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The Business of Life – Chapter 44 Postscript II finding that elusive balance

 There are few phrases that have crept into the lexicon of life in the 21st Century that annoy me more than ‘Work-Life Balance’.  I believe it to be simply inane, socialist dogma to imply that work is somehow anything other than an integral component of a healthy life.  It would be equally inane to refer to a ‘Home-Life Balance’.  Work gives us an identity that for the majority of us defines what we do.  Yes, I also subscribe to the concept of multiple identities; after all I am also amongst other things a husband, a father, a cyclist, a volunteer mentor and an aspiring writer.  But when I worked, it was my work role that provided the answer to the invariable question at parties, “What do you do?”

Finding the elusive balance

The phrase and the concept that makes sense is ‘Whole-Life Balance’, which at least recognises there are multiple aspects of our life in which we seek or should attempt an equitable balance.  Nevertheless, this state of balance is an elusive and frequently ephemeral state to achieve and there is little room for compromise if you really wish to succeed.  There are too many variables, too many uncontrollable factors that do not cease to be demanding and which conspire to upset this delicate state of equilibrium.  Yes, I learnt to fight back against the petty aspects of work pressure when I could but competition does not sleep and creditors, the Government and the economy certainly don’t.

It’s strange that we can accept that the great sportsmen and women, the politicians and the artists and stars we admire so much make massive sacrifices to succeed in their chosen careers.  But do we ask, do we require, do we care if they strive to achieve this so-called balance in their lives?  How many Olympic medal winners do we hear being chided for not spending more time at home?  And yet we make so little allowance for those in everyday life when they strive to succeed in their chosen careers.  It’s true that the family can enjoy the lifestyle that comes with the salary the breadwinner brings home.  But is he or she not worthy of the same respect as our sporting heroes when they make the necessary sacrifices to succeed?

 I am a happy and a satisfied third-ager precisely because I have achieved a state of self actualisation.  Apart from an ever growing bunch of people doing their best to destroy this wonderful world we live in, I am genuinely happy with my life.  I could claim that the end justified the means.  Nevertheless, I certainly cannot claim it was either easy to achieve this state or to strike that elusive state of balance for more than a matter of weeks at a time.  Nor can I claim that it must have been easy for my family (but I’ll return to that shortly).  To achieve one big goal in life requires dedication, commitment and the subordination of all other roles and goals.

That I was never a successful sportsman may be down to a combination of my physique (now was that nature or nurture..?) and my lack of early exposure to the joys of ball games.  But I was certainly as driven as many a sportsperson.  That drive came as much from a fear of failure as it did a need to achieve.  When I was fired from Akai I was, one could say, a victim of my character.  It was an intense sense of failure that overcame me and then drove me on to succeed.  But it was the same set of behavioural preferences that had driven me to that situation in the first place.

For those initial twenty years I had one success after another.  I really believed that I had got the magic formula.  Not only had I believed that being very good at what I did would be enough to maintain my career momentum, I had always used my ability to present my case logically and rationally (but rather like a battering ram).  The problem was that I had no political skills to bring to bear and I wore my negotiating position on my sleeve.  When you’re being confronted with the choice of being burnt or scalded neither is easily preferable.  If the choice is actually being burnt today and scalded tomorrow, then my tendency was to enter the fight straight away.  With the benefit of hindsight, I could never have won the battle at Akai because I was working for a company that ultimately had to fail because it simply didn’t have the resources to succeed.

However, ten years later I was still making some of the same mistakes when I realised that the company I worked for did not have the strategy to succeed in reaching its stated goal.  I was right in my view (as history has again proved) but I still lacked the political skills either to convince others or to survive.  Anyway, by this time I was probably seen as a threat and was fighting a whole layer of senior management wedded to preserving a status quo that was doomed.  Should I have worked on my political skills instead of the full frontal, bare-knuckle approach?  I don’t believe so for two reasons.  The first is that being Machiavellian is beyond my natural style of behaviour, it’s simply not within my skill set.  The other reason was that having seen the future and the people my future would depend upon, I just didn’t like it or them.

It took just a couple of years more to realise that corporate life was not offering me the chance to play to my particular skill set.  If you are in the wrong company, in the wrong industry, with skills that are not recognised then life is going to be really tough.  More so if you are the one telling the emperor that he has forgotten his clothes.  I really think that in such circumstances you should think about doing your own thing – building or buying your own train set.  The constant stresses and strains of having to do battle within your own company, in addition to the real work of satisfying the market and battling competition and the economy, are debilitating.  They were for me and they were for my family.

If fear of failure drove me on, it never soured my enjoyment of the here and now and it never stopped me taking what some might call unacceptable risks.  Freed of the political constraints and frustrations of corporate life, I decided to take the king’s shilling of venture capital.  To do so meant investing my life’s savings alongside the millions from a VC and the banks.  It didn’t worry me as I felt I was really in control for the first time and dependent upon my own judgement.  I made a rule however that I would never give a personal guarantee to a bank.  The essence of the concept of limited liability is destroyed by providing some faceless, business-illiterate bankers with the ability to claw back your home if it all goes wrong.  If my life savings weren’t enough risk money, then they weren’t for me.  And I never had to give that guarantee.  In that sense I wasn’t prepared to jeopardise the balance between my aspirations and the roof over my family’s head.  In the event, two out of three ventures were successes and that was just fine.

When my dear late wife became pregnant with our daughter we agreed that she would put her career as a nurse on hold and become a full time mother.  It was her suggestion it and I thought it natural to agree.  Just as I thought it natural that I should do whatever it took to replace the money she had been earning.  It took a great deal of hard work and a toll on my health but I can’t recall that she ever complained that I had the balance wrong.  And when the time came and she wanted to return to her career, I supported that decision.  My daughter and my son might feel that I wasn’t around enough or that I wasn’t there when they needed me.  I don’t know.  A Dutch colleague once said to me that in Holland they have a saying that for the first seven years the child belongs to the mother, for the second to the father and for the next seven years for both together.  I do know that I wasn’t around as much as I might have been for my seven years and sadly, Jean wasn’t permitted to share the next and subsequent phases with me.

I now realise that for many years I was someone who made decisions solely on the basis of facts, logic, my reading of the future and the implications for my course of action.  This approach certainly gave me the advantage of having an uncluttered and largely rational approach.  Business decisions were made never pausing to consider others’ feelings and emotions but focussing on what was required to achieve the result.  It came as little surprise when in a group activity during a course in the US, I was described by colleagues as ‘remote and unreadable at times’.  My response at the time was to see this as something of an accolade.  Subsequently, I made efforts to try to include the human aspects in my decision making but most times defaulted to my natural style.

However, following the appallingly early death of Jean, something changed in me.  I cried for the first time at sad films and passages in books and even music could have the same effect.  What Myers Briggs call the ‘shadow side’ of my personality, the undeveloped natural senses, were seeing the light of day for the first time.  I don’t believe that I lost my natural, behavioural preferences but now make a real effort to understand the feelings and perspectives of others.  I would find it hard to describe a business situation where I would make a decision based solely on feelings and emotions.  However, seeking out and being aware of the human reactions and implications of a course of action has made me a more balanced leader.

My career was extremely stressful at times but on balance (that wonderful word again) I absolutely enjoyed it and cannot imagine what else I might have done.  I can only hope that Victoria and Alex have as much fun and gain as much satisfaction and self-actualisation from their lives as I have done.

Do I have regrets?  Or remorse?  I have often pondered what I consider to have been a grave error of judgement (spelt out in Chapter 22) when I claimed to have been aware of a major problem but when in reality I had been blissfully ignorant.  My misjudgement stemmed from a desire to conceal that I had been unaware of something (a stock loss) that I should have known about (even though it had been concealed from me).  If I had claimed the truth I might have come out on top for the subsequent battle for a bigger UK role.  However, had this happened, I would certainly have not been moved to Switzerland a few months later.  I cannot speculate if my career would have been better but I know that I would have missed the pan-European role and invaluable (but painful) experiences in Geneva plus the trigger to pitch for venture capital.

Certainly I made other mistakes for which I feel remorse and can still vividly bring to mind situations where my inability to see consequences from another’s point of view caused pain.  These were not situations where I stood to achieve gain from another’s loss but just where my lack of an ability at the time to see the world through others’ eyes made me thoughtless and careless in my attitudes towards others.

For many years I regretted (and felt less of myself as a result of) my lack of a university degree.  What I might have studied I really cannot speculate, although I was being pushed towards art.  I am sure that this would have been a mistake as I probably wouldn’t have been ready for the rigours of studying at university in my late teens and it could so easily have been a wasted experience.  Instead I had the pleasure of continuing to learn throughout life.  I am not an expert in any field (to my regret at times) but a mercurial mind has provided me with the inclination to delve into many and varied subjects.

I now consider that I was fortunate I missed out on university.  This might sound strange but it ensured that I was always focussed on learning whatever I needed to progress.  There were times when I thought I knew it all but the mistakes I made always spurred me on afresh with the learning.  Throughout my career I often found myself surrounded by people who seemed to have left the process of learning behind when they passed through the gates of their university for the last time.  Overtaking these people was therefore never too much of a problem.  So, even with the best degree (or two) there is always so much more to learn (and no more so than in business).

So, for all of you who have followed my writing to this point, I wish you health, happiness and all the satisfaction in your careers that I have had from my own.

