Two minutes with: Sir William Gallagher

by The Listener / 28 February, 2013
The plain-spoken CEO and chairman of the 75-year old Gallagher Group on the company’s evolution from making electric fences in a Hamilton shed to employing 1000 staff, diving on shipwrecks and why Roger Douglas was right.
Sir William Gallagher -  “No risk, no reward.”
Sir William Gallagher: “No risk, no reward.” Photo/Jane Ussher

Your father connected fences to the mains, which was not quite legal at the time. Is that a Kiwi thing?
Pushing the boundaries is the polite expression. The good thing about our legal system is that it’s normally legal unless there’s a law saying you can’t do it. The wiring regulations came in later – the late 1950s.

Did it take a while to convince farmers?
Yes, and that’s still our job. Basically, you’ve got a low-cost grazing system. We see it in the US – you get 200ha farms and they’d have about five paddocks, and they’d wonder why all the pasture goes to weeds and rubbish. I’d describe New Zealand as probably the only country with a Western-style standard of living based on unsubsidised agriculture. I’m very much a free trade advocate. I believe what Roger Douglas was about: if you want to give consumers the best deal, you give them a free market on suppliers.

What are the keys to business success?
Specialise by market – [have] a narrow specialty and take it worldwide. The product’s the easier bit. When you’ve got the product made and working right, that’s not half the money, it’s probably quarter of the money. The biggest part of the finance is between ex-factory manufacture and getting it to the end user. And that’s where the mistakes are.

You also talk about integrity. How do you define it?
Doing what you say you’re going to do. But also being meticulous enough in the detail that it’s quite clear, especially when you’re dealing with people for whom English is their second or third language. It’s a gentleman’s agreement handshake, but it’s followed up by a letter defining what you have agreed. Don’t let’s get two years down the track and have a misunderstanding.

Do companies need to take risks?
No risk, no reward. If you’re going to achieve a lot, not all of it’s going to be right. But don’t make the same mistake twice or you’re a slow learner. But it’s got to be sensible risk.

Would you like more R&D help?
My philosophy is a smaller government and a low, flat tax level. We accept R&D assistance in the name of compensating for some of the distortions in the system. But I don’t think that’s the right way to do it. [But] I’d also say money spent with us is a better return for New Zealand society than spending it in some other places where you finish up with a nice research paper and 20 years later it’s still a nice research paper.

For some markets, there’s no substitute for being on the ground.
And basically to learn some of the nuances, some of the challenges they’re living with. Also seeing opportunities: they’ve got a challenge and if you can conceive of an answer for it, you can make progress.

You dive. What’s your favourite place?
Mayor Island, the Aldermens have nice clear water. Mozambique, Panama, Curaçao. Favourite dives are shipwrecks, treasure hunting. We were involved in the Elingamite to a lesser extent in the Three Kings. Sri Lanka, a silver wreck. But the other one is old ships, World War II, like Chuuk Lagoon in Bikini Atoll, Solomons. Scapa Flow in the Orkney Islands, that’s quite beautiful. German Grand Fleet of 1919 – 50-odd ships.

Do you have retirement plans?
I have no intention of retiring. Slow down a little, perhaps. I’ve got very good No 2s and 3s. Travel? Probably more, not less. The diving might come to an end in due course. I keep fit, but I’m at the stage of health of repairs and maintenance – prostate and hernias and heart bypasses.

LEGEND: From Electric Fences to Global Success: The Sir William Gallagher Story, by Paul Goldsmith (Random House, $45).
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