ITN: Sir William, first of all, do you keep any grazing animals like cattle or sheep on the lush pastures of New Zealand?
Sir William Gallagher: That isn't so easy because I travel an awful lot overseas - about five times a year. If you are going to keep animals, you have the obligation to be around. But actually my wife runs a farm on the edge of town, which has about a 100 acres. That's a pretty small farm for New Zealand. They have about 150 mostly Angus cattle there ...
ITN: … which are surely surrounded by an electric fence from Gallagher.
Sir William Gallagher: Yes, and our electric identification and weighing systems are also used. Electric fencing is very common in New Zealand. Almost every professional and hobby farm relies on it.
ITN: Even Buckingham Palace is protected by a Gallagher fence. How did that came about?
About Sir William Gallagher
The former New Zealand Prime Minister, Mike Moore describes the hugely successful entrepreneur, Sir William Gallagher, as a “Kiwi hero”. In his words, Gallagher is a charismatic figure “who leads from the front” – always on the go, always taking risks and always on the lookout for better ways to get things done. His description of Sir William in the foreword to the book “The Legend: From Electric Fences to Global Success” completely hits the nail on the head. The book was published in 2013 to mark the 75th anniversary of the foundation of Gallagher.
Sir William Gallagher: A few years ago, a protester dressed up as Batman climbed up over the palace's fence, which was a detection fence like most security systems. It didn't stop him. All it did was detect him climbing over the fence. So, "Batman" was able to reach the palace balcony, and he entered the royal bedchambers, where he talked to the Queen. "Pretty bad form" was the polite and sophisticated comment on that. However, as one of the consequences, the old security system was replaced by ours within a few months. By the way, another famous building provided with our perimeter security systems is the Indian Parliament.
ITN: Since your company is the world market leader for electric fencing, may I ask you about the recipe of your success?
Sir William Gallagher: Some years ago, I realized that all about the Hidden Champions and the ten points to learn. The one thing that I didn't have at the time of meeting Professor Hermann Simon was owning the marketing channel. It has changed since then. I sort of filled that one. This is surely part of our success story. Today, we own our marketing channel in North America and Canada, for example.
ITN: So what can other companies learn from you?
Sir William Gallagher: Let me point out my view of marketing in this regard: Go to the market, find the local entrepreneur, make ourselves his most exciting, profitable and, finally, his main business. Then we become his minority shareholder, with less than 50%. That works pretty well. There are a lot of companies of which we are minority shareholders all around the world. For instance we became minority shareholder of the Indian company IBEX in Bangalore, which is now IBEX Gallagher. It manages the sales of our electrical fences and security systems.
ITN: What are the main areas of electric fencing and animal management?
Sir William Gallagher: It's about managing grass and farming. About 30 years ago, also electric fencing for wildlife management began to flourish. It was used to keep elephants out of the oil palm plantations in Malaysia, for example. The third area of our operations is what I call the "two-legged livestock business," which means "keeping people in and out." We provided about 40 prisons in Australia and 11 out of 18 prisons in New Zealand with our security systems.
ITN: Do you pursue a straightforward strategy of internationalization?
Sir William Gallagher: For us, the crucial markets are still the developed countries. North America and Australia are the biggest markets. Europe is a pretty big market, too. I've got Dutch partners in Europe. And as regards the future, we’ve stolen a glance at South America.
ITN: What role does innovation play for your company and your products?
Sir William Gallagher: Innovation is very important. I've got a 110 people ̶̶ out of a total global workforce of about 1,000 people ̶̶ in our R&D department. They are certainly among the most expensive guys. About 15% of our revenues go into R&D.
ITN: Can you give us a current example of an innovative product?
Sir William Gallagher: We received an innovation award for a brilliantly simple innovation idea this year. We innovated the so-called "pig tail," which is about 70 years old. Everybody lived with its shortcomings, and nobody thought it might get better. It can be described as a pole with a pig tail on it for a portable fence which you stick into to the ground and run a wire across. This fence is usually moved in order to subdivide a paddock during wintertime when the grass is moving slow. But if you bundle many pig tails together, they all tangle up. And if you wind the wire across them, the wire cuts through the insulation in the pig tail, which causes a short. Finally you have to throw them away.
