BQ Scotland Issue 17

www.bqlive.co.uk

ISSUE SEVENTEEN: AUTUMN 2014

IN THE FAST LANE Former motor racing enthusiast reveals his latest business venture

THE JOY OF GIVING Veteran business leader on creating wealth and giving something back

TALKING SENSORS The tiny sensors we take for granted are a multi-billion pound business

WORLD VISION Can business make the world fairer?

ISSUE SEVENTEEN: AUTUMN 2014: SCOTLAND EDITION

THE FIXER My simple premise – ask customers what they want, then deliver it

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

SCOTLAND EDITION

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WELCOME

BUSINESS QUARTER: AUTUMN 14: ISSUE SEVENTEEN Welcome to BQ Scotland, issue 17. We hope you will find something thought-provoking to read and enjoy in this issue.

Scotland has voted by a 55-45 majority to remain in the United Kingdom. The debate has been stimulating, passionate, and, at times, heated, but the democratic decision, endorsed by over 84% of voters, remains valid.

We recognise that from the starting gun the ‘Yes’ campaign was more vigorous, creative, and better organised, and its effective deployment of social media is a world-class case study in how to excite and engage large numbers of grassroots campaigners.

Nevertheless, at the ballot box, a majority of Scots – more than two million – considered breaking away from the rest of the UK, a step too far. The arguments and risks – real or perceived – over currency, pensions, the EU, and the economy prevailed. What is clear is that the viewpoints of this more considered, cautious and less noisy majority were largely neglected by Scotland’s political commentators during this national debate. Among the silent majority were far too many business people in Scotland who felt unable to speak out. The pillorying of CBI Scotland and its staff meant businesses kept their heads below the parapet.

The Scottish consensus is that there is a need for constitutional change across the UK, and that Scotland will get more powers on taxation and spending, and the pro-Union parties in Westminster must keep their promises – or we face the prospect of a Neverendum.

BQ Scotland maintained a neutral stance throughout. However, during the referendum campaign we heard too many one-line slogans and sound-bites being delivered without recourse to the finer detail. Too often, ‘blame the fat-cat bankers and big business’ equated to a wider, more sinister, bashing of business.

Many ‘Yes’ voters simply did not believe ‘scare’ stories about firms moving south of the Border, Principal Sponsors

yet this was an acute and actual danger. We need coherent discussion about the important role of enterprise and entrepreneurs in Scotland. While the majority of Scots might feel a sense of relief that the debate is over, others remain vehemently disappointed.

Genuine passions have been running high, so we need to ensure calmness in our working relationships. We hope those who saw independence as ‘hope, not fear’ will appreciate that many Scottish-based business benefits from being part of a wider UK market.

As we have said previously, entrepreneurs by their nature are better able to handle change.

Indeed, many thrive on this. There will be unexpected consequences in this further period of change. We must all move with this, while holding both Westminster and Scottish politicians to account. Holyrood can already do much more to create an enterprising economy.

Hasty political vows were made that should not be broken, but proper constitutional change must be made thoughtfully and properly for the benefit of all regions of the UK. If this takes extra time to get it right, then surely this is acceptable and preferable.

The referendum has shown it cannot be ‘business as usual’ – or ‘same old, same old’.

We need to build a more equitable nation across the UK, in tandem with the interest of large and smaller businesses. In an increasingly uncertain international world, we need to sustain and increase our exporting – that requires focus and stability for business.

So now it must be ‘Yes’ for enterprise in Scotland; ‘Yes’ to sustainable investment; and ‘Yes’ to a higher education system that drives innovation and entrepreneurial spirit. Only then, can true social justice – which all fair-minded people want – be delivered.

CONTACTS ROOM501 LTD Christopher March Managing Director e: chris@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk EDITORIAL Kenny Kemp Editor e: editor@bq-scotland.co.uk DESIGN & PRODUCTION room501 e: studio@room501.co.uk PHOTOGRAPHY KG Photography e: info@kgphotography.co.uk ADVERTISING Bryan Hoare e: bryan@room501.co.ukk t: 0191 426 6300

room501 Publishing Ltd, Spectrum 6, Spectrum Business Park, Seaham, SR7 7TT www.room501.co.uk room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements.

All contents copyright © 2014 room501 Ltd. All rights reserved.

While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, September 2014. room501 Publishing Ltd is part of BE Group, the UK’s market leading business improvement specialists. www.be-group.co.uk

Kenny Kemp Editor of BQ Scotland Associate sponsor

UNIVERSITY OF STRATHCLYDE MANUFACTURING

SCOTLAND EDITION

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BQ Magazine is published quarterly by room501 Ltd.

BUSINESS QUARTER | AUTUMN 14

CONTE BUSINESS QUARTER: AUTUMN 14 SENSORS AND SENSIBILITY

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Features 22 THE FIXER Ian Milligan’s business premise is simple – he gives customers what they want

28 THE JOY OF GIVING Veteran business leader Les Hutchison on creating wealth and giving back

34 TALKING SENSORS Ubiquitous sensors we take for granted are a multi-billion pound business

BUSINESS QUARTER | AUTUMN 14

46 IN THE FAST LANE Former motor racing enthusiast Vic Covey on his latest business venture

52 LORNE GATHERING Legal eagle Lorne Crerar on helping businesses fulfil their potential

74 A BETTER WORLD Gib Bulloch believes business can play a role in building a better, fairer world

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CAUGHT IN THE FAST LANE

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TENTS SCOTLAND EDITION

40 COMMERCIAL PROPERTY

The latest deals and developments in this key sector

58 WINE The man behind a new TV show ventures into Champany Inn’s cellars

Regulars

60 MOTORING Does the new Bentley have enough class - and fun factor - to satisfy?

THE LORNE GATHERING

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64 FASHION 06 ON THE RECORD Firms making dough out of the growing glutton-free market

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

Josh Sims traces the roots of a look that captivated jazz fans

68 EQUIPMENT Car designer Martin Smith carved a career out of his boyhood dream

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

20 AS I SEE IT An idealist’s vision of a bold new Scotland

DELIVERING A BETTER WORLD

82 EVENTS Key business events for your diary

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ON THE RECORD

AUTUMN 14

>> Cautious Scottish business leaders were largely ignored during the referendum Pro-unionists who felt unable to speak out before Scotland’s day of destiny are breathing a sigh of relief... but where do we go now? Kenny Kemp reports The Scottish referendum gripped the interests of the business community just as much as the Twitterati and cyber-zealots who helped define this extraordinary campaign.

However, business people, in the main, remained unconvinced by the Nationalist’s arguments over a currency union, the economy, continuing membership of the EU, and the bickering over how much oil and gas was actually left in the North Sea. It was a massive leap of faith to vote ‘Yes’, and there was a collective sigh of relief at the indisputable 55-45 decision to remain in the Union.

During the campaign, we saw the likes of bra entrepreneur Michelle Mone, and Sir Ian Wood speaking out for remaining in the Union, while Brian Souter of Stagecoach, John McGlynn of Airlink, and Tony Banks, the chairman of Business for Scotland, all spoke about Westminster and its politics being morally bankrupt. Pro-Yes supporter Jim McColl’s intervention to save Ferguson shipyard on the Clyde was viewed as a photoopportunity coup for the nationalists, while risks to Ministry of Defence navy contracts further up the Clyde was cited as pro-Union ‘scare tactics’.

Yet amid this amazing jamboree, the actual voice of Scottish business was never properly heard. Too many business people felt neutered and unable to speak out. In private, many told BQ they felt that key Scottish government contracts might be harmed if they made pro-Union views known. PR companies were advising clients to say nothing. Others preferred to remain silent, fearful of tirades from cyberNats.

BQ Breakfast covered an excellent debate in Edinburgh between John Swinney and Iain Gray, hosted by the Federation of Small Business. It covered topics such as VAT, employment rights and enterprise grants,

BUSINESS QUARTER | AUTUMN 14

yet this debate got little airtime, and was not properly discussed by the political commentators who were increasingly bedazzled by the noise of the ‘Yes’ campaign.

After the vote, left-winger socialist Tommy Sheridan actually blamed businesses for the ‘Yes’ campaign’s defeat, saying business people were telling employees how to vote.

From Standard Life, Lloyds Banking Group, to Royal Bank of Scotland through to Weir Group, considered statements were made to investors about the consequences of the vote. Most listed Scottish companies included comments in their sections on future risk.

The uncertainty over the currency and no Plan B from the ‘Yes’ campaign, worried many financial firms, and there is no doubt that many companies were making contingency plans. However, there is no evidence to Mr Sheridan’s assertion that Scottish firms were ordering staff how to vote.

One significant Edinburgh fund manager was making plans to move its funds to London on the morning of a ‘Yes’ vote. So there was a great sense of relief.

Edinburgh voted by over 60% to remains in the union provoking a Herald newspaper headline which said: ‘Capital’s citizens voted with their wallets rather than their hearts.’

A rather harsh but perhaps accurate assessment, while Glasgow and Dundee both voted for ‘Yes’, which left many passionate voters disgruntled and deeply disappointed.

Gordon MacIntyre-Kemp, the chief

executive for Business for Scotland, the pro-independence business group, was an effective campaigner, dismissing CBI Scotland as irrelevant and discredited in Scotland.

Whether this is the case, remains to be seen.

Business for Scotland claimed over 3,000 businesses supporting a declaration of independence which stated Scotland could be successful if it went out on its own.

Many of these business people will be also disappointed in the result, but they must be encouraged to continue growing their firms to help ensure Scotland prospers within the United Kingdom.

Pro-independence commentator Iain Macwhirter spoke about the ‘dreary inevitability’ when Scottish business people dared to raise concerns about splitting the union. He accused Weir Group chief executive Keith Cochrane of being on ‘the wrong side of history.’ Mr Macwhirter is a respected and perceptive writer, but his comments in this case were symptomatic of a one-dimensional view of Scottish business, which used a short hand of banking collapse, fat-cat pay and banker bashing, to lay blame at the door of unfettered commerce. Yet this debate missed out on deeper discussion on the diversity and importance of enterprise and investment in Scotland.

There is neither a right nor wrong side of history, only history. This historical vote will give Scottish firms the opportunity to continue operations across the UK.

Yet amid this jamboree, the actual voice of Scottish business was never properly heard. Too many business people felt neutered and unable to speak out

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IO

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For more information, membership criteria and rates iod.scotland@iod.com

Events 3 October – UK Annual Convention, Albert Hall, London 6 October – Dinner Cromlix House, Dunblane 6 October – Board Experience workshop, Linlithgow 8 October – Policy Voice: Post Referendum Debate, Aberdeen 9 October – Leadership lecture with Ian Marchant, University of Edinburgh 24 October – UK Director of the Year Awards, London 28 October – Locate to Aberdeen, Hilton Treetops, Aberdeen 18 November – Logistics, Hilton Treetops, Aberdeen

Making Prosperity a Reality FAIRMONT ST ANDREWS THURSDAY 30 & FRIDAY 31 OCTOBER BOOK NOW http://iodscotland.com/ events-listings/annual-conference/

Director Development 1 October – Family Business Workshop, Glasgow 2 October – Leading from the Front (FULL) 14 October – Confident Leadership 16 October – The Role of the Chair (GLA) 23 October – Role of the NXD, Glasgow 11 November – How to influence others & handle challenging people (FULL) 13 November – Governance Master Class, Glasgow 18 November – Winning Board Behaviours, Edinburgh 19 November – The Creative Advantage 20 November – Role of the NXD (FULL), Edinburgh 26 November – Family Business Workshop, Edinburgh 27 November – The Role of the Chair, Edinburgh

More at www.iodscotland.com or 0131 557 5488. New Glasgow Hub at 200 SVS IOD.indd 1

04/09/2014 12:18

ON THE RECORD

AUTUMN 14

>> Angels and Genius making the dough Rebecca McDonagh looks at the gluten-free market and how two Scottish companies are making the most of the overseas opportunities Scotland’s food and drink sector has proven its capacity for invention – none more so than in the booming sphere of gluten-free foods. Not only are gluten-free products a godsend for coeliacs and wheat-free dieters alike, they are the foundation for growing Scottish companies with their eyes on international markets.

Kirsty Gillies, a chartered accountant and the owner of Angelic Gluten Free, based in Inverness, and shortlisted in the BQ Scottish Export Awards 2014, as best start-up exporter, has joined this market niche that offers a wonderful lease of life for those who suffer from gluten intolerance.

BQ has been following this trend since it met Lucinda Bruce-Gardyne to learn about her Genius Foods and the gluten-free bakery business. Now, four years on, the gluten-free market has exploded, with Genius leading the growth with its ‘Free From’ bakery category enjoying growth of nearly 70%, in the year to April 2014. In 2012, Lucinda won the EY Emerging Entrepreneur of the Year award.

Lucinda’s success has inspired others, such as Kirsty Gillies, herself a gluten intolerant sufferer, who began selling her cookies locally in 2012. Angelic has a range of sweet cookies and savoury biscuits, not only free from gluten, eggs and wheat, but dairy and nuts, so they are suitable for those with lactose intolerance and nut allergies. Kirsty told BQ that Angelic is in product development to expand the range of coeliac-friendly foods.

