Sarah

So John, 40 years in business is a fantastic milestone. How did you get here?

Ha ha.

John O’Brien
Sarah, I come from a very entrepreneurial family background. One part of our family is the Breville family and my family grew up owning country hotels. So I grew up in an entrepreneurial or small business family and I suppose it entered my DNA around the kitchen table and…

Whilst I went through university and corporate, when I look back I think I always had in my mind that I would have my own business one day.

I suppose if I kind of focus on that entrepreneurial bit, I think growing up, I often ask our potential franchise partners whether they’ve got any small business in their background or family and often they do. And I think that point I made about getting small business or entrepreneurism and we don’t use that word in Australia very often, entrepreneurialism. Having a business in America, I love the way they celebrate that.

And using an Aussie colloquialism, it’s having a go in life. And you learn about small business often around the kitchen table, if you’re in a small business family. Now I can remember, you know, from before I could walk, but as I grew up through the age of seven, probably early memories sitting around the kitchen table hearing mum and dad talk about customers and suppliers and cash and bills and staff and all those sorts of things. And when it came to put those into life, into action for me, that kind of came second nature. But I’m a big believer that most entrepreneurial businesses, all entrepreneurial businesses are about customer facing businesses.

And any exposure you can have, to the public to customers at an early age I think makes a huge impression on you. I remember pulling my first beer at the age of seven and giving it to a guy at the bar and the reason I did that was he owned a local greek fish and chip shop and he used to give me free chips on the way home. Unbeknownst to me chips for beer was my first contra deal but I remember selling

I remember our dog died from a snake bite and had all these pups. It was market day so I went out the front and sold the seven pups. I sold them to one kid on credit from school because he didn’t have any cash but he bought it back the next day because his parents wouldn’t give him money so I learned about bad debt. So all those things I’m saying, they really give you a great basis in business. I went on through country boarding school which was a great experience about… really teaching you about resilience as a young, as a youth.

Being in a country boarding school of 500 boarders, five hours drive from home, you only went home at the end of term. It really taught you to stand on your own two feet and was a fabulous experience. I just had a 50 year reunion and most of the class, three quarters of the class came to that which is pretty incredible.

It teaches you a lot about leadership. I was fortunate enough to be college captain and particularly to boarding school where you lived with your classmates. You learn about leadership at an early age. I did get into to study law at Monash in Melbourne. But I’m not equating myself to a lot of these famous entrepreneurs like Bill Gates and others. But.

But like them, law wasn’t for me. I remember after three years looking down those long law library books and I remember this teacher gave me an A and then he crossed it out and gave me a D because he said until such time as you’re a judge, rely on precedent. But I didn’t finish law and left with an arts degree and like a lot of those guys, I couldn’t wait to get out into the business world. I just hankered to…

to test my metal and to see if I could create something. One of the best things I did though, say again.

Sarah
Is that the driving force, the creation of something?

John O’Brien
Yeah, I think the burning desire to create something yourself, to not be beholden to somebody, to perhaps have the vision to see something and to create something and to be answerable to yourself and not relying on somebody else to create your future for you. I’m not sure, Sarah, how to… describe the burning ambition in an entrepreneur. I’ve spoken to many of them, but there definitely is a burning desire in your core that has to be fulfilled.

I speak to many potential franchisees who are in their 40s and 50s, even 60s, who have had that burning desire to have a business venture of their own, but have put it off and put it off for 10, 20, 30, 40 years because they got caught up in the catastrophe of life, mortgages and family. And finally, I’ve got to a point where they’re free enough to do it. And it’s often the happiest moment of their life. You see that spark in their eyes as they start in their new franchise.

The real university for me, Sarah, was when I did finish my arts degree. And I think in hindsight, maybe I did this on purpose, I’m not sure, but I went and worked with a corporate, I went and worked with Cadbury Schweppes’ head office in Melbourne, for about eight years, all through my twenties. And just fabulous experience and education and mentorship in business. I went through human resources and sales and marketing and eventually I ended up in franchising with Cadbury Schweppes. But that’s what really set me going because I learnt the skills of business moving through all of those functions with a great global corporate. So that’s probably what got me going.

Sarah
And what do you see, you’ve touched on a few things there in kind of, you know, talking about leadership and business. How would you describe your leadership style?

