At the helm of a $58 billion-a-year industrial conglomerate, Richard Goyder has narrowed a wide job description as managing director of Wesfarmers to a role that is at least manageable.
“My role is to set the direction of the organisation,” he says of a company employing more than 200,000 people across retailing, resources, insurance, chemicals, energy, fertilisers and industrial and safety product divisions.
“The second thing is to put top divisional leaders in place who can lead the organisation. We have a big focus on people. There is nothing Wesfarmers does that a competitor can’t do. The only source of sustainable competitive advantage we’ll ever have is the quality of our people.
“And the third thing is to live the values of the organisation. We have four core values as a group – integrity, openness, accountability and boldness. If I want people to take these values seriously, then I have to live them as well.
“I try to make sure there’s continuing energy, innovation and creativity in the organisation. We are performance-driven at Wesfarmers. The day you start thinking you’re going OK is the day someone is going to come along and whack you. So you should never be satisfied. And we should be our biggest critics.”
Goyder presides over a company that most Australian shoppers have contact with at some point. Among its brands are Coles supermarkets, Liquorland, Vintage Cellars, first CHOICE liquor, Target, Kmart, Officeworks and the Bunnings home improvement chain. Under an exclusive alliance agreement with oil giant Shell, Coles Express is a fuel and convenience store operator.
Across Australia, Wesfarmers operates more than 2200 supermarket, liquor and Coles Express outlets. Wesfarmers also operates several gas businesses, and is an open-cut miner and a leading metallurgical coal producer for export and domestic markets.
The sheer size of Wesfarmers is rarely more evident than during reporting season. For the year to June 30, 2012, the company generated operating revenue of $58.080 billion, a 5.8 % increase on the previous 12 months. It reported a net profit after tax of $2.126 billion, up 10.6 % on 2011. To put Wesfarmers’ revenue in some sort of perspective, global media giant News Corporation’s total revenue for the year to June 30, 2012, was about $US34 billion.
To manage a diverse Wesfarmers, Goyder relies heavily on each division contributing to the company’s objective of providing decent returns to shareholders. Divisional managing directors are called to address the board about performance.
But in between board meetings, Goyder expects to be kept fully informed on each division’s operations.
“I’ve always said, I want bad news to travel faster than good news within the group,” he says. “What I expect from my leaders is no surprises.
“We have very open communication channels for a reason. I also expect my leaders to generate a decent return on invested capital and to protect and enhance their company’s reputation.
“We give our divisional leaders a lot of space in running the day-to-day operations. With that comes accountability. People love the opportunity to make decisions and be responsible for them. There’s nothing magic about it, but it seems to work.”
Goyder joined Wesfarmers in 1993 and was appointed managing director in July 2005. In 2007, he orchestrated the biggest transaction in Australian corporate history when Wesfarmers bought Coles Group for $19 billion.