I have the feeling that life has a few more challenges left in store.

The Business of Life Chapter 41 – when the attack comes (part 2)

I am somewhere inside Airedale hospital and in acute pain, the worst pain I have known in my life.  A stern but sensible looking female leans over me and informs me that I am having a heart attack.  I feel nothing except pain as she goes on to tell me that I am to be taken to Leeds where they have a specialist unit and they will perform angioplasty and insert a stent if necessary.  I am to go in the same ambulance.  Some conversation is going on with Denise over following the ambulance.  I am glad not be involved.When the attack comes (part 2)

“I’m in pain!” I tell the assembled throng.  They tell me that they can give me more morphine and soon a needle is in me again and then I’m being wheeled down those corridors again with Denise telling me she will see me later.  I feel alone but relieved to see my two ambulance men; they are good guys and I trust them.  We soon set off and I hear the siren again.  I try to work out where we are and succeed some of the time.  I am surprised at how fast the ambulance can go and how it doesn’t have to slow very often, when I’m not thinking of the pain.  My chest is being crushed.

I’ve always prided myself on what I feel is a stoic like ability to ‘hang in there’ through the worse times and I concentrate on doing this now.  I feel like I’ve been doing it forever; hanging in, holding on.  It’s not working.  I pull down the oxygen mask that has been placed over my face and I am ashamed to hear myself suddenly pleading.

“Make the pain go away!”

I have no shame.

I get a squeeze of the hand and stern instructions to replace the oxygen mask but they can’t make the pain go away.  I decide that all morphine can do is slightly blur the pain, perhaps take it down half an octave but the volume stays the same. The oxygen is about as much use as a chocolate teapot.  The pain rises to a crescendo and then gradually it reduces, ever so slightly it dulls a little and then a terrible wave comes again.

I’m going to be sick!

I vomit into a paper bowl.  It doesn’t feel better the way a good chunder usually makes one feel.  The ambulance man tells me that morphine can have that effect.  On goes the journey.  I dimly perceive that the sun has faded and been replaced by dark cloud or fog.  And it’s colder still.  How much colder can I get?  I think we must be going up Otley Chevin and try to work out how much longer it will take.

I vomit again.  I feel like the worse kind of shit. 

We speed on ….it’s taking forever.

I want to writhe around to ease the pain.  I do and it doesn’t   I try being even more stoical but it’s becoming a hard role to play.

Dully, I sense we must be nearing wherever in Leeds we are going as I am vaguely aware of a cycle of braking, slowing, turning and acceleration.  And the fucking speed bumps again, the cruel, fucking speed bumps.

Suddenly we have stopped and I am being wheeled out of the ambulance.  I feel cold as I am wheeled down corridors once more and then into a large room with a group of people – waiting for me.  I don’t have to wait – I must be important.   I am transferred from the stretcher onto another gurney-like bed where soon people are working on me.

 “Lie still.” I am instructed.  This is difficult, as I have found (relative) comfort (mental not physical) in a resumption of my writhing.  Something is happening in my groin.  I distract myself by looking at a bank of monitors to my left and over my head.  I decide I don’t like what is going on and concentrate on the pain.  From the bit of my brain that is still able to function I start to recall the comments made to me by my business partner, Roger, who had angioplasty and a stent inserted 6 weeks earlier.  Roger is a big guy who has battled MSRA and terrible pain for many years due to spinal damage before falling prey to angina.  I recall him telling me that the insertion of the stent was the worse pain he had ever experienced.  “Oh, fuck!”

“You really must lie still!” one of the hovering team sternly instructs me (I have decided to award them this description as they seem to be indulging in some sort of co-ordinated behaviour).  I wonder if he’s ever had a heart attack.  I think I stop moving for a moment before resuming a sort of slow, rocking, writhing and wait for the pain to get worse as I now believe it will.  Will I be able to cope I wonder?  This pain is bad, very, very bad.  Will I be able to withstand much, much worse?  Fiddling is still going on in my groin area, I am aware of this but it no longer has relevance to me.  I am detached, properly, not the semi-detached variety, but I am lost in my pain and the expectation of worse to come.

A slap on my shoulder brings me out of the depths.

“You’re done!” he tells me, whilst briskly ripping plaster about the size of the Isle of Wight from my chest.  “They’ll take you up to recovery now.”  I am shocked.  The pain didn’t get worse.  I am aware of being moved on the gurney by following my progress across the ceiling.

Somewhere between the room where they did things to me and the recovery ward, I think it occurs in the lift, something happens.  I am not sure at first, I have not been sure of much for some considerable time, except the certainty of the pain.

The pain has gone.

I feel normal.  The pain has not eased – it has gone.  I have no pain.  I HAVE NO PAIN!

I am soon wheeled into a small recovery room where a chatty nurse tells me she is going to attend to the incision in my groin where the entry was made into a main artery.  Soon I am sporting a large clamp-like apparatus over the wound that looks like something Lakeland Plastic sell for various kitchen tasks.  Then follows a short lecture on the dangers of moving too much and how I am to inform them if I feel a damp sensation in my groin.  I realise that my sense of humour has returned when I hear myself telling her that they would probably notice the blood on the opposite wall first, it being a main artery we’re talking about.

They then show me a couple of before and after screen prints of my heart.  The before shot shows one main artery completely blocked and another one almost closed.  The after shot shows the main one flowing clear and unblocked.  Amazing.  I ask for copies but am informed that is against some regulation or other.  I begin to feel like a third party again for a moment.

Soon a very cheerful nurse comes and tells me that they have saved me some dinner – am I hungry?  My brain is working once more and I calculate that I must have been having my heart attack for something like 7 or 8 hours.  My sense of humour really returns when I see that the meal they have saved me is macaroni cheese.  I have had a heart attack and they’re feeding me cheese!  It tastes like the best thing I have ever eaten.

Shortly my affable male nurse arrives this time proffering a pair of PJs at least two sizes too small.  He tells me it’s all they have and I accept them as they seem clean and better than the gown I am wearing.  We laugh together and it’s a great feeling.

I lie back and a wave of unbelievable relief and gratitude flows over me.  I am alive and I feel great.  I have survived a heart attack.  I speculate that this is how soldiers wounded in battle must feel when they know they have come through it and won’t have to return to front line duties.

Denise arrives with our neighbour, Michelle.  I feel like I am the luckiest man alive.

Image courtesy of thetherapeuticresrourceblog.blogspot.com

The Business of Life Chapter 39 – brought down to earth

Life had never been dull at Metal Spinners Group but on a personal level I had settled into a routine that most weeks saw me travel up to Newcastle on Tuesday morning and return on Thursday evening.  Having invested my entire savings in buying the company (along with my stake in Bridgestream and ABC technology Distribution) I resisted what might otherwise have been a temptation to buy somewhere in Northumberland.  Instead I stayed in a variety of rented flats & B&B’s in the peaceful village of Corbridge culminating with the delightful Jill at Priorfield .Brought down to earth

Travelling had always been a part of my life and if I had to spend longer than a week in the same place I would become restless.  Now the international business wanderings had largely become a thing of the past but I had been wearing out a succession of cars covering 25~30,000 miles each year.  Whilst the time spent away from home was not something Denise enjoyed it did provide me with plenty of guilt free time alone.  The long hours on the road provided valuable thinking time and evenings alone permitted ample time for reading and whatever work I needed to do at whatever time I chose.  I also managed complete box sets of The Wire and The Sopranos, vast number of books and was always up before six either swimming, walking or working out in the gym.

In corporate life I had frequently felt I was under relentless pressure to make decisions with insufficient time to really think things through.  Owning and sharing the running of up to six businesses, all in different industries, all at the same time, might seem a less than responsible thing to have tackled.  However, this lifestyle did in fact help with many problems.  Simply having the time to think more deeply about all of the options and their potential implications overnight helped a great deal and the reaction to phone calls tended to become, “I’ll get back to you first thing.”  Having this time to myself was invaluable but there was one area it didn’t always seem to help.

Business partners can be a great help especially in broadening the range of  experience and skills within the team and the sheer advantage of others with whom you can chew over problems.  But, like a successful marriage, a business partnership requires respect and trust to succeed.  In opting for the role of chairman in these businesses I had to take my hands off the day to day levers of control and place trust in the partner who was MD to make these decisions.  Unfortunately, and to my great cost, Bridgestream was an example of what can happen when trust is abused.  Despite this the majority of my business partners have been entirely trustworthy but it didn’t stop me chewing my fingernails down to my elbows on occasions.

Roger was a vastly experienced chief executive with great depth and breadth of knowledge of the engineering sector worldwide.  He was also a proud and independent man and attempting to look over his shoulder or double guess his judgements would have been sheer folly.  Having worked with him on the broad strategy for the way forward, I would step back and give him the time and space to implement.  After the initial year working together we ceased holding regular board meetings for the most part.  Instead, we would frequently just sit over coffee and discuss progress, problems and the key issues.  Often no decisions would be taken but I knew that, having taken a sounding and gained another view, Roger would then make whatever decision he felt appropriate.  One such decision provided me with more than one sleepless night.