“More people are now aware of special dietary needs and this has expanded the market for companies such as Angelic. Of course, Genius have been the pioneers with bread, pancakes and croissants, and this has helped increase the opportunities for other products,” says Kirsty.

This heightened awareness, says Kirsty, makes it easier for someone with dietary needs to enjoy their eating. “With such a good choice of products, it’s a lot easier for someone with a dietary requirement to find something

BUSINESS QUARTER | AUTUMN 14

good to enjoy. The supermarkets obviously understand this too.”

Angelic Gluten Free cookies and biscuits are available in over 300 stores in the UK as well as hotels, cafes and coffee chains, while Genius has its range in Asda, Waitrose, Sainsbury’s and Tesco. Some supermarkets have even elected to create their own special dietary ranges – for example Morrison’s ‘Free From’ line – while the mainstream bakery groups have entered this emerging sector.

In the UK, the gluten-free market is forecast to grow by 46% to over £560 million by 2017, according to the Food and Drink Innovation Network. However, the gluten-free market is not exclusive to the UK. Health experts

estimate that roughly one in 100 people are affected by gluten intolerance and so 1% of the world’s population are affected by coeliac disease or are sensitive to gluten.

Perhaps a small percentage but still around 70 million around the globe, which is enough to generate a sizeable demand for gluten-free foods. Genius has been shipping its ambient and frozen products into Australia, the Netherlands, Spain and the United States, and now into France with its ‘Sans Gluten’ range available in hypermarkets, while Angelic is also shipping to the US, plus Ireland, Portugal, Czech Republic, Malaysia and Bahrain.

“We are exporting 50% of our products with the majority heading to the US,” explains Kirsty. “We’ve been taken on recently by the TJ Maxx chain [the equivalent to our TK Maxx stores], which has given us a strong footprint in America.”

But is the gluten-free market in danger of reaching saturation point? Food writer Nicholas Robinson with foodmanufacture. co.uk suggests that the gluten-free market could be reaching its limit. He states that the US market has already slipped and because the UK is two years behind America, glutenfree growth might only be a temporary fad.

However, Angelic’s US market uptake suggests the opposite.

Then there is the western world’s battle with obesity, pointing to a growing awareness for healthier foods and ingredients, and glutenfree and gluten-light foods could become a more mainstream taste of things to come.

One thing is clear, Scotland has shown it can deliver products for a positive lifestyle.

With such a good choice of products, it’s a lot easier for someone with a dietary requirement to find something good to enjoy. The supermarkets obviously understand this too

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AUTUMN 14

ON THE RECORD

>> How Joey Essex can help your digital business flourish Understanding how to engage effectively with your target audience is the key to holding on to them in the digital age, explains BQ editor Kenny Kemp When DC Thomson’s re-launched their teen magazine Shout, they needed maximum impact. The editors put Joey Essex, the star of TOWIE, on the cover. He has 2.75m followers on Twitter and he tweeted to them about the new magazine. The magazine raced off the shelves and has been able to build a new market crossing print with online digital. It has had a year-on-year increase in sales of 19.3%.

Meanwhile, the revered Radio Times notched up a record 4.5m unique users in August on its RadioTimes.com website, helped by Doctor Who and the Great British Bake Off, with a record 537,000 visitors alone on 27 August.

The UK’s magazine industry is still dynamic and vibrant, but it is in long-term decline, disrupted by the advance of digital technology and a generation of younger people who prefer social media and computer games, rather than reading comics and magazines. The industry has been fighting back – and it is doing so with a great deal of thought, research and innovation. At the recent Magfest in Edinburgh, run by the PPA Scotland, Ellis Watson, the chief executive of Dundee’s DC Thomson, said that commercial clarity, a more aggressive understanding of the cost base, a more entrepreneurial approach to what consumer marketing can do, is vital, without harming the integrity of the content.

DC Thomson is launching 110% Gaming, offering tips and hints on social media, aimed at eight to 12-year-olds, as a new magazine in October, priced £3.50. For anyone who hasn’t heard of Stampy Longnose and Mindcraft, this might be the time to catch up.

Two of Ellis’s colleagues, Helenor Gilmour, head of consumer insight with DC Thomson, and her colleague Maria Welch, Editor-in Chief of DC Thomson’s children’s titles, and a government adviser on teenage health, revealed excellent insight into the consumer market of children and the over 50s market.

Gilmour and Welch undertook a major survey, sitting in young girls’ bedrooms with their mums, to find out what was inside the head of four categories of girls: 5-7 years, 7-10 years, 10-12 years, and 12-15years.

Their conclusion was that since the recession, young girls are staying younger longer, contrary to what might be presumed. But their interests haven’t changed, with younger girls interested in friends, dolls and fluffy pets, while as they grow older, having a boyfriend, self-image, exams and shopping are at the forefront of their minds, although

Young people feel they have a relationship with celebrities this is dwarfed by a fevered interest in global celebrities, such as Kim Kardashian, Joey Essex or Harry Styles and his One Direction pals. And Twitter means that keeping track of celebrity ‘friends’ is now a near 24/7 activity.

“Young people feel they have a relationship with celebrities as a famous friend. The global popularity of celebrities means that younger people find it harder to identify if they are from the UK or from the US.” The interviewed girls knew their limits and boundaries and what was ‘not’ appropriate for them to watch or read. This is part of the ‘SelfCensoring Digital Generation’ who are more cautious, know the dangers and want to keep themselves safe. The relationship between girls and their mothers is increasingly one of trust and sharing information, with the traditional problems page under threat as mum and daughter become closer.

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The digital dilemma for magazine makers is that girls – like boys – are not looking for a standard magazine with curated content on line. They look at a range of sites, which means magazines must work harder to have more links to other content and sites.

Diane Kenwood, the editor of Woman’s Weekly, also a Magfest speaker, has proven that innovation is the key. She was editor of the Marks & Spencer magazine, where the glossy production values were high and each page had a budget of £1,000. When she joined Woman’s Weekly, the 100-year old magazine was on the wane, which meant a decline in traditional advertising revenues.

The page budget was only £230.

“The challenges of a constrained budget pushed me to be more creative. Our readers get a lot for the 92p cover price. It meant getting closer to our readers. The digital revolution has changed the landscape for everyone. The joy of working for an older market is that they are late adopters. They might be slower but they put more thought into their decision-making” She says the over-fifties are engaged with technology and that consumer groups have been patronising to older people, when many use Facebook, and most now have tablets and smartphones. A magazine competition attracted over 7,000 emails and only three letters, proving a decline in older people’s letter writing. But the launch of the Woman’s Weekly Show in Manchester helped with the brand, with 10,000 coming along to enjoy knitting, crocheting and cooking workshops.

“Our show has been a phenomenal success, making a profit in our first year. Our workshops sold out this year with people coming from all over the UK.” Continuing innovation is the only way for magazines to keep up with readers – and digital diversity is working for young and old.

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UNIVERSITY OF STRATHCLYDE MANUFACTURING

Working towards the future growth and success of manufacturing in the UK

www.strath.ac.uk/manufacturing

bq_advert.indd 2-3

A leading University and its industrial partners are finding solutions to global challenges – while driving economic growth.

It is this ethos of partnership working that secured the award of Times Higher Education UK University of the Year 2012/13, and more recently, Entrepreneurial University of the Year 2013/14.

Manufacturing remains an important sector in the UK economy with growth increasing steadily. Academics at the University of Strathclyde in Glasgow are working side-by-side with partners in industry to develop a new generation of products, processes and services, and set new standards in manufacturing design.

Much of the University’s focus on collaborating with industry will take place within the Technology and Innovation Centre, a £90 million capital investment in research capability.

The Centre will allow the University to concentrate on four key sectors— Health, Energy, Future Cities and Manufacturing.

Specialising in high value manufacturing, the University’s approach ensures technology development is relevant to global industrial challenges – from design, rapid prototyping, fabrication, operational deployment and business excellence through to management and optimisation.

Archie MacPherson, CEO of the University’s Advanced Forming Research Centre, a world-class research facility to support design and manufacture in industries from aviation to energy, said: “Strathclyde’s unique research facilities enable business and academia to work together to tackle the challenges and to exploit opportunities for

innovation. Ultimately, it’s about revitalising manufacturing in the UK.” The Advanced Forming Research Centre is one of 7 elite technology and innovation centres that form the UK High Value Manufacturing Catapult. The success of the Centre is such that it has more than doubled in size to meet demand. This collaborative venture between the University, High Value Manufacturing Catapult , Technology Strategy Board, Scottish Enterprise and leading multinational firms including Boeing, Rolls-Royce, TIMET, Aubert & Duval and Barnes, has already seen more than £30 million of investment in its bespoke building and facilities near Glasgow airport.

Meanwhile, scientists at the University’s EPSRC Centre for Innovative Manufacturing in Continuous Manufacturing (CMAC) are working closely with companies including GlaxoSmithKline, Novartis and AstraZeneca to enable a step change from current batch manufacturing methods, towards the development of high-quality pharmaceuticals at a lower cost, more quickly and in a more sustainable way.

CMAC Director Professor Alastair Florence said: “For centuries, many chemical products – including medicines – have been manufactured using traditional processes, whereby they are produced in large batches and stored in expensive warehouses. We are leading a revolution in the way such medicines will be produced in the future.

“Allowing drug companies to tailor medicine production to reflect patient demand reduces the need for firms to stockpile supplies – meaning they can make significant savings and reinvest in the research and development of new treatments.”

In the oil and gas, mining and power sectors,

a partnership between the Weir Group and the University is making a significant contribution to existing and new design concepts, product design, and development. The Weir Advanced Research Centre offers a crucial opportunity to develop innovative technologies and equipment for Weir’s served market. Senior company engineers are working together with leading engineering academics to develop equipment and services in the company’s three main markets.

With nearly 1,000 of Strathclyde’s alumni working around the world in the oil and gas industry, the University is also a major provider of skilled undergraduate and postgraduate students to the sector. Its new Oil and Gas Institute focuses on addressing the industry’s key business drivers of reducing costs, increasing production efficiency and continually improving safety and environmental performance.

Dr Simon Puttock, Business Development Director for the Institute, said: “Our partnership with industry enables the transfer of advanced research outcomes and staff skills from Strathclyde into industry design and manufacture; in return, Strathclyde gains valuable insight into industry best practice.

“We are taking partnership to a new level and helping Scotland’s industries compete on the world stage. Available for either ad-hoc testing or consultancy work or for larger more extended development work, we aim to ensure that manufacturing remains an important sector in the UK economy.”

For more information on the University of Strathclyde’s partnerships with industry please contact the Technology and Innovation Centre on tic@strath.ac.uk.

The University of Strathclyde is a charitable body, registered in Scotland, number SC015263

03/09/2014 10:53

NEWS

AUTUMN 14

Renewables investor buys £90m stake in wind farms, cargo handling helps Menzies break the £1bn barrier, insurance group increases profits despite Q1 severe weather, young entrepreneurs up for a challenge >> Craneware profits soar

>> Science sector can grow

Edinburgh-based Craneware, who provide automated revenue solutions for the US healthcare market, announced record revenues up from £22m to £41m for the year ending 30 June 2014. Increased sales activity reported delivered record sales in excess of 80% on the previous year.

Keith Neilson, Craneware’s chief executive officer, said: “We are delighted to announce a record sales year for the Group, with a year on year increase of more than 80% in the total value of contracts signed in the year, demonstrating the ongoing strength of our market position. The current sales success gives Craneware certainty over contracted revenue and associated profits upon which to build future growth.”

Founded in Scotland in 1999, Craneware has offices in Atlanta, Arizona, Massachusetts and Tennessee and employs over 200 staff.

Chemical Sciences Scotland’s conference will be held in Stirling at the end of October. Among those speaking at the twoday event will be Gordon Grant from INEOS, Alistair Cameron from Scotmas and Neil Partlett from CalaChem.

Dr Sandy Dobbie, chairman of Chemical Sciences Scotland, says that although the sector punches well above its weight, there is potential for growth, especially in Europe, over the next 20 years.

He says: “The chemical sciences sector is capable of boosting exports significantly by attracting inward investment and increasing international trade. Sustainable manufacturing has a major part to play in developing innovative products, processes and solutions which not only reduce greenhouse gas emissions over the total product lifecycle but will also drive export opportunities and strategic partnerships. Scotland is well-placed to take a significant share of this market with the potential to generate around £900m in turnover by 2025.”

>> Energy giant’s big plans Edinburgh-based Cairn Energy has a cash pile of £665m for future projects.

The firm says it intends to spend £180m on its exploration in the remainder of the year, focusing on mature and emerging basins in North West Europe. While between 2015 and 2017, it intends to spend another $1bn on the Catcher and Kraken fields in the North Sea. Simon Thomson, chief executive, said: “Cairn’s future programme of high quality development projects and material exploration drilling is fully funded through to delivery of free cash flow from 2017.

