Behind Business Success - Interview with Terry Bramall CBE, former majority shareholder of Keepmoat plc.
Keepmoat was undoubtedly a construction contractor success story.
In the rare interview, we talk to the man who was behind building a family business to nearly £800m turnover per year, enhanced profits from £3m - £50m per year over a 10 year period and became one of the leading, most sought after by clients construction contractors in England.
Terry and his two fellow shareholders sold Keepmoat in 2007 for c£700m
Note: We have our old branding on this recording, don't be put off by this as the content is pure gold.
Below is a full transcript of the call.
Hello, I am Irene Liddle, founder of Construction Contractors UK, set up to help owners and directors to build brilliant businesses within the construction sector. I am so pleased this morning to be joined by Dr Terry Bramall CBE.
I worked at one of Terry's companies within the Keepmoat Group for nearly 10 years from 1999 and to this day, feel humbled by the wonderful hands on education I received whilst employed there, that without a doubt gave me the skills, knowledge and experience to do the work that I do today in helping smaller businesses within the construction sector to be the best they can be.
The reason I asked Terry to join me, is that, to my definition of success, Terry created an extremely successful company in Keepmoat, from joining his father’s contracting business in the late 60's, to growing the business to over £700m turnover per year, from my recollection - being one of the only companies in the UK to grow profits by up to 10% year on year for 10 years and subsequently selling the business in 2007 for over £700m.
I'd like, in the time we have available to delve into how that level of success was actually achieved.
So, welcome and thank you Terry, for taking time to join me today.
TB - It’s a pleasure to be with you Irene.
IAL – Terry I am curious to explore first how you’re life in construction contracting started for you.
TB – Okay, well, as a child my father ran the business he was in partnership with someone who was more office bound than he was. So I felt like I have been in construction all my life, not just my working life. So it was always an ambition to go with the family business, I did try whilst I was at school, I took experience in other ways, tested a little bit at being a pharmacist, I would go and work in the shop, that showed me, that was Saturday mornings or Saturdays. That made me realize that I did not want to be confined by four walls. So, I think we kind of eliminated all the other options and decided I would pursue construction. It wasn’t as easy in those days to take further education or university, because there no degrees in construction. For building picture as I was in construction, so that was why I went and studied civil engineering, which was the nearest I could get to it in the early 60’s.
IAL – And when you joined your fathers business back in the 60’s. When you joined then, did you have the vision then of growing the company?
TB – I had had 4 years working for a major international contractor, British based, which we used to have several. One day I rang home and said I was going to change employer, to another contracting business. I discussed it with my father and he suggested that it was probably best for me that I came home now. So in 1968, after 4 years with gaining experience on site and also in some design as well, I went and joined the family business which was in those days was a very local contractor.
IAL – Terry, if you look back now on the time that you have had in business, and the success that you have had. Would you share with us some of the things that come to mind as to what you know have contributed to that success.
TB – Looking back, there was almost 40 years Irene that I was there. That included many wrong moves, cul-de-sacs and mistakes.
IAL – Yes, it is never a straight line for that success.
TB – It’s never a straight line, maybe the biggest learning come from the mistakes. Because looking back over 40 years, one can quickly identify which were the strong points and I would say the points which carried us through. The first thing to mention is that maybe I am a natural delegator. Maybe, I do believe that I can find people who can do things better than I can. So it is not difficult for me to give the responsibility if you like to them, maybe it is a passing of responsibility, so I would let third parties identify on that. If I said the strong points that carried us through, I think it was something you alluded to earlier. I think it was around positive recruitment techniques so I would say getting square pegs in square holes, and round pegs in round holes. And then from that basis people can then operate well and then applying plenty of training, motivation and enthusiasm to the cause. But, also then managing it well. Because, it is being a good management business that brings it through. As you will have experienced in later years we certainly were very strong on a strategically as well, looking at which directions to take the business in. I think particularly when you are a small business it is very difficult to really identify what your purpose is as a business. So I think the sooner that you can do that, the better.
IAL – I know it is interesting that you mention that strategic angle. Because when I talk to business owners and directors about strategy, quite often I see them roll their eyes. How do you personally define strategy and you have just eluded there, but what role did it play in the success of Keepmoat.
TB – It was, I would say essential, fundamental is a better term, if we had not had strategy, everything would have been done by accident. It is much better if you can move from accident to design.
IAL – And create something, rather than be at the mercy of what is being created by someone else.
TB – Yes, you have got to look at where the work is coming from. It is then absorbing that and then saying right, is that what I can do best. Identify where you can be really effective, where you are making the money. That’s why it is not always a one person thing. If you are a one person company then you have got to do it on your own. But, as soon as you start getting senior colleagues in, in particular finance people. Exactly where are we making our money? Where are we losing money? What am I wasting time on? Where am I really spending good time?
IAL – I know a lot of the business people that I work with are literally 100% working within their businesses, and not taking time out to see what their businesses could be. I know this time out was planned into your diary and your fellow board members.
TB – Yes it was, annually.
IAL - When you ran Keepmoat and you physically took time away from the business. So what was the purpose of that?
