Who knew that the Jim behind Jim’s Mowing has a PhD in history? It turns out that Jim Penman only became an entrepreneur because couldn’t get a job as an academic.
Founding and running Jim’s Group has kept Penman pretty busy, but he snatched time here and there to continue his research and published various articles in peer-reviewed journals. Now, 32 years after completing his doctorate at Latrobe University, Penman has published a book calledBiohistory: Decline and Fall of the West. As the name suggests, Penman believes that Western Civilisation is already decades into a decline that could be terminal.
His book applies the study of epigenetics – a branch of biology that looks at changes in genetic expression as a result of environmental influences rather than changes to the DNA sequence. Penman’s premise with biohistory is that trends in history have roots in biology – and there is more of this in the book and also on the website where there are two videos explaining the theory.
BRW recently caught up with Penman to discuss his new book and his business.
BRW: Is there any common thread between your research and your business?
JIM PENMAN: “The biggest connection between my business and my research is very unorthodox thinking.”
BRW: How would you sum up your book?
JP: “The book itself is an understanding of the biology behind history. It’s looking at things like the War of the Roses and the First World War and drawing, I think, some very convincing parallels with what goes on in animal populations, such as the way that lemmings and musk rats behave. It’s going back to biology and thinking about biology in history and economics. If it’s shown to be correct - and there are scientific ways of investigating it - then it would be an intellectual and scientific revolution and you’d have to rewrite every history book ever written and all the economic texts.”
BRW: In what way do you apply unorthodox thinking to Jim’s Group?
JP: “We’re the only franchising system in the world that allows franchisees to vote out their franchisors. We have an absolute obsession with service to the extent where we think the primary goal and purpose of the whole system is looking after franchisees. There are a whole lot of mechanisms, so for example franchisees can move to other regions, to other franchisors, if they wish to. We give people the right to walk out of the system when they want to, at the most pay a few thousand dollars; we don’t hold them with legal requirements. We give people the automatic right of renewal. The contracts themselves are very unusual.
“Our IT department costs something close to a million dollars a year. We’ve got a huge investment in IT with very innovative ways of controlling complaints for example and improving customer service.
“This is going to sound weird because everyone knows that inflation has gone away but in actual fact my theory suggests that hyper-inflation is going to be a problem at some point in the future so all my contracts have been changed to allow for monthly increases if inflation goes past a certain point.
“I’d also be very sceptical of anything that relies on China because there are reasons to believe that Chinese growth is going to slow down very radically and even go into reverse.”
JP: “There is no legal mechanism for voting me out. I could be voted out if I were a divisional franchisor but not as CEO of Jim’s Group. It was a tiny minority, about 1 per cent not 51 per cent. It was a non story.”
BRW: What is the main finding of your research?
JP: “The main idea is that temperament is behind everything: economic growth, political structures, intellectual structures; everything depends on temperament. People’s temperament changes and there are biological roots to that change. It’s actually not that radical in the biological sciences; there are recent articles in Nature and New Scientist talking about how fundamental temperament affects our beliefs, for example that liberals and conservatives are quite different people.
“You get civilisation because people have attitudes and behaviour that suits that; they fall because people lose those behaviours. You get economic growth because people are hard working and enterprising and creative; you get economic decline to the extent that they’re not. Everything is driven by temperament, not by government policy but the temperament of the average population; recessions take place because of a change in temperament, the rise in anxiety of the average population.”
BRW: If liberals and conservatives are quite different people, where do you sit in that equation and what does that say about your temperament?
JP: “I’m conservative. I have a temperament that inclines me towards conservative attitudes. I’m morally conservative, I wasn’t when I was younger, but it’s a reaction to my own research. I’m naturally in favour of minimal government; I like the government to stay out of my hair, like most of us, but I’m pretty passionate about it.
“In the present age, the orthodoxy is on the left, if you go to the universities they’re 98 per cent left wing and conservatives like me are an extremely small minority, that’s one of the reasons I’ve never got an academic post. The idea that being liberal makes you unorthodox is crazy when everyone else around you is liberal and you’re liberal – you’re not unorthodox, you’re conventional. I’m not a conventional thinker, I’m an unorthodox thinker who believes in old-fashioned ideas and values.”
BRW: What do you hope to achieve from this book? What would you like people, whether the government or individuals, to do as a result?
JP: “Let’s just investigate and see what’s going on. I’m talking about spending millions of dollars on research, not billions. The thing about theories of history and society in the past is they’ve never been testable, but with biohistory you can. If people can go out and do a bit of science and say this guy’s wrong, I’ll be relieved that we’re not going on a journey of decline. But I think I’m right and I think most businessmen would have the sense of things going wrong. How difficult is it to find young Australians who are really dedicated to their work? We’ve got some and they’re great, but so many of the best staff these days are Asian. Why is that, what’s happened to our youth?”
BRW: With regards to things going wrong and the future of civilisation, where does climate change fit into the picture?
JP: “I think climate change is a serious problem. I don’t think you can massively increase the carbon dioxide in the atmosphere without it having some effect. I’m all in favour of a carbon tax and I don’t see any reason why we should be having such cheap petrol. Carbon taxes I think are very good; it’s a beneficial tax and not distorting.