>> Investment fund acquires stake in two Scottish wind farms Greencoat UK Wind has paid £90.6m for a 51.6% stake in two Scottish wind farms, at North Rhins and Drone Hill, and two more south of the Border. The wind farms have been purchased from subsidiaries of the AES Corporation, a global power company.

Greencoat UK Wind is a renewable infrastructure fund which has invested in 16 operating UK wind farms with net generating capacity of 271.5 MW. The acquisitions, completed on 22 August, include the prepayment of existing debt and will be funded by a debt facility provided by RBC, RBS and Santander.

Meanwhile TRIG – the renewables infrastructure business with assets in Scotland – has increased the value of its portfolio to £353m, up from £300.6m.

The company is producing nearly 400GWh of electricity which is also generating cash.

The company has a revolving £80m facility, provided by Royal Bank of Scotland and National Australia Bank Limited, to acquire further assets.

UNIVERSITY OF STRATHCLYDE MANUFACTURING

BUSINESS QUARTER | AUTUMN 14

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>> SECC’s strong performance The Scottish Exhibition and Conference Centre – which played a starring role in the success of the Glasgow 2014 Games – has reported a profit of £157,000 for the year, representing a strong performance with the opening of The SSE Hydro. Live entertainment turnover increased by 27% and the addition of The SSE Hydro also broadened the range of events held in the venue. The profit was achieved despite some disruption associated with the opening of The SSE Hydro and preparation for the Games. Turnover increased 16% to £23.3m and EBITDA up 46%.

Collaborating with leading industry partners to develop innovative solutions to industry challenges

AUTUMN 14

>> Crawford secures £3.9m Crawford Scientific, based in Strathaven, 15 miles south of Glasgow, has secured £3.9m investment from Maven Capital Partners. Established in 1985 by founder Sam Crawford and with a turnover in excess of £10m, Crawford provides chromatography consumables, instrument parts and technical services to a number of industries including the pharmaceutical and oil & gas sectors.

>> Menzies thrives Cargo handling continues to drive John Menzies, one of Scotland’s largest companies, with turnover for the year breaking the £1bn barrier.

The group has two operating divisions,

Menzies Aviation and Menzies Distribution, its newspaper and magazine group, with turnover up 3%, with a 7% increase from its aviation division, while profits are up 7%.

According to its half-yearly results, group turnover was up £27.1m to £1,025m, from £997.9m, with underlying operating profit marginally ahead at £26.2m, from £26.1m.

Aviation has had a very busy first six months, winning and retaining contracts. Turnover was up 7% to £386.3m.

Iain Napier, Menzies’ chairman, said: “The group continues to progress despite challenges faced in aviation in terms of continued airline pricing pressure and operational issues within our UK ground handling business.

Notwithstanding these, we have enjoyed a very strong contract win season and aviation remains well placed to continue to grow in a market with positive growth dynamics.”

NEWS

The group continues to progress despite challenges >> Venturing into Africa Scottish Development International has opened its first office in Africa, in Ghana. The agency hopes to increase the number of companies it supports into the market to around 300 by 2014/15 – double that from 2012/13 – and increase Scotland’s international sales to Africa beyond the current £2 billion mark.

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BUSINESS QUARTER | AUTUMN 14

NEWS

AUTUMN 14

guidance and has been achieved despite the severe weather events of Q1. This is the result of our approach to underwriting across both segments at this stage of the cycle.

We continue to take a prudent approach to reserving and the Group’s reserves remain in excess of 15% above our actuarial best estimate.

The group also has returns from its 50% stake in the price comparison website, Gocompare.

Investment income in the first half of 2014 was £7.6m. The trading profit from the group’s 50% holding in Gocompare was lower at £5.4m, from £6.7m. The reduction in profits reflects Gocompare’s increased advertising expenditure relating to a new television campaign which was launched in the first half of 2014.

>> Weathering the storms Insurance group esure – which employs 500 people at the Equinox offices in Glasgow – increased its pre-tax profits from £56.9m to £57.1m for the six months to 30 June.

However, premiums for motor and home insurance reflecting the competitive rating environment in both the motor and home markets are down by 1.9% to £260.4m.

Peter Wood, chairman of esure Group plc, said: “The group’s solid performance in the first half of the year is testament to the approach taken by the executive team, led by Stuart Vann, focusing on disciplined underwriting in difficult market conditions.”

Stuart Vann, chief executive officer, said: “The first half of 2014 has seen no let up in the competitive rating environment in both the motor and home markets. The group remained disciplined in its approach to rating and volume which has contributed towards our solid performance. Our combined operating ratio of 90.9% is in line with

The group’s solid performance in the first half of the year is testament to the approach taken by the executive team, focusing on disciplined underwriting

Lees Foods Ltd, owners of Lees of Scotland and The Waverley Bakery and makers of the iconic Lees Macaroon Bar, has announced yearly sales for the group rose by 21.5% to £26.3m, up from £21.6m with profit before tax rising to £1.4m, from £1.2m.

Clive Miquel, chief executive, said “The group performed exceptionally well during 2013 and I’m pleased to report that the increase in sales has been largely down to the continued growth of Lees snowballs and Lees teacakes”.

>> Firm’s smart move Smart Metering Systems plc, the Glasgow metering services company that owns, operates and maintains metering assets, has increased its meter portfolio by 13% to 534,000 in six months, as it ramps up capital investment.

The firm increased spending by 48% to £15.5m from £10.5m as it expanded its customer base. Revenue increased by 44% to £18.9m, up from £13.2m, an increase of 24% excluding the £14m purchase of Utility Partnership Limited, while recurring meter rental increased by 43% to £8.6m, from £6m, representing 46% of total revenue. Gross profit increased by 52% to £12.2m from £8.1m – an increase of 38% excluding UPL.

>> A collaboration to get Xcite-d about Xcite Energy Resources has agreed to collaborate with Statoil (UK) and EnQuest Heather to evaluate the building of a gas import pipeline between the Kraken, Bentley and Bressay fields.

The Kraken is one of the biggest subsea projects in the UK sector of the North sea.

Xcite Energy Resources plc, a subsidiary of the Xcite Energy based in the British Virgin Islands, is operator of the Bentley field, 100 miles east of Lerwick, and holds a 100% working interest in the Bentley licence.

The Bressay field is operated by Statoil, with an 81% working interest. Shell holds an 18% share.

UNIVERSITY OF STRATHCLYDE MANUFACTURING

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>> Success is still sweet for makers of iconic snack

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Working towards the future growth and success of manufacturing in the UK

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COMPANY PROFILE

New Glasgow office is fresh lease of life for expanding PRG Every part of the business is growing and every division is hiring.

If you were the Chief Executive of Scotland’s largest independently-owned specialist recruitmenit consultants, that statement would be music to your ears.

But there is no chance of Steve McCutcheon resting on his laurels.

He wants the growth curve of the company he established in 2002 to climb at an even steeper angle.

To achieve that aim he intends to add new sectors to the nine in which PRG already operate so successfully and increase staffing levels to cope with the expected demand.

Steve McCutcheon graduated with a law degree from Strathclyde University, qualified as a solicitor and worked for a small Glasgow practice before deciding the legal profession wasn’t for him.

He landed jobs as a business analyst and operations manager with two manufacturing firms.

However, he became disenchanted and quit to pursue a self-funded MBA, back at Strathclyde.

In 1998, after completing the MBA, Steve joined a London-based recruitment consultant, where he remained for two years before moving to competitors who specialised in the accountancy profession.

Two years after that, in 2002, Steve realised he could do better if he branched out on his own and PRG was born.

In the beginning he concentrated on accountancy but PRG gradually expanded into financial services and other areas.

Currently they act for clients in sectors as diverse as Accounting & Finance, Financial Services, Business Change, Technology, Oil & Gas, Construction, Executive Search, HR and Banking & Finance.

By the end of this year PRG hopes to have an IT team in their Edinburgh office and a Procurement division in their

Steve McCutcheon is founder and CEO of PRG.

We have gone out of our way to attract the best operators in the market by creating a great place to work. newly-acquired HQ in the centre of Glasgow.

In 2015 there are plans to add Office Support and possibly Marketing.

There is a constant buzz in the firm’s prestigious office building, which is kitted out with a gym, and a chill-out zone complete with pool and table tennis tables.

Extra space was needed after rapid growth saw sales shoot up to £4.5 million in the first half of this year against £2.6m for the same period in 2013, and the move took place in August.

Steve commented: “We have gone out of our way to attract the best operators in the

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market by creating a great place to work.

“These new offices in West George Street will help us to keep up with demand from our clients and candidates, continue developing our business, improve our service and help meet our ambitious growth plans.

“They will enable us to double our headcount in the coming 12 months.”

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

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NEWS

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>> McColl’s rescue plan Businessman Jim McColl has pledged to rekindle the fortunes of 112-year old Ferguson shipbuilders on the Clyde.

Mr McCall, the boss of Clyde Blowers Capital, emerged as the saviour for the yard which went into administration in August. The firm, renamed Ferguson Marine Engineering, is to get £8m of new investment, and it hopes to rehire all of the redundant employees.

>> Lager reinvented BrewDog, Scotland’s self-styled brewing iconoclasts, have launched a beer taking lager back to its roots. This. Is. Lager. Is a 4.7% ABV pilsner designed to offer lager drinkers a craft beer alternative to the massproduced lagers. James Watt, co-founder at BrewDog, said: “This. Is. Lager. redefines a beer style that has for so long been defined by shallow, listless beers undeserving of the name. For years, global breweries have spent millions convincing the British public that lager is a beer style best served as fizzy, tasteless liquid cardboard propped up by snappy straplines, glamorous advertising or counterfeit stories of foreign provenance.

We hope to perpetuate a movement of craft breweries blazing a new trail for lager, proving it’s a misunderstood, neglected beer style.”

We hope to blaze a new trail for lager, proving it’s a misunderstood, neglected beer

>> Bright sparks show vision The fifth Converge Challenge final takes place at the James Watt Centre at Heriot-Watt University on 30 September – a showcase for the very best nascent entrepreneurs emerging from Scotland’s university campuses.

Year on year, there has been a continuous growth in applicants to enter the Challenge – coming from staff and students across the university campuses of Scotland.

Converge Challenge has become a ‘beacon’ within Scotland’s entrepreneurial ‘ecosystem’ for the higher education sector, serving as a fulcrum point for the innovation pipeline, while increasing the commercial skills of students and scientists.

This year, Converge Challenge received 111

>> Tasty deal will improve security and opportunities The Scottish organic root vegetables supplier TIO (This Is Organics) has been snapped up by Produce World Group for an undisclosed sum.

Produce World chairman Neil Fraser said: “The acquisition of TIO is a natural fit for Produce World, which is a leader in the UK organic vegetable market. This will provide greater security both for suppliers and customers, allow us to secure the future of valuable organic land and give us the longest possible domestic growing season.”

William Rose, owner of Morayshire-based TIO, said: “Becoming part of the Produce World Group will provide even greater opportunities for organic carrots from Scotland.”

UNIVERSITY OF STRATHCLYDE MANUFACTURING

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entrants from academic staff and students with business ideas spanning web and life sciences technologies, new energy solutions and ingenious consumer products, an achievement which pleases Dr Olga Kozlova, Director of Converge Challenge.

“Invention and a strong ‘can do’ attitude have prevailed across our universities down the years.

“This reinforces the message that we remain a strong country full of entrepreneurial flair and vision for ideas creation, all actively encouraged by our universities.

“Our programme helps inventors to develop their commercial skills and confidence to aim high and it is the growth that this national programme has enjoyed over the past five years that is so rewarding,” she said.

Providing support to the manufacturing sector with more than £300M in research investment over the past five years

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COMPANY VIEWPOINT

When spotting a toxic tax scheme gets personal For the ‘everyday’ entrepreneur, an informed, holistic approach to tax planning is a must.

Even if you’re not an entrepreneur, but a high net worth individual (a HNWI), tax planning still involves a complex blend of family, personal and business finances.

Just in case anyone is wondering, a HNWI (pronounced like Henry, only with a ‘w’ replacing the ‘r’) in the UK will likely have about £600k in addition to a home.

At this end of the market, personal and business finances are invariably linked, and in terms of tax the trick is to put an efficient plan into place that’s best for both and where one doesn’t injure the other. Customarily, compromises must be found.

That’s where the drive for efficiency comes in, and can often land the taxpayer in hot water. You only need to take a look at the newspapers over the last couple of years to note the stars (from both business and celebrity worlds) that have come a cropper due to some ‘efficient’ tax scheme or other. However, it’s not just the glitterati that have fallen into the trap of going along with a scheme that sounded fairly sensible at the time.

In terms of complications arising from such schemes, there are some serious financial considerations on the negative side. Firstly, the cost of fixing problematic situations. We have seen new clients that have been sold ‘tax efficient’ schemes and have had to pay more than the planned savings to extricate themselves from a potentially damaging situation.

