Monthly Archives: November 2011

Entrepreneur of the Year Finalist – John Watson OBE of John Watson & Company

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John Watson OBE has always been ahead of his time when it comes to business and despite having worked with, managed and led John Watson & Company (JWC) for more than 45 years he has no intention of changing his innovative ways as he drives the firm towards its next phase of expansion.

JWC, founded in 1824, is one of the oldest printing companies in Scotland producing some of the finest design and print related products using the most advanced technology in the industry. Chief executive John employs 100 at his printing facility north of the city centre and serves a core of blue chip companies in the drinks industry, particular the Scotch whisky sector, as well as a number of firms through JWC’s commercial division.

John joined his father in the business in 1965 at a time when JWC was primarily a stationery retail business and jobbing printing company. However, even at an early stage it was clear to John that the focus of the business needed to be realigned to realise its full potential. When he took over the firm from his father in 1971, John set about establishing JWC as one of the leading bespoke printing businesses in Scotland.

Over the years as the company grew John advocated the importance of innovation as being the key to success, along with the firm’s ability to offer exceptionally high standards; not just in terms of the goods manufactured but also the service offered. A key foundation to this success has been to stay in touch with the key issues and challenges facing his customers. The firm deals with a range of customer issues from rebranding exercises to implementing anti-counterfeiting measures.

While the Scottish market is in a mature state and the printing industry in general is in decline, John has still maintained a profitable and financially sound business through challenging times, with turnover reaching £9.7million in March 2011. 2011 also saw the installation of a new state-of-the-art £3m Gallus PSL (pressure sensitive label) press demonstrating John’s confidence in the future,

John has sought to challenge many of the overseas markets where the competition is even fiercer than in the UK by entering the French, Irish and Russian markets as he strives to strengthen JWC’s global reach.

Thanks to his contribution to the printing industry, as well as his charity endeavours, John was awarded an OBE in 2006.

Jim Boyle, partner and head of entrepreneurial business at Deloitte, and awards judge, said: “Over the years John’s clear edge has been his focus and his ability to understand the needs of his customers and being able to offer solutions that are of the highest quality, on budget and to the right timescales. His drive, determination and resilience over his 46 year journey is an inspiration to anyone starting out in business.

“John’s energy, enthusiasm and vision has helped him to establish and maintain, over an entire career, a profitable business with a top class reputation and growing customer base.”

Entrepreneur of the Year Finalist – Stuart McLeod of qedi

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Stuart McLeod’s entrepreneurial spirit knows no bounds. His prowess for spotting business opportunities saw him establish his first oil & gas services company in his 20s – during the 1980s’ economic downturn and in the unknown Azerbaijan market. Since then, Stuart hasn’t looked back.

Having sold his business in return for an equity stake in qedi, Stuart has gone on to be the major driving force in building the company into a global-leading company. Despite the latest recession, qedi has not only bolstered turnover from £20million to £60million – breaking its 2010 target forecast of £48million – but also accomplished its goal of a 35% growth rate.

Aberdeen-headquartered qedi is a market-leading oil and gas commissioning and technology specialist. The company, which is now part of international engineering and project management company AMEC, employs more than 350 people both in Aberdeen and internationally. In the past year alone, it has created more than 200 new jobs.

qedi’s success is underpinned by its proprietary GO Technology® which is not only fast becoming industry standard but integrates traditional oilfield skills with new computing technologies to help further internationalise Scotland’s world-class expertise for the future.
Industry uptake of the license for GO Technology® has increased by more than 150% over the last three years.

Stuart, a former Scottish chairman of the Energy Industry Council, further demonstrated his foresight for business intelligence and enterprise when he secured a deal earlier this year to ensure qedi consolidated its position for future global growth. The company was acquired earlier in 2011 in a £33m deal by AMEC whose cross sector expertise, global networks and customer relationships strengthen and support qedi’s offering to new and existing customers, in Aberdeen and globally.

Jim Boyle, head of entrepreneurial business at Deloitte and judge for the awards said: “Stuart’s focus and determination, combined with his refreshingly honest approach have seen him develop qedi from a small stable commissioning company into a successful, internationally acclaimed business, positioned as a high value, attractive target for acquisition. This is particularly impressive in an industry renowned for its reluctance to adopt new technologies and solutions.

