The business of life (chapter 8 – a business to run)

Driving across London for my meeting with Peter and Angus the next day I reflected on the growing sense of dissatisfaction I was experiencing with my current role. I was by then earning a great deal of money.  I had flourished through the recessions of the early and mid-seventies (induced by miners strikes, 3 day weeks and Arab oil embargoes), had moved into our first house the year before and we were enjoying regular family holidays.  The problem was it wasn’t enough; not the money nor the standard of living.  The real issue, I realised, was that I was just frustrated with my role.  I loved the negotiations that came with the big deals but the day to day role simply bored me.

By this time I had been selling successfully for over 8 years in two demanding companies and had graduated to the most important customers. But it simply wasn’t enough; I wanted more responsibility, a wider role and greater autonomy.  A few short hours later I had all of those things.

Unbeknown to me, Angus and Peter had been engaged in negotiations with a Japanese manufacturer of cine cameras and projectors.  The new brand Sankyo was potentially a wonderful fit into RAV’s consumer brand portfolio as we had no presence in this sector.  A powerful additional benefit to the Sankyo brand was their forthcoming entry into the market with a first generation sound cine camera.  The negotiations had been concluded, apart from their agreement to whoever RAV chose to head up the new venture.

When I drove away from the office later that afternoon I had the role of Business Manager for Sankyo and full profit and loss responsibility for the new business.  The downsides were that I had to rely on sharing the services of my old colleagues as a sales force, I had taken a pay cut and would have to keep the car I was currently assigned.  The sales team issue was a temporary one, my car was still fine and I had negotiated a basic salary that was 50% up.  However, I was going to be one third down on a monthly basis earnings basis for the first year when I would become eligible for a generous bonus scheme if I exceeded sales and profit targets. But I was also now on the company executive contract with the additional security that provided.  A few days later I met with the chairman of the Sankyo business and his team responsible forEurope and the deal was signed.

The company also agreed to fund a move to ease my commute and later that year we became residents of Henley on Thames, a delightful location (and one now full of wonderful memories).

One of the first meetings I had upon taking up my new role was with Martin, the finance director.  I had been required to construct a one year budget for our new business including my first attempt at a cashflow projection.  Not to put too fine a point upon it, I was taken ‘back to school’ for about an hour and then informed I was booked on a “Finance for the non-financial manager” course.  I learnt quickly and it established my enduring commitment to the critical task of managing cash in a business.  I might have had the financial backing of a major PLC but God help me if the subsequent result was more than a few percent out from my monthly cash forecast.  Cutting back on forecast purchases from Japan, if I had failed to achieve my sales budget, also brought the wrath of the Japanese gods down on my head. One learnt quickly that honesty and accuracy were far more important than over optimism or chancing to luck.

Having ensured that the sales team was trained in my new products and the press was briefed, the trade launch took place.  Luckily for me the products were well received and orders flowed.  However, a few months after launch sales started to fall short of projections.  Two problems were responsible for the slowdown; the first taught me a lot about the challenges of adding a product range to an existing sales team and expecting synergy to take over.  My erstwhile colleagues had existing product sales targets to achieve as did my two fellow business managers (John & Doug) responsible for Pentax & Mamiya.  Gradually, by a process of discussion and collaboration, we managed to stagger promotional activity and product launches and sales started to climb once more.

The second problem was more deep rooted but, once identified, the solution became one of the most important factors behind the brand’s subsequent success.  In my previous role I had learnt to understand the purchasing behaviour and product use of the typical still camera owner.  In common with everyone else in the retail photographic sector, I believed that cine camera owners had similar needs and behaved in a similar fashion.  In an effort to understand more about the market I commissioned research into cine users’ beliefs, behaviours and perceptions of the major brands.  When the results were presented, I was amazed to find that the average owner was almost completely disinterested in the technicalities of the equipment; they saw little difference between major brands and merely wanted something that was easy to operate and would perform reliably.  Yes, there was a technology aware group of enthusiasts but they were a minute percentage of the market.

The implications of the research were immediately apparent; manufacturers and retailers were stressing the wrong aspects of the equipment both in advertising and instore.  There was much evidence in the research findings that many purchasers were alienated with a retail sector they believed talked down to them in terms they couldn’t understand.  The typical cine purchaser was scared off by sales pitches that dwelt on the technical aspects of the equipment.

Armed with this unique knowledge, I implemented two new strategies.  The first was to sit down with the advertising agency and spell out a new communications strategy.  The new top of the range models we positioned as aspirational objects (one of which you can see above, courtesy of an eBay vendor).  For the volume selling lines we took care to explain the benefits that came with new features rather than the universal assumption that everyone knew what these benefits were.  The other new approach I developed was a training module designed to teach our retailers a more congenial and benefits focussed approach.  I took to the road to deliver this training programme to as many of our stockists as I could reach.  The new approach was a success and sales started to climb.

Life was now anything but boring but in the first six months I found I had gained half a stone in weight.  My energetic regime in sales was now but a memory and the long ‘business’ lunch was fast becoming a regular pastime.  Yes, I was still selling my socks off but these negotiations more usually now took place around the table in some suitably upmarket restaurant.  Shocked at my rapidly thickening girth I joined the local Henley rowing club and soon became addicted.  For those interested in the sport, no I never achieved greatness, but spent whatever hours I could free up on the river with a fellow fanatic in a coxless pair.  Happy days, whatever the weather, and the start of a fitness habit that has stayed with me to this day.

