Monthly Archives: January 2012

When the Perfect Storm hits (part 2 The Storm Clouds Gather)

In the previous post I described (in much abbreviated terms) the events leading up to our purchase of Bridgestream (not its real name).  Despite my concerns about the quality of Bridgestream in terms of its somewhat neglected infrastructure and systems, it was also my first experience of working with a venture capital partner.  With the glow of success still infusing our faces, the following morning we took control of the business and set about reviewing our new company.

Bridgestream traded from eight warehouses across the Midlands and Southern England, supplying a wide range of chemical and consumable products into two discrete industrial markets.  The business was trading profitably on narrow margins but had high overheads in terms of both premises and staff.  Our business plan included achieving major savings by consolidating down onto a single site; this would also have the advantage of operating with reduced inventory whilst improving customer service.  During the remainder of the first week, I visited most of the sites which served to confirm the urgency of the plan.

The first bombshell came with my return to the office to find an extremely concerned looking Richard in his office with the management accountant.  “We’ve been screwed” Richard announced to me.  In contravention of the terms of the sale and purchase agreement the vendor (let’s call him Mr. Offhand) had cancelled all of the previous month’s payments to creditors.  The effect of this was to deprive Bridgestream of the major portion of the working capital we had relied upon.  I agreed with Richard that an overhaul of the accounting systems was vital if we were to have accurate information.

The situation was compounded when we also discovered a few days later that in settling an intercompany debt pre-completion between Bridgestream and its sister company (remaining with Offhand) a large over-payment had been made.  The net effect was now a hole in our working capital of well over half a million Pounds, a situation that moved us from serious to virtually crippled. Richard quickly spoke to Offhand who made soothing noises and promised to look into the situation.  We hastily reran our cashflow projections and calculated with the benefit of the deferred consideration, changes to our payment terms and some savings we might survive; but we needed that cash.  The next call was to our lawyers.

Despite many calls to Offhand, no payment was forthcoming, so on our lawyer’s advice, we instituted proceedings against him for breach of contract. Offhand’s reaction was to issue a counterclaim for repayment of the deferred consideration.  As the months dragged on I attempted to engage Offhand in the Alternative Dispute Resolution (ADR) process but despite agreeing he never showed up for a meeting.  One of our managers still in contact with Offhand reported that he had no intention of paying as he believed we couldn’t afford the legal costs to win.  The legal processes rolled on and our costs duly rose.

Meanwhile, the cash situation was not improving.  We were surviving but barely and towards the end of that first year, the directors all agreed to reduced salaries.  Richard had agreed to replace the management accountant as he was, in Richard’s opinion, simply not up to the job.  The months dragged on but no change took place, Richard always having one excuse after another to delay making a change.  It also became apparent that our invoice financing company were reducing their advances to us, having the effect of stressing our finances still further.  A meeting with their management revealed their concerns over the credit worthiness of many of our customers.  Richard promised a major drive to improve debt collection.

Richard had started giving me growing cause for concern over this period.  He was increasingly absent from the office, ostensibly improving sales but instead he frequently met with one ‘snake oil salesman’ after another and came back full of his latest ideas for additional (and wholly inappropriate) new product lines.   The monthly accounts were increasingly late for our board meetings and appeared to be showing profits whilst we were bleeding cash.  After another board meeting when we were again without full accounts, I called off the meeting and met alone with Richard.  What followed were hopefully the most difficult couple of hours of his life.  I covered all of his shortcomings, his continued failings to take corrective action despite commitments, inappropriate sense of priorities and his duties as a director and required a programme of specific actions over the next period (through to our first year end).

Over the next couple of months we set about the site consolidation process.  We finally found suitable premises, close to the centre of the country and the motorway network and after careful planning on Tim’s part we made the move over one hectic, weekend.  The long awaited reduction in stock levels finally started to feed through.

Yet another turn of the screw came when the financing company rewarded our stock reduction programme with a reduction in advance.  The promised sales improvement failed to materialise and combined with our reduction in stock financing we were seeing no improvement in our cashflow. Richard was pleading the need to concentrate on producing our year end accounts (which we were under pressure to produce) and had still not replaced the management accountant (saying now that he had great loyalty).  I was forced to give him additional time to achieve the commitments he had made to me.  Richard shortly afterwards produced management accounts showing a breakeven position at the year end and promised that the cash situation was improving and that now the move was complete we would see real benefits.