Our largest customer (one of the world’s largest industrial concerns) was forever attempting to drive down the cost of purchasing by one means or another.  Roger informed me one day that he had found out that they were considering moving a major component away from us to another metal forming process.  “It won’t work, though,” he said casually, “I’ve paid for an engineering feasibility study and it proves it won’t work.”  He then shared the study with them but subsequently learnt that they were still pressing ahead with the trials.  “They’ve said they are going to take full production away from us,” was his next report back, “and they are refusing to renew our contract.  However, they want us to produce the samples but that is going to work out very expensive for them!  If we’re not getting the production volume at least we’ll go out on a very profitable high.”

With our largest (by far) customer threatening to take away the largest piece of work we did for them I tried not to think of life without them.  Yes, the margins for this work produced were lower than other business we had and this would blunt the effect of the volume loss, but it was still a nightmare scenario.  Some months later Roger bounced into my office. “Guess what?” was his greeting.  “The new trials are going wrong and they have asked us to drop down to the price we had previously agreed for production volumes.”  My spirits lifted.  “I’ve told them to get stuffed,” he went on, “no contract, so they continue to pay sample prices.  It’s not our fault their other process won’t work.” “Oh shit,” I thought.

A couple of months later when Roger and I sat down with Malcolm to review the accounts, they showed a giant leap in profitability.  “Good this sample business, isn’t it?” smiled Roger.  Over the next year our customer howled and squirmed but kept ordering and the profits mounted to such an extent we were able finally to pay down our remaining debt.  We also got a new contract.  Life on the roller coaster.

In 2006 we decided to see if we could sell and we appointed Deloittes in Newcastle to market the businesses and act as advisors.  Initial discussions led us to the conclusion that it would be extremely unlikely that we would succeed in finding a buyer for both of the companies we owned within Precision Engineering International.  We decided to put Trisk on the market first with the target of Hedson our largest competitor who had failed previously to buy in 1999.  After a long and increasingly fractious process we succeeded with a sale of the business and heaved a sigh of relief.  The only problem was we were left with a very large factory site in Sunderland as they quickly moved production to Sweden.

With Trisk sold we turned our full attention to the MSG business and Malcolm and I put in a vast amount of time pulling together the required information for the sale prospectus.  A global research programme was carried out and a shortlist of 20~30 prospective purchasers was assembled and contacted by Deloitte.  The interested parties were then supplied with the detailed information pack, which resulted in a small number of offers.  Unfortunately, there was only one offer that looked at all worthwhile and this was from a small northern VC.  By this stage our relationship with Deloittes had become somewhat acrimonious over the modest amount of senior management time that had been spent on our account.  Negotiations commenced and it quickly became clear that there were a number of real stumbling blocks to a sale.

The first issue was that Roger was being viewed as indispensable (and at that stage he was) resulting in the condition that he remained with the business.  This was compounded by the requirement that he roll over a large proportion of his sale proceeds into the new company.  Given that 3i still owned just over half of the equity it would mean that Roger would gain very little in cash terms from a sale.  This was bad enough but there was another major problem.

Due to the growing market in China our largest customer had been once more making demands of us and this time it was for us to open a joint venture factory there with them.  We had run the projections on such a project and come to the conclusion that because of the additional costs involved there was no way we could ever make money from the venture.  There was another insidious risk to such a move; with a far Eastern partner in a joint factory our unique technical know-how could be copied.  In the UK no outsider was permitted to observe or film our processes.  By this stage we had learned that there was no one else in the world that could match our capabilities.  This came to light when our ‘loyal’ major customer approached the manufacturer of our equipment to find another supplier only to be informed we were really the only choice anywhere in the world.

Shortly afterwards the purchase offer was withdrawn due (as we later learned) to the threat of a potential £2m investment in China.  By this stage Roger had negotiated a deal to supply sample production to China, promising that we were committed to the joint venture.  Gradually production volumes and shipments to China grew and the concept of a joint venture disappeared.

Following the collapse of the negotiations a strategy was devised to put the business into a more saleable position for the future.  This involved a new drive to widen the customer base (especially in the USA) and to eliminate the dependence upon Roger.  The first step was to commence a search for an MD for MSG and create an operational board for the company that would take control (over time) on a day to day basis.

We had made two previous attempts to recruit a potential replacement for Roger and, despite sparkling CV’s and wonderful references, both had proved to be incapable of the role.  It had become clear that attracting the right calibre of executive was extremely difficult.  We needed a mechanical engineer with large company experience and commitment to continuous improvement and someone who wanted to move into a smaller business.  By this stage we were very profitable and by far the largest company of our type in the UK (if not in Europe), our previously equal sized competitor having all but disappeared.  We were prepared to put together a very attractive offer for a suitable candidate.  But the problem with our two previous executives was that they seemed unable to adapt to life in a smaller organisation.

However, a new threat emerged that was of far greater immediate concern.  I got a call from Ian the executive at 3i who was our official contact (I had managed to avoid having a 3i executive appointed to our board back in 1997).  Ian and I had worked together during the years we had been turning around ABC Technology and had a good relationship.  I knew (from my years as a member of an unofficial group of investing chairmen 3i put together to advise on ‘problem investments’) that they had been slimming down their investment portfolio in businesses that were not of substantial size.  The word from Ian that day was we were being put up for sale in a bundle of around 40 businesses.

This prospect filled me with horror (as it did Roger and Malcolm when I reported back).  An unknown new VC owner who most likely wanted to meddle in our strategy and turn a quick profit was not something any of us could see any advantage in.  I called Ian and asked him if he felt 3i would be receptive to an offer from us for their shares before they put us up for sale.  I got an affirmative but with the caveat that we would have to work quickly to raise the money and complete the sale process.  We had the advantage that Roger had known the regional director at HSBC for many years, who proved very receptive to the prospect of financing our loan.

The negotiation with 3i proved somewhat more difficult than I had imagined and whilst they had no objection to a sale to us they were certainly no pushover.  The worst aspect was a ‘non embarrassment clause’ that held that we could not sell within a defined period without making good to 3i the money that they would have made had they not sold their equity to us.  Given that we needed time to complete our strategy we agreed and the sale and purchase agreement was completed.  The downside was that we moved from being debt free to being the proud possessors of a very large, shiny, new 5 year loan.  But the upside was that Roger, Malcolm and I now owned 100% of our business.  Thoughts of selling were put aside as we pressed on with expanding the business and paying down the new debt burden we had acquired.

Frustrated with the time wasted sitting in  traffic jams I started flying lessons.  The freedom of the air was wonderful but I was brought down to earth after a short period by two factors.  The first was that it rapidly became clear that given our weather patterns (especially around my local airport – Leeds Bradford) flying was never going to be something I could rely upon as a means of business transport.  Even thoughts of pleasure flying on the few favourable days we occasionally enjoy were also dashed when I found that Civil Aviation regulations would preclude me from wearing my (now essential) hearing aids for the medical I would have to take.  This was frustrating.

But frustrating as it was to learn that I would never take to the skies as a solo pilot, another event was to occur that was far more devastating.

Image courtesy of mistralaviation.co.uk

The Business of Life Chapter 34 – life under water

Earlier in 1997 I had been asked by 3i to review a technology business they had backed that was being viewed increasingly as a ‘problem child’.  I agreed to meet the two main director shareholders of Advanced Bar Coding (ABC) to see what the situation was and if we could work together.  The business, a distributor of bar coding products, had been formed by the joint MDs in the early 1990s.  It operated from an industrial estate in Hull where it had offices, warehouse and a technical department.  Approximately 60 staff were employed & turnover was around £8.0m (having grown by approximately 35% each year since formation).  There were two other members of the board, a Sales Director & a Technical Director.Life under water

The situation I found was dire.  It was clear that the business was on the brink of insolvency having lost £1.0m in two disastrous investments in the USA & Germany (with the losses increasing each month).  The bank was threatening to withdraw their overdraft and had placed the management of the account into the hands of their ‘intensive care’ division.  The factoring company were reeling in their advances due to the poor credit record of many of the customers.  Margins were slender and seemed to be slipping with each passing month.  On the initial visit I got on well with Mike and Alan (the joint MDs) and was subsequently appointed to the board as a non-executive director.  The total investment made in the business by the shareholders and the bank was, to quote a phrase, “below water”.

Mike was a volatile powerhouse, a dynamic and successful salesman, totally committed to his business but very autocratic and appeared lacking in broader-based business & strategic skills.  His energy was inexhaustible but at times he seemed merely reactive to events.  The other main shareholder, Alan, was a quieter and amiable individual who acted as Finance Director (despite being completely unqualified).  We started work on a revised business plan to try to convince the bank to stay with us while we turned the business around.  A core element of the plan was withdrawal from both the USA & Germany.

The meeting went well but the bank refused to support the plan unless 3i and the shareholders increased their investment.  In a separate meeting they also conveyed that any further support would be conditional on a restructuring of the board.  Specifically they required that Alan step down as joint MD and Finance Director and be replaced by a new and suitably qualified accountant.  I was appointed chairman and required to invest, as was the incoming FD.  3i agreed to inject a modest amount of further capital and the whole package was conditional on finding a buyer of the business without delay.

Mike and I had agreed to approach the subject of Alan’s departure in a joint meeting with him and I hoped that we could resolve the matter, if not amicably, at least following due process.  An early demonstration of Mike’s volatility was not long in coming.  I arrived on the morning allotted for our meeting with Alan to find no sign of him but was greeted by Mike in an agitated state.  “I’ve fired him,” were the first words he uttered, “I couldn’t stand him any more.”  It seemed a row had blown up early that morning between the two of them resulting in this potentially disastrous turn of events.  Not only were we liable for a clear cut claim for unfair dismissal but there was the not insignificant matter of Alan’s equity.

