All in the family: Father to son succession

All in the family: Father to son succession

An article in Dynamic Business 6th November featuring EO Member Peter Nuttall RUD Chains. Transcript below:

Peter Nuttall was his father’s second employee at RUD Chains. Now, almost 30 years later, he’s managing director of the multi-million dollar company.

RUD Chains, a subsidiary of the Germany-based RUD Group, provides a variety of steel link chain systems like tyre protection chains, snow chains, and lifting applications to keep different industries running.

Dynamic Business spoke to Peter about how the business has grown.

Your father started the business, and you were the second employee – but  did you always plan to get into and stay in the family business?

I had been working at another company for five years before I joined my father, so he started the business by himself and it started to grow and he needed an additional employee, so he asked me if I wanted to join to help him out. At that point, when you’re starting with two, you’ve got no idea what the future’s going to look like, and it was just good timing for me to change roles. It wasn’t a long-term plan or a strategy to build a family business; it just worked out that way.

I came from a sales and marketing background so my role was to develop and grow other products within the business. At the beginning I was doing sales and service and packing parts, and this was all before mobile phones, fax machines, and computers. It was a different era, you lived by the landline and Telex machine in the early 80s.

What challenges did you face in growing the business?

The challenge was learning the new products, because we started with the tyre protection chains. My father’s background was in earth-moving tyres so he had some understanding of that market, but then we moved into lifting chains and had no idea of that market. What we did to get to be a player in the market was spend time in the market going to visit the key players and understanding their business strategies and how they do business and then defining our strategy based on what they’re doing to create a better model around our high quality product.

We say we’re the Mercedes Benz end of the market with our product. We’re the most expensive, so we looked at how we could provide a better service and value. People talk a lot about price but they don’t talk about the value. If you can demonstrate the value, the price becomes irrelevant. With the space we’re dealing in, with power stations and other organisations, you have to think about the cost if you don’t invest in the product or the solution. If a power station breaks down, they’re losing hundreds of thousands of dollars a day. By understanding the customer’s needs and challenges, by getting inside their business, we’re looking at partnering with our customers. They tell us what their challenges are and we look at coming up with a solution that solves those challenges and makes their lives easier, so in return they value our product.

You recently opened a new warehouse and production facility in Australia – what makes you passionate about keeping the business local?

What we’re doing is making a transition – we’re an importer and wholesaler of high quality products, so we’re selling products, and with that we’re seeing people copying technology and products, so we thought a natural progression was to come up with complete solutions. People aren’t just looking for products, they’re looking for a complete solution. If the customer values what we’re providing, it makes it easier for them. It creates a barrier to entry for our competitors. Most of the other people in our space are importing and selling products. We’re now value-adding to those high quality products by doing fabrication and manufacturing locally.

People talk about off-shoring, so if you’ve got massive volumes and a lot of repeat business, that works, but in Australia, there’s not a high repeatability, there’s a lot of one offs, and that’s not interesting for China to be able to copy that. Then there’s the delivery time – you’ve still got a couple of weeks shipping time from those countries, and maintaining that high quality product, so we’ve set ourselves up to do pretty much everything in-house. We can design, manufacture, and certify the end products that go out into the market. Customers deal with us because we make it easy to provide a complete solution.

The government’s not supporting manufacturing in Australia, but where there’s changes, there’s opportunities. If everyone’s looking at offshoring or stopping manufacturing, there’s an opportunity in that space by thinking differently and innovating what’s been done in the past, and adding value there.

You’re part of the Entrepreneurs Organisation, how did you get involved in that and what have you gained from it?

I’ve been involved for about 9 years. I got introduced through Tom Potter from Eagleboys. It’s peer to peer learning; you’re not going there to listen to someone preaching about how to do things better, it’s people sharing their own experiences and challenges in business. It doesn’t matter what business you’re in, because you’ve generally all got the same people and problems, like HR issues or salaries, and the emotional challenges of being a business owner. You take great learnings from hearing about other people’s experiences. By hearing a lot of younger people in particular – they’re doing things that university or a textbook says you can’t do, they’re breaking the rules of what traditional university education’s providing, and that gave me confidence to take on bigger challenges, to expand the business, and take on bigger challenges. I’ve trebled the size of my business in the last 9 years, and I wouldn’t have done that without the networking and support within the Entrepreneurs Organisation.

What advice would you give other entrepreneurs?

Be open to learning from others, be a great listener. If you want to be great in IT, go study someone who’s great in IT, if you want to be great in manufacturing, go study someone in manufacturing. Learn from others, that’s the shortest way. We talk about R & D, which isn’t research and development, but in a friendly way, rip off and duplicate. Study other people who are already successful. Then you’ve got to have the passion and resilience to push through the challenges that are going to confront you.

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