Monthly Archives: June 2012

The business of life (chapter 17 – learning to be successful again)

The prospect of losing one’s savings is not a happy one whatever the economy is doing at the time.  The remainder of my drive to the office was a nightmare, dodging rush-hour traffic as I attempted to think of what on earth I could do given the collapse of Norton Warburg.  With our house in Henley under offer for the asking price, the offer for our chosen property in Yorkshire accepted and the largest mortgage I could possibly afford lined up, I needed my savings to make up the remaining difference.

By the time I got to the office my plan was clear; I would phone the Bradford and Bingley head office and enquire if an account had been opened in my name.  Within a few minutes of arriving at my desk my hopes were dashed.  The B & B head office did not keep centralised records of investors; I was informed that I would have to contact the branch concerned.  The only problem was I didn’t know at which branch (if any) my funds had been invested.  I located aLondon phone book and started calling branches in an expanding radius from Norton Warburg’s office.  After only five calls I was informed that, yes an account had been opened in my name late on the previous Friday; all I had to do was provide proof of identity to access it.  I needed several cups of strong coffee before I could stop shaking and face the week.  A large number of people (including the members of Pink Floyd) lost a great deal of money as a result of Norton Warburg’s failure.  I had been incredibly fortunate (and ever more suspicious since).

Over the next couple of months and more than a few false starts, our move was completed and we started life in the house I still live in today.  Curiously it was not first choice for either my wife or me, in fact it came about seventh on our respective lists.  But it was the first one we both agreed upon. Situated on a very quiet dead-end road, surrounded by woodland and backing onto open moorland, it has provided a haven of tranquillity through all the intervening years of turbulent business and extensive travel. After a London commute of anything up to an hour and a half each way, my new home was only fifteen minutes from the office, providing me an extra two hours of quality time each day. Bliss.  The only downside until I adjusted was that I found that such a short trip home in the evening wasn’t long enough to leave the issues of work behind.

Despite my new-found rapprochement with John he remained an almost impossible individual to work with.  During his long business career he seemed to have acquired only snippets of knowledge on sales and marketing but he regarded these as immutable truths.  I knew before I took the role that my budget was tiny in comparison to what I had had previously but John continued to drive me crazy with his unremittingly penny pinching outlook and dogmatic views.  So, I bided my time while I continued with my research and planning and soon the beginning of a strategy began to emerge that made sense to me. But before I had a chance to develop my thoughts, let alone start the process of influencing John, a bombshell landed in my lap.

Walking into the office one morning I was greeted by Brian, the European Marketing Director from our Geneva headquarters, who ushered the senior team into John’s office.  It seemed John had resigned and was leaving with immediate effect.  Great news! The bombshell was that a decision had already been made that Brian was to be his replacement.  Recruited as MD designate, this was a bitter pill for me to swallow.  But when I was honest with myself, after only 6 months in the role, I had not yet learnt the industry or the business and I had no choice but to accept what had happened.  When I sat down with Brian later that same day he commiserated with me.  It seemed that he had been seeking a move with his family (from Canada) toSwitzerland for some time wanting to settle there permanently.  Having found the role and the house he wanted in Geneva only a short time previously the move toYorkshire was a bitter pill for him to swallow too.  I told Brian I would give him 100% of my support and he promised me he would do all he could to further my career.  The years that followed were amongst the most productive and professionally satisfying of my career.

I set to work with a vengeance and was soon working long hours once more; not because I had to but because I desperately needed to prove to myself that I could achieve results once more. I also realised that I had to complete the first role for which I had been employed.  Brian had not been replaced in Geneva and I hoped that his role was one I could step into.  I remember being the only person in the company who worked through the entire bank holiday whilst Charles and Diana married in London and my family celebrated without me.  The results were worthwhile though.

The UK was in the depths of the savage recession of the early Eighties and, with no end in sight, all of our competitors had enforced redundancies and mothballed production lines.  Knowing nothing of my new industry, I started work on a forecasting model in an attempt to identify market trends that could assist in predicting future demand.  Working with a variety of sources I managed to pull together fifteen years of back data.  I was then ready to begin the task of regression analysis that might help me to estimate future trends.  The situation was complicated as our main market was driven by two main factors.  Demand came for light sources that both went into lighting fittings installed into new installations and those required as replacements at end of life.  The industry records simply didn’t split the two and I needed to as light sources were the only products we made and distributed.  After weeks of further analysis and (pre PC) calculations I had a result and a forecast I could barely believe.  Whichever way I ran the figures or changed key assumptions the result was that of a strong upturn in 6 months time.  This was being entirely driven by what would be an enforced demand for replacement light sources.  Companies were either going to have to sit in darkened offices and factories or they would have to spend on replacement light sources.

