John Koot is chief executive of Balfour Wauchope, Australia’s largest privately owned baking group. The company is based in Adelaide with 640 employees. He has been general manager of Westons Biscuits and general manager of Fine Earth Foods. He is a Fellow of the Australian Institute of Management.
AIM: Can you describe your career in management?
Koot: I didn’t go to university. I started as a storeman, and became the youngest store manager in Victoria at Half Case supermarkets. I was in charge of a business turning over $200,000 a week and with 100 people. Supermarkets are the toughest training ground: you work on such slim margins and have such tough cost and financial controls. Human relations are also very important because a lot of the staff are casual.
AIM: What came next?
Koot: I had a young family and was putting in 100 hours a week. I became a sales rep with Westons biscuits, then a sales supervisor. Then I was promoted to state sales manager in Adelaide. When I landed there the area had been floundering for many years: I made it the most profitable the company had.
AIM: What do you consider the most crucial management issue you face?
Koot: We have an ever-changing customer base in the food industry, it moves almost daily. Whereas the average customer might have bought a can of Coke and a pie from the local deli two years ago they are now going to convenience stores or supermarkets.
AIM: How do you approach such a changing environment?
Koot: As a manager you have got to anticipate trends so you can put the correct structures in place. We work very closely with customers to understand what direction they are going in. Woolworths is going very much in the direction of warehousing, Coles is going in the direction of cross-docking: you send it into the warehouse in Coles and it is sent to the store straight away.
To stay in touch with trends I go to overseas shows and read magazines. For example, category management has been in the United States for three years; it is only just coming to Australia.
AIM: What is category management?
Koot: The way the supplier and the retailer manage the total category in say cakes: the way they get dollars out of the supply chain.
AIM: Has the number of customers you deal with altered?
Koot: The number of retailers is the same, but the number of decision makers has shrunk. There is the same number of outlets, but whereas before you would have dealt with 500 milk bars individually, these days they form buying groups. That way they can get the benefits the big chains get. When I dealt with 200 individual store owners I needed a greater number of qualified people. Now I need an accounts manager and a sales rep.
AIM: What is the next trend?
Koot: I believe the corner store will have a rebirth, but not in the way we know it: Coles and Woolworths will build corner stores in strategic locations. I also think category management is here to stay: it provides an opportunity for suppliers to work much closer with retailers. Rather than saying “This or that product is down 10%”, the category manager will say “You have a total category that is getting this return for this number of linear feet and this much profit. Here is a list of ways of improving sales and space.”
AIM: How is this affecting your commercial relationships?
Koot: the traditional selling and buying relationship is certainly changing. Retailers realise that the main players in a category understand better than anyone how to get a return. If you are a medium-sized supplier in retailing you need one person for Woolworths, one for Coles, one for Franklins and one for the independents. They all do business differently. They want to be sure the same guy is not going to their opposition and giving the same advice.
AIM: What is the best part of the job?
Koot: Besides the thrill of getting good results, what I personally find most satisfying and frightening is being responsible for 600 people and their families.
AIM: How do you select people?
Koot: I spend a long time talking to people, seeing what a person’s outlook on life is. Ethics is important to me. Being ethical and upfront always stands you in good stead: people who are not that way are no longer here.
AIM: What general trends in management are you noting?
Koot: We have gone from being autocratic one person making decisions and everyone else obeying to where everyone is asked to make decisions. But some people don’t want to make decisions; they just want to come to work, not think about it, and go home. We need to encourage people to share, but realise that some people don’t want to.