John O’Brien
Well, I think it’s evolved a lot over the years, Sarah. I think anybody’s leadership style has to evolve as they get more experience and more maturity and more knocks and learn what works and what doesn’t work, but also times. At times, over my 40 years in franchising, leadership has changed dramatically and it’s changing in front of our very eyes now. As we know as different generations come through and they demand to be treated differently. But I suppose if I was to summarize my leadership style, I’d rather ask people I’ve led, but I believe very much that a leader must have a clear vision of what they want for the entity they’re leading or the people they’re leading, where they want to be in five years or three years or next month or whatever it is.

I think they have to be very good communicators of that vision to people. It’s one thing to have a vision in your head but you’ve got to be able to communicate it with people so that they come along for the journey with you. I think you need to be empathetic. You need to have a certain side of you that taps in to people. You do need to be a people person. You don’t need to be a soft touch because at times leaders have to make the tough decisions.
But you need to be able to pick when your people need a break, when they can be pushed, how to motivate different people. Not everybody’s motivated in the same way.

I think leaders, I think I’m hopefully those things, but resilient. I talked about that before, but there are many times in a leader’s journey that they’re the last person standing who believes in the endeavor. And they’ve often got to have the conviction to row their own boat, to follow their own vision, their own journey when everybody else, family, friends, abandons you and the vision.

You need to have the courage, the resilience to see it through to the end. I suppose I’ve been very resilient along the way, stubborn and dogmatic, hard working. You need to obviously be that. You need to in business, I think, or as a leader, be prepared to work harder than you’ve ever worked before. Responsible. You need to be very responsible as a leader, responsible for the company you’re leading, for the assets of the company, but most of all for the people, whether it’s the suppliers, the customers, but in particular the people around you that deliver to the suppliers and the customers. You need to be very responsible to them and to their lives and their opportunities. There’s some of the things that come to mind.

Sarah
You’ve talked about there about resilience and being the last man standing. So, you know, adversity is part of business, isn’t it? How do you think you handle adversity?

John O’Brien
You’re right in saying adversity comes to every endeavour and every person in whatever they do, work or life or family. And yet how you hand, anyone can be a fair weather sailor. It’s what you do when the storm comes that really counts and really defines you. Too many people run for cover when that happens.

We often talk in the business about those three foot high, one metre high penguins that used to be loaded with sand in the bottom and you’d punch them in the face and they’d fly back down on their back and they’d come back up again and you could keep punching these things and they’d just keep popping back up again. And I think often with adversity that’s what I feel like. I feel like as you’re growing things you often feel that every time you get through a problem or you get to the top of the hill where you think you have somebody punches you in the face and knocks you back down again and you’ve just got to have the determination and the courage I suppose to just keep getting up off the canvas and the more times you get up off the canvas the more resilient you become and the more things you’ve learned by being knocked down the more times you experience those things, they’re the greatest learning moment you’ll ever have in life.

And every time you get back up, it’s probably one punch you’re not going to get the next time. And eventually the punches become less and less. And eventually you seem to see your way through. That’s a long way to way of saying how I handle adversity. I suppose it’s just a dogged way. Head down, tail up and keep plowing through the negatives until you find the positives.

Sarah
So we’ve talked, you’ve talked a lot there about attributes and behaviors and of kind of leadership and resilience. What other factors in a business or particularly franchising, what other factors make it a success?

John O’Brien
In the company that I founded 30 years ago, Poolwerx, we have five values that the team, the extended team, we have a few thousand people working the brand across the globe now, but about 15 years ago, we were at a particular low ebb in the business. It was actually more, it was 20 years ago.

I had recently lost my brother through a car accident. He was my partner. I had gone through it. I was going through a divorce. I’d really lost my way personally. And any business or venture at the end of the day, it requires a strong leader, a lot of strong leadership team, but ultimately a strong leader. A fish rots from the head if it doesn’t have a good leader. So I needed to regroup for the sake of our franchise partners and our suppliers and our team. And I went out to the group and said, you know, we really need to find out what’s important to us as a brand. What are our core values? It was what people commonly refer to as, but.

And I reached out to a friend of mine, Dina Dwyer, from the Dwyer Group in Dallas, in Texas, and it’s now called Neighborly. And Dina had written a book on values and I loved it and she helped me through. And we reached out to the network and we came up with the things that we find are important to us. The number one, which sounds obvious, but people first always
and it is our number one value.

Ray Kroc, the founder of McDonald’s, wrote that fabulous book and in it he had a chapter on his three -legged stool and where he said that the franchise partners, the suppliers and the support team are the three legs that support the brand. And they’re the people first always for us. And we do call our people franchise partners. We call our suppliers partners in profit and our support partners is our head office team, our national support team. So people first always, our entrepreneurial value is dare to succeed. That’s the franchise value. It always keeps you hungry. It always forces you to choose the road less traveled, the hard road.

