Christopher Adams

The Business Herald’s markets and banking reporter.

Success more than stab in the dark

Culture of research-informed innovation drives growth in thriving Hamilton-based family-owned firm.

The book also reveals the extent to which Gallagher Group has benefited from its investment in research and development. Photo / Christine Cornege
The book also reveals the extent to which Gallagher Group has benefited from its investment in research and development. Photo / Christine Cornege

Sir William Gallagher was "looking around" Amsterdam's red light district on a chilly evening in 1988 when he got stabbed.

The chief executive and chairman of family-owned Waikato manufacturer Gallagher Group - who was in the Dutch city to visit a distributor - was walking down Zeedijk Rd when a man appeared out of the darkness and demanded his wallet, according to Legend, a biography of the businessman by author and National Party list MP Paul Goldsmith.

As he tried to co-operate with the thief a further two men rushed forward and he ended up getting stabbed in his chest and left hand.

Bleeding, Gallagher stumbled into a nearby bar. But instead of calling an ambulance the staff threw him a paper towel and sent him packing.

Gallagher, who was knighted in 2010 for services to business, got a similar reception in a nearby chicken restaurant, writes Goldsmith. Finally, he ran into a couple of police officers who took him to hospital.

The knife had fortunately hit one of his ribs instead of plunging into his heart and the next morning, against the advice of his doctor, Gallagher discharged himself and walked out to the parking lot where his Dutch distributor was waiting.

Goldsmith's book provides an insight into how Gallagher's energy and zest for business has driven the growth of the Hamilton-based firm, which is best known for its electric fence technology but has recently moved into other areas including security systems. He didn't return to New Zealand after the stabbing to lick his wounds. Far from it.

Gallagher left the Netherlands to visit a polywire manufacturer in France and then flew to Turkey to attend a New Zealand Exporters mission led by then Trade Minister Mike Moore.

After that he travelled to Colombo for a meeting with Sri Lanka's Agriculture Minister, Gamini Dissanayake, who was assassinated by a Tamil Tigers suicide bomber in 1994.

The book also reveals the extent to which Gallagher Group has benefited from its investment in research and development, and how the generous government export incentive policies of the 1970s boosted the company's growth.

Tax deductions given to firms that increased exports in that decade effectively reduced the firm's tax rate to zero. The firm also made use of a government R&D grant provided to companies that hired university science graduates.

Though the grant existed for only three years, it lasted long enough for Gallagher to appreciate the value that could be gained from R&D and a "culture of research-informed innovation" was established within the company, writes Goldsmith.

Gallagher Group, founded in 1938 by Gallagher's father Bill snr, is today one of the country's most successful and geographically diverse exporters with products sold in more than 130 countries. The company has revenues of close to $200 million and employs roughly 1000 staff around the world.

As Mike Moore writes in the foreword: "If New Zealand had another 100 Bill Gallaghers we would be the richest, most decent, best-natured nation on earth."

Legend
by Paul Goldsmith
(Random House, $45)
In book stores tomorrow

- NZ Herald

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