Some weeks later my mobile rang with a devastating call from our major supplier.  I learnt in a very difficult call that Richard had reneged on a previously agreed payment schedule and was now avoiding calls.  He informed me that all confidence in Richard was exhausted.  I promised immediate attention to the issue and asked, on my personal surety, for additional time to resolve matters.  The following day I was due to meet with Richard and Tim at our accountants’ office for the audit meeting, so I decided to delay any conversation until we could meet face to face.

The information from our audit partner was worse than I could have imagined.  The year-end breakeven Richard had reported (critical to the continued support of our financing company) was in fact a large loss.  Furthermore, we were informed that the firm had never seen an accounting system in such a mess.  Richard bumbled on making a series of ludicrous excuses whilst I sat and tried to configure a plan.  The first step had to be to remove Richard; not only was he past the point at which he could recover any credibility, it was clear that he was utterly incompetent.  I made suitable excuses and left to start moving things forward.

 My first action was to meet with our VC partner to bring him up to speed and gain his agreement to the action I was proposing.  I then had a meeting with our lawyers to review the terms of Richard’s contract.  They agreed that the situation constituted a serious enough breech of his duties to warrant dismissal without compensation.  That left the issue of Richard’s equity which was literally under water and without value.  Under the terms of his contract if he left the company he was required to sell the equity back to the company at an agreed valuation. In an act of generosity I set a valuation of a nominal sum.  I called Richard and set up an extraordinary board meeting for a couple of day’s time.

What followed was the hardest task I have ever had to undertake in business.  It had fallen to me to fire more than a few people in my time but to take away someone’s dreams and their life’s savings at the same time was not something to relish.  In the event a usually verbose Richard was stunned into silence save for a few monosyllabic replies.  I escorted him whilst he cleared his office and saw him off the premises.  Later that night he returned blind drunk and hurled two pallets through the front office windows.  The exercise of power can be a sobering experience.

Could we save the business?  In part three I look at the aftermath of Richard’s departure and how the gathering storm grew in intensity to reach perfect proportions.

 

 Image courtesy of viralblog.com

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When the Perfect Storm hits (part 1)

The failure rate of new businesses is high with around one third disappearing within their first three years.  But once through this initial period the rate of attrition falls and many businesses survive to have a long life, weathering even the odd recession (I knew the current generation of the same family that had started their firm in 1783).  But there is one circumstance where a business is put under great strain and that is when it changes hands.  Research has shown that the majority of acquisitions work to the benefit of the vendor’s shareholders.  There are many reasons for this phenomenon but I’d like to share with you what happened when the perfect storm hit a business that I had acquired.

Back in the investment cash fuelled 90’s, management buy-ins (MBIs) were less common than management buy-outs (MBOs) but a large number were completed under a venture capital strategy that can be summed up in layman’s terms as “If you throw enough hot cr*p at a blanket some of it is bound to stick”.  A refugee from corporate life, I had been pursuing MBI opportunities for a year and a half.   Strangely enough the pursuit of money was not my main driving force; having formed a low opinion of senior corporate management from my years in the boardroom running businesses for parent companies, I really wanted to do my own thing.  So, I had been working with a major UK VC and had investigated with them a large number of targets loosing out in the final bidding for three deals already (after many months of work in each case).  When my phone rang one day a memorable call set some very memorable events in train.

“Would you like to have a look at a business for us?” was the question posed by the VC executive I had got to know well.  This was a real break-through for me.  Up until this point I had been carrying out all of my own research and only involving the VC when I had an opportunity on the hook and a draft business plan. It transpired that they had been brought a prospective deal by a three man team but had decided that one individual (earmarked as the chairman) didn’t meet their selection criteria.  I met the remaining two team members and reviewed their business plan with them in a long meeting. The impression I came away with was that the team leader (we’ll call him Richard) was a great guy; originally a chartered accountant from one of the major firms and well experienced in business, Richard was charming & urbane and we hit it off at once.  The plans for improving the business seemed realistic and achievable.  The other team member, Tim, struck me as a solid and dependable man who would make a great operations director for the business.  There was the added advantage they had both worked together previously.

The target company (we’ll call it Bridgestream) was, at the time, a privately-owned service based business with a large distribution arm for the products it used. I reserved judgement until I could carry out my own due diligence.  The following week I visited, met the owner and had a chance to look over the main premises.  Being after office hours I wasn’t able to meet any of the staff or get a feel for the atmosphere of the business while it was operating (confidentially concerns on the part of the owner had precluded a visit during normal hours).  I came away thinking, the premises are old, they had a neglected feel and I didn’t take to the owner.

