North Shore Toyota is one of New Zealand’s largest and most successful car dealership chains. Founded in 1985 by Bob Jago, it’s now run by his son Mark, who’s taken an interesting route to the role.
North Shore Toyota has been through two major phases of growth – first in the early years, when Bob Jago acquired dealerships from Fletcher Challenge as they restructured their group, and then more recently, when the company took the bold decision to buy an additional dealership in 2010. As Mark says, “We actually started the negotiations right at the height of the global financial crisis in 2008, which was a good and a bad thing. Obviously, the business that was selling really had to sell. We probably still paid a little too much for it, but it has added scale to our business.”
As this suggests, Mark was already running the company by then, but it hadn’t always been that way.
After university, he trained as an accountant in Auckland, and when he qualified in 1998 he could have made the decision to join the family firm, but both he and his father felt the time wasn’t right: “I didn’t feel like I had much to add – I was just a newly qualified chartered accountant, and I really wanted to travel and work in the UK. Secondly, I didn’t think that Dad wanted to hand over the reins at that point, so I spoke to my partner at work and told him I was thinking of heading overseas, and he said ‘do it, that’s what I would do’.
That stint overseas lasted rather longer than Mark expected, and though he had always planned to return to New Zealand, it was nine years before he actually returned, in 2005. But he doesn’t regret it: “I had some fantastic experiences during that time, both in employment and otherwise. I built up a lot more confidence in myself and I took advantage of some pretty amazing opportunities.” He wasn’t sure, initially, if his long-term future lay with the family business, but as luck would have it, shortly before he was due to leave London, the CEO of Toyota New Zealand raised the issue of succession with Mark’s father: “My father was coming up to 60 and was looking to retire, and as far as Bob Field (the then CEO of Toyota New Zealand) could see, there was no succession plan in place. So he was the one who suggested to my father that I might be an ideal candidate, being a chartered accountant with experience overseas, and given that I was coming back to New Zealand anyway. So my father called me and asked me what I thought. So that’s how it came about – on a phone call at about 10 o’clock at night in London.”
But Mark didn’t step straight into his father’s shoes, nor did he want to: “By mutual agreement, I went through an apprenticeship at North Shore Toyota, if you want to call it that. I started by working for the operations manager, who was on the point of retiring as well. Even though I had worked in the business in Christmas holidays and as a student, you’re only exposed to a small part of the business that way. So working for the ops manager I got a much better handle on the complexities of the business.”
But it wasn’t just about learning the day-to-day running of North Shore Toyota; it was also about establishing the authority and credibility he would need to run it himself. Mark was very aware that many of the employees started by seeing him as ‘the boss’s son’, but with nine years’ experience behind him, he had the confidence to handle that: “There were people who said, ‘Oh here comes the boss’s son, and you better do it because he’s the boss’s son’, but you just call those people out and say, ‘Look, I am here to complete a task to assist the company, you can either help me or not’.”
That sort of open communication has stood him in good stead since, too, not least with his father: “There were situations early in my days as General Manager when I had made a decision and told the staff what we were doing, and some of those staff went to Bob and disagreed with me, but he supported me and stood by my decision, even though he did sometimes ask me in private what my reasoning was. He was pretty good in that respect – he allowed me to find my own feet and make my own mistakes, while making sure those mistakes didn’t affect the business as a whole. That said, I think it was difficult for him to hand over in the early stages – I’ve often joked with him that this business is his third child. In fact that’s a good analogy. It’s like handing over your baby, and until you’re sure that someone else is going to look after that child as well as you could, you’re always going to be looking over your shoulder and saying, ‘Oh I wouldn’t do that, I would do it this way’.”
Being the second generation of the same family to run the company can raise issues other CEOs wouldn’t face, but there are definite advantages too: “I could probably have a more open conversation with my father than an external CEO could have. Blood is definitely thicker than water, but that works both ways – he might actually be harder on me than he would be on an external CEO, but he is also a great mentor, and can see the job both as a shareholder and someone who’s done it himself. For example, we recently had a meeting with Toyota New Zealand’s senior management team, and my father came along, not as the manager of the business, but as its shareholder. So I was talking operationally to Toyota New Zealand, and Bob, my father, was talking about the return on his investment. We made it very clear that they were two different things.”
Perhaps the greatest challenge Mark now faces is to ensure that North Shore Toyota keeps up with the pace of change in the market, and in business life in general: “It’s a different world to the one my father faced when he started out. Part of the reason why I went overseas was because I couldn’t see myself working in the car industry – it was then a very insular industry, dominated by the entrepreneurs who had started their own businesses. How they ran their businesses was different back then, simpler I guess. But today, our business is run more like a corporation than a small family business.”
“In today’s environment you have to nurture people, both your employees and your customers. We train our salespeople that it’s all about personalising our service to the customer. For example, in our service business we can now offer specific appointment times, and pick up the car if it suits them. We have a lot of parents, for instance, who really like the flexibility that gives them as a customer.”
And digital technology is changing the game too: “Now you could literally buy a car on your smartphone. Do many people do that? Not at the moment, no. But in time they will. It’s very different from how it used to be in my father’s day – for example, he can’t understand why we need to be on Facebook, and in a way he’s right, since you’d never actually sell a car on Facebook, but you certainly do need a presence. People live on their smartphone these days. So I think I have brought in some new thought processes that are different to what Dad would have done. We’ve also invested in new ventures that complement that core business. For instance, we have two Firestone tyre operations and a rental car agency. But I’m very aware that you have to focus on your core business: if you take your eye off the ball for too long you will miss opportunities or, even worse, the business will miss you.”