The remarkable rise of Patrick Houlihan, DuluxGroup CEO
Patrick Houlihan, the research chemist-turned-CEO, explains how measured risk has reaped rewards for the DuluxGroup, including a doubling in share price since its 2010 listing.
By Susan Muldowney
Patrick Houlihan, managing director of leading paint company DuluxGroup, is standing in the Dulux Innovation Centre at the company’s head office in Clayton, describing a latex polymer resin that allows the company’s colourful products to stick to walls. For some people, this subject is akin to watching paint dry. But Houlihan can’t get enough of it. He is clearly proud of the work that comes out of these laboratories. As he goes on to explain the nano-level analysis required in perfecting each can of Dulux paint, the pride makes way for nostalgia and he stops to introduce a Dulux chemist of 31 years. “This is Barbara,” he says. “She taught me how to make paint.”
Houlihan certainly knows paint, from composition through to colour. It was in a similar Dulux research and development facility that he began his career with the company as a 21-year-old graduate chemist fresh out of an honours degree in science at Melbourne University. With a scientist’s sense of curiosity, he had decided to put his PhD on hold and take up a polymer chemist role at Dulux, which was then part of ICI International and later Orica. That was 26 years ago. Today, Houlihan is the CEO.
Such longevity with one company is quite rare these days. But the variety that Houlihan has experienced in his two-and-a-half decades with Dulux is the kind you’d expect for one who has hopped from one job to the next. The first nine years were spent as a chemist, including time spent working in ICI’s research and technology hub in Cleveland Ohio where he met his wife, Susan. After completing his MBA at Monash University, the next nine years were spent in various sales and marketing roles. In 2007, he was appointed CEO of the DuluxGroup division of Orica and, when the company demerged three years later, he gained his current role as managing director and CEO.
DULUXGROUP’S BUSINESS TODAY
Today, half of the DuluxGroup business is anchored in paints and coatings. A quarter is in sealants and adhesives, with divisions such as Selleys and, more recently, Parchem Construction Products, which DuluxGroup acquired in 2012. The remaining business is made up of home improvement products, such as B&D Garage Doors, Yates garden products, and Lincoln Sentry cabinet hardware. As of April this year, DuluxGroup’s share price had more than doubled since listing at $2.50 in mid-2010 and its market capitalisation has grown from just less than $1 billion to almost $2.5 billion.
"When we first
how we could
"When we first
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“The base business has continued to grow year-in, year-out to a point where some people who at the time of the demerger thought it was as good as it gets, keep saying ‘you guys are defying gravity’,” says Houlihan.
The success hasn’t happened by chance. As any good scientist would tell you, it required a methodical approach and a careful investigation for opportunities. “When we were part of Orica, our role at DuluxGroup was to stick to the knitting and keep doing the fundamentals well – great brands, innovation supported by R&D and a focus on customer service – but really not to move outside a tightly defined core,” explains Houlihan. “When we first demerged we really challenged ourselves around how we could unleash our potential.”
“We don’t want people to think that innovation means research and development. We want to keep the technology excellence going, but innovation is embedded into our values,” says Houlihan.
“Increasingly, we say to our executive team that they have two hats to wear – their primary role and looking at the DuluxGroup opportunities that we can enable. You’re taught as a scientist to quickly form a hypothesis about something but don’t ever assume that it’s a conclusion. You’re taught that even if your hypothesis is a straight line from where you are now to what you envisage, deliberately jump out to the boundary of things that are counter to that and then go about proving which one is right or wrong.”
FARM TO BOARD ROOM
Houlihan says his love of science is largely thanks to a former schoolteacher who instilled in him a sense of curiosity. Houlihan grew up with five siblings on a farm in Winslow, a small town 15km from Warrnambool, near the western end of Victoria’s Great Ocean Road. “You became largely self-sufficient,” he explains. “It was good to grow up with five siblings because there was enough of us to play footy or cricket on the farm.”
