Reece chairman Alan Wilson on business, family and why time it’s right to step down
For his entire career Alan Wilson let others do the talking. Having just retired as chairman, he now shares the $10bn ‘Mother Reece’ success story in the only interview of his life.
Alan Wilson’s milestone 80th birthday celebration in October 2020 was a two-day affair, starting with a quiet picnic with family and friends in Melbourne’s Canterbury Gardens on his birthday eve.
The next day the Reece annual meeting was held virtually for the first time due to the Covid-19 pandemic at the studios of CrocMedia in Southbank.
Afterwards Alan and his son Peter – Reece’s managing director – celebrated with a cake, beers and champagne in the gardens outside, before heading to Peter’s house where his wife cooked her father-in-law roast duck.
Peter opened a bottle of 1993 Grange, which marked the year he started at Reece.
It was an occasion upon which the family reflected not only on Alan’s amazing milestone, but quietly contemplated the future.
That day Alan had been re-elected by shareholders as a Reece director for another three years, but in his mind he was beginning to wonder how long he could continue as chairman.
“The additional modern responsibilities of sustainability and governance I find difficult, simply because my focus has always been on the operations of the business and most importantly, its people. My strengths are not in those former areas, they are in the latter,” Alan now says in the only media interview of his life.
“Over the last two years I have come to the view that Reece is now almost a $10bn company and it is time for someone else to chair the firm into its next era of growth.”
This week he finally decided to relinquish his chairman’s role at Reece and will stay on the board as an executive director. Reece’s deputy chair, Tim Poole, will step up to be acting chairman while a permanent replacement is found.
“A lot of these governance requirements, I don’t believe I can do justice to them. I don’t want to be responsible for things where I don’t fully understand what is needed. I will be happy to give advice going forward in the areas I enjoy and can add value,” Alan says.
Most importantly he will continue doing what he does best – visiting stores – which became virtual via FaceTime during the worst months of the pandemic.
Since restrictions lifted, he has been physically back in the store network at least four times a week.
His decision is a monumental one in the history of Reece, which traces its roots to 1919 when Harold Joseph Reece started selling hardware products from the back of a truck in Melbourne suburbia. Reece was listed on the ASX in 1954 and a decade later the Wilson family became majority owners.
Alan’s father was involved in sheet metal manufacturing and his grandfather was a plumber.
Today, Alan and Peter Wilson know every facet and nuance of their customers and the industry in which they operate.
They have ignored calls from investors for short-term rewards at the expense of long-term growth and have become a unique example of a highly successful father-son team in business.
Hard yards
Peter came into the business in 1993 at an important point in its history and took Reece to another level by organising and professionalising the company while maintaining the values of his father and grandfather.
Tim Poole says it takes a certain type of entrepreneur to build something from basically nothing, which Alan did through hard work, empowering managers and exceptional trading skills.
“It takes a very different type of person to take what was a collection of 250-odd small businesses, bring them together as one group and turn it into a globally significant company in its industry which is what Peter did,” Poole says.
“Alan was the master entrepreneur that went from nothing to something significant and Peter was the exceptional CEO that took it to the next level.
“It is truly remarkable to think they are father and son and so different. Incredibly, their unique and different skills were so right for the time that each of them were running the business.
“The chairman-CEO relationship is very important but it is tough to get right and you overlay that with the father-son issue and the length of time they have worked together. It is quite unique and a special story in the history of Australian business.”
It was code named Project Hamilton, Peter’s long-held dream to take Reece to America, the biggest market in the world.
The name was chosen as a testament to his grandfather, Les, who was born in the Victorian town of the same name.
But the 2018 acquisition by Reece of MORSCO – one of America’s biggest distributors of plumbing heating and cooling products – would be the largest and most difficult transaction in Reece’s history, for which it undertook a mammoth capital raising.
Alan now admits he had his initial reservations about the deal.
“I was certainly apprehensive knowing the risks involved. But I was confident in our model, even if I knew it would take a long time to implement,” he says.
Like father, like son
In Reece’s latest results, US sales revenue increased by a third to $4.1bn – boosted in part by a favourable foreign currency impact but also by higher margins – with earnings up 42.5 per cent to $312m.
After resuming travelling interstate over the past year, Alan now plans to visit North America later this year to see the MORSCO business for the first time.
