Business Brilliance Have you got the next rich lister in your company?

The Mowbray brothers topped the NBR’s Rich list this year. They got there by being brilliant at business[1], not by winning Lotto. There may be people in your business with similar capabilities. People who are brilliant at business have business acumen which is the ability to position an organisation to make money and return value to stakeholders. It is quite neatly summarized by Nick Mowbray:

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“We would do everything in our business to make it more and more and more profitable, which to me is the whole reason of building a business[i].”

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Over many years we have been researching characteristics of people with business acumen - who can make a business profitable and return value to stakeholders. Based on interviews and factor analytic studies of 400 business people we have identified three factors. ?

1. Deep understanding of business

This involves?really?digging into the numbers of the business. To have business acumen requires a deep understanding of costs and where the company adds value, and then being able to operationalize that knowledge. People with this capability are thinking long term?and?working in the here and now. Discussing how the Mowbray’s built a brilliant business Massey University Professor Bodo Lang, says: "They conduct research into product categories where they believe they can provide value for consumers. This value may mean lower prices, and/or better quality. Once they have identified such an opportunity their other strength comes into play: efficient production.”[ii] Their sister Anna, who was also involved in founding the business, says: “We knew everything down to the cost of the raw materials, labour and regulations, and could negotiate better and set up products and production faster by optimising the process through the value chain. That let us disrupt business in unique ways – not just with engineering but also with pricing.”[iii] Anna says she knew “everything from the cost per kilo of plastic to the per meal cost of feeding the staff and expected the same line-by-line detail from factories competing for her business.” ?

2. People developers and relationship builders

According to our statistical studies the second biggest characteristic of people with business acumen is their ability to develop people and build relationships. It is often not considered when we think of good business ability, and contrary to some beliefs people with business acumen want others to succeed, they don’t want to rip people off, and they want long stable relationships with business partners recognising that doing so minimizes the cost of doing business.? There isn’t so much in the public domain about this aspect of the Mowbray’s business acumen but we do get some insights. They recognised early on that they needed to partner with manufacturers (though they subsequently bought their production in house) and that they also needed to partner with distributors. They credit their partnership with Walmart as being a breakthrough for their business and they moved their USA headquarters to the city where Walmart is headquartered in recognition of how vital that relationship is to their success. Chris Wilkinson, retail consultant talking to Radio NZ says they engaged “the eyes, ears and hearts of the big brands - the Walmarts etc - once they've got them they've had the tenaciousness about keeping those relationships."?[iv] People with business acumen are equally focused on growing the capability of their employees. Nick Mowbray: "I'm trying to find the best players and find them really early – and then I'm trying to provide them a platform to succeed. "I think great leaders, their job is to serve the team. So my job is to create an environment for them to really succeed. I guess that's the whole thesis for us building Zuru Edge – we want to be a people-led company that just happens to make consumer goods, not a consumer goods company run by people. It's a really important distinction, because people come first if you get incredible talent on the team."[v] ?

3. Energised by business ?

The third characteristic of people with business acumen is they are energised by doing business, - they are invigorated by deal making, negotiating, pushing forward and succeeding. They are optimistic and resilient. The Mowbray family are legendary for their energy. Described as having an “unparalleled grit, spirit of innovation, and the competitive ethos,’’[vi]?and they have always been open in their ambition to be "the next Apple, Google, or Tesla".[vii]?In Nick’s case this wasn’t always healthy as he developed an illness which he ignored and which almost killed him.?[viii] Anna says that the secret to the family’s success is hard work, tenacity and when they hit a hurdle, - which they often did in the early days, - they would get back up and do it better the next time.[ix] ?

Where are your Mowbrays? Two actions to take now.

Some people seem to quite naturally have the characteristics of business acumen and while you may have some of those people in your business, our bet is you don’t have enough. To strengthen the business acumen capability of an organisation business leaders have two tasks. Firstly, business leaders need to continue to grow and develop the people who have business acumen because if they don’t that talent may well leave either to join other organisations or to start their own business. Often business leaders know these people. Continuing to extend these people by offering opportunities that stretch them is good for them and good for the business. Secondly, business leaders need to find the people who sit just under the radar who have the potential to develop business acumen. Get business acumen put on the criteria for people who your organisation sees as being high potential. It is likely that the business is going to have to actively work at identifying who the people with the potential to be the next Mowbrays are, and then to work out how to develop them. ?

How to assess business acumen

One outcome of the research is the development of a measure of business acumen. It measures all three factors of business acumen. It is called Business Mindset and I have partnered with?Added Insight?to make it available.?There are two versions. One is for development purposes and the other is for selection purposes. It is a statistically valid tool and a useful one for growing business acumen as an organisational capability. If you would like to talk more about business acumen and how to use Business Mindset questionnaire in your business give?Cynthia Johnson?a call – 021 443 652.?

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[1]?The Mowbray’s own Zuru. It is in the toy and consumable business with revenue of $NZ3b (2023) which is forecasted to grow to $10b in the next five years.? Zuru seems debt free with the business funding expansion. The company employs about 5000 people around the globe.

[i]?https://www.forbes.com/sites/noahkirsch/2019/08/20/to-infinity-and-beyond-the-mowbray-siblings-assembled-a-billion-dollar-fortune-from-cheap-toys-can-they-create-something-grander/ [ii]?https://www.rnz.co.nz/news/national/519138/who-are-new-zealand-s-richest-siblings-zuru-owners-mat-and-nick-mowbray [iii]?https://www.nbr.co.nz/mowbray-family-3/ [iv]?https://www.rnz.co.nz/news/national/519138/who-are-new-zealand-s-richest-siblings-zuru-owners-mat-and-nick-mowbray [v]?https://www.nzherald.co.nz/brand-insight/the-man-who-wouldnt-stop-and-nearly-died/P55WIF2QT62T2MDPJGKUXSPE6I/ [vi]?https://www.founderoo.co/playbooks/nick-mowbrays-zuru-journey-from-20k-to-a-billion-dollar-toy-empire [vii]?https://www.rnz.co.nz/news/national/519138/who-are-new-zealand-s-richest-siblings-zuru-owners-mat-and-nick-mowbray [viii]?https://www.nzherald.co.nz/brand-insight/the-man-who-wouldnt-stop-and-nearly-died/P55WIF2QT62T2MDPJGKUXSPE6I/ [ix]?https://www.nbr.co.nz/mowbray-family-3/

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