Upon inspection of the Shareholders’ Agreement I found that there was no provision in it that required Alan to sell his equity back to the company in the event of his departure.  Given the dictate we had been given to sell the business, the prospect of a disgruntled Alan with no requirement to sell his shares rendered this possibility almost impossible.  I proposed that I met with Alan and asked Mike to have no contact with him.  Over the next week or so I shuttled back and forth in a diplomatic mission that ultimately resulted in us buying Alan’s shares back for a nominal sum.  With the bank onside, albeit with a reduced overdraft (and ABC still in the intensive care department), the factoring company agreeing to continue support and 3i making their additional investment, we were only left with a small number of mountains to climb.  We now had to extricate ourselves from the USA & Germany, find a buyer for the business and, without delay, find a new FD.

In the event this last requirement proved relatively painless and Andy joined the team first as a consultant and then formally as FD.  An accountant with a very commercial outlook, good venture capital experience and somewhat of an IT expert, he also had the invaluable experience of having been part of a team that built and sold one extremely successful company.  He was a thoroughly nice guy who fitted in well but something of the iron fist in the velvet glove.  If Andy felt a particular course of action was not either legally, procedurally or ethically right then you knew that it was not going to happen.  Colin the technical director was supportive but I had my doubts about Jay, the sales director (who soon moved on as the business became progressively more structured in its approach).

The three remaining board members became the most successful team I have ever worked with in my entire career.  If anyone from outside had been an observer at many of our board meetings they might have thought we stood no chance of success as violent argument was not unusual.  But we proved Meridith Belbin (probably the world’s first, and arguably the best, expert on team-working) right.  Successful teams don’t need to be harmonious affairs, in fact dissent often ensures full examination of the relevant facts and the available options and leads to successful decisions.  Mike grew in my estimation.  I can’t imagine how tough it must have been for him to be planning the sale of his treasured business although I did know that a sale was something he hoped would never happen.  A previously successful entrepreneur, he had seem his creation grow and then fail, saw little or no hope of a return on his investment and had to welcome onto the board two outsiders who questioned every assumption about the business.  We certainly had blood on the walls at times and Mike would often storm out of the boardroom with a face like thunder when a decision went against him.  But always, and often within the hour, he would seek me out and tell me that he had already implemented (or put into motion) whatever change was required.

Mike knew everything about the industry we were in and everyone in it.  The problem was that his knowledge was vast at the micro level but it was akin to a huge database without a search facility that could link aspects together.  He had always existed previously making rapid decisions and usually without reference to others.  The business had been Mike’s train set.  I was worried however that he lacked the experience or toolkit effectively to analyse the industry and our place within it.  He didn’t know what he didn’t know so often he didn’t go looking.  If we were to stand any chance of turning the business around and selling it on (let alone making a return on investment) I knew we had to have a coherent strategy, one that would take us out of the maze we were in.  Mike had resisted initial attempts to instigate a full strategic review.  “Waste of time,” he would claim, “I know everything about this industry and this business.”  Finally, he agreed to a rigorous process of strategic review and over several long meetings, by a process of research, brain-dumping, questioning and probing a clear picture appeared that the whole board could grasp.

In a highly fragmented channel, it was clear from our research that ABC was market leader in distribution.  This leadership stemmed from high levels of customer satisfaction, driven by an industry leading catalogue, great depth and breadth of stock, a superior technical infrastructure and a uniquely proactive telesales process.  Critically, we had premises and systems that could support at least double our current sales.

We had a customer base with a low level of creditworthiness, poor sales and marketing expertise below Mike and suppliers (some of whom were well known global corporations) with chaotic distribution strategies, poor service and zero demand building activities.  It was also now clear that we were suffering from a lack of certain key ‘flagship’ brands.  But overwhelmingly we suffered from a continual cash drain from the USA and Germany operations and a balance sheet with a £1m hole.

It was apparent that there were actions we could take to improve matters such as boosting our technical services and expanding our specialist product ranges, both of which provided superior margins.  We urgently needed to improve the quality of our customer base and lessen the risks we faced from bad debts.  But, far and away, the only option that offered a real step change in our fortunes would be to acquire one or more competitors.

Prices across the whole market were falling year on year and manufacturers continued to dump stock further depressing prices and margins.  But the greatest threat facing the business was of the bank ‘pulling the plug’ completely, leaving us with no means of raising the capital we needed to turn the business around.

The situation the business was in could be summarised as being fraught with problems and opportunities!  There was also only a very limited window of opportunity to act.

Mike admitted that he had learnt a great deal from the process & a new strategy was agreed by the board to move the business towards achieving a sale.  We were still living from hand to mouth in cash terms and were very exposed.  We desperately needed access to the ‘flagship’ brands to improve our offering in every category.  So, the suppliers of the brands we required were approached to allow us to gain access.  An agreement was reached with the least important of these, however the main two companies still declined to add us to their distribution base.

The obvious solution that had emerged from our strategic review would be to buy a competitor & transfer all business to Hull, thus improving sales & profits in one giant step.  We researched all competition & identified the half-dozen most likely candidates who had the key brands we required.  Meetings were held with all of these; some were initially interested in a sale, some refused.  But the crushing difficulty was in obtaining further funding.  Following meetings with both the bank and 3i to present our proposed strategy, both agreed that acquisition was an excellent idea but flatly refused to lend more to achieve it!

 Over the next six months and only following a great deal of effort (initially attempting to improve our operations) we finally succeeded in withdrawing from the USA and Germany.  A small but significant victory was receiving an ex gratia payment from one of the big four accounting firms that recognised faulty due diligence work they had carried out in Germany had led to the problems we had encountered.  We were still technically insolvent (with huge negative equity) but we had stopped making losses and, painfully slowly, each month we were starting to reduce the hole in the balance sheet.

Priority was then given to improving the internal processes of the business and to improving profitability.  Much work was done to analyse the customer base, sorting them into categories.  The sales force was now targeted with specific objectives against each of the main customer groupings.  Certain customers were ‘de-emphasised’ and left to competition.  However, we still could not break into certain of the best potential customers due to our lack of the remaining key brands.  The only remaining way we could gain access to these was via acquisition.  The problem was that we couldn’t raise a single pound more finance.

Of the discussions we had been having with a number of acquisition targets, one of these was owned by an American parent, primarily involved in software.  The UK products distribution business was losing money heavily, the parent was very keen to sell but they wanted serious money for a sale.  The business was ideal as it had both of our target brands, had an excellent customer base (a good percentage of which would be new to us) and had leasehold premises we did not need.  We estimated that we would need none of their staff and could transfer the entire business to Hull.  We also felt that we could grow sales of our product range via their customers.  A perfect match.  We left them with a statement that we were very keen to buy but that their price was too rich for us.  The chances of them selling to us seemed remote as we simply couldn’t raise any money.  The only option left would be to get the American parent to fund our acquisition.  But would they?  And if they wouldn’t, what future would ABC have?

We were still way ‘under water’.

  Image courtesy of lakedistrict.gov.uk

The Business of Life Chapter 26 – casting off the chains

On my first morning at Selmar Industries I arrived early.  After a quick word with the few managers and office staff who were in at that time, I went on a tour of inspection.  The company was housed in an old textile mill on the outskirts of Brighouse in West Yorkshire almost at the end of a tightly wooded valley.  The buildings were a veritable rabbit warren with both offices and production facilities spread across different levels connected by tight and twisting passageways.  A new warehouse had been added to the rear of the site some years before and the yard outside appeared to be a dumping ground for disused HGV trailers.The Business of LIfe Chpater 26

Following a brief session with the management I held a series of meetings for both office and production staff.  After laying out the realities of the present situation, I went on to share my personal values and inform them that we would be working together to turn around the fortunes of the company.  I then held a series of individual meetings with all of the board and management team.  The highlights of my new team were Jeff and Neil (not my group MD), sales & finance directors respectively, professionally capable, enthusiastic, committed and nice guys.  They also proved to be extremely loyal.

The rest of the board and management were way below the level of competence I had been used to and, to be honest, made my heart sink.  They offered a veneer of support but it was barely masking an underlying denial of the dire situation the company was in and any personal responsibility for their role in it.  To say that I sensed a potential resistance to change would be a vast understatement.  Quite the saddest situation I found I had inherited was that of the administration director (who I’ll call ‘P’).  How he ever came to be promoted to this level was a mystery.  It would transpire that whatever hour I arrived in the office or left, he was always there.  Though supportive and loyal, I found that he was way out of his depth and was working 18 hour days in an effort to survive.  Knowing the urgent task I had on my hands to stem the haemorrhaging of cash, I decided to make no immediate personnel changes, there would be time later.  I knew ‘P’ was out of his depth and tried to protect him as best I could but he ultimately resigned.  A couple of years later I discovered from an HR consultant that my predecessor had engaged her to carry out an assessment of the board.  She had found ‘P’ to be so far below average intelligence, she simply didn’t know how he could even hold down a clerical role.  Nothing had been done.

