BQ Scotland Spring 2015

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ISSUE NINETEEN: SPRING 2015

THAT’S DRAM-TASTIC! Raise your glass to a new ‘social’ whisky company THANK THE LORD Business guru Lord Willie Haughey is sharing his expertise PART OF THE UNION The creative hub Desk Union is helping start-ups thrive TOTAL CUSTOMER FOCUS An uncompromising approach is giving one IT firm the edge

GAME ON!

How Minecraft changed a Dundee firm’s fortunes ISSUE NINETEEN: SPRING 2015: SCOTLAND EDITION

BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

SCOTLAND EDITION

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WELCOME

BUSINESS QUARTER: SPRING 15: ISSUE NINETEEN Welcome to BQ Scotland. We hope you enjoy the magazine and find something entertaining and worthwhile to read. With only a few weeks to go before the UK General Election, the national economy is in its best shape since we launched BQ Scotland magazine back in 2010. The recovery from the dark days of the banking collapse is something of an economic miracle. Happy days, surely. Well, not quite.

We are approaching the most unpredictable general election in a generation. And Sir Mike Rake, head of the CBI, in his recent Mansion House speech was right when he said “at the moment, the only certainty seems to be uncertainty.”

Policies are being presented in ever-more simplistic terms, yet the reality is that the challenges facing the country remain complex.

He is right when he said such issues are not going to be solved by “sound-bite solutions”.

The political debates have real bread-andbutter consequences. And with the latest Scottish opinion polls suggesting the Scottish National Party could be sending 56 MPs to Westminster (while Scottish Labour and the Liberal Democrats are wiped out), the transformation of British politics could be unprecedented. This could mean the Conservatives winning the most seats, but would English Labour MPs work together with the Scottish Nationalist who whipped their Scottish cousins? Whatever the outcome, business has to get on with life. Scotland’s enhanced devolution has the potential opportunity to drive growth but we still require some careful analysis of the impact of any new powers. Mike Rake argues that any new powers of devolution across the UK must preserve the integrity of the internal market which is a magnet for foreign investment across the whole of the UK. He makes a strong point. We agree that we need to attract global talent and continue to improve the level of Principal Sponsors

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skills in Scotland. The Scottish export statistics for 2013 show that while the United States is our top export market, the next nine in the top ten are European countries. We need to embrace the European Union’s Single Market and seek more opportunities for Scottish businesses. While Europe needs drastic reform this can only come with Scotland and the UK being included in the debate and firmly inside the tent. There is something more fundamental. Too many people in Scotland have not felt the benefit of the ‘miracle’ recovery. Indeed, many on lower incomes – and unskilled – appear to have been left behind. It is up to thriving and improving businesses to reward its people. That means substantially improving wage levels – which can only lead to improved engagement and productivity. The Hearts FC owner Ann Budge recently showed her commitment to the voluntary Living Wage, rather than the legal Minimum Wage for everyone at the football club. That has to be a starting point and a great example for good businesses in Scotland.

Certainly, the long-term solution for increasing Scotland’s lacklustre productivity is encouraging investment and giving the workforce the skills they need to compete in a globalised world. That bar is constantly being set higher. By 2022, half of all jobs will require workers to have completed some form of higher education, including apprenticeships.

We all need to recognise that Scotland – whatever the political hue in May – is increasingly propelled by an enterprise-driven economy, where productivity is rewarded and skills are continually upgraded to meet the international challenge. We live in interesting times and Scotland needs every one of its able workforce to be decently remunerated as it puts its elbow to the wheel.

Kenny Kemp BQ Editor Scotland

CONTACTS ROOM501 LTD Bryan Hoare Director e: bryan@room501.co.uk EDITORIAL Kenny Kemp e: editor@bq-scotland.co.uk DESIGN & PRODUCTION room501 e: studio@room501.co.uk PHOTOGRAPHY KG Photography e: info@kgphotography.co.uk SALES Contact Publicity e: info@contactpublicity.co.uk t: 0141 204 2042 Bryan Hoare e: bryan@room501.co.uk t: 0191 426 6300 Audrey Atkinson Sales Manager e: audrey@room501.co.uk t: 0191 426 8205

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BUSINESS QUARTER | SPRING 15

CONTE BUSINESS QUARTER: SPRING 15 DRAM-TASTIC

Features 20 GAME CHANGER The runaway success of Minecraft has transformed a Dundee firm’s fortunes

24 RISING STARS High-profile event showcases the movers and shakers of tomorrow

26 DRAM-TASTIC Whisky expert Simon Erlanger is at the forefront of a new ‘social’ distillery

BUSINESS QUARTER | SPRING 15

36 PART OF THE UNION BQ drops in on Desk Union to discover a hub of creativity and inspiration

38 REFLECTIONS ON AN ENTREPRENEURIAL JOURNEY

26 BUSINESS LUNCH

John Anderson talks about the useful learning

56 CUSTOMER FOCUSED How an uncompromsing commitment to service is giving an IT firm the edge

60 A VITAL SPARK Entrepreneur Lord Willie Haughey is determined to help fledgling businesses

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TENTS SCOTLAND EDITION

32 COMMERCAL PROPERTRY

The latest deals and developments in this key sector

42 WINE Diamond geezer Michael Laing gives his verdict on two blended wines

Regulars

44 MOTORING Law firm chairman Philip Rodney rolls with it in a friendly Ghost

THE ART OF TOTAL CUSTOMER FOCUS

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48 FASHION 06 ON THE RECORD A new private bank is set to shake things up at the top end

10 NEWS A round-up of key developments across the country

Josh Sims meets the Italian boss of an American firm that defined a nation

52 EQUIPMENT Trends are fickle, but quality endures in the watch industry, Josh Sims discovers

64 BIT OF A CHAT With BQ’s backroom boy Jock Yuler

18 AS I SEE IT The ‘old boys’ network’ of board directors is outdated, says David Watt

A VITAL SPARK FOR ENTERPRISE

66 EVENTS Key business dates for your diary

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60 BUSINESS QUARTER | SPRING 15

ON THE RECORD

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>> A direct route to the levers of power Carlos Alba looks at the low-key link between Scotland’s politicians and commerce It may not be well known to everyone in the Scottish business community, but it’s the closest Holyrood has to a link with commerce and industry. The Scottish Parliament & Business Exchange has responsibility for encouraging greater knowledge and understanding among MSPs of the way business works and, reciprocally, to help business people understand better the powers and processes of the Scottish parliament.

Until now, its work has been fairly low key, restricted by the scope of the parliament’s existing powers to influence the recruitment or operation of businesses and industries north of the border. With the majority of tax-raising powers domiciled at Westminster there are limited opportunities for companies to engage with politicians. Now, following the Smith Commission recommendations, responsibility for new tax-raising powers are to be transferred to Holyrood and, with them, a significantly greater requirement for businesses to engage with the parliament.

Lord Smith of Kelvin has recommended transferring to Holyrood responsibility for gathering Income Tax along with a share of VAT and Air Passenger Duty. It has also suggested that the Scottish Parliament should have all powers over support for unemployed people through employment programmes currently contracted by the Department of Work and Pensions, such as the Work Programme and Work Choice, when the current commercial arrangements expire.

While the commission decided that regulation

Arthur McIvor, chief executive SPBE

of utilities and public services should remain reserved, it recommended transferring responsibility for the management of the Crown Estate’s economic assets in Scotland, and the revenue generated from these assets, to Edinburgh. These include the Crown Estate’s seabed, urban assets, rural estates, mineral and fishing rights, and the Scottish foreshore for which it is responsible. The Scottish Government and Scottish Parliament will also have a formal consultative role in the process of reviewing the BBC’s Charter and Holyrood and Westminster are expected to work together on some matters including food labelling, to agree changes to the European country of origin rules so that a ‘Made in Scotland’ brand is recognised under EU law.

Most MSPs, with the greatest respect, don’t have a great deal of business experience – SPBE chief executive, Arthur McIvor

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Following implementation of the proposals, it is likely politicians and business people will find themselves at meetings and in forums with individuals they’ve never met before and with whose processes and working practices they are unfamiliar.

“Most MSPs, with the greatest respect, don’t have a great deal of business experience,” says the SPBE’s chief executive, Arthur McIvor.

“The majority of politicians don’t come from a business background and they don’t have significant business knowledge.

“Many come from professional and public sector backgrounds and they are not familiar with the skills and processes required to run a business. What we do helps them to move from a position of knowing a little about a lot to having a more detailed knowledge.”

Mr McIvor added: “Similarly, there are many business people who are unfamiliar with the powers and processes of the parliament and they find it useful, through us, to learn about these things.”

For the past seven years Mr McIvor, a former senior manager with Royal Mail and latterly business consultant, has been responsible for bringing these groups of people together for what the organisation calls ‘engagements’ .

They might include an away-day for politicians to visit the premises of a particular company or it could see a delegation of business people visiting Holyrood to learn about how the committee system operates, how the Scottish Parliament works or to hear about ‘a week in the life of an MSP’.

“The biggest attendance we have had was for an engagement with the CEO of Scottish Power Renewables, which is understandable because many politicians have an interest in that issue,” said Mr McIvor.

“We also had a large turnout for an engagement with the chief economists of two banks during the Eurozone crisis who helped MSPs to understand the implications of

SPRING 15

countries defaulting and the impact that might have on other economies.”

There was, in the early stages of the SPBE’s existence, a degree of suspicion in some quarters about its activities, according to Mr McIvor. Some people, wrongly, viewed it as a vehicle for lobbyists and McIvor has worked assiduously to distance the organisation from that perception.

“Lobbying is a legitimate part of the political process. If businesses want to lobby politicians, they are perfectly capable of doing it without the SPBE being involved and there’s a clear understanding among politicians that what we offer is purely an opportunity to engage with or to understand a particular sector,” he says.

“Likewise our member businesses are clear about our role as a facilitator and what they can hope to achieve from our engagements.

I attend all of these engagements personally and, if I think a discussion is going in a direction which is inappropriate then I will intervene and steer it away from that, but I very rarely have to.”

He added: “Every MSP who engages with a business is signed up to a code of practice.

Every engagement through our business exchange is non-partisan and non-lobbying. I oversee every engagement to make sure these standards are upheld.”

According to Mr McIvor, the prospect of new fiscal powers for Holyrood means politicians may require to be better informed about the impact that their decisions would have on businesses and the economy. Similarly they will be required to be aware of developments in particular sectors to inform their decision making. Businesses, meanwhile, will see decisions affecting their operation transferred to Holyrood whose processes are different to Westminster, particularly with its use of the committee system.

“Often we will bring a company into the parliament for a workshop on how the parliament works, including a formal welcome from a deputy presiding officer to a clerk of a committee coming in and explaining the parliamentary process and parliament’s powers and how to engage in the committee structure. It usually involves an MSP discussing the role of a committee or a week in the life of an MSP. We do these fairly regularly.” n

ON THE RECORD

>> The joys of good UX Tom McEwan, Director of Quality in Computer Science at Edinburgh Napier University, gives business an indication of the road ahead Forget OO – object-orientation and all that techie programming jargon – the top buzzword for the IT industry in Scotland is: UX – User Experience. That was the gist of the annual ScotlandIS Future Trends talk given by Richard Marshall of Gartner Group. The machines are coming to write the programmes for you. So what’s left is the UX and business logic – and even those can be increasingly automated.

But we still do empathy better than machines.

You might say Richard lit a flame under the digital tech sector in Scotland, but trade body ScotlandIS has already changed its stripes, rebranding from a quietly confident turn-of-the century blue/green power button, to a vibrant orangey red, and they certainly fanned the flames to ensure a sell-out crowd for Richard’s talk. I can’t talk about Technology Trends without pausing to remember, fondly, the late and much-lamented David Mitchell who for many years gave the industry a prescient Technology Forecast. Much of my credibility as a lecturer is when I can talk in an informed way about the state of the industry into which they will graduate. For what seems like over a decade I have David and now Richard to thank for giving me the signpost for the direction ahead. Richard began by quoting William Gibson, from 20 years ago, “The future is already here — it’s just not very evenly distributed”, to remind us that the future is eminently predictable. He then gave us ten trends to keep our eyes on. His basic premise is that digital innovations are already radically reshaping traditional business models, giving a quick plug for his own self-published novels, which are printed or kindled on demand. “Why do people spend so much time apologising for their technology?” was Richard’s first question.

Now it can be a convenient excuse when you’ve screwed up, but we all want technology that we can control. Another change is the shift from us having to seek information, to

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expecting relevant information to be seeking us. The ten trends are published by Gartner, so I won’t go through them blow by blow – you can get an overview for free on their website, or any time you bump into Richard Marshall. But the trends amidst the trends seemed to be threefold 1) Businesses need to start modelling what will happen to their operations as robotics become ever more precise (superhuman surgery), ever more knowledgeable (not only of typical usage but every edge case) and with constantly improving reasoning (predictive of heart attacks).

2) We need to be ready to cope with ‘deliberately unstable platforms’. For example rather than security meaning to ‘lock down’ a system, instead our defence against machines being ‘notoriously gullible when it comes to privacy’ is to ‘containerise’ our personal data and payment details. We do that with multiple layers of mediation of secure encryption.

This will be music to the ears of fast-growing Scottish start-ups such as David Lanc’s Payfont, who hold patents in this space, but also represents protection for the citizen against the creeping intrusion of health monitoring technology into our insurance premiums and jobs.

3) The user, or customer experience, is fast becoming the only differentiator for businesses, as everything from software components to 3D printed parts become not only commoditised, but like music and photography today, approaching zero cost. He demonstrated a lively Cortana compared to a staid but efficient Android voice interaction and clunky old Siri.

Microsoft had designed Cortana through ethnography – observing personal assistants day after day, and what they did and why, in order to model the facets of the ideal user experience.

So start thinking about the future, start using layer upon layer of encryption whenever you can, but most of all singalongaRichard “Ooh …

UX is on fire!”

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ON THE RECORD

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>> What’s the Hampden score? New private bank ready to open its doors The arduous journey to create a new private bank in Scotland is almost over. Hampden & Co, which occupies the magnificent Georgian offices at 9 Charlotte Square, in Edinburgh, are putting in place the final touches ready to welcome clients. The only stipulation is that you have a sizeable chunk of personal wealth that requires specialist banking.

For those not suitably financially endowed, the establishment of a new private bank, after the banking travails of the last eight years, is still a cause for celebration in Scotland. It is a remarkable personal achievement for Ray Entwistle who set up Scoban, now renamed Hampden, after a distinguished career with Adam & Company, based in Charlotte Square, which became part of the Royal Bank of Scotland.

The new bank has 250 shareholders, including two major investors, who will be opening their accounts in the coming weeks.

The chief executive is Graeme Hartop, who moved over from Scottish Widows Bank, where he built a niche yet profitable division over 20 years within the massive Lloyds Banking Group. Hartop was given plenty of room and autonomy to build the Scottish Widows’ outfit, now he must repeat the trick with Hampden, a more exclusive offering.

He explained to BQ that the UK regulatory authorities recognised that there were challenges for new banks to meet the levels of compliance and asset ratios and this was hampering the ability to build new ‘contender’ banks in the UK. Only a handful of new entrants, such as Charter Savings and Paragon have emerged. Instead, a ‘mobilisation’ road map was set up by the Prudential Regulatory Authority which involved setting out the shape of a new bank. This was about ensuring key senior personnel were in place, there was a robust business plan, and key documents on risk and operations where submitted for regulatory approval. In Hampden’s case, the two regulators gave a green light to continue on the mobilisation period to build up the

BUSINESS QUARTER | SPRING 15

systems and procedure for a licence to run a UK bank.

Much of the early groundwork in attracting investors was done by chairman Ray Entwistle, but then it was Mr Hartop’s task to ensure that all the banking facilities were in place.

“We were the first greenfield bank to go through this mobilisation process. It has been a huge learning curve for us – but we’re delighted with the progress we’ve made,” says Mr Hartop.

One of the keynote investors is Tim Oliver, originally a Lloyds’s of London broker, who set up the Hampden Group in the early 1970s. He bought Hampden House in Buckinghamshire, the home of Sir John Hampden, the English patriot who challenged the autocratic authority of Charles 1 which heralded the

invest in a new start-up. One of the trickiest aspects was finding the right shareholders and getting the synergies. We’re delighted with the progress that’s been made.”

Mr Hartop, a former Borders rugby player, is a polite, yet cautious banker to the core, and has signed a deal with IT group Oracle to provide the banking platform.

“It’s a tried-and-tested platform that has been customised for our needs and will be run from Oracle’s data centre in Linlithgow. RBS will undertake the clearing on our behalf.”

Hampden will offer the full services of a private bank with charge card rather than credit card. The clients will be high net worth individuals, with family and smaller commercial interests. Each banking manager will have a number of clients, all able to phone their

We were the first greenfield bank to go through this mobilisation process. It has been a huge learning curve – but we’re delighted with the progress we’ve made

English Civil War. Of course, Scottish sports fans know Hampden Park in Glasgow as the home of the national football team. Hampden, with group assets of £60m and £2bn, took a leading stake last April.

The key team is Andrew Milligan, finance director, Stewart Alexander, as chief operating officer, Jeremy Vaughan, as managing director of banking in London, Alison Inverarity, as chief risk officer.

Mr Hartop joined in January 2013 and in the following two years has been working to raise funds, build the banking platform and gain the regulatory approvals.

“This was the most uncertain element. The banking industry had to understand how to

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managers to discreetly arrange transactions.

Is there a minimum amount required to open an account?

Mr Hartop explains that the bank will hold accounts for family members of wealth individuals and successful entrepreneurs, so levels of assets will vary.

“In essence, we are all about an exceptional level of personal service, where we know the clients and their families personally. For this kind of service, you would expect to pay a bit more,” he says.

