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Call me loyal

By Fiona Rotherham

Friday 4th August 2006

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How did you feel when they announced you had won this award?

I was totally surprised. I was aware of it because I went to the Sir Peter Blake launch a couple of years [ago] at our old school. We both went to the same school - Takapuna Grammar - and we both went to Bayswater Primary and Belmont Intermediate. He was about three years head of me but his brother Tony was in my class, so I knew the family pretty well. And I obviously read about what happened last year with Sir John Anderson but I wasn't aware it was coming up or anything, and then lo and behold I got this call from Sir Ron Carter to say I was it. I don't know who nominated me or anything. They obviously do it all on public information.

How did you feel when you were told?

I was very humbled. I felt it was a great honour. The fact that I think Peter was such a great leader and sort of put New Zealand on the map as a sailing nation. And to sort of be related to that when you went through the same system as he did and you hung around in the same neighbourhood and knew him quite well. We had him along here [at The Warehouse] on two or three occasions to talk to management about how he led his Round the World campaigns and all the intricacies involved in that and then I had quite a bit to do with him latterly with the America's Cup before he gave that one up. I've remained assisting America's Cup Team New Zealand since.

Are you on the board there?

No, no I am just a financial supporter and go along and support them. I've been to Valencia and I went to Trapani last year and I'll be up there for the Cup next year.

Were you surprised you were chosen?

Yes, I was, in a word.

Why do you think you were?

You're probably better to ask them. I would imagine that it is probably the investment work I'm doing. Because I'm a strong advocate for trying to build, on top of the fantastic agricultural base we've got and the innovation and efficiency we lead the world in there - I class New Zealand farmers as our leaders really, they're the people that are holding the nation together economically. But I have also, through the work we did at the Knowledge Wave and then the follow-on with the New Zealand Institute and KEA, I am very mindful of the way the world is going in the knowledge and high-tech area and I suppose I have just put my money where my mouth is and every dollar that I have received in dividends from this place [The Warehouse] has either gone to the Tindall Foundation for what we call social development and the rest has gone into supporting all these young companies: seed capital, risk capital, and venture capital - whatever you want to call it - basically helping grow all these organisations.

How is that going by the way? You have been having some good results.

We've had failures and we've had some good results. We've had three floats on the Australian Stock Exchanges now: Living Cell Technologies, Neurenz and more latterly Brainz. Pure Depth has now gone on the over-the-counter bulletin board in the US. That's the multi-screen company - two LCD screens on top of its each other, formerly called DVI. I bought that off Peter Witehira and then bought out the other shareholders and we've been slaving away on that and it's been coming right, which is great. We have some good orders. Those are the ones that have gone on to the next stage. There's a whole raft of them still being built up. So also within there there is a lot of technologies that I think are also going to help New Zealand from an environmental perspective. Lanzatech is the best example, which is creating ethanol from the smoke that comes out of the chimneys at Glenbrook. There is another one which is creating Omega 3s. Omega 3s are a health additive that normally comes from fish oils. That's being grown in reactors out of algae.

We've got [other] things ... the vertical composting units - which the whole of Waitakere and North Shore cities, their whole greenwaste system goes through it - and we've had a number of good orders coming out of Europe for that company. It has a management team in London now.

There have been mixed reactions. I think of the money I have invested, it all gets down to, subjectively, to the valuation. The ones that have floated obviously you have a liquid valuation so you know if you cashed it up what you could get. The others are all subject to what stage of development you think they are at and where on the hockey stick you place it at the moment. I think in general, I hate to say it, but if I went under a bus and they had to cash everything up we would be well ahead.

The point isn't really, though, to make money, is it?

No, it is not. It is to try to show an example. All these things are really the future for New Zealand and [to] try to give encouragement to the guys that are actually slaving their backsides off trying to do all these good things. It is really obvious to me there is tremendous innovation out there, we just haven't been really that good at channels to market and international marketing. There are really big companies starting to emerge. Another one I am in is called Cabco, which has a large number of shopping trolleys in places like Wal-Mart and HE Butt and some of those companies. That has a really interesting future and I think it will go incredibly well. That particular CEO, Doug Bartlett, has done really well in terms of finding the channel to market. He's done a great job.

