Sarah Stowe (00:58)
Welcome Ajit. Good to have you on the podcast today. I just want to set the scene first. You’ve been with Snap-on for just over three decades. It’s almost as long as the mobile tool retailer has been operating in Australia. And on your LinkedIn profile, you describe yourself as a commercial, strategic and financial executive, but you’ve also expressed how passionate you are about the business. So…tell us, what’s the passion?

Ajit Ponnambalam (01:25)
Thanks for having me, Sarah. Yeah, I think there’s a passion to make a difference. A passion to be the best tool company in the world. We’ve got a passion to be the best franchise network that allows our franchisees to enjoy a lifestyle they otherwise could not have. A passion to be an employer that people want to join, stay with, and make a difference over a long period of time. Passion is what drives us. Passion is what gets us out of bed.

Sarah Stowe (01:54)
Is that something that you see through the network as well? Does that filter down through the franchisees? Because you said that you want to be a really good franchise or have a great franchise network. Do you see that passion inherent in the franchisees who are on the front line?

Ajit Ponnambalam (02:08)
Oh, absolutely. And I see that even with our customers, our brand name is well respected. I see that passion with our customers, as I said. I see that passion with our franchisees. I see the passion with our staff.

Sarah Stowe (02:25)
Snap-on is probably not a particularly well-known brand outside the customer base and the industries that you work with. It’s an American brand. It’s been established here for 35 years, I think, just this year. Can you just tell us a little bit about it and what do you think is the key to Snap-on’s longevity as a brand?

Ajit Ponnambalam (02:46)
Okay, Snap-on has been around 100 years and we’ve got a very rich history that spans the Great Depression, it spans several recessions, wars, and now pandemic. And I think the key to our longevity as a brand is our central proposition is that we exist to make life more productive for technician customers.

We have a value creation statement that we’re all proud of and that talks to attributes of quality, customer connection, innovation, continuous improvement and safety. So we’ll often bring our customers into our innovation centre and talk to them about their needs. And that’s how we stay relevant and engaged in the life of our technician customers.

We also have a network of passionate franchisees who will call on their customers each week, sell them product, offer them credit, take care of any warranty issues, and ask them about their upcoming tool needs. Our tool range is unmatched and the typical franchise mobile store will carry about 800 fast moving SKUs, but they can access far more than that from our central warehouse.

Sarah Stowe (04:08)
That’s an impressive number and I think you count, the American element of the business counts NASA amongst its clients. Is that correct?

Ajit Ponnambalam (04:18)
Yes, we do. We do. That’s why we say we are the Rolls Royce of the tool industry. No one else comes close.

Sarah Stowe (04:26)
So what was it that attracted you to the Snap-on business? And what was it like when you joined? Because we’re dialing back now, 30 years. I imagine it was quite different.

Ajit Ponnambalam (04:38)
Yes, yes. It was, as I said, Snap-on is a 102 year old business. In Australia we’ve just celebrated our 35th birthday and I started just over 31 years ago. My first boss, Greg Johnson, was our founder, Joe Johnson’s grandson. I was impressed with his integrity and humility. He shared a lot of the family stories from those very early days. And the Australian business was just over three years old at the time I joined so we experienced all the growing pains that companies go through. But we had expectations that this little business could be something special and we were all aligned with that vision. As I said, we are the Rolls Royce of the tool industry.

Sarah Stowe (05:26)
I’m interested in how you got there, so maybe let’s start back a few years. Let’s go right back to childhood. Where did you grow up and what did you see around you that has influenced who you are today?

Ajit Ponnambalam (05:43)
Yeah, interesting question. I grew up in Sri Lanka and I saw firsthand the ravages of racism and intolerance and poor government and that ensured I invested in my own education. I went to the UK for my degree, my accounting studies and finally my MBA. Education is something that no bad government can take away from.

Sarah Stowe (06:04)
That’s a very interesting point. Do you count your education as the defining kind of factor in terms of where you are in terms of your career?

Ajit Ponnambalam (06:19)
I think it’s a significant part of who I am and my drive. I decided fairly early on in life, I was going to be a chartered accountant. And for me, business was a logical degree. And after qualifying as a chartered accountant, I realised that I wanted to be involved in the whole of business, not just the accounting and finance side. So I studied for an MBA.

Sarah Stowe (06:45)
And was your background, was there business in your background, do your family own businesses or on the kind of accounting financial side, or was this something that you just saw as a route to something that was really interesting and in a sense, creative, I guess.

Ajit Ponnambalam (07:02)
Yeah. I think the fact that my father was a chartered accountant and a tax specialist did influence me, but I found accounting and finance fairly narrow, but the tax part of it even narrower and more specific. So yes, there was some input for sure, but I like to think that I have widened from those early days.

