By Jeff Bell.
Executive directors sleeping in their cars on road trips was common practice in the early days of Steel Blue Boots, according to CEO Garry Johnson. The mid-1990s startup had modest funds contributed by the founders and cash for travel and accommodation was tight.
This acute insight was the core of an absorbing Guest Conversation entitled One in a Thousand when Garry visited Band of Leaders Australia members and guests last week during their monthly meeting, this time above Casa Nostra Caffe in Osborne Park.
Garry said overestimating revenue and underestimating expenses were among the harsh early learnings for the company that now produces nearly one million boots a year at its factories in Java and Malaga.
BoLA is a peer membership group for business owners and chief executives. Our purpose is to develop outstanding leadership in a stimulating, confidential setting, through a full-day group meeting and one coaching session monthly.
In a captivating 110min., Garry said that Steel Blue Boots was founded by 5 shop floor workers who were inspired by how sports shoes had made leaps and bounds in design and performance. After leaving a failing company, the 5 joined forces to set up Steel Blue—1995 in Bassendean and then moved to custom-built premises in Malaga in 2000, incorporating offices, warehouse and manufacturing facilities.
The pursuit of comfort and quality design had been the early direction for the product, given the uncomfortable, poor wearing boots of their competitors. They felt that “workers deserved better” and wanted to provide something more stylish.
But pricing had also been an issue. With the implementation of the Button Report in the 1990s, tariffs were removed and cheaper imports gained ground. This began the decimation of Australian onshore footwear manufacturers (to the extent that today there are only 4).
So, Steel Blue’s pursuit of comfort meant a higher price and there was serious doubt among distributors: “You will not sell a single pair!” they were told. But after some deliberation, Steel Blue offered a 30-day money back guarantee. This was a telling move, as the company’s strategy was to remain a wholesaler, eventually building relationships with a loyal network of hundreds of retailers around Australia.
Garry said that the loyalty was enhanced by giving each retail store a broad territory, rather than seeking to crowd distributors together. This model was also activated internationally. Even today, many requests for dealerships are turned down in pursuit of the practice.
Garry said that going offshore to enhance the local manufacturing had become inevitable by the early 2000s, hence the establishment of the Java facility in a joint venture. This operation now employs over 900 people and in keeping with the company’s philosophy of worker engagement, 98% of those employees have received two COVID vaccinations.
Garry, formerly a banking executive, was appointed Steel Blue CEO in 2009 and led the brand’s expansion into Europe, UK, Africa, the Middle East and the USA. He has been working to maintain the brand’s reputation as a sector innovator and leader.
Garry said that one of his key learnings over the Steel Blue journey has been persistence. He relied on the teachings of the Chinese military strategist, Sun Tzu, who said “Build a fire behind so that there is no retreat.” Each new strategy had to be given time to develop, said Garry, and so many people give up too soon and fail to reap the benefits.
Steel Blue contributes to the community via partnership programs with Breast Cancer Care WA and Beyond Blue.
BoLA members will meet again in November, with our agenda a mix of external input, intensive attention to strategic issues and opportunities raised within the group and leadership development activities.
Our next Guest Conversation will be with the chief executive of ABN Group, Dale Alcock, on leadership.
Membership applications are welcome—contact Jeff as below.