Business
After two years in the RAF, I returned to civilian life and joined the business my father had founded 37 years earlier. I'd worked there as an unpaid clerk during my school years, so understood what was ahead of me.
It was a very basic job driven by a desire to continue what my father had started. I had no desirable qualifications and it seemed the sensible thing to do. Over the next two decades I took an interest in the national trade federation.
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I worked in South Wales Wireless Installation Co. Ltd., a business of which my father was Managing Director. We were wholesalers and in the days of Purchase Tax, which preceded VAT we were exempt, but acted as tax collectors. The tax which was levied at different rates depending on the goods' luxuriousness. Consequently we had to issue a letter to our suppliers to enable them to supply us free of Purchase Tax. To this day I can remember the wording of that three paragraph letter which began, “In accordance with the Finance Act 1941, we authorise and request you to supply us good without the addition of Purchase Tax and we shall be accountable to the Crown for payment of Tax thereon.. . . .”
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Normal working for all of us, not just where I was learning the trade, was a five and half day week. It was an easier start with most people starting at 9 a.m. and going home around 5 p.m. That did cause much more peak hour congestion on buses and trams of Cardiff, but the roads weren't particularly busy as few used cars to go to work.
I met people from similar businesses and we exchanged lots of ideas. By 1970 I'd become national chairman of the Radio Wholesalers Federation and somewhere we had a scrap book of photographs, speeches, notes of visits abroad to Japan and I made some useful contacts in that period. It must have taken 10 years for me to get control of the shareholdings when the other two outsiders retired. But with hindsight it was not the best time to invest in a small local company. The 1964 election had been won by Labour with a slender margin. The big issue was the abolition of Resale Price Maintenance which was the death-knell of the small retailer. Until then, a manufacturer could decide the retail price of its products. This had the benefit of securing a profit for the makers, the distributors and retailers but it defied the natural laws of economics. In a prospering economy there were plenty of entrepreneurs who wanted to be released from manufacturers' constraints. They were prepared to buy in bulk and sell from low cost warehouses rather than high street stores. They soon won the day and legislation that controlled prices was dropped. This is when big stores like Comet could begin to sell washing machines at rock bottom prices. It soon spread and every product with a decent profit margin for the small retailer became available from large bulk outlets at a substantial discount. This ran many retailers to the ground. It was particularly significant in the radio trade where many servicemen had been discharged from the second world war and set up with their knowledge of radio and radar in the late 1940s. These technical people by now had been in business for 25 years and some were thinking of retiring. So the upshot of this was the customer base for South Wales Wireless diminished and we had to look for industrial and other outlets for the stock we held. We moved towards big items like washing machine, fridges, TVs but still had a good reputation for having lots of spares, accessories and components. But by now I had a business overdraft of £100,000 and a young family, so we continued for a decade until 1974/5, then I closed the business. After I'd gone through the pain of clearing out all the unwanted stock and selling the premises it dawned on me I was 39 years old and feeling rather unemployable as I had no worthwhile qualification.
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The beginnings of Consultancy
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I did, however, have some business knowledge and thought I could help others by offering consultancy advice. I set up Penarth Management and carried out the first few consultancy assignments single handed. Shortly afterwards my good friend George Munday joined me as a partner and because of his strong engineering background we were able to break into the offshore oil industry. We spent seven years at that before expanding into a broader range of work.
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Hungary
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I was helping a Hungarian friend to achieve certification for his business in the UK when the Iron Curtain came down and he was, at last, able to return to his country of origin to meet up with family and friends. This was around 1991 and we were soon off to Hungary to see what business opportunities might arise. We decided to set up a business in Budapest that was a replica of Penarth Management. The deal was he would find the clients and collect in the fees in hard currency (not an easy task) and provide the language skills; I'd provide the credibility and know-how (which he soon acquired).
