All posts by Althea Taylor-Salmon

case studies

From Oil Rig to Board Room

Richard Kluth SMALL
SMF Richard Kluth, Managing Director Pulse Structural Monitoring

Richard Kluth’s journey to becoming managing director of Pulse Structural Monitoring, a fast growing structural monitoring company for the offshore industry, took some interesting turns, including a job in offshore drilling, an MBA programme at Spain’s IESE Business School and a stint in asset management at Morgan Stanley.  Richard shares his experience and his views on the need to promote engineering as an exciting career choice.

Like many young lads, I had an idealistic notion of becoming a musician, but as our band members drifted off in different directions, reality hit I started thinking about a proper job!  My maths was strong, so I studied physics and after graduating travelled throughout Asia and Australia and caught the travel bug.  This motivated me to find a job that would allow me to travel the world.  I joined my father’s pioneering fibre optic business, Sensor Dynamics, the first to install fibre optics in the oil industry.

It was a very exciting time, as I went from developing demonstration products for clients to creating prototypes and then travelled to California to oversee production and implementation of the products.  I received great development and mentoring at Sensor Dynamics and it gave me a passion for working in the oil industry.  I particularly enjoyed the service side and being out on the rigs.

After a fantastic grounding at Sensor Dynamics  it was time to spread my wings.  I landed a job as a field engineer on a fast-track management programme at Schlumberger, a leading oilfield services provider.  Schlumberger satisfied my thirst for getting in the thick of a job and travelling.  As a field engineer, I moved to a new country every 12 to 18 months, working as the second or third hand in a 2-3 man crew.  Drilling is a very complicated and complex function which requires absolute precision.  Initially I was responsible for providing the technical information that enabled the crew to drill safely, but by the end of my training I was also drilling wells.  I worked in Germany, Canada, America and the Middle East and at the end of that three year period I was head of the team, leading on the rigs.

By then the wing-fluttering had started again, and I realised that I didn’t want to pursue a structured career path that would lead me into managing logistical projects; I was after more intellectual rigor and wanted to join one of the big operators.  So I left Schlumberger.  This was back in the 1980s when oil prices were at rock bottom and hiring in that sector was not high on the agenda.  Rather than see it as a set-back, I decided it was the ideal time to do an MBA to develop my management skills.

Funding an MBA can be a challenge, so I was very fortunate to learn about the Sainsbury Management Fellows scholarship through a university brochure and even luckier to get through the stiff assessment panel and be awarded the £30,000 bursary.

Learning a new language was a big factor in where I did my MBA.  In all the years I had worked abroad I still hadn’t learned a second language, a source of great embarrassment, so I decided to learn either Italian or Spanish.  I fell in love with Barcelona when doing my recce, so chose IESE Business School in Navarra to do my MBA and learned to speak Spanish into the bargain.

The MBA rounded-off my commercial knowledge and improved my confidence in conducting commercial discussions.  It also enabled me to see that it was possible to make the leap from a technical function to a management/commercial role at a plc.

The MBA work placement was another big experience and confidence boost – I joined a global growth equity team at Morgan Stanley. They needed someone with an engineering background who understood fibre optic technology to help with the stocks they were managing in this field.  This was intellectually challenging and I learned more about the economy.  I must have done something right as they offered me a full-time position which I took after I graduated from IESE.  I received great training and worked with very bright people in a less structured career model than Schlumberger.  For example, if we wanted to create new products around what was happening in the industry, we could.

After working in asset management, I plunged straight back into the oil industry, taking up the role of business development manager at the VC-backed start-up, Sensornet, which specialises in fibre optic sensors and monitoring systems.  Its growth was rapid and I progressed quickly into a sales and marketing role, and then became sales & marketing director.  When the original investors decided to sell Sensornet, I was elevated to chief operating officer and ran the company freeing the CEO to focus on the sale. Tendeka acquired Sensornet and I made a bid for COO but they needed someone with both oil and gas experience, plus mergers and acquisitions expertise.

After seven years with Sensornet, I was at another career crossroads, and the SMF network – you become a Fellow when you graduate – was incredibly helpful at this point.  I put out feelers to Fellows who were very willing to talk and share ideas and contacts.  I even started discussing an entrepreneurial venture with another Fellow. The SMF network will always be there to support the Fellows and it certainly inspires you to take the next step in your career.

While thinking about my next move, I did what I love most – I went travelling with my wife and young child assuming that we would have a six months’ adventure.  But no sooner hand we landed in Australia, a head-hunter called with the exciting prospect of joining Pulse Structural Monitoring, a dynamic young company with a lot of promise.  The long distance interviews were followed by a personal one when I returned to the UK.  I was drawn to the role because Pulse is a strong company, with highly skilled engineers with a fantastic work ethic.  They needed a senior manager with both commercial and technical skills to consolidate and help grow the business.

Managing growth is our biggest challenge.  When I joined we were 17 staff and we’ve tripled in size in three years, with 60 people working in Aberdeen, Woking, Rio, Houston and soon Singapore.  We have had to adapt quickly to manage the growth.  Previously, we operated more like a project management company, where all the expertise was concentrated within project groups.  We have now developed new production and procurement departments so that key knowledge and expertise is centralised.  Likewise, we have introduced new systems in areas like quality and training to ensure that we capture the expertise of existing professionals to train the next generation of young engineers joining Pulse straight from university.

Engineers are critical to Pulse and wider industry and I don’t think the UK takes engineering as seriously as countries such as Germany.  When companies are growing as fast as Pulse, it’s frustrating to be faced with the struggle of finding engineers at the entry level.  The UK needs to produce engineers to tackle the big problems in society now and in the future.  More needs to be done to highlight the diversity and excitement of careers in engineering.

People tend to think of engineers as a bit nerdy, but engineers change the world – take energy – without it the world cannot grow and prosper.  Today, we all have to think about renewable energy and who will deliver the technology to make that a reality?  It is engineers who will provide the solution to cleaner energy.  We need to change the perception that engineering does not offer an attractive career path.  We need to communicate that engineering skills and experience can catapult you into different careers, especially when complemented with commercial and people management training.

