Enterprising North East

I had a most enjoyable evening last night at one of the Entrepreneurs Forum Members Dinner.

This is the first EF event I have attended since I have joined.  Over the past 6 months I haven’t been able to attend events due to diary commitments usually because I am not always in the North East during the week.

However on this occasion I had the chance and decided to go along.  The dinner was for a small group of about 20 people who where there to listen to Jonathan Eldridge who was the founder of the Gadget Shop in the early 90’s.

For those who have read my blog previously you will be aware that I am really interested in business stories.  Jonathan’s story is great.  From very ordinary beginnings in Hull he built a retail business with a value of over £60 million which employed 750 people at its peak.

Things then started to go wrong.  He had cash flow problems for a very short period of time and made one miss-judged call to the bank asking them to extend his facility.  They got nervous and called in the debt.  He had nowhere to go and had to bring in external investment.

There was some serious infighting between the investors which landed him in the High Court.  Cutting a long and interesting story short the business fell into administration largely due to the board being distracted by the legal issues.

From having shares worth millions he ended up with nothing.  He has since brushed himself off and started again with Red5.  What struck me was how balanced he is and how he carried no baggage from what had happened previously.  He was very philosophical about life and wouldn’t change anything which I found inspiring.

I encouraged him to write his story because I thought it has the good, the bad and the ugly.  He said he was waiting until the story was finished and wasn’t sure if anyone would be interested in the down side of his history.  I think it is the down side which makes his story particularly interesting.

Across his whole story it was obvious there was the lack of support from banks.  I always think it is difficult for banks to support entrepreneurs who have passion and drive.  Sometimes this is not tangible and we know in the current climate banks are unwilling to take risks.  His support generally came from private investors when he needed it.

Currently the Government seem to be focussing on encouraging the banks to lend money and we all know this is not working.  The Government should therefore incentivise private investment and acknowledge the importance this support plus the risk investors take plays in the ability to deliver growth.

The other interesting aspect of the evening came from the cross section of the other guests.  All ran North East businesses and all were realistic about the current market.  Everyone is finding it tough.

The interesting thing to me was that probably 70% of those around the table were from family businesses.  I have not decided why this is yet but wondered if this “keep it in the family” approach to business is preventing growth outside the region.  The other thought is do businesses retain ownership because there is a lack of talent beyond their small circle.

It is one to think about and discuss…

BIM Show Live

I have just about caught up after a very busy week last week at BIM Show Live.

We had the idea for BIM Show Live about 18 months ago and managed to put on our first event in October 2011.  We had 300 delegates on a single day.  This year we managed to attract 450 delegates over two days. 

This year’s event was a step up from the previous year without doubt.  The depth and quality of speakers was outstanding.

What I particularly liked was the networking which went on over both days.  There were events before the start of the conference, as well as a great dinner in the evening between.

It is at these sessions where the learning and connections are made and where the real value and progress is achieved.

We made the journey down by transit van, which was an experience in its own right and then put up the stand with one good arm, which was worth seeing. 

The BIM scooter made its way down to London again, not for marketing reasons, more just to irritate the organisers who particularly dislike it for health and safety reasons.

There was a great crowd in attendance and not only did we see all of the usual suspects from the UK BIM crew, but there were also many new faces.  What is becoming apparent is that constructors are ploughing their own furrow when it comes to BIM and several of them are now even employing their own modellers.  I suspect this may become an approach adopted in the future.

All was not perfect at BIM Show Live however.  I was disappointed with the central space for the keynote sessions.  Whilst the area we had was great in that it brought everyone together, trying to talk whilst there was noise on the balcony was very off putting. 

The balcony also did not give a similar level of exposure for all exhibitors, with those at the sides struggling to be seen.

I also felt that the show was a junior partner to the BFE Exhibition, which is something we were adamant must not happen with the organisers.

Still, it was great to see so many exhibitors there and particularly to see all of the major software vendors in the UK at the same event with equal billing.

All of this good and not so good information is gathered up and will be fed back into the plans for next year.

There has been debate about whether we should have another event in 6 months time, but I think it would be more sensible to wait a full 12 months so we can really review the progress that has been made across the industry.

Thanks for everyone’s support and we look forward to seeing you next year.

Exporting our Future

A few things have happened over the past few weeks which have made me look at the impact of this recession differently.

I have been to the Middle East several times recently and had quite a few discussions with young people from within the construction industry.  At the end of last year a close friend of the family emigrated to Perth, Australia.  At the beginning of this year a friend who I had worked with throughout the BSF programme emigrated with his whole family to Canada.