Brian listened patiently as I presented my analysis.  If we did nothing we would fail to take advantage of an upturn in demand.  If we did lift production through the summer months and built stocks to the level I predicted, we would eat up a large amount of working capital that could be a major problem if we didn’t get the upturn.  In the event we bet the firm on stock building and when the upturn came (exactly as projected, even to the month) we doubled market share at sharply increased prices.  Competition simply couldn’t react in time to the increased demand.  The process helped cement a view that had been building in my mind; marketing success was really built on the initial but unglamorous work of understanding and analysing markets; the 90% that was pure perspiration.

Sitting at home one Sunday morning, sipping coffee and reading the Sunday Times business supplement, I had what can only be described as one of those ‘eureka’ moments.  As all of our UK range was comprised of totally undifferentiated, industrial lighting products I knew we had, somehow, to differentiate everything except the products.  If we were to create an identity for our business separate and distinct from our major competitors to give customers a reason to believe in us, this was critical. I had known this for a while but hadn’t yet worked out how to achieve our new positioning (and how to finance the process on my shoe-string marketing budget). What I read that morning started a process that would position our brand and our company far from competition.

“Thorn Lighting bribes local authority with billiard table” was the headline I read that morning.  Still in the grips of recession this story provoked outrage but also provided the spark of inspiration I needed.  Bribing buyers with personal gifts was clearly wrong but what if we could make public play of offering our customers business related goods and services that could only be used by the business?  Fantastic idea but how could I fund this from my meagre budget? Accounting rules at the time (on both sides of the Atlantic) came to my rescue.  I discovered that the funding could come, not from my marketing budget, but from a deduction of sales revenues prior to declared turnover.  Accounting sleight of hand perhaps, but perfectly legitimate.  Brian smiled and agreed to the plans I was fleshing out with my colleague Martyn, the Sales Manager.

We put together a road show for our wholesale customers, travelling from the Highlands of Scotland to London.  At these presentations we first put forward a portrait of the industry that the customers had never seen before.  This information came from my careful, factual analysis of all of our major competitors (Thorn, Philips & GEC).  This showed the tangled web of brands, second brands and companies that competition used to bypass the wholesale distribution channels and sell directly to major electrical contractors, companies and government and local authorities.  I followed this with an economic update showing the continued grim outlook and acknowledged how difficult it was for companies to invest in their businesses (especially in the face of major suppliers who were actively competing with them).

The highlight of the presentations was our commitment never to compete with the wholesale channel, together with our large new business support programme.  The programme I had put together offered each and every customer, large or small, the opportunity to identify what business product or service they most needed to invest in that year.  The solutions we offered ranged from warehouse overalls up to delivery vans and everything in-between.  The programme required the customer to sit down with our sales man (or woman, yes we were an equal opportunity employer) and agree a purchase target that would trigger the supply of the business goods at the year end. Martyn and I followed these presentations up with individual meetings with all of the senior and regional and head office to hammer home the messages.  The programme was a major success that ran for a number of years.

As I result of my growing knowledge of the industry, it became clear that whilst there were many large and national companies in the industry, the level of actual business acumen was low at all levels in these organisations.  This was an especially acute problem due to the decentralised nature of the structure and decision making of the large companies. Most of the industry management had simply little training or understanding of how to trade through and out of a recession.  I drew up an outline of a financial management training programme to meet this need. Realising that I needed a rather more heavyweight partner to author it, I went to the London offices of Touche Ross & Co (now Deloites).  Together we worked on the programme named The Business Expansion Kit that I turned into a partwork, published on a monthly basis and circulated by our sales team.  In addition to providing valuable information, each volume gave the sales team a subject to discuss that was of value and entirely separate from the process of business negotiation.  This further assisted in setting us apart from competition.

A close relationship with the industry federation and the major trade publications came as a result of these programmes.  Close contact with the magazines enabled me to secure offers to write long articles on topical issues.  Careful never to pen overt publicity for the company, these articles nevertheless provided further evidence to our customer base that we were a knowledgeable, ethical and trustworthy business partner.

A hugely enjoyable aspect of my role was teaming up with Martyn to visit major customers.  Aside from the benefit of having both of us present at major negotiations, great value came from the hours of conversation we had whilst travelling the country, allowing us to cook up further ideas.  Some of the meetings had decidedly lighter moments; one of which I recall served to put us two bright sparks firmly into our places. We had travelled to meet the owner of a successful independent distribution business who welcomed us in and listened patiently whilst we pontificated somewhat to the chap over how to improve business. Turning to Martyn he enquired in a polite tone of voice, “Tell, me Martyn, what motor do you drive?” “Well,” responded Martyn “I’ve got aGrenada.”  “Ok,” says our man, “you might be two bright young men who think you know all about business, but I’ve got a fucking new Bentley outside!”

