PEARLS OF WISDOM FROM THE TOP

Written on the 10 May 2016 by Laura Daquino

PEARLS OF WISDOM FROM THE TOP

GREENCROSS (ASX: GXL) founder Glen Richards is making a splash on Shark Tank. He chats to Business News Australia about those times when splashes are necessary in business and when it's a more matter of riding out the ebbs and flows.

Richards recalls being served up a fortune cookie with a bite-size treat: "you can never plough a field by turning it over in your mind".

This resonated with Richards, not as a sad truth but instead through a sense of fulfilment that "struck a very nice chord". Richards associated it with Greencross' pioneering of the Australian veterinary industry through consolidation, which he knows a thing or two about.

Richards has ploughed many fields and weathered many different market seasons since founding Greencross.

The company evolved from a business plan he wrote as a bright-eyed and bushy-tailed veterinarian in 1993. Since then, Richards has led Greencross through the high seasons; the company's merger with Mammoth (Petbarn and Animates) saw its share price peak at $10.70 and market capitalisation rise above $1 billion.

He has also navigated the company through the low seasons; Greencross launched on the ASX after raising $11 million through an IPO, only to plummet one year later to 48c per share and a market capitalisation of $11 million on what Richards regards as "the company's worst day" in 2008.

However, Richards doesn't regard any of the fields he ploughed as CEO and managing director of Greencross to be fruitless.

"We were an illiquid micro-cap in the middle of the worst financial crisis ever seen; but with no one looking at us, and only a staunch group of 'welded on' shareholders consisting of founders, employees, friends and family, it gave us the opportunity to spend time developing the organic side of the business," Richards says.

"We pulled back from acquisitions, focused our time on engaging people with better HR and education programs, improved standards, evolved management structures and imported more talent.

"I look back and realise how good the GFC was for the company by 2010, we had a better and more disciplined approach, and were able to launch into aggregating with more sustained vigour."

For five consecutive years, Greencross delivered 25 per cent revenue and EBIT growth year on year, with total shareholder returns exceeding 1500 per cent. The company's early 2014 merger with Mammoth has seen it move from the ASX 300 into the ASX 200.

In his 21 years from self-employed to cooperative to corporate, and now as the newest Shark in the Tank, Richards has hunted many pearls of wisdom.

Planning

"Develop a plan, document ideas, review the environment, evolve financial models at least three to five years out, and have the discipline to fine-tune the plan on a regular basis. As we started to ramp up our growth, I was fortunate that my chairman, Andrew Geddes, introduced me to a Verne Harnish Growth Faculty workshop called the Rockefeller Habits. Aimed at fast-growing companies, known as Gazelles, the one-day program resonated strongly with me and ensured a strongly disciplined execution to continue our rapid expansion.

"We developed our one-page plan and five-year financial forecasts, established our 10-year Big Hairy Audacious Goal (BHAG), confirmed our one-year goals, cycled through our 90-day imperatives, and commenced our meeting rhythms of an annual planning retreat, quarterly strategic review workshop, 2M (or monthly management) meeting, weekly Strategic Operational Review Meeting (StORM) and daily huddle.

"Implementing the Rockefeller Habits gave us the tools we needed to drive hard, expand our market share, grow our practices, and keep the chaos under control. The 10-year BHAG we agreed on in 2011 was to evolve into a $1 billion market cap company that dominated pet care in Australia. Three years later, we merged with Petbarn and achieved that goal seven years early. Our team was receptive to the concept of a step change manoeuvre that helped turbo charge the company."

People

"Liz Wiseman's Multipliers put it so succinctly: do you want to be the genius or the genius maker. As a CEO, you must constantly ask yourself whether you are getting 110 per cent discretionary effort and intelligence from your team, or are you creating a political environment of distrust, disharmony and dissonance that gets less than 50 per cent from your people. Greencross went exponential when trust, collaboration and focus were at their greatest among the leadership team.

"The right people, for the right reasons, at the right time was key for our success. We worked as a team to tackle some of the roadblocks facing the veterinary profession. Older vets needed a succession plan; younger vets did not want the emotional or financial commitment of owning a practice so we implemented a partnership model where clinics have the opportunity to operate as a Greencross business associate."

Persistence

"As a leader, others residing inside and outside the company will doubt you. Authentic reality checks are important, and staying humble enough to evaluate other people's opinions is healthy.

"Heading into 2008, our share price had tanked and the bank demanded we started paying back capital. There were internal talks that I was running the company on blind optimism. I drew on a book Corporate Warfare, which says your worst fears are probably underestimating the extent of the damage that toxic people can have on delivering your plans.

"This gave me the opportunity to regroup, which included rewriting our five-year strategic plan, importing new talent and engaging with the investment community through endless rounds of one-on-one meetings. Persistence helped deliver the last five years of exponential growth."

Patience

"For most of us, it is a 10 to 30-year sustained effort to become an overnight success. The young bull spots a paddock full of heifers and suggests to the old bull they race down and grab a few; the old bull replies, lets walk down slowly and grab them all. We were of the view that we were setting up Greencross to last, and that we need to walk down slowly to ensure we did it right. Rushing into battle with a greedy disposition will only help to find the land mines faster."

Purpose with passion

"Your passion as a leader must be infectious, inspiring, sustained and focused. It needs to cascade down through the organisation to help assemble the team to fly in formation toward the stated vision and goals."


Author: Laura Daquino Connect via: Twitter LinkedIn

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