Life in our large open plan office was usually full of fun (and intrigue).  Doug and John were now my fellow business managers and we enjoyed a great deal of camaraderie. However, with John (sadly deceased at far too early an age) there was always a competitive edge that was exacerbated by his overly suspicious nature.  Our two heavenly secretaries, Sue and Linda, managed to lighten the atmosphere and both took delight in chiding and teasing John whenever the opportunity presented itself. I had confided in Sue the reason for my absence from the office for a couple of days which happened to be due to a minor operation that would ensure my days of procreation were over.  As soon as I returned to the office John became solicitous in an extreme towards me and I realised that Sue had been a little indiscreet (she just gave me her usual sweet smile when questioned).  It became progressively clear from John’s ever more pointed probing that, not understanding the procedure, he had assumed that I had been completely emasculated.  It wasn’t until several years later, enjoying a drink with Sue at a company function that she revealed the truth.  It seems that the day after my ‘procedure’ she had brought a small medical container into the office containing two pickled walnuts swimming in surgical fluid, which she proudly assured John I had given her as a souvenir!  John had truly believed that this was what my little procedure had entailed.

Towards the end of my first year in the role, I had my first visit to Japan, taking part in a multi brand press trip.  Up until this point I had been liaising with Sankyo with regular trips to their European headquarters in Düsseldorf.  It had been decided to steal a march on competition with a fact-finding press trip to a country that was still relatively unvisited fromEurope.  All of the major factories of our various partners were visited with a good deal of time for sightseeing and ‘rest and relaxation’ built in.  Once I had acquired a taste for sake, raw fish and Ryokan, I came to love the country, returning many times in the next 5 years.  With the excuses of further press trips, dealer visits and sales team incentives, I also managed to visit many of the traditional tourist sights. I also loved the hot spring resorts, the mountains, the temples and how even the smallest patch of garden was turned into a haven of peace and tranquillity.  I was highly impressed with the speed and sheer efficiency of the Shinkansen and particularly the Japanese methods of manufacturing and the care they had for their workers.   Business was something else though and gruelling in the extreme (more of this in subsequent chapters).

I exceeded budget that first year, reaching a level that now justified my own team.  My budget for the next year proposed a sales team of 6, together with a product manager and a secretary of my own (the lovely Sue being stolen away for the exclusive use of John).  Having seen how a good grounding in sales technique was more important than knowledge of the sector, I recruited exclusively from outside the industry.  With Laurie the Product Manager and Bernadette (from Grenada) our new secretary, my team was now complete.  Looking back my leadership style at the outset was one of working with people to achieve agreed results and this approach has stayed with me (although I have no hesitation of ‘letting go’ non-performers).  If I’m honest, though, I probably erred too far towards letting my hair down with the team on evenings before sales meetings and on trips.  I was always the first up in the morning and very intolerant of lateness or lack of serious intent with the business of the day.

We worked hard and we played hard and soon, in 1976, sales were at a running rate of well over £1m and growing healthily.  The new sound cine equipment was selling well, aided by our advertising campaign and good product performance.  In their first year my new team did well and together we beat budget; I was back earning serious money once more. Peter was delighted at the results, as was Angus and the Sankyo people back inJapan.  I also stuck close to the media and sponsored the annual amateur film competition run by a leading magazine.  The only downside of this sponsorship was having to take part in the judging, which involved sitting through hour after hour of the most turgid, amateur efforts.  The relief at finding one film that stood head and shoulders above the rest was palpable.

Shortly after my second year end I walked into the office one afternoon following a customer visit to find Bernadette looking as if the world was about to end.  “Quick,” she breathed in her uniquely husky Caribbean accent “Gordon’s been on the phone several times; he wants to see you now.”  Gordon our divisional MD (and Angus’s boss) was not someone I knew well (in fact I was not aware he even knew I existed).  A 6′ 7″ Scot, with a formidable track record, Gordon towered over the majority (literally and figuratively), inhabiting a suite of offices on the floor above and rarely venturing down into our area.  When I arrived in his secretary’s office, Gordon was on the phone and I had to sit waiting for what seemed an age, consumed with curiosity as to the reason behind my summons; I had done everything asked of me, hadn’t I?

Finally ushered into his corner office, I was directed to one of the armchairs that surrounded the coffee table, where I was joined by a jovial Gordon.  “You’ve been doing well,” he announced and before I could respond continued, “I’ve got a wee problem and I think you can help.” Trying to remain relaxed I muttered something about doing whatever I could.  The story then unfolded.  Akai HiFi was one of the largest of the Japanese brands in the RAV stable, was the first and had originally been won and run by Gordon.  “We’re in trouble,” he went on, “The sales have been flat at £4m for the last two years, the contract is due for renewal in a year and the Japanese have threatened to fire us. How would you like to take the business on and win another contract renewal?”

I had really enjoyed my time running Sankyo, having my own team and getting results.  For the first time in a long time I wasn’t even bored.  And now here was a monster challenge being dumped in my lap.  Did I want it?  Could I turn Akai around? Would it be a good move?

I said yes.  What followed were some of the most invaluable experiences and greatest successes of my early career.  Unfortunately, the next few years were also responsible for almost ruining my career, my health and my marriage.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s