Sainsbury Management Fellows helps to equip engineers with the business skills and experience needed to broaden their career opportunities and move into senior management positions, as in my case.  Engineers have a diversity of skills that are valuable at board level, a key one being logical, analytical thinking.  We bring a good structured analysis and approach to key issues in a business, which helps companies to grow and prosper.

Blog

Guide to Entrepreneurship – Getting Started

Chirag Shah (1)
SMF Chirag Shah, a successful serial entrepreneur, contributes his second blog in a series of six.

My co-blogger George Fowkes’ Guide to Entrepreneurship – Getting Started posted last October about the key steps of how to get started and a priority list of the key things to think about in the early stages.  So I thought I would complement his post with some practical tips that you won’t find in the textbooks.

At this stage you have a great idea that you are pretty sure can withstand the blows of competitors and make you some money. If you are going to take your idea forward into a business, the next thing you must do is set up a company. At this stage, it doesn’t matter too much what the company is called; you can always change it or set up a subsidiary with a more suitable company name later.  The UK is, in my experience, the easiest country in the world to setup a company. You can actually do it online in about 5 minutes and it only costs a few pounds! (Get the details from Companies House website.)

So why the urgency? Because it’s a quirky fact of life – especially in this day and age of heightened transparency – that most of your stakeholders (future employees, banks and clients) will assess your credibility first and foremost by the period of time that you have been in business – i.e. since your company was born! For example, most banks won’t extend credit to companies that have been in business for less than 6 months old – regardless of how much sales revenue they generate, so you might as well start the clock ticking. Completely meaningless and outdated, but that’s how it is. Now here’s the clever bit: get your newco set up now and hey presto in less than 365 days time your “Founded in 2013” cachet will make you one year old in the eyes of most stakeholders!

Tip 2: Know your numbers
By this I do not mean do a business plan. I’ll get to that in my next post entitled “Getting Funding”. I mean figure out what is the minimum you need to achieve to ensure you don’t go bust. The former Cabinet Minister and über successful publishing mogul, Michael Heseltine, is famously attributed with doing the numbers for his publishing business on the back of an envelope.

In my view you should be doing precisely that too. In any business only a few key numbers drive the whole profit equation and its imperative that you know what they are and understand them simply enough to do the calculation “on the back of an envelope”. Now, I appreciate that as a business grows it can get more complicated, but at the very least, you should be able to do the calculation to the point where you understand the “break-even” – in other words, working backwards to understand how much you need to sell to cover your operating costs.

Here’s an example that I use with prospective franchisees of my écurie25 Supercar Club concept:

KEY COSTS per month:

Staff – £10,000
Cars – £15,000 (5 cars @ average £3,000 per car per month)
Rent – £4,000
Marketing – £2,000
Other -£5,000 (round number factoring in insurance, service costs, professional fees, admin, etc)
TOTAL £36,000

On the REVENUE side
Average Membership (customer) Income per member per month (net of vat) – £1,200

Hence, the number of members required to hit break-even = 36000/1200 = 30

[Sanity check: Number of members that a club with 5 cars can support 40]

So, that’s it. If you wanted to start a Supercar Club, you’d need to ask yourself whether you could recruit 30 customers, at least.

Of course, you can go on from there to calculate how much money you would make with 40 customers, 60, etc and certainly you might have to add in more costs (supercars, in this case) to support the expansion; and of course there may well be start-up costs such as license fees, and fit-out costs and also other sources of income such as delivery charges and venue hire and so on.  Of course, there are many other revenue and cost items you can (and will) include in your business plan, but you now have your key metric that will shape your entire business thinking…I need 30 customers to break-even, let’s call it 35 to be on the safe side!  So now your focus can start to address key questions such as: can the market support that number? Where would I get them from? How many customers can I count on from my current network?

Tip 3: Ignore your customers
Well, at least for the time being. I know I’m flying in the face of convention on this one but here goes… I don’t advocate customer market research for start-ups! Henry Ford reputedly once said, “If I asked my customers what kind of car they wanted, they would say a faster horse”. When working in established markets, customers are very good at knowing what they want. But in the land of entrepreneurs, where hopefully you are bringing something to market that is a bit ground-breaking/innovative/disruptive, your potential customers are not the best source of feedback. By all means do canvas their opinions, but be prepared to take what they say with a pinch of salt. In reality most people are not that innovative; they are reluctant to accept change and slow to absorb great ideas even when they see them.

I find a much more beneficial route for entrepreneurial ventures is to undertake market research through talking with competitors (or “close-competitors” if there’s nobody doing exactly what you do), potential partners and key suppliers in the sector. Certainly, if what you are doing has been tried before, they will know, and more importantly they will have a good idea why your idea won’t work or didn’t work (in the past) which will help you refine your proposition to maximise the chances of success.

Of course you’re probably now wondering how you do that without giving away your top secret plans. Well, you need to be smart – talk to them in roundabout ways or share only a part of your secret sauce to ascertain whether it’s an area that they have considered before, or are considering right now. In my experience, most people like to meet and discuss – in this era people understand that today’s competitor is tomorrow’s partner and an open information exchange with a current or potential player has value to them too. Just be careful and understand your boundaries about what you are willing to share well. Prepare beforehand and don’t allow yourself to overstep the mark.

If you don’t feel you can talk to competitors, vendors and partners then mystery shop them – either yourself or through an agent as the case may be.

Tip 4: Defend your IP
If there is an element of internet or web identity in your proposition (and there should be), then do spend a bit of money now making sure you have conducted some legal searches to ensure you are not treading on anyone’s toes, and simultaneously taking the necessary step to protect your IP (intellectual property). It may be a painful expenditure at this stage in the start-up cycle, but the harsh truth is that the later you leave it the less “protectable” it becomes. A few well-spent pounds now could save you a fortune in legal fees or lost business later.

Tip 5: Focus on “frustomers”
In early stage business, sales can be divided into two groups: personal sales and “others”.

Personal sales relate to customers that know you from before (friendly customers or frustomers).  Either they bought from you in a past life, or know (of) you from your previous achievements.  The key is that these people are buying you and your reputation, not the product/service that you are going to create.  Therefore, you can sell to these people before you have even made the product – perhaps a concept or prototype is sufficient for them.  Of course, I don’t mean literally that you can get a cheque from them, but you can explain what you are planning to do and should be able to gain a significant degree of commitment – emotional, letter of intent, handshake, heartfelt promise – from at least some of them that helps you increase your confidence about your early-stage sales trajectory.

