Sometimes remembering where you come from is key to understanding where you are going. Director Kyle Donovan reflects on Donovan Group’s history so far, lessons from his father, and forecasts growth ahead as the company seeks to replicate its local success in new international markets.
In the 1960s and 70s Donovan Group was a small electrical business with just a handful of staff. Located in Northland, New Zealand, there were few clues that over the following decades the business would transform from into a dominant and fast-growing company with a revolutionary method for making strong steel buildings with a remarkably low carbon footprint. And in 2022 a new chapter starting as a promising tech business with a broadening international focus.
“Donovan Group was started by my father and it’s been a family business my whole life,” says Kyle Donovan, son of the founder Graham Donovan.
“My early memories are of visiting the factory, doing some weeding for pocket money, and eating food out of the fridge,” he jokes.
Both Kyle and his brother Brett finished their schooling and took on professional challenges – as an electrical engineer for Brett, and in the world of finance for Kyle. Brett returned to the family business first.
“Brett really drove the business from strength to strength from the early 1990s,” says Kyle. “In this time Donovan Group became known for industrial automation, manufacturing and manufacturing of structural building products.”
“By the time I joined in 2005-06, New Zealand businesses were starting to outsource more of their manufacturing to China.”
That was a defining moment for Donovan Group and the start of big change.
“We didn’t want to be told our business was at risk because someone in a corporate office was deciding where to outsource. We decided to build our own distribution network in New Zealand to keep our own touchpoint with the customer.”
In a process Kyle now describes as a ‘life’s work’, the brothers set about designing a new structural system that enabled them to build expansive, strong buildings with a reduced amount of steel.
They patented specific components of it, and set about creating a distribution network for the New Zealand market.
“We developed a building franchise where we owned the rights to supply everything into that channel including the customer relationship and the brand. We owned the sale for a customer all the way through.”
The pioneering formula is now the backbone behind several major New Zealand brands: KiwiSpan, Modern Building Product and Coresteel Buildings, amongst others.
“We are now the market leader, and we have grown 20% year on year for five years.”
But that wasn’t where they let it sit.
The next stage involved, over a period of years, developing software platforms to automate the design, detailed engineering and manufacturing of buildings that utilise Donovan Group’s innovative building products, DonoBeam and DonoBrace.
And now that the software, branded as AirBuildr, is well proven and fine tuned, it is poised to benefit customers around the world – while taking it a step further and utilising DonoBrace and DonoBeam, under license.
It’s an ambitious journey that Donovan Group is ready to embark on, but it’s the fact that Donovan Group is deeply embedded in the construction sector and uses its own everyday experiences to build software for the industry, which is critical to Kyle’s quiet confidence.
“We can succeed because we are working from within an industry that we know and that we are already highly successful and experienced.”
“You don’t wake up and start a software company,” he says. “We aren’t external to the industry, we are the industry. We have developed this software gradually and over time, and that is how we know it works.”
What is happening in the short and medium term for Donovan Group?
“Donovan Group has a very good carbon story to tell,” he says. “Our products are lighter, cheaper and stronger. We use less steel and that means we are a part of the climate change solution.”
He speaks of the decision to hire a hugely experienced and talented Chief Executive, Matt Woodley, to supplement the vision and leadership that he and Brett have given to the business. “Matt brings structure that is very positive. It formalises a lot of what we are doing and facilitates and enables the company to grow more in the future.”
Kyle believes that the company will develop significantly in Australia. “We have green shoots coming out of there now,” he says. “We will also have a good footprint in the United States, and we will be more and more well known outside of New Zealand.”
Like always, Kyle and Brett will pursue the very best outcomes for Donovan Group, and it will come from the right place.
“There is no problem you can’t overcome. Dad taught us that. When you are faced with a challenge, work around it. There is a solution for everything. We have always managed to solve and overcome things.”