Z Energy credits key decisions by Chief Executive Mike Bennetts, and the corporate values he has instilled in the organisation, with the first-year success of the new brand.
In a move described by one critic as 'commercial suicide' Bennetts drove the decision to drop the Shell brand in favour of Z Energy. And in the first full-year of the new brand, new outlets and new ethos, Z has emerged as New Zealand's most trusted, preferred and recommended fuel retailer and has also delivered strong financial results.
When Greenstone Energy acquired the former Shell retail business in 2010, Mike had a vision of building it into a world-class kiwi company. He identified six crucial elements present in all world class companies: superior returns, sustainable competitive advantages, thought leadership, strong future options, an iconic brand, and promotion of personal development within the work environment.
Mike is now building those attributes into Z Energy in a deliberate strategy underpinned by the five core values the business has adopted - to be straight up, to have the passion, to be bold, to share everything and to back people.
Mike's bold decision to drop the Shell brand - present in New Zealand for more than 100 years - shows that Z can more than hold its own. With just two-thirds of the changeover completed, already 63 per cent of New Zealanders know who Z is without being prompted. Z is consistently attracting 10 times the positive media coverage of any competitor according to an independent assessment.
Colmar Brunton Brand Tracker monitoring has shown the Z brand is outperforming its competitors on almost every essential metric. Customers rate the Z experience and service as excellent, say it is a brand they can trust and recommend, and nominate it as their first choice of fuel retailer.
Empathica
And to really keep that focus on the customer, Mike abandoned the former monitoring system in which a `mystery motorist' visited a random site once a month. Staff feared the visits which generated no meaningful feedback and may have done more harm than good.
Z has instead taken up the Empathica system, which delivers multiple pieces of customer feedback in real time from every of the 300 or so sites in the Z network, every day. And the feedback on strengths and weaknesses go to both the site managers and Z executives.
One consistent theme in customer feedback is that they appreciate the brand's commitment to being ‘local'; a key point of difference for Z. The rollout of the brand to 300 sites across the country is a major undertaking and probably could have been done most cheaply and easily by hiring a major contracting firm with a mobile workforce. Mike rejected this in favour of using local labour wherever possible and in doing so created 3,500 short-term local jobs, allowing communities to benefit instead of just one centrally located corporate.
And that focus on developing capability applies within Z as well, where Mike directs a $1.5 million, three-tiered leadership development programme. Performance contracts introduced for every member of the team include not only the individual's commitments on what they can deliver in the coming year, but also a weighting for achievement against their own personal development programme.
And in an ultimate act of transparency, Mike's own performance contract is shared with all staff, who can then read the outcomes of his own performance reviews with the Board, as well as a monthly company performance update.
As a result, Z has a motivated, engaged workforce working deliver for their local communities, and that is being reflected in the company's returns.
Despite the flat economy and a tough fuels market - in which industry petrol volumes slid to an eight-year low - Z's operating earnings increased by 10 per cent in the 2012 financial year. Return on average capital employed climbed to 9.8 per cent, up from 7.8 per cent the year before, and analysts now value the business at about $1.3 billion - almost twice that at the time of the Shell acquisition.
The Energy Executive of the Year award category is sponsored by Transfield Worley