Always be on the lookout for the next thing. It’s about winning. Like, 99 per cent of budget is a failure to us. We don’t celebrate that, there’s 100 and beyond.

We have other fabulous values like ‘Do the right thing’. It’s very simple. We have one called ‘Find the better way’, the one about best practices about never accepting mediocrity, I mean it’s an annoying value find the better way because you’d never get there!

You never sit down and say your system’s perfect. It’s like, how do we make it better? And the final one is the Energise, which was kind of the one that I love. It’s what brings all the values together. There’s no room for negativity in life. There’s no room for negativity in business. It just pulls you down. And what we say to people, for heaven’s sake, if you’re gonna criticize something, bring a better way to do that thing. It’s okay to criticize but bring something.

I’ve got three beautiful kids. Our family song has always been from the Life of Brian, which is ‘Always look on the bright side of life’. And many a time as a family when we had some down times, somebody would start singing that song and we’d all start singing along with it. So yeah, that’s some of the things that have held me together through and the brand through tough times. And often we’ve found when we get into a tough time, it’s because we’ve stopped respecting one or more of those values and respecting, identifying that and then starting to respect that value or values again helps you find the way out every time of where we are.

Sarah
On the financial front, profitability is essential, isn’t it? It’s essential for your business, it’s essential for franchisees’ business. Is it more difficult these days to be profitable?

John O’Brien
No, no, it’s no more difficult today to be profitable. In fact, if anything, I think it’s probably easier to be profitable. I used to worry when I first was wanting to get out of uni and get out of corporate and get into business that all the good ideas would be gone. Somebody would have taken them all.

I see more opportunity in our brand in Poolwerx today, in the pool industry today, in franchising today, in business in general. Wherever I turn, I see opportunities. I invested in a business only yesterday on Stradbrook Island where I have a holiday home where I saw an opportunity. It’s almost a curse, you know, but so there’s opportunity everywhere.

Why I say it’s as not easy, but it’s no harder to be successful today than ever or be profitable because there’s so much more education available to people today about how to start and run a successful business, small, micro, medium, large. There’s so many consultants, there’s so many mentors, there’s so many advisors, lawyers and accountants and investors are far more skilled and broader in their skill set than ever before. Industry associations, you know, like, you know, in our industry, the franchise council or in the pool industry, the swimming pool association that are there to help and support.

So, you know, kind of back in the day, 30, 40 years ago, a lot of that didn’t exist. You kind of had to make it up on the run.

But I do think that there’s a few key steps that get you there. I mean, if you’re kicking off in your own business today, because I get asked this question a lot, is, John, you’ve had five businesses, they’ve all been successful over 40 years, how have you done it? When I reflect back on it, vision, I talked about that earlier. First and foremost, you need to identify an opportunity or a need or a product or a service in the marketplace and have a vision to how you’re going to deliver that and what it’s going to look like when you’re happy with it. And you need to commit that in print so that you can see it, visualise it and you can share it with people.

Plan. So many people can talk to me about their vision or the opportunity they’ve identified, but they do nothing about it. They’re still talking about it. I’ve got a brother-in-law that’s still talking about a vision for an opportunity. He talked to me about 20 years ago. And I say to him every time, do not talk to me about it until you put it into a plan. Just put it in writing to the best you can. There’s plenty of those available online today. And just start populating, getting your thoughts down. Because once you have a plan, sorry, sorry.

Sarah
Is that… No, I was going to say, is that fear of failure? I mean, is that inherent, do you think, in some people? That some people are just more naturally risk averse?

John O’Brien
Yeah, yeah, absolutely. That’s yeah, I think you’re right. A lot of people can identify an opportunity and they can have a vision for it. But you’re right, just taking that first step, Sarah, that fear of failure, it paralyses people. And that’s OK. I mean, not everybody’s meant to kick off into business. But yeah, that old fail to plan, plan to fail. But we’re fanatical about planning in our businesses. There’s always a rolling three-year plan, one-year plan, one quarterly, monthly, weekly, daily, every franchise partner has one, the business has one. We measure everything we possibly can.

The good thing about that and having those sort of measurement tools and business intelligence is they create lead indicators so that, like I say, it’s like steering a great big tanker, you know? You’re up on the helm as a captain but you’ve got all these gauges in front of you but you can if one starts to beep or one glows or the ship goes slightly off course you can correct it feel it really easy but you know when it’s too far gone it’s hard to turn a big ship around.

