Linfox has recently celebrated its diamond anniversary, and has long been one of Australia’s most successful and high-profile family businesses, operating in the transport & logistics, property, airport and cash logistics markets Momentous milestones: 60 years of growth in Australia, so how did they do it?
How did they go from owning a single truck in 1956 to over AUD$3.5 billion dollars in revenue 60 years later? We talked to Peter D Fox AM, Executive Chairman, about some of the key milestones along the way.
Milestone 1: From one truck to two
“My father was a truck driver – in fact, I think I had diesel in my blood from a very young age. The business started when my mother lent him the money to buy his first truck. But the moment he bought a second one, you could say that’s when he went from being self-employed, to running a business. That was in the late ‘50s. And he never looked back.”
Milestone 2: The first professional manager
“In the ‘70s, we brought in an accountant called Sandy Murdoch, who set about introducing some structured processes and some financial discipline. He became a mentor for me personally, too, and gave me the best piece of advice I ever had which was to get myself some business qualifications to add to my practical experience: ‘then you can sit at the front of the room, not at the back’. He was soon joined by a couple of other external hires, and we ended up with a really strong senior team. In 1978 we were turning over AUD$18 million, which seemed pretty amazing, back then. Now it’s nearly 200 times that.”
Milestone 3: International expansion
“We started expanding into Asia in the late ‘80s and early ‘90s. First Thailand, then Malaysia, and now we’re in Indonesia, Vietnam, Hong Kong, Singapore, and India, with plans to move into the Mekong Delta, which would give us access to Burma, Myanmar, Laos and Cambodia. In fact there are more people working for Linfox today in Asia than in Australia. We saw an opportunity in Asia and moved quickly. We were one of the first in our industry to enter the Asia market, and it’s become a key competitive advantage. That’s the advantage of being a family business – when we decide to do something, we can move really fast.”
Milestone 4: Stepping up
“2000 was a big year for us – we managed the supply chain and all the inventory for the Sydney Olympic Games. It was incredibly exciting and rewarding to be working on such an iconic event. It really put us on the map.”
Milestone 5: A big acquisition
“In 2003, we bought Armaguard, which marked our first decisive move into cash logistics, which has since become such an important business for us. The process of identifying, buying and then integrating businesses of that size was a real learning experience, and it turned us into a billion-dollar business almost overnight.”
Milestone 6: Streamlining and refining
“The next step for us was to take a long hard look at the business we had, and decide where we wanted to take it, both in terms of sectors and markets. One result was a much leaner management structure internally, and the decision to focus on our biggest customers externally. We had 300 customers in 2008; now we have about 80. That took courage, but it was the right thing to do. For us, it’s about quality, not quantity: our strategy is ‘less is more’.”
Milestone 7: Looking ahead
“If I look ahead for Linfox, I see two key challenges for us. One is for the business, and it’s all about technology. People often think about digital in terms of the information it gives you, and yes, that’s important. But I look at it in terms of all the other things digital makes possible. There are some incredibly exciting developments in our sector using technology like driverless vehicles, robotics and automation to run warehouses better, manage deliveries more efficiently, and improve productivity.”
“At the moment, our IT infrastructure isn’t as good as it needs to be, but we have to be the first into these new technologies just as we were the first into Asia. The second challenge is for the family. Our third generation is just reaching the age when they’re going to have to decide if a career here is right for them, and we’re going to have to decide the right management structure for Linfox in the longer term. That’s not a decision we can make yet; it may be a member of the family, but it might not. But what I do know, is that it will be the best person for the job.”
This feature forms part of the PwC Global Family Business Survey 2016. It has been reproduced with permission of PwC.