One year into his new job, Cash Converters chief executive Mark Reid is on a culture change journey.
Twelve months ago, Mark Reid took on a challenge that many career bankers would shy away from.
That’s when he was appointed chief executive of Cash Converters International, having already spent 15 months as head of its Australian operations.
Mr Reid’s appointment was in tandem with predecessor Peter Cumins taking a new role as executive deputy chairman, focused on the group’s international franchising business.
A former Bankwest executive, Mr Reid was given the task of rebuilding the credibility of ASX-listed Cash Converters as a business and an investment.
His appointment followed multiple run-ins with regulators and a net loss by the business in the financial year to June 2016.
Mr Reid is implementing a multi-pronged strategy that features new products and services, while still embracing its traditional pawnbroking and second-hand retail stores.
“We’re never going to move away from our core capability,” Mr Reid told Business News.
“I think it’s important to keep our heritage, and at the end of the day there is a need for it.”
Mr Reid said his strategy was based on growth, and that meant sustainable, long-term growth.
“We have to do things differently,” he said.
“We are not there yet, there is still a lot we have to do.”
The changes have included bringing in a new management team, with eight of his 10 direct reports new to the business.
“I have clearly brought in a new leadership team; that is as much about where we’re going strategically as it was about our capability.
“We’re in a different phase, I just needed the capability around where we’re going, not where we’ve been.
“Equally, leaders create a culture and I wanted people aligned with the culture I want to create.”
Mr Reid explained one of his top objectives was to get buy-in from Cash Converters staff.
“I’ve gone around to colleagues in every state talking about culture, but it’s not the high-level stuff,” he said.
“It’s about when you come to work every day and the part you play in delivering the strategy.
“I can’t deliver the strategy, I’m just one person.
“We have to help the colleagues in the front line understand and reward the role they play.
“They can come to work and have this sense of pride and sense of ownership in the part they’re playing to help us grow our business.”
Recent initiatives including using the ‘net promoter score’ – a system popularised by iiNet – to track customer experience.
If a customer delivers a low score, the store manager immediately gets a prompt to contact the customer and ask what they could have done better.
Mr Reid said he made a concerted effort to stay in touch with the front line.
“I ring 10 customers a week and all my leadership team do as well,” he said.
“There is no point me sitting in this room if I don’t lead by example.”
Mr Reid said existing customers largely had a good experience, but the business needed to attract more customers.
“We have to do more with the brand,” he said.
The business is also aiming to educate the public about pawnbroking, which he insists has a legitimate role to play.
“It’s a fact that one in three Australians would not have access to $500 of disposable income in the event of an emergency, like your fridge breaks down,” Mr Reid said.
“That’s where pawnbroking can come in.
“It’s about using something you’ve got to replace the fridge, or get the car fixed up so you can get to work.”
Short-term lending, euphemistically known as payday lending, is one area Cashies has spent a lot of time tightening up its approach, both to meet regulatory standards and reduce its bad debts.
The business implemented new credit check systems and set new targets.
“We also spent a lot of time explaining why; to me that is far more important,” Mr Reid said.
Medium-amount loans and the Green Light Auto car finance business are seen as major growth opportunities.
“That gives us an opportunity in a whole new market segment with a new brand,” Mr Reid said.
With 71 company-owned stores and 83 franchise stores across Australia, and a growing volume of online lending, Cashies delivered total revenue of $271 million in the year to June 2017.
That translated to a net profit of $20.6 million, with the group anticipating a stronger result in the current financial year.