When in the Middle East, I have met so many people who have moved from the UK to make a new life.

Only last week one of our young architects in our Newcastle office decided to emigrate to Canada where they are crying out for young professionals.

My concern is not the short term, but more the long term impact this will have on UK PLC.  Lots of our brightest talent is leaving the country.  In the future we will pay the price for this.

Whilst in the short term, it is great there is a market for our skills but once they are gone they are gone.

Much of the historic success of our country has been built on our engineering and construction skill. Once it has been exported it is difficult to get it back.

Our government needs to make staying in the UK attractive to our young people and must give them exciting and creative opportunities if we are going to be a respected knowledge base across the world.

The Holiday Book Review

Regular readers of my blog will know that my holidays are a time for me to catch up on my reading. The weeks before I go away I build up a store of books on my iPad and work my way through them. I am not a fan of fiction but enjoy reading peoples stories, particularly related to business.

On this holiday we have travelled to Gran Canaria again.  We always go for the hotels which are full of Germans as you are guaranteed good service.  This time the hotel has a wider European feel...it must be that everyone in Europe is ready for a break.

My reading this holiday has been eclectic to say the least.  I have read Shaun Ryders autobiography, Karen Brady and Anita Roddick’s story, as well as Boomerang and a book by Alastair Campbell.

The Shaun Ryder book is an amazing story, however there is a theme throughout.  He spent at least 20 years up to his eyes on drugs.  Clearly he had a tough upbringing and was a product of his background.  The story has a happy ending however as he has clearly met a woman who looks after him and he is now focused on important things in life, rather than only drugs.

The Alastair Campbell book talks about happiness and his fight with depression.  I am a fan of Alastair Campbell as I think he has a brilliant mind.  A really thought provoking book.

I also read boomerang which is a must read.  It is an up to date view of the impact the banking collapse has had across the globe.  It covers Greece, Iceland, Ireland, Germany and America.

When you follow the stories it is unbelievable that we let this happen.  In Iceland you had fishermen becoming corporate bankers with no experience.  Our government recommended that our local authorities invest in this country.  Unbelievable.

The story in Ireland is a little different in that the government made a huge mistake in underwriting the banks debt and ultimately crippled the whole country.  The German story is that they invested in all of these countries and therefore couldn't possibly let them fail.

The Greek story is the most unbelievable.  They lied their way into the Euro by creative accounting and took full advantage once they were in by borrowing and spending more.  They overpaid public sector workers and didn't collect their taxes.

Boomerang is a great book, a quick read which you will find fascinating.

I also read the Karen Brady story as well as the Anita Roddick story.  It's a coincidence that I ended up reading about two successful business women.  Karen Brady is a really driven individual and clearly a workaholic and a great business woman.  I would imagine she has had to make many sacrifices and only time what the impact will be in years to come as the relationship with her children develops.

Anita Roddick’s couldn't be more different.  I think her success happened by accident.  She was clearly a very spiritual lady and driven by her values.

The book was written in 2000 and it wasn't long after this that she sadly died.  When you read the book now, she was clearly way ahead of her time.  All of the things companies such as M&S and Sainsbury’s are doing now in relation to the environment, she was promoting 15 years ago.

There have been several other books, all too sad to mention, but a good mix on this holiday.  The benefit of the iPad is you can take 20 books without having to worry about your luggage allowance!

Mike Ashley v Geordie Faithful

What a story Newcastle United has turned out to be this year. I think what has happened at the club since Mike Ashley took over has been fascinating.

It gives the supporters a real problem. For the last few years they have criticised Ashley for just about everything he has done. Unfortunately for the supporters, he is having huge success with the club, not equalled in 15 years. As well as success on the field, the business has never been in better shape.

What are the supporters going to say or do now? I have always been a supporter of Ashley and said I would judge him on results. Well, where we find ourselves now is that his decisions have been proven right. When he sacked Chris Hughton I said I would judge him on his replacement. I think Alan Pardew is a great manager and has a great team around him. I think most of his tactical decisions have been sound throughout the season.

In relation to the sale of Andy Carroll, again I said I would judge the decision on the replacement. There is no doubt now that selling him was the deal of the season and Cisse has been a revelation.

I think the success this season on the pitch has been down to the team spirit. There are no stars in the team such as a Shearer or a Carroll. I think the influence of Coloccini and Gutierrez has had a huge settling influence and brought maturity to the dressing room.

Off the pitch, Mike Ashley has been single minded and stuck to his plan. Despite criticism, he got rid of expensive problem players such as Nolan and Barton. He is committed to only buying young talent, with future potential and value. Ultimately, he is patient for success.