Secondly, the cost of fighting a case in court for tax savings from an avoidance scheme has just risen dramatically. A new ‘pay first’ rule is now in play, so if you want to dispute a tax bill with HMRC,

you need to have the assets to 6. Borrowing arranged by the pay up front and wait for scheme provider. the scheme to be tested 7. The words “nonthrough the courts. recourse” appear The other obvious anywhere. cost of foolhardy tax 8. Tax relief efficiency – often exceeds the initial called ‘avoidance’ - is non borrowed to reputation. The “investment”. value of reputation as 9. Professional fees/ an asset is difficult to commission are high. measure, but irreparably 10. A contribution to a damage it and the business Defence Fund is part of (and often personal) cost will the cost. become all too clear.

Buying a heavily marketed Paul Renz is a partner Of course, HMRC is becoming more scheme sold by a reputable specialising in tax robust in closing down schemes institution is a trap into which that are obviously beyond the many have fallen. However, pale. However, new schemes will if you have the assets that continue to pop up so it’s worth noting what make you a target for such schemes, then you’re to look out for. obviously no fool around money. As recent cases illustrate only too well, it’s always worthwhile 10 WAYS TO SPOT A POTENTIALLY RUM TAX DEAL maintaining personal responsibility for your 1. Confidentiality – being exhorted to secrecy and own finances and remembering that pushing the asked to sign a confidentiality agreement. envelope in business often pays off, but within the 2. Involvement of an offshore tax haven. current tax climate, it might just be worth keeping 3. Over emphasis on Counsel’s opinion / support your intuitive senses on high alert. As the old for scheme. adage goes, if it seems too good to be true, it 4. Generous tax breaks are reserved for high probably is. risk ventures so any suggestion of low or no risk implies a manipulation.

5. Relief is given on a sum of money a small part of which you provide from your own resources the far greater part is borrowed.

Paul Renz is a partner specialising in tax at business advisers and accountants Scott-Moncrieff.

T: 0131 473 3500 E: paul.renz@scott-moncrieff.com www.scott-moncrieff.com

Personal and business finances are invariably linked, and in terms of tax, the trick is to put an efficient plan into place that’s best for both and where one doesn’t injure the other.

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BUSINESS QUARTER | AUTUMN 14

PEOPLE ON THE MOVE

AUTUMN 14

>> Banking on Barton

>> Raising the Barr

>> Property promotions

Societe Generale Private Banking Hambros has appointed Douglas Barton as private banker to its Edinburgh office.

He has joined from PricewaterhouseCoopers and has previously worked for HSBC and RBS.

Stuart Lorimer has joined AG Barr, the soft drinks firms, as finance director.

Stuart, 47, has spent the majority of his career with Diageo where he was finance director of the group’s £4bn global supply operations.

Property consultancy JLL in Scotland has promoted seven members of staff to senior positions. Niall Robertson, building consultancy (Glasgow), Alistair Reid, office agency (Glasgow) and Andy Crosbie, valuation (Glasgow) are promoted to local directors.

Alex Fraser, capital markets (Glasgow), Shahid Ali, planning (Glasgow), Cameron McCallum, residential and development land (Edinburgh) and Iain Wallace, retail management (Glasgow) are promoted to associate directors.

In total, nine Scottish staff have been promoted, including Colin Campbell, capital markets (Edinburgh) and Colin McGhee, office agency (Glasgow) who are both promoted to senior surveyors.

>> Tennant made a partner Ryden have hired project management expert Craig Tennant who has joined the firm as a partner. A director with Currie & Brown, Craig has 20 years’ experience of managing major development and infrastructure projects across the UK and Africa.

>> Shepherd: the real deal

>> Recent graduate lands regional manager role Judith Hogg has appointed a regional manager for Scottish Land & Estates in central and north east Scotland. With a family background in arable and hill farming across Perthshire and the Scottish Borders, Judith takes up her role having recently graduated with a diploma in agriculture at Scotland’s Rural University College.

>> Three take on new roles Brian Cameron, Lesley Cameron and Kate McClorey have been promoted to regional directors, roles that will see them lead the development of Hudson in Scotland.

Scott McKenzie has been appointed investment director with Saracen Fund Managers, the Glasgow independent

BUSINESS QUARTER | AUTUMN 14

investment management company, set up in 1997.

>> McLean on the move Sarah McLean, former director of sales at the Waldorf Astoria, has been appointed

by Sodexo Prestige as the National Accounts Manager for Scotland, where she works for some of the country’s leading venues including Hampden Park and Perth Racecourse.

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Shepherd surveyors won a clean sweep in the Estate Gazette’s Dealmaker of the Year competition across all three categories in Scotland with Jonathan Reid in East Scotland, Patrick Cairney in West Scotland and Neil Calder in the Highlands, where the firm completed one deal every nine days.

>> Seeking fresh challenges Angus Cockburn, the interim chief executive officer at Aggreko, has joined his former colleague, Rupert Soames, at Serco Group plc. The move comes after Chris Weston was appointed chief executive officer of Aggreko. Mr Cockburn had previously indicated that he had decided not to apply for the Aggreko role on a permanent basis and that, after 14 years principally as chief financial officer, he was keen to seek fresh challenges.

AUTUMN 14

PEOPLE ON THE MOVE

>> New wave for Robb

>> Gove joins board as FD

Wave energy firm Aquamarine Power, based in Edinburgh, has appointed Douglas Robb as its chief financial officer. He joins from Cornelian Asset Management.

Colin Gove has joined Cooper Software as finance director. Colin spent 10 years as associate director at KPMG and, more recently, finance analyst at Wolfson Microelectronics. Colin will join the board, along with George Elliot, chairman, at a very exciting time for Cooper Software.

>> Capitalising on growth Edinburgh property specialist Cullen Property has made three appointments following significant growth. Sally Easton has joined the property managers’ team, John Martin is support administrator, and Mark Hall has begun a property administrator modern apprenticeship.

The last nine months has seen an increase of over £1m in the rental income of its managed portfolio.

>> Paisley joins Standard Life Standard Life Investments has appointed Andrew Paisley to its smaller companies team, reporting to Harry Nimmo, head of smaller companies.

Andrew joins as one of five investment directors in the smaller companies team. He was investment director, UK

smaller companies, at Scottish Widows Investment Partnership.

>> Law firm adds strength Law firm Wright, Johnston & Mackenzie’s commercial property team has been strengthened by the appointment of Neil Darling, as a partner. Neil joins from DWF and will be based in WJM’s Edinburgh office in St Andrew Square. WJM’s renewable energy team has been strengthened by the appointment of industry specialist, Alan Simpson, as a partner, who has joined from HBJ Gateley, while Alan Bauchop has joined the firm’s commercial property team and Michael Drysdale step in to the corporate team.

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BUSINESS QUARTER | AUTUMN 14

AS I SEE IT

AUTUMN 14

HOW TO TAKE A NATION ON A RADICAL JOURNEY What kind of future can Scotland now look forward to? Corporate Culture Group chairman John Drummond sets out his vision

BUSINESS QUARTER | AUTUMN 14

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The vote has been counted. A new future beckons. In fact, two futures beckon. There is the likely future. New powers. Politicians squabbling. Assets divided. Markets reacting.

New institutions set up. Delays to delivery.

Costs escalating.

Or, we could use this as an opportunity to create a future where we have a form of government that citizens feel they deserve.

They are clearly pissedd off by governments that are ‘too far away’ or full of too much heat and not enough light.

So what kind of underlying principles would give us a government we could trust? As I see it, it would do some or all of the following: IT WOULD CREATE POLICY BASED ON EVIDENCE: No nation is immune to global trends. There will be 11 billion people by 2100 bringing new stresses on the supply of energy, water and food and therefore pressure on the movement of people. What if the policies of government emerged from a regular and balanced annual analysis of the risks and opportunities facing the nation?

IT WOULD FOCUS ON OUTCOMES: What if governments focused on the achievement of social and environmental goals? The truth is that the same 17 outcomes are shared by all governments – issues such as water security, energy security, the reduction of poverty, a secure old age, manageable debt and a sustainable economy.

IT WOULD FOCUS ON THE LONG-TERM: The achievement of real change requires politicians to consider how they manage for the long-term. The current accepted form of government forces us to live purely in the present with annual financial targets.

Elections every four or five years mean we have sound-bite democracy. Only when there is an immediate threat (say, of the lights going out) do governments consider the resilience of our infrastructure.

IT WOULD COLLABORATE REGULARLY AND OFTEN: The reality is that many contextual issues do not

respect physical boundaries. Today technology, finance, climate change, innovation, culture, the threat of extremism are unburdened by geography. And if politicians are focusing on real change, governance may require cross-party action and may regularly draw on external expertise.

IT WOULD BE CONTINUALLY OPEN TO LEARNING FROM OTHERS: Businessmen instinctively know that real change requires innovation. Innovation does not happen if we live in an echo chamber, where we only hear the views of people who think like us.

What if politicians focused on ideas that work, not just ideas that echoed their narrow political convictions?

IT WOULD USE A FULL-RANGE OF STRATEGIES: And that may mean new and different strategies to achieve real change, not simply the use of the traditional armoury of new regulations, new laws, new institutions or new communications programmes. Strategies should naturally emerge from the evidence.

Defining, for example, a private or public sector solution in advance is often a victory of prejudice over common sense.

IT WOULD SHARE RESPONSIBILITY WITH CITIZENS: It would not assume that governments are always at their best when they do stuff for people. No long-term public policy change can be achieved without the action of citizens. We can’t assure a reliable supply of water without people acting to save water. We can’t assure a reliable supply of energy without people acting to save energy.

IT WOULD LISTEN AND ENGAGE: There was nothing wrong with the Big Society idea except its name. But the underlying thought is that people should be actively engaged in owning problems, imaging solutions to them and implementing them.

Surely this is the daily stuff of modern democracy?

IT WOULD BE TRANSPARENT AND ACCOUNTABLE: An early idea of the Tony Blair government was the idea of

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AS I SEE IT

Do we really invest in politicians that we can believe in? It’s time for a new generation of leaders an annual report from the government to its citizens. That’s a cracking idea for Scotland.

IT WOULD BE FAIR: In a BBC Horizon programme called “What makes us human?” two young kids collaborate to move levers and release sweeties. Then one got three and the other got one, their instant reaction was to share. People relish shared goals, shared processes and shared rewards.

IT WOULD BE SKILLED: Do we really invest in politicians that we can believe in? Does the role attract the right people with the right skills for the right reward? It’s time for a new generation of leaders.

Every nation is dependent and independent.

There is stuff it controls, stuff it influences and stuff it simply needs to accept. We lack governments we can believe in. But surely the noise around the referendum and, before that, the European elections are loud enough to wake-up the sleepiest of politicians.

So what if we had national governments that focused on individual and collaborative action to achieve real change? As I see it, the time couldn’t be better to begin a public discussion on a fresh series of principles that should underpin our nation states. Radical? Nah. ■ John Drummond is from Edinburgh. He is chairman of the Corporate Culture Group, a business behind several major public policy change programmes in health and the environment and advises leading businesses on sustainable business and behaviour change. He is the author of two recent reports – Reason; an executive guide to the probable future and Human; new insights on the human operating system.

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ENTREPRENEUR

BUSINESS QUARTER | AUTUMN 14

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ENTREPRENEUR

YOU CAN GET IT IF YOU REALLY WANT Ian Milligan's success is built on a deceptively simple premise – listening to customers and delivering what they want, he tells Kenny Kemp

Ian Milligan is standing at the front door of his office as the taxi pulls up outside. He is in buoyant mood and proffers a friendly handshake. The previous day, his company, Nugensis, signed its first deal with a major North Sea oil company to sell its software after two years of wooing.

You might also expect him to be standing on his head; because this is exactly what his business has been doing so successfully.

When the firm was set up in January 2011, it had no product and no idea what to sell.

It simply asked its network of clients what problems and challenges they faced,

then went out and found solutions.

Now Nugensis is one of Scotland’s fastest growing businesses, growing from its four founders to 39 staff. Last year turnover was £2.5m, with profits of £400,000, while this year turnover is expected to double to £5m, and to exceed £1m in profits. In March it secured a £2m contract with NHS Scotland for its award-winning software systems.

“The most important thing for us is that we will take £1 million of recurring revenue into next year. We are debt-free and will have the security of a year’s wages for everyone in the bank,” says Ian Milligan.

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“Starting another company was always on my mind. It was simply a question of timing and the availability of talent. In 2011, the key people were all aligned and interested in starting this business with me.”

The trio joining Milligan were Stewart McQuillian, the operations director, Iain Edgar, the sales director, and the chairman Peter Quinn.

“I worked with Iain and Stewart at Capito.

I knew how good they were – and they are better at their jobs than I could be. Iain has forgotten more about sales than I will ever know. Stewart has a capacity like no >>

BUSINESS QUARTER | AUTUMN 14

ENTREPRENEUR other to deal with every detail. They are perfect for sales and operations.”

“The concept of Nugensis was built around these people. We were lucky we had clients who wanted to trade with us but we had no idea what to sell them. We spoke to our clients and asked them: what do you want us to do for you?”

They all told Ian and other founders the same thing: don’t sell the same things that everybody else tries to sell us. This was a novel approach to starting a business. In many ways, it is counter-intuitive. But this was a clear message that the fledgling Nugensis team had to find products that were visionary, cutting edge and practical for customers.

