ONE of the main drawcards at this year’s SEPWA Harvest Review held last Friday at Esperance was keynote speaker Richard Goyder.
The former managing director of Wesfarmers is currently chairman of Woodside, Qantas and the AFL Commission.
Mr Goyder was born and raised on farms in Tambellup and Broomehill and believes rural WA and agriculture are a vital part of our State’s economy.
His address to the crowd centred on where growers can look to gain profits and he also provided some useful business advice, gained from years of sitting at the boardroom tables of some of Australia’s most well known companies.
Mr Goyder said gaining profit from farming was very relevant to him.
“I grew up in Tambellup and our first farm was 1200 acres and our second farm was 2280 acres, so we battled.
“I remember so well the drought of 1969, and as a 10-year-old I thought I am never going to go farming, because in my mind mum and dad were the best farmers in the world and drought and commodity prices and weather and things like that had impacts on what they were doing and life seemed pretty tough.
“I don’t think farming ever leaves you, however, and six or seven years ago, my wife Janine and I bought a property at Toodyay and we now farm 7000 acres and we had the best crops ever last year.
“They were magnificent and at that point farming looked really good.
“I came home from work one Thursday night in December last year and I saw a nasty storm to the west of us, so I went to the Bureau of Meteorology weather site and there was a red blob heading right to where our farm was and that night 90 per cent of crop was wiped out by a hail storm.
“Fortunately we were well insured but that is farming and it never leaves you.”
Mr Goyder was appointed finance director of Wesfarmers’ rural services business Wesfarmers Dalgety in 1996 and then became chief executive in 1999.
“The interesting thing about running Dalgety, was that when I went to that business, it was the division of Wesfarmers that was the under-performing rural division,” he said.
“We acquired the full amount from Dalgety in 1993, and there were bad commodity prices and droughts and so on but the more I had a look at the business, the more it seemed to me that it was less to do with commodity prices and more to do with good and bad management.
“We could have two Dalgety stores, 20 kilometres from each other and one would have a return on asset of 40pc and the other would be minus 10pc.
“This is the same demographic, the same area, the same crops and the same livestock.
“The more we looked at it the more we came to view that it was quality of management in each place that was the difference and that was a great lesson for me.”
Mr Goyder said Wesfarmers was a company with a very strong financial focus, but also a heart.
“Some of my learnings from my time there I think apply in all businesses,’” he said.
“In 1998 I was lucky enough to be sent to Harvard University to do a business program and it went for three months and in the last session, we were told that as we left we had to remember one thing. and I thought ‘This will be significant because this has been a great course’.
“The message was simply ‘Don’t run out of cash’.
“And it is the number one rule in any business.
“I was running Wesfarmers through the Global Financial Crisis and at one point we had no idea what was going to happen.
“We got through it even though we had just bought Coles and we had significant debts that needed servicing but my learning from that was, no matter what, always leave yourself in a situation where you can survive or be okay through any circumstance.
“Whether it is price circumstance or demand circumstance, ensure you can deal with any calls on debt that you have.”
Mr Goyder said another key to running a good business was that the quality of people matters.
“My philosophy with that is to surround myself with people better than me, because that makes my job a lot easier,” he said.
“I have seen too many business and too many people who fear having good people around them and fear people challenging and questioning them.”
Knowing when to step back from the business and ensure that you are doing things for the right reason was also an important factor, he said.
“Integrity and value systems matter,” Mr Goyder said.
“It is so easy in a business to justify what you are doing, but sometimes it is important to step back and make sure you have people around you that are questioning you and making sure you are doing things for the right reason, not for a single profit motive or a single survival motive.”
Citing the recent Banking Royal Commission, Mr Goyder said if industries and businesses didn’t regulate themselves, someone will come in and do it for them and when that happens it is a minefield.
“It is incumbent on us all to challenge and question ourselves and also recognise mistakes happen and when they happen they come to the surface quickly and are dealt with quickly,” he said.
In terms of agricultural markets, Mr Goyder said they were looking prospectively good.
“However, markets are not going to come to us or be handed to us,” he said.
“We have competitors and we have significant geo-political issues going on at the moment, such as the China barley anti-dumping issue and we need to be prepared for things like that.”
Lastly, Mr Goyder asked the crowd to take an interest in what others in their industry were doing.
“Esperance is a long way from anywhere and WA is a long way from anywhere, we are remote and so we need to be incredibly inquisitive and externally focused,” he said.
“The best things I have done in my time in business is to get on a plane and go and see what others are doing.
“I have looked at what the best operators do and what the worst operators do. It is a great learning exercise.”
