Delegation and passion keys to success

By Yoke Har Lee

At age 13, Robert Mackley built coffee tables and dog kennels and sold them for a profit. Now a 41-year-old entrepreneur, he runs the $20-million-a-year Famac Group, the largest independent electronic components importer in New Zealand.

He also manufactures components, and distributes Bosch handphones and Swatch watches.

Mr Mackley attributes his company's success to passion, the ability to organise resources and to delegate. "To succeed, you need to really get excited about things," said Mr Mackley, who built his one-man show into an enterprise with 50 employees.

Glenfield-based Famac has a stable of four companies - Active Components, ecco New Zealand, ACL Technik and The Store.

Mr Mackley's early electronic knowledge was learned while working for a company that supplied components to whiteware manufacturers such as Fisher and Paykel and Simpsons. At age 21, he was acting manager because he was the only employee with a firm grasp of the market and products.

Active Component was set up a few years later when Mr Mackley wanted control of his own destiny. "I sold everything I owned - a house and a boat. I didn't even think of failure because I was so highly motivated to succeed."

The company supplied a wide range of electronic components that go on to be the "heart" of switches and circuit boards, and soon took on other business.

"Customers would ask if I could do products for them because they were unhappy with the quality of the imported brand. So I ended up making different products." With no knowledge of the engineering involved in those products, he hired people with the appropriate expertise.

ACL Technik was set up as the company's manufacturing arm three years ago. It produces connector blocks, electrical connectors and neon indicators for use in whiteware and cookware products. Next month, those products will be exhibited at a German homeware fair.

"We are also hoping to export to Australia," Mr Mackley said.
Australasia had to be the marketplace for New Zealand, he said, because the domestic market was tiny.

Changing business expectations - NZ was shaking free of import licensing - helped shaped Active Component's future.

"A lot of our competitors grew up in that environment," Mr Mackley said. Dictatorial suppliers "basically told customers what they had and what customers were allowed to have. I would bend backwards to do anything for our customers.

The business just grew and grew. We went from rented premises to our own building."

Meanwhile, the product range expanded. ecco New Zealand was started to supply products to electronic wholesalers and, since winning New Zealand distribution rights for Bosch's handphones, is considered to have a great future.

Mr Mackley said the Famac group's annual turnover was about $20 million and was expected to grow about 20 per cent next year.

But Active Components' competition is getting tougher. "The industry is now dominated by multinationals with phenomenal buying power," he said. "We are small buyers in comparison. Customers are more demanding, with air transport being so efficient. Manufacturing lead time has also improved."

So Mr Mackley plans to reshape the manufacturing arm and stay ahead of the pack by making products based on proprietary know-how or intellectual property.

The only Famac Group company which had been a headache, he said, was The Store, a home furnishing-cum-homeware store bought from receivers who had taken control.

Some hard lessons had been learnt from that acquisition although the business was starting to perform better.

"It was my first encounter with failure. I don't think I will ever buy anything in receivership again. There is just too much negativity involved.

"There are many reasons why a company fails. One is the culture of the company.
Changing staff - their attitudes, from what they used to be - that's the hardest thing. It is easy to replace work tools, computers. But to change work attitudes, that is very difficult."

Eventually he cut down from five stores to two - one at Link Drive, one in Newmarket.

"I have learnt now never to take on anything that would take us completely out.
Always buy something with a track record of profit - be prepared to pay a high price for it but at least there will be good cashflow to cover the cost of acquisition. Besides having the expertise to run the business, you have to be passionate about the business."

Mr Mackley pays suppliers on the 20th of every month - to give the company lead time. "At least with that, you would know when you need extra time to meet any contingencies."

He cannot forget how difficult banks were when he started out. "I was looking for a $10,000 overdraft which was to be secured on my parent's house. It was exceptionally difficult then. After you have established a track record with the bank managers, it gets better."

Mr Mackley has made profits every year since he started Active Components in 1983. Now, at 41, he does more management and strategic positioning for the company.

Some days, he confessed, he need not even be in the office - and might be out flying his favourite aircraft or restoring planes.

Pictured: Robert Mackleywith two of his phones - the Bosch GSM mobile (left) and a Swatch home phone. HERALD PICTURE / KENNY RODGER