It must be quite exciting working with these companies?

Yeah, it is. Another one you may have heard of is Phitek, and Mark Donaldson is a real whizz kid in terms of finding his channel to market. He's sort of the technology guru and salesman all in one piece and that's an exciting company with huge growth prospects.

Even though the traditional VC model is that you've got to have a certain amount of failures you've also had a few winners as well.

Yeah, but we have had our failures as well. No doubt about that. Some of them have been liquidated. The thing in my particular case, from a reputation point of view, I have not let any creditors lose. In other cases where you have a spread of investors who have put their money into a limited liability company and the people they trade with know that is the risk, they trade with them on the basis that you might not get paid. In my case, I feel a strong moral obligation to pay all the creditors out, so on a couple of occasions I've had to do that.

What do you think makes a great leader?

I think in Peter's case it was a strong drive to succeed. He had a goal on those several occasions he did the Round the Worlds. The goal was to not only survive but to try and win. It took him a few attempts but he did it and you know, just a resolute, dogmatic determination to do it. It's interesting that word - we used it at the second Knowledge Wave. We had T-shirts distributed to everyone that said 'determination' with the word nation in a different colour and a little silver fern above that. I think that describes a leader. When you read books like Good to Great the people that seem to emerge as the leaders [are those] who have their heads down and they're just going. They're determined and they want to succeed and they, I think, they're the people that really back up their people and their teams to succeed. They're there as supporting. It is push rather than pull.

How important is leadership in business do you think?

The way I look at it is you can't actually say I'm on a path to be a leader, or I'm striving to be a leader or I am a leader. It is all subjective and it's based on what people think of you based on what you have achieved. I think often people might say that person does not seem to be a great leader but actually he achieved a lot, but then maybe he was. If you take someone like Ralph Waters and Ann Sherry - a couple of Australians who have come in here - I don't think they have tried to go out of their way to prove that they are leaders. But they have just got on and used the support of their boards and their own experience, and gone for it. I think that backs up what I said before, about head down, [the] tortoise, let's do it, let's not muck around. Do the research, find out how much capital we need, and if it's going to work let's take the risk and do it. There is quite a bit of risk involved as well. Then, at the end of the day, once the results come through, I guess you get labelled as to whether you are a leader or not. If you're a major failure I take it that you're probably not classed as a leader. People do come and go and fall from grace. You probably would have said Ken Lay [Enron] was a leader while everything was great. There's an example of someone who became the anti-hero.

Who were your role models?

I think my role model right through until I really got cracking was my Dad. He was a person I admired and still admire greatly. He was a person who just got on with it and did it. He wasn't looking for recognition.

What did he do?

When I was a kid he worked in a retail hardware shop in Takapuna. And then he went into a wholesale distribution hardware organisation as an employee and he was then headhunted to Northcote Hardware, which was just over the back here and he was given a shareholding in that. Along with those shareholders he became a shareholder/director of a importing manufacturers' representative tool company and basically stayed there through to the end of his career. But he showed me - as an example, without formally teaching me, just being there watching and observing him - that you can achieve things by just getting on and doing it. I can remember when I was a kid, like most families in the 50s and early 60s, there was not a lot of money and Dad had a day job and had two jobs at night. In his garage he used to manufacture baby bouncers - those things you strap a baby into and they bounce and hang from the ceiling - and he used to make toy garages that he sold to the Takapuna toy shop who then used to distribute them to other toy shops - he was in a buying group that particular guy. Dad proved the work ethic of just getting on and doing things is a good success. Mum had her business at home, she was a hairdresser so they kitted out one of the bedrooms at home that looked out over our backyard. I could get home from school and play cricket with my mates and she'd be there cutting a lady's hair and making sure we were under control. I think the ethic was there in the family.

Do you think New Zealand has enough leaders?

