David Mair. Photo / Supplied
At the age of 19, Skellerup chief executive David Mair headed to Japan with plans to become a judo world champion.
It only took "a few weeks of being bashed every day" to realise that wasn't going to happen, says Mair, the Deloitte Top 200 Chief Executive Officer of the Year for 2021.
But while it didn't quite go to plan, Mair's martial arts training, and more than a decade living in Japan, had a profound impact on his life.
It provided mental discipline and introduced him to (what was then) a new and revolutionary way of doing business.
Kaizen — the art of constant improvement — is well known in the West now but Mair, now 65, was introduced to the concept early on.
That discipline — along with its more revolutionary cousin Kaikaku — is now a fundamental part of his leadership style, he says.
Deloitte Top 200 judge Ross George — who is managing director of Direct Capital — credits Mair with a knack for presenting a soft, inclusive, popular leadership style with people and strategy, but with a hands-on deep and fanatical knowledge of customer requirements, process, plant and equipment, and design for Skellerup's manufacturing customers.
"Mair does not appear to make mistakes as he meticulously studies industries and business and skilfully acquires and integrates companies, often on an uncontested basis," adds George.
It shows in the steady progress the company has made since he became involved.
Mair, who grew up in a small town south of Dunedin, has an engineering degree from Otago University and did an MBA at Canterbury on his return from Japan.
He took on the chief executive role at Skellerup in 2011 having been on the board of directors since 2006.
He's the first to admit it took some time to create the momentum needed for a complete transformation.
"I parachuted in as CEO in 2011 with Sir Selwyn Cushing on the board and a plan in place. Then two weeks later we had the earthquakes," he says. "People say you've been CEO 10 or 11 years but it feels like five or six."
At the time the market had lost confidence in the company and there wasn't a good understanding of what it did, he says.
People still thought of the iconic gumboots rather than the highly technical and specialised manufacturer Skellerup had become. "What's the secret sauce of Skellerup? It's deep material science," says Mair.
While it predominantly involves rubber it is also about how to combine rubber with other materials.
It's a capability to make the tools to make specialist components or products.
"You might be a plastic supplier, a metal supplier and a rubber supplier ... and you do it all so you can take complexity away from the customer," he says. "And there's a lot of value in doing that if you are smart."
Skellerup has the capability to scale up fast but incurs relatively low development costs because they lie largely with the customer.
So it's less about blue sky research development, he says.
Mair is passionate about New Zealand manufacturing but he worries we spend too much time worrying about R&D and not focusing on getting the logistics and pricing structures right.
"New Zealand is well-placed in the world with a demand for protein etc but needs manufacturing to be strong," he says.
The value of strong relationships is something he had instilled in him while in Japan.
That's something that underpins his thinking through all parts of the business. He breaks it all down to five core components.
"There's the customers — we have to be the best supplier to our customers," he says.
"There's the employees — we must be loyal, we must treat them with dignity we must pay them well.
"There's the suppliers — we need to be demanding but fair and be the best customer for all those suppliers, it's a long-term relationship. It's not ground them down on price — which Kiwis tend to do."
The fourth thing is the wider community of people that Skellerup can reach.
Mair cites Skellerup's involvement with breast cancer awareness and the Pink Band fundraising campaign. The company has also supported Mike King with his work on mental health, with a focus on farmers and rural communities.
Last but not least, are the shareholders, of course.
They have seen strong returns in the past few years.
The past two years have seen the share price rise more than 300 per cent, although Mair notes that shareholders were getting good dividend returns for some years before that.
"But too many people focus on numbers," he says.
"Numbers are an outcome. They are like a mirror of what happens in the company.
"And what they mirror is the people, processes, structure and culture.
"So get those things right."
Coping with Covid hasn't been without challenges, he says, but strong communication channels and strong relationships meant they were well prepared.
"Collectively we became stronger. It's not that we solved supply chain issues or anything like that."
Being a holding company has advantages too, he says.
"We have a very small head office, so we delegated down into the teams. We're a global business — 80 per cent of revenue is generated overseas ... so they're in the best place to make decisions."
Mair sees his role and that of the senior leadership as an inverted pyramid. "We're at the bottom holding and supporting the people that make the best decisions."