“Stuart has achieved this through his ability to create strong teams, to manage complex individuals and to get those individuals and teams to perform at the highest level. The sale of the business to AMEC is a testament to Stuart’s energy, drive and ambition.”

Entrepreneur of the Year Finalist – Colin Robertson of Alexander Dennis

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Being asked to run an organisation with more than 400 employees at the age of 25 would be a daunting experience for most. For Colin Robertson, though, it was something he took in his stride.

Colin was 17 when he started his career as an engineering apprentice with Cummins Engine Company, climbing the ladder steadily before being put in charge of the entire machine shop, managing over 400 workers.

After a successful period at Cummins he took on a new challenge at JI Case, the tractor manufacturer, where for four years he was unit manager and responsible for facilities across the UK, Germany and France. After 13 years of service he moved on to Terex Corporation where he enjoyed a meteoric rise through the ranks, becoming President of their $2billion construction division and ultimately Executive Vice President of Global Operations, based at the company’s Connecticut headquarters in the USA.

In 2007 he returned to Scotland, this time as CEO of Falkirk-based bus and coach manufacturer Alexander Dennis Limited (ADL).

Since then ADL has seen its UK market share rise from 30% to over 50%. It leads the market in all four key sectors – midi bus, full-size single deck, double-deck and hybrid-electric sales – and has established itself as Europe’s leading supplier of low-carbon buses that reduce fuel and CO2 emissions by over 30%.

In parallel with this it has seen export sales grow rapidly from 20% to circa 35%, doubled turnover in the past three years to £360m, with a further 20% growth anticipated in 2012, and is on course to see profits increase significantly this year and next.

All of this has been achieved in the teeth of the toughest global recession in 40 years but, despite this, Colin is convinced there is much more to come on the back of new partnerships and ‘build alliances’ he has now secured in North America, Hong Kong, China and New Zealand, and with recent big business wins in Canada, Asia and the Southern Hemisphere.

Retaining almost 2,000 employees in the UK throughout the recession, ADL has cleverly introduced invaluable out-sourcing arrangements, enabling it to increase output by 60% while preserving its core workforce in facilities at Falkirk, Scarborough, Guildford and key overseas locations. Clearly, this is one Scottish manufacturing boss who sees adversity as opportunity – and has taken the opportunity to take his company into the big league of global players in his industry sector.

Jim Boyle, head of entrepreneurial business at Deloitte, and awards judge, said: “We were extremely impressed with Colin both as an individual and as a business person. He is clearly very passionate about ADL and is committed to expanding the business even further.

“From a young age Colin has demonstrated a nose for building successful businesses and has a very impressive track record both at home and abroad. On accepting the role at ADL he has shown a keen desire to challenge himself and those around him. With Colin at the helm ADL is a great example of a successful Scottish manufacturing business driving an export-led recovery.”

Emerging Entrepreneur of the Year Finalist – Stuart Mitchell, Flexlife

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Stuart Mitchell established his entrepreneurial credentials when he set up Flexlife four years ago with co-founder John Marsden. An Aberdeen-headquartered business it supports companies with subsea interests inspect, maintain and repair their flexible piping.

Working as an engineer within the oil and gas sector, Stuart’s vision was for a consultancy which offered tried and tested industry solutions while radically changing the way consultancy projects were priced to ensure goals were aligned with those of the customer.

Flexlife opened for business as a two-man operation in April 2007. Word quickly spread throughout the industry, both in relation to the success of the innovative engineering solution and its approach to pricing.

