Furnware – Hamish Whyte

Jim Newbigin: [Background audience noise] It’s 8th November 2016. I’m at the Hastings Public Library for the Landmark[s] talk, and we have with us tonight Mr Hamish Whyte, the CEO of Furnware.

Joyce Barry: It is a great pleasure to invite Hamish Whyte along tonight. You’re sitting on him, so he will describe all that to you as his talk unfolds. [Chuckles] A wonderful history, Furnware; I know it’s been named several things; I know it’s shifted in various places. But Hamish was Wellington-born, brought up in the Manawatu and the Wairarapa, and he came to Hawke’s Bay with marriage and ultimately bought Furnware as a going concern. And from then, it’s just continued into the most wonderful success story. And it was a joy asking Hamish what he was most proud of, and he said, “Culture”; and walking into his office up Omahu Road, I think Hamish, you’ve coined it. It was a beautiful open office; everyone interacting, everyone looking very happy, and Hamish in the middle of it. And if that is the culture that has led to the success you’ve had I can just say, “Well done.” So over to you, Hamish. Thank you.

[Applause]

Hamish Whyte: I’m sure there’s a few here that probably know a lot more about the history of Furnware than I do, going way back. Really just a humble business; 1934 Joe Rae had about a dozen cabinetmakers. He beat James Wattie to the Post Office, ‘cause we’re PO Box 1, Hastings. [Chuckles] Something that I always say to people round the world – they say, you know, “How many people live in Hastings?” [Chuckles] “Quite a few!” Quite proud of it. But yeah, the reality is that it is sort of a part of our DNA. I mean, to me it’s sort of part of the fact that we feel we are a significant part of the history right here in this town. And yeah, I’m sure Joe Rae would’ve been pretty happy walking home from the Post Office that day saying, “I got the first box.” So yeah, about a dozen staff. I’ll just take you through the early years, and then I’ll sort of talk about our whole journey since I got involved twenty-three years ago.

So Joe Rae, as I say, was the gentleman that [who] started it; then Dave Christie & Company got involved – purchased all the land in Heretaunga Street which is now Big Save. They had all the divisions there; they had caravans, they had the furniture division, they had a big electro-plating plant. There were various other entities within the business, but in theory it was all there. Then the war years came along, and Joe Rae and Dave Christie formed a partnership. That partnership supplied the army – became a preferred supplier; had over a hundred women working for it. So it supplied to the army rifle butts, water bottle corks and tent pegs of all things. And it went on from there to manufacture coffins … flatpack coffins … and polo balls, and police truncheons for the American police force – bit of a jack-of-all-trades [cough] business; in its heyday about a hundred and twenty people.

Then in 1944 Joe Rae resigned, ‘cause he wasn’t well. The history that we have captured was that he basically spent all his time in the joinery shop, and all the rimu timber fumes got him, as I’m sure it got a lot of tradesmen in those early days, ‘cause no-one had thought about protecting their breathing. It would’ve just been a dusty room, and the way they carried on. Came the fifties, the company changed its name to Furniture and Woodware. That’s when Roy Skittrup was involved in the business, and a guy, Bruce Gowan, and a gentleman, Bill Little.

[Shows series of slides throughout]

And this is 1954, so I believe this is Bill Little here, and the notes we’ve got is, he was quite a little Hitler, so to speak. Apparently he was a formidable foreman, and he scared the shit out of most people who worked for him. [Chuckles] And standing there, I’d say he looked like he had a lot of confidence.

So this is Pettigrew Transport – again, Hawke’s Bay brand, now Mainfreight. These are solid rimu State house kitchens. So the business really developed their whole cabinetry business. And it also made carpenters’ cabinets. It came with all the tools in it, all set out, hung in the right places. [Shows slide] The box that Farmers, the retail store, and I believe another couple of Hawke’s Bay entities, probably before Farmlands, sold them. So you could buy this cabinet you could take home; put it on the wall, and you were a guru carpenter, ‘cause she had all the kit in it. I mean, we probably need it today, to be honest.

So, Furniture and Woodware, that’s where it came from. So I believe that’s at the back of Heretaunga Street, behind Big Save, where it is now.

Audience members: That’s Queen Street.

Is that Queen Street? Right, okay. So the kitchen joinery, cabinetmakers … started doing church pews in Hastings; did three churches I believe. The electroplating plant was there; so it had a large tube-bending department because it made lawn-mower handles for Morrison’s, and Morrison’s of course were down behind where we are now, in Omahu Road, in the back. The electroplating was there when I got there.

And then in the fifties it basically got involved with the education market, and it was based around the tender system for the Ministry of Education, and I believe in those days quite a big order – the sort of normal run they’d do on an annual basis of about ten thousand chairs.

Then in ’69 we became Furnware Industries Limited; ’73 Ron Brierley got involved through Cyclone Industries; Cyril Brimer was the GM [General Manager] and then I understand that Selwyn Cushing was on the Board and became the Chairman, and then it became part of Fletcher Challenge … some deal. There was another guy called Bruce Judge that … some of you may remember his name; [murmurs] I don’t think he was a reputable person, and some people didn’t make much money out of his shares.

And so it had quite a mishmash of ownership; and when I got involved in 1993, three years previously there’d been a management buy-out by three gentlemen – one called Chris Reid – who were executives in Fletcher Challenge. So they basically, I understand, tarsealed all the driveways, painted the buildings, got it all ready and then decided to sell it to themselves. Probably quite a cunning plan if you’re someone involved with a corporate because you might as well spend their money so you can make more money out of it.

