After an uphill battle to garner recognition for naturopathy in Australia, Blackmores has cemented its position as Australia’s leading natural healthcare company, and a key driver behind that success has been its innovative approach to people management. Sarah O’Carroll and Zoe Lyon speak to CEO Christine Holgate, chairman Marcus Blackmore and director of people and strategy Richard Henfrey.
When a candidate is being
interviewed for a leadership
position at Blackmores, the
first thing they are asked is
“Can you tell us what nat
ural health means in your life?” It’s not
your typical interview opening, but a pas
sion for natural healthcare is such an intrin
sic part of Blackmores’ heritage and culture,
that it’s not surprising it’s the number one
prerequisite for potential employees.
The building blocks
Natural healthcare is far more than a rev
enue generator for Blackmores, it’s a value
that has been embedded in the fabric of the
company since it was started by Australia’s
pioneer of naturopathy, Maurice Black
more, in the 1930s.
An English immigrant, he was intro
duced to naturopathy while he was look
ing for ways of alleviating his own health
problems, and from his Queensland base,
he grew the Blackmores business from the
ground up.
Building a business based on alterna
tive medicine during the 1930s and 40s
was no mean feat. A passionate believer
in natural health, he strongly advocated
the values of naturopathy in the face of
hostile opposition from the medical pro
fession, and in the 1950s he successively
lobbied against the Queensland Gov
ernment’s attempts to ban it. Maurice’s
aim, which he worked diligently to
achieve, was to bring naturopathy within
the consciousness and reach of the main
stream population.
According to Maurice’s son, Marcus Black
more, who grew up around his father’s com
pany and is now the company Chairman, his
father’s dream was that Blackmores would be
the launchpad for naturopathy as a profes
sion – a dream that wasn’t realised within
Maurice’s lifetime. “He didn’t achieve his
vision in life, and on his deathbed in 1977 he
said to me that the sad thing about his life was
that he’d never seen naturopathy [recognised]
as a true profession,” Marcus says.
If Maurice were still around today, he’d
have reason to be proud of what has been
achieved. Over the last 60-odd years,
Blackmores has grown to become Aus
tralia’s largest natural healthcare company and
can be confidently described as a house
hold name. It holds more than 20 per cent
market share in chemists and supermar
kets, generates about $195 million in rev
enue annually, and pulls in after-tax profits
of nearly $20 million every year. It also
has a sizeable market presence in Asia,
with about 15 per cent of the business
comprising exports to countries such as
Thailand, Malaysia and Taiwan.
Despite the company’s steady expansion,
Marcus says that his father’s passion for
natural health is as strong in the company
today as it ever was. “The very roots of this
business are built in naturopathic philoso
phy and that still guides me and the people
in this place about the sorts of things we
do,” he says.
The happiness factor
When it comes to managing the company’s 400-strong work
force, Marcus says the company’s philosophy is simple.
“You’ve just got to make people happy,” he says. “I
know in my own mind and in my own heart that happy
people are more productive, they’re more innovative,
they’re more creative. I say to my HR manager: ‘Who did
you make happy today?’ That’s your job.”
To bring this philosophy to life, the company has imple
mented a number of innovative strategies – some dating
back to the days when Maurice was still steering the ship
– one being a Christmas bonus for all staff.
“My father used to give people a week’s pay at Christ
mas-time and it’s a tradition that we uphold today. He
said: ‘You must pay them the bonus before Christmas
because that’s when they need their money’.”
Though the concept remains similar, the Christmas
bonus system has become a little more sophisticated, with
Marcus converting it to a profit-share scheme involving
all employees and 10 per cent of the firm’s after-tax prof
its divided among the staff twice a year.
“I did that for a very deliberate reason,” Marcus
explains. “If we don’t make a profit, we don’t pay our
dividends, and we won’t be in business. I wanted people
to really understand the notion that we have to make a
profit in this business and the one way of doing that was
to share the profit with them.”
Another of the company’s more unusual traditions is to
give each employee a ham at Christmas time – a relatively
low-cost perk which boosts staff morale.
“The ham doesn’t cost that much. If you went around
to the staff and said ‘I’m going to give you a salary rise of
$1.20 per week,’ I know what they’d tell me to do with it.
But if you give them a ham for Christmas, and they sit
down to Christmas dinner and someone says ‘That’s a nice
ham – where did you get that?’ and they reply ‘We get that
at work; we get that every year,’ it really says something
nice about the place you work,” he says.