The product ranges of the three companies in my group included domestic and commercial battery chargers, cable reels and power cords.  The business also produced small transformers on a sub-contract basis for another company in the wider group.  The battery charger business had been a market leader (and perhaps still was) but it suffered from a number of problems that were at the heart of the group’s problems.  Sales were highly seasonal with winter producing a demand at least five times that of the rest of the year (more in an exceptionally cold year – and one of those was about to strike).  Production had to run flat out throughout the remainder of the year to build stock as it was impossible to produce sufficient to meet demand as it occurred.  Thus this major division of the business consumed cash for nine months of an average year.  Selling through high street multiples and producing own brand for some of the major retailers it was subject to intense price pressures.  With its many export markets it also had significant foreign exchange risk.  These problems were serious enough but they proved to be compounded by sheer internal incompetence as I was to find out.  The other two companies demand patterns were not as seasonal but were also subject to severe price competition especially the cable business.

Having been intrigued by the trailers in the yard I requested that they be opened for my inspection.  This revealed a horror story of incompetence and connivance.  Each trailer (and there were five or six) was crammed to capacity with components and the largest single category was injection moulded casings for battery chargers.  These casings were either for obsolete lines or had retailers’ own brands moulded into them.  The own brand versions were for current production models but we had lost the business and they could not be used because of the branding.  This was in addition to the warehouse that was also stocked to the rafters with raw materials.  Upon further investigation I found that this stock was sitting in the balance sheet at full value!  This meant the true losses of the company (£3m in the previous financial year) were even higher than the accounts showed.

Horrified, I summoned the members of the management team who were connected directly or indirectly to forecasting or ordering stock to the yard and asked for explanations.  Unsurprisingly, the excuses flowed with much finger pointing but mostly in the direction of my predecessor.  When I raised the subject with Neil (my boss), stating that we had to write these off he growled, “Make some profits first to write them off against!”  After continued investigation the causes became clear with system disconnects and plain incompetence at the root of most.  Many issues could be rectified without delay but others took much longer to uncover and put right.

If the stock situation was bad then the production processes were at least the equal and arguably much worse.  The main production floor housed five production lines for battery chargers, transformers and cable reels.  Two separate facilities existed on different levels for cables and commercial battery chargers.  The first impression of the main production floor was of a state of chaos with people, components and finished goods everywhere.

As an example the cable reel line had fifteen people who seemed merely to be getting in each other’s way.  Finding that one member of the technical department was a trained production engineer I took him down to the production floor and showed him the line.  His response was to tell me that he had done the original line balancing and that it called for only eight operatives.  When I asked him what had happened he claimed that my predecessor, when output needed to be raised, had simply thrown people at the line.  This time the excuse sounded true and I agreed to strip the line down to its original eight members.  The very next shift the slimmed down team increased output and kept it rising over the following weeks.  We started work on the other lines.

I turned my attention to the cable line that produced relatively simple standard products with moulded plugs and sockets at each end.  The process had a history of problems and never seemed to run to plan.  The production supervisor was Marion, a lady who seemed to carry the problems of the world, not least of which were related to her personal life.  I asked her to join me in her small office and asked her what she felt could be done to improve quality and output.  She looked wordlessly at me with world-weary eyes that were deep set, spoke of little sleep and many problems and shrugged.  It was clear that she had once been if not beautiful then perhaps at least pretty.  But a broken nose, black ringed eyes and poor skin had long since robbed her of any claim to looks.  I asked her again. She stared at me with those dark eyes showing a mixture of  suspicion and confusion and murmured, “I dunno.”  It was Friday and I suggested she had a think over the weekend and if anything came to mind to let me know the following week.  She walked off back to the line.  I went home that night despairing.

Arriving shortly after 7.30 the following Monday morning I found Marion waiting outside my office.  “You serious what you said on Friday?” she blurted out, “You really want to know what I think?”  We went into my office and I sat her down and assured her that I was, indeed, really interested in any views she might have to improve the line’s performance.  “No-one’s ever asked my opinion of anything, ” was her response, “but I’ve been thinking all over the weekend and this is what I think.” What followed was a succession of ideas that sounded sensible and easy to implement.  “Go ahead then.” I replied.  Her eyes came alive, “What?  Can I?”  Improvements followed quite quickly and were maintained.

An intractable problem was the night shift that was required to meet demand for the sub-contract transformer work.  Due to uncertainty concerning its future my predecessor had made a not unreasonable decision to use contract labour.  A contract had been signed with a local firm who recruited and bussed in the required labour from neighbouring towns each night.  The assembly tasks were relatively straightforward and the day shift was reasonable in its output and quality.  But the calibre of the people we were getting to work the night shift was dire.  I arrived in one morning to find that an entire night’s production had been lost to ‘an incident’.  It transpired that two of the crew assembled the previous night had been rival drug pushers who had decided to set about each other with machetes!

Output and cost of production slowly improved and the end of the financial year showed a reduction in the losses.  However, as soon as one problem was solved continued investigatory work revealed yet more.  We were by then winning more distribution but price competition was eroding any benefits gained from the lower production costs we were then achieving.  Component quality problems continued to be a problem especially the injection moulded components that came from another company in the wider group.  Attempting to resolve these problems always led to counter allegations of constantly changing demand, which I would invariably find had some substance.

Quite apart from the challenges of solving the cash drain problems of the battery charger business, we also had an unacceptably high level of product returns for damaged and faulty goods.  Carrying out a detailed inspection of our product packaging I found that the quality of the board used had been reduced to something that was totally inadequate for such a heavy product and many products were arriving at retailers damaged.  I then decided to test a number of our products myself taking a different model home each evening and attempting to follow the instructions.  My experience quickly proved that the instructions (even in English) were simply ambiguous at best.  God only knows what the myriad additional translations had turned them into but an unacceptable quantity was being returned as faulty purely because the instructions were unintelligible. .

 Into the second financial year it was becoming clear that with increased competition and the power of major retailers driving prices ever lower our efforts to improve UK production efficiency were never going to be sufficient.  With the greatest of reluctance I decided that the only future for the brand was to outsource production to the Far East.   Having made contact with several potential manufacturers, I headed out to Hong Kong with Jeff our technical director.  During that trip we visited many factories in mainland China, all were dispiriting places and, which combined with the fledgling infrastructure and teeming population, produced a hellish vision of a dystopian future.  Yes, it seemed we could achieve lower invoiced prices but quality and the lengthy supply line troubled me.  By the time we returned to the office the decision had made itself.  We had already received, via another route, a leaflet from an unknown Chinese manufacturer offering their products to us.  ‘Their’ products shown on their full colour leaflet were the samples we had left in China with our brand names carefully concealed!  It was just too risky to take the chance but events overtook me anyway.

By this time we had managed to pull the losses back to a break even position but added to the pressures within my business, our parent company was struggling to survive.  Neil my boss, with whom I had established a super working relationship, arrived early one Monday morning a few weeks later with bad news.  The group had decided, without reference to me and despite our elimination of £3m of losses, to close our operation in Yorkshire and merge with another group company.  I was informed I was to be made redundant but first had to oversee the sale of our cable business, again something that had been arranged by the main board.

For the next month or so I worked with the accountants sent in by the purchaser in the due diligence information gathering process they were conducting.  The sale concluded Neil informed me that I would have to work out the remainder of my contract (in some capacity) but ‘could take reasonable time off to seek other employment’.  The conversation turned into one of those blood on the walls events as I fought to achieve a clean financial settlement instead of working for another 10  months in some spurious role.  Not being able to reverse what was clearly a decision forced upon Neil by a cash-strapped main board, I engaged the services of a law firm specialising in employment matters.  A few weeks later I walked away with a cheque having compromised on a slightly lower sum.

This time there was neither rage nor sadness but simply the realisation that I needed to take stock afresh.  I had proved once more that I could achieve what required but to no avail.  Seeing the writing on the wall over the previous few months I had been quietly testing the market once more and had got to offer stage with a small US corporation.  However, my research on the company told me that I might well be going from frying pan to fire.  I was now 49 and had begun to feel that my corporate days were over and it might be better to draw a line than suffer the same fate again in a few years time.  My mind went back to Norman and his CVC backed purchase of GTE Sylvania and the decision wasn’t hard to make.  Reviewing my knowledge and experience I decided I could achieve a management buy-in (MBI) and I would.  I phoned the Americans and informed them I was withdrawing.  I then called all of my head hunter contacts to let them know that my time as an employee had come to an end.

I had barred and shuttered the route back into employment and, with my mind clear of distractions, I could concentrate on achieving this major new goal.  Could I do it though?  Could I really convince the venture capital community to back me with the millions it would take?

 Image courtesy of businesspundit.com

The business of life (Chapter 20 – from a dark place)

Although I was no stranger to the death of loved ones, having already lost both my sister and my father and other close relatives, nothing had prepared me for the loss of my wife.  Yes, I had mentally rehearsed the situation over and over in my mind in the preceding months as her health continued to deteriorate, trying to imagine how I would cope. At the same time I had been desperately hoping that somehow she could survive and return to her former self.  But the reality of her death, the awful, aching sense of loss, was something horrifyingly new.  Without Jean and with the certainty that she would never return the house seemed emptier than ever.

