I think we were very good at measuring and so everything in our company was measured. We used to track profit on an hourly basis in our business, which was pretty rare. I know that these days, technologies make it a lot easier to do those sorts of things, but we were at the cutting edge of using technology to measure everything that moves in a company. It was all about constant improvement and making sure that everyone in our business was incentivised and motivated towards making all of our metrics improve. We were very overt with all of our employees about what the earning profit was per month, even per hour and we got some of our clients involved in that as well. So being overt with information was pretty important for us.
Let’s say doing a case study for a client free of charge, rather than trying to sell something that doesn’t exist. People are pretty wary and unfortunately corporates can tend to be a little bit sheep like. They don’t want to do it unless they’ve seen someone else do it before. So I think that was some of the more trustworthy things, doing case studies on a pro bono basis to get a testimonial really.
I guess the biggest one would be the naïve assumption that a succession plan would be quite easy. We ended up doing five succession plans over the course of what probably amounted to about six years. And that’s very disruptive on a company and the culture and profitability and everything. So I think we learned some pretty strong lessons about how difficult succession is.
I think, first of all, recognise how larger a shadow the entrepreneur casts. Starting with one person in the business, it’s amazing how much influence and reputation is tied up into that individual, so it takes a long while to wean a company off that. The second thing would be I guess to be realistic about the disruption and the timeframe it takes for succession. It’s not one of those things where you can wake up one day and say “Oh no I’m bored of this, need to move on, let’s leave the business” and then three months later you’re out of there. You know it’s something that probably needs to be managed. I think it’s very important that you have an external board of advisors who’ve done a succession plan before. And I think making sure that there’s a culture fit of the incoming person. Skill’s something that’s very important, but culture fit is probably one of the most important things.
We were always keen to sell the business, as a natural succession for us in some ways from a financial point of view, that we’d still have some things in the business but that we could go on and do other things. We had a prospective buyer and had nearly finished when the financial crisis happened, and our advice at the time was that you need to be worth $100 million to be on the share market, and that’s the goal that we set and that’s the value that we were going to be slated for. The crisis pretty much shut down the market for any small businesses to be floated on the stock market.
That was in about October 2007, so we said, “Well let’s not do the stock market, let’s look at some other options.” So we looked at trade sales and the private equity market. The private equity market was more attractive to us because it meant that the company wouldn’t be absorbed into some other business. We had a few companies we were negotiating with and we settled on one party that seemed to offer what we were looking for. I retired from the business 12 months before we sold it for $109 million. At the time, Blueprint Management was turning over about $62 million a year.
I was 35 and 11 months. I know that because I set a goal to retire by the age of 35 and I only just squeezed in – well not by 35, but by 36 at least. The company’s always worth a lot more when the entrepreneur’s not in it and I also recognised that I never wanted to do any sort of work out with a company. So if the entrepreneur’s already left, then they can’t make you do that. I think it created a lot more value in the business, the fact that we did find a succession plan that was autonomous without the entrepreneur.
And that’s the time, I guess, I was having a bit of a look at what I wanted to achieve in life and some of those things were a lot more socially entrepreneurial, and trying to use entrepreneurship to do good on the planet. I had more of a lofty vision to get more people into business, more people successful at business, and more people using business as a catalyst for positive change. So that’s really how all that stuff started, and I think I probably ended up with lots of fingers in lots of different pies around the whole training entrepreneurs and lots of charities that are, for instance, trying to use business rather than fundraising.
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
