n > www.wintec.ac.nz

profile

Rolling with the punches It all started with an electric fence, but 75 years down the track the Gallagher Group is a multi-national company and one of the Waikato’s most recognised brands.

WORDS BY

Ellie van Baaren

C

onventional wisdom says a successful business needs to scratch an itch; 80-odd years ago Bill Gallagher Senior took that literally.

His horse Joe had, rather inconveniently, taken to using the family car as his scratching post and, to stop him, Gallagher devised a system that gave the horse a mild electric shock each time he rocked the vehicle.

That simple idea became the basis for one of the Hamilton’s, and New Zealand’s, most successful business stories – the Gallagher Group.

When Bill Senior started the company proper in 1938 he was selling electric fencing to farmers. Seventy-five years later the Gallagher Group employs more than 1000 people and has customers in 130 countries. It’s expected the company will make sales of more than $200 million this year. The latest incarnation of its security system secures an enormous casino with 80 elevator shafts in Macau; its security fencing keeps people outside Buckingham Palace, inside American prisons and away from Indian car factories.

Turns out it was quite an itch.

The company is still privately owned but it’s now split into three divisions – agricultural equipment (about half the company’s business), fuel pumps and security. Bill Senior’s son William now sits in the driver’s seat as CEO and chairman.

Knighted in the 2010 New Year’s honours list, Sir William joined the company on the > NOUS AUTUMN 2013 27

shop floor in 1962, fresh out of university. In those days it was a 10-man business and Sir William says his ambitions for it at that stage were inspired by a business with 30 staff just down the road.

“I thought if we ever got to 30 then that would be pretty good! Quite frankly, having 1000+ employees is probably less worry because we’ve got such a good network of good key people. If we were a 20-man business and lost a key person like the factory foreman, then it’s like the world’s fallen in on you. That doesn’t happen here – we have enough good people that nobody’s indispensible, including me.”

He sees his current role within the company as that of a “conductor/manager”. “When they have a problem I ask them how they’d fix it and then guide them in the right way so they get to the right answers without me having to be here.”

T

Sir William Gallagher: “We have enough good people that nobody’s indispensible, including me.”

28 NOUS AUTUMN 2013

he company first turned their gaze towards export markets in the late 1960s, although Bill Senior initially had his doubts “Father’s idea of exporting was that it wasn’t worthwhile,” Sir William explains. “He used to describe exporting as we’d send a load of potatoes to Australia and they’d find a bit of dirt on them so they’d scrub them to where they went rotten and then tip them in the harbour. Then we’d get a shipload of bananas we’d find a bug in them and the same thing would happen to them. So that was his view of exporting.”

That changed when he and his wife went to the UK for six months at a time, two years in a

row. It was during those trips that he laid the foundations for taking the company’s products to the world.

While it had its challenges, being a global operation means they can afford to invest in R&D, something that has become an integral part of the business. Around 115 people work in the R&D division of Gallagher, 105 of them are based in Hamilton.

“Having more than 10 per cent of our total staff in R&D is pretty unusual. We could never sustain even a fraction of the number of R&D people we have if we were living just off the New Zealand market,” Sir William says, adding that the company’s private status also helps.

“The difference with publicly listed companies is that while you’re growing and performing well the share market treats you well, probably too well, but then you have a couple of hiccups and you get slaughtered. We can work for the long term; it will probably take a couple of years before we see a return on current investments in R&D.” When they do come through, however, those results can make all the difference, especially in hard economic times. It’s one of the reasons the Gallagher Group is still going strong despite a high Kiwi dollar and collapsing economies across Europe and the USA.

A

ccording to Sir William, the secret to the Gallagher Group’s longevity is relatively straight forward – “unless you produce a positive bottom line, you don’t have a very good future.” As many business owners know, however, that’s often easier said than done.

“There are two drivers as I see it,” he

explains. “The customer is number one; if you don’t look after them you’re not going to survive. And you need good staff; good people in the right places. It’s a sum of all the little pieces that make up the success for business.

It’s amazing, I still see companies failing on some of the basics – it’s a recipe for going out of business.”

But his biggest piece of advice? “Life’s too short to make all your own mistakes, learn from others.”

It’s a philosophy born from his own experience in observing other businesses, especially the ones that had trouble on the exporting side of things.

“Having more than 10 per cent of our total staff in R&D is pretty unusual. We could never sustain even a fraction of that number if we were living just off the New Zealand market.”