However, when I reported back to my VC contact it seemed we shared the same view.  The business was not a particularly exciting one as it stood but the business plan the team had tabled seemed realistic and we both shared a very favourable opinion of Richard; furthermore, it seemed that he came with a tremendous recommendation from the references that had been taken.  We agreed it would be a goer given a ceiling on the purchase price, a satisfactory funding package plus my role as chairman in the team.

Richard, Tim and I worked on a detailed reworking of the business plan whilst we awaited the financial due diligence to be completed.  A series of meetings with banks and factoring companies resulted in finalisation of the funding package and my individual equity investment was settled.  I was surprised to learn just how large a cash stake Richard and Tim were putting up. They had originally planned to complete the transaction without external equity participation but suffered when, being unable to finance the deal on that basis, had revealed to the VC just how much they could scrape together (and that was then set in concrete).

The final element of the funding package was an element of vendor finance in the form of a deferred element of the total consideration.  The vendor haggled but finally conceded.  Shortly before completion, we met to receive the financial due diligence report.  There was good and bad news.  Whilst the overall level of company performance was confirmed, it seemed that the financial systems were not particularly robust.  There were two associated companies, only one of which we were purchasing (the distribution arm), the vendor retaining the service business.  The concern was that the accounting systems couldn’t be relied upon to always delineate between the two companies.  Richard undertook to work with the vendor to review the systems and finalise a working capital level for completion which would be guaranteed.

Negotiations over the sale and purchase agreement dragged on but we finally completed the transaction with everyone happy.  We were the new owners of Bridgestream (along with our VC equity partners) of a distribution business with eight branches around the UKand two separate operating arms.  For me I had made my first private equity investment (soon to be followed by others).  However, even as we sipped our champagne and accepted the congratulations of our advisers, the storm clouds were gathering.

In part 2 you’ll be able to read of the depth and breadth of the problems that were heading our way.

Image courtesy of Sodahead.com

Out of the Firing Line (part 2)

In the previous part of this series I looked at some of the critical early steps to take if you find yourself at risk of being let go or have actually been unfortunate enough to have had the axe fall on you.  In this post I’m going to look at some more of the things you should do in preparation for that first meeting and some of the techniques that have worked for me in getting through the door. 

Don’t just spray your CV around; be creative in your job hunt.  Remember that the sole purpose of a CV and application letter is to get you an interview. Most of your early efforts should be focussed upon networking, research and applications.  Moving through the next stages is something else entirely. There are no rules for the job approach and it is quite possible for a well thought out and executed but unconventional approach to succeed. Two examples that have won me interviews may give you some ideas.

Some years back I had an appalling shopping experience in a major retailer and, as a consequence, wrote to the chairman of both the retailer and the manufacturer of the product concerned.  The response from the retailer was interesting (a story for another blog post) but the response from the manufacturer (also FTSE100 Company) was fascinating.  I ended the tale of my shopping with a sentence or two on my experience of the sector and suggested a meeting as I might be able to assist them. The chairman wrote back suggesting I contact his CEO, which I promptly did and a meeting was duly arranged.  What followed at corporate headquarters in London was the strangest meeting I have ever had.  The CEO, prompted by careful questioning on my part, poured out his heart for 2 hours in terms of what was wrong with the business and his frustrations. I offered my assistance and, at his suggestion, made a detailed proposal to him which was subsequently referred to the chairman, who turned it down.  I later learnt that the chairman would only employ and deal with those who held a technology based PhD (usually Cambridge– that should give a clue as to his identity).  Bad luck perhaps but the approach worked; it got me deep into a major organisation at the highest levels.

The other approach that got me interviews was through thoroughly scouring the national business news every day and, when finding something of interest concerning a target company, I would then write to the CEO.  The letter would refer to the news item (say a major planned new investment project) followed by a sentence or two that outlined the aspect of my experience that was relevant and close by suggesting a meeting.  This approach got me through doors.  Don’t wait for a response though, tell the target that you will be calling in a couple of days and do just that.

