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Face to face: Mushroom magic

Meadow Mushrooms’ Philip Burdon on management, politics and best practice. By Reg Birchfield

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Philip Ralph Burdon can, at a healthy-looking 72, boast a full and extraordinarily successful business and public service life. He has accumulated, according to last year’s National Business Review rich list, a personal fortune of $70 million, give or take.
He is, along with his long time business partner Roger Giles, the co-founder and now chairman of Christchurch-based Meadow Mushrooms. The company is, says Burdon, the most sophisticated mushroom farm in the world and with an annual turnover of around $50 million it is one of New Zealand’s largest single agri-businesses.
Meadow’s mushroom business is growing rapidly. It opened a new $45 million plant expansion on the outskirts of Christchurch in March. The buildings cover almost three rugby pitches from which the company now harvests 160 tonnes of mushrooms a week and employs 500 Cantabrians to do so. It is an environmentally and commercially sustainable business that seems to fit the ‘100% pure’ New Zealand enterprise profile.
Burdon is, at heart, an entrepreneur. He has, however, successfully made the transition to professional manager and then on to hands-off director. Along the way he completed a successful secondary career with 15 years in politics.
Burdon and Giles, an Englishman, established their first mushroom business – Mattamore Mushrooms – in the caves of the Cyprus countryside in 1968. Christchurch-born Burdon convinced his partner they should also set up shop in New Zealand. They did, and Meadow Mushrooms was officially launched in January 1971.
It was a good decision. In July 1974 the Turkish Army invaded Cyprus and the tiny Mediterranean island was torn apart by a savage civil war. Its Greek and Turkish communities were irreparably divided and Mattamore became collateral damage. It was a traumatic commercial and human experience that Burdon would not forget.
Burdon may be wealthy and come from well-heeled English stock, but he is very much the political liberal. He served as a National Party politician through the 1980s and much of the 1990s. As Minister of Trade in the Bolger government of the early 1990s he was deeply involved in negotiating General Agreement on Trade and Tariff (GATT) reforms that ushered in a dramatic expansion of New Zealand’s international trade.
His trip into politics was prompted by his infuriation with the conservative politics of National Prime Minister Robert Muldoon. He considered Muldoon’s infamous 1970 payroll tax the “stupidest thing” a private enterprise government could do. Rather than insults from the sideline however, Burdon joined the party and battled “unthinking” policies from inside.
In addition to his chairmanship of Meadow, Burdon also chairs the Asia-New Zealand Foundation, a non-partisan and non-profit organisation “dedicated to building New Zealanders’ understanding and knowledge of Asia” and is, among a number of other directorships, deputy chair of Singapore-based GuocoLeisure, formerly BIL International.
He is still a party supporter but once again finds himself questioning the wisdom of National Government policies and practices. He heads a Christchurch earthquake recovery ginger group – The Future Canterbury Network – established to “prevent the city’s recovery from becoming mired in the bureaucracy” that characterised the post-September quake response. And he’s enlisted the support of an impressive gallery of Christchurch commercial and community leaders.
What drives this enthusiastic and rather tireless business and community leader? And how has he managed his exit from the management of Meadow Mushrooms and strategised its commercial longevity?
Burdon’s commercial success is, he says, based on his ability to delegate and choose the right people (to work with). “Most entrepreneurs compromise their businesses as they move from innovation to consolidation, then stagnation. They never learn to delegate and give responsibility to management,” he says. “We have successfully moved from entrepreneurial to professional leadership.”
The company has, he says, “endlessly engaged” in seeking out and implementing international best practice processes and focused on employing the best people to deliver those practices. “Roger and I were a unique [working] combination with complementary abilities and a clear understanding of what we wanted to achieve. Entrepreneurs often get submerged in the business detail of their creations,” a trap, he says, he and Giles managed to avoid.
Burdon looks for the “conventional qualities of leadership, discipline, expertise and the capacity to inspire respect” when he appoints a chief executive. “CEOs fail when their ego gets ahead of them or because they don’t listen and consult,” he adds. “Good CEOs have a succession plan and know how to delegate.”
Senior executives must be “self aware” to lead successfully, he says. “They destroy themselves and the business when they give way to personal arrogance or become obsessed with the business and micro-manage. It is critical not to be overcome by your own hubris.”