Sarah Stowe (07:30)
So you said you were interested, you were wanting to get into business in the wider sense because that’s where the creativity is, isn’t it, in terms of being able to achieve different things. And I just wondered whether you, looking back now, whether you think that business is something that is a mindset? Like, do some people have a business brain or is it something that you feel that you can learn, you can nurture?

Ajit Ponnambalam (07:57)
Yes. I mean, it comes back to that question of nature versus nurture, isn’t it? And I think it’s a combination. There needs to be a willingness to adapt, to take risks, learn from mistakes and to surround yourself with smart people who can be a good sounding board.

Sarah Stowe (07:51)
We’ve talked about the tenure of, we’ve talked about the longevity of the business itself with this amazing centering of trading. What is it do you think that attracts people to stay so long? Loyalty and long tenure seem to be part of the DNA because I think they’re, you’re not the only one that’s been there for quite a while in terms of the management level. So what is it do you think about the business that provides enough to keep you engaged with the business and creating new things.

Ajit Ponnambalam (08:16)
Yeah, I think we’ve always been rock solid on being an ethical business. And that’s important to me. The best advice I got when I first started was, when you make a decision, just think how it will sound like on the six o’clock news. I think that was wise counsel, actually. And as I said, we have developed a strong brand over 100 years. And people in the automotive space know that we are a quality brand.

And that in turn creates a sense of loyalty amongst our people. Safety is in our DNA. We have a caring environment. Even when the outlook appeared bleak, as it was during the GFC or the recent pandemic, we took care of our customers, our franchise network, and our dedicated staff, who invariably go beyond the call of duty. And I think people respect that and are happy to stay with us.

I recently had the privilege of recognising seven staff members who had significant anniversaries and those seven people had over 150 years of Snap-on experience between them. Yeah, we have a few staff who have over 30 years experience now and several of them have been with us 25 years. So across the network almost 15 per cent of our permanent staff and over 15 per cent of our franchisees have been with us over 20 years. And Sarah, that’s why I often say I think I’m the luckiest managing director in corporate Australia. I have good people. Good people.

Sarah Stowe (10:35)
Well, that’s so important, isn’t I mean, we hear it, we hear it as a throwaway remark sometimes that, you know, the business is only as good as its people, you know, that’s the heart of it. But that doesn’t necessarily always translate into a good business or a well supported staff. You touched there on navigating through the GFC and through the Covid times. Can you can you tell us just a little bit more? You said you supported people, was there anything specific that you did in terms of the staff and the franchisees to help you through that time?

Ajit Ponnambalam (11:28)
Yeah, look, the important thing is we always had the confidence that the headwinds would pass. As I said earlier, when you’ve been around 100 years, you’ve navigated the depression, the Great Depression, the various financial crises and now the pandemic. So we always had the confidence that these headwinds would pass. And our job, our management team’s job was to preserve the network and ensure that people didn’t allow their shoulders to sag. So we allowed customers who could not keep up with their payments to renegotiate payment terms. We allowed franchisees to stop payment on their loans if needed. We even took back special promotional inventory that we ordinarily would not have taken back. I

In fact, Sarah, there were some days in April, 2020, which I hope never to relive when we seemed to be processing more returns than sending out sales. And we maintained our salaries to staff, even though we knew they were not fully occupied.

Sarah Stowe (12:31)
Did you have to lay anybody off?

No, we knew that there were some 300 families depending on us to put food on their tables and we honoured their faith in us. So we were very lucky that way. And I was grateful for JobKeeper. And we kept our staff, as I said, they were not always fully occupied, but it was a pandemic, it was a crisis that would pass. This too shall pass is what we kept telling ourselves.

Sarah Stowe (13:00)
And so on that element of the franchise relationship, specific, has that changed in the business? I mean, we’re talking 30 years ago in franchising, quite a lot has changed in Australia in terms of the legal issues and various structures have become more popular than others. And I’m just wondering the relationships at the heart of all that. Have you observed a difference? Have you seen how that has moved with the times?

Ajit Ponnambalam (13:30)
Yeah, good question. In some ways, Sarah, it seems we’re still doing what our founder did when he visited customers at their place of work each week and brought them the very best tools that money could buy. We also allow customers to use their tools and pay it off on a weekly basis. That system was devised during the Great Depression, so the basics of the business model have remained unchanged over decades.

The way we interact with franchisees who have invested their capital to be part of Snap-On has remained largely the same. The product offering, of course, has evolved in keeping with automotive changes. We used to refer to our franchise opportunity as ‘a man in a van’. Today we recognise that doesn’t do justice to the breadth and range of products and the programs that we offer.