Another opportunity for creativity arose when I lost out after being down to the final two for a position running a national chain of builders’ merchants.  Having invested the time to carry out a great deal of background investigation on the firm and its competitors I thought, why waste it?  I waited a few weeks and called the new MD, introduced myself as the guy who came second, congratulated him and suggested we meet as I had a proposition that could assist us both.  He was sufficiently intrigued to agree to meet me.  When we met I made the suggestion that as he was busy getting to grips with a big new role there was a way I could help.  He listened very carefully to what I had to say about the industry, the position of his company and the issues I had identified.  He considered for what seemed an age and then said he would be pleased to receive a proposal.  I went away and submitted a detailed proposal for a very focussed consultancy project which he accepted.

Use head-hunters carefully.  The worse thing you can possibly do is to fire off your CV to as many head-hunters as you can find.  The resource I have found to be invaluable is the directory of UK search consultants published by Executive Grapevine (www.thegrapevinemagazine.com/publications/).  This publication lists every search consultancy firm in theUK, lists its sectoral specialisms, gives the salary ranges it typically fills and lists the search consultants together with their specialisms. Choose who you approach carefully and only contact the most relevant.  If your approach does result in an invitation to a meeting, don’t necessarily expect a job interview but use the occasion to find out more about their view of your experience & your target sector and be open to advice. Some of the search consultants I met provided invaluable advice to me and became people whose advice I could seek again and who sought me out over time.  And, of course, some approaches did lead to company interviews.

If you’ve been turned down for a position (especially after making the shortlist) don’t view the experience as a waste of time.  At one level you can use the process to review your approach and to refine your future technique.  On a different level it’s a good idea to follow the fortunes of the company concerned and to keep in touch with whoever interviewed you.  If you reached shortlist stage you will have been communicating my email and possibly mobile.  A way I have found of keeping in touch is (again) to follow the company and industry news.  When you see an interesting item, just send an email with a link, say something like “Hope all is going well with the business.  Saw this item and thought of you in case you missed it”.  It keeps the lines of communication open and can be of real benefit. Over the medium term if you are still interested in the company, it does no harm to drop a short note explaining the additional (and relevant) experience you have gained and simply saying you would still value a role within the business.  Many appointments fail to work out in the first 12 months and keeping in touch will position you well.

A word on CVs.  I’m not going to try and repeat or improve upon the plentiful and professional advice that abounds on the internet.  However, I’m not a fan of the competency based CV approach, preferring a well laid out reverse chronological document with clear statements of job scope, responsibilities and achievements.  However, keep the CV short; I once received an application for a management position that ran to 13 pages and included (amongst more extraneous detail that you could imagine) pictures of the man himself, his wife, his children, his dog, his holiday and the garden.

When you get that job offer stay calm.  Ahead lies a whole process of negotiation.  In my last business we had a policy of a cafeteria approach to pay and benefits.  Some aspects might have to be fixed but as far as possible we offered candidates a headline package and let them negotiate on how they would like this split (e.g. car allowance instead of company car, less salary and higher pension contributions).  It’s quite reasonable to make this suggestion to any prospective employer and to expect them to be flexible.

There are unfortunately employers who will attempt to get you on the cheap if they know what your situation is.  If you fall victim to such a response, I’d be inclined to walk away. It is so short-sighted to try to get someone at a below market rate because it will cause you problems over time.  Brush up on your negotiating skills; learn what is really important to your prospective employer and where they may be prepared to bend.  Don’t be cavalier in your negotiating stance but do be persistent. Also get every single aspect that is promised, hinted at or inferred in writing.  Treat the process as the legal contract that it is; as I’ve posted before, any legal contract has to be right first time.

When you consider any offer, ask yourself these simple questions; will this role further my career (more important that the package itself)? And, what will my CV look like in a couple of year’s time?  It is so important to start any job with the clearest idea of what you want to achieve from the job and its role in your career path

Remember that there is neither shame nor penalty in the job hunt when you are ‘between positions’; in fact it can work in your favour (all other aspects being equal) to be immediately available.  Despite the earlier advice concerning ensuring you don’t sell yourself too cheaply, when faced with two equally qualified and experienced candidates, one of whom is still very much in post, a company can decided that entering into an inevitably longer (and more expensive) negotiating process is not worth the trouble. Many employers have also found that a candidate who resigns can be tempted to stay and nobody likes going back to the other guy (you) when it is clear they have been turned down. In the last few years of all of the board appointments I have made, around 90% of the candidates were between positions.  Don’t try to hide this fact as it can count against you if you are seen to be hiding something – why destroy trust?

