CEO of Haigh’s Chocolates, Alister Haigh
Chief executive of a 101-year-old family-owned company has chocolate in his veins
Ask Alister Haigh about the benefits of joining the family company and he has to think about it. “Well, I didn’t have to go for a job interview,” he offers, erupting with laughter. Truth is, there wasn’t much choice. As the eldest son, Alister was expected from an early age – as were his father and grandfather before him – to join Haigh’s Chocolates and eventually take the helm of the renowned Adelaide-based business founded by his great-grandfather Alfred in 1915. “There was a bit of convincing by others that this would be a good career,” he says, still laughing.
Alister’s maintained the steady course set by his predecessors and today Haigh’s turns over about $50 million a year, employing 400-550 to hand-make and sell some 750 tonnes of chocolate via 250 different product lines. (Alister’s favourite, incidentally, is the dark chocolate-covered real apricot with fondant cream, dreamed up by his great grandfather and reportedly difficult to make.)
The company’s stores, spread across three states, are known for their friendly ambience and professional staff and that’s one benefit family-owned companies can encourage, Alister believes. “Your team can identify with the owners. Pretty well everyone who comes into the business says it has a nice feel and culture about it.” Even more effective, he believes, was an early steer he got on how to manage staff. “One of the best things I learned was to treat your tea m as volunteers. If you are with a notfor-profit you’ve got to be n ice to volunteers because they can walk away if they don’t like it. So do the sa me: ignore the fact that they actually get paid. T hat ’s t he culture I’ve tried to follow and instil in ever yone.”
It pays off. “We see over 2 m illion c ustomers a year, so i f you treat your team well, hopefully, they’ll treat the customer well. Then they keep com ing back so it ’s one of the ea siest ways of ma intai n ing customer ser v ice.” The same applies on the production side. “We have to do prett y well all our own trai n ing i n-house a nd if you spend months, sometimes yea rs, training people, you don’t want them to wa lk away.”
There a re new k ids on the block today, trying to muscle into the market – singlestore and small chain operators selling chocolates in cafe environments. Alister’s unfazed. It’s not a direction his company will take. “We raise the subject every year in our strategic review and decide it’s not an area of strength for us to run cafes. Also, it seems to be a very competitive market so we’re happy to stay out of it.” Besides, the company has seen off plenty of rivals over its 101 years. It’s proud to be the oldest family-owned chocolate maker in the country.
Much of the brand’s prestige and staying power is due to the input of Alister’s father John Haigh who, at 87, remains chairman of the company and its largest shareholder. He’d joined the business in the 1940s and identified six companies around the world to benchmark against and was accepted to work with Lindt in Switzerland. “He wanted to be proud and make a world-class chocolate,” says Alister, who continues to benchmark against Lindt today. “They’re nearly the biggest chocolate company in the world and the way they’ve managed to maintain their quality is fantastic.”
Unlike Lindt, however, Haigh has stayed clear of supermarkets, a decision also made by his father who had gone on to study retail and marketing methods in the US. “A supermarket approached him to make some lines and he knew he’d have to gear up the factory to do that. The day you do, you become beholden to those customers so he decided against it. We’re not chasing volume and we’re keeping the premium. We’re still
very much a hand-made boutique chocolate maker.”
The generation that produced Alister and his younger brother Simon was the first in four to see more than one son. Simon chose to come into the business a few years after Alister and the brothers were appointed joint managing directors in 1990. But they found sharing the role could be tricky, Alister explains. “Team members would come to one of us and ask something and, if they didn’t like the answer, sometimes they’d go to the other one, hoping to get a different answer. That’s when we split the roles.”
To help them decide who did what, the brothers sought help from psychological profiling experts. “We thought it would be a good idea to profile all our key people, including ourselves, because we wanted to make sure that we had round pegs in round holes. It was good because it enabled us to sit down and say this is actually us, not what we think we are, and we should accept that. For the company to grow we had to work out our strengths and weaknesses. This was the easiest way because dad obviously couldn’t make up his mind so we didn’t have that mentor or a board to be able to make that call.”
Alister became chief executive while Simon took the role of chief financial officer and the pair continue to share an office. Alister reports little friction. “Fortunately, our skills complement each other. Simon’s very happy working with computers and figures. I don’t have the patience for bookwork so I concentrate more on people management and things like that.”
On his father’s advice, Alister had skipped university to join the company after a spell jackarooing. “Back in those days dad said universities couldn’t possibly tell you how to run a business because they’re full of academics. I think it’s a lot better now.” But over time Alister felt he needed to learn more so he turned to The Executive Connection (TEC), a membership association that mentors and coaches senior business executives. “After about 10 years in the business I had realised there were things I needed to know. I’ve learned most of my business skills from TEC.”
As with many family-owned ventures, Haigh has to navigate the tricky straits of ownership and succession for following generations. Until his own there’d been one shareholder per generation – the only son, who also ran the business. That’s changing, not least because Alister and his brother and sister have 11 children between them to consider. “We’ve dispersed ownership only to a limited degree. This is what we have to face: how can we treat all family members equitably without being equal, so that shareholding doesn’t get too fragmented? That’s the trick to a family business and that’s one advantage of being associated with the Family Business Association, because family companies have different issues. Some have over 50 shareholders and they say it’s an absolute nightmare.”
The advent of dividend imputation and franking credits has helped. Before their introduction in the late 1980s, family members had to work in the business for any of their payments to be taxdeductible to the company. “There’s talk about scrapping the system but it has enabled us to separate out working and ownership, which is critical in a family business,” says Alister. Nor is succession planning such a worry for Haigh’s today. “We’ve grown to a stage where the business can pretty well run without Simon and myself. There are enough non-family managers and experts [seven] to look after the business and that’s relieved that pressure on the next generation to necessarily come into the business.”
In any case, Alister never wanted his children – all of whom have worked part time at Haigh’s – to feel the same obligation to join the business that he faced. “I’ve told my children they’ll effectively own part of the business – with siblings and cousins – but they don’t have to work in it. If they want to they’ll apply for a job and, if they’re the best qualified, they’ll get it.” All three have developed chosen careers, although his accountant son Charles and daughter Emily, a marketing executive, have expressed interest in working for Haigh’s in future.
Alister and his wife have long taught them to be independent anyway. “We’ve tried to instil in them that you actually have to earn money, you don’t get given it. We’ll be there in an emergency – although some of their definitions of ‘emergency’ are a bit different: ‘I need this jacket and I don’t get paid till next week’,” he says, laughing again. “On the whole they’re pretty good. If they want to save for the deposit on a house that’s up to them. If they choose to spend their money socially, then we’re not going to give them a handout.”
He’s affable and relaxed with a ready laugh, often at himself. But Alister’s apparent ease belies the fact that he still puts in long weeks – in the office and out of it – on family business and rarely takes a break. Nor does his brother Simon, although the pair are working to change their ways. “It’s an issue as the company grows. People think they’re doing the right thing by not taking leave and you’ve got to change their minds. We’re the worst of the team in taking holidays so we’re forcing ourselves to get better. We’re trying to lead by example.”
“We wanted to make sure we had round pegs in round holes”