Our mobile store is pretty impressive. It carries around 800 SKUs. In fact, Fortune magazine many years ago referred to it as one of the most productive retail spaces in the world.

Sarah Stowe (14:36)
Well, the trucks are quite large, aren’t they?

Ajit Ponnambalam (14:37)

Yes, yes. And as our product range and the complexity of our products have grown, our vans have also got a bit larger, but we also recognize that our franchise is still constrained by the limitations of space and time.

So today, those franchisees who would like to are supported and encouraged to take on an assistant to help service more customers. We have also recognised that toolboxes in the Australian market are getting ever larger. So now we have a few large tool storage vans that work with franchisees at no cost to them and show their customers some pretty special and unique toolboxes which are made in our factory in Iowa, USA.

Similarly, with diagnostics, cars have got ever more complex, so we have a few diagnostic specialists supporting our franchise network.

Sarah Stowe (15:32)
So that’s something that a franchisee can tap into and do they ask, do they kind of book an appointment with diagnostics to come on a route with them?

Ajit Ponnambalam (15:47)
Absolutely, and it’s at nil cost to them. So it’s a great investment that we’re making in the franchisee success.

Sarah Stowe (15:55)
Right. What’s the investment emphasis? Is it pretty much on technology these days? Is that where the big bucks go in terms of developing the business?

Ajit Ponnambalam (16:08)
All of it actually, the investment is in hand tools, whether it’s tools, storage, power tools, on the car equipment, you name it, anything to do with the car, these days even plane, and as you said, NASA still come to us. So we have an unparalleled range of tools and equipments.

Sarah Stowe (16:29)
Yeah, and in terms of, I mean, that’s fantastic for the customer, isn’t it? And I know that the inside of those trucks is always beautifully kept.

Ajit Ponnambalam (16:39)
Yep. Oh, those are fabulous little mobile showrooms actually. And as I said, Fortune magazine called them one of the most productive retail spaces in the world. When you think that’s a six-metre truck and you’ve got tools on either side and on the ceiling on top of you as well. You’ve got power tools, tool storage, you’ve got a TV playing various DVDs. It really is a fabulous arrangement.

Sarah Stowe (17:08)
But in terms of behind the scenes and in terms of the business itself and how it interacts, has there been a lot of development with technology on that front?

Ajit Ponnambalam (17:18)
Yes, there is. And those of us who’ve been here a long time remember the various day books at our old franchise and our old franchisees would also recall. I think I mentioned over 15 per cent of our franchisees have been with us over 20 years. So they would remember those old day books. These days, it’s much more slick. We have our own point of sale system, which ties into their inventory systems, inventory control, it ties into all of the stuff they need to do their best statements. It really is very streamlined these days. And we’re looking to improve it all the time. So there are constant updates that come out.

Sarah Stowe (18:03)
So what’s next for Snap-On? Is there anything specific? I mean, it’s a solid brand, isn’t it? It just keeps on track. You know, you don’t seem to kind of falter in any way. You just keep solidly ploughing ahead.

Ajit Ponnambalam (18:19)
Yeah, you know Sarah, I think the secret of our success is a relationship. How many businesses can say that they visit their customers at their place of work on a weekly basis, offer them tools or whatever the product, take care of warranty and even extended payment terms. So we have a very decent relationship with our end user customers.

And frankly, our franchise network and Snap-on is all about taking care of its customers and as I said, making sure that we help make their life more productive.

So what’s next for Snap-on? I think the basics of our business have remained unchanged for decades. And as I said, they’ve stood the test of time, ravages of war, disease and recessions. And since 1939, we have never cut or reduced our quarterly dividend. So our CEO keeps telling us that’s a Wall Street record. So the model is working and in Australia, we still have plenty of opportunity. As far as I can see, our roadmap is clear and coherent and we just need to continue execution of those plans.

Sarah Stowe (19:37)
It’s sort of solid and steady, isn’t it? I think sometimes, I’ve talked to a few people who kind of come from businesses, that are heritage businesses essentially. And they’re quite often family owned, slightly different I guess in this particular circumstance in Australia. But I’m always interested in how a heritage brand treads that path of continual success without getting drawn into the new and the novel that takes them off message, if you like.

But equally, you’ve still got to keep innovating. You can’t become stale. How do you manage that personally in terms of what you do with Australian business?