So that was really the history of that; and what happened then was they bought the business as a going concern, and they were quite ambitious, but the reality was that they really only had one customer in the education sector, and that was the Ministry of Education. And then the then Prime Minister, David Lange, who was also Minister of Education, decided to create ‘Tomorrow’s Schools’. So they basically were forced to go from one customer, to two and a half thousand, and they sort of freaked out, would be the best way to explain it; ‘cause they didn’t know their customers ‘cause they didn’t need to know them. They obviously had the addresses of the schools in New Zealand; they had government warehousing all through the North Island and some in Canterbury; and they just sold them furniture, and they had no emotional relationship whatsoever with the end user. So in other words, their customer was the government, and as long as their price was right, in theory they had a factory that was manufacturing and keeping busy.

So that really leads me to the journey that I’ve been involved with. This slide really just typifies what the business was – so it made indestructible, stackable, cheap furniture. So it was made to last forever; it was definitely not made to be comfortable; and it had to fit the right price mark. And the reality is we would send it here some days, and the same furniture there on other days. So you know, the added-value composition of the product if you’re looking at that in a business, there wasn’t much added-value on one side, because in reality you could never – in theory – visit your customer. [Chuckles] And on this side, because we were dealing with the government the whole time we didn’t have an emotional connection with the students … because it took us a while to figure out that they actually were our customer.

So I bought the business with my wife, Sarah, and my father-in-law, Graeme Lowe; Graeme Lowe was my Chairman. He was quite a strong chairman, [chuckles] and the ethos he was trying to teach me and show me was that his whole demur was around production; high production areas, manufacturing or processing. And he just saw this as a business that we could model probably pretty much the same as the meat industry – just drive volume through, get efficiencies and sell your product, and happy ever after. I think he was quite excited to think that he wouldn’t have to lend Sarah or I any more money, ‘cause we had a business that was a cash-positive business that had about sixteen staff when we got there in ’93. And as I say, these three gentlemen owned it prior to that so the place was in pretty good condition.

But, it had one catalogue because obviously it had to go out and meet all these schools; but the downside of that was that they had to suddenly become a marketing company and they obviously never had to be one before that. So they not only had to go and meet their customers, who were obviously the two and a half thousand schools in New Zealand, but they needed to go and find out what they wanted to buy, ‘cause up until then it had been dictated completely by the government. And with the Tomorrow’s Schools it took a couple of years to settle in, because all of a sudden all these headmasters became quite powerful in a lot of ways because they were running their own business. And then they appointed a Board of Trustees that had never had the experience before in being a Board of Trustees; so there was a bit of sort of to-ing and fro-ing in the power game within the schools for a while, while they sorted themselves out.

So about the year 2000 I’d taken over complete ownership of the business, and I’ve always had this vision to create the next generation of what I believed to be the learning experience for students. And I engaged this designer in Auckland called Murray Pilcher. And Murray and I’d met because we used to sponsor post-graduate students out of Massey University and then out of Unitech in Auckland. And we had this classic experience where we had a class of fifteen students in Auckland, and we engaged them with a brief about – we want to think about what you learned when you were at school, and what would you change? And what could you create or design? And the students basically said, “Look, you know, it’s too far away for us to even contemplate that; can we come and visit your plant, and we’ll look at what you make now and then we’ll work back from that.”

So we did that. So they came down in some vans, we had a great session in the factory. We got pizzas and beers, put them in the backpackers – so this is like, you know, I think there was about fifteen you know, twenty-one, twenty-year-olds; and of course all they wanted to do was drink. [Chuckles] And we had this session with them, and they spent the next day with us in the factory and they were absorbing all our manufacturing and then they went away; and about a month later I went up to Auckland and they reported back. And we got these quite amazing, really energetic, fruitful ideas about furniture and design. And they really opened me up to the fact that this is where we needed to go; we needed not only to go and talk to our customers but we needed to get designers in our business, because around the late nineties there was this massive wave of a threat coming from China. China was becoming the only place in the world to manufacture. So in other words, poor old New Zealand and Australia or wherever you were out of South-East Asia were under threat from low-cost manufacturing. And you’ve seen in your lifetime the demise of so many manufacturing businesses, even here in Hawke’s Bay, and it’s the threat of very cheap products. It doesn’t mean to say there’s added value; by most accounts that I come across there’s not much added value. It’s just the fact that, you know, you can go to The Warehouse and you can buy a toaster for $29, but you know it’s probably not going to be there in three years’ time, let alone three months’ time.

And the ethos of that is the fact that our market, where we are … as in school children … don’t want things that you have to throw away. They don’t want the landfills to be full of junk. They want things to be built to last, a bit like we were brought up on. I mean I’m sure some of you, like I did, inherited a dining room table that was probably made eighty or a hundred years ago, ‘cause it was a beautifully-made piece of furniture. So why would you want to change it every three to five years because a leg fell off? You know? So we had this threat from Asia that everybody there was sort of going, “Wow, we have to be really careful here, because they’re going to come along and take over our market.”

