In response to my piece about
Officeworks, and the part played by Stephen Goddard’s leadership in the success
of the business, a correspondent wrote:
“Making Officeworks successful was like
backing a horse which had already won.”
This appears to be based on the belief that CML “lifted the entire business plan from Staples
and Office Depot.”
There have been many successful
overseas retail concepts that stumbled when imported into
Australia. Sometimes we have the benefit of a comparative study to help us
understand why some succeed and others don’t.
In the early nineties we saw the
essentially parallel launches of HardwareHouse and Bunnings Warehouse. Both were based heavily on the successful US
Home Depot concept. Did lifting “the
entire business plan” from Home Depot guarantee success for both?
Not entirely. The two new businesses, aiming at the same
sector, soon experienced divergent paths.
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HardwareHouse was managed along more traditional retail lines.
They focused on sales per square metre, wages to sales ratios,
shareholder value, maximising gross margin and a management culture in
which everyone aimed to please those higher on the totem pole while
kicking the cr*p out of those below. The numbers were always the
drivers. They had a model of perfection and woe betide anyone who did
not achieve it. HardwareHouse was managed to within an inch of its life.
Bunnings Warehouse was born when a
group of managers from the Bunnings Western Australia (then a very different
business from the one we know in the eastern states) gathered around their new
purchase; the pile of ashes formerly known as McEwans. The sand gropers, with two or three senior
former McEwans people, went right back to first principles. They articulated what this new business would
be like to supply to, to shop at, to work in and to have as part of a community. The vision and core values resulting from
this were nothing more than what any group of decent people would come up with,
provided they felt they had the freedom to do so.
Bunnings had a plan based on range,
price and advice and a belief that if they got the first principles right,
success was unavoidable. I say success,
not perfection, because there was always a clear understanding that perfection
does not exist in retail and that success was a journey rather than a
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