The image
of a stereotypical entrepreneur may be of a single minded, driven personality
but the reality can be very different. We profile eight well-known entrepreneurs
who not only seized upon an idea but are examplars of how to use good people
management policies to drive that idea forward. Jane Lewis reports
What
makes a great entrepreneur? Judging from the variety of people and personality
types represented in the list below, you might well argue that it is impossible
to pin down any specific traits. Some fulfil our idea of the stereotypical
entrepreneur – entirely self-made, driven individuals, often the product of
difficult family circumstances and frequently not the easiest people to have
around. Others are altogether more cosy, possessing strong inter-relational
skills, and the ability to make inherited advantages (money, education, family
connections) pay. But when you look closely at all those featured below, it is
clear they all share a certain number of defined qualities.
The
first of these is a willingness to take risks. At some stage in their careers
all have had the self-belief or drive to risk everything on the roll of a dice.
And then there is a capacity to enthuse others with their drive and motivation.
Some have achieved this simply by leading from the front. Others have actively
followed the rules of good management – building strong teams, trusting
subordinates with a degree of autonomy, listening to what those around them
have to say.
Peter
Melrose at Hay Group describes a model of leadership recently identified in a
study in the Harvard Business Review which aimed to assess what made good
companies great. A high number of these companies had been built up by
so-called Level 5 leaders, "People who combined a fierce will with a
strong degree of personal humility and emotional intelligence".
But
another striking feature of today’s leaders is the ability to cut through
internal bureaucracy to focus on the quality of people in their organisations.
This shows not just in their ability to attract talent, but also in terms of
how they direct it. According to Melrose’s colleague Chris Dyson, a common
trait is that people know where you stand when working for them. He says,
"They’re transparent" – very clear about the goals they set and the
performance they expect in return." Research has shown that it is this
ability to light the blue touch paper of everyone in an organisation that is
key to consistent success in terms of performance, because it leads to greater
discretionary effort on the part of individuals. Read on and draw your own
conclusions.
Charles
Dunstone
Company:Â Â The Carphone Warehouse Mobile communications
Employee Numbers:Â Approx 1,500
Profile: Â In 1989 the then
25-year old Charles Dunstone saw an opportunity in the burgeoning mobile phone
market. His Carphone Warehouse has since ridden what turned out to be the
fastest consumer product boom in history. The company is the largest
independent mobile communications retailer in Europe with 1,000 stores in 14
countries. Dunstone attributes the company’s success to its ability to react
with amazing speed to fast-moving markets. The type of organisation needed to
accommodate such dynamic conditions is by necessity flexible – the company’s
offices are bustling and informal, operating at a pace that would probably
disturb more established businesses. And there’s an emphasis away from hefty
job titles and centralised processes. An instinctive leader – "I’m not a
particularly intelligent person, but I think that a skill I probably have is
sensitivity to mood" – Dunstone believes that the sales people at the
sharp end are "the heroes of the business" and aims to encourage
innovation and autonomy at all levels. Inevitably, mistakes are made, but
Dunstone says, "I try to make sure we don’t have too much of a blame
culture in the business. We’re used to dealing with slightly chaotic
situations. We don’t get completely thrown when we’ve suddenly got to do a U-turn
or come up with a completely new idea."
Perween
Warsi
Company:Â S&A Foods Ready-made meal manufacturer
Employee Numbers:Â 1,300
Profile:Â S&A Foods began
life in Warsi’s kitchen. In an effort to alleviate the "boredom of
domestic life" she began supplying local Indian restaurants in Derby with
home-made samosas and curries. After several hundred fruitless sales calls to
supermarkets, her big break came in 1987 when the high quality of her food won
over the tasters at Asda. Only then did Warsi admit she didn’t have a factory,
but she nonetheless contrived to turn out 4,000 dishes a week from her kitchen
while a site was found. Now boasting a long list of clients, from Waitrose to
Welcome Break, S&A Foods is projecting sales of £100m this year making Warsi
the wealthiest Asian businesswoman in the UK. Undoubtedly the key to the
company’s successful expansion has been its ability to translate
"home-made" values to a factory environment – and that has depended
on the quality of its staff. S&A Foods has attempted to reverse the
catering industry’s poor reputation for employee churn via an innovative array
of benefits and incentive schemes. But the most important factor in maintaining
morale and high standards lies with Warsi herself. A CEO who leads from the
front, she keeps a weather eye on detail and claims her one regret is that she
spends so much time in the boardroom that she has little time for cooking.