So Murray and I got together, and he said to me – one of the very, very first things – he said, “Tell me about our customers.” And of course I started telling him about the headmasters ‘cause they were the people we interacted with ‘cause they were the gatekeepers for us to sell our products into schools. In a high school it would be the bursar, but in every other school it’d be the headmaster. So we’d started sponsoring conferences so we could get to know them. We had many late nights … some very amusing late nights … but the reality is we’d built this relationship. And then when Murray said to me, “Tell me about your customers”, that was where I started, and that’s when he absolutely sat me down and told me off. He said, “There’s no way they’re your customer, ‘cause they don’t live in the classroom. It’s got to start with the teacher, and start and the students.” So that’s when we basically, as a company, went back to school to learn.

So in this journey of getting scientific knowledge about the human body, we measured twenty thousand New Zealand students, so we went and bought the machines outside chemist shops. Most men like me would avoid them. You put your dollar in and you get your body-mass index back, and then you nearly faint, and you run off because you think, “This is not good!” [Chuckles] “This is not a good ratio.” So we got those with laptops and we went round schools and we basically got all the school kids to come in. And the main thing was to capture their year … their age within the school. ‘Cause up until then we’d sold all the furniture to schools based on the age thing, as in the school year; so, you know, Primer 1, Primer 2, Primer 3; now Year 1, 2, 3, 4; and the furniture was based around their Year Group, not around their body size. Every single one of us here – as in the whole world – is different, so it was wrong for us to say ‘one size fits all’, ‘cause it was never going to. So in the measurement of the twenty thousand students we learned all about Melanesian and Polynesian students that get a massive growth about age eleven to say, thirteen, where they just spurt well ahead of Europeans. I mean, any of you that’ve been to Saturday morning rugby – you want to take the scales along because you don’t believe they’re the same age; ‘cause they’re such big body-mass people compared to the Europeans. And we found out that over nine percent of New Zealand were Asian; I didn’t know that ‘til we went and started measuring – this is in the year 2004 – so that’s probably got to be more like eleven or twelve percent now, I would think.

We found out that thirty percent of students in New Zealand have headache and back pain. We didn’t know that. So we got to know the students by spending this time in schools. We put videos in schools at the back of the room … it took about a bloody month in some schools to get the parents to all agree that we could video their perfect little children [chuckles] with all respect to the perfect little children; but at the end of the day we just wanted to video them so we could understand what was going on, and then we’d just fast-forward the footage and see the movement in the room.

This is the range of furniture, Bodyfurn, that you’re sitting on, so basically the chairs were created because there’s three positions in the classroom; there’s sitting static, being the perfect little boy or girl; and then there’s the boys, that are world famous for rocking on the back legs – and if you were really good you rocked on one leg. And we all did it. And the reality is the reason we did it is we wanted to elevate our necks so we could look up at the board where the teacher was writing. So it was just logical that your body wanted to lean back to look straight ahead, instead of you being upright and looking up like that. And when you want to work over the desk you want the chair to go forward so it releases your body to go over the desk. And the fact that your seat moves means that it removes the pressure points, not only under your thigh, but also in the middle of your back. So in this measurement, the popular ‘T’, which is basically from the bottom of the floor to the middle of my knee, is our ergonomic measurement as a human being. So that’s what all the ergonomists use when they’re measuring and creating things, especially like, car seats, shoes and so forth.

So we had to become scientific, and we weren’t up until then. Quite frankly, we just went out and flogged furniture. So this made us jump that whole fence and become specialists. And it was quite a challenge; it took a few people outside their comfort zone, and I lost a few of my sales staff ‘cause they didn’t want to take that extra step, because they felt that it was a load of BS. They didn’t see how us understanding the physical aspects of the human body could make our chairs any better. They also were quite hell-bent on the fact that they were really excited about the next generation of furniture, but they weren’t excited when I said it’s four times the price of the old chair. So of course everybody thought I was mental, basically, because I was going to a market that had limited funds; had a ring around it, as in two and a half thousand schools – it wasn’t every person in New Zealand; and I was tripling the price of my product. So how on earth were you going to be successful?

So this research that we did and the whole euphoria of getting to understand the students, led us in this journey to understand that if we embraced our relationship with students then we would find a way to be successful. And one example to use – when we [were] doing the video in Havelock North High School – was we had two trial rooms; and the First XV came in one day late for a class. So of course everybody sat towards the back of the room, as you do, ‘cause not many people sit at the front of the room, in a classroom. [Chuckles] Again, I’m not sure … it’s a habit; and the boys all had to sit in the front row and of course they were the largest boys, and we had two different heights of furniture in there. And then when we interviewed them thereafter, they said that they actually recognised that the lower furniture was just as comfortable as the higher furniture; ‘cause to be ergonomically correct, we all need to have our feet on the ground. So if you’ve got grandchildren at home and they’re at your dining table having dinner with you, and their legs are swinging in the air, they are only going to want to fidget. ‘Cause all you’re doing is restricting the blood flow by having the pressure under the back of the knee. [The] main artery runs under the back here, so the more pressure you have on that, the more your brain says, “I need more blood.” So basically in theory, your brain just makes your body move, which is what fidgeting is.

So in the research, we did three classrooms in Hamilton … did a one-year thesis with Waikato University. We videoed subjects and interviewed the students after every subject. Well, in that journey we captured that we reduce the off-task – in other words looking out the window and fidgeting around the room – by eighty-three percent. So we made the children calmer; we lowered their heart rate because we didn’t restrict their blood flow; so all these outcomes, and we had no idea when we started the journey, came from us creating this chair. So we became global experts – not quite overnight, but pretty quickly; and then we won the world’s best ergonomic chair in the Netherlands in 2003. So the world said, “This is the best school chair”; so that’s what you’re sitting in.