Hampden & Co, with its office in Edinburgh and a planned office in St James in London, will certainly be a welcome addition to Charlotte Square. n

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NEWS

SPRING 15

Mara Seaweed wins our Emerging Entrepreneur of the Year title, events community launches in Aberdeen, tycoon aims to treble shipyard’s workforce, Baxters’ first lady hails new deal a ‘milestone’ >> Firm doubles workforce

>> A natural winner Fiona Houston of Mara Seaweed was named BQ Scotland’s Emerging Entrepreneur of the Year, at the national BQ event in Gateshead. She goes as Scotland’s representative to MADE: The Entrepreneur’s Festival in Sheffield in October. “We are delighted to have won – this will help us raise our profile. We are raising funds so we can ramp up production, take on more staff and start to export our unique Scottish product,” she said. Chairman Robin Worsnop, chief executive of Rabbies’ Small Tours and an investor, said the company was looking for new financiers with the right fit and ethos. Fiona Houston and Alexandra Milne founded Mara after meeting in the school playground, and discovered a shared passion for rediscovering Britain’s forgotten tastes and natural landscape. From 2011-2013, they sunk their savings into developing the brand and products which are now being used by serious chefs. Judges, Gaynor Macintyre, of Macintyres, Rachel Jones, of Totseat, Jamie Livingston, of Livingstone James Group, and BQ Editor Kenny Kemp, also selected Jude Ower of Playmob, Nathan Pike, of Pike & Bambridge, and Calum Leslie, of Wooju, as runners-up.

Capquest, one of the UK’s leading credit solutions providers, has delivered a major employment boost with plans to create up to 100 jobs at its Broomielaw site in Glasgow over the next 12 months. The recruitment drive will see around 100 contact centre roles filled by the end of the year and will bring the total number of employees in Glasgow to over 200. The jobs announcement comes after the company was acquired by FTSE-listed Arrow Global in November last year.

>> A friendly takeover Scottish Friendly, Scotland’s largest financial mutual, has secured the takeover of Marine & General Mutual – the oldest active registered company in the UK. The two mutual organisations expect the transaction to complete in the second quarter of this year, subject to approval from members, regulators and the High Court. The deal will be the largest takeover

by Scottish Friendly to date and will double its assets to around £2 billion.

>> New fund to explore geothermal energy A £250,000 fund to support research into exploring Scotland’s geothermal capacity to meet the energy needs of local communities has been launched by Energy Minister Fergus Ewing. The Challenge Fund is open to organisations working together to benefit local communities, achieving carbon reductions which are sustainable and commercially viable on a long term basis and the development of future viable delivery models. The deadline for applications is 30 April 2015.

>> Starting a new chapter Global networking events community Startup Grind is launching its Aberdeen chapter with activpayroll’s chief executive officer Alison Sellar as its first speaker.

The global startup community was founded in San Francisco in 2010 and has now a presence with more than 160 City Chapters worldwide in over 65 countries.

The move follows a ramping up of activities in Scotland, resulting in successful Chapters in Edinburgh with Gareth Williams of Skyscanner and Glasgow with John McGlynn of Airlink Group.

Alison Sellar, activpayroll CEO, launched the firm in 2001 in Aberdeen and now has one of the largest and most experienced payroll and expatriate tax teams in the world. Activpayroll serves more than 1,000 clients, operating in over 80 countries.

The Startup Grind launches in March, with the first event on Tuesday, 17 March, at the Elevator at Aberdeen’s Energy Park in Bridge of Don.

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COMPANY PROFILE

An interconnected North is the key to economic success The last twelve months have seen a monumental increase in focus on the economic prosperity of the North and the potential to become a dynamic counterweight, complementing the thriving London and South-east economy.

A united voice for the North has been championed by the dynamic ‘Northern Powerhouse’ and complemented by the ‘Northern Futures’ consultation and the Chancellor’s ‘One North’ report which committed to investing £15b in the Northern transport infrastructure last summer.

One of the key elements across this whole debate and critical to the success of the North’s economic prosperity is the influence of the private sector in key decisions around efficient transport links along with its relationships with LEPs. The private sector is seen as fundamental to making the right decisions around Northern transport infrastructure.

Improved logistics, including better use of our rail network and waterways was a key feature in the ‘One North’ report. PD Ports was acknowledged in the report as the leading developer of portcentric logistics. PD Ports’ Teesport facility on the NorthEast coast has the potential to further attract logistics activity to sites with efficient low cost transport networks.

Portcentric logistics creates an efficient green link to enhance companies international supply chains. Bringing goods direct to port located importation or distribution centres eliminates unnecessary road miles routing goods inland only to reroute them back out to their final destination.

In recent years there has been a significant step change in this approach to logistics supply chains and PD Ports has been at the forefront of this shift. Switching for port located sites or those in the peripheral hinterland, has taken cost out of the supply chain in terms of saved road miles and has also met the challenge of CSR obligations with a significant reduction in carbon emissions.

One of the key factors in PD Ports’ success is

Geoff Lippitt, Business Development Director at PD Ports

Our approach is simple. We work in partnership with our customers to identify their logistics needs and develop the right solution that will continue to adapt as their needs change collaboration, as Geoff Lippitt, PD Ports’ Business Development Director, explains: “Portcentric logistics is not a new concept nor is the idea of port based distribution centres. There are clear reasons and clearer evidence why a portcentric logistics solution suits many modern businesses. And having helped some of the UK’s leading retailers, importers and exporters to simplify their freight, warehousing and distribution and minimise logistics costs, we believe the facts speak for themselves.

“Our approach is simple. We work in partnership with our customers to identify their logistics needs and develop the right solution that will continue to adapt as their needs change. This doesn’t necessarily mean being located directly at the port and by working collaboratively with development

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agencies as well as local land owners we can find the right solution within the local hinterland.

“Moving the goods from port located distribution centres to their final destination on the already heavily congested UK road network is becoming less viable. Supply chains are under increasing pressure to move goods through the network faster and more efficiently. And for that we have a unique solution.

“Being the best connected feeder port in the UK, Teesport is well placed to offer importers and exporters a direct route to Europe and worldwide.

Our daily feeder connections from Felixstowe to Teesport enable customers to move their goods North of the UK, avoiding the road network and reducing unnecessary costs. We also have a dedicated intermodal rail terminal at the Port which opened in 2014.

“The new £3M open access rail terminal already has connections from Teesport to Felixstowe and Southampton. Opportunities for the establishment of further new routes to Scotland, the Midlands and the North West are expected in line with market demand.

“The whole debate around the North as a dynamic counterweight to the South emphasises the critical importance of transport and infrastructure being key to economic prosperity. At PD Ports, our aim is to work closely with existing and potential customers; as well as the local LEP, development agencies and land owners/agents to stimulate business investment and opportunity whilst further strengthening the overall image of the North.”

For more information call 01642 877000, email enquiries@pdports.co.uk or visit our website www.pdports.co.uk

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NEWS

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>> Focusing on growth A quantum technology research centre has opened at Glasgow Science Centre. QuantIC, the Quantum Imaging Centre, brings together experts from the universities of Glasgow, Bristol, Edinburgh, Heriot-Watt, Oxford and Strathclyde to commercialise cameras built with quantum technology. More than 30 industry partners will help QuantIC’s imaging systems bring new benefits to the UK economy. Around 100 visitors from academic, industry and funding councils will have the opportunity to learn more about QuantIC’s potential and hear from speakers from organisations including the Scottish Funding Council, BAE Systems and M Squared Lasers.

>> Nautricity makes progress Scottish tidal turbine developer Nautricity has secured a grid connected tidal test berth at the European Marine Energy Centre, in Orkney, following successful sea trials at EMEC’s non-grid connected site.

After testing its CoRMaT tidal energy converter and Hydrobuoy mooring system, it is a step closer to commercialisation.

Its prototype will be tested at EMEC’s Fall of Warness.

>> Ultimate venture north Invoice financing specialist Ultimate Finance Group has opened its first office north of the Border. The firm’s operation in Glasgow is headed by Richard Waldman, who worked for Royal Bank of Scotland’s invoice finance arm before spending ten years as Aldermore’s regional managing director in the city.

>> Weir hit by oil price fall The shares in Glasgow-based engineering outfit Weir Group have slumped after the company warned that the recent fall in oil prices would hit revenues in 2015. The Glasgow-based company, which makes valves and pumps for the energy and mining industries, has been one of the recent fallers in the FTSE 100.

>> Kier builds on success Kier Construction, which boosted staff numbers in Scotland by a quarter during the past year, has reported a “buoyant” first-half performance as its parent group posted a surge in underlying profits. The firm’s construction division saw a significant jump in revenue to £874 million during the six months to the end of December, up from £742m previously.

It and Kier’s property business increased profits, while the residential and services divisions traditionally perform better in the second half of the financial year.

>> Tycoon hopes to treble shipyard’s workforce Jim McColl has said the workforce at the Ferguson shipyard in Inverclyde could be trebled to around 400 staff. The engineering tycoon, whose private equity business, Clyde Blowers Capital, bought Scotland’s last remaining commercial shipbuilder out of administration in September, expects to hear if the firm has won a tender for two 100 metre ferries from Caledonian Maritime Assets Limited.

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COMPANY PROFILE

When ‘bring your own’ becomes a challenge for businesses There is a clear rationale behind the promotion of IT security for all organisations, whether they are businesses, charities or governmental departments. Unfortunately, all are attractive targets for fraudsters and hackers, and those wishing to engage in theft of intellectual property or espionage. But, most ask, why would anyone target my business? Where should computer security be on your priority list?

Consider for a moment the type of assets a business holds in order to make operational processes work. Handling finances and storing and transmitting confidential information are everyday tasks. Therefore, it is important to commit some resource and investment in order to defend crucial systems.

And if it wasn’t difficult enough protecting closed networks with fixed-location desktops, staff are increasingly relying on mobile and BYOD (bring your own device) equipment as part of their normal working day. It’s rare for a member of staff not to have a personal device such as a smartphone, tablet or personal laptop – and in a ‘blurred lines’ business culture, it’s only natural that they will want to use these for business purposes. Companies often encourage BYOD as it is seen to increase work productivity and staff responsiveness, however it also presents a complex security challenge.

So, with pressure on resources from all angles, what can businesses do to manage the risks associated with the use of personal devices? There

is no single solution to tackle data, then there must be some BYOD dangers - risks will form of encryption when the be mitigated through data is at rest in case a a combination of device PIN or password both soft policy and is compromised. technology controls.

Also implement Develop a BYOD MDM (mobile device policy as a first management) step. There must software. MDM can be clarity over be used to configure which devices devices (over-the-air) the organisation is as well as providing both willing and able remote wipe facilities for to support. A security lost or stolen equipment. baseline should be developed, Use of this software also i.e. a minimum criteria for enables organisations to exert compliance assessment. Users greater control over what BYOD Robert Mackenzie is Partner should be advised that personal can access on their networks. For at Scott-Moncrieff business laptops should have the latest example, any device connecting advisers and accountants patches and anti-virus installed. without an installed MDM agent Soft firewalls should be enabled to could be restricted to a guest restrict access to insecure ports and network with limited access to communication services. network resources.

Establish and promote an IT security awareness Again, a combination of actions will be necessary programme, to include BYOD issues. Security to protect against BYOD risks, and these will culture could be improved through a combination be influenced by an organisation’s technology of computer-based-training, workshops and maturity and access to IT security resources. In bulletins. any case, management must carefully assess the Then, enforce the use of strong passwords and costs and benefits of BYOD to their business before where relevant personal identification numbers promoting, or even accepting, the use of personal (PIN) should be mandatory for authorised devices. devices on their network.

All data should be encrypted. If staff members are going to use mobile applications to store business

And if it wasn’t difficult enough protecting closed networks with fixed-location desktops, staff are increasingly relying on mobile and BYOD (bring your own device) equipment as part of their normal working day

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Robert Mackenzie is Partner at Scott-Moncrieff business advisers and accountants specialising in IT audit, internal audit and risk management.

Email: robert.mackenzie@scott-moncrieff.com

BUSINESS QUARTER | SPRING 15

NEWS

SPRING 15

>> Milne growth continues More than 250 new jobs will be created by the Stewart Milne Group in the next 12 months to support growth in its homes and timber systems divisions across the UK. The recruitment drive by the Aberdeen construction firm is a more than 30% increase to its 800-strong full-time workforce and will include skilled tradespeople, site management and quantity surveyors through to architects, design technicians and cost estimators.

>> Square deal secured M Squared Lasers has secured financial support from Barclays and the BGF. The company has received a £2.5m funding package from Barclays and £750,000 from BGF, following on from earlier investment of £3.85m in 2012. Founded in 2006, M Squared, based at the West of Scotland Science Park in Glasgow, and with offices in San Jose, California, employs more than 50 staff and has a turnover of £10m. It achieved growth of 40% in 2014 and expects to see similar growth this year.

M Squared employs more than 50 staff and has a turnover of £10m

>> Miller Group boss steps down Keith Miller steps down as chief executive of Miller Group at the end of March after leading the business for more than 20 years. Mr Miller, who turns 66, joined the company in 1975 and went on to run the mining and development arms before becoming the group head in 1994.

>> Sights set on expansion

>> Firm to supply Aldi

The founder of Barrhead Travel, Bill Munro, wants to open more travel agencies in England as the business maintained dramatic sales growth. The privately-owned firm increased revenues by 21% in 2014, to a record of £240m, up from £197m. Profits are expected to be up £500,000 on the preceding year.

An Angus vegetable grower has won a £250,000 contract with supermarket chain Aldi. Stirfresh, based at Upper Dysart Farm at Lunan outside Montrose, said Aldi will take approximately 10% of its total output supplying 58 Scottish stores. The limited liability partnership firm, owned by husband and wife Andrew and Anita Stirling, will supply Aldi with its soup mix and vegetable products.

>> Baxters’ first lady hails new acquisition a ‘milestone’ Audrey Baxter, the head of Scotland’s iconic food manufacturer Baxters which has bought the US company Wornick, supplier of military rations, describes the deal as a ‘milestone’. Ms Baxter, executive chairman, highlighted the importance of the deal as the Scottish company’s accounts showed it had made a pre-tax profit of £7.7m before exceptional charges in the 52 weeks to 31 May. This was down marginally from a pre-tax profit of £7.84m, before one-off costs, in the prior financial year.

>> Growth plan crystal clear Glencairn Crystal – suppliers to the whisky industry – are to take on 19 staff in the next three years after unveiling a £100,000 investment in production and manufacturing equipment at its East Kilbride headquarters.

The company say the investment is designed to power its growth ambitions, including overseas.

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NEWS

SPRING 15

>> BQ people on the move James Coyle has been appointed a nonexecutive director of Edinburgh brewery firm Innis & Gunn. Having worked for 20 years with Marston’s and Wychwood brewery, he helped to bring Innis & Gunn to market in 2003.

Adrian Grace has been appointed nonexecutive director to the Clydesdale Bank plc board. He has also joined the board of National Australia Group Europe Limited. Adrian is chief executive officer of Aegon UK PLC. It follows the appointment of David Duffy, of Allied Irish Banks, as chief executive officer of Clydesdale, who takes over from David Thorburn.

Campbell Dallas, one of Scotland’s largest independent accounting firms, has appointed.

Graham Cunning, a chartered Accountant, as corporate finance partner, and Murdoch MacLennan partner responsible for driving the firm’s business development across the owner managed business sector in Scotland.

Car leasing firm Pike & Bambridge have appointed Jack Ogston, formerly Clydesdale Bank head of division for corporate & leveraged finance, as non-executive director and chairman. Meanwhile, Nikki Rother has joined Pike & Bambridge as Operations Manager from Santander, while Piers Bambridge, director, has moved to the NorthEast to open the Aberdeen office.

Barclays Corporate Banking have appointment Stuart Brown as business development director. It marks a year of significant growth and activity for the company’s Aberdeen based oil and gas division. Stuart joins Barclays from the Bank of Scotland.

Open water swimmer Keri-Anne Payne, winner of a clutch of Olympic and World championship medals, has become an ambassador for Maclay Murray & Spens,

coach Mark Beaumont has joined the advisory board of Livingston James, the Scottish executive search firm. Jamie Livingston, director, said: “Having Mark join the Livingston James advisory board is a great addition to our business.”

the UK-wide law firm. It will support her throughout the Olympics and the various competitions leading up to Rio. She now trains and lives in Edinburgh, and won a silver medal in the open water 10K event at the Beijing Olympics in 2008, followed by gold in the 2009 and 2011 World championships.

Steve Thomson has joined the board of Commsworld as a non-executive director.

Steve brings 35 years of experience to the Edinburgh based firm after a career in marketing and investment banking for Burson Marsteller, Wickes, USB Philips & Drew and latterly as a managing director of Credit Suisse First Boston and Moscow-based United Financial Group. He is also on the board of Highlands & Island Enterprise.

Leith-based iMultiply Resourcing, a recruitment firm, has appointed Paul Atkinson as a non-executive director and announced the opening of its new Glasgow division. Paul, a founding partner in investment firm Par Equity, brings more than 25 years’ experience in the recruitment industry, and joins managing director Kirsty MacKenzie and her team.

Rod Mathers has been appointed as a partner in the corporate finance team at Henderson Loggie. Rod has over 20 years’ corporate finance experience gained in both the professional services market and industry. He was a senior member of a Big Four firm and partner of a large independent firm where he established the corporate finance practice.

Paul Hilton is the new chief executive officer at the ESPC, the property marketing company in East Central Scotland. The sales and marketing director has held a variety of positions in the industry over 30 years.

On the energy front, Mark Cubitt is the new chief financial officer of Denhom Oilfield Services and joins from the same position at Wolfson Microelectronics plc, while Roy Buchan is the new Chief Operations Officer of Ithaca Energy Inc. He was previously head of operations for BG Group plc. Meanwhile, Gary Cresswell has been appointed as a Non Executive Director of ADTI following its acquisition out of Transocean last year by Sun European Partners.

Keri-Anne Payne

Vanda Murray, a non-executive director of Edinburgh-based Exova Group, has been appointed as a non-executive director of Bunzl. She was the chief executive officer of Blick plc from 2001 to 2004, before becoming President of Europe for Stanley Security Solutions. Vanda was the UK managing director and group marketing director at Ultraframe plc from 2004 to 2006.