Julian
Richer
Company:Â Richer Sounds Hi-fi and home entertainment
retailer
Employee Numbers:Â 330 rising to
350
Profile:Â Julian Richer converted
his passion for music into a multi-million pound retail empire now extending to
some 60 outlets across the UK. Richer dramatically cut overheads by making a
virtue of ignoring high street premises in favour of tiny, out of the way
shops, often located under railway arches. He took a similarly unorthodox
approach to marketing, relying entirely on word-of-mouth recommendation. By
combining keen prices with an extraordinarily high degree of in-store knowledge
– Richer’s policy was to only offer jobs to devotees who had already bought
from him – the chain quickly established itself as a haven for both hardcore
woofer and tweeter buffs, and ordinary punters who just wanted a good system.
This formula has been successfully translated onto its Website. Since the
publication of his autobiography, The Richer Way, Richer is almost as
celebrated for his informal approach to people management as he is for his
stores. A famously inclusive manager, he pays well and rewards staff per sales
made rather than on their actual value. To ensure innovation, he encourages a
regular submission of ideas in return for a small payment and an immediate
personal response. Like many of Richer’s incentive schemes, this has since been
widely adopted by other organisations.
Hans
Snook
Company:Â OrangeMobile telecoms
Employee Numbers:Â 13,000
Profile:Â When Hans Snook sold
Orange – the mobile phone company he founded while at Hutchison Telecom from a
mish-mash of failing telecoms businesses – to Mannesmann in 1999 it had a
market capitalisation of £20bn. The company’s extraordinary growth during the
mid- to late-1990s has been attributed to Snook’s ability to establish Orange
as the hippest mobile phone brand around, and to assemble the right team to
build upon this initial success. Like many entrepreneurs, the Canadian-born
Snook was not always the easiest person to work for, but he nonetheless built
up a huge loyalty from staff on the back of his own commitment to maintaining
the brand’s high standards and strong commitment to its customers. As one
commentator remarks, "His vision, energy and sense of what was
possible" infected the whole company. He also kept senior managers on
their toes by instituting a process of "60-degree feedback", enabling
staff to assess the extent to which their bosses were "actually living the
values of Orange". This had a good impact on staff retention rates. After
a series of buy-outs, Orange is now in the hands of France Telecom. Although
Snook remains CEO, he has announced his intention to take his energies
elsewhere. "He’s the kind of man who needs to create and lead in his own
right." He says.
James
Dyson
Company:Â DysonVacuum cleaner/washing machine
manufacturer
Employee Numbers:Â 2,000
Profile:Â Long before James Dyson
turned the vacuum cleaning industry on its head, he had already enjoyed
considerable success as an inventor-cum-manufacturer, most notably with his
Ballbarrow. It was the problem of dealing with the dust produced during the
manufacture of this innovative wheelbarrow that paved the way for the Dyson
bagless vacuum which, after over 5,000 prototypes, finally went on sale in
1993. The rest, as they say, is history. Dyson is now one of the UK’s richest
and most celebrated entrepreneurs. An unabashed obsessive, he claims to be
fascinated by the process of using new technology to make something better.
"It’s also a professional obsession," he says. "The more people
tell me it can’t succeed, the more convinced I become." He has succeeded
in imbuing these values throughout the company – largely as a result of a
policy which ensures "that nearly 50 per cent of our management is
involved in R&D" – a huge percentage, by any standard. To keep the
talent coming, Dyson is also active in higher education, regularly going out to
sell the benefits of a career in design, engineering and manufacturing.
