While most Australians are familiar with the Kennards Hire name, what you may not know is the story behind this $330 million family business. My Business speaks with new CEO Angus ‘Gus’ Kennard about how the business grew from a single rural store to a household name, and what he is doing to future-proof it for generations to come.
It is often amazing to hear that what a business is best known for is not actually how it began its life. Such is the case for Kennards Hire.
“How it started was [with] my grandfather, who had a hardware business that used to sell lots of different products, and one of the products he used to sell was concrete mixers, in Bathurst [in central western NSW],” recalls Angus. He adds that his grandfather Walter ‘Wally’ Kennard chose to live in Bathurst because he suffered from asthma and sought the fresh country air.
“Someone said ‘Can I borrow your mixer?’ and he said ‘I can’t loan it to you, but I’ll hire it to you’, and that’s essentially how our business began.”
It was 1948 and the rural supply and machinery business went by the name of W. Kennard & Company.
“It was the days post-war … before pre-mixed concrete, but there was a bit of a construction boom going on, so lots of people were mixing concrete to make houses, and one time someone said ‘Can I borrow your mixer?’ and he said ‘I can’t loan it to you, but I’ll hire it to you’, and that’s essentially how our business began: that customer-centricity of just trying to sort out a customer’s problem,” Angus says.
His grandparents decided to return to Sydney in 1951.
“They worked out of my grandma’s garage in Mosman [on Sydney’s lower north shore], and then she got jack of that soon after: the phones were ringing and she was having to load concrete mixers onto the back of a ute. And then they moved to Artarmon in the early 60s, when my uncle joined and my dad joined,” he says.
“That was a 27-year partnership with the both of them. They started a number of businesses including Kennards Self Storage.”
Perception v reality
Kennards Hire presents a great lesson in how the public perception of a brand does not always align with the reality.
“The DIY [sector] is probably what we’re better known as, even though it’s only about 10 or 15 per cent of our business,” Angus explains.
“Most of our business is the man in his van, the tradie, even project managers on site ... large construction projects, specialty projects, as well as dealing with the likes of specialty utility companies and trying to find solutions for that.”
It is this large, lesser-known aspect of the business that helps to explain its impressive $330 million turnover in the 2015-16 financial year.
However, there is a degree of management required at an everyday level to ensure that trade customers are not deterred by the perception that Kennards is DIY-focused.
Another misconception still held by some members of the public is that Kennards Hire and Kennards Self Storage are the same business.
While they are both offshoots of Walter Kennard’s original company and are both controlled by members of the Kennard family, they are now standalone businesses.
Bigger isn’t always better
Forty years after the business relocated to Sydney, the brothers at the helm of the Kennards group, Angus’ father and uncle, decided to split Kennards into the two distinct business units.
“They couldn’t see how the next generation was going to work together, even though I’m very close with my cousins and we think it possibly could have worked, but at that time they couldn’t work that out, so they decided to split their interests,” Angus says.
“My uncle took the storage business and my dad took the hire [business].
“Funnily enough … the cultures of both those businesses, even after all these years, 25 years later, are still quite similar.”
Angus explains that this separation enabled each business unit to grow as an individual entity, focused solely on its own operations.
“Sometimes the breadth of knowledge and capability becomes too wide. We actually now need to refocus, and so we’ve had [discussions] around what [customers] need, so specialist concrete businesses, specialist lift and shift businesses, for example.
“By focusing on the customers and what they need, the offer can be quite different to a general hire store, and so it’s being able to meet their needs in a more tailored way.”
Reinventing a working model
SME owners can sometimes feel like they are caught in an uphill battle against larger, more established players. However, according to Angus, his business has its own set of challenges in adapting to technological advancements and changing consumer demands.
His comments suggest that bigger is not always better in business, and smaller operations with close customer contact and specialty knowledge can often add the most value.
“Even though we used to just be a general rental store, we’ve actually branched out into the specialist area as well. We have about six or eight of these specialist businesses that have a greater focus, which can better meet the needs of our customers,” says Angus.
These business units cater to a range of industrial and specialist customer segments, including traffic, rail and concrete care. Angus personally founded the latter in 2004.
“Our business model is more geared around being close to customers … We have a really broad customer base and our business model is set up to be the corner site, so it’s easy to get in, easy to get out and very convenient,” he says.