Note: If you are struggling to get sales commitments from this group, or don’t know anybody in this group, think very carefully about whether and how you wish to proceed. You’re probably doing something seriously wrong.

The “others” group don’t know you and it’s not worth trying to pitch to them too soon; if anything, you will lose credibility and make selling to them even harder later on.

In summary, most of this post has been dedicated to eliminating downside risk before you go off and start spending major chunks of money creating your product and bringing it to market. If you address these steps effectively, you should have moved from having a great idea to a new business and you should also be feeling pretty good about your future prospects for this business – without actually having spent more than a few thousand pounds in getting there.

Uncategorised

From Marine Engineer to Online Publishing

Lee Cowles

Lee Cowles, MD of Europe at Blurb – Lee has enjoyed a varied and challenging career, starting as a marine engineer in the Royal Navy before jumping ship into bespoke manufacturing.  He then made a major turn in career direction by studying for his MBA and moved into the world of business and worked his way up to director at Betfair, the successful online gaming company.  Lee then went on to lead another exciting internet business, the fast-growing online publishing company, Blurb.

As a youngster, what were your career aspirations?
As a teenager I couldn’t possibly have imagined that I would be running an online publishing business as it was pre-Internet days!   Back then, I was instinctively drawn to engineering because I saw myself as a problem-solver; I liked the idea of ‘making things work well’ though at that point, I had no idea what I might make work.

Why did you study engineering?
My first job was a marine engineer in the Royal Navy where I had ample opportunity to make things work! I resurrected damaged equipment, bringing things back to peak performance.  That experience led me into a manufacturing job.

When I left the Navy, I joined an unusual manufacturing business in Huddersfield – it produced customised winches and gearboxes.  Yes, I know this doesn’t sound terribly exciting, but imagine selling a concept to every new customer and then having to go away and make the product?  It was quite a challenge, as each product was a turnkey solution.   No off-the shelf products, meant no standard price list, yet it was essential to get the price right to make a profit and keep the customer satisfied.  Sometimes I had to take a leap of faith or we would have missed out on brilliant business opportunities.

Why study for an MBA?
My employer at the manufacturing firm was keen for me to develop in the business and offered to sponsor me to study for an MSc at Warwick University, but I already knew engineering.  I had been so involved in product development and sales at the firm, I started hankering after learning more about business.  When you’re in the Armed Forces you know exactly why people do the things they do – everyone has a shared understanding otherwise things can go horribly wrong.  But in business it’s different – there are lots of stakeholders with competing or hidden agenda.   I felt that an  MBA would help me to learn what I needed or at least get me started.

How did SMF help you?
Realising that I would be unlikely to return to the firm after studying for an MBA, my employer understandably didn’t want to sponsor my MBA study.  I was fortunate to discover the SMF scholarship and to get through the selection process. Without the funding, it would have been a struggle financing my MBA and I would have had a larger debt at the end, which might have influenced the job I took at the end of the course.

By providing the funding, SMF gave me the opportunity to start a different career and explore different options.  SMF doesn’t look for people based on the particular career they want to go into so you get a very mixed set of people.  SMF is about getting people into senior jobs across the board.  This helps Fellows to stretch their careers in different directions.

And the biggest benefit of your MBA?
The real revelation – and benefit – for me was studying with such a diverse and vibrant group of people; there were students from many different backgrounds and cultures.  The university places students in very mixed groups to maximise friction and learning.

Has the SMF network been useful?
You make lasting friendships and, because everyone takes different career paths and are not competing in the same arena, you can contact them and ask their views and advice without any conflict of interest.

How has business education changed your life?
My first job after graduation was with Ford, where I worked on the Accelerated Manufacturing Leadership Programme.  I also undertook a government research project into adult education for the workforce.  The project brought together civil servants and the private sector to explore how business might help to tackle adult illiteracy. While this project was intellectually stimulating, working in a very large corporation wasn’t for me. I wanted to be in a more entrepreneurial environment.

The game-changer for me came in 2003 when I become Head of Operations at the innovative online gaming company, Betfair.  Betfair has a great business model – it allows customers to choose their own odds, matches all the bets and charges a small commission on winning bets.

Moving money around is a bit like logistics and works like an engineering business; that’s how I positioned it at my interview and they liked my pitch.  Betfair was a small business when I joined, but it grew rapidly. In a small business you take on many different jobs and build very quickly.  My division went from two to 50 people in 18 months and I must have hired 200 staff during my time with the company.

Initially, I set up the back-office systems and then progressed into other roles. I professionalised processes and systems in one area, and then moved onto the next.  This included product management, product development and even the software development area.  By the time I left in 2011, I was Director of UK running half the business.  When the business floated it was valued at £1 billion and today it employs around 2,000 people.  In a small growing business you do many different things which may not be your area of expertise.  The MBA prepares you to deal with unexpected challenges.

What are you doing now?
Scaling up the business at Betfair prepared me for my current role as MD of Europe at Blurb, a venture capital backed online publishing business, which allows customers to produce everything from personalised e-books to professional books on demand. Blurb publishes around 2 million books a year, the same as a medium size offline publisher.  In the online publishing world, authors can create demand for their books through social media.

What is the biggest challenge in your business sector?
The Internet has increased the speed of every aspect of business.  It’s imperative to keep your eyes on the ball – on everything from systems and processes to sales and marketing – otherwise you will be outflanked by new competitors, trends and customer behaviour.

How can engineers help the UK economy to grow?
We need to embed flexibility and skills into the economy.  Engineers have valuable skills, for example, analysis and problem-solving; bundle these with business education and they have a big role to play in growing the economy.

What advice would you give budding entrepreneurs?
People who start a career in engineering are pretty risk averse.  That’s probably why we don’t see many traditional engineers, compared to software engineers in Silicon Valley, become entrepreneurs.  My tip is to ‘just do it’ – don’t let fear hold back a great idea.  Often the risk is not as great as you think it will be.

