Tuesday, October 15, 2013

Stillwell's genetic fuel injection

Bib Stillwell died suddenly on the Queen's Birthday weekend in 1999, leaving five shocked and grieving children to take over his car sale and servicing empire before the doors opened on Tuesday morning. Stillwell, one of Australia's most successful racing drivers, was brought down by a heart attack – rather than a ten-car pile-up – as he was inspecting the refurbishment of one of his dealerships.

As a result of the shock of that first handover not many family businesses take planning and governance more seriously than Stillwell Motor Group does now. In fact, SMG was recently inducted into the Family Business Australia hall of fame.

The company even has a dedicated family office run by Bib's daughter, Marianne Stillwell, that takes care of all matters relating to family in the business – wills, trust administration, tax, personal and professional management and development coaching.

The family also has regular meetings of the 'Five Pillars Council' consisting of Bib's five children, plus a NextGen Council which includes David, the only third generation Stillwell currently employed in the business, along with the rest of the third generation (high school age or over). The whole family goes on an annual retreat, they have a family constitution in place and they operate a discretionary trust that protects and distributes the family wealth.

Michael, Bib's oldest and father of David, is a non-executive director on the board as well as being on the audit and risk committee, but he's semi-retired and winding back his operational role. Then comes Robert, who used to be the business development manager but is now fully retired. Bib's third child is Chris, he's chairman of the board as well as former, and current, CEO (a non-family CEO was employed for several years but Chris is back as caretaker chief executive). Marianne is an executive director as well as director of the family office and the youngest is Nicholas, who serves as the group's aftersales projects manager.

According to BRW, Stillwell Motor Group turned over $403.5 million last year, up from $388 million in FY 2011-12. Last year the group saw the writing on the wall and dropped its Ford dealerships, instead focussing on new Jaguar and Land Rover business, this saw a temporary wobble in the group's turnover but it was all in the name of strategy.

"Anyone with a reasonable amount of business sense could see that Ford (and to a lesser extent Holden) were struggling to adapt to a changing market place in Australia," says David.

"Ford has had declining market share for a long time, particularly with the large cars. We wanted to associate ourselves, strategically, with brands that are growing their market share."

SMG employ around 400 people and usually sells more than 4000 new and 2000 used cars per year through their 7 brands in 10 sites but the relationship continues past that deal as the group is heavily involved in servicing the cars and maintaining an ongoing relationship.

"Most of our turnover for our corporate customers is about 3 to 4 years on their finance plans. The servicing, on the other hand (depending on the manufacturer) happens about once a year. So the after-sales department sees the customer a lot more often than the sales team."

The family is a professional bunch, and that hasn't happened by accident. As part of the family trust, all family members have their education paid for and they have access to professional and personal coaching.

So, while no family member will be given a job in the business just because they are a Stillwell, they have access to every education and development opportunity. This means that when they walk into an office for an interview for any job they'll be, more often than not, the best candidate.

But Stillwells have to jump through a few more hoops than other SMG applicants before they get an interview.

Family members have to spend two to three years working at another company before they'll be considered and must have a degree of education other than high school. On top of this they all have to have spent time paying their dues in one of the dealership's carwashes.

David, soon to be 28, entered the business two years ago and is an aftersales consultant at Bilia Volvo in Melbourne, one of SMG's 10 dealership sites.

He also follows the family's racing legacy, passed on by his dad, uncles and famous grandfather. At one point, Michael, Nicholas, Chris and David were actually all racing in the same category (state level BMW).

"It's definitely in the blood," says David, who is working on building a late model Ford Mustang into a circuit racing car at the moment.

But David hasn't always been this fanatical about all things automotive.

"To my father and grandfather's disappointment, I wasn't actually interested in cars until I started driving. In my early teens I was more interested in model trains," says David.

"Having that time in the family business early on, washing cars on school holidays, getting an appreciation of the business from the ground level, it became clear that no matter what your expertise or where your interest lies, there would be a position in the group that you would be able to apply for."

David kicked into gear after three years battling through a commerce/arts degree by getting on a plane to Queensland to study motorsports. He left his family behind and did some growing up but by the time he'd finished the qualification, the GFC had squeezed the life out of motorsport.

After holding a few industry jobs including 14 months at Adtrans Group in Adelaide, David snagged a job with SMG.

David's fellow NextGen group range in age from 3 to 31 and while he's the only one currently working for SMG, that could change at any time. But for all family members the idea that all positions must be earned is drummed in early. And in David's case, the message has stuck.

"I'd certainly want it to be known that I'm happy to work as hard, if not harder, than anyone else and do as good, if not a better job than anyone else could do in that position," says David.

The Stillwell family has firm views on nepotism. Any family member who comes into the business has to be the most logical choice for the role and they do their best to leave surnames and personal relationships at the door.

But for David, as with so many next generation family members, working in the business holds personal and emotional significance.

"I wanted to join the business to prove to my family that I am good enough to be considered to work in the business that they work in and helped their father build."

He says he doesn't feel like he's being groomed for the role of CEO but for someone as passionate about the business as he is it would have to be on his mind.

And while he keeps his cards close to his chest about his future plans in the business it wouldn't be surprising if, in a few years, he walked into an interview for the top spot and was the best candidate.


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