Stay positive.  Yes, you will have highs and lows during the job hunt, everyone does.  Don’t blame others when things go wrong, just make sure you learn from them and adjust accordingly.  Good people are hard to find even in a recession.

I’ve tried to put down in these posts some of the experiences I have had and some of the advice I have arising from my job hunts.  I’m sure that many of you have stories to tell and advice that you have found that really works.  Why not drop a comment or two so others can learn?

Finally good luck!

Image courtesy of lifehack.org

Out of the Firing Line (part 1)

In my last post I shared some of the events that led to my collection of ‘between roles’ situations.  Whilst I could have done without most of these events at the time, all of them taught me a great deal, caused me to re-focus upon my career direction and led to better things.  In this post I’d like to share with you some of the things that worked for me with some general advice.

Firstly and with no apologies, but being from am older generation, I have to say that debt is your enemy.  Certainly, we all have to take on a mortgage (I have never known someone to save up the entire price of a house) but I am not a fan of credit (unless in business when you have to fund a major investment). Having been schooled in cash flow management from my earliest days in business, it didn’t take long to realise that all credit does over the medium to long term is to eat up money in interest that could have been used to purchase more goods or services.  If you feel at risk of unemployment, then put priority into bringing down your debt before all else.  If you are newly unemployed, then go into crisis mode for spending and work out a plan with your creditors (it’s better and easier than waiting until every penny has gone).  Don’t feel embarrassed about being miserly, it is sensible and if it gives you extra months then it’s less stress.

If you have already been let go, treat the subsequent process as a full time job.  Keep office hours and don’t turn into a slob. If you have a home office, that’s great but if not stake your claim to a part of the house, call it your own and tell everyone else you’re at work and not to be interrupted. I worked extremely hard and methodically at each process of finding the next career move but I was also flexible.  If the sun was shining in the morning, I would take myself off cycling for 3 or 4 hours; building stamina and providing pure thinking time.  I’d then work through until 8 or 9.00 p.m.

Networking is vital as many roles (at all levels) are filled before they are advertised.  However, use the process intelligently; ‘give us a job’ is not the right approach.  Analyse your contacts, plan what each might offer in terms of reaching someone who can move the process on, the advice they can give and seeking information on target companies and industries (the more specific questions you can ask the better).  “If you hear of anything…” is the most stupid waste of breath and if you ever hear yourself saying this, give yourself a stern reprimand.  My experience is that used in this way everyone I contacted gave me time and the advice I that I received was of great help.

Carry out a persona SWOT (Strength, Weakness, Opportunities and Threats analysis), yes.  But then carefully work out what exactly it is telling you.  Do you really have unique strengths in terms of qualifications or experience?  Are you critically weak in some areas? What are market trends doing?  Are these likely to work for or against you?  Are there opportunities you can exploit and are there risks that are highly likely to occur?  Above all, don’t kid yourself and be brutally honest in your appraisal.  Focus then on the opportunities that build on your strengths, do all you can to avoid certain risks and minimise threats to your career.

 One of the hardest decisions is knowing when to build on an in-depth knowledge of an industry to target jobs in that sector versus using generic functional and personal skills and experience to move industries.  For some people moving industries at the same or higher level will not be possible; for others it may be your best decision.  I’ve moved industries many times and (I believe) it’s been a key factor in my success.  The incumbents in an industry can become myopic and vulnerable to groupthink but an outsider can bring fresh insights and new strategies (not always the easiest sell though). Be realistic though; moving from the private sector to the public or vice versa is not the easiest move to achieve nor is it likely to be the easiest to live with such vastly different cultures.  However, some skills (often technical) are more transferable than others.

 Another hard decision (and potential risk) lies in deciding whether to make yourself dispensable in your current role. This might sound like a crazy thing to say but consider; make yourself indispensable and you may weather a short term storm in a bad economic period but risk making yourself unpromotable.  Make yourself dispensable and you have proved you can move on and up but at the risk of being vulnerable in tough times.  However, I’d always rather be in the latter category and be able to prove to a potential new employer what I had achieved and how I was more than ever ready for the next big challenge.

Have a reputable psychometric assessment carried out; this is something I really recommend.  Questionnaires are available for free on the internet but I would not waste your time on these.  Instead find a practitioner of a well respected, reliable and accurate instrument such as the Myers Briggs Type Indicator (MBTI) or the Occupational Personality Questionnaire (OPQ32).  The real value will come from receiving feedback and the coaching process that should follow.  We all think that we know ourselves well but I have rarely, if ever, met someone who didn’t learn from the feedback I provided to them.  The experience will also give you a far better insight into recognising others’ behavioural type, and critically, the characteristics that a particular role is calling for and how you might fit into the target company culture.