"What we should be doing is making sure the most talented creative people
are attracted into industry," he says.
Stelios
Haji-Ioannou
Company:Â EasyJetTransport, Internet services, Financial
services
Employee Numbers:Â 1,386 in the
airline
Profile:Â EasyJet was formed in
1995 on the back of a loan from Stelios’ father, when the former was only 28
years old. The idea was to major on an efficient, low-frills service that would
"make flying as affordable as a pair of jeans" – the inaugural
flights out of Luton to Glasgow and Edinburgh were priced at £29. The airline
was one of the first to take advantage of Web booking, going online in 1997
Easyjet quickly achieved a giant-killer status, both with the public and with
rival airlines, comparable with Freddie Laker’s 1970s Skytrain. But unlike
Laker he withstood considerable pressure and was not forced out of business.
Instead, his formula was widely copied – most notably by British Airways with
its Go subsidiary. But none have been able to match EasyJet’s talent for
generating publicity. Stelios has majored on the same "no frills, good
value" in his approach to his own staff. An informal atmosphere belies a
strongly competitive and fast-moving ethos. EasyJet was one of the first
companies outside Adland to pioneer the concept of the "standing
meeting" as a means of cutting down on internal dithering. He has launched
a welter of other services on the back of the success of the "easy"
brand: including the world’s largest chain of internet caf‚s, an Internet-based
car hire firm, an online shopping subsidiary and, most recently, Web-based
financial services.
Toni
Cocobba
Company:Â DP ConnectÂ
– IT recruiter
Employee Numbers:Â 85
Profile:Â Established at the
height of the 1990 recession, DP Connect has become one of the fastest-growing
companies in its sector, enjoying an annual compound growth of 106 per cent.
Commentators maintain that the Toni Cocobba’s "new and enlightened
approach" to the problems of IT recruitment has been an important driving
force behind this. She began her service because "it was a flexible way
for a young working mother to earn some cash". But her dedication to
providing a quality service to both sets of customers – clients and IT
contractors – immediately began to pay dividends in a sector dogged by cowboys.
By sticking to her original dictum of "ethics before profits",
Cocobba contrived to excel in both. She shows a similarly enlightened approach
in her attitude to her own staff. "She is a person who understands the
demands on other people from their home lives and family," says one
commentator. Thus Cocobba pioneered the concept of achieving the right
work-life balance long before most companies (let alone the Government) had
considered the idea. A similar flair was apparent in her own recruitment
strategy. Cocobba believes in giving individuals the room and autonomy to
develop at their own pace, with frequently astounding results.
"She
hired a kid off a YTS scheme and put her straight into recruitment when most
organisations would have shunted her into filing. Now this young woman, at 24,
is on a six-figure salary – one of the best salespeople in the
organisation," she says.
Eddie
Stobart
Company:Â Eddie Stobart.-Â Road haulage
Employee Numbers:Â 2,500
Profile:Â Eddie Stobart rose from
obscurity to take what began as a one-man band to its current position as one
of Britain’s fastest-growing road hauliers. The secret of his success was simple
– providing an efficient, reliable service that above all looked professional.
Stobart banished all preconceptions of long-distance haulage as an industry
characterised by slobs and chancers by majoring on presentation. All drivers
were issued with ties and jackets and the Stobart fleet has become a byword in
vehicle maintenance and cleanliness. He backed this up with a strong emphasis
on efficiency and logistics management at the company’s headquarters. By these
simple means Stobart contrived to attract a welter of lucrative corporate
customers, impressed by the company’s clear dedication to service. As if this
were not enough, Stobart also attracted a strong public following,
incorporating many fan clubs, and there is a brisk trade in toy models of his
trucks.
