Showing the global way, an interview with Don Braid
First, the statistics
Mainfreight began in Auckland in 1978, growing quickly to become New Zealand’s most extensive freight network. Six years later the first Mainfreight International branch opened, followed by the opening of the first branches in Australia in 1989, and a further acquisition of a poorly- performing Australian business in 1998. In 1999 the company became global with the acquisition of businesses in Asia and the United States.
In the 2000s further expansion continued in America with the purchase of Target Logistics Services, and in 2011 Mainfreight grew its European branch network by acquiring the business of Wim Bosman Group.
Today, Mainfreight is a truly global logistics provider with over 250 branches around the world offering extensive services and sophisticated solutions throughout the supply chain. With teams and branches across Australia, Asia, Europe, New Zealand and the Americas, and listed on the New Zealand Stock Exchange, the company continues to expand its global footprint.
So, how did Mainfreight achieve this success?
“I wouldn’t say we have succeeded offshore yet,” Don Braid starts. “We’re in offshore markets, but there’s so much more potential for us. It will take additional time for some of that potential to be realised.”
Important point made, he then explains the key factor behind everything Mainfreight has done: strategic imperative.
“We had a strategic reason to go offshore,” he says. “We needed to create a network, not necessarily to attract freight to and from New Zealand, but to create a global network for our customers.
“Our growth was not necessarily about freight growing to and from New Zealand, but freight and logistics that became available from say China to the US and vice versa. Our customers in those areas were multinational and were exposed to our multinational competitors. So, if we didn’t go and play in the same geographical regions, then quite quickly we could have had our business eroded here in New Zealand.”
This strategic impetus prompted the growth path that followed, but it wasn’t easy.
“It takes guts, determination, perseverance and a clear strategy for what you’re going to do. Once you’ve got those things in place then it comes down to how you operate successfully in each of those countries.”
Early lesson: local national leads the national business
Braid says that Mainfreight learned many valuable lessons in its first move overseas: Australia – so often the proving ground for Kiwi companies.
“Companies often go there thinking ‘they play rugby, they eat meat pies, they have beaches and a similar culture to us, therefore it is the same’. It’s not. It’s very, very different. And we learned valuable lessons there.”
What’s so different? First, there are no handshake allegiances. “They’ll take you to the edge of the cliff and drop you off,” rues Braid. “You need to be tougher, and the environment is different in terms of people. Australians prefer to deal with Australians, for example. We had to understand that there was a different culture and style about Australian business.
“We would like nationals leading national businesses in each of our countries" Don Braid, Mainfreight
“Mainfreight therefore has an Australian leading its Australian business. We would like nationals leading national businesses in each of the countries we are in.”
Blend country and company cultures
Mainfreight now has a number of Kiwis in its global businesses, with some leading them, which Braid says is almost an interim step towards blending in nationals into Mainfreight’s style of doing business.
“We have a set of disciplines that are non-negotiable,” he says. “Weekly reporting, open plan offices, profit and loss details being shared with the full team. And then there is the softer side of the country’s culture. We learned this in Australia, we have an enormous respect for it, and we allow local culture to permeate into the way the business is run in that country.”
If Mainfreight’s early Australian learning experience was difficult for the company – and Braid admits that it was, taking a long time for the lesson to sink in – then he says that dealing in Western Europe is even more so.
“The Dutch, the Belgians, the French and the Germans; they are all so different yet within three or four hours’ drive of each other. They act and do business differently, and we must be conscious of these differences as we go about day-to-day business.”
Kiwis are accepted, but need to explain themselves
One big factor in Kiwi business people’s favour when dealing with all of these cultures, says Braid, is the fact that we are more widely accepted by business people across the world than those from some other countries.
“Once you get outside of Australasia,” he says, “there is an acceptance of New Zealand business people, versus for example Americans doing business in China or Europe. It’s almost a dislike, whereas New Zealanders are seen as neutral. We’re not at war with anyone, we’re not overly aggressive in terms of trade, we just like to get on and do business in our style. So, we are seen as being easy to do business with.”
However, we do have a job to do to explain ourselves.
“Where we do battle sometimes, and particularly in America, is around the question of ‘how can anyone come from a country of four million people and own a business in America?’ So there’s an ignorance that you have to understand, and work hard to prove them wrong. It makes you very focused and clear about your strategy.”
Spend time in-market
On the topic of working hard, Braid spends a lot of time travelling. “I try to be in-market as often as I can be, which means a lot of travel for me as it does for the board of directors and our management and sales teams worldwide.
“Because we are growth-oriented, that means making sales calls on customers where we can assist, and bringing key people from our businesses in other regions to New Zealand to understand our culture; a blue injection if you like. They see it operating here, and how successful it can be, and then take the recipe back to their respective countries.”
What's ‘the blue injection'?
