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For someone who has been in management roles since the age of 26, Richard Close is no fan of management. He attributes his success in transforming struggling companies into thriving enterprises to assembling a team of people who want to turn the business around.
Now on his fourth successful business turnaround, the chief executive of Briggs Equipment UK, a forklift truck business, has steered it from a £12m annual loss when he arrived in 2006 to a £2.5m profit in 2011.
“The way I’ve turned this business around, and others in the past,” he says, “is by getting the people to want to turn the business around.”
The term “turnaround expert” is often loosely attributed, but Mr Close has earned it. For a lad from Hartlepool, in north-east England, his beginnings in business were far from conventional.
“I graduated from Brighton Polytechnic – that hallowed seat of learning – in hotel administration in 1980,” he laughs. “I think it was the glamour of it – the north east was a drab place in the 1970s. Brighton and the hotel business could not have been further removed.”
But rather than find work in the hospitality sector, he trained as an accountant and at 25 began what would be 17 years of working for Lex, the motor industry conglomerate.
After spending time in a variety of finance roles, his first big break came at Transfleet, Lex’s struggling truck-hire business, in 1990. “I joined as finance director but moved sideways into people management as operations director,” he says.
“I was a 32-year-old accountant trying to teach hard-nosed truckers how to turn the business around. But by working in the depots, pulling them together – I took them rock climbing in the Welsh mountains – we came away as a team.”
Inheriting a £7.2m loss, he helped the division to break even in a year and make £1m profit in two. “That’s when I realised that if you’ve got the hearts and minds of people, you don’t have to do anything else.” His management philosophy was taking shape.
Having learned this formative lesson he switched to Lex’s car retail business, as divisional director running 120 car dealerships – another turnaround challenge: “It was in real trouble,” he recalls.
But his first steps were simple and effective: “I took the branding off the dealerships. They were previously called Lex Volkswagen, Lex Audi, etc.
“I put the location on instead – Rover Stockport for example. All of a sudden the managers felt it was their business, not Lex’s. Most people, most of the time, will respond to being given freedom to run the business. We achieved the highest profit growth in the business.”
After this came his first taste of forklift truck businesses. It is clearly an industry he loves, despite his first experience being enough to put most people off: “Lex said to me, we’ve got this forklift truck business. We don’t really know what to do with it – we’d like you to go in as MD and tell us.”
It involved importing from Japan and Korea, which placed him on familiar territory, as he had helped set up Hyundai’s UK franchise with Lex in the 1980s. But the business’s problems ran deep: “After about a year I realised there was a fundamental product problem and the brand was damaged. So I advised them to sell it.”
Which Lex did. The ability to face reality and cut your losses, he says, is crucial. But it remains the one that got away.
Rather than licking his wounds in another division of Lex, he accepted a new turnaround challenge from Nacco, a US fork-lift business, which invited him to become its European managing director in July 2001.
“I had five manufacturing sites across Europe, and the business was losing tens of millions,” says Mr Close. “A lot of people were frightened to raise fundamental problems. Manufacturing is about long-term planning and building factories; retail is about ‘sell today’. Those two cultures do not go together.”
He disposed of the retail division, drove a 15 per cent cut in company overheads, and rallied his staff around the brand. It became profitable in three years.
The move to his current position at Briggs Equipment UK presented the opportunity to “have a go at doing it for myself”.
He had watched the Briggs business – a struggling competitor of Nacco’s, then owned by Finning – with interest, and he liked its devolved way of working. “I have complete accountability and freedom to run the business in the UK,” says Mr Close. “It’s as near as I will get to running my own business but working for somebody else.”
He joined as Sammons Enterprises bought Briggs Equipment in 2006. “It was a £120m turnover business losing £12m a year, distributing a fleet of about 12,000 forklifts,” says Mr Close. “It had a dis-empowered staff, a parent company that didn’t really want it, and customers that didn’t like it.
“The day we bought the business we got all the UK sales force together, with my boss from America. The outgoing managing director stood up and introduced himself to the sales people – he’d never met them before. I looked at my boss and he looked at me. On the one hand we were shocked; on the other we thought – this is going to be easy.”
An early win was replacing the engineers’ beaten up old vans with brand new air-conditioned Fords. “And the lease rates were cheaper than the old ones,” laughs Mr Close. “It had immediate impact, didn’t really cost us anything, and all of a sudden all the engineers are listening to us. Then you ask their opinion. You gain momentum, and then you can take the management out and let them run the business.” His management philosophy had reached maturity.
“[Briggs] had a middle management concrete block. Most of those people have gone. Now, there’s a new level, promoted from within – young, dynamic, challenging.”
He’s also a firm believer in British manufacturing: “We haven’t lost the skills, we just don’t talk about them enough. We build more cars now than ever. Land Rover’s factory in Solihull is working triple shifts, they could sell each car four times over.”
A brief glance at his CV suggests that after six years at Briggs, his feet must be getting itchy. He insists he has many more goals to meet there, not least taking the business international.
But his eyes twinkle when he’s talking about turnarounds. “When you’re turning a business around,” he says, “you’ve got a brief honeymoon period when everyone is looking up to you and thinking: is this our saviour?”
Your first big break?
When I moved from finance director of Transfleet to operations director. I worked for a very inspiring man who said “Richard, you’re good enough to be managing director, but you’ve got to decide if you’re going to go the finance route or the line route – why don’t you move sideways and try it?” Everyone thought I’d been demoted, but it was the best thing I did because it taught me how to manage people and build a team.
Who was your mentor?
That “very inspiring man” was David Galloway. I worked for him three times at Lex. He was my boss, but he was more of a coach.
What would you rather have been?
I would have liked to be in the pit crew of a Formula One team. Not the driver, in the crew – I’d start off at wheel man and work my way up.
Best career advice to others?
Surround yourself with people that challenge you; don’t surround yourself with “yes men”. But that means constructive challenge and questioning, not undermining or just saying “no”.