Back in the saddle

By Dwight Whitney, April 24, 2008 @ 1:22 pm

Bob McMillan. Photo by Steve King / Succeed magazine

When the plan started to derail, Bob McMillan trusted his gut instinct

Ten years ago, at age 55, Bob McMillan started to think seriously about the future. One that involved his youngest son taking over his Team McMillan business, but also one that explored being able to release some capital to pave his path to retirement. He did all the right things, involved the right professional advisers and created a five-year succession plan.

McMillan looked for prospective buyers but at the same time he kept coming back to the feeling of not wanting to completely sell out or take a back seat in the business. Yet the burning question kept coming up: “What would, or should, I do?”

Then in 2001 fate stepped in. A business opportunity proposed by BMW New Zealand to acquire the rights to sell the revamped Mini range put the succession planning wheels into fast-forward.

“It struck me this might be the opportunity to test-drive the idea of introducing a new equity partner,” says McMillan. “I was willing to offer a 50-percent stake in a stand-alone Mini operation.”

Sharing his thoughts with then-BMW NZ managing director Geoff Fletcher (since retired and now an independent director of Team McMillan) brought a possible candidate to the fore. He had the right credentials, had a strong BMW connection, had worked in New Zealand but was from offshore, and generally seemed to “walk the talk”.

Within two days the candidate was in the country. Though the new arrival was initially excited about the Mini offer, McMillan recognised that this alone wouldn’t keep his potential partner fully interested and stretched. The possibility for a wider equity stake in the overall business was put on the agenda. The rest happened with turbo-like speed and precision … or so it seemed. Gradually, some disturbing indicators came to light. McMillan had, in effect, sold 50 percent of his business and put someone else in the role of managing director. Although not necessarily working ‘in’ the business, McMillan still had enough involvement to notice the changes.

“After a number of years, instinct—as well as the business data—alerted me that the business was not going well,” he says. “When I sold the shareholding we had a strong market share, we had embarked on a massive upgrade of our showrooms, we had excellent people and a very committed client base. Over time I became more and more aware that this seemed to be all slipping away.”

Key people were leaving—something abhorrent to McMillan, who prided himself on minimal staff turnover—clients were leaving for other brands and, most importantly, the vibe that greeted him at work was truly negative.

His gut feeling told him that he should act and start addressing the matter, but he decided patience should prevail and hoped the situation would improve. It didn’t and finally, in early 2007, McMillan began the process of regaining control of the company. Over nine months he worked through the issues, addressed some of the key problems, made some very worrying discoveries about some of the practices that had been put in place, and then finally returned to take over the company once his former partner was gone.

The night before his return to working six days a week, he felt some trepidation but at the end of a staff meeting the following day he felt recharged and re-enthused. As did his former staff and key management. Most importantly, the client base started to grow again.

What did he learn? First, he would not again hire someone from offshore without considerable independent assessment. He would make sure that the cultural fit was as perfect as possible and, given his style, most probably would opt for someone very much like himself. A down-to-earth, my-handshake-is-my-word Kiwi. He would be much more meticulous in checking the candidate—not relying on the flashiness and bravado that initially impressed him and others, but digging much deeper into the person’s style, beliefs and background.

He would work alongside the person in a more hands-on role before relinquishing that much control. He would also listen to his gut feeling, rather than what his head was telling him.

And although it was a learning experience, at least McMillan did step in before it was too late. “I was amazed at how quickly all the good work of over 20 years of business could be destroyed. I guess because the company bears my name the hurt was greater, but that is the past. I look forward now to having the right people around me, and my son, to make sure the end goal of the succession plan is achieved.

“We’re on course, we had some unexpected corners to contend with, but the most important thing is that I still have a great staff, great customers and a great business to hand on.”