Our optimistic Top Track 250 leaders are looking to expand through hard work and honesty.
Sticking to your knitting can drive discipline in management teams tempted to distract themselves with new, speculative projects. Yet not changing, failing to grasp new opportunities and respond to the challenges around us is also risky. Fail to look over your shoulder, and you could miss the new rival about to take your customers.
This message came across loud and clear from the leaders of eight mid-market Top Track 250 companies at our roundtable discussion when we asked them what was driving their success. Optimistic about their prospects despite some headwinds, they were capturing new business opportunities wherever they arose — from Wigan to Wuhan, China.
“One of my main areas of focus is the outsourcing of marketing print where it is a new concept, like China, Japan and India,” said Robert MacMillan, group chief executive of HH Global (No 74), which has evolved from a £1 million turnover UK print broker to provide print marketing services in 44 countries. Last month, it landed a deal with Walmart China, and MacMillan is targeting sales of £380 million this financial year.
Closer to home, PureGym (No 137) plans further growth in the UK. Founded in 2008, it has become the market leader by disrupting the business models of the incumbent players by dropping contracts, opening 24 hours a day, and lowering prices. Sales hit £198m with operating profits of £37m last year. “We’ve had loads of white space to go at in the UK and there is still plenty left,” said Adam Bellamy, chief financial officer. “A big challenge for us would be the international one, as it would be for any UK business. You can’t just stick your toe in the water. If you fail internationally, it does feel like a big deal; no one forgets the UK companies that have failed to succeed abroad.”
Make a success of such strategic thinking and it acts as a powerful tool to attract and retain talented people. “Growth is an important way to galvanise a team,” said Andrew Baxter, managing director of logistics firm Europa Worldwide (No 218). “If you say you want to stay the same, but make a little bit more money, it’s a hard story to tell. Instead, if you have a vision of what your company could be and explain that to your people, it will encourage them to join in the journey.”
Leena Malde, executive chairwoman of tropical and speciality food business Wealmoor (No 181), agrees. Her company, which supplies the likes of Waitrose with ethically-sourced treats such as mangoes and papayas, is constantly searching for new growers in emerging markets. Her teams happily travel for weeks to build relationships with farmers and to find ways to support their communities. “You have to be entrepreneurial, and the newness of each situation keeps everyone motivated,” she said.
As companies expand, they also need tuning. Chief executive Janet Entwistle has focused on this at Ainscough, the crane hire business, and Top Track 250 alumnus. Facing price competition, she is using their data to make improvements, focusing on how they use their skilled operators to improve margins and communicating the additional value their services can provide to customers. “Growth for us is about having the right type of growth. It’s not just about more cranes, but providing a broader range of services — profitably,” she said.
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Neil Clifford, who has led shoe brand Kurt Geiger (No 58) for more than 20 years, is juggling a tough UK market — it generates 60% of its £339 million sales from concessions at department stores — with the opportunities he sees for ecommerce and trading overseas. In July, he relaunched in the US after a five-year absence, wholesaling to stores and selling online. Back in the UK, Kurt Geiger operates in most department stores. “The shift to digital is making us all think differently and we are investing in the stores and our technology,” he said. “We work closely with all our partners on this. Thank goodness for Mike Ashley, [whose Sports Direct acquired House of Fraser in August] we really believe he and his team will do a great job with House of Fraser.”
Another business working through a period of change is Willerby (No 177), which makes 7,000 holiday homes each year from its factory in Hull. It is enjoying buoyant trading, generating £14.5m in operating profits on its £165.9 million sales in 2017, and expects 2018 to be even better. But its chief executive Peter Munk and finance director Susan Allan are thinking ahead, pushing their teams to focus on their customers and leverage their goodwill towards its brand. That means a shift in thinking from being a manufacturer to a consumer-facing business, as well as negotiations with its sales partners to show them the benefit of the change. “You must stretch your teams if your business is to reach its full potential,” said Munk.
How its people interact with customers and build trust is crucial for Travel Counsellors (No 121), which provides tailored holidays to 450,000 customers each year and has a net promoter score of 94. Its chief executive Steve Byrne said: “People are losing trust in some institutions and some brands, and that’s having a negative impact on business. It’s our job to build trust with our people and our customers. We think that people are looking for personalised advice and service, and if you can build that bond with your brand they will stay with you.”
It is clear that trust underpins so much of what we do, and that this trust is breaking down. Without it, all businesses will struggle to meet their aspirations for growth. All of us need to foster trust in our people, our supply chains — and put trust at the centre of what we do. If we do this, the mid-market can deliver on the growth opportunities in front of it.
This article first appeared in the Sunday Times Top Track 250 supplement, published on 7 October.