Today we sell those … they’re $129. Our old plywood seat and back that you all sat in, were about $39. So it was in a lot of ways, high risk, ‘cause that chair – the tooling and the R & D, [research and development] to do it and create it, was about $2million. So basically everything I owned went into that chair; and because we’re seasonal we missed one summer, ‘cause the research just kept going, and of course all the schools said, “Oh no, we’ll just wait for the new chair.” And we’re going, “Oh, no no no no no, you’ve got to buy the old one because we’ll go broke before you can get the new one.” [Chuckles] You know, something logistically that some people don’t ever do.

So that’s basically your three sitting positions; so you literally are curved; knees down, static; and then the boys – those boys in the back, leaning back. So that’s a fact. There’s three positions if you’re in a classroom. And all we’ve done is create a chair that allows you to be in all three positions; and it’s not rocket science. All the movement in there is just like a see-saw – there’s just rubber bushes in them. We’ve got a global patent on it which has just expired; it’s been copied twice by our agents in Saudi Arabia, [chuckles] and in Australia – good old Aussies. Both of them copied it badly, as you do, and it’s actually given us more business because people have bought the copy and then rung up and said, “This isn’t what I bought the first time.” So we became specialists really: that’s what I’m trying to tell you there.

So – the Bodyfurn growth. So Bodyfurn sold … which is what you’re sitting on … basically we started in 2004; this year we’re going to go through seventy thousand units. Plus we did it in a stool – we did it in a gas lift, like an office chair, so about a hundred thousand units this year, we’ll do; remember, four times the price of the old chair.

[Showing further slides] Then the blue one – just to give you an idea, we started exporting out of Hawke’s Bay about 2008. This year we’ll go close to sort of six hundred containers out of here. Last year we did about two [hundred and] seventy I think, so we’re growing at about forty percent. We’ve doubled our staff here in Hawke’s Bay in the last eighteen months; there’s a hundred and thirty-six of us, and we’re family, so to speak.

Okay, so this is just starting to take you on a journey of what we do now.

Schools in reality have become a place where they are collaborative; literally, the day of the teacher being in front of the room has gone. The walls have all been taken out. So in the seventies the government here did it – made learning spaces bigger – but didn’t take the teachers on the journey. So there was a lot of rebellion to these open spaces, because not only did you have to share it, but they were bloody noisy, and teachers didn’t know specifically how to collaborate together. So what’s going on now is, you’ve either got glass or sliding doors; you’ve got soft furnishings everywhere; you’ve got wheels on most tables so students can change the shape of the room every hour. You can have writable surfaces on the top where a lot of the table-tops are whiteboards, so you literally can collaborate and write on the table. Now of course, that has its problems because they will write on tables that aren’t whiteboard tables [chuckles] – as you do, ‘cause you know, when you’re fifteen you’re perfect. They don’t quite write on the walls. But just to give you a feel for the fact that you can do different things.

There’s a whiteboard table there; so there’s like – what we’d call a watering hole – so you sit around together at a lower height. [A] stand-up desk height which we call a lighthouse; especially in primary schools you get some very, vey social students, so we put them at the higher table because they want to be social; they want to see what’s going on because that is their natural DNA. They don’t want to be down by the fireside, or down by the watering hole in a limiting situation. So all the teachers are doing is basically identifying the needs of the different students to where they might fit in the room. And as I say, the children are basically picking where they want to be. So all the teacher’s doing through the use of technology and with the curriculum as it is today – they know that the students know more than them in an instant, ‘cause they just bloody google it. You know, so you’ve got to acknowledge that you’re going to lose the battle if they’ve got a device in front of them ‘cause they can go and find out more than you’d ever know.

So the reality now is, it’s just about how to create a collaboration. So teachers love to stand up, because they can come and be in a closer relationship with student because they’re higher up. Or they’ll come and sit here by the watering hole or the camp-fire so that they can feel that they can be more intimate with the student.

I have to be honest; we went and had a chat – we’ve got concerns about digital technology in classes, and really, how far is it going to go? I mean, is the whole world going to just be in beanbags? Or as Hekia [Parata, former Minster of Education 2011-2017] wants … is the whole world just going to learn at home? Which in reality is just monumental, because … what are the Mum and Dad going to do? It means they can’t go to work. Collaboration, getting on with people – the whole journey of life is about how you communicate and get on with people; it’s about what manners you’ve got; what respect you have; who you are; do you let other people go first? Do you let other people share the time or the moment? It’s just general DNA that we were all brought up with, but with absolute rules around it. But it was given to us as a ‘must have’ and ‘we must do’, whereas right now, if you’ve got a device and you can know more than other people in the room, then you may think that you can just go off and learn on your own.