Which engineering pioneer do you admire and why?
Brunel – he was audacious!   He was a hands-on engineer, who was never put off by failure.  He achieved so much and left us some wonderful structures.  In Brunel’s time engineers had the advantage of being able to over-engineer and learn from their experiences.  There’s no room for that in modern engineering.

Case studies correct at the time of publication.  SMFs may have moved to new posts since publication.  For the latest career information on our Fellows visit our SMF Profile Page.

case studies

From Marine Engineer to Online Publishing

Lee Cowles
SMF Lee Cowles, MD of Europe, Blurb

Lee Cowles has enjoyed a varied and challenging career, starting as a marine engineer in the Royal Navy before jumping ship into bespoke manufacturing. He then made a major turn in career direction by studying for his MBA and moved into the world of business and worked his way up to director at Betfair, the phenomenally successful online gaming company. Today Lee is leading another exciting internet business, the fast-growing online publishing company, Blurb.

As a youngster, what were your career aspirations?
As a teenager I couldn’t possibly have imagined that I would be running an online publishing business as it was pre-Internet days! Back then, I was instinctively drawn to engineering because I saw myself as a problem-solver; I liked the idea of ‘making things work well’ though at that point, I had no idea what I might make work.

Why did you study engineering?
My first job was a marine engineer in the Royal Navy where I had ample opportunity to make things work! I resurrected damaged equipment, bringing things back to peak performance. That experience led me into a manufacturing job. When I left the Navy, I joined an unusual manufacturing business in Huddersfield – it produced customised winches and gearboxes. Yes, I know this doesn’t sound terribly exciting, but imagine selling a concept to every new customer and then having to go away and make the product? It was quite a challenge, as each product was a turnkey solution. No off-the shelf products, meant no standard price list, yet it was essential to get the price right to make a profit and keep the customer satisfied. Sometimes I had to take a leap of faith or we would have missed out on brilliant business opportunities.

Why study for an MBA?
My employer at the manufacturing firm was keen for me to develop in the business and offered to sponsor me to study for an MSc at Warwick University, but I already knew engineering. I had been so involved in product development and sales at the firm, I started hankering after learning more about business. When you’re in the Armed Forces you know exactly why people do the things they do – everyone has a shared understanding otherwise things can go horribly wrong. But in business it’s different – there are lots of stakeholders with competing or hidden agenda. I felt that an MBA would help me to learn what I needed or at least get me started.

How did SMF help you?
Realising that I would be unlikely to return to the firm after studying for an MBA, my employer understandably didn’t want to sponsor my MBA study. I was fortunate to discover the SMF scholarship and to get through the selection process. Without the funding, it would have been a struggle financing my MBA and I would have had a larger debt at the end, which might have influenced the job I took at the end of the course.

By providing the funding, SMF gave me the opportunity to start a different career and explore different options. SMF doesn’t look for people based on the particular career they want to go into so you get a very mixed set of people. SMF is about getting people into senior jobs across the board. This helps Fellows to stretch their careers in different directions.

And the biggest benefit of your MBA?
The real revelation – and benefit – for me was studying with such a diverse and vibrant group of people; there were students from many different backgrounds and cultures. The university places students in very mixed groups to maximise friction and learning!

Has the SMF Network been useful?
You make lasting friendships and, because everyone takes different career paths and are not competing in the same arena, you can contact them and ask their views and advice without any conflict of interest.

How has business education changed your life?
My first job after graduation was with Ford, where I worked on the accelerated Manufacturing Leadership Programme. I also undertook a government research project into adult education for the workforce. The project brought together civil servants and the private sector to explore how business might help to tackle adult illiteracy. While this project was intellectually stimulating, working in a very large corporation wasn’t for me. I wanted to be in a more entrepreneurial environment.

The game-changer for me came in 2003 when I become Head of Operations at the innovative online gaming company, Betfair. Betfair has a great business model – it allows customers to choose their own odds, matches all the bets and charges a small commission on winning bets.

Moving money around is a bit like logistics and works like an engineering business; that’s how I positioned it at my interview and they liked my pitch! Betfair was a small business when I joined, but it grew rapidly. In a small business you take on many different jobs and build very quickly. My division went from two to 50 people in 18 months and I must have hired 200 staff during my time with the company.

Initially, I set up the back-office systems and then progressed into other roles. I professionalised processes and systems in one area, and then moved onto the next. This included product management, product development and even the software development area. By the time I left in 2011, I was Director of UK running half the business. When the business floated it was valued at £1 billion and today it employs around 2,000 people. In a small growing business you do many different things which may not be your area of expertise. The MBA prepares you to deal with unexpected challenges.

What are you doing now?
Scaling up the business at Betfair prepared me for my current role as MD of Europe at Blurb, a venture capital backed online publishing business, which allows customers to produce everything from personalised e-books to professional books on demand. Blurb publishes around 2 million books a year, the same as a medium size offline publisher. In the online publishing world, authors can create demand for their books through social media.

What is the biggest challenge in your business sector?
The Internet has increased the speed of every aspect of business. It’s imperative to keep your eyes on the ball – on everything from systems and processes to sales and marketing – otherwise you will be outflanked by new competitors, trends and customer behaviour.

How can engineers help the UK economy to grow?
We need to embed flexibility and skills into the economy. Engineers have valuable skills, for example, analysis and problem-solving; bundle these with business education and they have a big role to play in growing the economy.

What advice would you give budding entrepreneurs?
People who start a career in engineering are pretty risk averse. That’s probably why we don’t see many traditional engineers, compared to software engineers in Silicon Valley, become entrepreneurs. My tip is to ‘just do it’ – don’t let fear hold back a great idea. Often the risk is not as great as you think it will be.

Which engineering pioneer do you admire and why?
Brunel – he was audacious! He was a hands-on engineer, who was never put off by failure. He achieved so much and left us some wonderful structures. In Brunel’s time engineers had the advantage of being able to over-engineer and learn from their experiences. There’s no room for that in modern engineering!

Blog

Running an Engineering Business in West Africa

Ernie Edited
SMF Ernest Poku is currently working in Accra, Ghana as the Country General Manager and Director for an oil services company servicing the regional oil industry.

I manage 25 staff at our Ghana operations base and hold full profit and loss responsibility for the operations.