Work seemed an irrelevance and I stayed away for several weeks, never phoning or attempting to keep up to date with what was happening.  There was a human side to Gregg after all and he made it known he wouldn’t push me to return before I was ready.  With my son away at school and my daughter often out doing the sort of things that teenage girls do, life seemed hollow.  I prowled the empty house in the evenings half expecting to receive some sign from the heavens that I was not alone but all that remained were reminders of the life we had shared.  One morning, sometime in October, I awoke to find the sun was shining and I set out on a new bike I had bought not long before in an effort to distract myself.  It was one of those magical, calm days when the sun shone as it only seems to do in autumn and I cycled deep into the Dales, soaking up the beauty around me.  The world was carrying on and I had to join in.  The next morning I returned to the office.

A welcome distraction came in the form of an invitation to run a session at a pan-European meeting of our HR directors in Geneva.  I decided to take a few days holiday, took my son out of school and together we drove to Switzerland.  Already a skiing enthusiast at the age of fifteen he cajoled a visit to a ski resort from me and a new ski outfit.  Following my session we drove to Les Diablerets only to find that the snows had yet to arrive and the sun was shining brightly.  “No problem,” beamed Alex, “there’s a glacier that’s open all year round.”  The following morning, subjugating my fear of heights, I joined him on the cable car that took us to 3,200 metres.  Alex quickly disappeared on a set of hired skis while I was content to sit on a terrace in the warm sun.  Surrounded by high peaks set against a deep blue sky, I read an old copy of Women in Love for the second time and felt at peace.

When I became Managing Director I had joined the industry trade association (the Lighting Industry Federation) sitting on the governing council (comprising some 16 CEOs of the largest members).  I had been a little over-awed initially, not only as the youngest member on council, but being the only one who had not spent his entire career in that same industry.  I felt I had been talked down to and treated very much as the junior.  So, having kept a low profile for the first couple of years was then astonished to be asked to take up the role of president.  At first I couldn’t work out what had raised my profile to warrant the appointment.  But by the time I made my acceptance speech and took the chain of office in one ofLondon’s oldest clubs overlooking The Mall and with a Government Minister as my guest, I had worked out what lay behind it.

Long held, polarised and explosive views were held across the membership on a range of partisan issues.  The association (which set technical standards for the whole industry and ran a highly effective parliamentary lobby group) was facing a particularly critical issue at the time that threatened to pull the association apart.   I perceived that none of my largest competitors wished to be seen to preside over an issue that could be a PR disaster for them.  Ranged against them were a large number of members (of smaller firms) in the association holding the opposing view.  Had I been elected as a scapegoat?  Was I being set up to fail?

Deciding on a policy of diplomacy for my year of office, I felt I had to ensure that all views on the subject were heard and taken into account before a decision was made.  I had clear views of my own as to which route the association should take but reasoned that making these views known was only going to make my task harder.  And anyway, I calculated that my own company could exist equally well under whatever regime emerged.  Attempting to force my views on council was not going to work given my image as an outsider who was believed to know less of the industry than anyone else around the table.  Therefore I decided that the process should take priority, be seen to be inclusive and fair and should lead to whatever the membership ultimately decided.

I ran my council meetings in the classic chairman’s style, ensuring that all views were fully explored but never revealing a viewpoint of my own.  I found that by a policy of correct process, questioning and ensuring everyone’s opinions were sought, all relevant opinions and options could be uncovered.  I carried this process through to the wider membership, travelling to regional meetings up and down the country.  At these meetings, where I again chaired the sessions to ensure that every aspect of the subject was explored, I also never revealed an opinion.  I also held one-to-one meetings with the holders of the most entrenched views (large and small companies), always travelling to meet them in their own offices.  At the end of the year when the time came for a decision, the vote was almost unanimous, with everyone feeling their view had been heard and considered with the right decision made.

One surprising and pleasing outcome for me was that several of those who had held some of the most rigid views at the outset felt able to cross over to the opposing side without losing face.  Additionally, the few members who voted against the final decision, came to me later and said that although disappointed they felt that the process had been fair and the decision was one they could support.

By this time I had found love and companionship again and had married Denise.  A hilarious and old fashioned event took place some months before our marriage that showed yet another face to Gregg.  Having taken Denise with me to an industry function in London, I had duly filled out my monthly expenses sheet and sent it off to Gregg for authorisation with receipts attached (why MPs and civil servants can’t go through the same simple procedure still eludes me). A few days later I got one of my lunchtime calls from Gregg, who proceeded to pose questions about the industry event and my accommodation arrangements in more delicate terms than his usual style.  After a lot of beating about the bush, and in a decidedly embarrassed manner, he shared with me his concern that taking a woman who was not my lawfully married wife to a hotel for an industry function would damage my reputation!  Even when I shared the date for our impending marriage he expressed his delight but wouldn’t budge from his ‘grave concerns’ in the interim!

I was happy at the good fortune that life had once more bestowed upon me. However, I began to recognise some fairly profound changes in myself that seemed to have occurred since Jean’s death.  My entire being had previously been focussed upon achievement of my business goals.  I was always clear and focussed upon what needed to be done and prided myself on logical and rational decision making.  The exception had always been my immediate family but looking back I realised that even with them I seemed to have been somewhat removed from a real understanding of their feelings and emotions.  I understood anger and rage well enough, having always been quick to be roused but as far as others outside my close family circle were concerned, nothing had ever really touched me. People must have felt me to be cold and lacking empathy in my decision making when they themselves felt understanding and compassion was called for.

Now, since Jean’s death, I found myself crying for the first time whilst watching films.  I remember sitting sobbing uncontrollably through Truly, Madly, Deeply.  Even music began to touch me on a deeper level than ever before.  Knowing my love of Bach Denise bought me a CD of the Brandenburg Concertos.  As I listened to the opening allegro of the 6th for the first time, tears flowed down my face at the sheer joie de vivre the music conveyed. It touched me in a way that I had never experienced before.  On these occasions it was as if a veil had been lifted from my senses and I was experiencing the colours, sounds and sensations of raw emotion for the first time.  I knew it was connected with Jean’s death but it was some ten years later before I could finally begin to understand what had happened.

In an effort to improve selection of candidates for key roles in the businesses I was then running, I started a process of qualification for a range of psychometric instruments.  In the qualification process for one, the Myers Briggs Type Indicator, I was assessed as an ENTJ (Extraverted Thinking with Introverted Intuition).  Without going into a lengthy explanation, I found that there was a ‘shadow’ or hidden side to my behaviour.  As it was the fourth and least preferred of my four key behavioural functions, my preference for ‘Feeling’ in decision making was underdeveloped.  Whilst someone who has ‘Feeling’ as a preferred function for decision making would be sympathetic, tender hearted, assessing impact on others, compassionate, guided by personal values and be striving for harmony, these were not behavioural qualities I had ever used.  These underdeveloped aspects of behaviour (which differ from person to person) are referred to as the ‘shadow side’ of behavioural preference, usually only being revealed at times of great stress or under the influence of drink or drugs as behaviour completely unnatural to the individual.  Being unfamiliar in using this side of my personality it was manifesting itself in almost childlike ways.  I can still cry at films that reveal emotion but over time I have also learnt to understand others in ways that would never have occurred to me previously.  Life is richer as a consequence but sometimes much more complicated now I can see more than one perspective!

When Martyn left I hadn’t replaced him feeling at the time that none of his team (good as they were) was ready for the role he had carried out and I didn’t wish to bring an outsider into the company.  I already knew the majority of our medium and large customers well and built on these relationships with regular visits.  I maintained a regular schedule of visits to major customers by accompanying our regional managers or sales people on their visits.  In this way I was able to demonstrate my commitment to customers and sales force and, importantly, ensure I was hearing directly from both on their views concerning our strategies and service compared to competition.

One of the strangest situations I ever had to manage was that with our largest customer.  The owners (tax exiles) worked initially from beautiful offices overlooking the lake a few kilometres outside Geneva and then moved to Monaco where the tax regime was even kinder.  They had built one of the largest electrical distribution businesses in the UK and were spreading across Europe but had the strangest (and possibly the most Machiavellian) management structure and systems I had come across before or since.  There was no one person in charge of the UK and buying was spread between four regional general managers.  The buying process (designed to drive price down) was in fact so fragmented that, despite their size and potential clout, they were paying prices considerably above anyone else of their size (and many smaller firms).  Whilst I enjoyed the profits that flowed, at times their purchasing was so out of line on price I had to feed the senior management with a series of hints that would then lead them to ‘put the squeeze’ on me.  I just couldn’t run the risk that they would find out how terrible their prices actually had become!

I was now totally immersed in and enjoying every aspect of my role.  But whilst I was widening and deepening an understanding of my colleagues, our customers and the industry and steadily improving results, events were quietly and inexorably moving towards the most challenging set of circumstances I had ever had to deal with.

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

The business of life (chapter 11 – what goes up..)

Back as a hero from Japan, waving my bit of paper committing to contract renewal, I felt somewhat like Neville Chamberlain promising ‘peace in our time’.  My first action was to debrief Gordon on the exact details of the trip and the letter of intent and make the necessary changes to the operating budget. The flush of success soon wore off (I think it took place some time that same afternoon).  I then sat down with the team to plan out the detailed marketing plan to ensure we achieved the revised targets that I had agreed to back in Tokyo.  We had a mountain to climb.  However, I’d found that I rather liked challenges.