So we went and had a great session with Steve Maharey at Massey University a few weeks ago, and said, “Steve, we’re not sure where this is all going. We can make these cool rooms and put beanbags everywhere, but what are you seeing with what you’re getting as a student?” He said, “I’m getting students writhing, that are not used to working hard. I’m getting students that don’t know that learning is bloody hard – you just don’t get a degree because you turn up.” You know? And I think, as he says, there’s universities in the world that you go on-line … [in] fact all over the world … and you don’t have to turn up to university, you can do the whole thing on line. So the ratings on those degrees are seriously lower than the ones where you turn up. And then he [was] very open to say, “The reality is, we want our lecture theatres and … like Massey University, they want to rip them all out and make it more collaborative.” So they do want a room like this where the lecturer can be here, and the students can come and leave the lecture room, and interact. ‘Cause again, it’s all about how you get on with other people. ‘Cause it’s pretty hard to find a job where you don’t have to talk to anybody. It’s pretty hard to find a job where you don’t have to meet people, or see people at least. So we’ve got to get all those boundaries into education and make sure people go there. So you might think that we’re going a little bit outside the square ‘cause we make desks and chairs, but the reality is we’re an education company; the reason we’re successful is we’ve gone deeper. We want to know what the pedagogy is; we want to know what works in a room; we want to know if that is popular, or is that a failure? And as they say in Research and Development, ‘Fail fast.’

So we’re so spoilt here, ‘cause we just use Hawke’s Bay schools for our R&D. We’ve got some acoustic room dividers that we’re just about to trial, so we just shoot around to Peterhead or Frimley Primary, Mayfair, and we just trial it. Schools just say, “Come on in. Come and do whatever you want.” And we use real kids; and of course if you’re an eight year old, you’re going to tell me straight away whether … you know? [Chuckles] I mean it’s ‘cause they’re all honest, you know – there’s no pre-set ideas; you know, they’re not going to hold back, they’re going to tell you.

So again, just more of what we do. So, colour – back in the old Ministry days, brown frames, black frames, plywood, maybe some green vinyl. [Chuckles] So you can see, I mean, the room is fun; I mean, you can imagine being there yourself. It’s a bit like the library downstairs, isn’t it? You want people to come and feel they can relax.

So, white board surfaces; stand-up desk height; large back seating units. And again, we’re doing a lot of work around using acoustic fabrics, because these modern learning spaces have taken all the walls out, so most schools now in New Zealand have three … probably two and a half to three classroom space, with no walls. So they’re making a real effort to bring the teachers on the journey. An example would be, if you’re teaching an animated lesson and you’ve got a reading lesson – well, that’s a disaster, isn’t it? Because the noise in the room will be over the top. So, can we all do a quiet session when we need to do a quiet one? If we’re going to do animated, well then we’ll all get ear plugs and we’ll get everyone to be animated. But the reality is, we’re seeing there is a real effort to make the teachers feel that they can own the space, but the biggest threat that we’re getting is sound, so we’re doing a lot of work around acoustics.

And again, like the cookie pads on the floor there. We sell hundreds of thousands of them; they’re all made by Regal Furniture in Napier. So they’re like a frisbee – in fact, they’d do bloody well going out the window. [Chuckles] But the thing about them is we just see that the kids love them because it makes them feel that they’ve got their own space, so wherever they are in the room, they just put it down and lie on it, and do something with a book or with an iPad.

Research is showing us out of America that iPads are drifting right out of the American curriculum; everyone’s coming back to Notebooks because they wanted to type on a proper keyboard, because typing is their future. Even though we want handwriting to still exist, the reality is that an iPad doesn’t have a proper keyboard. What else can I show you in there? So there you go – that’s an example of the sliding doors. So there is privacy, but the reality is that would probably be open most of the time.

Sarah Absolom of the Absolom family, Rissington; this is her class in Singapore. This was the day I went in to have ‘pirate ships’ day, so I had to dress up as a pirate when I came in the room. And we gave Sarah one of our very first whiteboard tables. They were born out of Mildura in Australia where Vince, the principal, rang me and he said, “Hey, I’ve got this thing – all my boys in the high school here, they just won’t bloody stand up in front of the class and write on the board – mainly because their hand-writing’s appalling, plus they can’t spell, and they just don’t feel natural up there. And if you can put that on the tabletop, I think it’ll work.” So we literally did that for him, and trialled it; and we probably do about ten thousand whiteboard tables a year now. So it’s become the favourite table in the classroom. Most schools would do one, maybe two. They’re really popular in staff rooms and businesses; we sell a lot to companies in Hawke’s Bay where they’ll put one in their staff room so you know, you can stand with a coffee or a beer and you can all brainstorm and visualise with pens.

And it’s [this is] Kowloon Junior, so this is another example of another great customer. So they built the school which is in Kowloon – [for] those of you who’ve been in Hong Kong Island – Kowloon. Seven storeys; playgrounds on the roof; and … look at that for an open space. These are all break-out rooms either side, and you can imagine the noise in there with the lino; you know, you need earplugs. So we’re working with them; it’s really at the stage of acoustic fabrics, ‘cause we want to make sure we can dampen the sound. But Marianne Brock, who works for me, lives here; Brockie looks after Hong Kong. So she went over and we did the negotiations … did the deal; we shifted in forty-four containers. We had to de-van into little wee trucks to get up the roads in Hong Kong. Then we had to install at the school; go up the seven flights. She was there; handled all the people who went in doing deliveries; so she then cleaned it all. And the teachers came in and she explained why we designed it, explained why we used it, why it’s used by the students; and [in a] couple of situations she spoke with the school kids that [who] were going to use it. Before she got to the airport that night, she got a call from a neighbouring school saying, “Can you just come back and do the same in my school?”