Most of our products are mechanical engineering focused supplies to the upstream oil and gas industry in the region.  I regularly travel to Ivory Coast, Togo and Nigeria in addition to my work in Ghana.  I travel to meet with customers and discuss their needs in terms of engineering services, often I need to demonstrate that these services can be effectively sourced in the region rather than ordered from the EU or USA.  I often identify new opportunities and add new products and services to our portfolio.

The West African region is much more diverse than I ever imagined and bears some interesting similarities to the European Union.  There is a burgeoning Economic community of West African states consisting of 15 states and a population of 300m people; the big difference is that this population is dominated by Nigeria with a population of over 160m people.  Nigeria is currently the second largest economy in Africa and projected to become the largest economy within a decade; it is an economy dominated by the oil industry. Ghana by contrast is the second largest economy in ECOWAS with a population of 25m people and the highest growth rates in Africa with 14.4% growth in 2011.  There is even a common currency between a number of the French speaking states in ECOWAS, the CFA which existed long before the Euro and there are discussions on a regional currency union ongoing.

Working in West Africa has its pleasures and challenges.  One of the things I didn’t realise before I arrived here was how much I would have to travel by plane to visit different cities.  The cities are densely populated and the countryside is sparsely populated and the road network is very poor; motorways between cities are rare.

Accra, the capital of Ghana is equidistant between Lagos, the capital of Nigeria and Abidjan, the capital of Ivory Coast.  Both are only 45 minutes away by air and over nine hours by road.  In Europe the journey to these cities which are only 300km apart would take around three hours.  I find myself regularly flying four times a week as a result.  The other surprising thing is that direct air links between these countries are a relatively new innovation, only a couple of years ago it would be quite normal to have to fly via London or Paris to travel the region safely.

Operating a company in Ghana requires a more vertically integrated approach than in Europe.  We have had to develop our own water and electricity supply, construct buildings, develop good logistics infrastructures to secure the materials we need to run the facility and train our local staff in-house.

I have been surprised by the large numbers of university graduates and the relative lack of skilled technicians.  We have found it challenging to recruit high quality skilled builders, masons, carpenters, machinists and mechanics.  There is a lack of high quality vocational training in Ghana which is holding back the industrial development of the country.  University graduates are important but only as part of an overall mix of skills in the population.

On the same theme, the Ghanaian government is very keen on encouraging local content to ensure that the oil companies operating in Ghana do not solely use expatriate labour in the oil and gas value chain. This landmark legislation aims to have 90% local participation in the oil industry within a decade. This is a very exciting initiative and as a dual British-Ghanaian national, I am interested to see how successful it is. This policy has been successful in encouraging local participation in the Nigerian oil field and Ghana hopes to emulate their success. If Ghana can use oil and gas to develop its local industrial capacity it may well meet its aim of becoming a middle income country within a decade.

If you’re wondering how you can help countries in West Africa develop, I would urge you to consider doing business in West Africa, currently most goods are exported as raw materials but there is low cost power and labour (hydro power dominates here), an English speaking and well educated workforce on the same time zone as Europe and generous corporate tax holidays. Every business established here makes a huge difference to the economy.  Oh and by the way the temperature is between 25 and 35 degrees centigrade all year round!

Blog

Entrepreneurship – My Experience of Getting Started

Jonathan Selbie
SMF Jonathan Selbie is a Director of Swarm Systems which develops unmanned aerial systems (UAS) and autonomous systems technology for the Aerospace and Defence Industry. Jonathan’s early career was in motorsport, working in the Research and Development Departments of two Formula One team, leading development projects from concept through to end use at races. After his MBA, Jonathan helped build Swarm Systems from scratch into an established supplier to the UK Government. He has developed relationships and carried out successful collaborations with key suppliers, partners and academic institutions in the UK, Singapore and China. More recently, Jonathan is leading Swarm System’s projects to develop nano-UAS technology.

In the final year of my undergraduate Engineering studies, as part of an entrepreneurship module, I attended a lecture given by two recent engineering graduates. They had started a company after university and were now running a three year old, multi-million pound business. The stories they told of starting the company in desperate surroundings sounded almost romantic. Their do-or-die attitude allowed them to survive the early days – but only by the skin of their teeth; they relied on paying their first employees with sandwiches and finding their first customer only thanks to a serendipitous misunderstanding.

The tale of their struggles, from a worthless, bedroom-based entity to a company with plans for international expansion, filled me with excitement. Even more exciting was their plan to sell the business only four years after graduating. In talking about the sale, the numbers they bandied around suggested they could not have retired – but a first (and probably a second) home wasn’t out of the question.

As I left the lecture hall, my mind was filled with possibilities. The notion that one could earn a living, and more, by pursuing one’s own dream held some ideals and inspired me. So I decided I was going to do it. Job offers would be ignored (they weren’t that interesting anyway), caution would be hurled to the wind and I would go and work for myself. 12 years later, I finally got started.

I have often wondered why it took me so long.

The problem is that getting started is not romantic. It involves hard work and uncertainty.   When you get started working for yourself, there is no structure or framework to guide you. There is no boss to check you are on time or that your work is on target; and nobody senior to whom you can defer when things go awry. Instead, you must develop the discipline and skill to do these sorts of things for yourself. This requires commitment and sacrifice and is a marked transition from what I had been used to at school or in previous employment. Getting started also tends to be all-encompassing.  Success is often only achieved through delayed gratification; putting off holidays and buying a home or even having a family later on.

This is hard; I found it much easier to convince myself that the reason I hadn’t got started yet was because of funding problems or the idea wasn’t quite right (or even very good).  I was often able to build up the enthusiasm about a particular new piece of technology or business model – only to find that enthusiasm dampened a few weeks or months later thanks to some further analysis and a natural inclination to be sceptical (I am an engineer after all!).

I suppose the point is that getting started is, ultimately, a leap of faith that requires courage and confidence to undertake.  The popular media suggests starting a company is glamorous, highlighting personalities like Larry Page, Mark Zuckerberg and those guys who sold Instagram for a billion. But the reality of giving up the structure and relative normality of employment can be quite unglamorous.