Adventurer, broadcaster and motivational

Loch Fyne Oysters, one of the UK’s largest oyster farms and exporter around the world, has appointed Cameron Brown as managing director. He was previously managing director of VMG Foods and Adelie Food Holdings.

If you’d like to include someone on the move, please email editor@bq-scotland.co.uk

BUSINESS QUARTER | SPRING 15

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AS I SEE IT

SPRING 15

HOW DO WE BREAK THE ‘OLD BOYS’ NETWORK?

David Watt says we must train all our board directors – and nonexecs – so they fully understand their roles in leading business

BUSINESS QUARTER | SPRING 15

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There are persistent moves from politicians and in the media to increase board diversity and certainly there is strong evidence that balanced boards are more effective and efficient and have produced better results.

The Institute of Directors – while being resolutely against quotas – is very supportive of the drive towards balanced boards which reflects a sensible and appropriate range of skills, interests and experiences; and is responsive to the demands on the organisation.

Many boards – and some with a degree of justification – are accused of being “old boys’ networks” yet the only way to break that positively is to build a band of potential board members who have the capability and the

SPRING 15

AS I SEE IT

Surely all our company directors should be trained. Indeed, so should all trustees or directors working in the third and public sectors. If you sit on a board and have an influential role... then you should be quite clear on exactly what your role is

expertise and are ready to serve. Such a group of people would be impossible to ignore.

The most important issue we face today is building the capacity of current and prospective board members – in particular the non-executive members. Being a good executive director does not necessarily make you a good non-executive as the skills are not exactly the same.

There are not many walks of life in a modern day Scotland where a qualification and some clear proof of training and expertise is essential but, somewhat bizarrely, it is possible to be the director of a sizeable entity without any direct or specific training.

Surely all our company directors should be trained. Indeed, so should all trustees or directors working in the third and public sectors. If you sit on a board and have an influential role in the future of the organisation, then you should be quite clear on exactly what your role is.

It doesn’t make sense that you can be responsible for a company’s operation or that of a large charity – or indeed a world level football brand – and yet have no requirement to be trained or undertake ongoing development and performance evaluation.

We see a lot – and almost daily – of examples of bad practice at this level of organisations and yet we don’t demand that the individuals involved are educated in this very specific skills and have an understanding of the role to the level needed. Certainly Scotland has many examples of well-run companies and agencies

but surely we should be demanding more certainty around that and their continuity of success through developing and supporting the best possible corporate leadership.

Understanding corporate governance and your role and duties within this heading is a vital background to your role in developing the future strategy of the organisation. Being in charge of the fate of the organisation is obviously an important and serious job and not one to be taken on lightly.

The Institute of Directors is not the only organisation offering training and development in this space but it is the only one offering a Chartered Director status and a certificate and diploma in company direction.

Of course I would encourage people to follow that route but most importantly would exhort them to get some specialised training regardless of its source.

The IoD is also running a project on developing board experience to get people close to how boards operate in advance of applying for any such posts. In addition there is a board mentoring system focused on those people who are “Tips for the Top” and who will,

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given the appropriate support and guidance go on to be very constructive board members.

We must mount a campaign to get all our boardroom leaders properly prepared to lead and if we do that we will improve boardroom and company performance and we will all benefit, as will our economy.

Moving in this direction is the key way to ensure that we have no more bank crashes or bankrupt football clubs and the key step to improving under-performing companies and organisations in all three sectors of our civic life.

Scotland has a number of high profile and successful corporate leaders in organisations of all sectors and sizes – like Sir Andrew Cubie or Lady Susan Rice or Sir Moir Lockhead.

They exemplify how strong leadership from the boardroom can really make a difference in bodies as diverse as the Scottish Rugby Union and a medium sized family business or a reinvented bank to a small educational charity.

All have benefited from this quality leadership and guidance and we should do all we can to rise up to these standards – so we must train and develop all our directors and then we will improve boardroom behaviour, company performance, and the wealth and wellbeing of our nation.

Few if any other steps would bring about such significant economic impact for a relatively small input. n David Watt is Director of the Institute of Directors in Scotland.

BUSINESS QUARTER | SPRING 15

ENTREPRENEUR

SPRING 15

A GAMES MASTER WHO PICKED UP THE CONSOLE PRIZE The Minecraft games phenomenon has also led to the transformation of Chris van der Kuyl’s 4J Studios in Dundee. BQ Scotland Editor Kenny Kemp catches up with Scotland’s serial entrepreneur in Glasgow Chris van der Kuyl has been knocking up the Air Miles. And while he could have his head in the clouds over his lucrative partnership with the world’s most successful computer games franchise of the moment – he’s remarkably down to earth.

He has just returned from Seattle, where he was in meetings with Microsoft, and then spent the day in Kilwinning. He’s also been to East Linton and home to Dundee. He’s back for a week with his children for the midterm break, then off again to San Francisco for a games development conference. We meet in the bustling SAS Radisson in Argyle Street in Glasgow before he heads off to an Entrepreneurial Scotland meeting. There’s hardly time for breath, never mind a coffee.

“The main thing for me at the moment is leading 4J Studios. We’ve had the most incredible few years. It’s all down to the relationship we kicked off with the guys at Mojang in Sweden who invested in Minecraft.

We are in the fortunate position to be able to take Minecraft over onto games consoles, which are Playstation and Xbox.”

Minecraft was bought by Microsoft for $2.5bn.

The game has been out on games consoles for three years and is a phenomenon. It’s a fantasy digital lego-type world where the players build

BUSINESS QUARTER | SPRING 15

the landscapes and environment with billions of pixelated cube blocks.

“Minecraft has become one of the most successful games of all time. The Microsoft deal is pretty interesting and the good news for us is they have committed to us. We are long-term partners for the development of all the console versions. It has been amazing and a total game-changer for us.”

Chris and his 4J Studios team (it stands for Dundee’s ‘jute, jam and journalism’ monicker and adds ‘joy sticks’) went to Stockholm four years ago to meet the Minecraft inventors.

The Dundee – and East Linton – company had arisen from the ashes of VIS Entertainment, which Chris set up in 1996, producing the likes of the best-selling game State of Emergency.

4J Studios are just one of Dundee’s hot games businesses, with the likes of Tag Games, who work on mobile platforms, recently announcing a doubling of its workforce.

“It was Microsoft Studios, the video game production wing of Microsoft, that set the deal up. We had been successfully delivering a whole range of products for them and they desperately wanted Minecraft on Xbox 360,” says Chris.

Mojang had spoken to some local Swedish developers but found they were not up to

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the task. They phoned Microsoft Studios who recommended the Dundee operation.

“The guys in Sweden said, ‘We don’t need money, but we’d love to see it happen too – but we’ve no idea how to make an Xbox game.’ We said, ‘Let us do it for you.’”

And it happened. At the time Minecraft had sold about one million copies for the PC. “It was a hugely successful indie game, and nobody knew how successful it would be on games consoles.”

Paddy Burns, the chief technology officer of 4J Studios, and a long-term business partner with Chris, who lives in East Linton, knew instinctively what was required.

He clicked with the Stockholm guys who were amazed that he knew as much about Minecraft’s inner working and underlying engine as the original developers.

“They very quickly understood that Paddy and the team could make this happen. It has all been about the relationships.”

But how would it work financially for the Scottish firm? “They asked us: ‘What kind of deal do you want?’ With hindsight, it was the best decision I ever made. I said, ‘We think you’ll sell a million copies but that’s an optimistic number, but we will do a deal where you pay us a royalty on anything over >>

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BUSINESS QUARTER | SPRING 15

ENTREPRENEUR a million copies. We break even at a million units and if its sells a million and a half, we’ll be delighted,” he explains.

He grins widely. The Xbox version launched in May 2012 reached four million sales by October. Mojang sold another 4.2 million units in the run-up to Christmas and during December of that year, making it one of the best-selling titles of all time. It continued to break records in 2013. Microsoft have sold over 15 million copies with some hefty royalty cheques being banked in Dundee. In comparison, VIZ Entertainment’s biggest year, when it employed 250 people, was in 2002, and it was earning less than 4J Studios, whose philosophy is to remain small and work “with the best of the best.”

And there are the continuing prospects for 4J Studios with PlayStation 3 (with several million sales already since December 2013), PlayStation 4, and Xbox One and PlayStation Vita. The game has also sold over 20 million pieces of added content.

“It has been transformational for us. Our little bit of the world is the console games but that’s enough to be getting on with,” he laughs.

It’s also been amazing for Minecraft too.

Markus Persson, aka Notch, had been working with King.com, a listed entertainment group for mobile technology, based in London and New York, and makers of mobile download games Candy Crush and Pet Rescue, and then decided to set up his own business. Minecraft had no external investment so by the time he sold the business to Microsoft, he was already making a few hundred million dollars. Markus Persson cleared about $2.5bn on the deal.

“To create that kind of money in five years without any external investment is phenomenal. He’s an interesting character as any 35-year-old billionaire would be,” says Chris van der Kyul.

He represented the new games elite enjoying their fame and fortune and he recently outbid music stars J-Z and Beyonce to buy a $70m mansion in Beverly Hills.

“While Marcus is a phenomenally creative brain, he understands the zeitgeist and has built the game he wanted to build. And suddenly the game became bigger than he ever believed it could. It took some risks at the start and did crowdfunding before anyone knew

BUSINESS QUARTER | SPRING 15

SPRING 15

I have a constant supply of parents and teachers, as well as kids, saying they adore this game what it was. He was developing Minecraft in his spare time. He asked for support and funding from the gaming community to set up the business and he got it in spades. He then brought in a professional team with a small group of young guys around him,” says Chris.

“It got so big.” He put his hand up and said, ‘My journey with this is over. It needs someone to manage this on to the next level.”

Chris van der Kyul is effusive about Minecraft, which involves building a Lego-style environment where players join together.

“It is, by far, the best game we have ever worked on. Once people get into it and want to play it, it is the most creative environment that anyone has ever made on a video game.

It is the only time in my career that I have a constant supply of parents and teachers, as well as kids, saying they adore this game and that it has a positive impact on their lives.”

He explained that from a business point of view, games sell on a six-monthly cycle and then require something fresh and challenging to keep the gamer involved.

“In six months, you have done most of the major sales, then you are managing the

22

decline, until you get the next version or sequel.

Minecraft is constantly updated, so that every couple of months there are major updates.

Traditionally you needed discs, now this is done through downloading over the net.”

After three years, at the time of writing, Minecraft was ranked number five and number six in the top selling games charts with the PlayStation and Xbox versions.

“That’s nuts. And it is 50-50 girls and boys too. The console version is for 6-12 years olds but there is also the community. A young generation of superstars who are playing the game professionally are publishing every day.”

He cites the likes of Stampy Longnose, who is a 24-year-old from Portsmouth, who uploads Minecraft story video to Youtube everyday.

“He’s the third biggest Youtuber in the world.

He has five million followers on Youtube – and has around 350 million views a month. He is probably the world’s biggest children’s media star. He’s bigger than Beyonce or Justin Bieber.

If you are six to 12, you will know him. What we are seeing is play patterns, when kids are watching his videos – and others like him – then going to the game and trying to do what he did in the episode. That’s an incredible marketing tool.”

It’s also a feather in the cap for East Linton, near Dunbar, where Paddy Burns has moved from the old newsagents to an old pub.

“We don’t see ourselves working on anything else at the moment. We’ve been speaking to Microsoft about it strategically for the future.

Minecraft is one of the biggest entertainment franchises in the world now. They announced a film option deal with Warner Brothers and there are the Lego toys. Our little bit is the console games.”

However, 4J Studios have also invested in TVSquared, the big data television advertising business set up by Calum Smeaton.

“We are looking at backing and investing in the world of digital media and things we really believe in and I’m excited about Calum’s business. It’s amazing. We’re also in the process of buying our first piece of commercial property on the Dundee waterfront.”

This is a vote of confidence for Dundee, now making the most of its regenerated waterfront and the forthcoming arrival of the V&A. “I’ve always been a huge believer in Dundee

SPRING 15

ENTREPRENEUR

The creation of Entrepreneurial Scotland Entrepreneurial Scotland has been created by the merger of the Entrepreneurial Exchange and the Saltire Foundation. Chris van der Kyul was instrumental in this merger.

“As chairman of the Entrepreneurial Exchange, I saw that the Exchange had been in existence for 20 years and done an incredible job for Scotland and for a number of entrepreneurs who have come through, including myself. For me, the network I have been able to build has been through the Exchange and it opened my eyes. My challenge was to do much more. It had a reach of 400 members and some would become successful. What many of us have seen is that enterprise and entrepreneurial activity changes all businesses. Clearly, the Exchange was ‘by entrepreneurs, for entrepreneurs’, which was brilliant, but I felt we were missing an opportunity in Scotland to really encourage entrepreneurial behaviour in corners. So as well as individual entrepreneurs, I wanted to help ‘intrapreneurs’ in big corporate businesses and in the civil service, local government, teachers and other public bodies. These people don’t see themselves as entrepreneurs, but entrepreneurial behaviour created the best performance.”

The Exchange had been working closely with the Saltire Foundation and saw the fellowship programme and it felt a natural fit for Chris van der Kyul. “It was about using the organisations as a springboard to create something more substantial and with more impact.” He sat down with Peter Lederer, the chairman of the Saltire Foundation, and then with John Anderson, the Exchange’s chief executive, and they all agreed that it was time to look at the next challenge.

It was about building something more strategic.“Without sparing anyone’s blushes, we could all see someone like Sandy Kennedy, [the Saltire Foundation’s chief executive], was the natural leader for this entrepreneurial drive in Scotland and the enlarged organisation.

“There was an element of trepidation at that point and we sat on the idea. Then we talked to others within the Exchange and there were only one or two – out of 400 plus – who have not welcomed the new organisations. The response has been overwhelmingly positive among the members.” This would mean wider networks for the entrepreneurs bringing in more organisations and collaborations. “We are not trying to consolidate the market. It is about communicating and promoting a far bigger and thriving entrepreneurial culture in Scotland.

So all the other organisations – that do amazing work – we want them to come to the party and help them achieve great work.”He says they should join Entrepreneurial Scotland, so that they have the strongest voice possible when speaking to government. “That seems to be working for us.” The biggest global entrepreneurial event for Scotland is being planned for the SECC Hydro in 2015. So watch this space.

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and its culture. Our future as a business and a technology investor will be closely linked to regeneration in Dundee and East Linton.”

The company is backing a community broadband project to ensure Scotland’s villages have the bandwidth to compete for digital work around the world.

He remains an adviser to the board of DC Thomson, the famed Dundee publishing house which owns the Beano, the Sunday Post, Dundee Courier, People’s Friend, and the Press & Journal in Aberdeen, and he is on the board of Brightsolid, a DC Thomson business, that is building a new tier III + data centre at the P&J’s Lang Stracht campus.

He’s optimistic about Scotland, saying the angel investment community, and also the likes of Pentech and Scottish Equity Partners, has been re-investing in digital business.

“We’ve a number of great companies but there are two that really stand out in the digital media and tech sector: Skyscanner, the flight comparison site, and FanDuel, the betting site for NFL and NBA sports fans. Both are backed by the angel and VC community and both I think will go to IPO or a sale and be worth billions. I don’t think people in Scotland realise how big these businesses are yet.

“I was in New York the other week and every media organisation I was talking to asked about FanDuel: ’How have this Scottish company done this?’ They have taken the American sports market by storm. Nigel Eccles, the chief executive, took a risk, when no-one else in the US could do so.”

He can’t leave without talking about RockStar North – who are fellow travellers in the games industry – and its move into the Scotsman’s former headquarter building in Edinburgh. It is the maker of Grand Theft Auto 5, which remains a massive global hit.

“It’s probably the single most valuable development organisation in the world and it’s based in Scotland.

“I think GTA5, just the one game, was bigger than the whole music industry for the year.

Certainly the Minecraft franchise is up there with its sales.”

An hour with Chris van der Kyul is a whirlwind of exuberant chat. He’s already picking up his bag and heading for the door. There’s much more to do for this driven entrepreneur. n

BUSINESS QUARTER | SPRING 15

EMERGING ENTREPRENEUR

National Emerging Entrepreneur Dinner 2015 In partnership with

The National BQ Emerging Entrepreneur Dinner 2015 at Newcastle Gateshead Hilton brought together both emerging and recognised entrepreneurs from across the UK for a celebration of enterprise and to recognise entrepreneurial rising stars from Scotland, the North East, Yorkshire and the West Midlands

Associate sponsor:

Held in association with MADE: The Entrepreneur Festival 2015, the dinner highlighted the individual stories of 16 shortlisted emerging entrepreneur finalists with one from each area being chosen to go forward for national recognition at MADE 2015.

The dinner was held in partnership with Gateshead College with other sponsors including Irwin Mitchell, Quantum Law, Lloyd Newcastle, BMW & Mini, Chromazone and U Name It Promotions and hosted by Mark Easton, BBC Home Editor.

The BQ Scotland Emerging Entrepreneur winner was Fiona Houston of Mara Seaweed, a businesswoman who has turned seaweed into a national brand.

Fiona Houston and Alexandra Milne founded Mara after meeting in the school playground, and discovered a shared passion for rediscovering Britain’s forgotten tastes and natural landscape. Their book Seaweed and Eat It explored Britain’s forgotten foods.

It was seaweed, one of Scotland’s most undervalued natural resources, that captured their imagination most, and they set up Mara to bring this ancient food to a modern audience. They sank their own savings into developing the brand and the products and in 2014 Mara launched its premium range of seaweed flakes into UK retailers such as Harrods, Harvey Nichols, and Whole Foods.

In 2015, the company is raising investment, mainly to build out the production facility and to invest in sales and marketing to enter lucrative export markets.

She said: “It is a real thrill for me that this unconventional vision – to build a British seaweed brand that nourishes body and soul – has been recognised by business leaders. The award is a great platform for future growth.

“Now back to the office to make Mara emerge out of the emerging category.”