That’s the above and beyond that everybody [cough] aspires to – that’s who we are, so we want to go deep. We want to know that your school wants to achieve this, this, this and this, so we’ll try and figure out a way physically to give you what you want, but we will help you take your teachers to where they need to be, to use this. And it’s very important people understand why it is. I mean, the holes in the seat and back are so you can either heat up or cool down after recess, ‘cause in the old bucket seats you just used to sweat like mad when you came in after lunch. So it’s all about comfort; it’s all about getting you into a space where your head is relaxed and it can work. ‘Cause as I say, Steve Maharey said, it’s not easy to learn. Well we’ve got to keep reminding ourselves that these kids need help, too. It can look like fun, but it needs to work.

This is what’s going on right now. We have created an app – it was built in New York for us – so in reality, I could be sitting here with you now. We could talk about what you want to achieve in this learning space that you’ve got. If you’re building a new building you can send me the plans so I can put it in my app in my iPad. I can drag and paste everything into that room that you want. You can choose all the colours of what you want. We can do all the heights. Then I can push a button and I can give you a complete photo-render of that; in other words, a photo image of the room. You and I can fly through the room, 360 degree[s]; look around the whole room; see what it is. I can print it off for you right there and then. So that’s like a big step for us. We can be anywhere in the world and instead of maybe having five meetings with you to get to that, for you to buy that furniture, we believe we can get it to three. In other words, I can get about thirty, forty percent productivity gain from anyone … I’ve got twenty-two people throughout the world, right now, selling, wherever they are. So imagine if I can get a thirty-odd percent increase in what they can achieve – pretty good return on investment. This is about $250,000 worth of software. We own the software, and it’s cool; we’ve just got some new updates going on. We’ve limited it to about a hundred and twenty products.

So that’s a render, okay? So we’ve kind of talked about what you wanted, you know, so our storage unit with tow trays underneath; soft furnishing. Again, how much fun would that be in the classroom? But not obtrusive, to the point of view that you create an area where bullying or intimidation could happen, ‘cause you need to make sure they’re safe spaces, ‘cause it does happen. The reality is we need it to be cosmopolitan and easy; that you can feel you’re private but you’re not hidden away. So again, we very much work on the age group of the children – how high the backs are – so it just gives you an idea of what you and I could create in about thirty minutes.

Another room. So again, just trying to create products that have storage that are really practical, ‘cause often the room don’t have – like the old days with lockers built in – they all evaporated. And then soft seating that you could use in other areas, so you put a round whiteboard table in the middle of that. You can create a theatre situation – again, soft furnishings.

This is a teacher’s pod; so the teacher’s desk has gone. The teacher stands up all day or sits with the students. And that’s their complete resource unit. So they can move around the whole room, they can teach in the back of the room, the side of the room, the front of the room.

So again, just whiteboard tables; they all nest, they can be pulled apart. These are pretty cool for a corner – splats – pretty cool, ‘cause you can just lie on those, you can sit them in the corner, you can go and have time out. We can adjust the view out the window, but no-one has for these ones. So again, segment tables – put them together; pull them apart, move them around. If you want to have an exam in that room everybody’d have their own table, ‘cause again, you’ve got to remember about exams – people still need their space, even though … I think The Dominion this morning talked about cheating.

As I showed you earlier, this year we should crack through five hundred-odd containers. We do have five hundred in New Zealand anyway, so just keep going – just about half our business right now is out of New Zealand. 2008, it was all in New Zealand.

So, cool places. We do all the International Schools in China … made in Omahu Road; Russia, furthest away … did about a million a year in Russia. No-one’s been there; all done by Skype and on the internet. Africa’s cool; Middle East strong; two people [and] we’re just recruiting a third in Singapore; schools all over Asia, Japan, Brunei; Australia we have eleven people … Australia’s growing annually about fifty percent, so we will own Australia soon. [Chuckles] I didn’t say that. But the reality is, we’re seeing in Australia that if we continue our relationship with our customers, going above and beyond and blowing them away basically with what we do and how we treat them and how we interact with them, they’re just grabbing us, ‘cause they just don’t get that service in Australia. Our competitors are just manufacturers, and they have great businesses ‘cause they have a huge volume of product to make; but they didn’t have to go above and beyond because they were always going to make money, whereas we’re the little kiwi guys that go, “Well, you know, we’re only as good as we are tomorrow in reality, ‘cause everybody can copy us.” Everybody can do anything they want to to a certain degree, in reality and physically, in product; ‘cause I mean, it was half a million [dollars] for the patent on the chair but for me to fight someone significantly is probably a $1million. So how much do you want to throw at protecting your products?

America’s cool; we’re just negotiating right now to put an office in Florida. We have an architectural firm that we get on really well with.

So – the culture is what I’m proud of. And culture is the asset that I own. We’ve got about four acres down Omahu Road; bought all the land beside us for another factory; got millions of dollars in machinery; but it’s the people. The people are who we are. So we created these four guiding principles that we all want to live by in everything we do.

So they live in the classroom – it was all designed that our customers live there so we should live there. We want to know more about what they want to physically achieve in a room than they do. And if we do that then they’ll always be our customer.