 However big the temptation to sell yourself into a role that really doesn’t play to your strengths, don’t do it; it will only end in tears.  We all have personalities that favour certain behavioural traits and these tend to make us more likely to be more successful in some roles than others.  We can modify certain behaviours but trying to do a 180º on a key aspect is really asking for trouble. A corollary to this is to avoid the temptation to believe all you hear from a prospective employer.  The recruitment process is really like dating; both parties may agree on the next step but the one after can be a very different and difficult affair.  A company is only as good as your boss, so research a prospect boss very carefully.  With LinkedIn this is easier than ever.

Research any prospective employer, do it thoroughly and understand what you have found out is really telling you.  I cannot stress enough how important this simple concept is.  Companies House can provide full sets of accounts for a small fee and a recommend taking a look at the last 3 ~ 4 years to gain a picture of what the key trends are.   Doing the same for key competitors will provide an additional source of information and equip you with more knowledge for an interview.  Google searches are so easy it’s almost not worth mentioning but they cn reveal a great deal.  The number of times I have been faced with short listed candidates (even for board level appointments) who have not carried out even the most rudimentary investigation on the business is incredible.  You can’t hope to understand everything about a business from the outside and it may make you very foolish if you jump to conclusions at an interview. Good research will enable you to raise the right questions and show you have done your homework.  There have been occasions when I have deliberately let a well prepared candidate take the lead at an initial interview, impressed by their depth of knowledge and perceptive questioning.

In the third section (following shortly) I shall look in more detail at some of the more creative approaches to the job hunt that I have found can work in getting that all important initial meeting.  Meanwhile, good luck and I’ll be back soon.

Image courtesy of careerguidetips.com

In the Firing Line

Fired, let go, made redundant, kicked out or whatever euphemism you choose, lucky is the person who has not experienced the process or lived without the worry that it could happen at any time.  Given that it is so long since the last recession (not the start of the current one in 2008) this is a dilemma that many will be facing for the first time. So, what’s to do if you’re worried about the potential threat or, more urgently, if you have been recently let go?

 Before anyone questions my credentials I should explain that, having been fired 5 times in my career, I have both form and opinions and, in the current vernacular, I do have the tee shirt.  A brief summary of the sordid details

My first firing took place with me flat on my back in a hospital bed early in the recovery phase of a life threatening illness that was to take half a year before I was back to full health.  Getting my P45 in such circumstances was only slightly softened by the personal, bedside delivery from my boss.  Given the then indeterminate length of my stay at the pleasure of the NHS, I have to say that the actual firing was somewhat underwhelming in comparison to other considerations. My fault in the firing process?  Falling ill.

It was more than a few years before the P45 experience came knocking at my door once more; in fact it is more accurate to say that it was prefaced by a loud thumping on my office wall.  As this was the usual form of summons from my boss, the CEO, I legged it into his adjacent office assuming only that more of his workload was going to fall into my in-tray. “Boy, you’ve got a problem with the main board” was his greeting as he waved an envelope at me, “You’re fired”. The main board being 100% comprised of Japanese nationals was safely ensconced in Tokyo.  It would be fair to stay that, given that the contents of the envelope included a cheque of calming proportions, and the fact that my boss was extremely cordial about the whole thing “Nothing personal as far as I’m concerned”, the disbelief and rage took a few days to set in. My role in this affair was somewhat less benign.  I still believe that the decision was wrong but I had been guilty of arrogance and an inability to either adapt to changing circumstances or to learn how to play politics.

More years passed and this time found me bitterly unhappy, working in a European country famous for its gnomes and financial probity, doing a job I hated and, which I have to admit I was singularly unsuited for (politics really is not my bag) against a background of the business having just changed hands.  I had worked with the new owners for the previous six months whilst the due diligence process ground on and had come to hate them with an intensity rare even for me.  So when the Swiss equivalent of the P45 was thrust into my hand 10 days after the deal completed, a wave of sheer relief swept over me.  Apart from any role that my continued lack of political skills played I was genuinely in the wrong place when a new owner decided he really didn’t require a European headquarters.

