Star of Dragons’ Den James Caan is chief executive of private equity company Hamilton Bradshaw, and founder of recruitment company the Alexander Mann Group. But he claims that without investing in people, he would never have made his millions. Tara Craig finds out how he engages his staff, and his views on HR.
The BBC’s Dragons’ Den isn’t a programme known for tolerance. The ‘dragons’ loll in their executive seats, content to humiliate contestants over the tiniest thing – including poor punctuality. So you can imagine my surprise when, turning up to meet dragon James Caan, I was kept waiting for 40 minutes, before having to shoehorn the anticipated 60 minute-long grilling into an unsatisfactory 20. Caan, who says “I think you treat people the way you want to treat yourself”, was obviously having a particularly trying day, kept busy as he was by sending text messages throughout our discussion.
Caan has gone from strength to strength since setting up the Alexander Mann Group in 1985, in what he is fond of calling “a broom cupboard in Pall Mall”. His private equity company, Hamilton Bradshaw, specialises in two key areas, buyouts and development capital, and “special situations”, including turnarounds. The company is willing to invest £10m in each transaction, and can find the money in less than a month. Ever one with an eye to the future, Caan is currently setting up a Sharia law-compliant fund to enable sovereign Middle Eastern funds to enter the UK. His won’t be the first such fund, but Caan feels that he will be able to communicate and market his to a higher standard.
Today, he’s worth a fortune, with homes in London, France and Pakistan, but he shows no signs of slowing down or losing any of that ambition. Caan may be a talker, but he’s a doer too – and his business success is testament to a work ethic inherited from his father.
“My father practised what he preached,” he says. “He didn’t tell me what to do, he showed me how to do it. His work ethic is unbelievable. I’ve just followed the same qualities that I saw in him – the ingredients and the characteristics that I saw made him very successful.”
Caan allowed himself a “year out” when he hit 40 but, characteristically, spent it learning to fly and taking the advanced management programme at Harvard Business School. He’s not short of admirers or plaudits, either, and at one time or another has been one of the 100 most influential Asian people in the UK (awarded by Asian Power 100), the PricewaterhouseCoopers Entrepreneur of the Year, and winner of the BT Enterprise of the Year award for outstanding success in business.
Describing himself as “a serial entrepreneur”, Caan claims that “in most of the businesses that I’ve invested in, without the people, I’d have no business”.
“It is not the products or services that create the people, it’s the people that create the business,” he says, adding that a potentially successful person will show “expertise, knowledge, passion, understanding, motivation, drive and conviction – human qualities.”
One such success story was that of Dublin woman Rosaleen Blair, chief executive of Alexander Mann Solutions, Veuve Cliquot Business Woman of the Year, and spotted and backed by Caan and his then business partner Jonathan Wright, a decade ago. So we know that Caan can pick a winner.
“To me, when you’re buying a business, you’re not buying the lease, you’re not buying the furniture. If you’re buying, say, a PR agency, or a recruitment company, other than the people, what are you buying? What else have you got? When you’re buying a business, the people are the greatest asset. That’s what you’re paying for. That’s what the premium’s for.”
Caan made it clear how highly he values his staff, so how does he engage and retain them?
“People are very engaged if they feel inspired and motivated, and if they have somebody they feel they can follow. Good leaders and good managers inspire people,” he says.
Caan’s three characteristics of good leadership are vision, approachability and passion. His hero in the “approachability stakes” is M&S’s newly promoted executive chairman Stuart Rose.
“What I find impressive about [Rose] is the number of times I’ve seen him being interviewed – and he’s always on the shop floor. That tells me that he’s approachable. Rose has put the basics back into the concept of leadership.”
Caan sees himself as an especially approachable boss – he doesn’t have an office, and takes particular pride in eating the same sandwich as his PA. He even drinks “the same coffee, in the same cups”.
“This,” he says, “creates tremendous camaraderie.”
Caan says that he keep his staff – he currently employs 500 people – by “treating them well.” He adds: “I don’t say that glibly. I would say that one of the major reasons that people stayed with my businesses is that they’ve grown and learned. As soon as they stop growing, money won’t keep them.” For Caan, as for so many chief executives these days, the biggest challenge is attracting the right people, and he’s found this issue consistent across all of the sectors in which he has operated – retail, leisure, financial services, and investment.
He acknowledges the skills shortage, which he feels is global, but says: “We’ve had 10 years of unprecedented growth in the economy. The macroeconomics tell you that fundamentally, we’ve got too many people in the workforce.”
One of Caan’s key business philosophies is to provide equity to the people he goes into business with – the concept of “interpreneurship”.
He says: “This has given me the greatest success because I find that people work differently where they feel that they have a stake in the business. I’ve found that the passion people have when they have a sense of ownership makes a huge difference.” And according to Caan, this is particularly true when it comes to the service sector, “where you don’t have widgets or products as such”.
Caan’s career has involved several encounters with HR, but when asked whether HR should be represented on the board, he coyly replies: “No comment.” And he’s convinced that HR has fallen into red tape hell.
“HR has become perceived to be too much of an admin function,” he explains. “The concept of people and relationships has become too diluted. HR used to be – at least when I started my business – where you went when you wanted to develop, or when you had an issue. Now I think we’ve just got too much legislation.”
He mentions a recent incident involving the “sophisticated HR department” of one of his own companies, where the chief executive was reluctant to travel to regional offices, and the HR manager failed to realise that it was her responsibility to encourage him to get out and meet his teams. Caan wants his HR practitioners to take responsibility – he believes that they should be in a position to put the chief executive straight on HR issues. They should take ownership of all HR issues.
What’s next for Caan? Apart from his day-to-day work commitments, and filming his second series of Dragons Den, he’s writing a book – the story of his journey from that Pall Mall broom cupboard.
“I’m just very happy with life generally. I want to do more of the same,” he says. “As long as I enjoy it, as long as I get a thrill out of it, I will continue doing it.”
- Hamilton Bradshaw, private equity, 2004
- Alexander Mann Group, recruitment, 1985 – 2002
- The Concise Group, computer services, 1998 – 2002
- The Humana International Group, franchising, 1993 – 1999
- AMS, business process outsourcing, 1996 – 2002
Caan the dragon
“The series would not be the same if I hadn’t arrived. Dragons’ Den was in need of a little bit of spice, a little bit of colour. And in came Jimmy C .”
- “When I actually got into the Den, I found it much harder than I thought. I was genuinely surprised at myself, because I went in feeling pretty confident.”
- “You’re sitting there, thinking that it’s £200,000 and it’s your cash. And £200,000 buys a lot of Armani suits for me – so I don’t want to lose too many deals.”
Meet James Caan
Come to our HR Directors Club breakfast briefing at the Prince of Wales Theatre on 24 April 2008 to hear James Caan discuss how he became a success. For more information, go to www.hrdirectorsclub.com/events