This business model, Angus adds, is designed with the needs of its customers at heart.
“With a tradie ... time is money for them, so whatever they can do to save time is actually money for them, and we can support them in being able to be productive,” he says.
According to Angus, Kennards Hire has been innovating new ways for its customers to access its range of products, to further streamline this emphasis on time savings.
“In the modern world people do rent things: you rent your music, you rent lots of things that traditionally you thought you’d never rent, so there’s certainly a trend towards that.
“[But] there’s also a trend towards online, and we have a new website that was launched only recently that has an end-to-end transactional [function]. It’s the first in the industry in the world, and what it allows people to do is to actually research at night, book it in and then pick it up the next day, and so there’s a connection [with] what’s available in that store at any point in time.”
Tied to this online service is the implementation of in-store technologies, such as mobile transaction devices, to enable staff to better assist customers and provide a seamless experience between online and in-store.
“That’s the challenge for us: how do we replicate the experience they can have in the store and actually do that online?” says Angus.
“There’s a deep level of sophistication to understanding customers to be able to try and replicate that.”
Like many family business operators, Angus says he was never pressured to enter the company, but has seen great value in working his way up.
Yet with 14 in the next generation, he says his business needs distinct rules around succession and the hiring of family members to ensure that both the business and the family remain on steady footings.
“There’s plenty of great businesses that have fallen apart not because of the business falling apart, but because the family has fallen apart.”
“Often when you’ve got a family business it’s hard to separate the business from the family, and there’s not a family meeting that goes by that we don’t have conversations around business. I have them with my dad all the time, and they’re great,” Angus says.
“[But] there’s plenty of great businesses that have fallen apart not because of the business falling apart, but because the family has fallen apart.
It’s about what structures you can put in place, what are the things you can do to actually ensure the bond of a family.”
For the Kennards, Angus says it was a lengthy two-year process to define the family values and how they align with the vision for the business, but it was a highly valuable investment to devise and implement a workable charter.
“I think it’s always easier for the next generation, who are actually growing up in that process. It’s all they’ll have ever known,” he says.
“We have a rule that if you want to come into the business you’ve got to work somewhere else for five years. Go and make mistakes on someone else’s watch, go and have to hire someone else or fire, or be fired, or be performance managed, or get a job yourself. That’s a critical thing.
“It could be five years, it could be three years, it could be 10 years. We just felt it was enough time for you to have to stand on your own two feet.”
Angus’ thoughts about success in business
On implementing innovations
“I think you can never get [innovations] perfect when you start, and so we got it to a point of about 80 per cent before ... it was perfect. That just actually provided a platform for us to measure the success … then it’s about refining what that is, and slowly building other features into that.”
On customer service
“That’s really why we’re here. Our ethos and our brand promise is to help make our customer’s job easier, and that’s what we’re here to do, and everything we’re trying to do is actually for that purpose.”
On service delivery
“I think when you have a lot of different channels of how [customers] come to you then you’ve got to adapt what your model is. Yes, there’s more people transacting online; does that mean there’s less people calling? Does that mean there are less people coming into the [stores]?”
On education and development
“A couple of years ago I embarked on doing an MBA because I felt like I needed more of a challenge. I think it gives you a different way of thinking, a different way of approaching problems, especially around leadership and how you deal with people.”
“I think with every business you go through growing pains, and it’s not a gradual thing; it can often be a bit of a step thing, of how you grow to the next level, and you’ve got to put resources and capabilities in to meet the needs of the business now and into the future.”
On the future of business
“There’s a sharing economy that’s coming, and how’s that going to affect us, and we need to be able to plan that space and be aware of what’s going on around us, so positioning ourselves for the future is going to be quite critical.”
To maintain sanity, Angus says it’s important to switch off and engage in something far-removed from your business.
For him, that involves getting behind the wheel of a rally car.
“When you’re hurling through the bush at warp speed, you’re not giving much thought to any of those [business] issues at all!” he says.
Kennards Hire is a strong supporter and sponsor of Rally Australia.
Industry: Equipment rental
Headquarters: Sydney, NSW
Locations: 160 stores across Australia and New Zealand
Employees: Approx. 1,400