“We thought long and hard and came up with a very simple strategy with some simple tactics to underpin it. We decided to drive towards sustainable profits by thinking differently from everybody else and by trying to exceed our customers’ expectations. That’s a big bold statement in terms of what we do.”

How could such lofty goals be achieved?

This led to conversations with clients in two sectors, the National Health Service and UK oil and gas. The question being asked was: what problems do you have today that are not being solved?

This was a revelation. Once Ian and his colleagues learned more, they set off to find solutions for their clients’ pressing problems – bringing back a possible answer. So where and how were they able to find such solutions when others might have tried?

“One of our longest-standing customers was at a computer show in London and he saw some new technology. He phoned us from the show and said: ‘This is amazing, you have to look at this stuff’ - and within four weeks we were selling it. This was Nutanix,” recounts Ian. Nutanix delivers web-scale infrastructure which is scalable and simple in its interface with the users. Within two years, Nugenis were awarded by Nutanix the partner of the year for EMEA having sold £2m of product.

The relationship with US-based Nutanix has flourished, but there was more. On the NHS front, another client alerted Ian and the team to a product that was being used in Trafford General Hospital in Manchester.

BUSINESS QUARTER | AUTUMN 14

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“Again, we got a call from someone who said: ‘I think it’s very cool’. Four weeks later we bought the company. The product they were developing we now call WardView. We have integrated it into our business and the software is now in 38 hospitals, 87% of all the hospital in Scotland, in over 720 wards, covering 20,000 beds.”

Nugensis bought Deep Red, then owned by Stephen Waterson, [‘an absolute genius of a guy’] who is head of applications and development and works in Nugensis’s

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office near Warrington.

WardView replaces the whiteboard and felt-tip pen system in hospital wards which recorded each patient and what bed they occupied. The new system allows hospitals to monitor more effectively who is in each bed and how and when they are moved.

“It gives you a lot more information about the patient. It was a problem the NHS had that wasn’t being solved. Stephen had a brilliant piece of software but no ability to get it to the market. We had a market and the expertise

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to get it there. That was three years ago and today we have nine products, including PharmacyView and AdmissionView. We have just concluded our largest deal outside Scotland at NHS Doncaster and Bassetlaw who purchased our software for their three hospitals. We are beginning to gain traction in England and Wales.”

He says both these sets of products came purely by asking clients what they needed to solve problems.

“Our success is through the way we engage with our clients. Never be afraid to ask them what they want; but don’t tell them what they need. We’ve stuck to this and it has served us pretty well.”

Scotland’s health minister Alex Neil heard about WardView’s effectiveness and made money available for the hospitals to implement the system.

“It's easy to talk about ROI and efficiency gains when you design a system but we all too often forget the simple things, one of the best and most surpirising benefits of our system came in the form of feedback from the nurses – they now have time for a cup of tea in the morning. Before WardView the morning meeting took half an hour, now it takes 15 minutes. The nursing staff love the system.”

How does Nugensis select the appropriate technology to sell and then service?

“We are interested in more niche products that solve specific problems. We are very good at that. We are good at building more into the product or solution than the customer expects – and we don’t charge more! It’s part of who we are and our culture, it's something we are very proud of.”

The third side of the business is ‘data visualisation’, where massive amounts of information can easily be assimilated and understood by under-pressure managers.

“Yesterday we completed a deal and signed up our first oil and gas company on our latest product. It's a visualisation product that allows the management team to gain quicker and more insightful views on what is happening on their North Sea oil rigs,” he says.

Managers in most businesses are bombarded with daily reports that are often difficult to access and don’t clearly and simply show the key information. The Nugensis system takes all

ENTREPRENEUR

Our success is through the way we engage with our clients. Never be afraid to ask them what they want; but don’t tell them what they need. We’ve stuck to this and it has served us pretty well

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the key information from a myriad of sources and presents it in a simple view, in addition it allows management to trend the information.

This builds a historic picture of what happened allowing managers to make more informed assessments of what the future could look like.

“Our data visualisation product took us two years to develop and get right. This gives us a chance to develop a software side to our business that will solely focus on the oil and gas sector. We are very selective about what we do. We have a robust process for introducing new technology into Nugensis .

First and foremost, the technical team have to say they can deliver it, then the sales team have to believe they can sell it and a select number of our existing clients have to say they are interested in it. At that point, we adopt the product, all three parts have to be ticked.”

He says if you can’t deliver a product, there is no point in selling it, and if you can’t sell it, there is no point in being technically competent. If no-one will buy it, then the technology doesn’t matter a jot.

Another business trait that Nugensis takes pride in is its ability to deliver in shorter timescales. With public sector procurement often seen as a quagmire of delay and expense, Ian Milligan says Nugensis remains fleet of foot and delivers quickly on projects.

“For example, our software into major acute hospitals in Lanarkshire was implemented in three weeks. That’s unheard of. Once everyone connects, it’s quick,” he says.

Nugensis, headquartered in offices in Tannochside Business Park, in Uddingston, and in Warrington, and Aberdeen, is now working on exporting its products and looking for partners to help with its international expansion plans. It has been assisted by Scottish Development International, who have put Nugensis on an export programme, and the firm is currently assessing partners in India, Canada and Central Europe. [“It’s about picking the right partners, they need to have a similar philosophy to us.”]

Recently Jamie Rae, the entrepreneur and founder of Redeem, the Falkirk-based mobile phone recycling business, has joined as a nonexecutive director. He has also been using his networks to raise the Scottish firm’s profile.

“It is about getting our products to the >>

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market. We must sell professionally and quickly in a friendly manner. We need to keep developing our products at the pace we currently do. That’s the hardest part for our competition, it’s tough for them to compete with us on that. Our products will continue to look better, be more feature-rich and easier to use than anybody else's. That’s the best way for us to protect ourselves. Everyone in Nugensis is a sales person, perhaps not everyone recognises this though, but we depend on selling. Supporting sales has to be the number one priority for everyone.”

How did Ian Milligan reach this stage? Born in Kirkcudbright, he left the local high school at 18. “Rather than go to college or university, a job and money was much more attractive to me,” he recalls.

He worked in weapons testing at the local MoD facility at Dundrennan for seven years.

He admits it was a fascinating experience, but having signed the Official Secrets Act, he says he can’t say much about his work.

“That was my introduction to computing.

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There were few organisations in the world at the time that could afford large computing devices. During my time there, everything became computerised. It went from a computer the size of a large caravan to a single desktop.”

In his mid-20s, he left to join Gates Corporation, a global business that was at the time one of the largest privately owned companies in the world, making industrial and hydraulic parts such as belt drives for cars, escalators, and tractors, and also manufactured tyres, hoses and rubber belts.

The Denver-based company, with its European headquarters in Erembodegem, in Belgium, was committed to network computing and Ian was put on courses to increase his skills.

“There was a facility in Dumfries where I worked. I got a wonderful introduction to computing at a global level. I was involved in global projects and I found that not only did I enjoy it, but I was good at it too.”

It was certainly a productive time for Ian, but

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he was told he might make more money as a consultant. At 27, he moved from the southwest of Scotland to Glasgow, joining Altor, an IT consultancy.

“I was always driven to stay in touch. I didn’t get stuck or stubborn in a sense of ‘this is what I do and I’m only going to do that’.

When I moved to Altor I met sales people doing jobs I’d never seen before. I also started to get engaged with senior figures in the business. To see the importance and power of sales to an organisation was a huge learning curve. I quickly realised that if you wanted to grow and develop yourself, you had to be involved in and understand sales.”

He moved into pre-sales rather than technical consultancy. He then met Peter Quinn (Nugensis’ chairman) who owned a successful computing re-selling company called Capito.

He joined Peter to help move the business from purely selling computer systems from IBM, Compaq and Dell, into a computing services operation.

“Peter recognised that his business had

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to change from mainly selling products to delivering service. He brought me on board and I became technical director. In three years we took the business from achieving 80% of its profits from products, to 80% coming from services.”

Capito was selling to public sector, including central and local government and health, and larger financial players and oil and gas. The yearly turnover was around £20m and the margin improved.

“The role was simple: build a team of people capable of supporting a services business and find a way of integrating it into the sales process,” he says.

Peter Quinn remains an important sounding board for Ian. “He was the person who made me realise that sales and cash were the two most important things in your business. If you didn’t have one, you wouldn’t have the other.

He’s a brilliant man to have as our chairman.“ Capito did well, Peter Quinn sold out and a new board took over. Ian was uncomfortable with the direction.

“I didn’t agree with the strategy and could not be a board member and part-owner of a business where I didn’t believe. I put my hand up and said, ‘I’m out and thanks very much’.

I had no idea what I was going to do. No real inclination of what I wanted to do. I just wanted a break.”

This was 2008 – in the teeth of the worst recession in post-war history. It was a scary thing to do.

“Some people would say it was a bold move – others might say it was a stupid one, but I wasn’t happy. I wasn’t doing what I wanted to do. It was all amicable though.”

Five weeks later, he got a call from a friend who was nursing a failing £1bn project. Ian was asked to help Lend Lease, the construction company, who were working on the UK Government’s Building Schools for Futures. There was a bottleneck with the introduction of the ICT into the schools and it was a potential deal-breaker. Lend Lease was struggling with two contracts: one in Lancashire and the other in Birmingham. It was controversial in that the private sector was building schools through public-private finance partnerships and it was a political hot potato.

Ian Milligan was asked to run the overall

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ICT programmes. The deals involved ICT systems being linked to the construction and maintenance contracts for a 25-year period, yet this was not Lend Lease’s core competency.

It was an arduous three years, but he left with the contracts successfully in place and the schools equipped with modern systems to help the next generation of young learners.

“It was project turnaround work and I absolutely loved it. It was one of the biggest challenges of my life, especially with Birmingham City Council, who were a very large organisation to deal with.”

Why was it in such disarray? “It’s the same for every turnaround project, the client did not believe in what needed to be done. They didn’t like what was being put on the table and we couldn’t close the contracts because of protracted solution and legal wrangling. There were issues of emotion and politics too.”

How did he resolve this?

“Step number one: meet the client and ask them what is wrong. It is amazing how many people don’t do that. Too many people assume they know why the client is annoyed.

Or assume that they know why the client is wrong and they are right. Few people ask: ‘Tell me what’s wrong?’ It doesn’t happen in one meeting, but eventually if you listen enough you can boil it down to the main issues.

Then you say: if we agree to fix these issues, can we close the contract. Step two is then implementing.”

With such large projects, he talks about the necessity for constantly ‘revising your specification’ to take into consideration the massive change in technology and computing.

While Ian had a large team within Lend Lease, he also brought in people such as former Capito colleague Martin Kerr, who taught

IT law at Strathclyde University and played a critical role in working through the ICT contracts; Chris Dickinson, who Ian knew would ultimately take over from him, and Gian Fulgoni, a man with the passion, drive and determination to bring all of the pieces together.

For Ian Milligan, it has come around full circle to sales.

“I’ve had the absolute privilege to work with some wonderful people who fundamentally changed the way I thought about working and selling. I’ve been inside businesses that have been heavily sales-focused and that has been a great grounding,” he says.

He also believes that companies spend too much time thinking about tomorrow.

“Inside large organisations, they are all too keen to produce three-year business and financial plans, we have a three-month plan.

We talk about and focus on staying in the moment – what will we do tomorrow not in one, two or three years' time. We have a strategy for Nugensis with hopes and aspirations, but we have three-month plans and objectives. If you can’t execute in the next three months, then you are not going to get to three years.”

After three months, the company’s goals are reset again, based on what has happened.

“This way we are constantly adapting and changing to what the customers are saying and the market is doing. If we keep on executing, if we keep on thinking differently, and we keep on exceeding our customer’s expectations, then we will grow as a business.”

This proof is in the contracts being secured

by Nugensis – a Scottish firm with a strong future. n

I’ve had the privilege to work with some wonderful people who changed the way I thought about working and selling. I’ve been inside businesses that have been heavily sales-focused and that has been a great grounding

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FORGING A BETTER BUSINESS FUTURE FOR SCOTLAND Bothwell-born Les Hutchison is a veteran business figure who reached the top in a global engineering company. Now he wants to give something back to Scotland’s emerging leaders. He talks to BQ Editor Kenny Kemp Our GlobalScots – that eclectic group of kinsmen and women who lead international business lives – have a unique ability to reflect back to those of us in the homeland.

Les Hutchison is an international business figure, based in Barbados, who is able to offer his considered ‘Home Thoughts From Abroad’ to help Scotland’s future leaders. Les trained as an electrical engineer in Scotland’s steel industry: a technical apprentice who immersed himself in learning. It held him in great stead as he went on to run significant international businesses. After an early career shaping several Scottish engineering companies, Les joined ShawCor, one of Canada’s most successful global businesses. He rose to become general manager and vice president of the Shaw Pipeline Services Division, the Omsco drill pipe manufacturing division and senior vice president of Bredero Shaw, before becoming a ShawCor board director and vice chairman from 2008 until his retirement in May 2013.

