Flower power secret to a Tynte success

This week’s family business was inspired by two other great business people, each totally different from each other and across the world from each other: the legendary Melbourne florist Kevin O’Neill, and Ricardo Semler, owner of Brazilian engineering firm Semco.

Jan and Rick Frolich own Tynte Flowers in Adelaide and operate it with their daughter Dani. Jan started the business in 1988 after quitting her job as an air hostess (they’re not called that any more of course) and Rick, a business consultant, quit his day job in 1991 to join her in what had become a burgeoning family business.

I joked to them that Tynte Flowers is what you get when you cross a florist with a management consultant, and it’s true: it is a unique operation that now employs 70 staff and is still growing rapidly.

Let’s cut straight to the Frolichs' influences, and what has made the business different.

When she started it Jan wanted to emulate the quality of flowers and service that made Kevin O’Neill a household name in Toorak, as he catered to the parties of rich and famous. O’Neill was a pioneer in the use of bright colours as well as pastels; he wasn’t just a flower-seller but a kind of flower artist.

JanFrolich’s model involved operating seven days a week and staying open until 7pm every night so customers could buy flowers on the way home – unheard of in Adelaide in 1988. She pioneered the use of refrigerated vans and delivering flowers in vases in water to extend their life. Just as Kevin O’Neill was fastidious about the quality of his flowers, so was Jan, buying all her flowers from Melbourne.

When Rick joined the business he looked again at the whole of the floristry and decided it was as much a manufacturer as retailer – an assembler of flower arrangements, as well as a distributor of them.

So he brought in a process engineer from RMIT University in Melbourne who worked three days a week for three years to streamline the floral processes. The distribution centre was set up as a stand-alone business, with the Frolichs' shop as its biggest customer.

Also, instead of making the arrangements to order as most florists do most of the time, the Frolich "sell what they make, rather than make what they sell”. That is, 90 per cent of their sales come from flower arrangements that were put together earlier.

And then, about 10 years ago, Rick Frolich became aware of what Ricardo Semler was doing in Brazil. He wasn’t alone there: Semler was named Brazil’s business person of the year in 1990 and 1992, the World Economic Forum nominated him as one of the global leaders of tomorrow and he generally became famous in books, magazines and TV documentaries.

Ricardo Semler had taken over his father’s Sao Paulo manufacturing and engineering business in 1980. In 1990, in response to the disastrous Brazilian recession in that year, he persuaded his workers to take wage cuts, and management to cut their salaries by 40 per cent, in return for having a say in the business.

Semler introduced a form of participatory democracy into his business, which gave employees the right to approve every item of expenditure. Giving the workers more say across the whole business led to dramatic efficiencies in the business – for example, there was a 65 per cent reduction in inventories, big cuts in product delivery times and a defect rate that fell to less than 1 per cent.

Rick Frolich says that he and his wife, now 62 and 65 respectively, didn’t want to end up as the ageing matriarch and patriarch of a family business, and so instead they introduced their own form of participatory democracy, giving the employees much more say in how the business is run.

He says it is much harder to do this sort of thing in Australia than Brazil because of the unions here, but basically the leadership team at Tynte Flowers effectively drives the business and there are staff meetings every morning to make key decisions.

Rick still handles marketing and Jan still buys the flowers, and Dani works in the business as well looking after technology and social media, but the family is more and more taking a back seat to the staff.

The plan is to fully replace the Frolichs as managers in three to four years' time. "We wanted to look at succession in a different way,” says Rick. "We have only one child and we didn’t want her to be burdened with the expectation that she would have to take over the business someday. We wanted it to be up to her.”

Ricardo Semler would approve. He now spends his time writing books and travelling the world speaking and promoting his vision of industrial democracy.

As for the Frolichs, well they’ve just had their biggest sales week of the year and things are going nicely. Online sales are up to 38.3 per cent of total sales, and growing quickly, but bricks and mortar sales are also continuing to grow. In fact in 24 years they have never had a year when sales were less than the previous year.

What’s helping to drive growth now is their latest innovation – SMS message confirmation of delivery and a "frequent flower” loyalty scheme, which deducts 50 per cent off the average price of a customer's previous four purchases from every fifth.

Will they look to take their model beyond Adelaide? "Well,” says Rick Frolich, "after 25 years I reckon we’ll have a model that could be duplicated beyond our home town, either through joint ventures or franchises.” Indeed.

Innovation is the great catchword of our time, but innovation in business processes, as opposed to the product itself, is usually underrated. In fact, in my view that’s the kind of innovation that should be celebrated above all, because that’s what increases productivity – even in flower arranging.

*A previous version of this article erroneously referred to Rick and Jan Frolich as Rick and Jan Tynte.

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