TB – The purpose of that was to work on the business not in the business. There is a subtle definition between the letters I and know there, because when you are working on the business, it enables you to take a kind of remote view, a helicopter view if like and looking down. And saying well where is our business going? Not, being inside it, you can actually work on it not in it. That can help guide your direction. And strategy enables you to sort out these things out, days away, you are not getting telephone calls, you are not in familiar surroundings, but you are in comfortable surroundings which allow you to think. It seems expensive to be away for two days, but think how much time you can waste doing the wrong jobs.
IAL – I know, unfortunately I see it time and time again. People heads down and backsides up. Especially in the last few year. Maybe more so than previously, and it is encouraging people to really invest in that time. Because the outcomes which I have seen for myself from the people who have taken my advice to do that has been quite priceless really.
TB – I am sure, strangely enough when you don’t always talk about the same things when you are on strategy. Because, the challenges will be different, the world will have changed. Every year the world changes. The climate, the commercial climate which you are operating in. So maybe one year, for instance, maybe it is that you are struggling to find the right kind of people, struggling to find the work. Or you are struggling because your cash flow is going in the wrong direction, people aren’t paying you. You have to identify these simple right up front tasks. Then look if there is a wider view you can take, where you can solve them and see where your business is operating. Because, it will be operating well somewhere, it will not operating not so well in some other places.
IAL – Absolutely, and one of the things I am going to ask you in a little while is about the concept of the invest in the world. We will come into that. I have often wondered as well Terry whether you had a crystal ball. Obviously when selling the company, the board deciding to sell the company when it did, meant that you and the other shareholders missed out on the latest recession that the industry and country have gone through. I was wondering if you still owned the company how might your strategy have changed?
TB – First of all, we didn’t have a crystal ball. We had good reason to sell the company, I have to say that none of those reasons are, oh by the way there is a recession coming so let’s get out now. A lot of people credit me with that or credit me and my colleagues with that.
IAL – One of the questions that I had Terry was that I recall that before the decision was made, that research was carried out. Into what happened to businesses that were taking over by third generation of family ownership. So from my perspective it was very very considered and why the decision came. So it might be good to talk about how that research did come about.
TB –Well, I suppose it was David and I who were 2nd generation, we had in mind that there was a succession, we were both in our mid 60’s It was felt that we ought to consider it, when we sold we had been considering it for two or three years. We have 6 children between us, 3 of them worked in Keepmoat. The other 3 didn’t directly, but were interested. There was a programme of at least two years, where the six children got to know the company better. Those who didn’t work for there, met most of the operating units and went around and saw what they did, we encouraged them to go and speak to anyone who they wanted to. Within the business and experts in this field of family businesses as well. They did it they were very diligent and enthusiastic to go through that process. At the end of the day they concluded that infact they would not wish to proceed taking over the management of the business. We had already been advised that it would not be a good idea to employ professional managers and that was not a route to success so that lead us to the third alternative which was to sell the business. That’s how we arrived at it.
IAL – I can remember being introduced through Keepmoat to the work of Jim Collings who wrote the book from Good to Great. At the time I can remember thinking WOW, I particularly remember from that book one of the strategies of Keepmoat was to have a BEHAG Can you just explain briefly what BEHAG meant to Keepmoat?
TB – Big Hairy Austratic goal –
IAL – That’s great isn’t it. You want to see the looks that I get when I mention that.
TB – Yes, well, we went through a succession of teachers as it were. I think one of the earlier ones would have been a chap called Tom Peters. Who gave us the core of the agenda for our directors meeting. It was decided ultimately of course that first item on the agenda should be H&S. Because we faced that new legislation coming through which transformed the safety in the industry which was a positive thing and it transformed also the way that we approached. So we always put that at the top of the agenda. And rightly so, I am very happy with that. Then it came as Tom Peters said the acronym was CLIP and it was customer’s leadership innovation and performance. I don’t know if you ever saw a board papers Irene, but they were there. So it was kind of sales people and innovation. We tried, tried and tried with innovation and it is very difficult to get that really integrated into a business, but it is very worthwhile to share and improve. Then financial performance, so, that’s what we got from amongst other things from Tom Peters. Then there was a chap called Gerard Egan who actually came across from America and did some teaching with us. Luke Tyson the Pacific Institute and then in later years, it was Jim Collins Good to Great and there was also another book he wrote as well.
IAL – So it’s interesting that you always looked to external thought leaders of the time and ask was best for us to consider for our business.
TB – Absolutely, best management practice and we were guided throughout this 20 odd year period by David Hall who facilitated all our strategic days and I still know David and we still speak. So, he would do all the sifting and pick up the best teachings of the day and then bring them to us. And these were the people and there is so much in Jim Collins work that I think can help any business.
IAL – Yes, I agree, certainly the BHAG which I have used with some of my clients. Being best in the world at something which I eluded to earlier, just how easy would it be, if all you were focusing on was being best in the world at just one thing? How much easier would that make things?
TB – It does bring results
IAL – I look forward to speaking with you again, hopefully the people that are listening to this call will take away even if it’s just one thing that they take away from the call that they can really work on to improve things for themselves in their business.