A Commitment to Service, A Family Legacy

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-By Anne Lindert-Wentzell

When Dr Dennis Jaffe noted that, “Family businesses are the backbone of enterprise in South Australia,” he could have reflectively postulated that such remains true – of all Australia. As an internationally renowned leader in organisational and personal issues encompassing the field of family business, Jaffe recognises the intrinsic value of the family business – the movers and shakers of the Australian economy.

Nationally, 73 per cent of privately owned businesses are family owned, employing 50 per cent of the workforce and generating an overall wealth of $4.3 trillion. The future of the nation’s economy, culture and communities are dependent on the family business sector’s strength and success. There are those who acknowledge this reality, because they live it.

Ian Malouf, Managing Director and partner in Malouf Pharmacies has been involved in the pharmaceutical industry for 40 years. Along with his brother, Richard, Senior Partner and third business partner, Lawrie Bray, Malouf Pharmacies is 50 years strong. All three partners are pharmacists and have made it their priority to establish a reputable name in Queensland; they are committed to customer service and satisfaction. So far it has reaped rewards. “We’ve always been a believer in using our name,” says Ian. “We’ve worked hard to get a good reputation in our city and state. People feel comfortable knowing that there’s a person behind the pharmacy name.”

Malouf Pharmacies is the largest privately owned group of pharmacies in Queensland, employing over 600 staff, a commendable achievement, considering its humble beginnings. It was Richard Malouf who opened the first Malouf Pharmacy in 1962. In 1970, the ‘Beauty Bazaar’ was introduced into the store showcasing an array of beauty products. Today, there are eighteen Malouf Pharmacies situated throughout Brisbane and surrounding areas, on the Sunshine Coast and in regional locations of Toowoomba, Gympie, Bundaberg and Rockhampton, and fifteen Cosmetics Fragrance Direct outlets spread along the east coast of Australia. . Fifty years later, the pharmacy chain is still growing. But much has changed since the first store opened its doors in Brisbane.

At one time, a pharmacy could be opened anywhere and a license granted to dispense national health prescriptions. That all changed in the mid seventies with government licensing restrictions. Ian explains, “The government decided upon restrictions so that pharmacies were spread out. There was a proliferation of pharmacies in the big cities and in the outback some small towns were struggling to get a pharmacy. The government brought in a complex set of distance rules… it’s harder if you want to expand, but you’re also safeguarded if you’re in a good location.”

With outlying areas disadvantaged, the government offers a rural allowance to pharmacies that conduct their business in outback towns. However, gone are the days of a free license. Today, a license must be purchased. With 18 pharmacies, the chain remains optimistic about its growth. “We’re still looking to open more stores in Queensland,” says Ian. “It’s a state that we can support well from our Head Office in Brisbane, so is our preference for expansion at this time.”

Although Malouf Pharmacies offers competitive pricing, its focus is on delivering exceptional customer service and value. The company provides expert advice, and its employment of specialists such as naturopaths, nutritionists and dieticians ensures that the customer is provided with a wealth of information to make informed decisions.

One area that has become increasing popular is that of holistic health. “Herbal medicines have taken off in the last few years… now there’s a large proliferation of the herbal type of preparations to treat various conditions,” says Ian. “Increasing internet usage in this country is arming people with more and more information and we find that our customers are coming in wanting to clarify the information that they have with experts.”

Certainly the biggest growth in the pharmaceutical industry has been that of natural organics, and with that came the wiser consumer. No longer is indicating that a product is natural or organic satisfactory. “Now customers are starting to ask questions like, ‘How natural is it?’” says Ian. “The consumer is more astute… they want more proof that a product is natural.” Coinciding with this demand, Ian continues, “The government has stepped in saying that if a product wants to say it’s organic, there have to be guidelines that are conformed to.”

Malouf Pharmacies makes it a point of pride to keep customers informed. A private consultation with a naturopath, for example, is free. If a customer requires a more in-depth consultation it can be conducted at a reduced rate. “People want the information. We want to keep up with that,” adds Ian. The same holds true for every prescription medication filled in Malouf stores. “We offer consumer product information on just about every drug in the Australian market… we don’t force anyone to stay for a consultation, but it’s nice to know that if they do, we have highly trained professionals to discuss any medications that they’re taking.”