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Our first client manufactured oil filters for engines and made them for every model of car, van and truck that roamed the roads of the Soviet Union. The factory was immense and the management team had little knowledge of western business ways. The primary difficulty was that they'd been brought up on business decisions being made by committees. This was a safe environment as no finger could be pointed at an individual if anything went wrong. Accordingly they were reluctant to make even the most minor decisions alone. It took quite a while to change this company culture, but eventually we persuaded them to write down the processes and develop procedures that could be audited. We had to rid them of a 'blame culture' and persuade them that improvements can only be made if we all knew what went wrong and work out how problems could be corrected.
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The typical timetable was to fly out for week, gee them up a bit and return a few weeks later to see if they'd implemented the agreed changes. While this was on the go we were visiting other potential clients and soon had a healthy list of people who thought the best consultants were from the UK and from London. We didn't stop to point out Penarth was a much more prosaic place.
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Among the industries that engaged our assistance were a thermometer maker who produced beautiful glass instruments for measuring temperature and specific gravity for the manufacturing industries. We also worked for an international airline that had a large freight division carrying everything from documents, components and even day old chicks. These people had their operation air-side at Budapest so we spent a lot of time negotiating with Customs to reduce the clearance time from several days to just a few hours. But that wasn't the biggest problem.
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Our client had an office in the city centre and their warehouse at the main airport. Telephone lines were scarce and the waiting time was said to be two years, so we set up a satellite link between their office and warehouse. These were the early days of satellite technology and it is amazing how quickly you can assimilate the knowledge but the snag is, obsolescence strikes almost as soon as you've installed and commissioned the systems. It was all part of the great learning curve.
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One of our more prestigious clients was the new governmental Quality Assurance department in Hungary. They talked the talk and were influential in drawing down funding for public and even some private enterprises. As they were staffed by academics and civil servants, there was much for them to learn about process improvement but they seemed to espouse the concepts and were ready to have a go themselves - except that they weren't 'doers'. They facilitated the early projects but left us to do the donkey work.
Tomato Sauce
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One of the more colourful factories I visited during my days as a management consultant was a tomato sauce factory on a wondrous scale. It was in Hungary and supplied tomato sauce to the entire Communist Bloc. Every day five huge articulated juggernaut tipper-trailers would arrive and tons of tomatoes would be tipped from each into the storage silos. They were then mashed up and squirted around the factory through gargantuan pipes suspended at high level above the machinery.
The product flowed to cookers, ovens, emulsifiers and to have the magic ingredient added that stops the thixotropic tomato sauce shaking out of your bottle. A thixotropic fluid is one which takes a finite time to attain equilibrium viscosity when introduced to a step change in shear rate. Some thixotropic fluids return to a gel state almost instantly, such as ketchup. I don't want to blind you with the technicalities of tomato sauce, but I do want to tell you about flanges and pumps.
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The factory had been built in 1947 and was showing signs of lack of maintenance. When tomato sauce is being pumped around a factory, there will inevitably be a leak here and there. The trouble is, tomato sauce when dropped from overhead pipework onto the floor of a dark, dingy factory at the feet of workers who've seen it day in and day out, stays on the floor.
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They were used to it, but until you are familiar with the sight, the first impression was that an assassin has just done away with a party member who hadn't voted for Yeltsin. Blood, gore and the smell of rotting tomatoes was not the happiest environment for the implementation of food hygiene standards that met EEC regulations.
You think I'm joking?
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They were just beginning to get the hang of the idea of maintaining production records, so that they could get the 'sell-by' date right on the label. I was therefore a bit surprised to see that a week's production all had the main front label neatly printed and marked 17thAugust.
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'How can this huge batch which looks like a week's production have all been made on 17thAugust?' I asked.
The production manager replied: 'Ne hülyéskedj Augusztus 17 a szüreti idÅ‘pont'
I asked him to write it down, and later I had it translated from Hungarian:
'Don't be silly. 17thAugust is the harvest date'
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The tomato sauce bottles had a metal closure, with the usual dimple that clicks when you first open it, showing it had been properly sealed. So at some stage in the packing process, someone had to check the seals were OK. Bear in mind that these bottles were travelling fast and being stacked into crates and on to pallets. I asked to be shown the check, and there, sure enough was a man with a light hammer who tapped each lid as the bottles cruised past and listened for the 'wrong' tone. I watched for a full five minutes and noticed that when someone else walked past, he'd politely stand aside and miss the next couple of dozen bottles which were in the packing cases and on the van before he'd looked round.
