Chapter 8

Oh, Mother, should I work with my brother?

So, I’ve founded a company. What’s the story about bringing in family?

Any person who joins your company should be there because they are going to add value to the business – this is even more applicable when it comes to family.

You can’t afford to build a company where people in the company feel that the only reason James is here is because he is Jane’s husband, or that the only reason that Jim is in the business is because he is the founder’s son. You can’t build a great company when your team thinks that the only way anyone can get anywhere in the business is if they’re a family member. You can only succeed when your team knows that any career opportunity is based on merit and on the value that they add, no matter their name, gender, religion or race. Why would any sensible founder not want to promote the best? Sometimes common sense is not common practice.

I worked at Com Tech with my two older brothers: Jon joined after a year and Steven after about two years. Like Dad, we were all chartered accountants. How could we possibly add value if we were all accountants? Well, you get accountants … and then you get accountants – and only one of us was really qualified to do the books. When we eventually brought in Macquarie Bank as a private equity partner, the Mac Bank board representative, Michael Traill, affectionately referred to us as Doom, Gloom and Boom.

Steve was Doom. He predicted the global financial crisis 25 years before it happened. He was a real CFO, and truly safeguarded the assets of the company. Steve is by nature extremely conservative, and he was always negative about Com Tech expanding into new areas of business and new regions, constantly questioning how we would fund our growth.

Jon was Boom. He only ever saw blue sky. When things were tough – even in great companies, you have your challenges – Jon still only ever envisioned a positive outcome.

I was Gloom – even when things were going brilliantly, I was always worrying about something. Who could disrupt our business? What could we be doing better for our staff and customers?

We were an awesome combination, especially Jon and I.

Steve prepared our management accounts with amazing diligence and managed our inventory and accounts receivables. As a distribution company, at times we may have had $250 million tied up in these assets – poor management could have cost us our business. Our industry was rife with bad debts and obsolete inventory. Steve kept ours to a minimum.

Jon worried about today, and I worried about tomorrow. I may have had the vision, but Jon executed on my vision better than I would have done myself. I was the hunter, Jon the farmer. I would identify a new product and then the challenge for me was to secure the distribution rights. Once I had achieved that objective, someone needed to manage the partnership. There was nobody better than Jon. Our suppliers loved him and he was able to negotiate discounts that really helped our profit margins – as my dad taught us from an early age: ‘Boys, the profit is made in the buying, not the selling.’

Despite all three of us being accountants, there was very little – if any – overlap between us. Jon focused on merchandising (ordering inventory) and sales, while my focus was marketing and sales. So, admittedly, we did overlap on sales – but you can never have enough of that. If an account manager wanted me to visit a customer and I was busy, they would take Jon, and vice versa. We also both invested heavily in enhancing our staff relationships – which, I can’t emphasise enough, is a critical role for any leader.

With minimal overlap in our respective roles, my brothers and I all added significant value to Com Tech – and I know that I’m right about that. After I left, Jon remained in the company for about six months, then became an advisor and continued as a board member for many years. Steve stayed on as financial director for another six years. If they were both there only because they were my brothers, Dimension Data would have fired them the day that I left. They must have added value.

Once I left Com Tech, we never worked together again. While I’m sure that Jon and I have both done well independently, I have no doubt that we would have done better as a combination. Just as Lillee and Thommo or Horan and Little were to sport, we were the best combination in the industry in 2000. But we didn’t maximise the opportunity presented by the internet – something that two other brothers, Paul and Andrew Bassat of SEEK fame, absolutely nailed. We should have continued on our path.

Some family members may not work directly in the business but even so are an essential part of it – and I’m talking about your life partner.

As a founder, I would not have been able to achieve what I did without the unbelievable support I got from my wife, Colleen. We have three sons, and the amount of time and effort that Colleen put into raising our boys was huge. My boys are good kids, but sometimes on a Monday I would think, Phew, work today! Being a stay-at-home mum is a full-time job. While Colleen never came into the office, her role often involved entertaining staff, suppliers and customers at our home or at restaurants. Being a founder is tough – not having a supportive partner makes it that much harder again.

Colleen never thought I would quit. However, I always said that one day someone would come knocking on our door wanting to buy Com Tech. I knew that as long as we were building a great company, we would always have options. We were on a rocket ship and it would have been irresponsible of me to get off – I had the opportunity to set my family up financially for life. I was realistic enough to know that without the lucky breaks I’d had when founding Com Tech I would probably never get that opportunity again. Fourteen years was worth the sacrifice. Thanks to Colleen, our sons are all great, hard-working, well-rounded boys. We are able to do things as a family that we may not have been able to do if Colleen and I hadn’t put in those fourteen years of hard yakka.

A few years ago, Colleen and I were able to share this advice with one of Australia’s most successful founders and his wife. I think they sincerely valued the guidance at the time, and they found it encouraging to know that you can have both a successful startup and a great marriage – they are not mutually exclusive.

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You can only succeed when your team knows that any career opportunity is based on merit.