Graham Mountfort went about his own succession story with engineering-like precision
Graham Mountfort saw the future- and unlike most other business people, he did something about it. The former majority owner of Papercoaters, an Auckland-based cardboard and packaging business, acknowledged the fact he wasn't going to be around forever. "We all age, and we all need to move on at some stage. Back in 1990 we had a growing business but someone said to me, 'you are the company' and I took it to heart. I realised that if the company was to continue I needed to do something about it."
Papercoaters was already a significant business, with trans-Tasman customers and packaging machinery unique in the southern hemisphere. Mountfort had been a manager with the company since the 1970s when it was a division of AHI and Forest Products. A series of corporate takeovers through the 1970s and 80s was followed by a management buy-out , which led to his appointment as managing director and majority owner in 1998.
One of his first acts as MD was to appoint an independent board, including a lawyer and an industry expert. "That board introduced a huge level of intelligence into the company."
Another key decision was to hire young management talent, with a view to eventually owning the business. "I chose people who could step up. Some people hire those who are no threat. I've always wanted people around who challenge me." He gave the young team increasing responsibility, especially Brent Devlin, who is now filling Mountfort's shoes as MD and owner. Hired at 28 as commercial manager, Devlin in time took over the Australian operation and was given the option of earning a share of the business early on.
"It was a case of nurturing people and then stepping back a bit to let them run things. It was quite hard because it's your baby and you have to resist the temptation to take over."
In the end Mountfort was spoiled for choice, selecting Devlin from three quality candidates to lead a management buyout.
The investors backing the MBO (Direct Capital) told Mountfort at the time that the quality of the management team was a key reason to invest.
Asked if he has advice for owners in a similar position, Mountfort is very clear. "Get this process started early. You've got to get the people in place-and then be prepared to step back."