Coming home in high spirits from one of these trips, my wife sat me down and shared fears with me that over the next few weeks led to her diagnosis of cancer.  Our world had fallen in and neither of us knew how we would or could cope.

‘Savings’ image courtesy of http://www.wordsaboutthings.com

‘Charles & Diana’ image courtesy of http://www.denver-weddings.blogspot.com

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The business of life (chapter 16 – grim up North)

After just three months and 79 applications I had secured a new position that seemed to offer the future I sought.   Arguably it was at the same level as my previous role.  Yes, it had a narrower functional focus but it was with a division of GTE, a major US corporation, and I was earmarked as the replacement for the current UK managing director.  Sylvania Lighting, the company I was joining, was exclusively involved in industrial and commercial sectors that were completely new to me.  I had a lot to learn.

On a Sunday evening early in December 1980, I waved off my family who had spent the weekend with me in Yorkshire house-hunting.  I got an early night in preparation for the start of my new job the following day.  Sleep didn’t come easily due to a combination of an incredibly noisy heating system in my hotel room and the thoughts that kept crowding into my mind.  All of my marketing training and experience at this point (and the majority of what was taught at that time in the UK) focussed exclusively on consumer marketing.  The only information that my research had uncovered on marketing in industrial sectors was a very short pamphlet from The Industrial Society in London.  This was very different ground to the exciting sectors I had been involved with up to this point and the concepts kept going round in my mind as I struggled to sleep.

Feeling like death warmed over after what felt like only 5 minutes sleep I presented myself at the office and tried to appear bright and raring to go to John, my new boss.  Quickly introduced to everyone in my new team (all three of them) and the rest of the office based staff I took a briefing from John.  Having only acquired the manufacturing assets of an old established British company approximately 5 years previously, the business imported 85% of the range of products sold in the UK from other European group factories and exported 90% of our own factories’ output to the rest of the world wide group.  Following an initial period of UK growth sales had run out of steam.  Competition came in the form of Philips, Thorn & GEC, all long established and major companies.  My task was to construct a strategy to grow against these industry giants.

After sitting down with my new team I felt very alone.  They were warm, friendly and eager enough but had limited experience and low levels of initiative.  Meeting the rest of the management team revealed that Bob the finance director was the perfect caricature of the Scottish FD.  Mike the operations director seemed competent and friendly but both seemed somewhat reserved about my role. The really bright spots were Martyn the Sales Manager, a great guy with whom I shared photographic industry experience, and Andrew the HR director who I had met at interview.  I felt I could work well with these two.

I spent the remainder of the day trying to find industry & company information I could use for analysis & planning.  Before we left the office, Martyn suggested we had dinner together as we were staying in the same hotel (he also being in the process of relocating and a weekly commuter).  The evening was good fun and it became increasingly clear that we were going to have a great working relationship.  After a few pre-dinner drinks in the bar (it had been a long day), we sat down to eat and enjoy a bottle of wine.  Towards the end of the meal, Martyn waved the empty wine bottle and suggested, “Shall we have the other one?” I recall that I must have responded in the affirmative as I awoke the next morning with the most appalling hangover.  Somehow I managed to blag my way through the day, vowing all the time that I would never touch another drop.

Following my week in the hotel, John suggested I rent a flat as it would be both more economical and convenient for the time it would take to find and move into the house of my choice.  A large loft apartment was soon located in a quiet leafy suburb and it was suggested that I share with Cliff, an American student who was on secondment to us.  Cliff was an ideal flat sharing colleague as his interests and daily routines ensured we rarely ever met except in the office.  Immediately we moved in the key problem with the apartment became apparent – it was totally devoid of insulation.  With a combination of heaps of additional blankets & a huge electricity bill we would make it through a very cold winter.

Over the next few weeks it began to emerge that not only was John a curious character, but he was an absolute bully to his team.  The bullying took the form of a continuous need to be seen not simply to be the leader but to be right in any and every situation.  He appeared to be incapable of trusting anyone to carry out their role without his interfering.  That I knew little of industrial marketing I was well aware but John’s lack of understanding of the entire purpose and practice of marketing was verging on the complete.  This was however a deficiency that never prevented him from pontificating on the subject.

He was also exceptionally parsimonious; one of that select band who know the price of everything and the value of nothing but carried to an extreme. On one occasion he drove to London early one morning to attend a trade fair and drove back again that afternoon to show his face in the office.  He then went home, changed and drove down to London again to attend a dinner before driving back up to Yorkshire once more in the early hours.  The following day he made it known that he had saved the company money in this way (by driving around 1,000 miles in a day)!