The first major contract came in the form of a well project in Tunisia, which provided the security of cash in the bank and allowed Stuart to start on his second vision for the business – to combine the engineering consultancy with patented products for the inspection, monitoring, repair and protection of flexible pipes.
This award-winning technology is now widely acknowledged as a step change for the industry.
Earlier this year, Stuart strengthened his Board with the appointment of two non-executive directors in David Cassie of Subsea 7 and Sandy Clark of Amec, both considered to be energy industry leaders.
The last 18 months have seen the company position itself to take advantage of international growth and it now has a presence in Brazil, the USA and Asia-Pacific and has secured a clutch of high profile contracts with Hess, Statoil, Total, Shell, Maersk Oil and CNR among others.
The recent injection of equity, long term contract wins and strengthening of the Board has meant Stuart is now well placed to continue the business’ impressive growth through the £20million turnover barrier and beyond.
Jim Boyle, partner and head of entrepreneurial business at Deloitte and judge for the awards said: “Stuart is a focused and determined individual who spotted the opportunity to address dissatisfaction in his industry and did something about it. In four years, he has created a business unlike almost any other in the industry and which has a relentless focus on adding value.
“He has executed on his strategy in an incredibly short space of time, managing the company’s rapid growth without compromising on the approach which has made Flexlife the success it has been to date.”

Emerging Entrepreneur of the Year Finalist – Margaret Lang, Intelligent Office UK

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Margaret Lang first established herself as an emerging talent in 2001 when she used the experience she had gained from a number of years living and working in London and New York to successfully complete a management buy-in of Docuserve. Docuserve would subsequently become Intelligent Office UK, a firm that specialised in providing outsourced administration to the professional services sector.

Over a ten year period, Intelligent Office has transformed from a single service, regional provider of document handling services, to a business process outsourcing provider operating throughout the UK. Intelligent Office now also offers transcription and consulting services, providing clients with strategic advice and guidance on the optimum use of resources, systems and processes. This transformation has cemented Intelligent Office’s position as market leader with a particular strength in the legal sector.

During the credit crisis in 2008, Margaret was quick to recognise that the internal structure of the company needed to be streamlined in order to compete effectively in the new economic climate. Overseeing a radical restructure of the business in January 2009, Margaret ensured Intelligent Office was not dependent on external bank debt and was well-placed to capitalise on the budget cutbacks in the legal industry, which increased demand for outsourcing.

Margaret’s ambition continues to drive the business forward and she plans to extend Intelligent Office’s market reach through a combination of organic growth and acquisition.

Jim Boyle, partner and head of entrepreneurial business at Deloitte and judge for the awards said: “Margaret is a very impressive leader with a clear understanding of the market. Intelligent Office has a growing reputation as well as a strong and clear strategy for future expansion. A key factor in the company’s success is its ability to adapt and refine its commercial proposition in accordance with demands in the market. This is testament to Margaret’s forward planning and fundamental reorganisation of the business at a time of great economic uncertainty.”

Emerging Entrepreneur of the Year Finalist – Keith Wight, SST Sensing

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Keith Wight has increased his customer base by more than 600% in two years by going against the grain and developing a customer-centric business strategy – something which has not always been high on the agenda in the electronic sensing industry.

Keith is the chief executive of sensor designers and manufacturers SST Sensing Ltd which he founded in 2002 after four years working as an operations manager with New Medical Technology. In the first three years Keith initially built SST, which has headquarters in Bellshill, by quietly winning work from local contacts in Scotland, however, his hard work paid dividends in 2005 when he had his first major business breakthrough.

Keith identified a gap in the market to supply standard and bespoke electronic sensors to original equipment manufacturer (OEM) customers, providing a unique selling point through excellent customer service and technical support. The value added business allowed SST to have a closer relationship with their customers, resulting in increased repeat business and new opportunities. These contracts averaged up to £500,000 per year. The market had historically been dominated by larger firms driven by high volume, low customisation and less emphasis on efficient client service, so Keith’s alternative approach proved effective. Combining high quality technical support with SST’s ability to customise products to meet specific customer requirements, Keith was able to corner the market.

This success allowed Keith to raise the required capital to position the business for future expansion. As the company continued to grow, Keith incentivised staff members with a percentage of shares in the business, encouraging them to take a vested interest in future success.