When the Australian dairy industry lost its large UK export market in the 1970s, Houlihan’s father took up part-time work packing shelves at the local supermarket to make ends meet, later renting the farm to a neighbour and working at the supermarket full time. “He took on a mission with my mother to put all six of us kids through an education to let us do what we wanted to do.” All six went onto study bachelors of science.
“It was a great environment to grow up in, but you don’t know what you don’t know,” says Houlihan, recounting a story of a teacher asking about his ambitions after school. “I think my response was that I’d go and work in the bank, which I thought was a fine and honourable opportunity through my lens. He said what about university? I’d never heard of university. So you start to see the give and take in it all, but I wouldn’t trade my background for anything. It anchored me in so many ways – treating people how you’d want to be treated, being down to earth, learning how to engage with different people.”
"I tell graduates
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"I tell graduates
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RISK AND CHALLENGES
Today, Houlihan meets with DuluxGroup graduate recruits to share his own story. “Everyone inherently has their own comfort zone. Some people’s [comfort zones] can be much smaller than others. When I look at the company, I’m a chemist who’s become the CEO. Our CFO was an engineer originally and the GM of Dulux was an accountant. I tell graduates that when the ball gets thrown to you, be decisive. It doesn’t mean you have to say yes; you might say no and throw the ball to someone else. But opportunities come when you least expect them.”
Houlihan also encourages employees to take calculated risks. “I think risk taking is good for the individual but also, as you move through life and get involved in a professional environment [for instance] how do teams embrace the right degree of risk taking and complement what might be a core strength with some other possibilities? I’m certainly more of a risk taker than I would have originally been. In the evolution of my own risk taking, it’s been to try to do different things across the journey, whether that’s moving into other disciplines such as marketing and sales to being a CEO of a division and now a publicly listed company.”
Houlihan says a key challenge is to continue DuluxGroup’s growth agenda without letting the team get, what he calls, a rush of blood to the head. “It’s about defensive growth – a sensible view on strategy and complementing the strategy with culture.” This strategy is threefold. It focuses on enhancing the position of the company’s coatings and adhesives business in Australia and New Zealand, growing home improvement product opportunities in these countries and establishing prospects for growth in Asia. “Not in a way that’s betting the farm, but we’re trying to sensibly plant some seeds now that will hopefully flourish in 10-20 years’ time.”
LEADERSHIP IN RESEARCH
Houlihan recently took on a directorship role at the Murdoch Children’s Research Institute, which is affiliated with the Royal Children’s Hospital and Melbourne University. “While this is specific medical research as opposed to my background in chemistry related research, in the end that thirst for discovery and the power that discovery enables still feels like part of my DNA,” Houlihan says. “Even in my role of CEO of the company, it’s always a pleasure for me to see science enabling the innovation that leads to our next commercial outcome. I’ve never been what you might call a top-down career person who said one day I have to be CEO. In my own way I’ve been willing to give things a go, try different things and see where life takes me. I suppose that’s framed everything.”
There’s also that sense of curiosity. The screensaver on Houlihan’s iPad is a photograph of the driveway looking out from the family farm in Winslow. “I often think that was my life for the first 17-and-a-half years, apart from getting on the bus to go to school,” he says. “Who would have thought leading out of it that I’d go on to university and ultimately run DuluxGroup?”
3 Quick Questions
1 How do you balance work and life?
I think what helps me keep the balance is my background and my strong connection to family and those values. I have a tight-knit family with my wife and three kids. And I still spend time in Warrnambool. I was there last year for my 30-year school reunion. It was fantastic!
2 What keeps you awake at night?
I sleep very well! I think about the growth agenda and at the same time our baseline delivery and whether we’re treating people right if I take a cultural lens. I’m a glass-half-full person. I’ll always assess anything for risk but my natural starting point is that there’s always more opportunity than you realise. That probably helps me sleep.
3 You’re a Dulux veteran. So what’s your favourite colour?
It’s blue. But I’m biased because I go for the Geelong Football Club.
Patrick Houlihan with some of the company's product range.