The business of life (chapter18 – Influence versus Power)

My wife had cancer and our world changed, the effects of which are still with my family today.  The immediate results of her illness were two major operations, radiotherapy and lengthy recuperation.  My wife was a nurse and well placed to understand her illness and the prognosis.  Despite her medical training she also took support and advice from the Bristol Cancer Help Centre (including a diet so heavy in carrots that her skin turned orange).  But she drew on of levels of courage and determination I never knew she possessed and gradually life went back to an appearance of normality.

Following this period, when I cancelled all travel to ensure that I was at home or close by, my focus returned once more to the challenges I knew we still faced as a company.  Our major competitors were heavily involved in the manufacture and sale of lighting fittings and this was important for a number of reasons.  By working with architects, electrical consulting firms, Local Authorities and large clients, competition ensured that their fittings were specified (usually ensuring the sale of their light sources within the fittings).  This power of specification ensured a large degree of leverage and influence over the electrical wholesale channel when it came to the supply of light sources and effectively inhibited the sale of our own.

The addition of a range of mainstream light fittings seemed to be a logical and essential extension to our activities.  Our European head office had already launched a small number of sophisticated (and expensive) fittings that were way ahead of competition in performance.  Unfortunately, these were niche solutions that were extremely difficult to persuade architects to specify or distributors to stock whilst we lacked mainstream products and an image as a competent supplier.  The logical next step was to introduce our own range of popular fittings with which we could attempt to establish our brand in this vital sector and overcome the barriers competition had created.

Having agreed this shift in strategy with my colleagues, I pressed ahead with further research into the market for lighting fittings.  Despite our own huge factory in West Yorkshire it made sense to outsource production, at least until we could justify investment in our own facilities.  After an extensive search across Europe, I located a manufacturer of the required quality in Eire who not only had spare capacity but who didn’t compete with us. Working with an industrial design group we produced and refined prototypes, which I tested using focus groups of architects, specifiers and electrical contractors.  Following a national launch supported by heavy trade advertising we achieved our initial sales targets.

Meanwhile, Brian had remained true to his word that he would support my career development.  An early demonstration of support was his engagement of a personal French tutor to start the process of preparing me for a career move into our European businesses.  This was followed by my enrolment in a management training programme that took place on both sides of the Atlantic.  GTE (our parent in its pre-Verizon days) had recently invested in its own ‘university’ spending $50m (30 years ago) building a magnificent redbrick management training school in Norwalk CT.  Spread over acres of prime real estate the objective was to provide a world-class business education.  Not only were the physical facilities superb but I studied under the best professors that Harvard, Yale, MIT,Dartmouth and Columbia could provide.

Eager to learn and with 20 years of business experience already under my belt, I soaked up everything I could that was at the cutting edge of business strategy and technique. Between programmes I found I could directly apply what I was learning to the challenges of my role.  However, the more I learnt the clearer it became to me that senior management, whilst supporting the concept of advanced management training, simply wanted a ‘business as usual’ life and would resist any moves that threatened change.  The scene was set for great future frustration on my part and friction with those to whom I reported.

One moment of levity at this time came from a delightful character, Phil Thurston, at the time Professor of Business Administration at Harvard Business School. At the end of one programme Phil gathered us around and said, in his slow, hesitant drawl reminiscent of the actor Jimmy Stewart, “Well, guys I’ve taught you what I know about the subject and you’re well prepared.  But there is one additional quality you’re going to need in that world out there that I just can’t teach you – rat like cunning!”  Oh how right he was and how I wished I had found a way to acquire this vital quality.

Whilst our initial launch of lighting fittings had gone well the situation we were now finding was that the stock was not selling out of the wholesalers as planned.  Our sales force was now of high quality.  Having worked closely with Martyn on profiling, recruitment & training, my research now showed that we had moved from the worst image in the trade to the best.  Something else was wrong.  The sales force were supposed to start calling on electrical contractors, the critical group who actually bought the fittings from the wholesaler and installed them.  The problem was simple; the sales team weren’t making the contractor calls but the remedy was far from easy.

Whilst we had got good acceptance of our new product amongst our wholesale customers, and despite our advertising, they were finding it difficult to sell to the contracting trade.  We were an unknown quantity in a very traditional sector.  The solution was to split the sales force into two parts; one group continuing to sell into distribution and the second trained to enable them to design lighting schemes, obtain specification and to influence contractors.  I also started an intense period of public relations activity with the Electrical Contractors Association, building relationships with some of the key people in that sector.

During this same time I stepped up activity with our core customer group, the wholesalers, taking a number of those most loyal ones across the Atlantic to visit their major counterparts in the USA & Canada.  In this way we were able to demonstrate that whilst we might have been new to the UK, we were a company with a long and deep history of support to the distribution channel.  Another venture, in conjunction with a leading trade publication, was in forming of group we identified as the leaders of tomorrow and in creating training and development events for them (with appropriate publicity).  My latest research showed we were viewed by the trade as #1 for our sales force, service and trade support.