“But at the same time, if I can draw a crude analogy, if you went to a beautiful beach and saw it was strewn with rubbish, you wouldn’t like it, but if there were an army coming in you wouldn’t worry too much by comparison. The effects of civilisation decline are orders of magnitude worse than any possible effect of climate change. To me what the climate change alarmists are talking about is so mild in comparison to the worse disaster facing us.
“I’m a Liberal supporter pretty obviously but in actual fact in this particular way, the Labor government had it right because what they were doing with a carbon tax was a very market efficient way of reducing carbon dioxide. Whereas with the present policy, Direct Action, the government picking things and we all know that governments are very bad at picking things. The carbon tax is a very sensible idea and I’m in favour of it. It’s not the main game, but sure do it.”
BRW: What is the cause of this civilisation decline?
JP: “It’s to do with wealth. It’s the same thing that occurred in the Roman Empire and every other civilisation. When you become wealthy and urbanised, it changes temperaments and behaviours in a way that makes people less disciplined, less hard working, in the end less enterprising. It takes a few generations to take place and epigenetics explains why that happens. People think that technology is going to save us but in fact technology makes it worse because it makes us so rich.”
BRW: Yet you said that Jim’s Group was investing heavily in technology – can it also be a force for good?
JP: “Technology makes it worse to the extent that it makes everybody rich and that makes us have too much food. But technology that makes us understand the science to fight against those effects would be a good thing. If we could find a way to reverse it so people would not be inclined to eat too much and naturally want to eat less and be more disciplined in their lives, that would be a good thing.
“Technology is very exciting – Jim’s Group right now is investing heavily in new efficiencies and systems and I love it and think it’s fantastic, but we’ve got to use it in good ways not bad ways. Nitrogen-fixing technology is fantastic and helps us feed the world but it also makes it possible to have huge explosions and devastating wars.
“I believe in our technological civilisation, I believe it’s worth preserving, I absolutely do. I have 10 children, every single one of my children is alive and healthy. Do you know what an extraordinary thing that is in historical terms? I’ve been married more than once and nobody’s died in childbirth – isn’t that fantastic? There are so many good things about our modern world but we need to work to preserve that, we can’t just assume it’s going to remain the same because I don’t believe it is.”
BRW: Digital disruption has destroyed the business models of a lot of traditional industries. Is Jim’s Group vulnerable to digital disruption?
JP: “We’re in a phenomenally strong position because we’re dealing with services and it’s not a thing you can disrupt digitally. If you’re in manufacturing you can go overseas, if you’re answering phones you can go overseas, but the sort of thing we do with building fences and tagging electrical equipment and mowing grass, technology just makes our job better.
“In the last year we had 88,944 unserviced leads, which is 19 per cent of our total leads, that we could not handle because of the volume of work and demand for our services. In dog washing and fencing, close to half of our leads are unserviced. Demand for our services is phenomenal. We’re still growing but we can’t grow fast enough to meet the demand. Technology is wonderful for us because we can do our jobs more efficiently and we can give better service, our level of complaints is a fraction of what it used to be. Being so large, with 3,400 plus franchisees we can afford to invest in technology in a way that our competitors can’t.”
BRW: If not digital disruption, then what about disruption from social change? For example, more people are living in apartments now and don’t need their lawns mowed.
JP: “I wouldn’t say living in apartments is relevant. Maybe you don’t mow lawns but you’re still going to need cleaning, building maintenance, plumbing, electricals, dog washing – if you’re in an apartment, you really don’t want your dog smelling bad. Apart from cutting the grass, there’s little difference.
“Our biggest difficulty is not customers, it never has been, even during the global financial crisis our leads went up. Our biggest difficulty is finding enough quality franchisees. The best thing that happened to Jim’s Group is a really serious recession like back in the 90s that throws a lot of quality middle management people out of work. It’s cynical and I actually wouldn’t vote for it because I’d vote for the country rather than my company, but the reality is we do better in tough times. We had one year in the 90s in that recession we had to have where we grew 40 per cent in a single year. The demand for our services is effectively infinite.”
BRW: As an entrepreneur, what are you hoping from next week’s federal budget?
JP: “My biggest concern is the national debt. It just frightens me that we’re paying more than we can possibly pay back and I think for the long term that’s horrifying. I’d like to see us balance the budget. If we can’t balance the budget, we’ll go the way of Greece; it’s just shocking. To me the greatest achievement of the last Liberal government was paying off the debt and that would be my top priority.
“Obviously, with reducing taxes I think there are things that should be done in that area. Very high company tax is costing us dearly, overly high income taxes are obviously also a bad idea. I’m not saying that I should pay less tax, I’m just saying that the way taxes are collected are very destructive. Our current taxes hurt the economy and discourage people from doing things in business.”
BRW: How can you both cut taxes and balance the budget?
JP: “We should change our taxes to things that aren’t so destructive. Company tax is a very difficult one because when you try to reinvest in your company you’ve got to pay very high tax. I would transfer taxes. We should tax land for example, particularly property above a certain level. I own millions of dollars worth of property and it’s quite reasonable for that to be taxed; the unimproved land value, that is. You can’t avoid the land tax because if you own the land you can’t disappear the land. We should introduce a federal land tax and obviously we should also look at raising GST.”