How do we right-size SMEs in New Zealand?

The REACH we are familiar with today bears little resemblance to the ReachMedia that CEO Struan Abernethy assumed leadership of in 2019. Here he outlines the transformation he has steered in the company to support the growth of New Zealand businesses.

You don’t get a much bigger challenge than the one CEO Struan Abernethy undertook when he acquired what was then ReachMedia, in July 2019. He was joining a business that was operating in a fiercely price-driven monopoly in its core product of letterbox marketing. It was suffering from an erosion of profitability, had low morale and high staff churn, and was confused on identity, direction and relevance in a rapidly evolving digital marketing landscape. 

Struan, was an experienced business professional and CEO with over five years experience as Global CEO of a
sales and outsourcing company.

“I was asked by friends and family at the time, what the hell was I taking on, but as my dad used to tell me, ‘A faint heart never won a fat turkey’,” he says.

Fast-forward four years and the previously magenta pink-branded and solely letterbox focused ReachMedia has evolved into REACH – a transformation that is significantly more than just a coat of paint. 

Getting out of bed for ‘NZ Inc’

REACH has brought together data and insights to help clients understand households and shopping behaviour, a rejuvenated letterbox product, and digital marketing services. Now it’s a business built on its philosophy of ‘traditional and digital marketing working together’ for maximum results to help New Zealand businesses grow – especially SMEs. 

Struan’s tenure as a leader in New Zealand, and more recently at REACH, has seen him working alongside a broad range of more than 3000 New Zealand businesses from SME to enterprise. But he’s hyper-aware of the rate at which businesses fail from a lack of commercial prowess, strategy, external factors, and cash flow. Business is hard, but what’s become apparent is that there is a formula that works, and this is one Struan has applied to his own challenges.

Why do so many New Zealand businesses fail? 

Struan spots fundamental problems with how SMEs are run and used this insight to evolve REACH. His critical top five are:

Get your humans right: Do you know what you stand for as a ‘people-force’ before a ‘workforce’? It starts with the hire. It extends to the induction. It grows and flourishes through the alignment of value and your business succeeds through the effective engine of human interaction and results. First, align your leadership group. REACH invests in this regularly, with offsites exploring areas including vulnerability and trust across the team and introduced recognition rituals. “People grow, laugh and cry and everyone leaves the event aligned.” And the results speak: people engagement scores across the past 3.5 years at REACH have ranged from a low of 82 percent to a high of 97 percent.

Create an authentic culture: Struan detests the rising ‘tick box of diversity’ in corporate culture. “I’ve always worked with a solid range of leaders in my teams, where gender diversity and cultural variety naturally existed. However, this has been born out of good hiring for values alignment rather than making sure we have a certain number of ‘X gender’ on our leadership team, or a range of countries represented.

This might seem controversial, but Struan is advocating for diversity – under a strategic umbrella of understanding the business’s heart and soul rather than what looks good for PR.

REACH has 17 different nationalities and a real mix of genders at leadership level and through the wider team. He says this was achieved by employing the best candidate for the role aligned to the business’s ‘good humans’ value.

“Know how to hire for culture, values, and high performance, and remain open and curious about what a variety of humans can bring to the table. Also, know how to shed those who don’t fit – quickly, respectfully, and effectively.”

Understand brand value: Your brand is not a logo. It’s who you are, what you represent and what you believe in. Brand excellence is having customers who feel that your product or service improves their life.

“We brought in a brand strategist who accelerated our thinking. When you have a clear brand proposition, it informs everything in your organisation such as values, recruitment, language, cultures and the value you bring to your customers,” says Struan.

The REACH brand strategy was built around harnessing the differences in market, to create distance from the competition, including strong data-science capability and customer service rigour.

“There was risk in this approach as we were not always the cheapest, but this positioning led to significant market share gains and a dominant position in letterbox marketing, as well as the ability to ditch the ‘price war’, which competition had driven.”

Know your numbers: Many businesses fail to bring their people on the numbers journey, either because they don’t think it’s necessary or don’t have a good handle on the numbers themselves. But transparency with the financial indicators is a game-changer for empowering your team to play a part in the revenue and profit picture. If your culture is right, everyone should feel like they have skin in the game.

“We have a ‘don’t leave money on the table’ value at REACH. This isn’t just about salespeople selling more marketing services, this extends right through to finance, developers and beyond – especially our clients,” says Struan.

Whether direct or indirect, everyone at REACH knows they can impact success by the ways they build relationships, curiosity, and diligence in diving into the details on numbers and costs.

“Strength, transparency, and alignment enabled us to break the price-war game we were in with a key competitor at the time, by shifting from a price sell to a value sell. A massive achievement for REACH in terms of how customers viewed us, and the value we bring to their businesses.”

Don’t make assumptions: We all have assumptions about our best customers – what they think of us, what they need, and we also have assumptions about those we didn’t convert or that left us. Often those opinions and assumptions serve ego and a fear of failure, rather than fuelling us to build better businesses and better products.

Through formal research or casual chats and online surveys, gather insights (good, bad and ugly) from your customers and non-conversions. Wherever you can, go in with an open mind and neutral curiosity and you will see it serve you no end. Find way to gather feedback on a regular basis and use it to help shape direction. 

What next?

Struan is excited about the journey ahead. “Transformation is never really finished, and transformational leadership never stops. We should always challenge the status quo. We have come a long way, and I am proud that investment in leadership, culture and brand has delivered a new business with a stronger market position.

“I’d love to see other businesses across New Zealand realising sustained growth by adopting some of the key factors we’ve used at REACH.”

This article was first published in our December/January 2023/2024 issue.

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