Perthshire-based Keith, who graduated from Napier University in Edinburgh in 1995 with a BSc & MSc in Engineering and Quality Management, now employs 47 staff and has consolidated SST’s position in the industry. He has boosted the customer base from 70 to 450 since 2009 and is planning the next stage of the firm’s development, with the ultimate goal being to list the business on AIM within three years. Other plans are afoot to expand SST’s successful growth in the export market, further exploit the oil and gas sector and research overseas acquisitions. SST also has many new sensing technologies in development and its new oxygen sensor is designed to offer a vastly improved solution over existing technologies currently available. The vision of the company is to be the market leader in gas and fluid sensing and control within five years.

Jim Boyle, partner and head of entrepreneurial business at Deloitte and judge for the awards said: “Keith should be applauded for the way he has turned SST Sensing into a successful and profitable organisation, with a loyal, committed and stable workforce. He has shown he has the vision and ability to provide customers with products and services which they both need and want, whilst also appreciating that it could not have been achieved without the continued support of his dedicated team.”

The Six Factors of Influence

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Guest Blog from Russell Wardrop of Kissing With Confidence, who has shared the highlights of his talk to Exchange members at a Focus dinner. The event was hosted by Alan McCafferty

The Six Factors of Influence
I opened with the importance of fairness, emphasising that it’s always in the frame even if you are in a strong position. We are emotional beings and fairness always matters to us, so be aware that human beings are prepared to say no to something even if they will lose, simply to stop you winning, if they think you are asking for too much.

Reciprocity
Reciprocity is, essentially, making the other side feel special. Who doesn’t like to feel special? Find a way to have those you are trying to influence believe that you are doing something just for them and they are more likely to be persuaded to your way of thinking. Better still, of course, genuinely do something special just for them. This can be as simple as a hand-written note, a surprise you know they will like, a heads-up on a business opportunity or an early look at some new research.
One way or another, we do like to think we matter to other people. Show others that you matter to them and they are likely to reciprocate.

Social Proof
We are persuaded by others, especially those we have a good opinion of. So when you are putting that sponsorship form around the office, go to a generous and well-liked colleague first- one you know will put at least a tenner in the box- and you will do better than if you start with the tight-wad.

Social proof is about finding other parties to convince others that you are good at what you do.

I added benchmarking and proper empirical research These can take a bit more time and effort than collecting a quote, but are great objective ways of using social proof to persuade.

Consistency and Commitment
When people make a commitment, they are more likely to be consistent with that commitment. At a simple level, this is about getting those you want to persuade to commit to what you want: to say yes.

This took us into five minutes on one of my favourite emotional intelligence skills: assertiveness. Assertive people say the right thing, at the right time, in the right way. They are not afraid to ask for what they want. We had a brief discussion about knowing what you want before you go into the room, which is important, and ensuring you ask at the right moment.

Authority
Stanley Milligram did experiments in the 1950s that had people giving electric shocks to strangers at the behest of a “doctor” in a white coat. Eighty per cent of those in the sample administered a fatal dose.

Bottom line? We defer to authority, so enhancing and increasing your authority is an effective way to get others round to your way of thinking.

Scarcity
Some of the discussion here was around how dangerous factors of persuasion can be. Of course, any “technique” one might use can be ineffective if you use them in an amateurish way: for example if you only used your authority to push something through you will likely get push-back.

Scarcity is possibly, especially in hard-times, a very risky factor of influence. But there’s the thing, as we discussed: if you are less available then you are more valuable. Think about ways you can use your lack of availability to be more precious. Don’t call back tonight, right away, leave it until tomorrow morning…

Likeability
Ahhhhhhhh… finally likeability. I’ve spoken about networking before at the Exchange and networking has likeability at its core. Having a smile on your face and not being a miserable sod is important: no-one likes a miserable sod.

I finished here on small talk, and the importance of working on your ability to do it. It’s more than an ice-breaker, it’s more than just polite, it’s more than convention. Having great, interesting small talk makes you more memorable. And having others remember you is essential if they are to be persuaded by you.

But there’s more: if you share good small talk and get rapport going likeability turns into trust; and trust is what you need if persuasion is your goal.

Of course many of us use much of the above every day of our lives when out there trying to earn a crust. But when you look at the above you might find that you emphasise one a bit too much at the expense of others that might be effective. And here’s the thing: too many of us spend too much time using too much logic and too many facts. Use a bit of creativity to make your self appropriately memorable when you are out there and you’ll get more of what you want.