Today he is Patron of the Saltire Foundation, dedicating his own involvement to a well-kent and admired entrepreneur.

“For me, some things have come full circle.

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It was Donald Storrie who encouraged and inspired me. I benefited from people such as Donald taking the time to show me how to give back. Then I had the pleasure and opportunity to become a GlobalScot and give something back. What I’ve seen is that a successful business life is about strong leadership, application and hard work to develop skills. Perhaps I’m in a place to pass some of this to the emerging generation of Scots. That’s why I’m delighted to help the Saltire Foundation,” he says, sitting in his holiday country house in Perthshire.

Born in Bothwell, Lanarkshire, in 1954, his tenement home was surrounded by dairy farms, with woods and fields where an adventurous boy could explore. Les’s father drove the machine which ultrasonically checked the British Rail track, while his mother worked in the House of Johnston furniture shop in Hamilton. He has an older sister, Myra, while his brother Jim, five years older, was killed in a road accident when Les was 23.

At 10, Les was given a BSA Bantam motorbike and learned to ride off-road on the disused railway yards around his home. He enjoyed

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‘tinkering’, stripping down the bike and fathoming how it worked, becoming adept with handling tools.

He attended Uddingston Grammar where he was encouraged by inspirational Scottish teachers.

“When I went to high school, I enjoyed maths and physics. Many of the teachers, such as Mr Wallace and Mr Prentice, were very encouraging. I was lucky that they instilled that passion. Also in physics, Mr Urquhart, was a great teacher who also coached the football team.”

Relaxing in the expansive drawing room, he can savour the many comforts his life has given him, but he was a typical workingclass lad keen on football and golf. At 10, he joined Bothwell Castle Golf Club as a junior, remaining a life-long member and its first patron. On the football park, he played in the Under 18 Scottish Youth Tournament and, at 19, joined Larkhall Thistle as a junior professional, before signing for Albion Rovers, where he played in goal. Les recalls: “You learn a lot being a goalkeeper. It’s a lonely position. It comes in fits and starts. You have

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to learn to focus for the whole game and have some tremendous self-confidence. Seventy per cent of what you do is prevention. You have to control your defence – and be a good communicator.”

He left school at 16, and went on a British Steel technical apprenticeship at Bell College in Hamilton, now a part of the University of West of Scotland. [“This was a technical apprenticeship, which was academic with a fair bit of practical work. It was fantastic grounding.”] Les has established the annual Hutchison Prize for Engineering at the university.

In 1970, the British Steel Corporation was a major employer in Central Scotland, a remnant of our mighty heavy industrial past, but changes were afoot. As a qualified electrical engineer, Les covered four of the BSC’s steelpipe plants in central Scotland, formerly known as Stewarts & Lloyds. A number of years later, ShawCor purchased a steel-pipe coating division taking Les back to his roots.

The sites were the Clydesdale Works in Mossend, where Les was based with its steel works, pipe manufacturing and quench-andtemper facility [a series of furnaces where metal is heated to a specific temperature depending on the quality of steel required] which he helped to install. The others were the Calder Works and the British Clyde Works, both in Coatbridge and the Imperial Tube Works, in Airdrie. It was a highly skilled division within the wider nationalised BSC. In the quench-and-temper process, metal is reheated to get the correct metallurgical qualities, before a series of ultrasonic and electro-magnetic inspections ensure there are no flaws. Then it is tested under highpressure water using the Bronx Hydrostatic Tester, which Les, an electrical design engineer, commissioned during his time at British Steel in 1974 and is still in use today.

“I was fortunate to go through the period of transition from the open-hearth to electric arc to concast [continuous casting]. I was an electrical engineer and I designed some of the high-voltage control and distribution systems.

I was responsible for a large part of the Imperial Works, where we did a lot of pipe threading and the manufacture of large couplings. It was really very interesting.”

Scotland has the capacity and know-how to make steel of high quality and precision.

So what does Les think happened?

“When I talk about business today I say every big business begins and ends with the market. The burgeoning North Sea oil industry was the market in Scotland at the time. We had to work out whether we were the low-cost producer for that market. We clearly were not – and the foreign competitors became much more efficient and able to understand and replicate a lot of the technologies we were developing. The market changed with the supply chain undergoing a lot of mergers, rationalisation

INTERVIEW

It was what we all did to make ends meet.

I’ve never found a substitution for hard work.

I’ve never met anyone who has achieved anything without a lot of hard work.”

A serious motor cycle injury put paid to his fledgling professional football. Meanwhile he showed his entrepreneurial streak growing the mobile disco business, with former school-mate Ron McCulloch, who went on to become a leading Glasgow nightclub owner, creator of the Rock Garden and Big Beat, then Les set up G&L Electrical, an electrical contracting business with colleague George Robertson.

“We did this for three years and I learned

From the age of 19, I had three jobs on the go... I’ve never found a substitution for hard work. I’ve never met anyone who has achieved anything without a lot of hard work and the North Sea market declined.”

Japanese mills, making excellent pipes, closed in on European markets, while the Americans, the Argentinians and the Chinese all began producing at much lower costs.

“Most things from Asia improved through time. When I go back to my early motor cycles I was a British bike guy with Triumphs, BSAs and Nortons, and I remember seeing the first C90 Honda, which sounded like a sewing machine. We thought it would never take off.

But they managed to perfect their bikes and introduce volume production and get the cost down. And they didn’t leak oil. They put British manufacturers out of business. It was the same with pipe-making – their quality improved and the price was much less than we could produce.”

A younger Les was always on the go with a remarkable amount of youthful energy.

“From the age of 19, I had three jobs on the go. I had a disco business, getting in at 4am and having to get up at 7am for my engineering job, I was at football training two nights a week and playing on a Saturday.

Fortunately, I was really very fit at that point.

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about profit, loss and cash flow and that it is often difficult to get paid. I learned about contract management and making sure you get staged payments, so you are always covering your materials and labour.

The only thing you are risking is your profit.

It is important to have some leverage on the customer to ensure payment”. Something which was very useful many years later when undertaking work in Nigeria.

Les could see the writing on the wall as new installation work dried up and he moved to Lambertons in Coatbridge as a control system engineer for material handling systems. He stayed a year before switching to Motherwell Bridge, where he became an electrical project manager. Here he broadened his skills with pricing, negotiating, designing and managing installations around the world. [“The whole gambit from beginning to end. It stood me in good stead later in life.”]

He began totting up the miles, worked on the electrical instrumentation on installations on Das Island in the Persian Gulf, part of the Emirate of Abu Dhabi, then in London and Avonmoth in Bristol, and on a flare stack >>

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at Grangemouth, earning enough for a deposit on his first house in Motherwell.

Increasingly, Scotland was a dot on the globe, as Les’s career horizon opened up.

“What was interesting was that you could see the demise of Scotland’s large industries, the mining, the shipbuilding and steel production.

On the global scale, unless you had a unique technical advantage, there wasn’t a way that we could compete when you are making pipes or strips of steel.”

The trade unions were dominant in the lives of many working Scots and they did little to encourage anything more than was required.

“I never asked for a promotion in my life when I was working for someone else. If you want to do something: do it. Unfortunately, a lot of people would say: ‘I don’t get paid for that, so I’m not doing that’. The can-do attitude has to be about doing a bit extra and learning a bit more about what you’re doing at work, and seeing whether you can do something or not,” he says.

He joined Anderson Strathclyde, a Motherwellbased company that crystallised Les’s thinking.

“The company was making a material change.

It was a business that designed and built Anderson Mavor, world-class long-wall mining equipment. There was a fantastic group of Scottish engineers, really good people, making brilliant products. But they knew they had to make the change from mechanical-driven equipment to electrically-driven machinery.”

He was brought in as assistant works manager to help with the changes to introduce new electrical control systems for the longwall cutters.

“I started to build up a large team of electrical engineers and fitters building electrical control and monitoring systems for the mining equipment. For its time, it was cleverclever stuff.”

The Motherwell company was making 70% of its products for National Coal Board in the UK, but the world was changing here too. China was set to become a major coal producer. In 1985, a Chinese contract required Les to go to Fushun in North-east China as part of a technology-transfer agreement where he was training engineers to manufacture engineering equipment.

“It was my first trip to China and it was

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fascinating. It was fundamentally different in so many ways. They sent engineers back to Scotland and they wrote up technical books and made hundreds of sketches of all of our equipment. It was question after question. They were all extremely competent, enthusiastic and they were acting as one.”

He learned basic Mandarin and worked alongside other engineers, where 20 Chinese would attend every meeting devouring every aspect of Anderson Strathclyde’s machines.

He was astonished by the Chinese capacity to copy, design and build after their trips to Scotland – this was ‘hyper-technology transfer’.

In 1987, Les was sent to a world manufacturing conference on lean manufacturing at Gleneagles. By now, and deeply influenced by a book called The Goal, a piece of fiction by Eliyahu Goldratt and Jeff Cox, he was developing his own practices on quality control and manufacturing techniques in engineering processes. He was production manager with 1,000 people making domestic and export equipment for Australia, and South Africa. He penned a memo on optimal manufacturing strategy, which looked at how to reduce costs and lead-time to help repel the increasing competition from abroad.

“I was asked by managing director, Jim Mowat, to lead a team of managers and external engineering consultants from Rossmore Warwick to do a fundamental review of the company in the UK. This intensive study gave me an intimate handle on the financial state of our business. It was a powerful lesson in finance and investment and proved to be the basis for my future success, he recalls.

But there was a growing sense of alarm at Anderson Strathclyde HQ in Glasgow as the bitter miners’ strike, provoked by Margaret Thatcher, slashed demand for mining

equipment in the UK while the Scottish firm was battered in a global market by strong sterling against its US competitor.

“We were pound for dollar when it came to selling. The phrase Clyde Built still meant something. We were using solid and sturdy metal plates while our competitors were making lighter and cheaper equipment,” he remembers. Les Hutchison faced up to the terrible task of beginning the process of laying off 700 people but it ripped his own heart out as he admired the people in Anderson Strathclyde and he decided to try his hand as a business consultant. He moved into business development with Lanarkshire Development Agency, a new enterprise body spawned to help a community devastated by the mass closures of the heavy industry and hoped his newly acquired skills could help local businesses. During this time he struck a friendship with Donald Storrie, a well-known entrepreneur and the first chairman of the Entrepreneurial Exchange, and worked on new ventures.

While consultancy had its merits in allowing Les to make recommendations, he missed the urgency of line management decision-making and the power to implement change.

“It proved to be very frustrating for me. I was headhunted to take on Scottish Stampings, a division of British Steel Forgings, based in Ayr. The guys were really good and made forgings for the truck industry in Europe and North America. The business had once employed 1,800 and now had 260. It had gone through death by a thousand cuts.”

Here was a chance to turn things around if he could bring the unions on side. Within a year, British Steel put the firm up for sale and Les approached Donald Storrie to get involved in a management buy-out bid for the Scottish

I never asked for a promotion in my life when I was working for someone else: if you want to do something: do it. Unfortunately, a lot of people would say: ‘I don’t get paid for that, so I’m not doing that

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Thanks to his charity work for the Clinton Foundation, Les and his wife Virginia were able to meet former US presidents Bill Clinton and George W Bush division. However, a rival £92m management buyout bid resulted in United Engineering Forgings taking over.

“We missed out and instead I went to work with Donald. He put me in charge of all of his businesses to try and rationalise them and expand the manufacturing division. We looked at over 100 small companies to acquire.

However, people were overpaying and it was difficult to get the value but it was great fun.”

In 1998, he received a call from Shaw Industries, then a $350m turnover business with operations in Scotland. The Shaw family, proud of their Scottish heritage, have been exceptionally entrepreneurial with cinemas, restaurants and a civil contracting business, that became a successful pipe coating company. One of the family members, JR Shaw, started Shaw Communications in Western Canada, the equivalent of Sky Television, and its spin-out, Corus media and entertainment in Toronto, which owns radio stations and produces programmes for TV. “By 1998, Shaw Industries were not operating any coating facilities, but had a joint venture

with Dresser Industries, a US multinational with bases in Leith and Ellon. In 1996, Shaw became non-operational shareholders of Bredero Price, the largest pipe-coating business in the world,” explains Les. Shaw had diversified into heat shrink sleeving and also had a drill pipe-making facility in Cumbernauld for the North Sea and they asked Les to be managing director. He turned it down, explaining he wanted to concentrate on current deal-making with Storrie. He suggested they phone back in three months.

Twelve weeks later he got the call – just as Scottish acquisitions were drying up – and so he flew to Canada to meet the Geoff Hyland, the chief executive officer, and Bill Buckley, the chief operating officer. He took the Shaw Industries job in August 1998, parting from his friend Donald Storrie.

“It was fundamentally different in its business culture. If I compare it with Lambertons and Andersons, the biggest step up was with British Steel Holdings who were much more analytical and measurement-oriented. That went up another notch when I worked for Shaw. They

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were metric-orientated, quarter by quarter, and listed on the Toronto stock market.”