Shortlisted entrants were chosen on the

Supported by:

MADE

The Entrepreneur Festival: Sheffield

BUSINESS QUARTER | SPRING 15

Wine sponsor:

Lloyd Newcastle

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basis of entrepreneurial character, business performance, business strategy, business impact, innovation and personal values. The three others on the Scotland shortlist were: Nathan Pike of Pike and Bambridge, Jude Ower of Playmob, and Calum Liam Leslie of Wooju.

As well as host Mark Easton, BBC home editor, the event also featured guest speaker Stephen Kee, managing director of Saks Hair & Beauty, the national award-winning hair and beauty salon group.

Bryan Hoare, director of BQ magazine, said: “Congratulations to Fiona who was the worthy winner in an extremely strong field of contestants who bear testimony to the vibrant entrepreneurial culture in Scotland. BQ magazine is all about profiling and encouraging entrepreneurs and we are delighted to be able to showcase them at the awards and to give Fiona such an important national platform as the MADE festival, which has been described as a Glastonbury for business.’’

Judith Doyle, principal and chief executive at Gateshead College, which was headline sponsor and partner of the national dinner, said: “Supporting the next generation of entrepreneurs and entrepreneurial thinkers is at the core of our strategy at Gateshead College and we were delighted to be part of the BQ event.

“Recognising those individuals that are embracing their ideas with commitment and ambition and helping to create employment and economic prosperity is extremely important. At Gateshead College we are inspiring our students to leave college not only with the qualifications, skills and knowledge within their chosen fields, we also want them to possess the confidence, strong work ethic, personality and softer skills that can make a real difference to the businesses they develop or the organisations they go on to join.” n

Signage and promotions supplied by:

EMERGING ENTREPRENEUR

Fiona Houston of Mara Seaweed (left) with Judith Doyle Principal and chief executive at Gateshead College and Kenny Kemp, Editor BQ Scotland

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Recognising those individuals that are embracing their ideas with commitment and ambition and helping to create employment and economic prosperity is extremely important

BUSINESS QUARTER | SPRING 15

INTERVIEW

SPRING 15

A SCOTCH TALE WOVEN IN HARRIS The Isle of Harris Distillery is a ‘social’ whisky company promising sustainable employment on the Outer Hebridean island.

BQ Editor Kenny Kemp meets Simon Erlanger, the industry veteran involved with the project Simon Erlanger probably has the finest Scotch running through his veins. This affable and softly-spoken insider is steeped in the arcane world of malt whisky making and global brand-building. Scotland’s whisky industry has a close-knit group of alchemists and marketing veterans who have defined the success of our most iconic product. Simon is one of them.

Now the accumulated knowledge of Erlanger – who helped steer the £300m sale of Glenmorangie to Louis Vuitton Moet Hennessy (LVMH) – has been distilled to perfection for the creation of Scotland’s newest Outer Hebridean distillery.

Of course, there’s a plethora of worthy distillery projects dotted across Scotland these days, with the Adelphi at Glenbeg, at Ardnamurchan; the Gartbreck single malt distillery on Islay; the Shetland Distillery, on Unst; several in Fife, including Kingsbarns, Daftmill, Lindores Abbey and Glenrothes; and there is the reborn Glasgow Distillery and the Falkirk Distillery bidding to revive the famous Rosebank brand.

All great projects. Yet the Isle of Harris Distillery, which involved Erlanger, stands out for its originality and its aspiration to be a long-term contributor to a fragile rural economy, best known for its hand-made Harris Tweed fabric.

“One day I was on business for Penderyn [the

BUSINESS QUARTER | SPRING 15

Welsh whisky company] in Montpellier in France, sitting in the square. It was a lovely summer afternoon. I got a phone call from Ian Macleod of Odgers Berndtson, the headhunters saying, ‘Simon, I have a really eccentric remit here!’

He was looking for a managing director to put together a business plan, raise the finance and then run a distillery on the island of Harris.

“It was one of those moments where you go: ‘Yes, obviously, why has nobody in the industry thought of doing this before! It was one of those ‘wow’ moments and just seemed like a fantastic thing to do.”

It took a guy with no knowledge of the industry – or how to make whisky – to come up with the left-field idea. The Isle of Harris Distillery is the brainchild of Anderson Bakewell, the founder and chairman, a musicologist, who has been connected to Harris for over 40 years.

“Anderson’s view was a distillery lasts. It could be here for centuries if it is done properly. This was sustainable. He just had in mind a very high quality distillery,”says Simon, sitting in his Charlotte Square office surrounded by maps, architects plans and whisky bottle samples.

It’s been a fascinating career path. A French and German language graduate, originally

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from the Cotswolds, he went into retailing for four years with Marks & Spencer, before joining Distillers Company as the European marketing manager for Johnnie Walker. [“It was a fantastic time, travelling around Europe selling whisky.”] The company became United Distillers, and later Diageo, and brought in Bain & Company management consultants who developed the ‘portfolio’ strategy for the brands. “Instead of all the brands in silos they were brought together as a portfolio.”

Simon Erlanger looked after drinks for Austria and Switzerland, setting up a subsidiary in the latter. He moved to Lausanne as head of sales and marketing. “With my new wife, we sat looking at Mount Blanc. Skiing all winter and walking all summer. It was pretty heavenly.”

This idyll didn’t last for ever as they were called back to Edinburgh when Simon became the European sales director of Glenmorangie plc in 1993. The company, set up in 1843 by William Mathieson, and run by Alexander Muir, James Durham and Roderick Macdonald, was eventually 51% owned by the Macdonald family, although a minority of its shares were traded on the London stock-market.

“It was an interesting time. Within nine months of arriving, the managing director, Neil McKerrow, who had been there

SPRING 15

INTERVIEW

for many years, building the Glenmorangie brand, left the company and the first nonfamily chairman came in replacing David Macdonald. It was the best of both worlds because we had the security of family ownership and yet we had the scrutiny of institutional investors and shareholders. We were take-over proof as long as the family wanted to keep the company.”

Peter Derbyshire, the managing director of Drambuie, became the new boss staying for three years until June 1998, when he was replaced by Paul Neep, who had been Glenmorangie’s marketing director. Erlanger, as global sales director, took over Neep’s marketing role on the board, and they worked together building value for the business.

“I always say the groundwork was done

by Neil McKerrow. He obsessively built the Glenmorangie brand to be Scotland’s favourite

It was one of those ‘wow’ moments and just seemed like a fantastic thing to do

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malt whisky. He introduced the marketing concepts of the ‘Sixteen Men of Tain’ and the spirit of tranquillity. He was very brand focused.

It was all about stability and continuity. That was the bedrock.”

Yet there was stagnation in the business and innovation was needed. The solution was the creation of wood finishes.

“When I joined it was 10-year-old and 18-year-old and that was it. The 18 had very limited availability. So we only had one bottle of the brand in a crowded sector. The introduction of the Wood Finish range with port, sherry and Madeira, suddenly increased the range and exposure. Glenmorangie invented this process and again Neil McKerrow instigated the research project into wood maturation, further developed after his departure by Dr Bill Lumsden, head of distilling.

We wanted to understand even better what impact the wood casks had on the >>

BUSINESS QUARTER | SPRING 15

INTERVIEW

SPRING 15

Road trip: The arrival and installation of two copper stills brought by truck from Siena in Italy

whisky flavour. There was a lot of science in looking at the casks, for example whether they came from north facing or south facing trees.”

Money went into research, taking the whisky out of an Ozark mountain bourbon oak cask (90% of Scotch whisky is matured in bourbon casks) and putting it for up to eighteen months in a port, sherry and Madeira barrel. They experimented with oaks that were charred or toasted, and air-dried. The results were startling: the flavours were changing and the whisky found a new level of taste.

“We were the pioneers of this and the industry followed our lead.”

Alongside this was the purchase in 1997 and development of peaty-flavoured Ardbeg on Islay, then owned by Allied Domeq, which was a complement to the lighter Tain-produced Glenmorangie and Glen Moray from Speyside.

“Ardbeg had been neglected somewhat, and it was a success story from the start. We created new branding and a whole personality for it and every year it beat our forecasts. It became a cult brand with people even tattooing themselves with the Celtic ‘A’.“ Then the Macdonald family, including David Macdonald’s four daughters, decided it was time to sell its 51%. In 2004, the firm with its brands was sold to Louis Vuitton Moet Hennessy (LVMH), the French luxury brand business, for £300m, with the 15 Edinburgh family members sharing over £100m.

“They didn’t have a whisky portfolio, so there were no production synergies and they kept the whole workforce. The fit was ideal and has taken the whisky brands to the higher level luxury premium market and expanded

BUSINESS QUARTER | SPRING 15

into Asia/Pacific. They went to a different level.

Premiumisation was the key, selling the stock at a higher price point.”

All of this wealth of experience has been channelled into the work with Isle of Harris. It is worth noting that further north, at Carnish on the Isle of Lewis, Mark Tayburn has been distilling the Abhainn Dearg Single malt since September 2008, but this is a different concept to the Harris project. From the start, the vision has been about the ‘Social Distillery’, creating a local enterprise on Harris that had the community at its heart.

Simon joined Isle of Harris Distillers as a consultant in May 2011 along with Ron MacEachran, former chief financial officer with Whyte & Mackay, who have co-led the £10.5m investment project.

“Ron has a superb financial brain. He and I put the business plan together and raised the money. We set a target of raising £10.5m.

The duo had to work out the on-cost of building a distillery in such as remote location, where everything has to be shipped in, and all products will be shipped out.

“When we looked at the cost of labour and building we realised it was going to be a difficult sell. The return on investment for an investor is some way down the track, and it would be relatively low rates of return.”

The conclusion was that they needed public funding to bridge the gap and get the project moving. Of the £10.2m, £2.5m would be required from the public purse.

“We were very fortunate. We got the biggest ever food and drink grant awarded in Scotland from the FPMC for £1.9m. Highlands and

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Islands Enterprise (HIE) then stepped up to the plate and exceeded our expectation with another £900,000. They have since helped to fund some of the development costs. This helped us attract a very special group of 17 private investors, all of whom are in for the long term and are buying into the vision”.

“However, we are not just the creators of 25 jobs: we want to be the catalyst for economic growth on Harris. Hopefully, there will be spin-off opportunities and an increase in tourism as well. The Scottish Government and public sector agencies, such as HIE and Skills Development Scotland, have bought into this vision with SDS funding half of my team’s training.”

The distillery is now being built on reclaimed land in Tarbert, on the shores of East Loch Tarbert, where the CalMac ferry plies across the Minch from Uig in Skye. Two copper stills have been shipped over the snowy Alps from Frilli Impianti, a firm in Siena; the mash tuns supplied by Musk engineering, from Burton upon Trent, and then five 8,500 litre pine wash backs from Joseph Browns of Dufftown. Once all of this is completed, test distilling will begin.

There is no natural barley grown on windswept Harris, which is probably why a legal distillery was never sited here before, while the company has exclusive lease agreement to the water from the Abhainn Cnoc a ’Charrain.

“Chemically speaking, we believe, it is the softest water in Scotland. It flows over Lewisian Gneiss, a very hard and smooth rock so very little is picked up along the way. The spring water picks up a tiny part of peat and perhaps some salty sea water. There is a bit of mineral

SPRING 15

INTERVIEW

Whisky galore: The Isle of Harris distillery takes shape alongside a bonded warehouse for the whisky casks

but it is very soft water,” says Simon.

“We can do almost everything on site. We malt the barley, which we receive from the mainland, then use our own water and the fresh Outer Hebridean air.”

The distillery has a 90-year lease on the site from HIE. Alongside is a warehouse for storing 200 casks, and a small bottling plant. A larger warehouse for over 4,000 casks is being built three miles away on the Island’s west coast.

The first ‘Hearach’ single malt is expected to be ready in four years, producing the equivalent of 300,000 bottles a year. Meanwhile, an Isle of Harris gin, developed in association with Heriot-Watt University in Edinburgh, will be made sourcing local botanicals.

“We’ve had an entirely positive reaction from Harris residents. Anderson approached the project with such sensitivity. Local people see it for what it is: a socially-orientated enterprise.”

The head distiller is Kenny Maclean, who is also a local Harris crofter.

“I’m proud of this. Staying true to the ethos of the business, we have recruited a team entirely of local people. Nobody has come in from outside the island.”

The distillery team will be working alongside some seasoned whisky consultants, including Jim Swan, one of the geniuses behind the wood-finish whiskies at Glenmorangie, in Tain, as well as recent success story Kilchoman distillery on Islay.

“Jim is the guru of whisky-making and he’s helping with ‘spirit optimisation’ and he will be supporting Kenny. Jim will be helping with cask selection and process optimisation. What we have in this team is the most enthusiastic

What we have in this team is the most enthusiastic and passionate guys I have ever come across and passionate guys I have ever come across.

There is no way this is going to fail.”

“We’ve allocated 200 barrels from the first year’s production for individuals, through our Cask Ownership Scheme. You are not allowed to buy for investment, just for pleasure. A cask is £2,500 which will give you 300 bottles of Isle of Harris malt. The figure does not include VAT, spirit duty and bottling which will treble the cost. But it’s still less than £30 a bottle.”

The sale of these early casks has been helpful in pulling in cashflow for the new distillery, and there are still a quarter up for grabs.

“Whisky is a long-term business: it’s not about instant gratification. This has brought in early revenue which is really important. Everyone has a personal story and I make a point of speaking to everyone in person who has bought a cask.

It’s fascinating that people want a piece of island history.”

The Isle of Harris gin bottle has been designed by one of the leading drink designers, Stranger & Stranger. It is a herring-bone Tweed effect and is slightly imperfect – deliberately so – and feels like an ocean-washed pebble.

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The whole project has delivered local work around the Highlands, for instance the local employment work was handled in Inverness.

“I needed an employee handbook, terms and conditions, and help with any future issues and challenges. I spoke to Malcolm Mackay [the chairman of United Employment Lawyers], who had done work for me in a previous role, and told him about our whisky journey on the Isle of Harris. He loved the story and wanted to work with us.”

Malcolm Mackay was able to recommend employment specialist Ewan Stafford of Macleod & MacCallum in Inverness, a member of the UEL network. Simon explained: “We met Ewan in Aviemore and briefed him on the ethos of the project. The application of best practice is central to our strategy. We explained the values of the ‘Social Distillery’ and its importance to the community.”

Ewan understood the task and was sensitive to the distillery’s human resource requirements.

“He developed a contract and an employee handbook, all based on our values for the business. We’re very pleased with the results.

“It’s been about keeping as much of the work in the Highlands and Islands region.”

For Mac&Mac, one of the Highlands’ largest law firms, this was also about helping to play its part in securing and sustaining employment on the islands.

Meantime, the operations have moved from the Charlotte Square offices where the concept and idea was matured to the full-time working on Harris. This whisky-making tale on the Outer Hebrides will be one to savour – along with a glass of Hearach. n

BUSINESS QUARTER | SPRING 15

UNIVERSITY UNIVERSITY of of STRATHCLYDE STRATHCLYDE

TECHNOLOGY & INNOVATION CENTRE

THE FUTURE OF ACADEMIC & INDUSTRIAL COLLABORATION

www.strath.ac.uk/manufacturing The TheUniversity Universityof ofStrathclyde Strathclydeis isaacharitable charitablebody, body,registered registeredin inScotland, Scotland,number numberSC015263 SC015263

TIC TIC BQ BQ Spread.indd Spread.indd 2-3 2-3

The Technology & Innovation Centre at the University of Strathclyde is a hub for world-leading research, transforming the way academics, business, industry and the public sector work in partnership.

We’re working together to find solutions to challenges in areas of economic importance. We’re helping companies to compete globally while offering them tailored support at a local level.

Our aim is to translate fundamental research, development and innovation in enabling technologies clustered around four key themes:

HEALTH MANUFACTURING FUTURE CITIES ENERGY www.strath.ac.uk/tic

06/03/2015 17:31

COMMERCIAL PROPERTY

SPRING 15

Scotland at the forefront of real estate investment revival, £200m project could deliver 3,500 jobs, consultancy joins the A team with move to prestigious new offices, property firm puts faith in Scotland 2004. There are other proposed developments such as Capital Square at Morrison Street, New Waverley, Fountainbridge and a further building at Quartermile. Glasgow enjoyed a strong second half of the year with a number of large deals taking place in the city centre; the largest of which saw Network Rail acquire 48,570sq ft of space at 151/155 St Vincent Street in addition to a further 20,525sq ft at George House. Total take-up reached 403,630sq ft in H2, bringing the 2014 total to 671,937sq ft. Despite 470,000 sq ft of new space due to be delivered in the first half of 2015, overall supply levels fell in Glasgow, particularly on new and early marketed space. However, the level of pre-lettings means the overall impact in 2015 will be minimal.

>> New lease agreed >> Real estate deals soar Scotland is among the top three regions in the UK for real estate investment as volumes hit a record £65bn in 2014, according to property agents Jones Lang Lasalle. One of the major drivers of growth in investment volumes was capital flows into the UK regions, which hit £28bn, a 70% rise from the previous year and the highest on record. Real estate investment in Scotland has increased by 82% since 2013 to £3.2bn. Office deals in Glasgow city centre rose by over 30% in 2014 – proving the vibrancy of Scotland’s largest city. There were 129 transactions, compared with 99 in 2013. Approximately 643,442sq ft was taken throughout the whole year, only a small decrease on 2013’s 677,564sq ft.

Alistair Reid, director for JLL in Glasgow, said: “The Glasgow office market performed strongly throughout 2014 with a number of high-profile transactions.”

Meanwhile, CBRE, the commercial property and real estate services advisor, pointed to the highest level in demand since the start of the downturn. Office take-up in Aberdeen totalled 1.03 million sq ft in 2014 – growth of 44% compared with the previous year.

BUSINESS QUARTER | SPRING 15

This was boosted by the second largest occupational deal in 2014 in the UK with Aker Solutions’ pre-let of 335,000sq ft at Aberdeen International Business Park.