“When I was president of the local manufacturers association, I saw businesses that went into receivership and one of the base causes was sloppy detail; the export money never arrived because they hadn’t made proper arrangements and the party they were

selling to had a very different idea of what the payment arrangements were. You’re dealing with people with a different culture and sometimes different languages, so make sure your terms of trade are very clear.”

Needless to say, while the Gallagher Group may do business with a handshake, it’s followed by a letter that clearly details the different arrangements.

Another privilege of being successful is “being able to do right by your community” and the Gallagher Group is well known for its philanthropic activities, especially in the Waikato. The company sponsors a wide variety of groups, sports teams, events and organisations.

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hen asked what he thinks have been the biggest challenges in getting the Gallagher Group to where it is today, nothing sticks out. “I think it’s consistent hard work all the way,” he says. “It’s been 60 hour weeks for 50 years, that’s about my record, and there has been constant change. The key is to get out there and drive the changes rather than be changed by circumstances. Being involved in writing international standards, for example, really puts you at an advantage because you understand the intention of the standard thoroughly from the beginning.”

And in another 75 years? Well, he’d like the company to still be going strong, but as he points out, by then it will be someone else’s problem. n > www.gallagher.co NOUS AUTUMN 2013 29

opinion

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Mychillybin

Future now In business, as in life, nothing stays the same and the key to surviving and thriving is to anticipate those changes and put plans in place to take advantage of them. Jason Lewthwaite discusses some key trends that the Waikato, and the country, should be readying for right now.

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t is widely thought that New Zealand is a low cost producer of primary produce and what can follow is a tendency to rely too much on the perceived strategic advantage that comes with it. The truth is, however, that once you factor in the high entry cost of land and the cost of debt or an adequate return for other capital sources, the overall cost of producing primary products isn’t so dissimilar to countries such as the USA. The challenge for us now is to start thinking innovatively about how we want to evolve our businesses and better position ourselves for the future, while there is no immediate pressure on us to do so.

The opportunity over the medium term as I see it is to move down the route of high value-add products. How do we vertically integrate – either as individual businesses or collectively – so that we can take more of the available margin at the same time as futureproofing businesses for what consumers are going to need in the future?

We have to change our way of thinking and do things differently, because unless we really lift our game and move away from being largely a commodity player, we run the risk that others will do it better. And there already are others doing it better. The Dutch are a good example. When it comes to dairy they have a far more collective approach with one centralised dairy institute that develops new products of benefit to the whole industry.

This type of thing is starting to happen in New Zealand, which is exciting. Palmerston North’s Riddet Institute at Massey University works closely with Fonterra to create scientific breakthroughs that can lead to process

Jason Lewthwaite is Director of Value Chain for agri-business with BNZ and covers the Waikato region.

and product innovations, like putting omegas into milk. There is also a recent initiative by a number of our universities around value chain advice that will provide essential data for how best to vertically integrate within our industries and compete globally.

To give an idea of the types of opportunities around, DNA testing is very close to being commercially viable at the consumer level – it could cost as little as $30 and be ready in 20 minutes. Individuals will then be able to know what their body needs and what it doesn’t like.

What may develop from that is a market for single serve UHT products that fit an individual’s specific sets of needs. The challenge is how we start gearing up now for what we know is going to come.

Fonterra’s fortified product range Anlene is a great example of this approach. The Asian diet hasn’t traditionally included a lot of dairy and as a result bone density is typically low, leading to a propensity for osteo-arthritis and other related illnesses. Formulated for adults and enriched with bone nutrients, Anlene is the leading high calcium milk brand in more than 10 markets across Asia and the Middle East and Fonterra predicts it will earn around $600 million in Asia over the next six or seven years. The brand sponsors World Osteoporosis Day and provides free bone health checks to millions of people in Asia and the Middle East.

They’ve identified a need and sell a product to fit it. That’s where I can see the opportunity for other New Zealand businesses to add value to base commoditised products.

Doing this also potentially means we need to look outside our individual businesses to ensure that we are taking full advantage of the world markets. New Zealand can be quite parochial. We, of course, get passionate about our own operation and don’t want to see it get blended into another, but by the same token the challenge is to consider the needs of our customers, and they may need us to collaborate with other suppliers, manufacturers, distributors and the like to provide the product experience they desire. By working collectively across complementary businesses we could offer a much better proposition that ultimately could de-risk our strategies on an individual basis.