Despite these improvements in customer perception and growing share in the market for light sources, our progress in the new area of lighting fittings remained very slow.  Realising that gaining a foothold in this tightly controlled sector of the market was going to be difficult, I commenced a search for a suitable acquisition candidate.  Alongside this new strategy I continued to look closely at the performance of our sales team.  The technical sales team were small in number and it was clear that their progress was going to be slow against long established competition.  The main sales team however appeared to be neglecting the tasks set to them to support the new range and it seemed to me that they were staying within their comfort zone.  I repeatedly raised this issue with Martyn but little seemed to change.

During the time I had been working closely with Brian (and supporting him in every way I could) I had also been taking every opportunity to remind him of my general management experience and the unused competencies that I possessed.  I was constantly pushing for a wider role in the business either in the UK or inEurope. Additionally, I had also used external opportunities to demonstrate I was a saleable property (which did no harm to my salary but achieved nothing else tangible). As the fittings growth stalled my representations to Brian increased and I was actively lobbying him to put sales under my control.  Instead, in a surprise move displaying the judgement of Solomon Brian, appointed both Martyn and I to the board!

With a new stripe on my sleeve my CV improved but nothing else had changed and the problem of little or no growth in our fledgling fittings business was causing me great concern.  The strategy I had constructed and implemented with the support of all in the UK andEurope included the vital component of achieving a shift in the image of the company from a light source company to a comprehensive lighting company.  In practice this would enable us to break a stranglehold competition had on sales via the wholesale channel (the vast majority of the market).  Our pitch to major distributors had been predicated on our commitment to displace competition in a sizeable share of the fittings market that would lower the wholesalers’ risk in moving more light source purchases to us. The power of competition came from the constant threat to route specification business away from wholesalers if they reduced their light source purchases.  Failure to establish our fittings range was jeopardising our means of breaking this tactic.

The relationships I had with the management team within our European headquarters were also a source of frustration for all parties.  With many of the team I had an extremely close and productive relationship.  However, the European strategy (such as it was) brought me into constant conflict with both senior management and the various holders of the role of European Product Manager for our incandescent light sources (ordinary household light bulbs).  There was constant pressure for me to target the retail sector in the UK (several of our other major subsidiaries were present in this sector and achieved reasonable volumes).  All of my considerable experience in the retail sector showed me that we could never make any profits from such a move and I resisted strongly whenever the subject was raised. Information gained some years later shed a fascinating new insight into this issue.

Armed with a great deal of knowledge concerning the UK retail sector, how it operated and differed from its European counterparts together with a great deal of personal experience, overcoming these representations was like shooting fish in a barrel.  It earned me enemies though.  Instead, Martyn and I sidestepped the main problems of trying to establish our own brand by winning considerable private brand orders that for a while boosted our volumes.

Over the next few months a number of shifts took place that saddened and frustrated me but finally gave me some hope.  Over the previous few years life at home had returned to normal and, despite the residual effects of her illness almost 5 years previously, my wife seemed well and had returned to working in the health service.  A real boost to her self-confidence came when the local authority offered to sponsor Jean through a degree course.  She was elated.  The joy was short lived as a week or so later my phone rang and I heard the news that she had collapsed with what appeared to be a seizure.  More fits followed in the next few weeks as we waited anxiously for the test results.  It was with horror, fear and sadness that we heard the results; a large tumour in her brain.  An operation was quickly carried out but the outcome was that the tumour had been in an advanced state and the prognosis was terrible.  We battled on.

The disagreements with Martyn remained and I continued to plough on using a full frontal assault to achieve the changes I thought we required.  The result became an open rift and little progress.  What had been an incredibly successful working partnership (recognised across the industry) was no more.  It also cost me a friendship. At the time I heaped all of the blame upon Martyn and it took me many years to realise and accept that, had I modified my approach, we might have been able to reach an accommodation, preserve our relationship and make better progress.  I continued my hunt for a suitable acquisition target but became frustrated when it was made clear to me by our European management that I should desist in my efforts.  This frustration with senior management had not been enhanced by ourUS parent’s failure to pursue acquisition of our majorUK competitor (Thorn Lighting) in 1985 when theUS$ almost reached parity with the Pound (at £0.95).  An unbelievable opportunity missed.

All became clear a little while later when our European management proudly announced the acquisition of Rotaflex.  ThisUK business was focussed upon the design, manufacture, specification and sale of high end architectural light fittings via the Concord brand.  The group also included Linolite, a smaller company manufacturing and distributing ranges of niche, low value commercial fittings.  Neither of these companies would assist in achievement of the strategy that I had constructed and that had been accepted.  All of my difficulties remained.

A form of hope came when it was announced that Brian was to move to run the newly acquired Rotaflex group.  The opportunity for me to replace Brian was obvious but it soon became clear that I would have competition.  The overall growth we had achieved since I joined the company spoke for itself.  But had I acquired more enemies than friends?  Could I convince our irascible European president? I tossed my hat into the ring.

Image courtesy of http://www.jollypeople.com

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