The fourth occasion of an involuntary cessation of my duties came after two years of sheer slog, pulling a large subsidiary of a small Plc back from losses of millions to a break-even situation. Rage attacked me all the more acutely when I dwelt on how long they had allowed the previous, disastrous management to build up the losses in the first place.  So, my reward was another P45 episode.  What really had the rage in full flood this time was that they wanted me to work out my notice to save the cash impact of paying me off on the spot.  My pugnacious side was given full vent.  Aided by a decent lawyer and several bloody battles later I emerged into the sunlight clutching an acceptable cheque.  I think I had done everything I could to improve the business, my mistake being to have joined such a fragile Plc (it subsequently faded out of existence in the next few years). Finally sick of being at the whim of others, this was the episode that turned me away from employment and into a new career of consultancy, entrepreneurialism and VC backed buy-ins.

 An intense period of two years saw me buying 3 separate businesses with the aid of venture capital.  As experience has shown, the classic management buy-in, pursued with (reckless?) abandon through the 90’s, is an incredibly risky process (you simply don’t know where the skeletons are buried).  Robbed blind by the vendor on my first deal, matters were made worse by an incompetent business partner and a duplicitous supplier. I did everything possible to turn an impossible situation around but finally, when no other options existed, petitioned for an administrator to be appointed.  As I discovered within 24 hours, owning a business doesn’t mean that you are free from the risks of an ordinary employee and, yes, a brand new P45 was waiting for me. There is a long story concerning this business that I have touched upon in an earlier post but suffice to say I should have trusted my judgement and walked away from the deal in the first place.

A footnote to this last episode was finding that the Big 4 accountancy firm I had appointed as administrators, robbed the insolvent business blind, stringing the administration process out for 10 years whilst they took whatever cash they could get their hands on as management fees.  The creditors got not one penny and I lost a lot of money but I did learn that certain forms of robbery are entirely legal.

 Once I had overcome my early rage at being fired I found these experiences to be extremely liberating and (although you may not believe this) some of the happiest times of my career.  Was I stark staring mad?  Had the whole process unhinged me?  I don’t think so but what I do know was that when the pre event stress stopped, the calm was wonderful and the prospect of a new step in my career very exciting.  It provided time and space to be genuinely reflective and to be completely focused on the single new goal I had.

 So, what advice have I got?  If you are faced with the risk or reality of being let go, what should you do?  Part 2 (posting soon) will take a look at some advice I have acquired as a result of these experiences.

Image courtesy of planetill.com

Looking back at 2011

Last year started, with being up to my eyes in selling our business.  By the time the year started we had already been negotiating hard for four months with the prospective purchaser, a large American corporation who owned our most serious competitor.  The headline price had been agreed between the parties but two scheduled completion dates had already passed whilst both sets of lawyers wrangled over potential liabilities that seemed so remote as to be laughable.  By the time January started both parties had moved into that familiar realm of wanting the deal to complete but with trust almost destroyed and misunderstandings abounding, both sides were weary but ever alert. When it comes to legal agreements, you cannot hope for the best, you just have to get it right.

Image courtesy of betterecm.wordpress.com

Two more scheduled completion dates passed fruitlessly by, the sale and purchase agreement had reached absurd length, legal bills had risen alarmingly, insurance had been taken out for the most remote potential liabilities (have you ever heard of The Chancel Repairs Act of 1932?).  Tempers were frayed to breaking point.  Finally, there we were in our lawyer’s offices on 7th March for closing.  The final issues were thrashed out, compromises were reached, clauses adjusted, we all signed and the champagne was poured.  I thanked my two business partners of the previous 13 years, shook hands with the new owners, the lawyers and advisers (don’t even think of the fees) and quietly made my exit.

 I had looked forward to this day for so long but I just felt numb; I simply wanted to be alone.  I drove out into the afternoon sunshine of an incredible early spring day and found myself deep in the Northumberland countryside parked by a small country lane just gazing out at beautiful scenery that hadn’t changed for centuries. Yes! I had finally done it; the culmination of a lifetime of work, the realisation of the biggest goal of my life.  Up until this point I had avoided imagining what it would feel like to sell up or to make plans, having experienced the agony of a failed sale process 5 years earlier.  I had spent a lifetime working and suddenly it was over.

 I could no longer think of myself or describe myself in terms of the role I carried out in business; I was retired; I was unemployed; it was all stuff I used to do.  After I had celebrated and visited with my family, I started to take stock.  Having been through great change in my life before, I understood and accepted that my life was going to change and that, as a consequence, I was going to change too.  It was exciting.  I was going to become a different person with a different role in life.