Exiting your business – enjoy the journey

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Lots of people will give you advice on the best way to exit your business, but the most valuable – and most accurate – information comes from someone who has been it, seen it, done it and written the slogan for the T-shirt.

Award winning entrepreneur George Yule shared his experiences at a recent Focus Dinner on Exiting Your Business, and he’s given us permission to share the highlights here.

George gave very detailed advice about the process of an exit, the why and the how, but just as important were his messages: “don’t hang about” and “enjoy the journey”.

Identifying the reason for exit comes first, whether its retirement, distress or a new venture, closely followed by establishing owner-expectations on the price and schedule, the remit and the main objectives of exit process, as these will have a bearing on your scope, schedule and position of strength (or not).

Take into account any influencing factors such as overall market conditions, the likely acquirers e.g. trade and/or private equity, and the strengths and weaknesses within the seller’s business.

And prepare a detailed Exit Action Plan that identifies what needs to be done internally (address ALL known weaknesses/ gaps – this includes process, systems and people!) and externally (meet and engage best-in-class deal advisors at the appropriate time i.e. not too late – or too soon as their fees will be worth the additional premium).

George emphasised the importance of this for the seller, as the exit process will place significant demands on you and your management team throughout the process at a time when you both need your own business to be performing at its best because >EBITDA = >£ Enterprise value

Ensure the Plan has defined activities, such as visible work-scope, milestones, roles and responsibilities, schedule, plan v, actual measurement of progress, etc. And be sure to clearly define and communicate the plan and process to the various action parties.

It’s key to assess how you can motivate other members of the management team and key staff to take ownership of project and its successful outcome e.g. ££’s bonus, equity options via EBT / EMI, senior future management opportunities, etc.

In George’s last project, he ran a sale process with five serious bidders that commenced in November and concluded the following May. He shared the detail of the stages he and his team went through to complete the deal:

• Issue sale ‘teaser’ / flyer to broad list of potential acquirers
• Deal advisor screens replies to teaser to establish short list of serious parties
• Compile data room & management presentation
• Round of direct meetings / presentations with bidders & allow access to data room
• 1st round of bids received, screened and lowest bidders given option to drop out or re-bid
• 2nd round of meetings with management, site/ facility visits, 1-2-1 discussions with CEO/MD
• 2nd round of [increased] bids received, screened and selection of top 2-3 bidders
• Further round of meetings with bidders, Q+A’s, 1-2-1 discussions / assess ‘chemistry’
• Another round of bids received and preferred / final bidders [2] identified to meet again
• Closing date identified to bidders for closing bids, successful bidder identified
• Exclusivity allocated pending completion of due diligence [in this case 6weeks allowed]
• Management team of seller exposed to financial, commercial, legal, technical Q+A
• Diligence completed / deal done
Asked what he saw as the main learning points, George said there were many, but namely: be prescriptive about self-diligence before meeting any bidders, ensure buy in from key staff, know your business, your market, your clients, your USPs and look for scalability, quality of earnings and sustainability.

Take EVERY opportunity to increase EBITDA during the sale process, seek specific client testimonials and references, prepare meaningful management presentation and rehearse religiously the Q+A process with senior management before meeting with bidders.

George said it’s key to exude confidence and competency when presenting your business to potential bidders and to ensure you get clear of being on critical path during the diligence period by providing concise responses to diligence advisors acting for bidder.

And appoint a deal maker with a proven track record, work closely with them throughout the process – they will be the ones who deliver the prize.

Ultimately, don’t hang about – drive the sale process and diligence on an on-going basis until completion. If you are seriously considering an exit, allow preparation time of around 18-24months from the outset to ensure all of the above tasks and other relevant actions such as PR profile, strong branding, visibility and building a data room of quality company information are included on your list of to-dos.

And finally, enjoy the journey keep a sense of perspective and remain focused on getting through the seeming endless questions and requests for information by potential acquirers and their advisors – they’ve an insatiable appetite for detail.

For more information about George, biog here