In my case, there were two key elements to helping me take the plunge and get started launching a new venture.  The first was confidence. This was thanks in no small part to my studies for an MBA whilst at INSEAD in France. Not necessarily for the technical skills but for the opportunity to immerse myself in an entrepreneurial community. To understand on a very practical level the steps that could be taken to get started. Developing plans and ideas in this environment felt natural; help was never far away if I had problems.  As much as anything, it showed me that getting started was not rocket science.  The idea did not have to be perfect. Raising capital was possible. It was extremely reassuring to see how it was done first hand.

The second element was realising the necessity of working on a venture in a team.  Whilst operating alone enables complete autonomy, in my experience exchanging this for the opportunity to share and discuss issues and problems is a trade well worth making.  Since getting started myself, I am always amazed at how often problems that seem insurmountable can be chewed on, processed and solved by discussing with a partner or team of like-minded passionate individuals. And, for me, winning as part of a team has always been better than winning alone.

Getting started and being successful in a new venture requires confidence and tenacity as well as good fortune and stamina.  For me, it has been both stimulating and exciting. There have been setbacks and it has been important to remember to stay optimistic no matter what has gone wrong. However, I have learnt a great deal and been exposed to wild and varied situations which have been fascinating and will, I feel, be invaluable in my career going forward.

I believe the venture in which I am involved will be successful. But if it is not, I doubt I will regret much. For in the end, it is the exposure to those wild situations and the experience of those setbacks that creates the romance and glamour of getting started – and this is really what I was after in the first place.

case studies

From MBA to Psychotherapy

Philippa Dickenson, from MBA to Psychotherapy

Philippa Dickenson

Philippa became one of the early Sainsbury Management Fellows after gaining her MBA at INSEAD in 1988.  Here Philippa   shares her thoughts the MBA and her career.

 

What career aspirations did you have as a youngster?
I’m not sure that I had career aspirations as such in the mid to late 1970s.  I was much more interested in feminist politics, social science and going to parties than I was in thinking about a career track. I enjoyed creative writing and travelling whenever I had the chance and could afford it. I suppose the continuing theme is an interest in ideas and how they apply in the real world.

Why did you choose to study engineering?
I really liked physics and maths at school and wanted first of all to study physics.  With two older brothers and a father who’d studied engineering or were qualified engineers, the influence was very strong to do something more vocational that would lead to a job after university.  Although, my father wasn’t keen for me to study engineering – not quite the thing he thought suited a girl which was a red rag to a bull to me!  I think studying engineering was a form of teenage rebellion if I’m honest.

What roles and responsibilities did you have before your MBA?
After university, I joined Mars – of Mars Bars fame – as an engineering graduate trainee. I remember looking across the vast open plan office at Justin King (a fellow graduate trainee), little thinking that he would one day be CEO of Sainsbury’s.

After my training, I became a Zone VI Project Engineer. My area of responsibility was the engineering elements of producing chocolate – lots of it.  I managed a range of projects, from small production improvements to a major upgrade and factory rebuild for the chocolate production facility. Huge fun and huge responsibility for a 25-year old to be responsible for what would now be about $30m of capital spend, a team of 5 and a vast range of contractors. And all to be done within a working production environment. It taught me such a lot about getting things done with and through people, about listening to others as part of making decisions, about organisational politics and about the vagaries of real life and contractors.  ‘So my cheque is in the post then, is it?’

Mars gave me great experience as I had to produce the business case for any engineering spend I wanted to make and see projects all the way through from concept to commissioning and then handover to production and regular maintenance crews. I left after 4.5 years to take up my SMF at INSEAD.

What was your motivation for doing an MBA?
The final part of my engineering degree was in Manufacturing Systems which covered a wide range of business topics as well as technical subjects: economics, industrial relations, employment law, finance and statistics as well as design for manufacture. The course director suggested doing a full-time MBA after getting a few years’ experience. Although I wasn’t consciously seeking to do an MBA, I guess the idea stuck in the back of my mind so when I heard of the SMF scheme to support an MBA, it struck a chord.

What was the greatest benefit of your MBA?
Starting to think like a business person rather than an engineer. Broadening my horizons in terms of international exposure and to exposure to different types of thinking.

How has the SMF network helped you?
There’s a strong entrepreneurial group within the SMF and that has inspired me to think more entrepreneurially. Whether the product is about psychological assessment and talent development or much more technical, any entrepreneur needs the same disciplines and thought processes about product development, market feedback and testing, marketing and sales etc.

What’s been the greatest benefit of being an SMF?
The opening up of new avenues to me through going to INSEAD.

What are your hopes for SMF for the next 25 years?
That it can help raise the profile of engineers, particularly entrepreneurial engineers. They might not need an MBA to do their job, strictly speaking, but it does attract a ‘can do’ group of people interested in doing different things.

What is the biggest challenge in your business sector today? 
How to develop a strong presence quickly in a crowded marketplace without having your intellectual property stolen before you’ve had the chance to grow your product.

How can engineers help to grow the UK’s modern manufacturing industry?
The kinds of skills I learnt in managing technology projects stand me in as good a stead as any business training. Having more broad-minded and business-savvy engineers at a senior level in business can only help to strengthen manufacturing industry. And engineers tend to be passionate about what they do. We’re fantastic at high-level, sophisticated engineering work – we need to reinforce this and draw on our engineering intelligence to see how we expand that knowledge and skills base in industry.  And engineering skills apply in wildly different contexts too – who would think of putting engineering and psychology together to develop a product for managers to develop their talent? Yet it’s happening.

How has technology transformed the way business is done in your sector?
IT and cloud-based computing are changing the world of psychological insight and development. Reviewing the talent of your team used to involve highly trained experts, with at least 200 hours of training under their belt, and could cost you up to £750K.  Using SaaS-based technology, managers can learn to assess teams for themselves at a tenth of the cost. And it helps each manager learn how they think about their own as well as other people’s potential, rather than leaving it to the outside experts.

What skills do engineers bring to business?
An engineering mindset is useful in all sorts of settings, including in the psychotherapist’s consulting room. Handling ambiguity, working with a wide range of different kinds of information, thinking systemically and dealing in the art of the possible are all things I learnt in my first job as an engineer. These are as much life and leadership skills as they are engineering skills.  More engineers at senior levels in business who can bring a broad as well as a practical perspective can only help industry to succeed.