Julian
Metcalfe and Sinclair Beecham
Company:Â Pret a Manger – Sandwich manufacturer and
retailer
Numbers in company:Â 2,100
Profile:Â Beecham and Metcalfe
were in "the right place at the right time" when they launched their
first sandwich shop in London’s Victoria in 1986, capitalising on the growing
trend for packaged sandwiches among urban professionals in a hurry. But the
quality of the Pret experience – both in terms of the sandwiches themselves and
the stylish and chic manner in which they were offered – soon singled the
company out as a winner and a pattern of exponential growth quickly followed.
Pret has mushroomed to a chain of some 104 shops on a judicious mix of careful
branding, excellent ingredients and well-trained staff, making it an "icon
of the real new economy of quality personal services", according to one
commentator. But following the group’s controversial link-up earlier this year
with what many see as its brand antithesis, McDonald’s, a question mark hangs
over its integrity. Although Pret ‘s founders insist they maintain total
control of the product and management in the deal which was designed to aid
foreign expansion, many believe the chain may have sold its soul in the process.
Hans
Rausing
Company: Tetra Pak – Carton manufacturer
Employee Numbers:Â Approx 36,000
Profile:Â Hans Rausing became the
richest man in Britain when he sold his half share of Tetra Pak for a cash sum
in the region of £5bn in 1995. But the man known as the Garbo of the business
world (Swedish-born, highly successful and ultra-private on the subject of his
success) began his company in more humble surroundings with a staff of just
six. The company’s breakthrough had been the discovery that the tetrahedron
shape was the perfect packaging vehicle for liquids such as milk and fruit
juices – combining maximum convenience and hygiene with minimum expense. The
product really took off in the 1960s. Rausing attributes his success to two key
factors. First, simplicity – "Never do things which are complicated".
And secondly, strong internal communication and staff buy-in. "You must
talk and listen to absolutely everybody in your company," he says. At the
age of 74 he plans to launch a second packaging venture EcoLean, based on a
cheaper and more biodegradable substance that looks like plastic but actually
consists of 40 per cent chalk, 40 per cent natural gas.
HR
pioneers of the past
The
recognition that any organisation is only as good as the people who work in it
goes back much further than might be imagined. The philanthropic industrialists
of the 19th century – typified by the chocolate dynasties of the Frys and
Cadburys – may have had their social consciences to the fore when they built
public parks, organised works outings and even constructed whole housing
complexes for the benefit of workers. But they must have been aware of the
other benefits, in terms of improved production and worker loyalty, wrought by
such outwardly altruistic schemes.
But
it was nonetheless the rise of the trades union movement in the late 19th and
early 20th centuries that had the strongest impact on what we now call good HR
policy. Most employers had to be dragged kicking and screaming towards employee
rights, let alone the kind of democratic company structures we take for granted.
But there were some early pioneers. Typical of these was John Lewis, whose
department store chain pioneered the acceptance of employees as
"partners", shareholders of an exclusive club whose benefits extended
far further than the shop floor, and who had a say in how the company was run.
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Meanwhile,
in the US, a far more patriarchal model was taking hold – epitomised by the
management style of the Watson dynasty that created IBM. In his autobiography,
Thomas Watson Jnr describes the extraordinary lengths that IBM would go to in
order to champion the notion of an IBM "family". These included
regular "family dinners" with the company’s managers, strict dress
codes, internal sports competitions and the conscious nurturing of talented
mavericks – a group referred to by Watson as Wild Swans.
But
it wasn’t until the 1960s and ’70s, when the art of management began to evolve
into its current status as a science that could be learnt, that company leaders
began taking good HR practice really seriously. Early pioneers in Britain
included Sir John Harvey-Jones, (pictured) whose enlightened approach to people
management at ICI helped restore the then-troubled colossus to good health.
Meanwhile, high-profile entrepreneurs like Sir Freddie Laker made a virtue of
the loyalty he was able to imbue in staff via a raft of innovative benefits as
well as his own leadership charisma, to tackle the international giants of the
air industry. It wasn’t long before Laker’s dictum that a happy staff equals
happy customers equals good profits equals happy shareholders achieved the
widespread acceptance that we see today.