For years Reece has been criticised for its corporate governance practices and many have wondered why the company remains listed given it is 67.7 per cent owned by the Wilson family.
But Alan is adamant Reece would not have grown to its current size if it had been private.
“Being listed has also given Reece an accountability to its shareholders and staff that has been to its benefit. We have been proud to pay our shareholders significant dividends over the decades,” he says.
While Reece investors have long lauded the relationship between Alan and Peter Wilson, the former accepts he has found giving positive feedback to his son challenging at times.
“I suppose I am a bit like my father. He never gave praise. He would do it in an indirect way. He would never say ‘Well done’ but I would hear it from other people. But I knew he thought I was doing the right thing. It was implied,” he says.
“I suppose I did have an expectation with Peter. But I am sure I would have said ‘Well done’ to him more than my father ever did to me. Peter is a very resilient character, which is a credit to him.”
Asked what is the most important thing he has taught his son, Alan’s response reflects the affection he held for his mother and Peter’s grandmother, Ngaere, and for the business he has grown to love like a family.
“Doing the right thing by Reece,” he says. “Look after Mother Reece and it will look after you.
“I would like to think that Peter has picked that up. We used to drink to that every year and I still say it on a regular basis and it is said to me back. My brothers understand it too. I would like to think he has picked that up and if he has, the journey will continue.”
So what has Peter taught him?
“That there is always a better way and if there is a better way, do it,” Alan says. “I’ve often persevered with people who were not ideal for their roles but they were achieving goals for the company. I will turn the other cheek. In building the business, I would accept some different standards. Whereas Peter has always wanted a consistent, higher standard.”
The silent type
Peter has long lived by his father’s one-liner mottos: Stick to your knitting. Make hay while the sun shines. It’s not how you buy, it’s how you sell. Keep it simple. We must make sure we are on the right horse. Through hard work you can achieve anything. Live within your means. Be humble.
“Most of these philosophies are now ingrained in the culture at Reece. Perhaps the greatest accolade to dad’s leadership attributes is the huge number of people at Reece who see Dad as their father figure and their mentor,” Alan says.
Asked why he has always eschewed publicity, Alan simply shrugs his shoulders and for a moment stares out the window of his corner office at Reece’s new high tech headquarters in the trendy inner-city Melbourne suburb of Cremorne. It is a world away from its old office at Burwood.
“I was brought up not to talk about myself and I have followed that mantra all my life.
“I have a saying to let other people do the talking when it comes to yourself. I regularly say to people who are good, ‘You don’t have to talk about yourself, let others do it’,” he eventually says.
“I still enjoy the fact I can go anywhere and be incognito. I enjoy just being a normal person. I have always seen money as purely a tool to get from A to B. It has never been a driver for me. Achieving dreams has been my main driver.”
Alan’s wife Denise was diagnosed with Alzheimer’s disease in 2017. After battling for years to care for her, earlier this year it finally became too much. “I’m very happy that she now is settled in an aged care home, where she feels comfortable and secure,’’ he says.
The family, including Peter’s younger siblings David and Claire, celebrated Denise’s 81st birthday in July with a small function in a private dining room at the home.
Alan says he has rationalised his situation knowing that compared to most people, he has still been better off than many and has had a great life for all his 81 years.
“I have been able to do lots of things I like doing. It has been no good me fighting the reality of Denise’s situation. I can’t do anything about it. It has to be,’’ he says.
For a moment you see the pain in his eyes, of helplessly watching on as his wife slides towards a tragically inevitable fate.
“It is when you are in situations like this and you are tested that you realise that you love somebody,” he says. “That is stronger than anything else. It is amazing how strong that can be. In the 50 year journey, when you’ve had your ups and downs, it is still there. It staggers you.’’
Alan is still up for his early morning walks and plays golf each Wednesday and Saturday afternoons with friends.
But he gets the greatest pleasure from continuing to engage with Reece’s people.
He is immensely proud to have made the firm the nation’s biggest – and most profitable – bathroom and plumbing-supply retailer and biggest trade supplier.
The Wilson family has still not sold a single share since it took control of Reece back in 1969.
“Mother Reece has been my love affair with this business,” Alan declares. “This place has given lots of everyday people a great career. I’m immensely proud of that.”
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