The Akai Golf

As our new brand widening advertising campaign got underway, one of the unwelcome effects was that all manner of ‘unmissable opportunities’ started crawling out of the woodwork.  Most of these were not worth the time spent reading them, but then one of those serendipitous events occurred.  I received a letter from Richard Lloyd  (of GTI Engineering) seeking sponsorship for the forthcoming British Saloon Car Championship.  What caught my eye and set his approach apart from many others, was artwork of his Golf GTI in our brand livery.  We met, got on famously and I agreed to a package of sponsorship for the year, with an option on the next. I had the artwork for the car reworked, wheedled a road going version from VW that I had resprayed into a replica to use for dealer events and then bought a double decker bus (a Bristol FLF for anyone interested).  I had the bus converted into a hospitality suite, also repainted in the team livery.  We then set about using the races for dealer hospitality, something that became hugely popular, especially as Richard won time and again. Sponsorship became a core element within our communications mix, offering a high technology, exciting and success driven image that resonated with our target market.

 The team I had inherited came up with a variety of ideas for boosting sales and, following a review of these together, we decided that one had real potential to fit with the exciting image we were creating and to boost sales.  That year the Akai Awards were born.  Hammed up beyond belief, we announced to our dealers that they could nominate themselves to win a ‘coveted’ Akai Award for success in promoting the brand and growing sales.  Following a long weekend of exhausting investigation of venues around Europe (in the welcome company of my wife) I chose The Trianon Palace atVersailles and engaged the services of Michael Parkinson as host.  The event later that year was a runaway success.

The most critical new product introduction from Akai that year was the new VHS video recorder.  Head to head with competition from the other brands in the VHS technology camp (especially JVC) it was an all out systems battle with the Sony Betamax system. Against the odds, Akai was the first brand of VHS recorder onto the UK market (and ahead of Sony & JVC) with a batch of just 50 machines air freighted in.  These machines had a recommended retail price of £799 but even while the first batch was still in transit (and with no firm date for the next), retailers were advertising a price cut to £750. Despite a severe supply restriction from all manufacturers in that first year, the price continued to fall.

An interesting endeavour took place whilst I awaited the first VHS deliveries.  We had left in stock quite a large number of an earlier portable black and white quarter inch video system (the VT100).  Never much of a seller and now completely obsolete, these were something I had inherited and they now needed to be cleared prior to our VHS launch.  Thinking of ways to clear the stock (none of our retailers would touch them) I hit upon an idea. My father in law had been struggling to get me to understand what needed to be done to improve my golf swing (my failure not his).  I realised that if I could see what I was doing it would be so much easier to understand.  Back in the office I set about recruiting a temporary sales team to sell these systems into golf professionals.  We succeeded in clearing the stock but it was an uphill struggle to get these ‘professionals’ to envisage the potential of what we were offering!  The joke about the machine gun salesman getting turned away at the battle of Hastings came to mind.

As that first year progressed and sales climbed, research was showing that our brand awareness was rising and that of our competitors was falling.  We repeated the research on a regular basis and monitored consumer purchases via an omnibus survey of household buying by brand. It seemed that the battle for brand awareness was very much a zero sum game.  Using this detailed information I was able to determine which elements of our marketing mix were having the greatest effect on consumer purchases.  It was therefore possible to fine tune our spend in the most cost effective way.  Unfortunately, this knowledge couldn’t save me in a future battle that was looming.

A change that occurred that first year was David’s departure and replacement by Gerry.  A very different man to David, he exuded charm and bonhomie, but soon demonstrated a severe lack of marketing judgement or expertise.  Bounding into my office one Monday morning shortly afterwards, he announced that he had had a simply great idea for a completely new advertising campaign.  “Picture it,” he gushed (complete with a wide ranging variety of hand gestures), “a nude draped over the bonnet of a red Ferrari hugging an Akai product that doesn’t quite cover everything.”  “Great idea.” I responded, trying to muster enthusiasm, “Why don’t you join me at the advertising agency next time we’re having a brain-storming session and pitch it?”  Oh, shit, I thought.

My trips to Tokyo became fairly regular events.  Whilst these visits had been mentally exhausting over the winter, as the months turned to spring and early summer they became physical agony.  As the world was still suffering an energy crisis, Akai had decided that the air conditioning would only be switched on in July and August.  Sitting on the plastic covered chairs in a pool of sweat in one of the windowless meeting rooms, during an unseasonal heat wave in early summer, Andy and I were soon afflicted by a medical condition colloquially known as ‘baboon bum’.  Sweating and fidgeting away we decided that we needed ‘rest and recuperation’ to ensure our fitness before we returned to the office.  The advantage of crossing the international date line on the return leg was that of gaining a day.  Why not take advantage of this?  A call to rearrange our flights saw us that Friday evening jetting off to Hawaii rather than Anchorage.  If you’ve never done it, arriving at 6.00 am (after a seven hour flight) on the morning of the same day you departed at 6.00pm, takes a little adjusting to.  Friday was largely lost in a jet lagged haze but we did manage a few visits the next day and decided that the (then) Kahala Hilton atDiamond Head would make a fine venue for the next year’s Akai Awards. It took a subsequent visit a few month’s later just to ensure that we had made the correct decision.

Back in London the visit of the Akai Company President finally took place (having been continually delayed), resulting in a significant shock.  There was to be no contract renewal despite our raising sales by 50% in under two years to a new high of £6m.  Instead, it was announced that Akai was to form its own company that same year (1979).  I was involved in no further discussions and the President and his entourage moved on.  RAV promptly served redundancy notices on me and my entire team.  The personnel director assured me that he would let me know if any other roles became available within the group. Gordon was nowhere to be found.

Did my success count for nothing? Had my spell of success run its course?  With the trade unions wreaking havoc upon the economy, the three-day week, Britain being laughingly referred to as the sick man of Europe and with unemployment raging, the outlook seemed far from benign.  What followed over the next couple of years was to reveal aspects of my make-up that would cause me to question my abilities and the wisdom of meeting opposition head on

Image courtesy of Forzamotorsport.net

The business of life (chapter 9 – is fear of failure a spur?)

Ushered into my vast new office that first morning as business manager for Akai, I felt quite alone.  Moira, my new secretary, did her best to make me feel at home and proved over the coming months to be an invaluable asset with her timely and appropriate guidance.  I quickly set off to walk my new territory and to meet the team (who numbered more than three times my old crew).  Following a series of personal meetings with my direct reports a vague feeling of unease settled over me.  To say that they were wary of me (the outsider, again) was to be expected.  What did concern me was the impression they left me with, that nothing really needed to change.  Why had the business plateaued for two years?  Not their fault.

AKAI GX 630 DSS

The existing team included Lindsey (marketing manager), Andy (sales manager) & Peter (technical manager).  Of these, Andy seemed the most resistant to any thought of change (unless it was change that originated from him or favoured him). They had all worked together for a number of years and clearly felt that they should be left to run the business. Lindsey was an interesting and knowledgeable character (who went on to become a director of a major advertising agency).  However, my view was that he was somewhat defensive, which was perhaps natural given the stagnation of the brand, and possibly resentful of my appointment (and perhaps even scornful of my lack of formal qualifications). He remained wary of me throughout our time together.  Peter was a delight; free from commercial considerations in his role, he was a technical wizard who suffered my endless questions, always giving honest and invaluable advice.  Another gem was Ian, the product manager, who worked for Lindsey.  Whatever problem he was posed, Ian would return in double quick time with a well researched and intelligent response.

David my new boss was the director responsible for the entire Audio division (which included Rotel, Leak and Wharfedale brands).  He was well educated, refined but remote (even aloof) and someone who rarely ventured out of his office to talk to the troops.  He was a smooth operator, used to getting his own way and it wasn’t long before we had our first run in.  However, the big blow up occurred later that year when I was putting together our internal budget for the board. David drove me to distraction by continually sending me away saying, “Hhmm, I’m sure that if you take another look at the sales, you’ll find they could be higher.”  This went on and on, with me returning to find the same approach applied then to margins, then overheads, then cashflow.  By this time I lost patience with him and responded, “David, you’ve obviously got a clear idea of what it is you’re looking for, just tell me what it is, I’ll construct the numbers around it and do whatever I can to achieve your budget.”  He went apesh*t.  I have never taken well to the concept that I should take responsibility for someone else’s views.

An immediate priority was a whistle stop tour of our major customers, which I undertook with Andy (believing the time spent travelling would provide an ideal opportunity to get to know him better). Andy had been in the audio trade for some years and had an extensive knowledge of the sector and the customers.  However, he was, I became convinced, reluctant to embrace change.  However, he seemed well accepted by most of our customers (and certainly those who enjoyed lavish entertainment).

I hadn’t gained a high opinion of the major retail chains from my experiences in the grocery trade.  Nevertheless, and despite meeting some fascinating people in firms both large and small who became close contacts, I soon came to the conclusion that the major electrical retailers were in a class of their own. As it was the time of year when new product ranges were introduced there was a dual purpose to our visits. Andy and I shared the task of selling in the new ranges of products that were to form the next season’s key lines.  I made what I thought was a well reasoned and logical proposal covering the new product features and carefully researched price points to Nick, the buying director of one of the UK’s largest retailers.  Leaning back in his chair, hands behind head, he responded, “I don’t give s h*t about your research or product features! You come back with a price half that or less and I’ll think about giving you an order.”  Sadly, the electrical retailers seemed obsessed with price to the exclusion of all other factors (something that has not improved with the passage of time).