But it’s not easy, it doesn’t often happen that you develop a great product and then just sell it in volumes you want to and for a price that is profitable. It can be an incredibly difficult process getting your channel to market right and distribution is one critical part of that. In New Zealand we know how to produce a great product and we’re very innovative with how we go about that, but the larger part of that is how you make a commercial return on it.

As a business owner, it’s a matter of looking at your future and how you’re making

decisions; start questioning how you’re doing things. Ultimately how do we make a more sustainable business, one that earns more of the margin from the paddock to the plate?

Having a sound governance structure will become key in this process, ensuring you have the right advisers and partners in your business.

“There are massive opportunities available to us but they require us to change our thinking.

The challenge is to consider how much of the value chain you currently capture and do things differently to increase margin generation for your business.”

There’s a lot of work to do but I see a lot of potential for New Zealand agri-business through greater collaboration, whether this involves formal joint ventures or partnership opportunities. The key is looking to value chain and, importantly, this will involve more effective distribution channels. The key is getting independent advice, which can mean paying for it, and doing the proper due diligence – Google is a wonderful thing but it’s not the only way to investigate a potential business partner.

Outside of this, we also need to leverage our networks a lot better. Per capita we have a lot of people who travel and who have working knowledge of a lot of markets with which we would like to do business around the world. There are also a lot of expats who are passionate about helping New Zealand business. Throughout Asia, for instance, there are reputable advisory firms who employ New Zealand and Australian expats who would like nothing more than to help someone from Australasia succeed in breaking into the Asia markets.

We need to leverage that; we need to realise that we’re not in this game alone. We need to proudly sell what is New Zealand and who we are – we have a wonderful lifestyle, we work hard and we’re innovative and we can do a much better job at marketing ourselves internationally. n NOUS AUTUMN 2013 31

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The Chief’s Chat Rugby fever hit the Gallagher building in February when 135 business representatives, Marist old boys and St John’s College parents gathered to hear from coach of the reigning Super 15 champion Chiefs team, Dave Rennie. The evening was a fundraising event for St John’s College rugby, with the $12,000 raised from ticket sales and the auctioning of two signed jerseys from Richie McCaw going towards helping develop the programme and get the team to Australia for their April 2013 tour. Rennie spoke candidly about the importance of supporting teens in their sports, especially after school, keeping them motivated and encouraging them to continue developing.

PHOTOGRAPHS BY ANNE CHALLINOR

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1. Morgan Watt, Ma’ake Mosa’ati (St John’s). 2. Matthew Cooper (Sport Waikato). 3. Paul Honiss Jnr, Rebecca Honiss, Kevin Burgess & Sharon Robertson.

4. Ricky Matara, Haydon Ross & David Finlay. 5. Andrew Palmer, Art Gage-Brown & Ian Baines. 6. Jan Laurie (Sport Waikato); Scott Laurie (Gallaghers).

7. Shane Tong (St John’s); Dave Rennie (Chiefs coach). 8. Gary Robertson, Pauline Butt & Paul Honiss Snr. 9. Grant McDonald, Sharon McDonald, Erin Harrison & Phil Harrison 32 NOUS AUTUMN 2013

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New Zealand Business Excellence and Achievement Awards

Ranfurly Shield visit

The team at Wintec was recognised at the New Zealand Business Excellence and Achievement Awards in December, taking home the business achievement award. The awards are administered by the New Zealand Business Excellence Foundation and are open to all businesses in the private and public sector. In awarding the title, the judges said they recognised Wintec’s strength in planning, marketing and interaction with its community and employer groups. > www.nzbef.org.nz

Prolife Foods staff got their hands on some impressive silverware on January, when the Waikato Rugby Union took the Ranfurly Shield in for a visit. Employees got an up close and personal view of this treasured icon of rugby, which will stay in the Waikato’s trophy cabinet until the start of the domestic rugby season later this year.

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1. Mary Cave-Palmer, Bryce Cooper, Ritesh Chandra, Michalle Huntley, Graeme Thomas, Clint Baddeley & Mark Flowers (Wintec). 2. Chuck Aubrey (Asia Pacific Quality Organisation); Mark Flowers (Wintec); Mike Watson (New Zealand Business Excellence Foundation).

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Hamilton Gardens Arts Festival VIP event A veritable who’s who of Hamilton turned up to the VIP opening of the Hamilton Gardens Arts Festival in February, celebrating the beginning of two weeks aimed at making the arts accessible to everybody.