Ajit Ponnambalam (20:22)
Yes, so that’s right. I mean, we don’t play in the DIY business. There’s a huge market there, but we, as I said, we play the Rolls Royce end of the tools. So how do we stay relevant? I think it goes back to that customer connection. I mentioned, you know, innovation is at the heart of what we do. We have today a world of advanced electronics in the automotive space, innovative products, I think they’re just perfect solutions for the technicians. And we invest significant amounts in R&D. So staying at the forefront of technology, that’s vitally important.

I don’t know if I’ve ever shared this with you before, Sarah, we have some 3,000 active or pending patents worldwide. It ensures our relevance. And what it does is it allows the franchisee the ability to walk into the customer shop and answer the question, ‘What’s new, Snappy?’

And that’s our license to go into their business. So the investment in R&D, bringing customers into the innovation center, asking them or talking to them about their issues, in fact, helping them come up with solutions to their problems and then turning that into tools. Hey, guess what? We’re very proud of that..

Sarah Stowe (21:43)
Let’s just talk a little bit more about your kind of approach to business and your experiences. Is there a business regret that you have? Is there something that you would like to have handled differently or lessons learned from particular instances?

Ajit Ponnambalam (22:54)
Sarah, I think I’ve made many mistakes and I’m lucky that I’ve got a very good management team. They’ll come in, they’ll shut the door and they’ll put me right. So, I like to think I’ve only ever gone and hired people who are brighter and smarter and harder working than me. So I’ve had a fairly collaborative management style which allows that free flow of information. So mistakes, plenty. But have they been business stoppers? No. And I think that’s because, not because I’m smart, but because I’ve got a good team watching out for me.

Sarah Stowe (22:32)
And you’re smart enough to listen to them. I mean, I guess that’s the thing, isn’t it?

Ajit Ponnambalam (22:37)
Yeah, there’s no point. As my boss would say, there’s no point paying good money and getting good advice if you’re not prepared to listen to it.

Sarah Stowe (22:42)
No, that’s so true. Is there anything that’s a standout in terms of an achievement in all that time?

Ajit Ponnambalam (22:50)
Oh, look, this January, I was recognized for 30 years in the business and I was reminiscing. When I started here, we were a $12 million business. And now we are many multiples of that. And our top four or five franchisees last year did more than all of Snap-on did in my first year. So that gives me a great sense of satisfaction to think we have helped, we have helped to drive that. Okay, it’s not overnight, we are not an overnight success, but over a period of 35 years, we’ve been able to achieve some things as I think it’s pretty cool actually.

Sarah Stowe (23:36)
That’s a very impressive kind of figure. It really is. You’ve talked about your leadership style being collaborative. Is that something that you naturally have? Is that inherent in you? Is that something you’ve learned through your management experiences and your leadership experiences? Is there anyone that influenced it particularly?

Ajit Ponnambalam (23:59)
Well, I think Snap-on as a company has been good listeners, whether you’re listening to customers or whether you’re listening to franchises. And I think it’s important, whatever role you do, whether it’s the managing director role or any other role at Snap-on, that you be a good listener. And that way you’ll get the feedback and you’ll make sure that you’ve got somebody covering for you when you make a misstep.

Sarah Stowe (24:28)
So what advice, is that the advice you offer to someone starting out in business now or do you have any other kind of tips for someone that’s ambitious and wanting to either make their way in a corporate role or wanting to do their own thing in a business?

Ajit Ponnambalam (24:44)
I think people have different needs and priorities. So I just say, be clear on what you want and then putting the hard work needed. But above all, make sure your values and the values of the company that you keep are completely in sync, completely in sync. The values part of it must line up with yours, otherwise work, life, whatever it is, will be just a drudge.

Sarah Stowe (25:14)
That’s a great point. It’s a good point to finish on that idea of values because that’s certainly something that seems to be inherent with Snap-on. So thank you so much, Ajit. It’s been great to have this chat and congratulations on your stellar tenure at Snap-on. 31 years, fantastic. Well, so what’s next for you?

Ajit Ponnambalam (25:34)
Thank you, Sarah.

Sarah Stowe (25:35)

Let’s just say, what do you hope to, what would you like your legacy to be at Snap-on?

Ajit Ponnambalam (25:42)
Well, I’m very happy with what we’ve achieved, Sarah, and my legacy, I think, has to be the people I leave behind. As I said, I’ve had several staff who’ve been with us for 30 years, and we’ve grown them and helped to nurture them. I’ve had over 15 per cent of our network who’ve come in, with limited means and yet make a very handsome living, and stay with us for over 20 years, my legacy will be my people.

Sarah Stowe (26:16)
Fantastic. Ajit thank you very much for your time.

Ajit Ponnambalam (26:19)
Thank you, Sarah. Thanks for having me.