Which engineering pioneer do you admire and why?
Dyson – for his persistence, his enthusiasm for technology and ideas and for his commitment to educating others about what engineering and education can do.

Which engineering endeavour do you most admire? Getting the Olympics working so successfully – a huge engineering challenge of many different kinds and on different levels.  How about inspiring a generation of engineers as well as athletes? We could make so much more of what went on behind the scenes to make the sport tick.

Case studies correct at the time of publication.  SMFs may have moved to new posts since publication.  For the latest career information on our Fellows visit our SMF Profile Page.

Blog

Marketing an Engineering Business

b9-1106 Bedfordshire Businesswoman awards held at Woburn Sculpture Gallery. Overall winner Andrea Rodney of Hone-All Precision Ltd

Andrea Rodney is a dynamic, self-taught, self-motivated businesswoman who helped Hone-All Precision in Bedfordshire to extraordinary success, part of which can be attributed to the transformation of the company’s marketing strategy. Andrea joined the company at the age of 21 and 18 years later is a director of the company. Here Andrea tells us why manufacturing businesses should not shy away from marketing themselves.

For many years, Engineering and Manufacturing has suffered from a poor image. It seems that the media insist on continuously showing images of the old guy in overalls standing at his bench with a file in his hand whose length of service was judged by the length of the fingers he had left.

But the question is: how do we help ourselves in this?
Few companies within our industry ever covet press coverage or publish press releases or case studies shouting about the technological or process advancements they’ve made, the efficiencies achieved or even something as simple as a new machine being delivered.

Even fewer have a strong corporate image with memorable company logos which create an overall brand resulting in facilities with a themed colour scheme, matching corporate work wear, uniform documentation combined with an effective website to ensure the brand is seen externally by a national or international audience.

Within smaller companies in our industry, many are owner-managed or are run by excellent engineers who have never been involved in sales and marketing activity – they know how to make the parts, but not how to play the game!

As companies, regardless of size or speciality, we need to show just what we do and how well we do it. We need to look as good as we are. And we need to let people know about it. We are always told to focus on the 4 Ps – people, place, process and product – but without the 5th P – profile – it’s irrelevant as nobody knows just how good we are.

And so as an industry, we need to look to the brands we remember and ask ourselves what made them memorable? Then we apply that to our own businesses, however small and with whatever budget we have available to us.

It costs nothing to come up with an eye catching logo, to ensure this brand continues across all levels and throughout all functions of the business; and to ensure that when the telephone is answered, it is always in the same, bright, professional, bubbly and courteous manner. It costs nothing to ensure the facilities are clean, tidy and create a great first impression. And to ask people what they thought during their visit and act upon their feedback.

For those potential customers that cannot come for a visit there may be a small investment required to ensure that you can create a website that follows the same principles as your people, place, product and processes.

Once this is in place, it costs nothing to ensure your website is listed on all the free listings pages available, of which there are hundreds. Each entry moves your site up the rankings of search engines such as Google.

Advertising within trade magazines Services & Capacity listings is usually exceedingly cost-effective – less than a few hundred pounds for the entire year. But having a consistent presence raises awareness of your company and reinforces the brand each time it is seen.

Also, once these entries are placed, the magazines are usually much happier to include press releases and case studies from you which are placed free of charge and yet again tell your story, reinforce your brand and raise confidence in the continuity of your company and the services you provide.

The press releases can then be forwarded to your customers on a regular basis keeping them informed of your successes, investments and developments. Again, this costs nothing but offers a massive boost to reinforcing your image and keeping you at the forefront of your customers’ minds.

The benefits of these simple steps are that your company – which may well be exceptionally professional – is also perceived to be so. Not just by those that know you, but more importantly, by those that don’t.

You can build a brand and a profile for the minimum of investment and simply by playing the game you can tell the world about your fantastic people, about your safe and efficient facility, about the quality of your product and the effectiveness of your processes – all through one simple profile.

The greater hope with this is if more of us get this right, the less companies there will be for the media to use in order to portray manufacturing as an antiquated, outdated industry with little technology or progression for the youth of today. We have more chance of showing CNC machinery, sharing stories of technological advancements, highlighting companies consistently investing in continuous improvement and reinforcing the fact that manufacturing is the best and safest way of balancing our economy and therefore deserves the recognition and support of everyone – the media, the Government, the country and those within it that don’t shout loudly enough about their contribution to the most exciting and innovative industry in the world.

Blog

How the MBA Changed my Life

James Dunbar SMALL
SMF James Dunbar is an Analyst, Refining; Logistics Technology on the Future Leaders Programme at BP.

Has an MBA has changed my life? Back in 2006, I was in a Middle Eastern desert with the Royal Air Force, reviewing whether we had enough PGMs for combat operations. Here I am in 2012, looking at the capital portfolio for BP, reviewing whether we have enough PGMs for business operations.

In 6 years, I’ve gone from worrying about Precision-Guided Munitions, to Project General Managers. Anyone who has ever changed companies or industries will talk about wrestling with a new business dialect. But it’s not just the language that I needed to make this change; it’s the knowledge to lead at both a tactical and strategic level. That’s what the MBA gave me.

Commissioning into the Royal Air Force in 2002 was my first career-changing leap. The military encourages officers to accept leadership responsibility very early in their career and I thrived in these circumstances, building on engineer training to successfully deploy military aircraft to trouble spots around the world and manage projects across the Tornado fleet. Leading 110 technicians on operations, mentoring junior officers and managing discipline challenges are experiences that will stay with me forever – and not easily explained to some of my more sheltered colleagues! My RAF service also helped me complete my chartership and a second undergraduate degree (in engineering management). After a hugely enjoyable six years, I felt that my future career in the RAF would re-tread familiar roles and I wanted a new challenge.

A stint as a project manager for Bombardier Transportation helped me quickly realise how much I didn’t know about applying my experience to the commercial sector! I needed to re-orientate my leadership skills to managing in the business context – much as I had developed military knowledge for a successful career with the RAF. An MBA seemed to provide the transition I was looking for.