The festival has been running for 16 years and this year saw 70 events ranging from children’s pantomime to a wide range of musical programmes, live comedy to the outdoor film festival. The events were held in 21 different spaces around the Hamilton Gardens. > www.hamiltongardensartsfestival.co.nz

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1. Kaleb James (Stafford Engineering); Lisa James (Wintec).

2. Lynnette Flowers & Pam Roa (Trust Waikato); Mark Flowers (Wintec).

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1. Andrew Smith & Lei Lui. 2. Amy Johnson.

3. Trevor Foster.

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opinion

Common challenges I

If New Zealand is to substantially increase its exports then every business should be looking to innovate. In saying that, Peter Maxwell points out that coming up with a great idea is just a small part of success.

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have the privilege of meeting entrepreneurs on a daily basis. They are, typically, positive personalities who are aspirational, action-focused and optimistic.

As an Englishman who’s emigrated to these shores, I am struck by the vast entrepreneurial spirit of New Zealand’s business community.

So I am confident that we can rise to the challenge of increasing our exports from 30 to 40 per cent of GDP by 2025. I have met the clever and ambitious business people who are determined to make that happen and I work in a role that looks to support those most likely to succeed in producing a new product or service that will meet a global market need.

R&D in business is ALL about commercialisation. I regard the idea for doing something faster, stronger or better as the very important first 1 per cent of success, but successful commercialisation of that new concept is 99 per cent perspiration.

So who should be looking to innovate and grow their range of products and services?

New companies only? NO. Everyone in business should be looking to do this. Unless a company is moving forward it is falling back.

In business there is no standing still – it’s innovate or die.

There are common challenges that all entrepreneurs face, regardless of whether they are a lone inventor or operating from within an established business.

Know Your Market Yes, yes, you definitely have the next big thing – but have you checked that with your customer yet? Even though your version is stronger, smarter or faster, do you know how much value the customer places on that? How will you reach your market – where are they, who are they? Who is your competition?

These are the key questions I ask of all my clients, and I am surprised how many are unable to answer them effectively. Don’t assume your concept is a sure thing. Get feedback from the market throughout the development process and plan your path to market from an early stage.

Money and Investors As sure as night follows day, you will need cash to fund labour, materials, expertise and IP (intellectual property) advice through the development phase. Then you’ll need more money so you can test and validate your new product in the market … and then you’ll need even more money to actually produce, distribute, brand, market and launch your new product. Only then will actual revenue begin to flow.

Entrepreneurs and established businesses alike need to fund these development costs and if external investment is required, then you need to start connecting with relevant investors long before you need their money.

Rebecca Walthall

Start-up and early stage companies are only attractive to “angel” investors – private individuals putting up their own capital. These investors often take time to watch you in action and watch the progress you’re making before committing their own money to your venture.

“Unless a company is moving forward it is falling back. In business there is no standing still – it’s innovate or die.”

Remember, cash is the lifeblood of any business. If a business runs out of cash it dies, so be prepared not to take any money out of the business unless the business can afford it – and it won’t be able to afford it until it is making money. As a business grows it will need additional money – so just because it has made $1000 that does not mean that $1000 is available to be taken out by the shareholders.

Team Dan Carter is undoubtedly the best first-five in international rugby, but an All Black team made up of 15 Dan Carters would not be a world champion rugby team. You may have generated an idea and have the passion, drive

and skills to build on that, but I’ve never met a successful entrepreneur who’s managed to thrive singlehandedly – although I’ve met a number of failed ones who have tried!

Recognise the skills you have and identify the other skills that you will need to build a business. Assemble those skills around you, bringing people in either as investors, advisers or employees. And just like in a rugby team, play people in their best position. Just because you are the inventor doesn’t mean that you are necessarily the best person to be the managing director.

Ambition and Belief No matter how much good advice you take on board and implement, successfully bringing an innovative new product to the market will require real ambition, determination, guts and stickability. It’s these qualities that we need to nurture, encourage and celebrate in the next generation of New Zealand’s entrepreneurs.

Don’t be afraid of failure. As my old bandmaster used to say: “the person that has never blown a wrong note hasn’t blown a right one either”. Even great entrepreneurs such as Richard Branson have had many failures in their lives – who can remember Virgin Brides (a chain of bridal-wear shops) or Virgin Cola?

The important thing is to learn from your mistakes and move on. n > www.innovationwaikato.co.nz

Peter Maxwell is the deputy chief executive of the Waikato Innovation Park and delivers support around the Waikato and Bay of Plenty regions as part of the Ministry of Business, Innovation and Employment’s “regional business partner” scheme.

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