Daring to break with the past
In 2015, Ian Pratt led major changes to his family company, South Haven Group. He discusses its new branding, the decision to establish an independent board – and the all-importance of culture.
South Haven Group CEO Ian Pratt has enjoyed three decades of running a thriving family business. Yet in 2015 he and his brother decided to make sweeping changes to its operations and branding. He explains why to Business View.
Ian Pratt had an unusual adolescence.
“I spent most of my weekends visiting supermarkets with my dad, talking to the managers and discussing what was working well and what could be improved.”
His father is Bill Pratt, who brought Safeway to the Australian grocery market in 1963. And the lessons he learned on those road trips served him well when he and brother Gary co-founded South Haven Group, which builds, owns and invests in quality properties.
“Dad was, and still is, a powerful influence,” Ian says. “Gary and I grew up inhaling the philosophy that if you look out for your customers your business will prosper. We’ve always seen our tenants as customers and done our best to keep them happy, and I think that’s what sets our business apart.”
An accidental career
Thirty years ago, when Ian was an accountant and Gary was working in retail, the family spotted a hotel for sale in Lake Eildon, Victoria.
“It wasn’t well run and we thought it had potential as a passive investment – we had no intention of getting involved ourselves,” says Ian. “But, when we weren’t happy with the manager we put in, Gary decided to give up his job and run the hotel full time. I worked there most weekends.
In just four years, they quadrupled the size of the business, adding guest rooms, a garden centre and conference facilities.
“Running a hotel is an all-day, every-day job so it was a very taxing time, but we did gain an amazing array of skills, including important life skills,” Ian says. “We also discovered that we really enjoyed the developing side.”
They invested the proceeds from the sale of the hotel in a run-down shopping centre in Queensland.
“Once again, we felt we could do a better job than the local manager, even though we were based in Melbourne,” says Ian. “We spent two days there every month, talking to tenants and building relationships. It’s always been our policy to listen to what our tenants want and help whenever we can and, as a result, we have very high retention rates.”
By 1991, Ian and Gary had expanded into commercial office space. They developed an end-to-end approach that takes in all phases of the property investment and development cycle and also added mixed-use and residential properties to their portfolio.
Two years ago, Ian and Gary decided to make significant changes to both the company’s operations and its branding, a move that signalled a new phase of growth and expansion for the brothers.
“We believed we’d get more buy-in from our employees if we weren’t using a family name,” says Ian. “We also decided to establish a board of directors with Mark Laurie as our independent chairman. Our business had always been professionally run – Dad was used to sitting on corporate boards such as Woolworths and expected us to have the same standard of governance. But we had reached the stage where diversity of thinking and a broader range of skills would be of great benefit – though it was still a big step to put someone at the top of the tree who wasn’t a member of the family.”
Mark Laurie says he was impressed by the Pratts’ strict adherence to their values.
“They have built their business on being honest and fair,” he says. “I live my life by the adage that trust is fundamental to success, so the culture was a natural fit for me.”
An evolving strategy
South Haven Group’s vision is to maintain an unparalleled reputation for quality. The company is two years into a five-year growth and expansion plan which includes attracting external investors and diversifying for greater security.
“The plan gives us a sense of direction, but we regularly revisit the strategy to makes sure it’s keeping pace with the changing market,” says Mark.
“We’re continually looking over the horizon in terms of our investments,” adds Ian. “The way the current market is taking shape has meant a conscious step back from retail for South Haven Group and greater investment in the commercial office space. We gave a lot of thought to our commercial investments when people started predicting that everyone would soon be working from home. We didn’t believe that offices would become obsolete so we stayed with our strategy, and we’ve actually seen an increase in demand.”
Looking back, Ian can think of just one thing he would do differently: invest earlier in seriously good people.
“Like most small business owners we were very cautious, and that’s not a bad thing,” he says. “But I can see now that, when you employ the right people early on, they can help you grow your business in ways you hadn’t thought possible.”