A LIFE IN MANUFACTURING

How did you get into the business?

“As far back as I can remember I’ve always had some scheme or other to earn some money. When I was eleven, I sold papers for a profit down on the docks where my Dad worked. Then I started a mobile disco and I worked as a DJ in the night clubs in Sheffield which kind of put an end to my education, so I didn’t go to university.

My first job was with Thos. Wards, a large scrap business as a Trainee Accountant on £63 a week. Here I met a guy who came around selling jeans and trainers so I did a deal with him where I was selling his stuff too. So  I was earning more from selling stuff than from my job. It was at this point that I visited a staffing agency that focused on sales.

They sent me to four interviews and I got four job offers so I picked one with a company called Bearing Services Ltd. It was a really good business with lots of young people just like me and it enjoyed a really good reputation – the best in the market. I got promoted to run one of their depots.  I was working hard, highly motivated and I loved it.”

So, how did you come to set up your own business?

“Although we were the best in the business at supplying bearings, there were ancillary products that we played at. I thought, I could do it better. So at the age of 23 I left to set up my own business to supply oil seals, despite it being 1980, the economy was in the middle of the industrial strikes and business confidence was plunging. When you’re young, it never occurs to you that you might fail, well, not to me anyway!

Before long we were selling hydraulic seals and then moved into the hydraulic cylinder reconditioning business. The business was growing really quickly and I realised that we really needed to be able to do our own testing. So I bought into a new company and merged it with the seals business. We relocated the reconditioning and testing functions to a new site. Amazingly the previous owner had left valuable scaffolding which I was able to sell for £9,000, which paid for the complete site refurbishment.”

How were you affected by the industrial strikes of the 1980s?

“We soon started to work with British Coal and at Duckmanton Colliery, I came across a huge pile of rusted and abandoned hydraulic cylinders used to keep the roofs up. When I asked about them, I was told it would cost far too much to recommission them at £120 each. I thought otherwise and we experimented with various ways to bring them back up to scratch and eventually we found a way to recondition them for £40. I suddenly had more orders than I knew what to do with.

With the contract with British Coal we managed a success rate of 96%, scrapping only 4%. Then as we all know British Coal workers went on strike. Like many I didn’t think the strike would last as long as it did, and the orders eventually came to a dramatic halt. To compound things British Steel, one of our other customers also went on strike and it severely impacted our business – in truth, it nearly finished us! We exited the year alive but with really high bank borrowings but at least we still had a business.”

How did you recover after the strikes?

“After the strikes were over, we got going again and because there had been lots of underground damage in the mines, we got a lot of business. However, it made me think that it wasn’t good to rely on mainly two such large businesses in one area so the choice was to diversify or look at another sector, like oil and gas or underwater, marine sectors.

The only other thing to do is to acquire businesses but I didn’t have any money that wasn’t tied up in working capital but I was determined to diversify the company.  The first acquisition was a machine shop and the second was a steel stockholder. The deal with the bank was that I would borrow the money to buy these businesses, turn them round, sell them on and invest again in new businesses, paying the bank back as we went.

Each time I did a deal, I would repay the debt and they would lend to me again for the next one. In all we bought 25 companies, I would love to think that it was all carefully planned but my rule of thumb was I would look at anything to do with manufacturing, providing it’s not capital equipment, nor retail; it had to be a product that we could make into something else, or using a raw material that we could add value to make a finished product. I am not sure if that was a great plan, but I have always been of the mind-set, let’s give it a go and see what happens!”

Do you have any overriding business principles?

“Yes I adhere to 3 main principles in my business: that is suppliers, customers and employees need to be treated as one. The first rule is that you treat each of them as you would want to be treated.

All relationships are really important to me and it doesn’t pay to push the ethical boundaries of trust and respect. I think this is why we have so many employees who’ve been with us a long time and also many of those businesses that we have acquired have also seen their people chose to remain and continue to work for us. It’s really a two way-street in that we will support and develop our people including those going through adversity but for those who aren’t interested in staying, then we’ll help them find a new career elsewhere.

Secondly, I don’t start anything that I don’t fully understand. I am not averse to taking external advice on these matters, but if I still don’t “get it” then I pass on the opportunity.

Thirdly, I believe you get good results from good people. Even when things don’t go to plan you have got to keep supporting your people through thick and thin to achieve the best result you can!

When I have followed these principles and rules, I have not gone far wrong.”

As the business has grown and you’ve developed a strong management structure, what do you look for in terms of character in the people you recruit?

“First of all – integrity. Second equal are intelligence, communication skills and determination. In my opinion, businesses, large and small, fall down because managing directors and owners can fall into one of two big traps; they either appoint in their own likeness probably because there’s an insecurity about challenge or they go to appoint the brightest people because it’s easy to mistake intellect for commerciality.

I have come to recognise one thing in my life – no matter how good I might think I am in business, I acknowledge that I don’t have all the answers nor can I do everything by myself.

Therefore I like to surround myself with smart and driven people. Another key aspect of leadership is self-awareness: it is absolutely vital to understand where your strengths and weaknesses lie, and if necessary be prepared to be critical of yourself as let’s face it, it’s all too easy to be critical of other people. What I have tried to do is surround myself with people who are good at those things that I am not.

For example I have worked with Chris Heaton, our Group Managing Director for twenty-five years and we’re both completely different characters. There are times in big meetings when he will see a blindingly quick solution to a specific issue. Chris’s mind works like a computer, he is particularly commercial and always logical, and that means we work really well together and ultimately we can complement each other’s strengths and weakness.

Additionally the management team needs to be not afraid to challenge, to suggest better ideas and encourage a healthy debate to find the right path and solution to problems.”

How do you manage the people who don’t share your motivation and drive?

“You can teach people lots of things, but motivation is not one of them. I’ve never met anyone who is good at something they don’t like doing! You’re doing people a big favour if you say, “Stop doing that. Go and do something else.” If characters are somewhat lazy with low motivation, it’s a fairly easy decision; if you don’t want to be here, don’t be here!”

You’ve been in business for over thirty years, what keeps you going?

“For me enthusiasm is massively important. With some people, if they don’t see the point of what they’re doing, I can see why they find it difficult to be motivated.

For example, when we acquire a new business you sometimes need to remove barriers; so we quickly try to identify the person who could be holding everyone back. We often chose to let them go and then say to the rest, “Here’s your chance, guys. Stake out what you want to do with this business. Go claim it. Tell me what you want to do and how it’s going to benefit the company and tell me what I can do to make the job easier for you.” When the barrier is removed, their enthusiasm more often than not is re-ignited and I find that that energy is so infectious and rubs off in the rest of the business.”

Looking ahead, what future do you envisage for the business and for yourself?

“I’m really lucky, because, personally, I’m interested in lots of things and I’ve always built management teams so that I can do things outside of the business such as sitting on boards and other non-executive roles. I was also very privileged to be Master Cutler. 

I’m also very lucky in that my son has earned his way into the business and is now the Managing Director of the largest of our businesses. He’s a smart guy, highly motivated and I’m impressed with how he has progressed.

Sometimes I’m asked, “What’s your exit plan, David? When are you going to sell it all up?” and I reply, “Well, I’ve got this business which is financially strong, I enjoy being part of the team and I’m still motivated to jump out of bed and come to work every day!”  Why would I sell a business that is generating good returns and that I know intimately, take the capital and invest it in the stock market which I don’t know intimately and expect to make a better return. In any case, that wouldn’t be as much fun as this is.”