Braid says that it is relatively easy to build offices, warehouses and cross-docks, and set them up, but it is an altogether different task to get them functioning well with a cohesive structure. This is where Mainfreight’s culture counts.
“The Blue Injection is the reasoning behind why we do things,” he says. “It’s about a flat management structure, and getting decisions made as close to the customer as possible.
“In some countries, in Asia for example, hierarchy is very important to the culture, so typically the boss always makes the decisions. In Mainfreight, the person closest to the customer makes the decision, not the boss, so it’s really important for our Asian team to understand why we are doing it like this.”
“Our customers want to do business with Mainfreight because the person they talk to on the phone says yes or no, ‘I’ll make that happen’, not ‘I’ll have to ask permission’.” Don Braid, Mainfreight
He says that if you think about it from a commercial point of view, that’s a big part of Mainfreight’s ‘why’, and why customers want to do business with the company. “The person they talk to on the phone says yes or no; ‘I’ll make that happen’, not ‘I’ll have to ask permission’.”
To give an example of this in action, Braid tells a story about a recent trip to America. “I was making a sales call with a person who had worked for a large competitor. I asked her why she was enjoying working for us, and she said ‘I can make decisions for the customer, and the customer knows it is my decision. I don’t have to push it upstairs three floors to know the rate I have to quote, which gives me an enormous amount of responsibility, and it is satisfying’.”
Ultimately, he says the approach is about creating a motivated salesforce and team of operational people who know they have the ability to make decisions. “They will create far more growth than by kicking decisions upstairs. That’s the depth of culture we wish to have understood and accepted in our operations around the world.”
Always a work in progress
Emphasising still that Mainfreight has not got it right in every country, Braid says that sometimes people see the aesthetic – the open plan, the white walls, blue carpets and notice boards
– but they don’t necessarily understand the depth of meaning about the culture: why an open plan office works, or why the P&L needs to go on the wall in the cafeteria, so that everybody is involved.
He cites a new facility in Belgium. “It’s a great facility. It looks just like a branch here in New Zealand: newly built, clean and tidy, everything we stand for, but the guys in the cafeteria had no kitchen, just a room to bring their lunch. They had plastic plates and cups, while upstairs we had the fancy crockery. They hadn’t got the ‘everyone is equal’ culture, so the depth of the culture is still not yet understood.
“The success of our business is to have all of us together with fewer hierarchical layers, to be closer to the customer and to have our people given the responsibility to make decisions.”
This does take a lot of effort. “If you were to speak to a lot of companies with aspirations to be offshore, I’m not sure they’d understand the depth and perseverance you need to go and be successful. It’s different to thinking about an export market: you’re thinking about building a large business within a country that has a lot more people to work with, and an economy that screams opportunity.
“Honestly we do not kid ourselves: it’s a work in progress. But we know that getting the culture, quality and service right in each of these countries will generate far more business for us.”
“Getting the culture, quality and service right in each of the countries we operate will generate far more business for us.” Don Braid, Mainfreight
So why is Mainfreight successful overseas and others not?
One thing Braid wonders is whether New Zealand businesses have the strategy and/or desire to be a bigger business and operate in markets offshore.
“Some Kiwi businesses are just export-driven,” he says. “Their product or service is unique to New Zealand and it can be exported, but the company itself won’t grow in an offshore market. Then there are those businesses who have done a very good job in our very competitive market in New Zealand. And let’s not underestimate how competitive this small market is. You have to fight tooth and nail to hone your business to be very good. However, they seem to lack the confidence, strategy, determination and longevity to want to get offshore, when they could be doubly successful if they did.”
The bigger question he says is why don’t more New Zealand companies get themselves offshore – why don’t they access these bigger markets? The few that do have done a really good job, he says, but there’s not enough of them.
“Some smaller businesses are highly successful here, and could well expand offshore, but then decide to sell rather than expand. It’s the old ‘bach, BMW and boat’ theory: ‘let’s take the $10 million now, rather than $1 billion in twenty years’ time.”
Ultimately, Braid is clear that Mainfreight’s success is really about having clear strategy and purpose. “The strategy has to be right as to why you want to expand globally. Is it an export-focused philosophy, or is it a network philosophy? Do you have a profit sanctuary at home to help fund the growth required?
“We have been successful so far because we’re linking the 22 countries that we’re in with trade and customers. Air New Zealand, for example, has also been very successful in terms of understanding that they are a link to and from New Zealand. By using that link they have built profitable offshore routes, rather than thinking that they could be profitable in running offshore airlines.
“So, it’s about getting that strategy correct. For us it is about being able to intensify our global network and helping the network to help itself.”
He says that having a strong business at home provides opportunity and reasoning to explore exciting markets and further opportunities offshore. “What I think we learn here in New Zealand is very good customer service. In our competitive market we should not underestimate what that could do for a business in a bigger market with lazy operators; nice niches for a well-tuned New Zealand business to explore.
“Give it a go.”
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