After a lengthy application process, I was lucky enough to get a place on the full-time MBA at London Business School. This world-leading institution reflected environments I really enjoy: highly collaborative, very academically challenging and employing a global view. Deciding to undertake an MBA is a big decision – it’s a massive investment. Winning the funding of a Sainsbury Management Fellowship, awarded through the Royal Academy of Engineering, was the decisive factor in making this second career-changing leap. I think an MBA should give you three real advantages: technical skills, commercial leadership skills, and a powerful peer network. That’s exactly what I got from LBS, taking courses as diverse as advanced corporate finance, strategy, business communication, acquisition management, negotiating; bargaining, risk analysis, and accounting.

The scholarship not only enabled me to go to business school, but also gave me access to an invaluable network of nearly 300 SMF professionals with a vast range of experience and knowledge. This network led me to several academic studies during my MBA, my first consulting contracts after graduation and continues to be a source of professional advice – as well as a great advertisement for the benefits of engineers as industry leaders.

After the MBA, I wanted to work in a global engineering-related business that actually produced something tangible, where I could use the skills to make a strategic difference, but still benefit from my experience of managing in a safety-critical environment. Whilst at LBS, I was lucky enough to attend the CBI conference, where I heard CEO Bob Dudley talk about the turnaround of BP. I had not seriously considered the energy industry before, but the values he described directly matched what I was looking for. Fortunately, the company was looking to start its Future Leaders Programme, to develop a more diverse leadership talent pool in the downstream business. They recruit externally for individuals with post-graduate qualifications, relevant professional experience, international exposure and, most importantly, leadership potential. The structured development plan also helps in getting up to speed on the breadth of different global business areas BP work in.

So here I am, working on BP’s strategic plan. I miss the camaraderie of the military, but professionally I haven’t looked back. Challenging, continual professional development has always been important to me, and without the MBA I certainly wouldn’t be enjoying the career that I am now.

You may also be interested in reading interviews with the winners of the SMF MBA Scholarship.

Blog

Guide to Entrepreneurship – Getting Started

George Fowkes Cropped
SMF George Fowkes runs The Clear Alternative, which provides interim director expertise to clean technology companies to catalyse their start-up and growth phases. George’s early career was in new product development for Cambridge technical consultancy Sagentia, and management consultancy at A.T. Kearney. Conversations with investors while raising finance for The CarbonNeutral Company in 2001 gave him the idea for a company that would bring commercial and project skills to clean tech ventures, to accelerate their development. This became The Clear Alternative in 2006.

Before I start I wanted to add to Chirag’s post by nominating David Hansson, the founder of software company 37Signals, as the international grandmaster of ‘CARD’. And in fact most things about getting a business started. I think he has written a book but his speech at Stanford boils his whole philosophy down into one irreverent hour that you can laugh along to on your way to work.

If I had to summarise the very best of what I’ve seen in the past 12 years of getting ventures started for people, it would be the following:


Find a complementary partner
Most people think that the expression ‘better to own a share of something than 100% of nothing’ came about from raising money. That may be true, but it’s even more relevant right at the beginning. To get any new organisation started is such a huge amount of work, requiring so many judgement calls and such a very wide range of skills, that even an engineer with an MBA cannot do it on their own. You can’t be world class at everything, and it’s lonely flying completely solo.

If I think of the half dozen really successful serial entrepreneurs that I’ve met – the people who have built and successfully sold more than one business – almost without exception they work with a business partner. That partner doesn’t just fill a skills gap with their co-entrepreneur, they also fill what I’ll call a ‘character gap’, as follows.
Everyone has a number of aspects of the business that they can’t help preferring. It could be sales. Or the numbers. Or building the team. It’s very difficult indeed for an individual not to give these preference – it’s part of their character – so stuff gets missed. The partner has an innate preference for different aspects of the organisation. Their first thought on Monday morning is quite different to their co-partner. And so most of the bases get covered. That’s why you see sales people paired up in business with accountants, marketeers with ops people, Myers-Briggs introverts with extroverts, and so on.

So my point would be to find someone who’s quite different to you that you can trust implicitly and make them a significant partner in the business. And even (especially) if you’re married to them, sign an agreement that at least covers what happens if things don’t work out.

Touch the market early and often
With the very rare exception that essentially comes down to luck, it is not possible to bring a successful new product or service to market without first exposing it to the target market. To compete against better-resourced incumbents your product or service has to not just work, but fit the way its users look for, assess, buy and use the thing.

For the product itself we need to bring the alpha and beta-test principle common in software development to our own business idea. How to do this depends largely on the nature of the product, but everybody should be able to find their own versions of customer and competitor interviews, pitching the concept to friendly contacts in the target market prior to development, lending prototypes to prospective customers, offering ‘no-regrets’ deals for early buyers and so on, as the feedback from this user experience is essential. The next proof point is the one where customers actually part with their cash for the product. Hansson is right that this cannot come too soon and, in general, almost any way to bring early revenue into the business (that does not distract from the main development effort) is a good idea.

Closely linked to this, especially in B2B markets, is that your product can only be successful in the context of the buying patterns in the target market. Every market has its idiosyncratic way in which solutions are sought and evaluated, buying decisions made, price and delivery negotiated. And if you’re not compatible with the time of year, use of OJEU, ‘Plan A’, Environment Agency regs, contract management or other trivial necessity you won’t sell any product to that sector. The least costly way to master an industry’s buying patterns that I have seen is to get an industry veteran on the board.

Have a plan
It is true that no plan survives first contact with the enemy, but keeping a plan (i.e. a list of milestones/targets and dates, with associated responsibilities and costs) updated on a regular basis confers many benefits. First, putting the plan together forces you to think about priorities and risk. What’s got to go right, and cheap ways to stop things going wrong. Second, it’s a fantastic communication tool. With a plan everyone can see where the effort has to go. Scope creep – possible the worst enemy of the pre-revenue business – is easier to keep at bay. And finally, it enforces realism. Not all milestones will be met. The insights from ‘why not’ and ‘by how much’ make achieving future targets more likely. And achieving targets is an essential skill to keep investors putting money into a business. So put together a plan and keep it with you. If you have to keep changing it, at least you’re learning!

None of this covers seed funding, getting an office, or marketing, recruiting and financing on the cheap, which will have to wait for another day. Or be picked up by another blogger.