For those who are not as patient, such as Manchester City or Liverpool, spending £240 million has not provided the answer. Our problems next season will come from the very same clubs. They will undoubtedly pursue our players and our manager. Mike Ashley is a trader and if the deal is good, I have no doubt he will sell.

I also think that if we get into the champions league, Ashley may look to get out himself. He will have to weigh up the cash benefit against the European profile for sports direct.

If we get to the Champions League the renaming of St James Park may be another master stroke, if a big sponsor such as Qatar Airways comes forward.

All of this success is a little embarrassing for the supporters. Mr Ashley got it right and the 54,000 Geordie Faithful got it wrong! Maybe because he made dispassionate decisions, rather than getting wrapped up in history and tradition, he has been able to take the club forward.

Despite this he will always be seen as an outsider and will never get the recognition for what he has achieved. I suspect Mike Ashley couldn't care less. Newcastle United is an investment and something to do with the kids on a Saturday afternoon.

Another Trip to Qatar

Just before I headed off on my Easter break I had a few days in Qatar. I continue to be fascinated by this place.

I was out there talking to a client about a retail opportunity.

Before I get on about Qatar....the previous weekend I had been to the Westfield shopping centre at Stratford on the Olympic Park on a scouting mission before going to Doha. If you haven’t been it is really worth a visit when in London. It makes the Metro Centre or Trafford Centre look so 1980s. It is more than just a shopping centre and is more of a destination, with lots of leisure activities as part of the centre. We were there late in the evening and it was buzzing.

With the Olympics only weeks away all of the international retailers were making a real effort with their stores.

Anyway back to Qatar. At the moment there is lots of talk and huge plans. Without doubt there are billions to be spent. I think however the country is a big social experiment. At present it must be the biggest export market for UK skills. We have filled the country with construction and oil professionals who are all working tax free for their futures. None of these people see a long term future in the country.

All of the work is being carried out by Indian labour...they will not stay beyond the construction work.

Most of the Qataris work in government pushing paper around. They really would rather be in the malls spending their cash.

The ruling families are building a fantastic infrastructure for the country but they need to also build knowledge. As they invest in their country they must work hard on the knowledge transfer. They must encourage the indigenous population to work with the Europeans and Americans to learn new skills before they all leave.

The country has to develop its own entrepreneurs and thinkers, as well as building roads and railways. To put things in perspective, our country has been developing for hundreds of years. In reality, Qatar only started its journey 40 years ago.

I admire what they are trying to do and I look forward to following their progress over the years ahead!

New Dawn

I am sitting in our Leeds office overlooking the River Aire which brings to mind that further down the river was Carey Jones leading architectural practice in the North of England.

Unfortunately last week Carey Jones Northern Business went into administration. This is particularly sad and poignant to me personally as when I was a student Carey Jones was the pathfinder practice in Leeds.

They were a very commercially focussed practice and delivered some great buildings over many years.

Being a north easterner I am particularly fond of both of the buildings which they completed behind Central Station.

The business as strong as Carey Jones failing in this market is an indication of how difficult business is within this recession.

The loss of an organisation such as this has a personal impact on so many people as well as impacting on loss of skills in the industry.

Many more businesses have been lost in recent months with names such as Brown Smith Baker one of the oldest established architectural practices no longer trading.

I am sure the reasons are many and varied and maybe in the future someone may look into what right and wrong things for a construction related consultancy business to do through a recession are.

One thing is for certain that there is still a long way to go for everyone and we are far from out of the woods. The practice of architecture which I joined in the 1980’s no longer exists and the market which our new graduates enter is completely different.

One of the attractions when setting out on the journey to be an architect was to own your own business. I think that in the future this will be increasingly challenging. It is also the case that after many graduates have seen the challenges of their colleagues in recent years it may be that owning your own business is not what it is thought to be.

I believe in the years ahead the polarisation of construction consultancy will continue. There will be a need for small nimble practices who produce beautifully crafted architecture.

At the other end of the scale there will be global businesses providing skills across the globe at the highest level.

The current market place is speeding up this transition and polarisation and we sit and face the fall out from this adjustment month on month.

From a personal perspective it is sad to see this evolution occur however I am also excited by the opportunities which change in the industry can bring.

The depressed nature of the construction industry has forced individuals and companies to consider things which several years ago would have been unthinkable. New technology and procurement routes are encouraging innovative thinking which I believe will ultimately improve the product which we deliver to our customers as an industry.