He believes it is about extracting the right information from the business. If the people in charge don’t ask for the information, then they will never get it. It was a rocky start in Cumbernauld. The day he arrived the management announced a round of redundancies, and Les was identified as the catalyst for the cuts, although he knew nothing about this.

“On my first day I was in a meeting with the employee representatives about a 30% reduction in staff. It was a baptism of fire! We then worked hard to keep it going,” he recalls.

He became involved with the restructuring in a separate division in Peterhead and acquisitions, such as the DSG Group in Germany. There was plenty to keep Les occupied and he gained a reputation as Shaw Industries’ turnaround expert, sensitive to the human story behind each employee.

“The oil and gas industry started to come out of recession. The guys at Shaw invited me to go to Texas and run the main plant for the >>

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pipes for the drilling industry along with the operation in Scotland. This seemed like a great opportunity.”

Life in the United States was rewarding, although the Texans took time to understand his Scottish accent and implement his requests.

He quickly learned to speak more slowly and use Texas grammar.

“It’s true that we are too great nations separated by a common language,” he laughs.

“Also, if you are not clear about an instruction, you should not be scared to stop the boss, and ask again until you’re sure.”

The Houston plant designed and manufactured 30ft sections of pipes, from 2.78in to 6.58in in diameter, plus different kinds of drill-string components, threading and attachments, for the rental companies and drilling contractors who worked with the major oil giants.

“What was surprising to me in Texas was they had not adopted the principles of lean manufacturing. You might think that America leads the way, but not at this time. People didn’t see the need to change and I had to demonstrate that need. We were not the biggest: the market leader was four times bigger than us, so we had to find a way to compete.”

Les identified improving lead time from order to pipe delivery as critical. This was a competitive advantage that ensured premium pricing – and increased market share.

Innovation was also fundamental, developing a patented high-torque threading – called TorqueMaster or TM4 – which could withstand much higher torque needed for new directional drilling techniques.

In 2001, the parent company became ShawCor and the following year it took over full control of the pipe-coating business from Dresser, now part of Halliburton, to create Bredero Shaw, a world leader. Overnight, pipe coating represented 70% of the group revenue, and this changed the dynamics of the group.

ShawCor won contracts to build the world’s longest subsea pipeline and broke the $1bn revenue barrier in 2005.

“ShawCor was very conservative about doing deals. Mr Leslie Shaw, the chairman, had a famous phrase: Be conservative with the balance sheet, but aggressive with the business. This was his philosophy. We

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worked hard on ‘value’ selling rather than just a commodity – we were selling business improvements to other people. Value-selling was a big part of it for us. To do this, you have to understand the market, its technical requirement and to be at the centre of that market.”

He says Scottish businesses must learn more about ‘value’ selling, rather than competing on price. “If there is one thing we are not doing well here in Scotland. We have some very creative people in Scotland with some great ideas, but we have continually had difficult commercialising opportunities and how you make money out of it. People don’t understand the concept of lateral thinking and value selling. It’s about understanding the customers’ costs and the market they are operating in to be able to get the maximum price and best terms. We worked hard at this in all of our businesses.”

Les ended up running several divisions, which included knocking the coating business into better shape, and then, after selling the drilling business in 2005 to a French firm, was invited to join the board. His global trouble-shooting continued in Europe and Africa. However, he managed to find time for friendship then romance and went on to marry Virginia Shaw, the daughter of chairman Leslie Shaw, who passed away in January 2007. Between them, they have two daughters, one is fashion designer, Tanya Taylor – a favourite of Michelle Obama – and the other, Leanne, who has given Les three special grandsons.

“It’s been an enthralling career that has taken me all over the world. Towards the end I became, sick so the travelling had to stop.”

While he was fit and still playing golf, he was shocked when a bad cough turned out to be non-Hodgkin’s lymphoma. While he lives in gentle Barbados, he was treated in New York Memorial Sloan Kettering Cancer Centre and began spending some recuperative time back in Scotland with the family and buying his holiday home near Pitlochry.

The Shaw family and his wife Virginia in particular, has been very philanthropic, supporting wounded soldiers, the Clinton Foundation and other charitable causes. Les and Virginia have been particularly active with disabled children programmes in Barbados.

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“Donald taught me a lot about giving back and philanthropy. He was an inspiration for me.

He could have taken his well-earned millions and gone to the beach. He did that for a while but, after eight weeks, he and his wife May said: ‘Now what?’ They came back to Scotland and embarked on major projects, including the new Marie Curie Hospice at Stobhill Hospital where he helped raise over £10m." [“I was happy to help with fund raising. He did many, many great things that people did not know about,” says Les.] So Les is dedicating his Saltire Foundation patronage to his late friend Donald Storrie.

“What I’ve learned is the world is a very small place and, as Scots, we need to be looking outwardly. In Houston, we were active as GlobalScots and the contact with Scottish Enterprise, led to the embryonic idea of the Saltire Foundation. We needed to expand the potential for young people. This led to a trial programme of two young people at Shaw Pipeline Services which we improved and expanded and now have over 600 young people building and growing companies. I am particularly pleased with the amalgamation of the Foundation with the Entrepreneurial Exchange this year, which brings everything full circle from my early days with Donald Storrie.”

He wants more Scottish companies to compete in the global market as world-class companies.

“As Scots, we don’t have a strong enough ethos of taking ownership of our own life, which is what I had to do from 19. There are still some who have a dependency culture – and I don’t mean people on benefits, because some people have to be on benefits, but a culture that the state – or somebody else – will look after you.”

Les’s wife, who is Canadian, put her finger on this by saying that the Scots are ‘addicted to government support’. That we expect the government to do everything for us.

“Through the Foundation, I’ve been trying to begin the process of getting people to take responsibility for their own life and own country. As a GlobalScot, we have been encouraged to help promote Scotland and its people. But Scots have to realise they have to continue to change and adapt to maximise the benefits of this global economy, which I am sure they will,” he concludes. n

AUTUMN 14 14 SUMMER

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SENSORS AND SENSIBILITY Trillions of tiny sensors are transforming almost everything we do. This data-voracious industry is a rapidly growing sector in Scotland with more than 170 companies. Darran Gardner speaks to Ian Reid, chief executive of CENSIS, the industry body promoting new technologies, and Dane Ralston, of the emerging smart-grid start-up, Losstex The ubiquity of sensors in everyday life might take some by surprise. An increasinglypervasive type of technology it can be found in everything from smartphone touchscreens and smart meters, to breathalyzers and parking sensors. With billions of sensors quietly working away globally, it’s perhaps less surprising that the trillion sensor future is already being talked about.

The fact that in Scotland alone sensors are linked to an industry already generating revenues of £2.6 billion, with 170 sensorfocused companies employing 16,000 people might also be surprising. However, with research identifying 22 sub-sectors and 23 major sensor types globally, and a $69bn market forecast to rise to closer to $500bn expected, the opportunities for Scottish companies and the importance of sensor technology in underpinning innovation in

other sectors is clear.

This is the context that one of Scotland’s newest Innovation Centres finds itself operating in. The Centre for Sensor and Imaging Systems (CENSIS) is aiming to support a step-change in Scotland’s R&D capability in sensors as it seeks to bridge the gap between university research and industrial uptake, assisting SMEs to develop new innovations in partnership with Scottish university research teams.

Ian Reid, CENSIS’s chief executive, is shaping the Innovation Centre in partnership with Scottish Enterprise, which already sees roughly 20% of innovation grants and Scottish Investment Bank funding ploughed into the sector.

“We have a rich research base of industrial renown and we are clearly strong in systems and imaging systems research. There’s also

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around 170 sensors companies and when we look at the R&D activity we see a £50 million spend annually,” says Reid, who has worked in R&D roles with the likes of GEC-Marconi and QinetiQ. “However, there’s been a disconnect between industry and university research. There’s a lot of interesting stuff going on, but it’s not necessarily relevant to industry. So we need to make sure that it is and also that research done 18 months to two years ago is re-used by industry and ensure that industry is shaping research activity going forward.”

With a £10m budget from the Scottish Funding Council, the ambition of CENSIS over the next five years is to deliver 150 collaborative R&D projects which bring together industry, universities and SMEs in tripartite project teams to bring new products or services to the market. Projects >>

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ENTREPRENEUR will range from 6-18 month engagements to longer, more strategic collaborations which aim to define university research agendas, delivering outcomes which meet common needs and fill knowledge gaps of a wider range of end users.

With the CENSIS team taking shape in its Glasgow city centre headquarters, Reid is focused on building on the success of its Glasgow University-based predecessor, the Scottish Sensors System Centre (dubbed S3C), and developing a business development resource capable of shaping new project opportunities as well as internal technical team able to support projects with the level of expertise often limited to large companies.

“This is an attempt to do something quite different which makes the role interesting,” says Reid. “Taking research out of the universities and applying a business focus, making them industry-led or company specific to help access new markets or create a new product is our aim.

“We need to tease out from companies their problems now and going forward. Some problems could be industry-wide or company specific – it doesn’t really matter. One of the challenges when you talk to industry is to get them to tell you what’s really worrying them.

To do this we need to develop relationships where they will trust us with talking about long-term challenges. You need solid relationships to have these conversations.”

With CENSIS acting as the Hub, the plan is to create ‘Spokes’, essentially industry groups covering the key technology development areas around what is known as the sensor stack [U1] , to build this trust and identify priority R&D areas. With the aim that CENSIS projects deliver real economic value, they will focus on development rather than research, with internal investment and advisory groups also steering activities. On the skills side, it will fund post-graduate studentships and support secondments between industry and academic, and vice versa.

With up to £4m to spend on Scottish university research teams focused on sensors and imaging systems research, Reid recognises the need to build strong and effective collaborative links between industry and university, with each party having their own

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priorities, strengths and weaknesses. The strengths are clear with dedicated research groups at seven Scottish universities and £100m of UK grant funding secured over the last five years.

“But if you look at the research commercialisation groups in Scottish universities they spend £17m annually on innovation, filing and maintaining intellectual property. With only £6m generated in Iicensing income, the questions is whether that represents a sensible thing to be doing?

“If you look at Stanford University in the US, they have a clear industry focus and lots of research goes to Silicon Valley – and yet they have admitted that they just about break even on IP. One problem is that universities

opportunities currently under review.

Among those companies talking to CENSIS are smart grid-focused start-up, Losstek Limited. Based in the Glasgow Entrepreneurial Spark Hatchery, the company is a vehicle for the technology and data analytics talents of entrepreneurs Calum Smeaton, Blair Robertson and Dane Ralston. Their ambition is to develop a data analytics company capable of providing insight into electricity distribution networks for UK and international utilities, helping them improve efficiency and tackle the impact of ever-greater amounts of distributed generation on an ageing grid which requires a multibillion pound upgrade spend over the next decade.

“We started,” says Ralston, “looking at the

We need to tease out from companies their problems. Some could be industrywide or company specific – it doesn’t really matter. One of the challenges when you talk to industry is to get them to tell you what’s really worrying them generally underestimate the costs of filing and maintaining IP and then overvalue it. They also lose sight of the fact that with IP that it may have little value unless you can enforce the protection offered. You need to get it into the industrial base and make new products for new markets.

“While you seek to lock it up you will struggle to get value out of it. The right place for IP is in the industrial space. While we will need sensible collaboration agreements to make that happen, the market needs to be trusted to get the innovation out there and get the maximum value from it.”

Given the wide range of sectors already utilising sensor and imaging systems technology – from renewables, smart grid and subsea engineering to food and drink, life science and defence – early interest in CENSIS from Scottish industry is strong.

In addition to the completion of legacy projects developed by S3C, several projects have already kicked off, with range of other

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issue of network losses. But the real driver for us is the growth of smart meters in the network. We believe that the utilities are not really ready to deal with the quantity of data generated by more sensor-led measurement.

“So our interest in sensors is obvious: that’s how we get our data. Sensors measuring data is one thing but you then need to use the analysis of it to do things more efficiently.

It doesn’t matter to us whether it is the electricity or water industry, the need is the same. The challenge for us is that meters are in place and people tell us there’s plenty of data, but they are just not doing anything with it. We are, however, talking to Jersey Electricity about a new substation monitoring project with an international player and an English SME. Ralston adds: “Scotland is a great place to be a start-up. There’s plenty of advice and support, even if it can be tough to find out about all the funding options. It’s also frustrating being a little ahead of the >>

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ENTREPRENEUR

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ENTREPRENEUR curve, with companies focusing on getting the hardware out there, but not knowing what to do what data that comes from whatever they measure.”

Des Gibson, CEO of the Cumbernauldbased innovator and producer of marketleading Co2 sensors for a range of industry applications, is among the first to formally engage with CENSIS on a project designed to determine if its technology could serve as a low cost, accurate and lightweight device for sports medicine applications. The company, which started trading in 2008, has developed its internal R&D and collaborative muscle, working in partnership with Glasgow Caledonian University and the University of West of Scotland and securing four Innovate UK (formerly the Technology Strategy Board) grants over the last two years. A fifth grant is imminent.

“We focus on the market and try to address market problems. The trick is aligning our technology with what the market needs.

