Muir a magpie manager for farm tech firm

MATT NIPPERT
Last updated 05:00 01/06/2014
Greg Muir
CHRIS SKELTON/Fairfax NZ
TRUE TEST: Chief executive Greg Muir says an innovation culture has driven the company’s growth.

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Greg Muir is skittish for someone who once ran some of our biggest companies.

Clasping and unclasping his hands, conducting a tour of his offices at such a speed that a photographer was often left trailing behind, the former Warehouse and Pumpkin Patch executive seems impatient to get personal portraits out of the way and get down to talking business.

"Frankly, I'd rather talk about Tru-Test. I've had enough time in the spotlight," he says.

This spotlight was mainly trained on his chairmanship of Hanover Finance, one of the most-scrutinised finance company collapses. The Hanover meltdown saw Muir, if not crash to earth, then certainly go to ground.

Withdrawing from publicly-listed life, he has barely been seen since and explains he has intentionally kept his head down since taking over as managing director of unlisted farm technology firm Tru-Test in February 2009.

Muir had a minority shareholding (a trust connected to him still owns a 5 per cent stake) and says he wanted get out of the boardroom and back into management. Tru-Test certainly needed a steadying hand having - like Hanover - also felt the bite of the global financial crisis. Tru-Test is closely held by a handful of agricultural and asset management firms - including Muir with his small stake - who between them hold a majority of shares.

After a $15 million slump pushed revenues down to $82m in 2009, causing the company's earnings to shrink to practically zero, business has recovered.

Muir says organic revenues have grown 10 per cent annually and, added to some modest acquisitions, the company is on target for $19m in earnings next year on the back of $150m in sales.

With 60 per cent of sales overseas, to 90 different countries, New Zealand Trade and Enterprise last year crowned the company as the country's best international business.

Tru-Test has been a return to form for Muir and, also, a return to his childhood roots. While the spheres of big box retail, finance companies and children's fashion don't have a lot of crossover with farm technology, Muir is not entirely clueless when it comes to cows.

He says his formative years growing up in Hamilton gave him hands-on experience in the dairy sector. "My dad was a retailer, we lived in town, but I stayed on friends' farms and milked cows.

"And for six or seven summers, over school and university, I worked in a dairy factory," he says.

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And it is the dairy boom that has fuelled Tru-Test's growth.

Muir does not agree with milk sceptics who believe New Zealand's economy is dangerously dominated by dairy.

Rather, he believes our grass-growing climate and geography means the opposite is true.

"I have the reverse view that New Zealand should become more deeply engaged in the dairy industry, because this is where we have genuine competitive advantage," he says.

"There's more demand than production for as far as the eye can see. I don't think anyone that's immersed in the dairy industry will see production overtake demand in their working lifetimes."

Muir concedes water use and effluent run-off are issues facing the sector, but is optimistic the application of technology will mitigate these problems.

"In five years these issues will be less contentious than they are now because we'll be able to make farming much more sustainable," he says.

And, if Muir has his way, Tru-Test will be part of that transformation. He is unwilling to divulge current research that ties in with this strategy but does open up about the innovation culture that has fuelled the company's growth.

Muir's approach to management resembles a magpie with an MBA.

He sprinkles concepts like "fast learning", "lean manufacturing", and "voice of the customer" through discussions and freely admits sourcing many of his ideas from elsewhere.

"A lot of them are stolen from offshore. I don't mind using the word ‘stolen', they're not patented or proprietary to anyone," he says.

But these are not hollow corporate buzzwords, Muir insists, saying they permeate the business and have tangibly boosted the bottom line. Lean manufacturing is credited with shaving 30 per cent off Tru-Test's cost of production.

Evidence of these concepts being paid more than lip service are the clusters of paper charts and whiteboards around the company's clinically-tidy factory in Mt Wellington. They are used as part of weekly discussions by the workforce to thrash out ways to make the business work better.

Muir acknowledges that in an era of cloud and tablet computing, relying on ink markers and paper might appear to be a throwback for a technology company that prides itself on innovation.

"In this email, iPad, Instagram world that we live in, it almost seems archaic.

"But again it's cultural, because people talk and stand around whiteboards," he says.

Getting staff to buy into these concepts is important, he says, but participation has to go both ways.

Tru-Test staff are given an unusually detailed insight into the running of their company.

"We tell them a lot more, we show them a lot more, we try to give them more of the financial data for the company.

"We share the projects that we're working on and the plans we have going forward," Muir says.

Fears this level of information-sharing would result in leaks that help the competition have abated.

"I used to worry more about that, I think, 10 or 20 years ago. But over time you come to realise that a business is more than the sum of its parts. Even if people know what you're doing, they usually can't replicate it, because what makes you special is all of the little bits and pieces that go on here."

The lean concept cut production costs but also engendered a form of austerity in the business, Muir explains.

"The whole concept of lean is: How do we avoid activities that our customers don't want to pay for?"

They clearly don't want to pay for chrome-and-leather executive thrones, illustrated by Tru-Test's relatively modest boardroom stocked with bog-standard high-backed office chairs.

"Exactly. They are exactly the same chairs that most people here sit on.

"They're comfortable but not showy or ostentatious," Muir says of the furnishings.

Citing Apple visionary Steve Jobs, he says the customer is sometimes wrong and companies should not be passive listeners when hearing the voice of the customer.

"You can't go out and ask customers what they want, they'll tell you the wrong thing," he says.

Illustrating this riff with the development history of an RFID wand, a device to scan animal ear-tags during stock-takes, Muir says he was hearing the main concerns of users were price and scanning range.

"We sent people out, they spend days sitting watching sheep, beef and dairy farmers, and we found out neither of those two things was that important," he says.

From observation and discussions, Tru-Test determined battery life, ergonomic design and the speed of the scanning made more a difference when farmers had to check thousands of animals in the course of a long day.

"We observed people with their old wands who'd come out and have three batteries all charged up.

"But very few of the farmers said to us battery life was important: When you've always had bad batteries, that's what you expect," he says.

He credits active observation of customers using his products, rather than more traditional focus-group interviews, as unlocking new ideas.

"Suddenly, it changes the way you think about products," he says.

Despite the accolades from NZTE, and a balance sheet that would not look out of place on the NZX50, Tru-Test has flown under the radar.

Muir describes the lower profile that comes as a side-effect from helming an unlisted company, away from the big board and regular updates required on the NZX, as "nice".

Comparing his stints with the Warehouse and Pumpkin Patch, Muir says the difference from being unlisted mostly manifests in time horizons.

"The single biggest difference is that you have the freedom to run the business for the longer time.

"One of the worst aspects of the listed market is often the inability of the market to look through cycles or blips," he says.

"I've always been bemused by the markets' surprise that listed companies go up and down.

"Well, every company goes up and down."

The ability to get down to business does not mean Muir has ruled out a return to the listed sector, even with his current company. "I think Tru-Test is eminently listable. At some stage we'll need to make a decision on what's next," he says.

Muir hastens to add that these thoughts are at present idle aspirations and his board is not knee-keep in discussing a listing.

"It's a possibility but it's not on our radar yet."

- Sunday Star Times

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