The other one though is cash. Cash, cash and cash. I’ve had five businesses all successful but gee we’ve sailed close to the wind many a time. And every time we’ve sailed close to the wind, it’s been because we’ve taken our eye off the cash. I’ve seen the lack of cash kill so many good businesses and it shouldn’t.

You know, reconciling your bank account all the time, being so close, strict on your debtors and debtor control, making sure you pay your creditors on time because you’ll need to call favours from them during tough times, having strong supplier relationships because they can be a source of cash and growth funding. Doing your weekly cash flow forecasts all the time. Having bank overdrafts, being close to your bank manager. All those quite obvious things. But vision, plan and cash, to me, they’re the ways that, they’re the fundamentals that make sure that you’re profitable. And it really profits just the scoreboard at the end; the vision, the plan, the execution, the cash, they’re the things that deliver the profit.

Sarah
But that is essentially why so many people do go into businesses. That’s their choice. And why they go into franchising is to have the help and support that’s available to be able to kind of achieve those goals, whether it’s purely profit or whether it’s kind of a lifestyle goal or a desire to achieve an ambition. What do you think the future of franchising looks like? What’s the landscape?

John O’Brien
Yeah, it’s over the 40 year journey, I’ve seen it, I was pretty much there at the start in Australian franchising and I’ve seen it have its ups and downs along the way. But if you drew a line through it over time, it’s been incredibly steady growth sector globally and in Australia, which as we know is one of the lead countries for adapting and adopting franchising and does some things like franchise relationships better than anybody else in the world. But it is changing today.

There’s been a lot of private equity. Certainly in the US, massive private equity came into the fast food sector 15 years ago, into the service sector 10 years ago and into the home service sector where we play five years ago. Where private equity has along that journey, they take on a brand, got to like that sector and then start aggregating independence into that brand and then aggregating like brands together.

So take for example, I talked about Neighborly before. They have some 25 home service brands and some 15 ,000 franchisees and the ability to cross market and whatever. So I see that private equity play is interesting, the aggregation of brands and services within that private equity group.

I’ve seen a professionalism come into the franchise sector where when I kicked off most of it was led by founders like myself and there was incredible entrepreneurship and dynamism and energy. Entrepreneurs are fabulous at growing businesses but they have their downside and they normally don’t cross their t’s and dot their i’s and as well as what they could and should and more recently more professionally younger educated franchise executives are now leading and running brands. I think they’re bringing bringing a lot more stability, a lot more risk protection and a lot more profit generation for franchise partners as time goes on.

And I suppose that there’s another couple of things I mean obviously Government regulation particularly in Australia is endless. Has it been good for franchising or not? Look, I would say in the whole, it goes a bit overboard like any government regulation does from time to time but in the whole, when you look at the the health and success of franchising in Australia and in most countries where there’s regulation I think it’s a good thing. I think it protects franchisees. I think it protects franchisors and it raises the bar on franchising. So there are a couple of us and it’ll be never-ending. It’s just part of the game and it’ll continue to grow and franchising needs to grow with the government regulation.

Sarah
And it’s interesting to see how franchises are kind of looking internally now. There’s a much stronger focus, I think, on internal recruitment. The more multi-unit franchisees which we’re seeing has been a trend very much in the US, and I assume that that will continue.

John O’Brien
Yeah, I think the point you make is so true and I see it all the time in our brand, let alone others. And we’re right across Australia and New Zealand and we’re now in 15 states in the US, so I can get to see different sides of the ditch, but Australia’s very much followed the US trend of multi-unit and we are too, both in the US and in Australia and New Zealand. Our typical franchisee has three units, two or three stores and 15 vans and a revenue over three, five million, some have seven, 10 million.

But 30, 20, 40, 30, 20, 10 years ago, franchising was pretty much just a man and a family in a store, a man in a van. These days, you’ve got middle level managers with university degrees who own their home, have got significant resources, that want an opportunity for the husband and wife, both with careers, with their children, they want a family opportunity, and they want to hit the ground running. They don’t want one store, one van. They want to build an empire. They want to have a business and we’re seeing seriously educated and resourced business executives moving into the franchise sector.

And I think that’s fabulous for the sector because it brings great level of service for the end customer. It brings great skills into the brand and it puts real pressure on the franchisor to raise the bar and to deliver to those franchisees on services. So yeah, it’s a good point, Sarah. It’s really raising the calibre of franchising across the board.

Sarah
John, it’s been wonderful to chat and reflect a little bit on your footy. I know you probably have a whole heap more to share with us because of your experience, but it’s been really great to chat today. Thank you.

John O’Brien
Thank you.