“I just think it’s about looking after your staff. It’s
part of doing the unexpected little things that other
companies don’t.”
Managing workplace reforms
The incoming workplace relations reforms have many HR
managers spinning plates. However, Blackmores’ director
of people and strategy, Richard Henfrey, believes the com
pany, which employs all staff under a collective agreement,
is well positioned for the changes.
“The philosophy we have here has led us to err on the side
of being more, rather than less, generous in pretty much
everything we do,” he says. “Clearly one of the challenges
most HR departments face at the moment is the new legis
lation, but our view is that there’s not actually very much that
needs to change with our collective agreement because …
we’re already well inside the new conditions.”
Marcus adds that the company’s philosophy in forming
the agreement was to develop an employment package that
all staff would be genuinely satisfied with.
“The regulatory requirement for collective agreements
is you have to have 50 per cent agreement from your staff
plus one. What that suggests is that you put in place a set
of criteria which people are bound by and you’re going to
accept it if only half the people vote for it. I think that’s silly.
“It can’t be a collective agreement if half the people
don’t like it,” he says.
“We have a totally different attitude here. We feel is
that our collective agreement is not an agreement that those
outside the company – namely regulators or government
– foist upon us. It’s a document that we as … individuals
that work for the company choose to be bound by.”
Marcus explains that the company actively sought staff
input when establishing its agreement, and, as a result, it
received a 97.5 per cent acceptance rate. “That’s unheard
of,” he says. “It’s unheard of in companies but it’s because
we approached it from a different perspective.”
Building a high performance workplace
While staff might be getting a seemingly good deal at Black
mores, Marcus is quick to point out that he also expects
a high performance from them.
“The basic principle is that you pay them more than
they would expect elsewhere, but then you also justified to
expect more performance. Yes, we’re generous, but we
also expect that that generosity is reflected in the work
place and that people will go that extra little mile for the
business,” he says.
Marcus believes that treating employees well and setting
high performance expectations is important, because many
companies fail to measure – and recognise – the enormous
potential value that employees can bring to a business.
“The great failure of business, not just in Australia but
in the world … is that there is great repetition in chair
men’s reports of companies saying ‘Our people are our
greatest assets’, then, when you look through the finan
cial statements, nowhere can you find any value on peo
ple in the organisation,” he says.
“What happens in organisations is that if I want to go
out and buy a forklift, you’ll need pages and pages of jus
tifications, but then they’ll go and put on an extra person
in a flash. It’s just amazing, because we really don’t appre
ciate how much people are worth to us. What we do inter
nally here – and what I ask people to really think about –
is how do we put a real value on the people that work in
the organisation?”
Weathering the storm
According to CEO Christine Holgate, the economic down
turn hasn’t broken Blackmores’ stride, and she says the
company, and the natural healthcare industry as a whole,
is continuing to grow strongly.
She believes one of the reasons is that in a downturn
people are more likely to go to a chemist rather than a
doctor and that phramacists are more likely to consider
alternative medicines.
“Pharmacists are trained to give advice on comple
mentary medicines, so they’re more likely to recommend
complementary medicines than a doctor. And when you get
into a chemist you’re more likely to see Blackmores. We
have 30 per cent of shelf space in a pharmacy,” she says.
She also believes Blackmores’ strong brand has been a
benefit as the economy has slowed. “People do switch to
strong brands – both retailers and consumers – in tougher
times because they want to make sure [that] what they’re
buying works and they can trust it, rather than perhaps
something they don’t know about.”
Henfrey adds that the company has actually used the
downturn to recruit to top talent, particularly at the sen
ior management level. “If anything, the economic down
turn has been an opportunity for us – particularly on the
people front – because it allows us to bring new skills into
the business,” he says.
“We’re undergoing a changed management program
that’s seen us do a bit of a restructure ... and bring new,
experienced people in. It’s been a good time to do that,
rather than, say, 18 months ago, when talent was very,
very scarce in the market.”
Moving forward
Maurice Blackmore faced an uphill battle when he launched
Blackmores back in the 1930s, but his hard work has paid
dividends and Blackmores has played a key role in bringing
alternative medicines to the consciousness of the masses.
Having secured the position of Australia’s number one
natural healthcare company, and boasting a product line
that appears relatively unaffected by the economic down
turn, the future for Blackmores looks healthy.
