Anyone brave enough to grab the handlebars of the Harley-davidson brand needs a firm grip and a clear vision of the road ahead.
Harley-Davidson is a name often associated with tattoos, unkempt hair and a band of denim-clad bikers roaring down some lonesome highway. The most common tattoo in the world happens to be “Harley-Davidson”. “Mum” ranks second.
Harley-Davidson is, however, a highly successful international business, the board of which had the vision three years ago to bring in an outsider to run the company with a modern approach to business.
The Australian and New Zealand arm of the 125-year-old motorcycle manufacturer also turned to an outsider, an Englishman with a motoring pedigree that included Chrysler, BMW and Volkswagen to assume the role of managing director in 2008.
“I never, ever dreamed I’d be associated with Harley-Davidson,” Peter Nochar tells CPA Australia CEO Alex Malley after a tour of Harley-Davidson’s gleaming Sydney headquarters – and, admittedly, a bit of time admiring the bikes.
As well as the motorcycles, Nochar has 40 staff under his care and the operation turns over about A$160 million annually.
He talks to Malley about how the company has worked to keep updating its brand and to increase market share, and explains how he managed to get the job despite being overdressed for the interview.
Malley: We’re seeing a resurgence of Harleys on the road, what’s turned the business around?
Nochar: On one level, in difficult times strong brands come to the fore and we have a good track record of residual values. We’ve become more affordable, realigned our prices, and make a wider range of bikes than we used to, which caters for a bigger cross-section of the market.
We’ve also spent a lot of time with our dealers upgrading facilities. The main thrust of that is to move from bike shops – which can be a bit intimidating, you’d always want to take a friend with you – to places where your wife would be happy to pop in and get you a T-shirt for your birthday.
Last year we had 15 upgrades, including five new facilities, in the network. We’ve rationalised a bit. There were some dealerships that wouldn’t or couldn’t come along with us on a more modern approach to business. So a focus on retail, value and the range has made a really big difference.
Malley: Training is an important concept for you.
Nochar: Yes, we’ve introduced our own apprenticeship schemes because we’re constantly short of good people. Three years ago we had no Master Technicians [highly trained workshop specialists] in Australia. We now have 19 and by the end of this year there will be 40.
Malley: The global CEO [Keith Wandell, appointed in 2009] was an unusual appointment and has made some major changes.
Nochar: He was the first in the company’s history not to have been appointed from within Harley-Davidson. He was not a young guy either, being aged 59 or 60.
We were a company in need of a good shake-up. There had been a period of enormous success and the previous management was anxious about changing anything in case it should be less successful. One person described it to me as the “burden of success”. It’s an easy trap to fall into and there’s an expectation that the good days are going to go on forever.
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The company paid very well and it was a good place to work, so there wasn’t a great deal of staff turnover at the executive level. We were well behind in IT, in our manufacturing process and our labour agreements became too inflexible. The board realised that deep organisational change required fresh eyes.
He (Wandell) is quite a charismatic individual in a “roll up your sleeves and get on with it” kind of way. He wanted to regain the faith of the stock market, outpace the S&P, grow our exports to 40 per cent of the business because we were very US-centric, and he wanted to develop growth markets.
We now have four pillars on which we work: growth, continuous improvement, leadership – he is very focused on leadership development – and sustainability, which has a green dimension but is also sustaining a company that has existed for 125 years. We’d like it to be around for another 125.
Malley: You mention the new CEO is focused on developing leadership. What sort of culture is that building?
Nochar: In the past there was more of a tendency to operate in silos and I think silos in some stages of commercial history have been quite attractive – let’s do what we do best and leave them to do what they do best. However, he brought with him a “one team” and “one direction” approach. It’s written on a lot of our internal material. These things may sound a bit obvious and glib, but true transformation is going on everywhere. It really is amazing.
Malley: You came to Harley-Davidson from BMW via Volkswagen. How did that play out?
Nochar: I joined BMW as field sales manager and a couple of years later, at the age of 30, was made national sales manager.
Malley: That’s young.
Nochar: Yes, well you learn from things as you get older. When I first joined I went for five or six interviews and kept meeting the same people. After I got the job I asked them why it took so long and they said it was between me and a guy from Volvo. He was 35 and I was 28.
In the end they went to the MD and explained the dilemma. The MD asked how old each candidate was and conventional wisdom says go for the 35-year-old one. But he said: “If he’s this good at 28 isn’t he going to be a lot better by the time he’s 35?” That’s quite insightful. And brave. And that was about 150 years ago! So it’s even more remarkable because the attitude at that time was more conservative than now.
Malley: How did you cope being national sales manager for BMW in the UK at 30?
Nochar: I’ve always enjoyed work and if I’ve ever been in something I didn’t enjoy I dropped it pretty quickly. As you find with careers, there’s always a couple of dead ends here and there. But generally I’ve always enjoyed the atmosphere and teams where I’ve worked, which makes all the difference. You spend so much time atwork and if you don’t like it then I don’t think you’ll be very good at it, and that is a waste of a big chunk of your life.
Malley: You went from BMW to Volkswagen.