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These were the sort of things we had to correct. In the end everything is achievable but you do have to win the support of the workforce who see little point in change. But now, when you see a bottle of sauce with Hungary marked as the county of origin, you should feel assured the management structure was put in place in the 1980s and will by now be well established.
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I started using computers for business in about 1972. In those days South Wales Wireless had a hundred customers and several thousand items in stock. We used a computer bureau which was able to take our invoicing data and produce customer statements and stock record updates quickly. I became fascinated by the new technology and marvelled at their mainframe with huge reel-to-reel tapes and demountable Winchester drives. My contact in that bureau is still a friend and we meet every six months or so.
This was used by the clerical staff giving us the elements of a modern system at very low cost. Later we migrated to desktop computers and then to laptops, so that my colleagues and I could work away from base.
Environment Projects:
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I tried to add Environmental consultancy to our portfolio but misjudged the market a bit. By 1980 I had formed an environmental division, with all the marketing collateral in place and one part time graduate specialist, but did not land a fee-earning project until 1984.
One of our early ISO14001 environmental projects was in Hungary where we put an Environmental Management System into 57 ARAL petrol filling stations. Surprisingly the most significant pollutant was the soap suds from 57 car washes which gushed down into the street drains. They were OK on the hydrocarbons as they had good control of fuel storage and dispensing.
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Less successful with hydrocarbon effluent was Budapest Airport. We weren't actually on this project, but as our client had their office 'airside' I got to know a lot of the airport management team and knew of their problems. They were perplexed by being unable to reconcile their aviation fuel records. Every month they were short of many hundreds of gallons of expensive aviation fuel. This hadn’t mattered when they were purely military, but now the accountants moved in and expressed the loss not in gallons but in monetary terms. I knew the chap who was scratching his head about it but I had no time to help him. However we chatted. 'Nobody can be taking it home in their car and selling it on the black market,' he said.
'But they could be signing for deliveries that haven't arrived' said I.
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We'd been debating this on my previous trip. When I flew in next time his staff were eager to explain the loss.
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'Good job you don't stay near the perimeter of the airport'.
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'Why?'
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'Last Thursday afternoon there was a huge explosion. The village on the north eastern boundary of the airport was burnt down'.
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It seems there had been a gradual leakage of fuel from underground storage tanks for years. It had seeped underground and found its natural level which was all fine until a contractor dug a big hole. When finished he leant against his JCB, lit a cigarette and threw the match into the hole. This ignited the rich mixture, lifting several acres of topsoil into the air and with it several allotment sheds and two small bungalows.
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The oil industry:
The most lucrative part of the UK economy in the late 1970s was the offshore oil industry. Every skill, from welder to cook was needed on an oil platform. With George's undoubted skills our firm was providing some engineering consultancy to the off-shore oil industry and I spotted the need to help engineers already working on short term contracts. Typically, an underwater welder would fly out to an off-shore platform and work during a shut down period, then wait for another platform to need his specialist skills. I built up a database of reliable people who were busy and had no time to search for the next job. These skills were scarce, so companies would pay high rates for putting the right man on the right platform by the right date. This increased our commitment to the lucrative oil industry and for a time we had a shared office in Union Street, Aberdeen. It was a 10 hour drive from Cardiff, but an attractive journey though the Lake District and Scotland that I enjoyed.
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In those days several oil platforms were being built in the shipyards and towed out to position in the hostile North Sea. It was no good getting them in place and finding a fault in the assembly, so a new industry emerged to assure the quality of workmanship. BS5750 (1978) was launched and I developed quality management systems for many firms who made components and equipment for building off-shore platforms. They could be as ordinary as an accommodation module or as sophisticated as the process of tensioning the guy wires that held the flare bridge in place. It was a lucrative market which we exploited in 1978 but by 1985 the price of oil fell and Penarth Management began to focus on land-based projects.