One of his big moves in 2021 was lifting the pay of the frontline workers. "We started moving lower-paid people and take-home pay well ahead of this so-called 'Great Resignation'," he says. "People with mundane jobs where they have to turn up. They can't work from home. They delivered our product consistently through a challenging time. They've been told they have to wear masks, they have to be two metres apart, they can't each lunch together ... I could go on and on."
Skellerup lifted the base pay rate to $25/hour, well ahead of the new minimum wage.
"We wanted to be well off the bottom," he says.
Mair says one of his proudest moments of 2021 was achieving the strongest employee engagement that he has seen in his time with Skellerup.
Finalist: Naomi James, NZ Refining
For NZ Refining chief executive Naomi James the biggest achievement of 2021 was bringing together all the different elements to create the new plan for Marsden Point.
After 60 years of operations as New Zealand's only oil refinery, NZ Refining made the tough call to close the operations at Marsden Point and move it to an import-only fuel terminal.
"That needed to go across a lot of stakeholders," she says.
"It needed our shareholders' support, it needed our leaders' support, it needed new long-term agreements with our customers, it needed government support, employees, unions, iwi and the local community."
Bringing all of that "complexity and diversity" together while still dealing with a highly challenging operating environment wasn't easy.
"But it's also what made it interesting and rewarding," she says. "It's really a credit to the whole team at RNZ."
James joined Refining NZ in April 2020 as chief executive officer, following a stint as executive vice-president at Santos Limited.
"With significant industry experience, Naomi has overseen a huge period of change for New Zealand's only oil refinery, commencing with a comprehensive strategic review when she joined in 2020," the Top 200 judges said.
"Having overseen these transitional negotiations, James continues as chief executive under its new name, Channel Infrastructure NZ, which will continue to be an important part of the New Zealand economy.
"A great job in challenging circumstances," the judges noted.
The chief executive says the next six months would see an intense focus on a safe shutdown of the refinery and the set-up of the import only fuel terminal.
"Then on transitioning to a very different organisation and business ... all the while managing Omicron as that plays out," James says.
"But we also have some really great growth opportunities ahead of us."
These involve "everything from doing more at Marsden Point with the assets we have, increasing our storage to support the security of supply, removing our remaining direct emissions by looking at solar farm development on our site to looking at other sites and infrastructure assets that we could potentially grow into in the future."
"So, I'm looking forward to putting more time towards those as we go through the year."
Finalist: Nick Grayston, The Warehouse
For Warehouse CEO Nick Grayston the biggest challenge in 2021 — and the biggest success — was moving the company to an 'agile' operation.
Grayston, was appointed chief executive of leading general merchandise retailer, The Warehouse Group, in January 2016 after moving to New Zealand from Chicago where he held leadership roles with Sears Holdings.
He's already overseen a huge change including a 165 per cent increase in profits. The shift to agile working — the non-hierarchical management structure with roots in the tech sector — was all about speeding up decision-making and problem solving within the organisation.
The timing couldn't have been tougher for a full company shift — kicking off in August 2021 right before the long Covid lockdown.
"It was a completely fundamental change in terms of our operations system. The last thing we wanted was to do that in lockdown," Grayston explains. "With less than a week's notice we had to flip from 900 people at Spark Arena for a kick-off event to going virtual."
Going agile is part of a strategy to move the iconic Kiwi retailer more aggressively into the digital space.
"I came to the conclusion that the old fashioned methods of command and control, with all these layers, all these silos, were just no longer quick enough for the dynamic world that we live in."
"What I'm most proud of is the reliance and dynamism of our people."
That includes a leadership team that had to come to terms with the removal of layers of hierarchy.
In fact, Grayston says it has meant a big shift for himself as well — and his leadership style.
"It's been an enormous challenge," he says. "I've built a successful career on the back of the command and control model."
He describes the shift as something of a leap of faith "and you jump into the void" but I've been massively lucky because my people have caught me.
The Top 200 judges said, "Nick has applied his Northern Hemisphere retail experience for the benefit of The Warehouse in a high period of change."
"He has overseen a restructure, new strategy and prepared the business for the new retail industry it faces. He is a no-nonsense, researched, matter of fact leader making positive change for an important New Zealand company."
• The Chief Executive Officer of the Year award is sponsored by ServiceNow.
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