Nochar: There were some of us who had achieved head of department roles while quite young, so there was a lot of competition for the next place, which was the sales director’s role. But at that time BMW was flattening things out and in a single stroke they wiped out that role.
So I bought a BMW dealership in Winchester (southern England) and had that for about four years, when an opportunity came up for another dealership. At the time head office had asked if anyone wanted to go overseas. It was one of those fork-in-the-road moments – do I want the money or to do something I really enjoy?
I ended up in Japan as operations director at BMW for a couple of years and then received the call from Volkswagen. That gave me the chance to be number one at Volkswagen, whereas I was equal number two at BMW.
Malley: And following that, I understand it was an interesting interview process at Harley-Davidson.
Nochar: It was quite out of the blue. Many years before I had done a Tom Peters course (Peters is a writer on business management practices and author of the best-selling In Search of Excellence) in California and one of the case studies was about Harley-Davidson. Peters had already written about them, about how they had restructured in earlier times. I thought, what a very cool business that would be and never, ever dreamed that I would be associated with it.
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I had to go to the US for the interview and you think of all sorts of things when you’re going for one. For example: what to wear? Wearing a suit to a Harley-Davidson interview is a problem. My predecessor suggested I dress like a country and western singer. I did, and it seemed to do the trick.
Malley: Once you’re the owner of a Harley, it doesn’t matter whether you’re a judge or a labourer – there’s a certain equality between you.
Nochar: The brand has an egalitarian perspective. For our customers, each bike is individual. It’s a big responsibility when you join Harley to nottreat customers as anything other than individuals. When you have the opportunity to go that one next step, you should take it.
If a customer calls in here and they want to speak to the managing director, I take the call.
Malley: I do that, too. Often you can learn things that you don’t through the traditional communication channels.
Nochar: That’s right. And this is a very energised place to work – there is a collective responsibility that is enjoyed. We have a flexible start and finish time, but nobody starts late and finishes early. If you need to go to the dentist or school play, then you do.
Malley: Who are some leaders you’ve found inspiring?
Nochar: One of my first bosses and my current boss are the ones I most admire. My first job in manufacturing was with Chrysler UK. He was always approachable, which wasn’t the case with everybody back then. It’s something I’ve subsequently learned about management: if you’re dealing with people you’ve got to put on the stage paint and pretend to be optimistic and bright, even if you don’t feel like it that day.
Malley: It’s the resilience of leadership.
Nochar: Yes. In Japan, all relationships are built on trust. They trust in circles: an immediate circle, a family circle, a work circle and ultimately Japan – they trust Japan to take care of Japan. A foreigner must learn there are no short cuts, that patience is key.
The analogy is, if you have a Japanese group and a Western group in a race to a destination, all the westerners will jump in the car and go roughly north. They’ll hit dead ends and take the long way around the mountain. The Japanese will sit and get the map out, work out how to get there, where the fuel stops are, and so on. Both teams may arrive at the same time, but in a completely different way. As a foreigner, it’s when you understand this that you can make real progress. They also have a great sense of humour.
Malley: What does your customer base look like these days?
Nochar: The deep water is around 43 to 44 years old. We’ve had big gains with women and younger people.
We’ve doubled sales to women in the past three years, moving from 7 to nearly 15 per cent. And they are buying it for themselves. They’re getting off the back [of the bike].
"We’ve doubled sales to women in the past three years, moving from 7 to nearly 15 per cent. And they are buying it for themselves. They’re getting off the back [of the bike]." – Peter Nochar
We run garage parties at the dealerships, we’re demystifying riding and we get a really good response.
Malley: Whenever people see a Harley they have their own view on it. Does the brand engender more respect now?
Nochar: [There is still] a dark element, as we call them, the 1 per cent – numerically I think they’re even less than that. We focus on the 99 per cent. I am keen to let people know that this is a great business, it’s not just about the bikes. Internationally and locally it is a very successful company.
Malley: You’ve been quoted as saying you’re being paid to do something many people would do for nothing.
Nochar: My predecessor, whose background was in Jaguar and Land Rover, said: “If your experience is as good as mine this will be the best job you’ve ever done, the best company you’ve ever worked for with the best boss you’ve ever had.” And it’s true.
I’ve worked for some great companies and great teams, but this comes to the top on every level. It has a level of engagement second to none.
Malley: What does the future hold for you?
Nochar: I’ve got no idea, because if you’d told me 10 years ago I’d be sitting here in a Harley-Davidson office I’d say “you’re joking”. Life has a way of presenting opportunities – or not. I’m in that comfortable position – nearer the end of the career than at the beginning – doing something that I really love, which not everybody can say.
When I was younger I always wanted the next job, and that was part of the drive: whoever I reported to, I said to myself, “I could do that”. It may sound a bit arrogant.
There are two times in my life when I felt the genuine weight of responsibility. One was when my first daughter was born. The other was realising that a lot of people go into business because they want to make decisions, do the hiring and firing – then very soon the day dawns when, instead of paying your own mortgage and looking after your family, there’s 30 or 40 people depending upon you for their livelihood.
They are absolutely reliant on you. You can’t have a few bad days and walk away. You can’t go anywhere. You’re in chains.
People are absolutely reliant on you. You have to talk the talk and walk the walk.