However, the event that really began to send the doubts that were gnawing away in my mind into overdrive was the Christmas staff function.  John invited the whole management group to his house for drinks before dinner, which was fine but it merely served to demonstrate that his obsessive compulsive behaviour was not confined to the world of business (his poor wife….).  We then moved to a local pub where John had booked a function room for dinner.  The meal was simple and I kept well away from John and used the opportunity to become better acquainted with my new colleagues.  At the end of the evening I witnessed an event that, even today, I still cannot really believe I saw.  John went around the room collecting up glasses that still had wine in them and poured the contents into several empty wine bottles.  “Waste not, want not.” he opined when he saw that I was watching him.

Driving home for the Christmas break my mind was in turmoil with the conflicting experiences of the last month plaguing me.  The challenges of the job had got to me and I was convinced I could devise a suitable strategy for growth but it would not be a five minute task.  I had to have the freedom to explore on my own and I was growing less tolerant of John’s style by the day.  I had turned down two other roles and they kept returning to my mind; perhaps they had not yet made an appointment?  I realised that I would be in a very weak negotiating position if I pursued that route.  The four hour journey gave me plenty of time to mull things over and by the time I neared HenleyI had decided to give my role one more try.  I was a fighter and I was determined to make things work if there was a chance.

Back in Yorkshireafter a wonderful Christmas with the family, I started to review the task before me. The meagre information I had on industrial marketing (the one brief pamphlet) suggested that if it was not possible to differentiate the product itself (a cornerstone of consumer marketing) then attention should turn to differentiating everything other than the product.  It was quite clear that our product range was totally non-differentiated with every product made to a set of harmonised industry standards.  Construction of a complete marketing strategy that differentiated our company and our strategy was the great priority; it was what I had been recruited to do.  But I had John to contend with and I had to get him out of the way while I worked on the planning and then get him onside for whatever the solution transpired to be.

Then one of those serendipitous events took place that was to change things overnight. John called a meeting one afternoon and around six of us crammed into his office (in the old office we lacked even one meeting room).  With the heating pumping out and the windows and doors closed to exclude noise it soon became stifling; I undid the top button of my shirt and undid my tie. “We keep our shirts buttoned at all times in this office” barked John.  I was, to use a newly acquired local expression, gobsmacked and quickly responded, “That’s simply ridiculous.” and left my shirt how it was. John glared at me for an age and then moved on to what became another of his usual uninspiring meetings.  As the meeting concluded, without thinking and probably remembering the general office was considerably cooler, I did up my top button, restored my tie to full mast and walked out to the gents to relieve myself.

I had barely concluded matters when John burst in announcing, “I need to talk to you in my office, now!” Ready for a fight and thinking that I couldn’t take his petty bullying any longer, I followed and quickly became astounded back in his office.  “You disagreed with me earlier,” he started in on me, “in front of my management and wouldn’t back down.  But before you left my office you made it clear that you would comply with my rules and I just want you to know that I respect that.  Now, how’s the house hunting going?”  From that moment on, John changed his attitude towards me, even seeking my views in front of others and then making it clear that he would back them.  He also gave me the time and space to concentrate on my key goal, something that consumed my full attention.

Just as I was starting to enjoy my role something more serious occurred that rocked my world.  A couple of years back my old boss Gordon had introduced me to Norton Warburg, a financial investment and asset management company.  I had been persuaded by their presentation and seemingly very professional manner to place my savings with them for investment. The actual sum today would seem slight but it represented well over a year’s earnings for me then.  The money had been duly invested and it had produced not only a very good yield but, due to some highly effective financial planning available at the time, was very tax efficient.  I was relying on these savings to help finance my move to Yorkshire.  One Friday afternoon I had spoken to my advisor and informed him that I would require access to the money at short notice.  He came back to me with the suggestion that the Bradford & Bingley were offering a very good rate for short notice investments.  We agreed he should make the switch.

Early the next Monday I set out on my usual drive from Henley on Thames up to West Yorkshire.  Breaking the journey on the M1, I bought my usual copy of the Financial Times, which I started to flick through as I sipped my cup of the usual foul motorway coffee.  When I came to the business section I was stopped in my tracks by a story that indicated that over the weekend Norton Warburg had been placed into administration and that first indications were that it was doubtful that creditors would receive any recovery.  I went cold.  The thought of losing my savings was more than I could bear to contemplate.  I found a payphone and called their number only to be told that the administrator was not taking calls from creditors; I would have to wait until he was ready to make an announcement in due course.

I drove the rest of the way to the office in a state of shock.  There must be something I could do.  Surely, I couldn’t have lost all that money?  Or could I?