ITN: How did you innovate this product?
Sir William Gallagher: Our researchers came up with a ring top instead of a pig tail. We launched it this year. No more tangling. The ring top is a premium product made of spring steel. We sell it four times more than forecasted.
ITN: Now what do you consider to be the power of your brand?
Sir William Gallagher: We are powerful because we have three businesses in one brand: The first one, as we already talked about, is agricultural and animal management with electric fencing at its top. Electric fencing and agriculture are still our "biggy." They make up 50% of our overall business. Secondly, we have the security access area. I consider us to be the biggest of the small guys on this market. It is about an integrated security business encompassing access control, the perimeter solution and the intruder alarm, all of which interface with the management system such as health, safety and qualifications to do the job. And thirdly, there is the division of fuel dispensing systems. We also strengthened our expertise and knowledge by buying other brands.
ITN: Sir William, you have received many honours, and you are regarded as a living legend about whom a whole book has recently been written. Could you list a few attributes which best define your legendary status?
Sir William Gallagher: Thank you. The book was published last year for the main reason that our company celebrated its 75th birthday. The author, Paul Goldsmith, did a really great job of putting it all together. I graduated in mechanical engineering, but that’s only part of the tools, technical sales, I guess, that’s what my job is. And I always moved with the times and adapted to the changes required. I spent my first 35 years in the agricultural business, and the last 15 years I have spent on the security side, which is more of a challenge: a magnitude more of complexity, with a heavy amount of software involved. I really had to learn a lesson.
ITN: But the formation is one thing. Since you are the CEO of Gallagher, do you have a certain leadership style?
Sir William Gallagher: I try to be a coach-type manager – like a coach of a football team. You try and get results through other people, not doing it all by yourself. So, when you have a staff member that comes to you with a problem, I always say: "Don’t give him the answer. Ask him what he would do.” We discuss some of his approaches, and I add some aspects for consideration. In the end, he gets the right solution. Whenever employees come to me with a problem and get the answer right most of the time, I always tell them: "Hello, you don’t have to be here!”
ITN: Thus, you are delegating decisions.
Sir William Gallagher: Of course. Because the type of manager who makes all of the decisions always has to make the decisions. This is, Simon would be aware of it, what I call a one-man band. The one-man band often finishes up with one decision maker and a whole lot of yes-men who turn their brains off. I have seen those companies which were led by a one-man band up to their 70 people, before the guy at the top got mad and went away.
ITN: Is there anything else to be mentioned in this context?
Sir William Gallagher: Well, to walk the walk is important. I do what I am saying. I don’t ask someone to do something that I wouldn’t be prepared to do myself. Encouraging people to make decisions that they are happy with is also important. And last but not least, there is an important quote: "Learn from other people’s mistakes because life is far too short to make them all yourself."
ITN: At the end of our interview I would like to ask you when it all began. Was there a starting point for your success story?
Sir William Gallagher: Oh, yes. Everything started with Joe the horse in the late 1920s on a Waikato farm. As a young man, my father Bill, a dairy farmer and tinkerer, had an Essex motor car which his horse loved to rub his itchy back on. My father and his brother, a mechanic, wanted to stop Joe from damaging the car. They took a magneto for the spark plug, rigged it up, earthed the magnet and finally wound it up with a rubber band. Thus, they were able to set high voltage to the car every time it was rocking. Because the rocking of the car resulted in the spinning of the rubber band and eventually it caused ignition voltage on the vehicle.
ITN: What happened then?
Sir William Gallagher: My father and his brother waited for Joe to come round, but he didn't show up. One morning they noticed that the rubber band was unwound and Joe the horse never again came around this side of the house or anywhere near the car. That was the initial spark that led to the launch of the electric fencing business in 1938.
ITN: We would rather not think about what might have happened if Joe the horse hadn't existed: All animals around the globe running wild with no electric fences to stop them like the Pamplona bulls, which sometimes rush through the city hunting people or, reversely, are hunted after. Have you ever heard about the Pamplona bulls?
Sir William Gallagher: Sure, they are well known. It's a successful spectacle. One of our comedians called it the "the pick-your-own-beef scheme."
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