Following a long shortage of Grade A space, speculative construction has started in Aberdeen. Dandara’s The Point (80,000sq ft) and Knight Property’s The Capitol (74,000sq ft), both city centre schemes, are now on site and are due to complete in 2015. Titan Investors’ Silver Fin building (132,000sq ft) and Muse’s Marischal Square scheme (173,000 sq ft) are also expected to commence this year. Take-up of office space in Edinburgh in the second half of 2014 was 411,923sq ft, taking the full year total to 873,072sq ft, up 18% on 2013 – the highest annual total in Edinburgh since 2004. Standard Life’s 108,564sq ft deal at St Andrew Square significantly boosted the total figure. The amount of ready-to-occupy space in Edinburgh fell for the third year in a row in 2014, with just 439,500sq ft of newly completed space available. This was down 60% since the supply peak of 2009. With levels expected to fall further in 2015, overall supply in the city is set to become the lowest since

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A ground floor office suite at Cradlehall Business Park in Inverness has been leased by environmental consultancy EnviroCentre (Highlands & Islands) for three years at a rental of £8,300 per annum. The 470sq ft office is set within Alder House, a two storey multi-let building providing 8,000sq ft in total and has been leased by Shepherd Chartered Sureyors.

>> Turnover tops £150m Commercial property consultancy GVA has increased turnover to more than £150m, and recorded a 33% rise in profit for the year to 30 April 2014. The company, which trades as GVA James Barr in Scotland, saw its revenues increase by 7% to £157.6m, up from £147.3m the previous year. The significant rise helped pre-tax profits to climb even higher, increasing upward from £7.8m in 2012/13 to £10.4m. GVA merged with Bilfinger Real Estate to establish a new European real estate consultancy in July 2014. The merger gave GVA access to BASF, a long standing client of Bilfinger, as sole selling agent on a 63 acre site in Paisley, Scotland.

SPRING 15

COMPANY PROFILE

PRG shows way with boost in turnover PRG, Scotland’s largest privately-owned professional recruitment business, and associate sponsor of BQ, has seen its turnover jump almost 75% to £10m The firm’s spectacular growth, from £5.75m in 2013, has coincided with a major rise in staff numbers who were hired to take advantage of the opportunities afforded by the improving economy.

Profits also increased from just under £250,000 last year to over £400,000.

Founder and chief executive Steve McCutcheon said: “In this past year we have delivered a revenue rise of 74%, which is a magnificent achievement by any standards.

“Most of that new business has come from providing temporary staff placements and while we welcome these opportunities, margins are lower in this area than in permanent recruitment.

Consequently, our 2014 operating margins rose by 67% on 2013, slightly lower than revenue growth rate but still delivering huge growth.

“Our 2014 profits grew notwithstanding a massive investment for growth programme which included new premises for our Glasgow city-centre HQ in West George Street and more than 30 additional staff. “These new members of the PRG team required specialised and costly induction and training. There then followed an inevitable period of sub-standard productivity until the recruits got up to speed.

“Another major expense was our investment in new technology.”

According to McCutcheon, PRG, who are also based in Edinburgh’s South St Andrew Street, are set to

Steve McCutcheon is founder and CEO of PRG.

continue this rapid growth in 2015. He forecasts a rise to over £17m based on a continuing improvement in the economy. And he explains, PRG will be a £50m company by 2020.

“We currently operate in 12 professional and technical recruitment sectors – Accounting & Finance, Financial Services, Business Change, IT,

Our 2014 profits grew notwithstanding a massive investment for growth programme which included new premises for our Glasgow city-centre HQ in West George Street and more than 30 additional staff

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Business Support, Legal, Risk, Insurance, HR, Oil & Gas, Subsurface and Geoscience and Construction – and we are experiencing rising demand in all of them.

“Certain markets have big challenges, eg Oil & Gas recruitment faces a more uncertain 12 months due to the current low price of oil. However our positioning re key resilient energy markets worldwide means we are satisfied that we’ll continue to press ahead in this practice area.

Also, other sectors also face their own difficulties, though again I’m very confident our business model and the quality of our people will see us able to continue delivering rapid growth.

“The indications are that, increasingly, demand from here on in will be for permanent staff and consequently I anticipate our 2015 margins to be over 120% up on 2014.

“We intend to increase the number of sectors in which we operate and also open new offices in Aberdeen, Bristol, London, Dubai and Houston.

The first of these will be Aberdeen in 2015.

“These major additions to the company, along with the new staff we will require, will have a positive impact on the balance sheet and I am targeting a turnover of £25m in 2016, £33m in 2017, £39m in 2018 and £50m by 2020.”

If you would like to discuss the market generally, address a specific requirement or talk about your own situation, please contact PRG on 0131 550 1460 / 0141 331 9380 or visit www.prgrecruitment.com

BUSINESS QUARTER | SPRING 15

COMMERCIAL PROPERTY

SPRING 15

An Edinburgh building set over six floors, The Cube offers Grade A office accommodation with a stunning five storey atrium and feature cantilever meeting space.

Only ground floor space remains available in the building, where other occupiers include Glenmorangie, Bowleven, Bailie Gifford and Starbucks.

>> £200m project could create up to 3,500 jobs One of Edinburgh’s largest commercial mixed-use projects is progressing well with work above the ground. Progress on the £200m development has been largely underground, with contractors carrying out strengthening works on the Victorian railway tunnels beneath the site. The first buildings are earmarked for completion by early 2017. The Haymarket is being developed by Edinburgh Haymarket Developments Ltd, a joint venture between Interserve and Tiger Developments. It is one of Edinburgh’s biggest commercial projects of the last ten years and is expected to create around 3,500 jobs. Meanwhile, up the road, Scottish Widows Headquarters at Port Hamilton in Edinburgh has been sold for over £105m, reflecting an initial yield close to 5.10%, making it the largest ever office transaction in Edinburgh. The purchaser is an overseas based private client of HSBC Private Bank. JLL and CBRE acted on behalf of the vendor, Aberdeen Asset Management; CMS were legal advisors. Knight Frank and Brodies LLP acted on behalf of HSBC Alternative Investments Limited. This was the key deal of the year accounting for over a third of all investment activity in 2014.

>> LSH puts faith in Scotland Lambert Smith Hampton has hired Ewen White as a Director in its Capital Markets team in Glasgow. Ewen’s appointment is part of LSH’s investment in Scotland which sees the arrival of Andrew Sheills as a Capital Markets Director in Edinburgh. Their combined experience will help drive growth for LSH in the country. Mike Thatcher, regional operations director at LSH, said: “We are recruiting some of the brightest, most ambitious property professionals in Scotland at a time when LSH is poised for further growth. Ewen’s appointment is the latest example of this approach.”

BUSINESS QUARTER | SPRING 15

>> WYG join Grade A team WYG, the global programme, project management and technical consultancy, has relocated to offices at The Cube on Edinburgh’s Leith Street. The firm has signed a lease agreement with landlord Hasna Invest for the 5,467sq ft. fourth floor office space, as well as two car parking spaces. WYG’s current offices in George Street will be vacated by 30 March. WYG employs over 1,400 people and operates from more than 50 locations across the UK, Europe, Africa, Asia and the Middle East. The multi-disciplinary firm offers the services of designers, project managers, transport planners, engineers, surveyors, town planners, environmental specialists and business services professionals.

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>> LSH puts faith in Scotland A new community of Grandhome with an investment of nearly £1 billion in up to 7,000 homes, a new town centre, a business district and amenities - has been launched in Aberdeen. The Grandhome Trust has unveiled the design for a new community building at the heart of the first neighbourhood, to be known as Laverock Braes. Edinburgh-based practice Reiach and Hall Architects has won the brief to design Davidston Hall following an architectural competition held by the Trust. The contemporary building will include a multi-use hall, external public space, a café and small retail unit and is designed to host a wide range of events and functions. The Grandhome Trust has announced the three housebuilders – Bancon Homes, Cala Homes and Dandara – that have been selected to deliver Laverock Braes, which will comprise around 600 homes and be built over the next four to five years.

Grandhome occupies a 320 hectare site located four miles north-west of Aberdeen city centre. With long-term potential for 7,000 homes, the community is being planned and developed by trust, a familyled entity which has held the land for more than 300 years.

IP 10 0

THE UK’S INTELLECTUAL PROPERTY LEAGUE

THE IP100 - RECOGNISING THE VALUE OF IP IN YOUR BUSINESS BQ Magazine is delighted to announce the launch of the IP100, the UK’s Intellectual Property League Table compiled in association with Metis Partners, an award-winning boutique IP solutions firm.

Published initially in relation to Scottish companies prior to our UK wide launch, the IP100 will profile and rank innovative firms within Scotland’s private sector by intellectual property (‘IP’) value, identifying those businesses which have significantly invested in their IP in the form of IP management policies, R&D activities and IP commercialisation.

Despite IP assets underpinning the competitive advantage of most businesses, IP remains one of the least recognised assets within a business as it is rarely captured on a company’s balance sheet. Yet IP assets are growing in importance. In 2011 the UK market sector invested £126.8bn in knowledge assets, compared to £88bn in tangible assets. Since the recession of 2008-09, intangible investment has not only recovered but grown.1

to take security over these valuable assets under different corporate structures.

The IP100 will be an annual ranking of companies by IP value based on a rating of the IP asset strength of the business and the company’s track record in exploiting their IP. The process involves obtaining IP-specific data linked to main IP asset classes including brands, software, patents, trade secrets and critical databases. An IP scorecard will then be applied to calculate an IP score for each business and the IP100 team will rank the Company based on the results of the scoring.

So whether using IP to boost the exit valuation of a business, improve access to new markets, protect existing market share or creating new barriers to entry, IP now plays a central role in traditional business activities. IP also has the ability to play an important role in transforming funding options available to businesses, as IP assets can be used to raise finance, realise value on the balance sheet or restructure debt. Furthermore, finance providers are increasingly recognising the opportunity

The League Table will provide an insight into the potential value of IP in the companies which have entered the IP100, and will publish in Scotland in the autumn edition of BQ Magazine in September 2015 as part of a special IP report.

The IP100 is open to all UK companies to enter and details about the process as well as the information required can be found at www.bqlive.co.uk/IP100.

The IP100 is jointly managed by Metis Partners, an award-winning, boutique IP solutions firm operating from the UK and USA and BQ Magazine.

1 Source “Estimating UK investment in intangible assets and Intellectual Property Rights – IPO 2014

ENTER THE IP100 NOW

The IP100 is open to all UK companies to enter and details about the process as well as the information required can be found at www.bqlive.co.uk/IP100

INSIGHT

SPRING 15

Joanna Reynolds

It’s rather incongruous to see so many startups in the grand surrounding of Scotland’s biggest bank. But the magic appears to be working. Ian LeBruce, the managing director of Cappuccino Ads, is the brains behind portable advertising on the ubiquitous coffee cups. The coffee shops get free bio-degradable cups. With three billion cups set to be consumed by 2018 – that’s massive potential, particularly when you’re typically holding the warm receptacle for up to 20 minutes, and likely to read the messages on the side. He’s also one of scores of young companies emerging in this vibrant new space in Scotland’s capital. So, firstly, how is his business?

“It’s going very well for us. We’ve got two new campaigns going out today for Teapot Trust and Sense Scotland with another five lined up for the next few months. The coffee body scrub side project is going well and we’re hoping to see it in spas across Edinburgh soon” says Ian, as he takes BQ on a tour of the Desk Union space.

“We’re gearing up for a huge Edinburgh Fringe Festival and a lot of the work going forward will be focused on that. It’s the busiest month of the year for us and requires a lot of planning! One of the campaigns we have lined up is for Enterprise Campus, something close to home as I’m still involved in the academic world when I find some spare time.”

BUSINESS QUARTER | SPRING 15

Ian LeBruce

Russell Dalgleish

Natalia Equihua

DESK UNION BQ dropped in to the Desk Union’s buzzing upstairs space in the Royal Bank of Scotland’s Georgian offices in Edinburgh. Ian LeBruce of Cappuccino Ads was able to show us around and introduce the emerging businesses.

Photographs by Kevin Gibson Can you tell BQ about this amazing prime office space in central Edinburgh?

“The space has been provided by RBS and is run by Desk Union, who operate co-working spaces on behalf of corporate organisations. We’re loving working from here. Firstly, the location is amazing – right in the heart of Edinburgh – and the grandeur of the surroundings are very impressive to our clients.“ Who’s been the driver for making this such a buzzing place?

“The main driving force is Victoria Arnold, the chief executive officer of Desk Union. I’ve known her for a few years and she is amazing.

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I’m very impressed with the environment that she and the team have created here. When we graduated through the Entrepreneurial Spark process, Desk Union was the logical place to come as it keeps the collaborative community vibe going plus it’s flexible enough to meet the needs of our growing business. We’ve worked closely with a few of the members in the space before, namely We Are The Future and Big Noodle and are looking forward to working with others too!“ Ian explained the co-working space has been driven by Vicky, working closely with Chris Wilson, managing director for the RBS branch and private banking for Scotland RBS.

SPRING 15

Bruce Walker

Steve Jeans

INSIGHT

Livia Innocenzi

Josh Quigley

...WE’RE LOVIN’ IT “Chris and Victoria share a passion for this emerging community, working in collaboration and growing the UK’s small business community. We’re all grateful to the bank for having such foresight. A lot of the current members have joined through recommendations from ourselves too.

Can you tell us more about the businesses in Desk Union?

“There are now more than 70 members at Desk Union. Alongside We Are The Future & Big Noodle, we also have Sharkdog, Churchill House School of English, Klozers and LoCa Lab to name but a few. It’s a really diverse business community which adds to the friendly atmosphere and opportunities for collaboration.

How do you interact in this evolving community?

“We have a serendipity map on the wall showing some of the connections between members, with several companies based here sharing clients and networks. Desk Union have done really well at creating a homely environment that encourages us to interact over a cup of coffee [Editor: in

a Cappuccino Ads cup we hope!]. They also host regular events – both formal and social – that bring the community together in a positive way. Being surrounded by like-minded people creates a really positive environment.

What have you learned building Cappuccino Ads as an emerging Scottish businesses?

“Increase your network as much as possible:

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co-working spaces like this are great for that. Take opportunities when they present themselves and get comfortable being uncomfortable,” he says.

Can you define the mood of the firms in Desk Union?

“Excited and full of energy!”

Is there anything else that you’d like to add?

“We love visitors, so pop in and say hello!” n

BUSINESS QUARTER | SPRING 15

BUSINESS LUNCH

SPRING 15

John Anderson, the former chief executive of the Entrepreneurial Exchange, has moved into a more academic role at Strathclyde Business School. He talks to Ken Symon about the useful learning

Lunch with BQ on a day when your father’s obituary has appeared in The Herald is perhaps not the most auspicious timing and perhaps led to John Anderson, director of the Hunter for Entrepreneurship at Strathclyde Business School, being in a particularly reflective mood.

Given Anderson’s ‘typically Scottish professional background’, the fact that his father was a leading accountant with the then firm of Thomson McLintock and his inherited aptitude for numbers it was little surprise that the son followed the father into accountancy.

He also followed his father’s advice in going to work in London where Anderson senior felt he missed out on a lot of mergers and acquisition work that he could have had if he had moved south.

The other piece of counsel was “if you can get to the States where they have the highest standard of professionalism in accounting,” a view, which John Anderson chuckles, was

“highly ironic given what happened with Enron etc.” He followed both bits of advice going to London in 1986 and to Chicago the following year.

It was when he was in America working with Ernst & Whinney (forerunner to Ernst & Young) that he caught the entrepreneurial ‘bug’ which was to define his career. Because of the interest he had shown while there he was sent on a three-day course in Cleveland with Babson College, the leading US exponent of entrepreneurship education. It was a light bulb moment for John Anderson. “I said, ‘That’s what I want to do’. It was as clear as that.

In an instant.”

It would lead to a change of direction from the route to partner that he had in front of him. “I was going to do the BP job in London – one client for two years – I would have made partner, lived in Surrey, got a train into Waterloo every day and do very nicely thank

you. But I thought ‘do I want to bring up a family in Surrey? I want to come home.”

He worked in the firm’s Glasgow office where his approach began attracting more entrepreneurial clients including David Sibbald who was then building communications software business Atlantech Technologies, which was sold to Cisco Systems in 2000.

“I went with David on that journey,” he says.

He was also contributing a monthly Traiblazers column to The Herald newspaper that highlighted entrepreneurs who were innovating in the way they went about their business.

This gave him exposure to a whole range of new thinking on business that he chose to study in more depth when Ernst & Young (as the firm had become) put him through an MBA at Strathclyde University.

He produced what was essentially an approach to targeting entrepreneurial businesses that >>

REFLECTIONS ON AN ENTREPRENEURIAL JOURNEY BUSINESS QUARTER | SPRING 15

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BUSINESS LUNCH

was not to take off at the time but would provide the seeds for what became the UK’s Ernst & Young Entrepreneur of the Year programme.

But his initial approach was rejected. He says now: “I was astonishingly naïve about making change happen in a large organisation.”

So he took his business plan, reformed it and took it to rival firm Price Waterhouse where he set up their entrepreneurial services practice.

He worked in a number of different roles including for Grant Thornton before he says he ‘retired’ from his professional life aged 40.

He was then doing management accounts

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for the Entrepreneurial Exchange and he felt that from his exposure there, all was not right with an organisation that was meant to be about entrepreneurs sharing experience, not a business development tool where people were trying to sell to each other.

Anderson suggested to Exchange chairman Sir Tom Hunter that he work full time for the organisation seeking to build its brand and develop its role beyond the existing eventsbased programme.

He started working for the Exchange three days a week, an arrangement that allowed him to develop other business interests.

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“When I took it on Sir Tom Hunter said this will take a while I want you to commit to five years. I said ‘Can we review it in three.’

I was there for 12,” he says.

Anderson left the Entrepreneurial Exchange quietly in September though it was marked properly at the formal dinner in November at which the Exchange joined with the Saltire Foundation to form Entrepreneurial Scotland.

At the dinner Anderson was given a lifetime achievement award. “There were a lot of tears that day too,” he says.