Meanwhile, I had been given six weeks to put together a plan, agree it with the board and get on a plane to Tokyo to sell it to the management of Akai.    Having listened to all everyone had to say about the brand, including the advertising agency and some quickly commissioned research, I started to put my thoughts together.  The brand had been known for and had flourished on its reputation for cassette recorders and open reel tape decks in the enthusiast market for HiFi separates.  In the area of amplifiers Pioneer ruled.  There were two problems looming.  Firstly, there was a growing trend towards ‘racked’ HiFi systems, which required the major components to be of the same brand (to fit physically and in terms of appearance).  Given that Pioneer were much stronger overall, the Akai brand was vulnerable to these changes as we were little known for our amplifiers, tuners & turntables.  The other challenge was the news that Akai had joined the technical group (led by JVC) who were developing the VHS home video system.  With Sony coming with the competing (and technically superior) Betamax system there was going to be a battle and Akai had to be at the forefront to survive and prosper.  It was clear that we had to reposition Akai as a broad based Hifi brand, raise its consumer awareness and be ready to extend that brand image to include video.

The next few weeks passed in an exhausting blur. My turnaround plan was principally based upon the required broadening & raising of the brand image and major investment in the necessary advertising, PR and other promotional activities required to widen our distribution.  In putting the plan together I also used elements proposed by my team that, to my mind, offered a valuable role in the overall mix.  Despite the mutual reservations that existed between my team and I they had worked with me on this key task.  Luckily, David and the board backed the business plan with little modification, agreeing that to retain our distribution rights we had to be seen to be raising our investment.  Frankly, Akai had been treated as a cash cow for the last few years.

Sitting in my office on the Friday evening before my flight to Tokyo, I reflected on my situation.  I was now in a role that offered a fine balance between success and failure. I wanted the former but feared the latter. I had been given another significant raise (and was enjoying a great lifestyle) but once more I realised it wasn’t the money that was driving me.  I had known what being really hard up was like and had no desire to return to that state. I began to realise that it was as much fear of failure as it was a desire to succeed that kept me pushing forward.  Could I succeed in winning a contract renewal?  Were the results I was promising realistic?

Image courtesy of http://www.akh.se

The business of life (chapter 6 – in which I discover riches are not everything )

The company I joined in late 1972 was Rank Audio Visual (a division of The Rank Organisation) based in an imposing, 1930’s style building on the Great West Road in Brentford,West London.  The products marketed by RAV included those manufactured in the UK (such as Aldis, Leak & Wharfedale) together with many of the premier Japanese and European brands (Nikon, Arriflex, Bauer, Akai, Pentax & Mamiya).   The team I joined was responsible for the sale of Pentax, Mamiya, Aldis & Bauer consumer, professional & educational products).

As a small team of six sales managers we covered the UK. My own geographic horizons broadened in that I was now responsible for more than half of the capital plus all of Essex,Kent, Surrey andSussex.  Apart from my new boss David, theUK sales manager, I was the only one of the team who had not previously worked ‘man and boy’ in the photographic business and, as such was treated with a mixture of caution or distain.

Following a product introduction day spent with the two product managers, I was despatched to spend a few days ‘on the road’ with my fellow sales managers.  Having come from a highly structured and disciplined company with rigid call patterns and performance ratios, I was amazed at how relaxed the new business was.  It was clear that my new colleagues were coasting, they were old hands who did just enough to make target (usually with a great deal of  game playing) and who were never on territory before 10.00am and rarely, if ever, after 3.00pm.  Now, despite being someone who had had more than his fair share of afternoons off in the past, it had always been because I had finished that day’s workload and there was little or no way one could earn any additional money. The money I could earn now was limitless and I was certainly going to make the best use of every waking hour.

Here I was with a completely open-ended commission scheme meaning the more I sold the greater my earnings; I was going to sell the maximum I possibly could and reap the financial rewards.  This attitude quickly brought me into conflict with my new colleagues who attempted to instil in me (by fair means or foul) their own values and working practices.  I made it clear that I was going to do whatever it took to be successful.  Over and above the potential for earning, I was now ambitious and I had my sights set clearly on David’s job; he clearly had potential therefore, I reasoned to myself, there would be an opportunity sooner or later. The business was certainly more exotic than the one I had left.  One of the annual highlights was the unveiling of the Pentax Calendar shot by Sam Haskins one of the great glamour photographers of the 60’s & 70’s.  I was constantly befriended by those who clamoured after each year’s new edition.

From the outset my new role was wonderful, the freedom was stimulating, travelling the English countryside in a smart new car (still at far too high an average speed) was refreshing and the selling task was enjoyable.  I had taken over from an old hand who had neglected vast swathes of the market. My advanced level of training had prepared me well enough for the task and the environment was challenging but responsive.  The retail environment I had entered was split into two main factions. There were those that were still attempting to cling to manufacturers’ recommended pricing and a traditional way of retailing on the one hand and, on the other, the new volume driven entrants who created a cost base that enabled them to exist on extremely slender margins (usually via mail order).  I managed to make real progress with both groups.  With the volume operators it was a question of staying close, negotiating well and constructing pricing models that fed the volume needs of both us and them.  With the traditional outlets I spent time on a selection who I felt offered the right geographic coverage and who were receptive to the patient and reasoned sales methodology I put to them (concentrating on lines that the mail order outlets didn’t favour).

Getting past my lack of trade experience was never a problem but it did produce some hilarious moments.  I had one East End Jewish retailer called Ken who enjoyed a formidable reputation.  On my first visit I waited patiently for him to finish with a customer and was greeted with a scowling, “Who are you?”  I politely explained who I was and was peered at closely. “What were you doing before you joined RAV?” he barked.  Sensing a challenge was on the way I decided a truthful response was in order and replied that I had been a margarine salesman. Ken’s eyes narrowed.  “Do you speak French?” “Un peu”, came back my cocky reply.  “Good”, growled Ken, “then you’ll understand F*ck off!”  I grinned and stood my ground.  “OK, smart*rse,” he responded, “explain reciprocity failure to me.”  I did in very succinct terms, grinning all the while. He caved in and we did business.

At the end of my first year the money I took home came out at more than double my basic salary and I was even more confident that I could do better.  One of my largest accounts was a national retailer called Derek Gardner, run by him of the same name.  Initially a very intimidating man, who had been extremely difficult to meet, we built a good relationship and business flowed.  Derek was a very disciplined man whose office was always impeccable and without a single piece of paper on display anywhere; in fact the whole office, nicely furnished as it was, was completely devoid of anything of character.  One summer morning I arrived at his office mid-morning for an appointment.  Derek greeted me in his usual reserved but polite enough manner but after five minutes or so I could tell his attention was elsewhere.  “Do you fancy a game of football?” he chipped in halfway through an attempt on my part to engage him on the business of the day. “Come on”, he continued, not waiting for my reply, “We’ll go to my house.”

Derek’s house transpired to be larger than I had ever been in before and set in beautiful Surrey countryside.  The sun shone and for half an hour or so we kicked a football around a section of his enormous grounds.  When he had had enough we sat and chatted.  It wasn’t long before the chat turned into a very serious discussion over a proposition I put to him to launch a major national promotion on Pentax cameras.  We got as far as I could go before I realised that I was, as the saying goes, out of my pay grade.  I made a suitable excuse of checking supply with Japan prior to committing on the details of price and promotional support.  The potential we had discussed was simply huge, greater than my entire budget for the brand that year.  Fast driving got me back to head office that same afternoon and deep in discussion with David’s boss, Peter.  We agreed that if the necessary level of additional support fromTokyo could be obtained, there was the makings of a deal I could go back with.

With a new price agreement in place from the Japanese, I made another appointment with Derek to thrash out what we both envisaged to be minor details.  The evening before my meeting Peter called to say that he couldn’t be with me but his boss, Angus (the divisional director) would be accompanying me.  I had no problem with Angus as I had always had a good enough relationship with him.  However, from the outset it became clear that there was a significant clash brewing between the two of them.  Derek was a self-made man with a clear sense of his own abilities and Angus, although warm and engaging, had that public school confidence and assertiveness that set him a world apart.  I sat and watched as our carefully nuanced deal fell apart before my eyes.  Within half an hour Angus and I were outside on the pavement with Derek’s outright refusal to negotiate further ringing in our ears. Angus put on a brave face and departed for the office.  It was a long drive home but the first thing I did was to phone Derek and seek an appointment with him the next day.  “So long as you don’t have that *&%! with you”, was the response from Derek.  I assured him not.

The next day Derek and I negotiated hard once more, going over the key points but avoiding the pitfalls of the day before.  An hour or so later we finally reached a position we were agreed upon. This time, pay grade or not, I shook hands with Derek, got him to write out and sign the order and headed out back to the office.  I walked straight into Angus’s office unannounced and slapped down the order.  His eyes went wide and then he grinned widely. “You bastard!” was the greeting I got.  But I had brought back the largest ever order in the history of the company and it made sure that I earned a great deal of money that year.  The following month I bought our first family car and booked the first holiday in a long time.

I had certainly made the correct move joining RAV with a level of earnings now flowing that I could only have dreamt of previously.  But once the euphoria wore off I was increasingly bored and looking for a bigger challenge. I was tired of the motivational sales meetings, the endless tweaking of the commission schemes and the lack of any real learning opportunities from the company.

I wanted a move up the ladder; I wanted the chance to do things my way. But could the company provide the career opportunities I now so desperately wanted?

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