Does any country have enough? It really is the way you describe and perceive a leader. That is why I brought up the analogy of the New Zealand farmer. Ask the average cow cockie if he thinks he is a leader and he'd say 'what are you talking about?' you know. That is our New Zealand egalitarian attitude, the way we sort of developed as a people. But in their own right and especially with their combined strength under Fonterra, that is an absolutely awesome combination of world-class efficiency backed up by the land-based CRIs that are there doing the R&D for them all the time, a big cooperative organisation in Fonterra that I think is now proving that it is understanding channel management, sales and brand management. It is up there as the fifth largest dairy conglomerate in the world. I personally think that is a great example of a whole bunch of leaders because they are leading in their field globally. The actual management of the company is also very ably lead as well through Andrew Ferrier and co - the team he has built.

Does winning this award make any difference to you?

It is something that feels good from a recognition perspective because, you know, you get the odd brickbat. Something like this is a good buoyancy compensator to convince yourself you are doing a few things that are right and it is worth carrying on.

Do you have anything new on the go because you usually do?

The latest thing I am working on is biofuels. We're not ready to go public on it yet but what I can say is all the research we've done so far and the discussions we've had with some of the people who have been negative towards it are now starting to prove all those negatives can be alleviated - you can get around them based on land use. There are several stages to it. The first one and the easy one is corn because corn is already working well in the US to make ethanol. It is a turnkey thing now. It does depend on some alternative energy sources. In our case there are some alternative energy sources which at the moment are going to waste. For example, there is a lot of heat going into the Waikato from Huntly which we could utilise, and there is a lot of waste heat out of Wairakei. There are ways of making one and one equal three. So we're talking to a number of people about how we might be able to do that. Over the next, say, 15 years we could stage this - get the corn one up and running and then go to a more biomass. There is a lot of biomass in New Zealand produced that at the moment is going to waste. With the right chemistry, if you can turn, for example, surplus rubbish from, say, pinus radiata into ethanol then you have the next stage. That is harder to do. There are some other very good examples of using hardwood such as salix. That's another one but that's 2011, so my view is you have to get started now with something that is a turnkey and then just progress. Unless the New Zealand fleet is prepared in advance to take E3, E10 and up to E85 etcetera then you won't be able to institute the product.

Do you think the price of oil is helping accelerate development here?

Yes it is. But we have to do our costings on the fact it could come right back down again and so far that is looking like it is do-able.

Is that through the Tindall Foundation you're doing this?

The Tindall Foundation does get involved in helping with some research and works with some various not-for-profit bodies. We're doing a lot of work on carbon farming at the moment through the foundation. You tend to have to work with a lot of iwi and people who have land that is actually not much good for anything else. So how can you then, through a very collaborative approach, turn that into carbon farming rather than waste land?

What is carbon farming?

Let's just take, for example, you've got some marginal land at the moment that you have in pasture and it was in pasture in 1990, which is also quite important for Kyoto, or it is just in scrub. What you do is you fence it and either plant it, or in most places particularly in places of high erosion, so all you do is let is generate and you can then sell the carbon credits. So you are actually farming carbon, effectively. I'm saying convert pasture or scrub. The rules of Kyoto are if the land was not in forestry in 1990, was either in pasture or say basically low scrub which was not sequestering carbon, you can then count that as carbon credits. You can either fence it and it generates into native itself - so it might start off with gorse, manuka and kanuka and eventually it will generate into native bush itself.

That's the cheapest way to do it if you have very steep hill country, which at the moment is just eroding badly. If you fly down the East Coast and there is just thousands of hectares of land that is all just eroding away and doing nothing. Or you can go and plant it but doing that on that sort of country is highly expensive and particularly if you want to mill it, you find there is no return. Whereas farming it for carbon credit, maybe there is.

The foundation works on that sort of thing. Anything I think is commercial I do in my own name. And in my cases, anything that is going to be good, along with carbon farming, you would then try to make it a commercial operation, so you can set it up to attract investors.

Anything you want to add?

The good thing about New Zealanders is that we don't take ourselves very seriously and that could translate to not trying to be formalised in the way we have our leadership recognition programme, but I personally think it is a very good thing. And I think probably when you go to look for leadership in business, which is, of course, what your magazine is about, the overriding factor really from my perspective is delivery. In other words, someone who has actually led an organisation before and been very successful at it is sort of the safe path as opposed to taking a big risk on a particular leader based on gut feel.

What most leaders have in common is they're usually pretty humble. Would you agree?

No, I think that is an important factor.

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