Always a better way – so that’s all about us embracing lean manufacturing; just in time; value versus waste; finding ways to be smarter, quicker and better tomorrow than we are today. We all know that Asia is a phenomenal force in manufacturing, being low-end cost, but the reality is for us to retain what we do here in Hawke’s Bay, we have to be better tomorrow. We’ve got to make sure that our people want to work smarter and harder tomorrow; we need to make sure that all the people that work on that can come and say … or change … whatever they think they should change to make their job more efficient.

Design for the future – we’ve got four guys in our design team. We’re working on some pretty amazing new things; some of them are six-month, twelve-month projects; couple of them are twelve-month projects. The acoustics is one big one that we’re working on right now; also the chair seat that you’re sitting on – we’re going to make it so that it’s 360 degrees. So it will be the same as you sitting on a Swiss Ball, but it’ll have a back on it. So if you’re sitting on that, in theory your inner core is working, which means that your brain won’t go to sleep, ‘cause you’ll fall off the chair. [Chuckles] That’s the theory.

And look to the world – we want to be world-class. We believe that we can be in the top two or three in the whole world in our sector, because not only have we got attitude, but we certainly know our customer – we believe more than any of our competitors in the world. The kiwi way has to be successful but we have to live on the fact that we need to do all of these every day as well.

So it is a challenge. I’d have to say that the thirty-two or [thirty]-three people that’ve joined us in Hawke’s Bay this year … we’ve found some amazing people. Three, four of them have moved from overseas to work for us – kiwis that wanted to return home. And we advertised globally, so that was pretty special, to bring people back; couple from London. We’re just seeing people arrive that … because we’ve got such a good brand in Hawke’s Bay, and we make an effort for that brand … is that we’re getting the sort of people we want. And if we can keep doing that, then we’ll keep growing the way we’re growing, ‘cause we can’t get bigger without great people, ‘cause we’ve had a few wobbles in the last two years, ‘cause, you know, growing quickly is bloody hard. And even though we have great people, we didn’t have outstanding systems, because the people carried the systems ‘cause they were great people. But when you add a lot of people quickly, you don’t have that DNA in the business.

So we have two shifts down there, two ten-hour days, so there’s only four hours left in the day, which probably, in theory one day we’ll find a way to fill it up. But the reality is, like any business, the more you’ve got going through your plant the more chance you have to make money. And I’m sure you’re well aware, we make a real effort to be in the community. We’re proud to be a Hawke’s Bay business; I mean, Graeme Lowe taught me that. And we get involved with so many things, and to me that’s the return on the investment. And it’s like, you know, your children, your grandchildren; my children, my grandchildren when they arrive; deserve to have the best in the world to help them grow.

So, that’s my gig.

[Applause]

Joyce: Pretty speechless … is [are] there questions, please? Amazing talk, Hamish.

Question: Hamish, sustainability is the buzzword everywhere, and particularly when we have this somewhat tarnished … potentially very close to being tarnished … clean, green image. So is what you’re doing in the sustainability area?

Hamish: Okay; so the Bodyfurn chair, which was the beginning of our journey in 2003, is ninety-three percent recyclable, so the only thing in there we can’t, is the powdercoat. All our tables are complete sort of cradle-to-cradle timeframe. All our products have a ten year warranty, although we’re just thinking of making it twenty years. ‘Cause in theory, we make it; we make it bloody well; we repair anything that breaks; the only other issue we have with soft furnishings is the vinyls, ‘cause in theory they’re not that easy to recycle. We don’t use recycled plastic matter in any of our products except the pencil-case unit, ‘cause the integrity of the plastic isn’t strong enough to make a virgin plastic product out of it. We recycle all our cardboard; all our waste. We’ve just gone to the highest echelon in the green star of New Zealand. We changed our gluing that we used for our table tops, so it was clean. The edge band we use is a recycled edge band; before it wasn’t. So we’re getting there; I mean, it’s something that you can’t achieve a hundred percent, but we use all New Zealand panel[s], so it’s not Asian, which … you don’t know what’s in it; use all New Zealand steel, so again, you know what’s in it. We recycle about a thousand chair plastics a year, and as I say, they go into a pencil-case unit. And we talk to the students a lot about it, ‘cause they want us to protect … as I say, they don’t want toasters every month thrown into the landfill. And I think New Zealand itself has moved on from The Warehouse having all the stuff that everybody thought was great, and now want the old brand back and one that’ll last; and generally give a gift that’s going to last. And I think that’s sort of part of our journey for the environment; our product will last for a long time, but we will take it back at the end of its life, and then we’ll find a way to recycle what we can out of it. And that’s quite a new initiative, because we had schools that, when we did the Bodyfurn tour and got a lot of new product into schools, they didn’t know what to do with the old. So in the last five years we’ve mainly been putting together containers and sending them to the Pacific Islands, so we did all of Tonga after the problems there; and we’ve just started with some of the schools I think in Niue. So we work with schools, get all the old furniture back, load it in a container, do a deal with the shipping company and then we send it off. So we try not to fill up the landfill.

Joyce: Thank you.

Question: Skilled labour – is that a problem for you?

Hamish: It’s probably not the skill – it’s the ‘attitude labour’. No, it’s not a problem, and I’m surprised, ‘cause I think it was about ten years ago, so I think everything was too easy. But now I think a job has more value for people that are working. We’ve just done this year the permanent night shift, so it’s twenty-one people, and we were quite blown away. We were a bit worried about it; we paid about a twenty-five percent premium to do the night shift. So a lot of people will do it, ‘cause it’s … you know, it’s four in the afternoon ‘til midnight, or ‘til one in the morning. So they can go home and get a sleep, and get up and look after their kids, or get them to school; so I think a lot of families are doing that because there’s some balance between husband and wife working.