In the past few years, a number of discount pharmacies have entered the pharmaceutical arena offering lower prices but, “The trade-off to customers is a reduction in the level of service,” says Ian.

With over 200,000 active loyalty club members and growing, Malouf Pharmacies Loyalty Program is one means by which the company hopes to combat the discount pharmacies. Malouf Rewards is a free membership, benefits and savings program that earns points for money spent in Malouf’s stores. “We launched the Rewards Program a few years ago,” says Ian. “We certainly have our specials and promotions, but not to the extent the discounters do. We like to reward those that want to stay with us.”

And staying they are. Richard is proud of the fact that some customers have written to express gratitude for Malouf Pharmacies’ customer service, one of whom wrote, “You have a customer for life.” Richard reacts to such appreciative comments saying, “People don’t often take the time to write long letters to tell you of the extraordinary service they received. But when they do, it’s a wonderful thing.”

There is a push for government policy change from such giants as Woolworths and Coles, who want to make it easier for anyone to own a pharmacy. “They want open ownership. They want their own pharmacies,” says Ian, adding that, “The Pharmaceutical Guild has been lobbying, very successfully, to show the government that we can do it very well without opening ownership any further. If open ownership was to come, it would change the landscape of the pharmaceutical industry but I am confident that we would weather it very well with the model that we have.”

Richard also acknowledges that a very strong eye is kept on the competition, not only the pharmacies, but department stores as well. “We don’t really try to compete on price but we do compete and believe win on value. When you take into account our loyalty discounts and service equation we feel we offer much better value to the health conscious consumer.”

One issue that needs to be addressed is the increasing number of hospital visits arising from medication mismanagement. The government is now creating some programs in which pharmacists will be paid for providing information and counselling to ensure customers are taking their medication properly. Malouf Pharmacies offers such service in medication management, such as personalised medication packs. Organised with a doctor’s consult, they’re distributed into daily, weekly and monthly doses. Says Ian, “It’s a huge saving for the government if they can keep people out of the hospitals,” and particularly for the aged, “They’re able to manage their medications better.” He adds, “We have more pharmacists in our stores than the discounters, because we want to be able to give advice.” Malouf Pharmacies also offers another government funded program – the home medicine review. A pharmacist will come to the home to review medications and explain how they should be taken. A report is then given to the doctor. “The discount pharmacies aren’t interested in doing that,” says Ian.

Unlike Europe and Asia, Australia’s family business history is not extensive. Yet the nation is the birthplace of some prominent family business names, such as Lionel Samson & Sons, six generations old. This, however, is a rarity, considering that third and fourth generation family businesses can often become vulnerable and unstable due to shifting generational aspirations and expectations. In fact, by the third generation, 90 per cent of family businesses fail. Yet still, the persistent question remains, hat of succession planning – who will take over the business once those in management retire?

According to research conducted by Melbourne’s RMIT University and commissioned by MGI, a family business consulting firm, only 25 per cent of family businesses consider succession plans a priority. Research also indicates that members of Generation Y, or the millennial generation, don’t respond well to the traditional command and control style of management. They’re often unwilling to take on leadership responsibilities, preferring a better balance between work and life. Changing careers is common and sometimes on an extreme scale. Does this concern Ian?

“We realised that in a short period of time as partners, our children wanted to get involved in pharmacy. As partners we’ve always gotten along for the past 30 years… we spend a lot of time talking to our children to make sure they understand the need to get along… that each has a role to play. Our children, so far, have understood the perils of working together.”

Richard, 72, still an active mentor of Malouf Pharmacies, says of the family members coming in to the business, “We have a succession plan in place and have our children aged from early twenties to early thirties working across the business and I hope to monitor their growth for at least 10 years. If I can guide them into our philosophies and the way we do business, the plan is that they will carry it on.”

After 50 years Malouf Pharmacies’ mission statement remains unchanged. It’s based on the most fundamental principle of any enduring business – customer satisfaction. “Our main claim to fame is service – in all areas,” concludes Richard.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

December 19, 2018, 9:25 AM AEDT