His role at the Hunter Centre for Entrepreneurship comes as he has developed

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a different approach to entrepreneurship from his previous thinking. “Start-ups are fantastic,” he says. “Entrepreneurship, however, is not just about start-ups, it’s about growth and that’s whether you start a business, whether you buy a business, do a management buy – out, buy – in or whatever or inherit it.”

One of the fruits of this new approach is a programme at the Hunter Centre focusing on an entrepreneurial approach to the family business sector. Anderson highlights the reflections of Marie Mickel on the five generations of Mactaggart & Mickel, which she described in one of a series of family business events at the Strathclyde Business School talks as “inter-generational entrepreneurialism.”

Each succeeding generation built on the business they had inherited and took it to a new level of growth - the firm’s original founder started to realise there was an ambition for home ownership not just social housing, then there were improvements in construction technique - each generation has built on a platform to innovate.

Anderson says wryly: “It’s quite contrary to the idea that you have the entrepreneurial innovator in the first generation, the second generation sort of steadies the ship and the third generation buggers it all up for everybody – clogs to clogs in three generations.”

The Business School’s Growth Advantage programme he describes as the first core growth programme for ambitious growth orientated entrepreneurs from a Scottish business school.

He says there were a number of such programmes in England such as the Goldman Sachs 10,000 programme, the lead programme at Lancaster and a similar one at Cranfield but there was nothing of its kind in Scotland.

The programme developed with the support of Santander Corporate and Commercial takes a cohort of 15 entrepreneurs through four two-day programmes over a 10-month period. The fact that it is scheduled over four Friday-Saturdays means that the entrepreneurs only have to have four weekdays away from their business.

BUSINESS LUNCH

Anderson is delighted that the course is now up and running and that Sir Tom Hunter is going to do a closing contribution to the first programme.

Another programme that the Hunter Centre is going to introduce is a new approach to developing and professionalising sales management.

While Professor Eleanor Shaw, professor of entrepreneurship and head of the Hunter Centre, ensures the teaching and research at the centre are kept at the highest quality, John Anderson will build and maintain the

centre’s links with entrepreneurial companies in Scotland and further afield.

“I don’t think Santander would have come to us if it had just been academic, without the contact with entrepreneurial businesses” he says.

“The idea is that I am someone who is not tied down by a research commitment or a teaching commitment. I don’t think it has quite been done this way outside the Hunter Centre.”

Once again John Anderson is breaking the mould and has come a long way from his ‘typically Scottish professional background’. n

Malmaison does the Honours If you haven’t set foot in the Glasgow Malmaison for a while you will not have seen the £1.5 million refurbishment of its event spaces nor its new restaurant. The bottom floor of the former Greek Orthodox church building has been transformed with the introduction of Michelin Star chef Martin Wishart’s Honours brasserie. It features a glittering domed ceiling, rich, red circular booths in the middle of the restaurant and tables round the outside amid a lighter décor. The menu is a mix of modern and traditional French cuisine and has much to impress. We each opted for the Loch Fyne Crab Marie Rose complete with white radish, espelette pepper and wheat cracker from an impressive selection of starters that included oysters and scallops. For the main course we plumped for something from the Grill section of the menu. Each of us opted for a taste-filled steak from the range of Glenarm Shorthorn Himalayan Salt Aged Beef options on offer. The 250g of Sirloin cost £25 and was the best steak I have enjoyed for a while. We enjoyed a bottle of Merlot but there is a good selection of wines to suit a range of tastes. We both resisted the temptation to choose from a list of desserts that included Apple Tart Tatin for Two, Vanilla Crème Brulee and the Soufflé De Jour. The bill for such a lunch would range from £80£100 but it would be a good choice for a central Glasgow lunch or dinner for a guest you were seeking to impress with something just that bit more special. www.malmaison.com/locations/glasgow/the-honours/

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BUSINESS QUARTER | SPRING 15

LAING ON WINE

SPRING 15

A PAIR OF GEMS READY TO ENJOY – ALMOST! Michael Laing, OBE, the owner of Laing the jeweller in Edinburgh, is a recognised world expert on diamonds.

And, as a chevalier of Burgundy from the Confriéré des Chevaliers du Tastevin, he knows quite a lot about wine too. BQ asked him to sample two bottles

I can see a correlation between diamond cutting and wine-making. While it is Mother Nature who makes the grapes and creates the stones, it is the human hand which makes it extra special. You can find two rough diamonds that appear the same: yet in the hand of the master cutter you’ll get 50-70% more light and shimmering beauty, than with an ordinary gem cutter. It is exactly the same with wine. I see the enjoyment of wine as a lifelong quest where you are always learning something new.

We all start off with the sweet wines, then the dry whites before turning to the reds and back to whites again. Sometimes, it can be a big over-oaked full-bodied flavour that we savour, then something lighter and fruiter and crisp for a summer afternoon. You are always moving on, seeking greater subtleties and, like a falcon moving along an ever-decreasing branch, never stepping backward, only ever forward.

In general, I love the wines of the Burgundy region. I prefer Pinot Noir with thinner skins from colder terroir. I was fortunate to meet the influential cellar master and oenologist Michel Rolland when I was made a Chevalier of Burgundy from the Confriéré des Chevaliers du Tastevin at the Clos de Vougeot, at St George, in November 2013. The Hospices de Beaune holds a charity wine auction over the festival weekend of food and wine which is a great occasion. And I have enjoyed and collected wine for over 25 years.

So I was delighted to be asked by BQ to sample two bottles of mid-range wines.

DE MORGENZON MAESTRO WHITE 2013 This is an enormous South African white from winemaker Carl ven der Merwe! Big flavoured grape varieties that I generally love – Viognier, Chardonnay, Chenin Blanc and Roussanne – altogether in the same blend that gives a

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gobsmacking white of higher alcohol (14.2%).

It has a slightly aromatic nose giving both fennel and citrus fruits and the same counterpoints in texture of both creamy balanced with crispy acidity, with hints of apricot, peach and grapefruit with lemon. In my opinion, I think this wine needs a little longer to meld together.

At present I would drink it with strong spicy/ chilli dishes, but it would also be fabulous with strong cheese.

ESPORAO RESERVA TINTO 2012 This is a Portuguese Red blend from Herdade do Esporao, in the Alentejo region, from winemaker David Baverstock and Luis Patrao.

The legs on the glass reveal the higher alcohol of 14.5%. The nose is dark red jammy fruits and toast with a hint of dark chocolate. Now the taste was a surprise! Much sharper and medium bodied than I would have expected.

The fruit is still young and unripe. The dry, tannie finish suggests this wine has ageing potential and needs another few years to mellow and develop. I would recommend that you decant it well and let it breathe before quaffing. Today I would drink it with creamy mushroom risotto to let the sharper style cut through it. While these wines might not be the finest diamonds, they certainly have the potential to be little gems that you can enjoy drinking. n The De Morgenzon Maestro White 2013 is £15.69 and the Esporao Reserva Tinto 2012 is £15.49. Thank you to Richard Meadows, Great Grog, 17 East Cromwell Street, Edinburgh, EH6 6HD. 0131 555 0222.

Free delivery for 12 bottles. And thanks also to Emma Offord and team at the Sheraton Grand Hotel in Edinburgh for the permission to take the pictures.

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LAING ON WINE

BUSINESS QUARTER | SPRING 15

MOTORING

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A TOAST FOR THE FRIENDLY GHOST When we asked Philip Rodney, chairman of law firm Burness Paull, if he’d like to test drive a Rolls-Royce Ghost, he was apprehensive. But he was able to put aside his reticence and briefly savour the joy of driving a true classic

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SPRING 15

There is an old Yiddish joke told to illustrate the two meanings of the word “schmuck”.

Mr Shapiro, an elderly widower, was having a lonely time in Miami Beach. He observed a man of his own age who was never without female companionship and constantly enjoying amorous advances.

One day he worked up the courage to ask him the secret of his success: “Mister, excuse me, what should I do to make friends like yours?”.

The man sneered and said: “Get a camel.

Then ride up and down Collins Avenue every day. Before you know it, everyone in Miami will be asking who that man is, and you will have to hire a social secretary to handle all the invitations. So Mr Shapiro bought a newspaper and looked through the ads. As luck would have it, he read of a circus, stranded in Miami and in need of capital. So he phoned the circus owner and within the hour he had bought a camel. The next morning, wearing khaki shorts and a pith helmet, Mr Shapiro set out on his camel down Collins Avenue.

Everywhere people stopped, gawked and pointed. Every day for a week he rode his trusty steed.

One morning, as he was about to get dressed, the telephone rang. It was the parking lot attendant to tell him that his camel had been stolen. Mr Shapiro called the police. Sergeant O’Riley answered.

“What…you say someone stole your camel?”

“That’s right”, said Mr S. “I have to fill out a form”, said the sergeant, “How tall is the animal?”

“From the sidewalk to his back, where I sit, a good six feet.”

“What colour is it?”

“Camel colour, a regular camel-coloured camel.”

“Was it male or female?”

“What?”

“Was the animal male or female?”

“How am I supposed to know that?

Wait a minute. Yes, it was a male.”

“Are you sure?”

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MOTORING

“Absolutely.”

“But a moment ago you said you weren’t sure.”

“I’m positive, officer, because I just remembered…Every time and every place I was riding on that camel, I heard people yelling: “Hey, will you look at the schmuck on that camel!”

Approaching the road test of the Rolls-Royce Ghost Series II, which I had been invited to do by BQ, I was a bit worried about being Mr Shapiro. In honesty, I was apprehensive about what people would say if they saw me in it. To put this into context, my daily driver is a two year old VW Up which according to WeBuyAnyCar.Com has a value of £6,265.

Turning up at Rolls-Royce Edinburgh and seeing the car that was going to be ‘mine’ for 24 hours was a wedding car white with white upholstery and specced with 21 inch polished alloy wheels didn’t exactly dilute my anxiety.

Sad to admit, I have had a lifelong love of cars. As my family will confirm, I will always >>

BUSINESS QUARTER | SPRING 15

MOTORING

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find an excuse to walk through a car park to get somewhere rather than follow the most direct route. Over the years, I have been lucky enough to drive other prestige cars such as Ferraris, Bentleys, a McLaren, a Maserati and various Porsches. However, I had never driven a Rolls-Royce (I refuse to refer to it as a “Rolls “ or a “Roller”). The closest I had ever got was in the 1960s, as a wee boy, sitting in the driver’s seat of my great uncle’s Silver Cloud III while it was parked in his garage. I can still remember the smell of the leather, the smoothness of the chrome switches and the comfort of your shoes sinking into the lambswool rugs. It also had a record player in the front which played singles. I imagined my uncle saying to his chauffeur, “Would you mind putting on ‘Itchycoo Park’ by the Small Faces?” and Mr Thomson (for that was his name) struggling to put on the disc while driving through the rainy streets of Pollokshields. Sitting in the Ghost, the similarities were immediately evident (except for the lack of a record player). The dashboard has the sheen of a Bosendorfer grand piano, the seats look like Linley armchairs and the air vents are controlled by aluminium organ stop levers that you just want to play with all day. And the lambswool rugs – forget 0-60 in 4.8 seconds or a top speed of 155mph – this is what a Rolls-Royce is all about. I carefully manoeuvre out of the forecourt and gingerly make my way onto the M8 to head back to Glasgow. While initially it feels XXXL, after a few miles it’s just XL – rather like a comfy t-shirt that you buy one size too large.

As you accelerate, the prow rises. Where the Spirit of Ecstacy points, you follow. The suspension cossets. It’s hydraulic and only has one setting – comfortable. The 6.6 litre engine produces 563 bhp. The numbers are irrelevant.

The V12 has a perfect resonance. At 70mph it’s hardly turning over. Rolls-Royces don’t have anything as crude as a rev counter, but the power reserve dial says you are only using about 5%.

It is loaded with tech, but if there is anything that disappoints, that’s it. Whereas the cabin is unique, the hardware is generic BMW. It works brilliantly of course, but I want it to feel different from a 3 Series.

I hit the rush hour traffic. It crawls. That brings

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The dashboard has the sheen of a Bosendorfer grand piano, the seats look like Linley armchairs and the air vents are controlled by aluminium organ stop levers that you just want to play with a surprise. When I want to change lanes there is no aggression from other drivers, just respect. The next morning I take Jamie (18) and Max (14) to school. They make me drop them a couple of blocks away. Arriving in a Rolls-Royce is apparently not cool.

When I get to the office, I find a problem.

It’s too big to fit in the lift for the car park, so I have to park it on the street.

At lunchtime I drive back to Edinburgh to return it. Spalding Gray in his monologue ‘Swimming to Cambodia’ talks about searching for that perfect moment. I had one driving back, at a leisurely speed listening to David Byrne on the hi-fi, feet set to warm and head to cool and seeing a beauty in Harthill

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that had previously been missed. I wasn’t thinking about how quickly I could get to my destination; I was concentrating on enjoying the journey. One of my friends once accused me of liking cars that were brutal and stupid.

If in my dreams I had £250k to spend on a car, I would no longer buy a Lamborghini.

The Ghost has redeemed me. n The car Philip Rodney drove was a RollsRoyce Ghost Series II in English White and Seashell interior. The OTR price for the car is £263,465 and was supplied by RollsRoyce Motor Cars Edinburgh, Bankhead Drive. Edinburgh, EH11 4DJ. 0131 442 1000 www.rolls-roycemotorcars-edinburgh.co.uk

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FASHION

AMERICAN DREAM TEAM Its designers created clothing that defined a nation, but now the Italian CEO of US company Brooks Brothers is pushing for change. Josh Sims speaks to Luca Gastaldi Luca Gastaldi is the 47-year-old Italian CEO of the Italian-owned Brooks Brothers, almost 200 years old and about as quintessentially American a clothier as one could find. It was Brooks Brothers that invented the button-

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down collared shirt, that pioneered the stripy, so-called ‘rep’ tie, that shaped preppy style and which, by introducing the boxy, wearable sack suit, effectively defined the template for business dress for much of the last century.

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Abraham Lincoln wore Brooks Brothers – he was even assassinated wearing it – as did Kennedy, the Vanderbilts, Morgans and Astors, and Hollywood greats from Valentino to Clark Gable, Cary Grant and Fred Astaire.

“But if you want a real contradiction, it’s not the fact that an Italian is running such an American company,” adds Gastaldi – who admits to having discovered the company through close study of the dandy attire of another Italian, Fiat supremo Gianni Agnelli, “it’s that it was only seven years ago that Brooks Brothers even had a store outside of the US. Brooks Brothers has deep American roots – and that American nature is a pillar. But now we have to build on that. We all travel more now and trends move faster. The trick is not to lose the American wardrobe and the styles we pioneered, while staying tuned to changing modes of dress.”

Gastaldi, who came to Brooks Brothers after 20 years in senior positions with Italian luxury goods company Loro Piana, concedes that is a tricky path to walk. On the one hand has been Brooks Brothers’ more progressive moves over recent years: the launch of Black Fleece, a more directional premium capsule collection designed by Thom Browne, Red Fleece, a more trend and cost-conscious collection, and now the appointment of designer Zac Posen to oversee womenswear as creative director – the first time the company has brought in an external designer, established in his own right, to oversee a whole segment of its business, from clothing to packaging and marketing. It is a statement of the company’s intent to fulfill its “huge potential” in womenswear.

Then there is the sizable international store expansion programme, which will see over 50 new Brooks Brothers shops (some whollyowned, some in partnership) open over the coming year, including 12 in the Middle East, the same across Scandinavia, 10 in eastern Europe and Russia, and up to 15 across India and Australia.

And yet, on the other hand, there is Brooks Brothers’ deeply-embedded culture of clothing a conservative American customer that remains the company’s bedrock – this is the company, after all, that still provides those Ivy League uniforms to the US’ collegiate blue bloods. For every Brooks Brothers aficionado – Gastaldi

FASHION

Some people are scared by change – we’re all human.

But we’re ready to exchange ideas, even if that means the process takes longer than I’d like

speaks of devoted customers who know more about the company’s history than those working for it do – there is a fashionisto more inclined to dismiss it as staid and, well, too American: ”To excite attention by anything at all remarkable in the way of colour of texture is considered both vulgar and ridiculous,” as the company stated in an ad back in the 1920s.

“Modernising while respecting heritage is easier to say than to do,” says Gastaldi.

“And sometimes there’s resistance within the company itself,” Gastaldi adds. “Some people are scared by change – we’re all human. But we’re ready to exchange ideas, even if that means the process takes longer than I’d like.

I like to challenge that American part of the

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company that says there’s still demand for that very American cut of suit – very full, wideshouldered – by introducing more tailored styles too, which are selling well. Even very traditional customers like the idea of bringing something fresh to their wardrobe. And we have to remember that talking about, for example, how Agnelli wore Brooks Brothers shirts, is a totally meaningless conversation for a lot of people.”

That is to say that, incredibly, there are those men – it’s mostly men – whose interest in clothes goes only as far as keeping warm and within the law and not looking silly. Gastaldi is not one of those men. He can wax lyrical on the unique extent of Brooks Brothers’ >>

BUSINESS QUARTER | SPRING 15

FASHION

contribution to the menswear canon – on how it’s “a good thing to have the originals in so many menswear items, the many copies of which just make the makers of the originals stronger” – but also on the hazards of relying on them. “There’s a danger when a [clothing] company culture is too tied to those classics, when you can’t see how dress is changing,” he says. “One advantage of our international expansion will be that we’ll have people working in different regions challenging that American culture to adopt what is new while also being consistent with Brooks Brothers.

It’s good to provoke our design teams.”

Intriguingly, however, Gastaldi is not so caught up in the idea of riding the patriotic manufacturing wave that certain consumers have ridden over recent years. While the company has historically acquired specialist manufacturers with which it has had a long, close working history, and while Gastaldi remains keen on bringing more manufacturing back to the US, his motivations for doing so are, unsurprisingly, entirely pragmatic ones.

“Offering the best value for the price is the priority, so I wouldn’t stake so much on being made in the US, or made in Italy, at the expense of that,” he says. “We go wherever

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is best – Turkey, Morocco, Asia or now, as is happening, more so in the US. Of course, some customers want their Brooks Brothers made in the US – and if you’re going to bring manufacturing back to the US, who better than Brooks Brothers to do it? – but I think they’re a minority. They’re very keen on Brooks Brothers, more like collectors – I’m one of them. But the fact is that the majority just isn’t so bothered, even if they’re American.

