The history of dynastic family businesses often gets summed up this way: the first generation starts it, the second generation builds it and the third generation destroys it.
Well, the Beard family’s bed-making saga has defied that old business curse, as Gary Beard and his brother Allyn take this iconic Australian family business, which churns out 350,000 beds a year, into the 21st century! And what’s more, they make a damn lot of their beds right here in Australia.
But wait, there’s more.
The company exports beds to China!
Who was it who said that manufacturing is dead? Whoever it was, they didn’t tell the Beards.
Call me weird (or maybe just a tragic lover of Aussie success stories) but I cried when Kieran Perkins took gold in Atlanta from lane 8. And I tear up when great local family businesses take on the world. I hope and suspect I’m not alone on that subject.
The Beards are in the pantheon of great business achievers but like good sleep, they’re silent achievers, like a lot of inspirational family businesses. In coming weeks and months, I’ll try to change that, by blowing the trumpets for these Aussie achievers.
These days, Gary is Chairman and MD, while Allyn’s marketing director. Their two sisters, Christine and Lexie are on the board. However, things are in the process of changing and coping with change appears to be one of the strong reasons for A.H.Beard’s success.
“We’re moving towards a professional team with a CEO, CFO and a leadership team that covers marketing, operations, purchasing, etc.,” Gary explained. “The fifth generation is working in the business but they’re in their early 30s and still learning the ropes and that’s why we have non-family personnel in management roles.”
After 12 years in the top role, Gary admits that he found letting go to others “unsettling”. However, once the newcomers came to understand the family’s values, he admitted it became easier.
How did he get across the ‘letting go bridge’ that so many family matriachs and patriarchs find difficult to traverse?
“I have to say that without my involvement with Family Business Australia since 1999, in meeting the right people, who understood what the game was about, I wouldn’t have achieved the harmony to get them to understand how to move forward.
“And without the FBA, it would not have happened.”
Gary said he and Allyn “were brave enough to lock themselves away for three days” with an expert on family business leadership issues.
“And without him, we could have self-destructed.”
The process involved understanding what all four siblings wanted. Did they want to sell or build the business up with professionals so it could go on to the next generation?
Like many family businesses, the way shares in the business were carved up was complicated, so an acceptable arrangement to all parties was critical to ensure the business succeeded going forward.
To understand the potential threat to this exceptional business, Gary concedes the allocation of equity didn’t suit all parties.
“With the help of what we learnt from the FBA, we got the stinking fish from out under the table,” he explained. “As part of winning over our siblings, Allyn and I convinced them we could grow a bigger pie using professionals, so each slice would actually be bigger and that’s what we’ve been able to do.”
Over this new period of management, A.H.Beard almost doubled its revenue. “And, over time, monthly meetings with our siblings went from monthly to quarterly to every half-year, or if and when a major decision is to be made.”
As they say nowadays — all’s sorted.
And part of their modern day success story has been A.H.Beard’s long march into China.
To understand their preparedness for a move into exports, the company produces in five states, have a factory footprint of 70,000 square metres with over 500 workers and lately, they’ve licensed IP on a unique bed concept to the US, Russia and Singapore.
Their China story started in 2014, with none other than John Howard launching the export drive as an ambassador for the business.
“Three savvy Chinese ladies, all in their 30s, who sell imported-looking apartments in China were our partners,” Gary explained. “They saw the next wave of imported products coming to be bedding and after doing their homework on the Internet and reading our story, they contracted us to make beds here in Australia to send to China.”
What is staggering is what the Chinese are prepared to pay for imported quality products.
“All of the stock on the floor is Australian-made out of our Sydney plant with the entry point price being $3000 up to $70,000 for a queen-size mattress and that’s US dollars,” Gary said. “The ladies in question wanted Australian made products, built in Australia and with the five generations of family history behind it.”
Has the dollar given impetus to their China story?
“With the entry point of Chinese mattresses being $200, yes, the lower dollar does help,” Gary admitted. “But the recent cut in the tariffs has also helped.”
Right now, their Chinese partners have 27 shops and by 2019, the plan is that there will be 80, so no one in this story from Australia to even China is sleeping on the job.
And when you read a story like this, you can’t help feeling like a proud Australian. And if you’re super-sensitive, you might even shed a tear or two.