Meadow is a “transparent organisation” that Burdon says has always been conscious of the need to take the founding families out of the management as it grew. “As a rule, a second generation business should avoid family executives. Being family automatically carries the insinuation that a ‘first among equals’ rule applies. We have a corporate structure with a strong, independent board and all the appropriate disciplines and accountabilities that accompany being a large corporate,” he adds.
Building a business on mushrooms has helped. Many entrepreneurial businesses are, says Burdon, constrained by the limitations of New Zealand’s small economy. “We operate in a sector that allowed us to grow and achieve sufficient scale to move to a corporate structure.”
Burdon now measures his personal contribution to the enterprise in terms of applied wisdom, the accumulated learning that comes with the scars of experience and the appropriate caution that goes with the reality of “having been around for a long time”. The “near misses” experienced in a career are, he says, invaluable.
So will he know when he has reached his used by date? “Probably not,” he responds with a smile. “But I’ll be aware that I am increasingly overarched. Actually, I have been for a while now.” The realities of driving the growth of a sometimes tricky mushroom business plus the years in politics have, he concedes, taken some toll.
“There are many reasons for being proud of what the company has achieved,” he adds “but I am no longer involved in any executive capacity. I am simply exercising the boardroom control that any corporate has. I am deeply engaged in what I believe is effective governance of the company.”
Burdon takes pleasure from the success of his personal transition from management to governance. He applies the same stringent standards to leading his board as he did to leading the company’s management team. “The board rules we live by are as good as any corporate in the country and every bit as accountable. We are just as committed to best practice at board level as we have been to best practice in managing the business,” he adds.
He did not, of course, serve on the Meadow Mushrooms’ board when he held Ministerial portfolios. “That would have been most irregular,” he says, conceding that he also “enjoyed” his political career. His five-term stay from 1981 was, he says, a “challenging and dynamic” time in New Zealand politics. He became, according to his biography – Burdon: a man of our time – the moderate voice in the struggle between right and left economic ideologies that split the 1990s’ National Government.
“I retired from politics because I thought we had achieved what we had achieved and I personally could see no further challenge,” he reflects. “It was time to move on.”
Do business people generally transition well to politics? “There aren’t that many business people in politics,” says Burdon. “It is not so much a case of the discipline the individual comes from, but rather whether they have the personal qualities that enable them to succeed in politics. There are probably very few highly successful business people going into politics. If they do, they probably translate their business success into political success.”
Burdon thinks his stint in politics enhanced his understanding of public policy issues. Most business people have what he calls “a pretty blinkered view” of the significance of public policy on their decisions, whether they like it or not. “Politics is a human dimension. You must work within the system and understand the nature of decision-making which many business people don’t. You must also have respect, rather than contempt, for the complexities of society and public policy processes,” he adds.
Post politics and Burdon’s decision to help establish the Asia-New Zealand Foundation and, in a sense, launch the third pro-bono leg of his career, came from a “profound distaste” for any form of bigotry and what he calls “mono-culture arrogance”. He wanted, he says, to see minority communities of every kind fully included in New Zealand society.
Looking ahead, Burdon is concerned about the realities of the “sub-culture of under-educated, under-achieving and under-motivated young with heavy Maori and Polynesian overtones. This represents a social failure,” he says. “We clearly have a long way to go to succeed here. But we must succeed because it is an enormous drain on the country’s capacity to achieve to its maximum potential – not to mention the social price we pay for this reality.”
New Zealand, says Burdon, is a natural resource economy and needs to think in those terms. “To delude ourselves about being a high tech and global financial centre is fantasy. I am surprised that some [politicians] are still talking about it. Because of our insulation and isolation we tend to engage in some remarkably self-deluding conversations and ambitions. We need to focus on best practice and developing the natural resources we have.” He concedes, however, than when it comes to adopting best practice, New Zealand business is disinclined. M

© NZ Management magazine  June 2011

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