 Holidays were not on the agenda in the short term.  We knew about holidays, we loved our holidays but they were the annual episodes of escapist unreality and I (we) needed to adjust to life in our home together.  For the vast majority of my career, I travelled every week, I travelled the world, I had lived and worked abroad and it was something that suited my restless nature.  That had finished and both Denise and I had to learn to adjust to seeing each other every day.

 After 3 weeks of indecision I decide to indulge myself in something frivolous (completely against my practical nature) and together we bought a sports car.  You see, I led an underprivileged youth (sob, sob) and could never afford a sports car, so sod it and go for it!  It’s powerful, senselessly, illegally fast, thirsty, black and British and Denise loves it as much as me.  Spring and early summer brought superb weather and we had fun with the wind in our hair.

An approach to work with young people came, helping them make the transition through university and, hopefully, into British industry and was looking forward to an autumn start.  However, a shoulder problem I had been aware of for a couple of years started to get worse to the point where I could no longer put treatment off any longer, so it was into hospital I went.  After 3 months of recovery and physiotherapy I have regained most of the range of shoulder movement and am working on building muscle and strength once more. Another young people venture seems interested in my experience so I’m following this up later this week.

The early dreams of a money worry free retirement started to look potentially optimistic as the year unfolded with the news in Europe playing out exactly as my fears and fellow Euro skeptics had predicted.  Having now had many meetings with financial advisers, wealth management firms and banks, I reached the conclusion that no-one knew what the outcome is going to be.  Research also revealed that claims of success were based more on luck than skill. I’m not going to indulge in a bout of banker-bashing but I have now taken the precaution of not relying on a single firm or bank.

Writing a book (or finishing the one I started many years ago) was one promise I had made to myself over the years.  This project is still on the list but blogging has provided bite sized bits of satisfaction and new contacts and Twitter is becoming (dangerously) addictive.

 So what have I learned from these experiences? 

 One can succeed in business even if (like me) you start with absolutely nothing, neither qualifications nor money.  I don’t know what part luck played for me but I have had my share of failures; the critical aspect was really learning why things had gone wrong and in adapting accordingly.

 Make goals, tough ones certainly, but make goals that are realistic based on your experience and abilities and be single minded in pursuit of them. Change tack when faced with difficulties but don’t give up just because it’s got tough. Tenacity and commitment is vital.

Work with good people, trust them, delegate, support them and reward them with what matters to them personally if possible; money is a stupid, blunt instrument when it comes to motivating others.

 Get a balance in your whole life that works for you.  I have no time for the ‘work/life balance’ expression – it’s an insidious left wing assault on the ethics, enjoyment and fulfillment that work provides for us as humans.  Work is an essential part of life and it provides a sense of identity and means of self-achievement and a means of supporting oneself and ones family.  Getting a ‘whole life’ balance is tough but so is life; if you can’t hack, it don’t attempt to denigrate those who can.

 Never stop learning; if you think you have learnt it all, you’ll be working on today’s problems with yesterday’s mindset.  Having spent a lifetime of working towards my own goals, I’ll admit that stopping is tough.  But I’m blessed with a mind that wants to keep learning and I’m starting to feel I know where I’m going.

A sense of self-fulfillment has settled upon me and I am increasingly comfortable with how I feel about myself. In my time I have created wealth for employees, for communities, for suppliers, for customers, for shareholders and for governments (I just wish they had spent it more wisely). I feel largely calm where I once felt stressed.  I’ve had the ulcers, the heart attack and some other physical problems that working hard can bring but I’m learning to be more relaxed and it’s a nice feeling.  I’ve now got time to spend with friends and family and to meet new people and I’m enjoying the change process.

 The people I have met through social media have taught me a great deal; I’ve met great people from across the globe and enjoyed their companionship and the views they have shared.  I’ve howled with laughter at the humour many can conjure up in 140 characters (or less).   But I have also been stunned and dismayed at the level of tribal hatred that still exists in our world. I’ve tried and will continue to attempt to learn what people are feeling and why they feel the way they do.  My fear is that due to ignorance and hubris many of history’s mistakes are destined to occur again and again. The world continues to face great challenges and no-one knows how the combination of social, political and economic issues will play out.  But I wish that some of you could be more understanding of each other.

But to all of you I wish you a peaceful, happy and healthy 2012.

Back soon.

Image courtesy of betterecm.wordpress.com