They buy Brooks Brothers because they trust it to provide the right quality at the right price. That’s what has made Brooks Brothers’ customers so loyal.” n

It’s a good thing to have the originals in so many menswear items, the many copies of which just make the makers of the originals stronger. But there’s a danger when a company culture is too tied to those classics, when you can’t see how dress is changing

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EQUIPMENT

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EQUIPMENT

Y T I L A QU REMAINS TIMELES S Innovation and sophisticated design counts for more than passing fads when it comes to creating timepeices, as Josh Sims discovers

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Talk to the elite end of the watch business, and the question of trends is increasingly met with a blank stare. “I have no idea what the trends are. I’m not sure there are any,” says Peter Harrison, the CEO of Richard Mille, one of the more progressive independent brands. “We just do what we like.”

Or, as Michael Parmigiani, the watchmaker behind Parmigiani, puts it, “the industry just doesn’t focus on a few big styles anymore – now it’s a question of ever small trends being added to what’s already available, so each watch becomes more like an art work in its own right. It’s more individualistic, because these days everyone wants to be different.”

Indeed, if SIHH – the Salon International des Haute Horlogerie, held in Geneva each January – is anything to go by, the mass market may continue to thrive on consumers identifying with status brands and their iconic models, but at the very top – where prices in six figures are not rare – it is the piece itself that matters; a piece, indeed, which may have taken many years to create. As IWC’s creative director Christian Knoop stresses, ever-longer development times mitigate against trends in a watch industry making ever more sophisticated watches – “this is not the fashion industry”.

This is not to say that the new watches for 2015 don’t reveal certain loose patterns. There is a playfulness with shapes, for example, with watchmakers the likes of Vacheron Constantin (celebrating its 260th birthday this year), Chaumet and Cartier setting round dials in squared off cushion cases.

A push towards more unusual materials is also on the rise, with, according to Knoop, many more unexplored materials set to undergo investigation for their use in watchmaking over the next couple of years, especially those that improve durability and reliability. In the meantime, most are pursued for their visual and textural appeal. Audemars Piguet has used forged carbon in its new designs, Parmigiani meteorite and Piaget onyx, in a re-edition of Andy Warhol’s Black Tie watch.

Ralph Lauren – perhaps, thanks to its fashion foundation, the most willing to push forward on the use of unexpected materials solely for their aesthetic appeal – has introduced models featuring shot-blasted steel, for a distressed effect, and dials ringed with burl wood. >>

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EQUIPMENT

A decade ago TechnoMarine caused outrage for much of this conservative industry by teaming precious jewels with a plastic case – but now the idea returns thanks to Roger Dubuis, which has developed a method for setting diamonds in rubber.

Black and off-white may remain the dominant colours for dials, but blue continues its assent and grey is on the up – even if subtly: A. Lange & Sohne’s Datograph Perpetual brings the colour of storm clouds right across its face, but the company’s first minute repeater with a digital (as opposed analogue) display – in development since 2010 and yours for €440,000 – achieves a similar shade by using blackened German silver.

If you’ve spent that much on a mechanical movement of such exquisiteness you might well want to see it, and show it off, so skeletonised movements, stripped back and fully visible front and rear of the watch, are more widespread too.

Cartier introduces one for its classic Tank,

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and for its 60s Crash model, Ralph Lauren has created its first and Roger Dubuis has introduced new star-effect and creeping ivy skeleton architectures for its models.

But perhaps the most striking skeletons are from Parmigiani. Its Tonda 1950 Squelette – with clear glass – is also available as a model for women. A skeleton for women may be unusual enough as the industry is only recently

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coming round to the idea that women are interested in the mechanism that drives their watch, not just the superficial aesthetic, ideally covered in gemstones. But this one comes with a semi-opaque milky glass which, when lit from behind, shows the movement’s parts with all the evocative blurred edges of shadow play.

Indeed, if an overarching trend out of SIHH can be discerned, it might be more one in business culture than in the popularity of certain approaches to the look and feel of the new year’s clutch of timepieces – and that would be the waking up to the potentiality in the growing demand among women for serious craft beneath the pretty exterior of their watches.

“The fact is that women’s attitude to watches is changing,” says Piaget’s marketing and creation director Frank Touzeau. Piaget has introduced a refinement of a bracelet first devised in the 1960s, and comprising some 300 tiny, hand-assembled links. “Compare the industry today with 15 years ago and there’s a distinct change. Then it was men who wanted a strongly recognisable watch with real technical value, and now women want that too. Recognising that is a process that you can see starting now.”

Certainly, as Peter Harrison and Michael Parmigiani hint at, some of the most impressive watches launched for this year are simply going their own way in style and innovation, and, what is more, doing it for women. Cartier, for example, has created a new setting for diamonds that, in effect, mounts them on tiny springs with just the right amount of vibration

EQUIPMENT

to give the stones movement and so added shimmer. Tellingly, Richard Mille, meanwhile, offers its first flying tourbillon, and offers it to women: the tourbillon cage is set amid a series of petals which open and close every five minutes, allowing the tourbillon to rise through this mechanical blossoming.

It’s a marvellous little moment to behold.

But for how long will such extreme craft be appreciated? Montblanc has produced arguably the single most culturally relevant watch of 2015, and the interest lies less in the timepiece as its strap.

Its Timewalker Urban Speed has what the company is calling an E-strap. This comprises a small touch screen through which the wearer can manage mobile phone calls and texts and monitor their activity. It is highend watchmaking’s first riposte to Apple’s recently-launched watch, tapping as it does into the younger generation’s obsession with connectivity as well as its general disinterest in wearing watches that simply tell the time, in however artful a fashion. The E-strap is, perhaps, a sign of what’s to come. n

15 years ago it was men who wanted a strongly recognisable watch – now women do too

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BUSINESS QUARTER | SPRING 15

INTERVIEW

SPRING 15

The American entrepreneurial magazines are filled with exuberant profiles of ‘over-night’ stars who become social media billionaires by the age of 30. It’s heady and inspirational stuff but for Paul Thomson, a 50-year-old IT industry veteran with over 25 years’ graft tucked under his belt, and his experienced colleagues at ECS there are other ways to build a successful business.

For Paul, who worked with Digital, then became the sales director of ACS (UK), it involves building a team with superior industry knowledge and networks and then super-serving the customers. It is obviously an excellent business model.

Paul’s executive team includes Neil Davidson, as service director, who also worked at ACS and was himself a former Dell executive and Martin Boylen, formerly with Ignis Asset Management, as chief operating officer; and David Calder as IT security practice director.

The most recent recruit is Charles Quinn, who has now been managing director of the Glasgow-based company since September last year.

“In essence, ECS is an IT service company. We focus on the basics of serving our customers as best as we possibly can. For us, it is about listening to our customers and then focusing on delivering consistent, quality services. Our various company attributes help in that we are agile, pragmatic and have a can-do attitude.

All of these ingredients add up to a really successful business,” says Paul, on a joint conference call with Charles.

They are both members of a cohort of computer-literate Scots who benefited from the invasion of the US computing giants such as HP, Digital Land, IBM in the 1980s.

BUSINESS QUARTER | SPRING 15

SUCCESS BUILT ON SATISFYING THE CUSTOMER ECS is one of Scotland’s secret success stories.

This IT services company has been making massive headway as it aims for a £80m turnover in 2015. BQ Scotland Editor Kenny Kemp meets Paul Thomson, chief executive, and Charles Quinn, managing director Paul was instrumental in building the success of the UK service specialist ACS, which was bought in 2006 by Dell. Paul stayed on for a period after the take-over and then decided to team up again with Eddie Young, the founder and Chairman of ECS, and former Managing Director of ACS. Charles worked with Microsoft and Dell where their paths and careers crossed over.

ECS was founded in 2008 and delivers a range of IT transformation services including designing, building and running IT infrastructures.

“We started off primarily in the banking and insurance industries, and established the

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company in the first two or three years in those markets, and we have diversified in the last few years into pharmaceuticals, oil and gas, manufacturing and retail. We’ve really broadened out our account base significantly,” adds Paul.

ECS now have over 30 major blue chip companies as customers, typically in the FTSE 100 or 250. While the company is something of an unknown star in Scottish business circles, expanding without fanfare through its own networking, it has built an enviable reputation with its customers.

Charles Quinn chips in. An IT industry veteran with a track record in executive leadership, >>

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INTERVIEW

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INTERVIEW

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sales, marketing and IT services gained with the likes of HP, Dell and Microsoft, he is tasked with spearheading ECS’s next phase of explosive growth.

“I joined in September last year and it’s been a whirlwind for me since I arrived. My connection with Paul and the other directors on the board and many in the company goes way back over the last 25 years. Through our corporate careers, we’ve all worked together at some point on various projects,” says Charles.

How does he see his role now with ECS? “I’m working closely with Paul to ensure we have the right strategies in place for our sustained growth. I’m focused on what we deliver making sure we’re on-time and on budget. For me, it’s about ensuring that the customer relationships are tight and strong.

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I’m working with the sales teams to move the business forward.”

It’s been a rapid six months but Charles admits it has been thoroughly enjoyable.

“There is a fast-moving pace in the IT sector.

We’ve got to adapt to meet the customers’ changing situations and having the capability and agility to make this happen is very enjoyable. It’s been quite incredible and very refreshing being a part of this.”

It is this kind of continuity that has helped ECS. Prior to joining, Charles led a multi-billion pound business across 75 countries as vice president and managing director of HewlettPackard in EMEA. Is it not a big career step moving to a nimbler player after working with the major US firms?

“I could see the great opportunity at ECS – and that’s apparent every day I’m out meeting

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our customers. Yes, it was big decision for me to come back to the UK and take the position as managing director, but I’m delighted to be in this invigorating organisation.”

It is a case of building on the relationships laid down over many years in the sector.

“Our personal networks and relationship building – over a number of years – have been the primary route to market for us,” says Paul Thomson.

“Within the company, between us all, we have a large and extensive network. When internal heads of banking IT move on, they know about us and our capabilities and we get the call to come in and talk about their fresh challenges. We get a lot of recommendations through this kind of referencing. That gets us through the door so we can win the next piece of business.”

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“We have six main practice areas: from consultancy, networks, programme delivery, data centres, end user computing and security,” says Charles.

IT security is one of the expanding areas, where large corporates cannot afford to let down their guard. Cyber attacks from all fronts are a perpetual issue for large financial institutions that are trying to remain open and accessible to customers who are on the move, using mobile devices.

“We are seeing rapid growth in the cybersecurity space and I don’t see this stopping.

IT security is an extremely hot market at the moment. It will continue to be so – so there is a lot of focus on this. This is the fastest growing part of our business,” he says.

Paul Thomson is on the call from India, working in Pune, which is emerging as one of India’s hottest IT locations, and home also for the country's booming motor industry.

“I’m out in India to support our head of operations in Asia. I’m spending time understanding the progress that is being made across the various departments. We are also looking at the developments and the plans for our teams in Pune. I’m also able to update our staff about the general progress of the business. The work we do here is for the UK and it is a wholly-owned subsidiary.”

There are already 60 people in Pune with that doubling to 120 by the end of the year.

“We’ve got a broad range of IT skill-sets here in India from application packagers, software developers, project management specialists, network specialists. And we are growing fast.”

It obviously works well.

“You can sum up our value to the customers in three distinct areas. We pride ourselves on the skill level in the company and the quality of the service we deliver. It is broad-based with a lot of experience. We have hundreds of combined years of IT infrastructures. For us, having the right attitude is important. The can-do, agile, pragmatic attitude is absolutely key to what we do. That is at the heart of everything we do. I think it is one of many reasons why we have been so successful.”

While many companies aspire to this level of customer focus, Paul Thomson says that this has to be combined with delivery.

“We’ve an impressive track record of delivery.

We have a very loyal customer base. We’ve never lost a customer and we’ve never been sacked. In many instances, our relationship has developed into one of a ‘trusted adviser’.

We strive to achieve a win-win for ourselves and customers.”

Typically, a large corporate in banking and insurance, the energy sector, retail or fastmoving consumer goods (FMCG), has a rolling programme of change.

“Our customers will have a never-ending programme of change. For us, it’s the case of once you’ve established the relationship, you plan to work for them every year. That might not be contracted on a multi-year basis because projects will change and differ. We’ve got established relationships that pre-dated the creation of ECS, going back to ACS, which I ran before. Some of our relationships go back to the mid and late 1990s.”

It means recurring revenues. Despite their deep connections with the likes of Dell, IBM and HP, ECS is agnostic about which

INTERVIEW

in South Africa and leading sales and marketing activities.

“We do have some major customers outwith the UK. The South African business has been developed predominantly on the back of existing customers wanting us to be in that market place. On the back of this, we’ve moved with the customer, but in turn this has brought us fresh opportunities. We have now opened an office in Johannesburg. Most certainly, this is an area of growth for us, but the bulk of our business is UK-centric.”

ECS was recognised at No 15 in the Sunday Times’ Tech Track 100 Companies as one of the fastest growing businesses in the UK, with year on year growth of 116%. This was Scotland’s highest entry, with Skyscanner at 23rd place.

In 2013, the turnover was £55m, with the unaudited account for 2014, a turnover of £67.5m. This year the company is anticipating breaking the £80m barrier.

“We’ve had an unprecedented start to 2015.

The can-do, agile, pragmatic attitude is absolutely key to what we do. We are totally focused on the customer...we strive to do the best thing at all times vendors to recommend to clients.

“We are totally focused on the customer, so we are not tied to any particular vendor.

We strive to do the best thing at all times.

We do partner when it makes sense. It is about establishing the best solution for the customer.”

So how would Paul describe his relationship with his customers?

“One of ECS’ fundamental principles is that we are in it for the long term with customers.

We would never do anything for short-term gain. That would be a foolish approach.

We will always take the long-term view and customers appreciate this.”

Charles Quinn is focusing on developing the six practice areas to exploit growth. He is already developing new growth opportunities

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There has been a huge amount of activities in the first couple of months and this augurs well for us breaking the £80m barrier,” says Paul.

The company headcount is over 700 staff and is anticipated to be over 1,000 by the second half of the year.

While ECS is headquartered in Glasgow [“We’re firmly a Scottish business,” assures Paul] it also has offices in London, Edinburgh, Leeds, Johannesburg and Pune.

“It’s about a third in Scotland, the North of England and in London. As we grow this year, it will be about getting more business from our customers in the City of London.”

ECS might not be a household name around Scotland – but that might well change as it starts to raise its flag above the parapet of business. n

BUSINESS QUARTER | SPRING 15

A GLASWEGIAN WITH THE VITAL SPARK FOR ENTERPRISE BUSINESS QUARTER | SPRING 15

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SPRING 15

Lord Willie Haughey and his wife Lady Susan made their major breakthrough by winning a national contract for Asda.

Now he is helping Scotland’s emerging businesses through his support for ESpark. Ken Symon went to visit the enlightened Glasgow entrepreneur at his Gorbals HQ

ENTREPRENEUR

If the look in Susan Haughey’s eye had been different that day in Dubai, perhaps one of Scotland’s leading engineering businesses would not have been born. Willie Haughey started up his City Refrigeration business as an alternative to moving permanently to the Middle East where he had been earning more money tax free than he could hope to earn in a staff role in the UK. He and his wife visited Dubai where they had had an offer to live and work.

Haughey, who was created a life peer as Lord Haughey of Hutchesontown in September 2013, recalls: “It was quite obvious that although Susan was saying yes, her eyes were saying no.

“Actually, it was Susan who set up the business while I was still working in the Middle East, so I’ve been a fraud standing up there winning awards all these years.”

He says that from the start the couple made a perfect business team with Susan taking care of the accounting, the back office, and the admin. Willie worked on delivering the jobs and went out and found the business.

The business was funded using £70,000 they had built up whilst Willie was working in the Middle East. They had two employees, “a guy we knew and my brother as an apprentice.”

“To start with it was really, really tough to get business. After chapping [knocking on] the doors and treading the streets for a year, the money was nearly running out. I was getting to the stage when I was ready to send my CV away again when we got a break – on the day of the World Cup Final in 1986.”

Haughey was called in to the Videodrome, one of the largest pubs in Glasgow.

“They had 600 people in the pub – it was Tennent Caledonian’s biggest account – and they had all these people and the beer wasn’t flowing. I stayed there all day and night to

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make sure it was all right,” Haughey says.

The incident began a relationship with Tennent Caledonian Brewers that is still key to the City Refrigeration business. Indeed, work for brewers was central to the company’s growth in its first nine years. One experience in particular demonstrates how Haughhey’s original concept struck a chord. He had been working on the roof of Marks & Spencer’s store in Glasgow on a scorching hot day when he and his apprentice took a break to get something to drink. But the Cokes they bought were unpleasantly hot. This, the barman told them, was because pubs could get refrigeration engineers in the winter but never in summer.

“The licensed trade thought they played second fiddle to big retailers and that was probably true and always stuck in my mind,” he says. “So when we put our first van on the road we put on it ‘specialist to the licensed trade’ when we didn’t have one customer.”

Haughey stresses that to him customer service is all-important. He learned that when he had earlier been working in Abu Dhabi – he went out to work as head engineer but very soon had the opportunity to step into the general manager’s shoes. He remembers going to see the company’s main client and despite being untried as a general manger the client put his trust in him – because, as a German, he had a real respect for Scots.

“That was an eye opener. People think that for financial services and engineering there is no-one to beat Scots,” Haughey says.

“If a guy or a company trusts you like that you can never let them down. That was a great lesson for me.”

He describes his next two years in the Emirate as a “working MBA.” “What I learned there was that the service delivery was all important – and then you look at the bottom line. If you give the >>

BUSINESS QUARTER | SPRING 15

ENTREPRENEUR customer more than they were expecting, faster than they were expecting, you will always be there.”