But it’s not the skill, because we’re becoming more of a componentry manufacturer, so it’s more assembly. But it’s the attitude we want; we don’t want a hangover; we do want you to turn up five days a week. We spend a lot of time on the culture though, to get that, and that’s why I think we’ve got a lot of people applying to work for us. There’re a huge amount of staff barbecues; everybody gets Southern Cross … everyone in the business gets Southern Cross. We had four bouts of cancer this year within the family at Furnware … husbands and wives … and they’ll get the right treatment. And I think that goes a long way in showing people that we’re the bigger picture rather than, you know, “Can I get fifty cents an hour more down the road?”

But I think that right now, the bigger problem is probably more the pip-fruit for people, and the skilled labour. When you have an industry like that growing the way it is, and such a short window to capture your product and produce it and process it … they need to automate what they’re doing. We’ve just got a new engineer with a PhD, so he’s clever; a lot smarter than … and the other thing is everybody’s smarter than me, so it’s easy for me to go to work. [Chuckles] I am, I’m the thickest in the room. And he’s already talking to us, ‘cause we’ve already got four robots that do all the welding [on] most of our product; but we want to automate how we manufacture this year – we actually want robots to make the chairs. And we just designed a new table system that … university students can make the tables. So it’s not welding, it’s actually assembling, and we will get some of those bits made in China so we’ll be more competitive. But no, we just want attitude. We can pretty much train anybody who’s got attitude.

Comment: The hort [horticulture] industry is working on robot picking.

Hamish: Well I think you see a lot of the plantings – they look like they’re going along wires don’t they, like the grapes? ‘Cause like, Hydralada do amazing … great products.

Question: In terms of perception development, are you happy with the products you’ve got, or are you looking to inventing and designing new products?

Hamish: Yeah, no; we’ve got – I’d have to shoot you if I told you. [Chuckles] We really are working towards trying to do another world-class, you know, the best in the world product range – like, a whole family of products. And that’s based round acoustics, ‘cause as I say, that’s the biggest thing that’s thrown in by schools, was get their rooms quieter. They don’t specifically want curtains hung down, or acoustic panelling; although you could do so much in the roof, like you probably could in here. But the reality is, I’ve got four guys; we started a year ago with designers – we used external before that. Jessie, one of our designers, she’s an ex-schoolteacher, so she’s like … really is in the know. And yeah, we’ve got … I would think within the year we’ll have some product that we will patent, and go down that journey, just from the point of view that we should patent because we should try and pick a fight, ‘cause the reality is we’re getting to the size where we are getting a lot bigger. We’re not just a little, you know, place down Omahu Road any more. I mean, I would envisage that in a year we’ll have, you know, two hundred people down there, so I mean, you know, I have to protect them as much as protect myself, with product.

Question: Is there as strong a response in the secondary schools as there is in the primary for all this wonderful new design?

Hamish: Yeah, the secondary schools are freaking out a bit. Some are absolutely embracing it and just running with it, and then others are saying, “No, no, no, no, no – I want thirty desks and chairs – but you need some beanbags in the corner.” So there’s a bit of a compromise; but no, it’s happening, but it is around the pedagogy and the confidence of the teachers, because it is a big change.

But primary schools love it; how could you not want to be in one of those rooms? And the colour is a big part of it, you know, so people feel really welcome. I mean, especially going to see the students round at Flaxmere, that you know that it’s probably one of the highlights of their day. It’s just real, isn’t it? So you go there and you see these kids and … so we use an eight year old and twelve year old in our design committee, so we’re with them.

And we get about thirty or forty school tours a year, and we sit them down and ask them to do projects for us. We’re give them Q&A sessions; and do a factory tour and ask them what they’re doing; and you know, what do they see. And then we’ve got like, thirty university students started this week, ‘cause we’re seasonal for the start of the New Zealand school year. So yeah – we’ve got I think five engineers started, and you know, we’ve got doctors, physios, and they come back year after year. I remember our dear old friend Stuart Devine … Hamish and Angus … and he rang me one night: “Hamish, Stuart. Just want you to know I had dinner with the boys. Unbelievable! They’ve been sitting with someone all week having lunch, and he’s on $2 an hour more.” [Laughter] “And he’s been there thirty years; you’ve taught them so much. ‘Bye.” [Chuckles] You know, the reality of … they come in and they see what they could do all day for $15.50 an hour, or $16.00. We give a ten-hour flat rate, and we have no union; we just straight out look after everybody working out there. But we interview them at the end, and say, “What would you change?” We’re always trying to look for that … you know, always a better way. ‘Cause I mean you can come in there and you’re eighteen, nineteen years of age; again, you’ve got a real fresh thinker. So, “What’s wrong? What the hell do you think we’re doing wrong? Tell us!”

Hamish, this has been amazing; I’m sure it’s been an eye-opener for everyone. You’re just sort of like Ikea of New Zealand, aren’t you? I just wonder, have you been to the headquarters of Ikea just to see their approach?

I do go and steal some ideas every now and again … a little bit of R&D somewhere on the side.

I think he deserves an amazing round of appreciation.

[Applause] Thank you very much indeed.