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The start of Quality Assurance:
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I had by that time some useful knowledge of Quality Management Systems and the Government was beginning to urge UK manufacturers to prepare for the European Economic Community in 1992. There were various incentive schemes for businesses to improve their performance in readiness to compete within the EEC across Europe. Quality Assurance was seen as an essential to be competitive and grants became available. We were in just the right place at the right time and were among the first to exploit the opportunity. The first registered assessing body for BS5750 (1987) was Lloyds Register of Quality Assurance, ahead of the British Standards Institution. We submitted out first client to them in 1988. The assessor was no more experienced than us. We were definitely in on the ground floor. The result was that while other consultancy firms were scrambling to qualify their firms and their staff to provide grant aided consultancy we were ahead of them. Similarly when it came to the assessments, we were as experienced as most of the people who came to assess our clients. We never had a failure. Our reputation grew and fortunately we were able to build a steady business on a solid foundation. We were not big, but we were profitable. Within a few years I'd worked for a very wide range of industries and one of the sure ways to close a deal and land the contract was to be able to talk to the prospective client as though we knew his industry well. We could usually refer him to someone in the same industry who had already engaged us. The result was we had a steady flow of assignments that continued for years.
In the early days of being in the radio business, the photocopier had not been invented, we had to type each letter which was then signed in ink by a Director. Facsimile rubber stamps were popular in those days, but were not permitted on legal declarations. We could have had these letters printed, but that was much more costly than having a school boy to type them. The upshot is that I have always typed, and even today prefer typing to handwriting.
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I joined South Wales Wireless in 1957 and carried out mundane work for some years and then gradually moved into a management position. My father sent me to trade association meetings which was quite a revelation. I discovered there were other businesses just like ours, in Bristol, the west of England and elsewhere across the UK. I began by attending regional meetings in the South West, and later went to national meetings in London. There, in due course, I was elected national chairman of the Radio Wholesalers Federation and this brought me into contact with a much wider group and perhaps more influenced people.
Harold Wilson's government was determined to appease the Kremlin in the interests of 'better relations', which hopefully would increase trade between Britain and the Soviet Union and reduce the risk of a nuclear war. The Russians saw several benefits from this. In my capacity as National Chairman I was invited, along with others to visit Russia to represent the radio trade. We set off on MV.Pushkin and sailed through the Baltic to Helsinki. The final half hour sailing into Helsinki was memorable because the channel was so narrow that you could almost touch the land on either side of the ship. We then left Finland and sailed on to Leningrad, as it was then known (now St. Petersburg). I visited the the State Hermitage museum which is one of the largest and oldest museums in the world, and the showcase of art and culture in Russia.
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Around that time I flew to Japan and the flight was 'over the top' as they say. We took off from Amsterdam on Japanese Airlines and were served sparrow in aspic jelly for breakfast. The first refueling stop was at Anchorage in Alaska. When we took off for the second leg of the flight we were again served sparrow in aspic jelly. We arrived in Tokyo in the evening to be royally entertained by the radio industry in a high rise building. I particularly remember thinking the building was swaying, but was told this was the result of sitting in an aircraft for too many hours.
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We visited many factories and had many a meal in skyscrapers in various cities. One was a revolving restaurant where you could see north, east, south and west as the meal progressed. We'd just about reached the final course when the evacuation alarm went off. We then realised that the mild judder we'd felt a little earlier was the revolving mechanism stopping. We were dining by candlelight so hadn't noticed the electricity had gone off, stopping the revolving restaurant and plunging the city into darkness. Now were were expected to walk down 33 floors in an orderly manner. Happily the atmosphere was buoyed by much fine wine and we sang merrily as the entire restaurant, diners and staff, jogged gently to the street. We had no sooner put a foot on the pavement than the lights of the city sprang into life and we were invited to resume our seats 33 floors up. We didn't.
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Strangely these recollections are clearer than my memory of any of the factories, though I did bring back some small transistor radios and a batch of early calculators.