In City Refrigeration’s early days, that meant changing the way jobs had always been done.

Haughey recalls: “There was a regular problem with draymen, who came to deliver beer shipments to a pub’s cellar, turning the freezer off on the panel outside the cold store, putting the deliveries of beer in and then forgetting to turn the freezer back on when they left. As a result hundreds of gallons of beer had to be poured down the drain.

“I went to the brewers and said I can design you a better control panel. There is a red button that the draymen could press to turn off the freezer but it automatically comes back on when they go away.”

So that became City’s approach: “You tell us what you do and we’ll do it for a wee while and if we’ve got a better idea, we’ll tell you about it, trial it and if it works we’ll bring it in.”

Haughey stresses that along with customer service and innovation, one of the biggest lessons for a leader is in maintaining a total focus on the business. “If I can give you the hard lessons I have learned it would be one: concentrate and focus totally on your own business and don’t get involved in too many things until you can afford to,” he says.

He learned that the hard way, he says, when he became a director of Celtic Football Club, of which he has long been a passionate supporter.

He ploughed money into the club, which he had received from selling a large slice of the equity in the City Refrigeration business. In 1994 he made the deal for £5.6m, a cash and share deal that left the Haugheys with a 36% share of the business.

“During the next two and half years I spent too much time with Celtic where I was a non-executive director and I had completely taken my eye off the ball with City,” he admits ruefully. “Don’t ever get involved in a business where you make most of the decisions with your heart.”

This lack of focus hit City’s profitability. “When I sold the business we were turning over £6m and making £830,000 but over the next two and half years we were stagnating, going back the way – we still had turnover of over £6m but making nothing like the same profit.”

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Haughey’s total re-engagement led to more innovations, not just in practical engineering process but also in business process – in the way that the business relates to its clients. He sums up this approach: “We bring absolute transparency to contracting. We very seldom tender: we go into partnership.”

It is an approach that has been introduced not just in the UK but also in a wider geographical footprint. “The MD of Woolworths in Australia said to us recently ‘Whether we use City or not you’re going to change the face of maintenance in Australia’.”

This began with the remarkable relationship Haughey’s business has had with their first and biggest retail client.

“Asda were the perfect partner,” he says. “The success of City in the past 17 years – a huge part of it is that Asda have treated us like a real partner. What Asda liked about us was that we were a small company, a private company, that was willing to be moulded.”

This approach meant running a completely open book – showing Asda how much the materials cost, how much the labour cost and then adding a percentage on top of that. The relationship between City Refrigeration and the retail giant began in 1997 when they had the opportunity to tender for one contract in a single UK region. At this time City’s turnover

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was £10m and the Asda contract alone was worth £5m. This huge spurt in their business was, of course, not realised without a lot of sweat and tears and some pretty fast footwork.

“We were thinking about it every night and day. We would be going to a meeting with Asda when they had asked us the next day for a copy of our Health and Safety policy. When Susan turned up the next day it was a good job that nobody actually touched it because the ink was probably still wet,” he jokes.

“We’d like to thank some of the companies from whom we plagiarised their HR policies!”

Success meant getting the corporate governance right, meeting all the statutory requirements, setting up a call centre to meet the volume of demand and making sure all the administration was handled efficiently.

City Refrigeration was in competition with four other companies servicing the rest of Asda.

“It’s fair to say we came top in every category: delivery of service, corporate governance and most importantly within budget.”

The idea was that after two years Asda would whittle the suppliers down to two and then one. On the eventful day, Willie and Susan were taken into a room to be told they were going to be Asda’s facilities management supplier for the whole country. “So when we walked into the room our turnover was £15m

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and when we walked out it was £45m,” Haughey says. The growth has continued with Haughey having brought his impressive business HQ and its 700 employees to the Gorbals area of Glasgow where he grew up.

City Refrigeration Holdings, recently ranked as 60th largest business in Scotland, has a turnover of more than £458m. The HQ also hosts Entrepreneurial Spark or ESpark, a mentoring and business hatchery that Haughey supports – a striking example of ‘giving something back.’

“In 2001, when I won Entrepreneur of the Year, the Exchange asked me to come and do various talks to try and share some of that with the up-and-coming entrepreneurs. I think since then I’ve just got the bug,” Haughey explains.

“I’ve tried to help businesses through the Entrepreneurial Exchange, which is a fantastic organisation, and then getting involved in setting up the first ESpark hatchery in Scotland.

It’s one of the best things Susan and I have been involved in. The glow you get seeing these people marching out of here to their new premises with five employees is amazing.”

He adds an example: “Two boys turned up here two years ago with an idea for a business.

Last week they were standing up at the annual awards dinner, returning to give something back to the people here and saying ‘by the way, next year we’ll be turning over £5m.’ It took me nine years to get to that,” he laughs.

“For Scotland to come from the bottom quartile to the top in the success rate for startup businesses in such a short period of time is absolutely phenomenal.

Haughey speaks with pride about Entrepreneurial Spark: “If you want to start a business, you can do so with no financial burden hanging round your neck. You know you haven’t put your house on the line or given up security over your car to get office space.

ENTREPRENEUR

Everything is free so that has to be a big thing.

It takes the pressure off and gives you more time to prove your idea is correct.

“But I think that being in an environment where everyone round about you is an entrepreneur where, if you are having a bad day, they’re helping you through that. You’re getting mentoring – the help that Jim Duffy and the team are giving them is invaluable.

“Bringing in big law companies, accountancy companies to give you lectures, to give you pro bono advice, all of this. If you and me had been sitting down 15 years ago with the Entrepreneurial Exchange, which I thought was brilliant, we would have been saying ‘Here are all the things that are missing – what they have done in here is ticked every box’. We give all the space free, all the telephony, all the computers, everything is free, there is no charge whatsoever and they can now be in there for a year. What we also do is try and help them with our contacts.”

So is this the opposite of the BBC’s programme Dragons’ Den? “The total opposite, we put our money up for nothing,” he says.

And that is no small amount of money, Haughey estimates that the financial contribution probably amounts to about £400,000 a year in kind and in cost.

Asked what would happen if City grows to the point when it needs all the space in the impressive office building including that occupied by ESpark, Haughey doesn’t hesitate: “I wouldn’t put them out, I would go and rent somewhere else. Or if I could find them somewhere…but there’s no doubt that this working environment helps them as well.

They think they’re part of something big.

But what is great is that my people feed off them as well. They’re amazed at how everybody goes about this building with a smile on their face.” n

For Scotland to come from the bottom quartile to the top in the success rate for start-up businesses in such a short period of time is absolutely phenomenal

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Helping to deliver a deal that brings hope Willie Haughey has cut back on some of his commitments to give time for a new role as Chair of the Glasgow and Clyde Economic Leadership Board, a body that will help co-ordinate the Glasgow and Clyde Valley City Deal.

The City Deal will cover the areas of Glasgow City Council and seven surrounding local authority areas around the River Clyde.

It will be funded by £500 million from each of the Westminster and Holyrood governments plus £130 million from the councils and private sector money that will be leveraged in.

Haughey says: “I think if we get this right there’s so much upside. You’ve got the benefits in relation to the jobs and the local economies across the region but also more than anything it’s a great way of demonstrating that local authorities can deliver and that you can trust them.

“They know more than anyone the needs of the people and I think this is a fantastic opportunity to showcase that.

Haughey says that they have the highlights of the 20 major projects that the Deal will back but a lot of detail has still to be decided.

“Where we’re going to leverage in the private investment, what it’s going to mean, what the infrastructure projects are going to mean for private investment – all has to be worked out.”

He adds: “It’s a 20 year project, although we can condense most of the goodness into 10 years, but I hope at the end of it we have managed to deliver on 29,000 new jobs and 15,000 jobs in construction.

“I hope we’ve managed to deliver on thousands of meaningful apprenticeships and that the people of what I am calling this new super region, Glasgow and Clyde Valley, will benefit.

“Hopefully a lot of people furthest away from the job market will see there’s a bit of hope for them that maybe isn’t that prevalent at the moment.”

BUSINESS QUARTER | SPRING 15

BIT OF A CHAT

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with Jock Yuler >> When justice failed The passing of the Glasgow lawyer Joe Beltrami reminds us of an unsavoury time for the Scottish justice system: the fight by Paddy Meehan for justice. Meehan was found guilty of the killing of 72-year-old Rachel Ross in Ayr in July 1969. She died after a break-in, although her husband Abraham survived.

Meehan was a noted criminal and was found to be in Stranraer that evening casing a motor tax office for a job. His phone had been tapped, so the authorities knew he was in the area. But he was framed for the Ross murder and in October 1969 was put on trial at the high court in Edinburgh before Lord Grant. In the witness box, Mr Ross said he picked Meehan out in an identity parade after hearing his Glaswegian accent. However, the police evidence was rigged and Meehan was sentenced to life imprisonment. It wasn’t until May 1976 – and after years in self-imposed solitary confinement – that he was granted a royal pardon. Joe Beltrami was the lawyer of ‘Tank’ McGuinness, who with Ian Waddell, both well-known Glasgow thugs, actually committed the Ayr crime. After McGuinness himself was murdered in Springfield Road, Mr Beltrami could reveal to the court that his client had told him confidentially that he had, in fact, committed the Ayr crime. It was only after the Lord Advocate granted the police officers who committed perjury immunity from prosecution that Mr Meehan was eventually found innocent. Anyone who seeks to glamourise this aspect of street life – with the passing of Mr Beltrami – needs to understand the human misery caused by the whole affair.

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>> A great leader worthy of praise – 150 years after his death Abraham Lincoln was assassinated 150 years ago on Friday, 14th April 1865, at Ford’s Theatre in Washington, shot by the actor John Wilkes Booth. According to business thinker Jim Collins he was the only US president to display ‘Level 5’ executive leadership, which is about humility, and subsuming the ego for the greater good of the corporate body. After the bitter American Civil War, Lincoln called for reconciliation [there was no capital punishment for the rebel Confederate generals] and during this ‘hard war’ he talked consistently about the moral meaning of the conflict. He told a general: “Do nothing merely for revenge, but that what you may do shall be solely done with reference to the security of the future.” Great words. Wouldn’t it be a fine gesture for people to lay a token of appreciation at his statue in Edinburgh on the day?

>> Dishing the Birt Professor Chris Carter at the University of Edinburgh’s Business School is writing a book about John Birt and his tenure at the BBC from 1992 until 2000. Out next year, it is being tipped as the definitive guide to the turmoil of Producers’ Choice and Birt’s revolution inside the BBC. Of dozens of interviewees he says the most convivial was Peter Jay, a former London Weekend presenter who coined the Birtian phrase ‘the mission to explain. Sixteen years on, the imprint of Baron Birt still hangs heavy on the Beeb.

>> Closing their accounts So farewell from the hot seats of two significant Scottish banking figures who quietly kept their dignity as the financial world around them imploded. Lady Susan Rice has

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stepped down from the Bank of Scotland, part of the Lloyds Banking Group.

Also stepping back from signing the bank notes is David Thorburn, the well-liked chief executive of Clydesdale Bank, still owned by National Australia Bank, but for how long?

Lady Susan has been a serene figure who has been able to navigate her ship through the choppy waters of the banking industry.

While David Thorburn, a former CBI chair in Scotland, has been a great team builder and leaves his bank in a better situation after recent traumas. Knowing Lady Susan’s love of books – she is chair of the Edinburgh International Book Festival – it would be good to read her own account of the turbulent years since 2007. As a former New York academic it would be a factual tale for our times.

It’s unlikely the retiring Clydesdale chief will be penning his memoirs but he might spend more time on the racing circuit. He’s an expert racer with a touch of Steve McQueen about him.

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EVENTS

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BQ’s business events diary gives you lots of time to forward plan. If you wish to add your event to the list send it to editor@bq-scotland.co.uk and please put ‘BQ events page’ in the subject heading

MARCH 19-20: SCDI, the Scottish Council for Development & Industry, Forum 2015, at RBS HQ, Gogarburn, Edinburgh. All Cylinders Firing: Decentralising Powers, Driving Productivity, a two-day policy, economic and business-focused event includes a dinner on the Thursday evening addressed byFirst Minister of Scotland, Nicola Sturgeon, while Alistair Carmichael,Secretary of State for Scotland, will address Friday conference.

20 Premier Series Dinner with Edinburgh Chamber of Commerce, Keith Williams, chairman of British Airways. 5.30-9pm. Waldorf Astoria, The Caledonian, Princes Street, Edinburgh, EH1 2AB. www.edinburghchamber.co.uk 22 Greed – Who was right, David Hume or Gordon Gecko? Royal Society of Edinburgh, 6pm. Speaker: Lord Sutherland of Houndwood, jointly with the Library of Mistakes, sponsored by First State Investments. www.davidhumeinstitute.com 22 Scottish Chamber networking at the races, with Dundee and Angus Chamber.

12-5.30pm. Perth Racecourse. www.perth-races.co.uk or 01738 551597.

24 Annual Dame Sue Bruce Breakfast, chief executive officer of Edinburgh City Council with Edinburgh Chamber of Commerce. Sheraton Grand Hotel & Spa, Edinburgh, 1 Festival Square EH3 9SR. 8:30am-10am. www.edinburghchamber.com

23 After Hours: WEST Brewery. 6-8pm. Glasgow Chamber of Commerce networking event at WEST brewery in the Templeton Building. www.glasgowchamberofcommerce.com

24 Carbon Capture and Storage, with Institute of Directors, 12.15-2pm.

Hilton Treetops Hotel, Aberdeen. Contact: Heidi Bisset on 0131 557 5488.

28 Doing Business In Manufacturing, BDO LLP, 4 Atlantic Quay, York Street Glasgow, with Glasgow Chamber of Commerce. 8-10am. www.glasgowchamberofcommerce.com

26 Women’s Networking Lunch with Glasgow Chamber of Commerce, Chaophraya Glasgow, Nelson Mandela Place, Glasgow. 12-2.30pm.

26 Institute of Directors Scotland Director of the Year awards, 6.45-11.15pm.

Crowne Plaza Hotel, Glasgow. Contact 01577 863850.

26 Launch night for Glencoe Marathon Gathering 2015, by Venture Scotland, sponsored by Cornerstone Asset Management, with David Fox-Pitt, director WildFox Events. 5.30-7.30pm. Exchange Tower, 19 Canning Street, Edinburgh, EH3 8EH. 27 The Ayrshire Chamber of Commerce annual dinner, with Donald Trump, introduced by Kaye Adams. 6.30-11.30pm. Ayr Racecourse. www.ayrshire-chamber.org 30 Gerald Ratner on Leadership, with Aberdeen and Grampian Chamber.

The jewellery boss talks about his rise and fall – and rise again. 6-9pm. Ardoe House Hotel, South Deeside Road, Aberdeen, AB12 5YP. www.agcc.co.uk 30 The David Hume Institute, Royal Society of Edinburgh, 6pm. New powers – is the Scottish Parliament still fit for purpose? Speaker: Tricia Marwick MSP. www.davidhumeinstitute.com 31 BQ Scottish Export Awards 2015. at the Hilton Hotel, William Street, Glasgow, G3 8HT, hosted by Mark Easton, BBC Home Editor. 6.30-11pm.

30 Glasgow Talks Food and Drink. 8-10pm. With James Withers, chief executive of Scotland Food and Drink, Petra Wetzel, owner of WEST. Venue tbc. www.glasgowchamberofcommerce.com 30 After Hours Networking at Glasgow Print Studio, with Glasgow Chamber of Commerce. 6-8pm. Wine and nibbles and informal networking at the awardwinning gallery.

MAY 4-7 Offshore Technology Conference. Over 2500 exhibitors from 46 countries, including a record number of Scottish-based firms, with almost 110,000 visitors, Houston, USA. Scottish Enterprise have a Scottish Pavilion, which companies can join.

8 City Connections. Networking with Aberdeen and Grampian Chamber of Commerce. 11.45-2pm.Thistle Aberdeen Caledonian Hotel, 10-14 Union Terrace, Aberdeen, AB10 1WE. www.agcc.co.uk

31 Chamber Business Club, Midlothian and East Lothian Chamber of Commerce. Key marketing tips for small business. 8-10am. Venue tbc. www.melcc.org.uk

15 Reaction Chamber. Speed networking lunch at Celtic Park for members of Glasgow Chamber of Commerce. 12 noon-2.30pm. www.glasgowchamberofcommerce.com

APRIL 14 High Flyers Club with Edinburgh Chamber of Commerce, in partnership with MBM Commercial. 6-8pm. MBM Commercial, 125 Princes Street, Edinburgh, Midlothian EH2 4AD. 15 The 20th Anniversary of the British Association of Women Entrepreneurs reception. keynote speaker Madi Sharma of Sharma Group. Networking Bar, No 29 Private Members Club, 29 Royal Exchange Square, Glasgow. 6.45pm.

0141-225-561. www.madisharma.org/about-me 15 The Edinburgh Chamber of Commerce Dining Club at FISH, sister restaurant to STEAK at Picardy Place, Edinburgh. 12.30-2.30. www.edinburghchamber.co.uk 16 Visit to FloWave Ocean Energy Research Facility, King’s Building Edinburgh, with IoD Scotland, 6-8pm. Contact: Patricia Huth, 0131 557 5488.

BUSINESS QUARTER | SPRING 15

30 Spring Keynote Address: West Lothian Chamber of Commerce. Alec Stewart OBE. Known as the ‘gaffer’ of English cricket, Alec is the most capped England cricketer of all time. Norton House Hotel, Ingliston, Edinburgh, EH28 8LX. 6.30-10.30pm. Contact: aileen.ross@wlchamber.com

22 Business Breakfast with Aberdeen and Grampian Chamber of Commerce, with Bank of Scotland. 7-9am. Aberdeen Marriott Hotel, Overton Circle, Dyce, Aberdeen, AB21 7AZ 27 Summer BBQ and Archery with Ayrshire Chamber at Kelburn Castle and Country Park. 5pm. events@ayrshire-chamber.org

The diary is updated daily online at www.bqlive.co.uk Please check with contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above email address of any changes or cancellations as soon as they are known.

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