By Lynne Testoni
It can be difficult taking a highly successful family business to the next level—growing it without losing the culture that made it special.
For Brisbane-born Hutchinson Builders, it involved taking an innovative approach to the structure of the company, supporting its growth while maintaining a family feel.
Associate director Jack Hutchinson is the fifth generation of his family to work in the business and says much of the credit for the successful expansion of Hutchies (as it is fondly known) goes to the managing director Greg Quinn.
“Up until the early 2000s, my father Scott was the managing director and then he saw the place expanding beyond what he felt he could control,” he says. “Dad decided to hand over the managing director role to Greg while he took over the chairmanship.”
“Greg was the one who really grew the business. He kept the same structure, which is a little unusual, but works for us.”
Jack Hutchinson explains that Hutchies is divided into self-managed teams, either by project type or location.
“Hutchinson is structured so there’s 30 construction teams who almost run their own shop with no centralised HR department,” he says. “They hire their own people. They have their own relationships with subcontractors; they bring in their own work through clients (although some comes centrally to the company and is distributed). They’re tasked with running their own operation within the company. “When Greg took over, he expanded that structure geographically into Sydney and Melbourne, Hobart, Adelaide and Darwin.”
This approach has led to unprecedented growth, Jack says.
“When I was a kid, we were probably turning over $100 million and had 100 staff. And now it’s $2.7 billion turnover and 1500 staff. Each team has their own mini culture within the company, but I think that the general values of the company are repeated and have scaled with growth.”
Jack says that this structure makes the team leaders accountable for the success of their individual construction teams and helps to provide a supportive environment for all their staff.
“Often when a company grows, they add more middle management, which leads to a reduction in accountability, or a more corporate feel where everything goes through multiple layers of management,” he says. “We’ve always resisted the urge to add more layers of management. Essentially, all those 30 team leaders report directly to the managing director. “It’s still a very flat management structure and a very non-hierarchical place. And it’s about keeping the sense of fun too. Often, when corporations get big the culture becomes more cautious, whereas we’ve tried to keep the sense of fun while being respectful to everyone. We’ve always tried to encourage being yourself at work.”
Still a private company, Hutchies has a very healthy balance sheet, says Jack, with no debt.
“The only shareholders are my father and his parents,” he explains. “We have no outside capital or outside shareholders. And they don’t really raid the balance sheet or pay themselves big dividends. They leave the cash in there and we’ve built that balance sheet over time.”
This freedom from shareholder pressure allows the company to plan for long-term success.
“A publicly listed company has statutory obligations around reporting and you can have activist investors who want you to sell off part of your business,” Jack says. “We don’t have to worry about that. We don’t have any non-exec directors either. All the directors work within the company; they’ve all been there a long time so they understand the culture.”
As the fifth generation of his family to work in the company, it would be easy to think that there was a lot of pressure on Jack to pursue a career within both the building industry and the family company. However, he says that’s not true.
“There was not really much pressure, to be honest,” he says. “The opportunity was given but it never felt like I didn’t have options.”
Instead, Jack says that by seeing the company up close, it allowed him to appreciate its strong culture and robust integrity.
“Even from a young age, I was going to staff Christmas parties and it was pretty clear it was a good organisation to work for,” he says. “There were always a lot of long-term staff, even from when I was a kid, who are still here now. I had a good feel at a pretty young age that it would be a good place to spend my life.”