We saw the Technology Strategy Board route as a way of opening up new opportunities, allowing us to work with new companies and universities. Universities are not always easy to work with, as they don’t always work to timescales and milestones, but they can have expertise and equipment we simply can’t afford.”

R&D and innovation, along with a determined focus on understanding the market’s needs and building up useful intelligence on the medium and long-term opportunities, says Gibson, are critical to the 22-strong company’s ambitions for its collaborative projects. With turnover now at a profitable £2m, engagements with the likes of CENSIS and Innovate UK, concludes Gibson, help the company remain ahead of the market and able

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to take advantage of emerging opportunities.

“Yes, it’s difficult to change from the business plan or shelve it, but that’s a defined business process for us. We spend a lot of time and effort getting to know the market. Sticking to one idea or path is really just a route to disaster.”

Optos plc, the Dunfermline-based and stock market-listed medical technology company involved in the design, development and manufacture of ultra-widefield retinal imaging devices, is also engaged in a new CENSIS project.

Derek Swan, senior research director at Optos, highlights the company’s long record of engaging with research institutions, in Scotland and internationally, to support R&D and product development in hardware, photonics and algorithms.

Early this year, Optos kicked off its first CENSIS

It’s difficult to change from the business plan or shelve it, but that’s a defined business process for us. We spend a lot of time and effort getting to know the market. Sticking to one idea or path is really just a route to disaster BUSINESS QUARTER | AUTUMN 14

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project in collaboration with world-leading optics experts Prof Andy Harvey and Prof Miles Padgett of the University of Glasgow. The project aims to advance the state-of-the-art in ophthalmic imaging, helping to improve the optical performance of the company’s product and secure future access to a global optometry market forecast to be worth $18bn by 2018.

“With the CENSIS project,” argues Swan, “we have an immediate commercial need and a university we have worked with before. I think there’s often a mutual learning curve to get through, but the more you collaborate, the more you get to know what works in terms of timeframes and deliverables. Some of our previous projects were not well matched in terms of what we needed commercially and the timeframes of academics. The technological expertise can also be hard to reach in universities, with IP clauses and development agreements to deal with, which can be frustrating.

“For Optos the key to project planning is understanding the market, seeing the competitive landscape and understanding customers’ needs. Working with CENSIS means doing that market and SWOT analysis and understanding the performance our technology will need five years down the line. The further you are from your market, the harder it is to innovate.” n

COMMERCIAL PROPERTY

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Prime location in capital to be redeveloped, top golfing hotel snapped up for £32.4m, HFD Group expands into Aberdeen, office lets benefit from bounce back in demand, no vote clears the way for potential property deals >> Winds of change A jobs boom for the Highlands moved a step nearer as the Port of Ardersier secured the backing of the Scottish Government for plans to turn the former oil fabrication yard on the Moray Firth into a manufacturing ‘super-hub’ for offshore wind. The Port of Ardersier has been identified as a strategic port in Scotland’s draft Third National Planning Framework.

The vacant site 15 miles east of Inverness now holds a marine licence and a harbour revision order, together with full planning consent from Highland Council secured earlier this year, paving the way for more Highlands jobs.

>> Deals get go-ahead

>> New lease of life for ‘at risk’ building The Chris Stewart Group – owned by Chris Stewart (pictured above) who was featured in BQ last September – has purchased the former RBS headquarters at 42 St Andrew Square and the adjoining building on West Register Street for an undisclosed sum.

The neo-classical listed building on the corner of one of Edinburgh’s iconic Georgian squares has stood empty for over seven years and was recently added to the ‘at risk’ register.

The aim is to transform the two buildings to deliver a mixed use development for the West Register Lanes vicinity introducing 60,000 sq ft of Grade A office accommodation alongside hotel, serviced apartments, retail and restaurant operations. The total area offers 130,000sq ft of development opportunity.

Consultations have begun on renovations as well as eventual use with the intention of bringing forward a planning application within the next six months.

Chris Stewart said: “There will now be a period of investigation and consultation to assess how best to sensitively redevelop the buildings to secure their future physically and economically.

We want to move quickly as the buildings and the area deserve to be given new life. We see tremendous scope for a vibrant mixed use development that will add a new dynamic to the area around West Register Lanes with good street level activity and world class hotel and office accommodation.”

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Galliford Try, the construction group which has bought Miller Construction, has reached a deal on a £35.4m project to construct the new Inverness Royal Academy and a £15.4m project to construct Noss Primary School in Wick.

Inverness Royal Academy, due for completion by summer 2016, involves the construction of a four-storey replacement school, sports pitches, an outdoor terraced teaching area, gardens, landscaping and a car park and bus drop-off area. The new academy campus will cater for around 1,500 pupils.

>> Moorfield’s good start Property deals at the Westway Park in Renfrew passed 300,000sq ft in the first half of 2014, according to park owners Moorfield Group.

Mark Holmes, of Moorfield, said six deals ranging from 4,500 sqft to 170,000 sqft, have been concluded the largest deals involved leading Scottish-based logistics company, The Malcolm Group, who signed-up for a further lease extension on 170,000 sqft at Block K, plus a further 30,000 sqft.

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>> HFD Group expands Glasgow-based HFD Group – founded in 1989 by Lanarkshire entrepreneur William Hill – has secured a £56m package as it expands into Aberdeen. Its new project, funded by Barclays, follows consultation with Wood Group PSN. HFD Group secured a 6.5 acre site before gaining planning permission for a circa 215,000sq ft Grade A office development.

The funding will support phase one of the CityPark project, with CityPark 2, a second 100,000sq ft office development going through the planning process. Located in Altens, CityPark1, completed in 2015, will allow Wood Group PSN to co-locate the majority of its Aberdeen South Campus to a new office.

DTZ has announced 101 promotions across its UK business, including one to its Glasgow office and two in the Edinburgh office.

Iain MacLaren in DTZ’s project & building consultancy team is now a senior surveyor in Glasgow, while Jamie Fergusson (investment agency) has been promoted to director and John Laval (sustainability) is now an associate director in Edinburgh.

COMMERCIAL PROPERTY

>> Green projects doubled The UK Green Investment Bank has doubled the number of green projects it backed in its first year, investing £668m in 18 green energy projects. Edinburghbased GIB is now the most active investor in the UK’s green economy. The bank says a further £1.9 billion of private money has been committed to projects alongside GIB’s investment, taking the total to £2.5bn of new investment in the UK’s green economy in 2013/14.

>> Bank reduces risk National Australia Bank – the parent of Clydesdale and Yorkshire banks – has sold a £625m parcel of largely non-performing loans from its UK Commercial Real Estate portfolio to an affiliate of Cerberus Global Investors (Cerberus).

The transaction – which included undisclosed businesses in Scotland – is a substantial de-risking of the portfolio, reducing the gross loans balance of the NAB UK CRE portfolio by 20% to £2.38 billion as at 30 June 2014, and reducing gross impaired loans by 48%.

The funding will support phase one of the CityPark project >> Industrial unit for sale A modern industrial unit on the Lochside Industrial Estate, just three miles northwest of Dumfries, is being offered by Shepherd Chartered Surveyors.

Providing 8,580 sq ft of warehouse and office space, the gable end light industrial unit also has office accommodation.

Fraser Carson, surveyor in Shepherd’s Dumfries office, said: “This unit represents an attractive opportunity to acquire a sizeable, modern industrial unit with excellent transport connections.

>> Top St Andrews golfing hotel bought for £32.4m The prestigious Fairmont Hotel in St Andrews – popular with international golfers – has been snapped up for £32.4million. Kennedy Wilson Europe Real Estate, a listed company that invests in real estate in Europe, has entered into an agreement to acquire the hotel from SABD Holding (UK) Limited. A share acquisition will be funded from the company’s cash resources.

The property is operated by Fairmont Hotels and Resorts, a premium hospitality company with a global reputation, under a management agreement until 2031. Set within 520 acres of land in St Andrew’s Bay, the hotel and resort comprises 209 rooms, with conference facilities, two four-bed manor houses, two 18-hole golf courses, a fitness centre and spa, as well as several food and beverage offerings.

Meanwhile, Glasgow’s Crowne Plaza on the Clyde is among the Queens Moat House-run hotels sold in a deal worth between £130m and £150m. The Christie Group has brokered the sale of 11 QMH UK hotels. The hotels have been acquired for an undisclosed sum by Marathon Asset Management after Christie + Co brought them to the market in February.

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>> No vote aids deals

>> Bounce back boosts office lets Edinburgh is well above the five-year quarterly average in office lets – due to the sustained bounce back in occupier demand reflecting continued business confidence.

GVA’s Big Nine research for Q2 reveals a take-up of 153,997 sq ft in Edinburgh’s city centre, compared to the five-year quarterly average of 135,907 sq ft. This is creating a continuing tightening of the prime supply that is driving real rental growth for good-quality secondary accommodation, particularly for small to medium-sized suites. Edinburgh’s out-of-town demand remains steady at 63,468 sq ft, against the five-year average for the quarter of 41,787 sq ft.

In Glasgow, Q2 take-up is a disappointing 67,000 sq ft, well below the five-year quarterly average of 129,000 sq ft, but Alison Taylor of GVA says the figures veil a number of highprofile lettings underway. “Cigna Insurance has 34,000 sq ft under offer at Ignis’s Grade A refurbishment of The Grosvenor Building opposite Central Station while Network Rail have committed to all the remaining space at the Hermes refurbishment at 151/155 St Vincent St.” Other high profile pre-lettings underway include Deloitte and Grant Thornton, who are both taking space at BAM’s 110 Queen St, which completes summer 2015 and overlooks the Gallery of Modern Art. These four transactions alone will generate over 120,000 sq ft in take-up during Quarter 3 and Taylor is optimistic about the second half of 2014. She added: “This activity in the pipeline confirms that a number of the larger corporate organisations are alive to the reducing supply of prime Grade A space in the city centre and quietly considering future property options over the summer.”

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A total of £1.2bn of commercial property in Scotland could well change hands after the uncertainty of the Scottish referendum.

David Davidson, managing director of Cushman & Wakefield in Scotland, said: “For the last three months it feels like we have been driving with a hand brake on.

While there have still been commercial property deals happening it has been so much harder since the beginning of the year.

“The referendum result is undoubtedly very good news for Scotland’s commercial property market. The process has caused huge uncertainty but investors and occupiers are now likely to react positively to the many opportunities Scotland has to offer.

“We believe that there will be a surge in investment market activity over the coming months. There is over £600 million of stock either under offer or on the market in Scotland and we predict the ‘No’ vote will end up doubling this figure as investors seek to invest outside of the increasingly over-heated London market.

He said a number of major European investors visiting Scotland over the summer have been waiting for the outcome and hoping more stock will come on the market.

“Lots of big companies have been putting off recruitment, relocation to new offices and capital expenditure and are now likely to press ahead with plans that have been on hold. “

Referendum result is good news for Scotland’s commercial property market

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Advertising feature

Riverside East

Regeneration and Games legacy has Clyde Gateway on track for success The Games may be over, but it’s back to business as usual for Clyde Gateway as the regeneration project announces that yet another two household names have decided to make the regenerated East End of Glasgow their new home.

Police Scotland has confirmed that it will relocate 1,100 staff in a £24m move to Riverside East in Dalmarnock later this year.

The move coincides with the construction of a new 13,000 sq. ft. building, for use as a technical facility for the engineering and training divisions of BT, which began in mid-August.

Established in 2008, immediately following the announcement that Glasgow would host the 2014 Commonwealth Games, Clyde Gateway’s aim was to regenerate some 2,000 acres in the East End of Glasgow and South Lanarkshire, creating Scotland’s largest business and commercial hub. The Police Scotland move highlights the area’s unrivalled facilities and transport links which appeal to top public sector organisations, as well as private businesses.

This latest news demonstrates the huge interest in the revitalised and regenerated East End, which rose dramatically during the period of the 2014 Commonwealth Games.

CG BQ Scotland Advertorial 260mm h x 410mm w RFP.indd 1

Fast becoming the location of choice for businesses looking for modern, high quality, affordable and environmentally friendly premises, with first-class transport links, the benefits of working and living in Clyde Gateway were showcased to a worldwide

“Over the past six years more than £1.5 billion has been invested into the area”

boast modern offices and industrial buildings, as well as serviced zones which are ready for future development.

New roads and the rebuilt Dalmarnock railway station mean that Clyde Gateway can take advantage of excellent transport routes. It is a mere fifteen minutes from Glasgow airport, four minutes from Glasgow City Centre by train and the £445 million extension of the M74 quickly connects it to the national road network.

audience during the Commonwealth Games.

The Games, and the interest generated, has provided the perfect platform to continue the delivery of a lasting and sustainable legacy for local communities.

In addition to Police Scotland and BT, a range of businesses from the engineering and construction sectors have already moved into the area, these include: Oil and gas services company, Glacier Energy Services; the first company to move into Clyde Gateway.

They took a 22,200 sq. ft. unit on a 10 year lease, relocating its manufacturing operations from its previous site in Motherwell, and Torishima Service Solutions Europe Ltd, a leading global designer and manufacturer of high-end pumps and boiler house systems.

Over the past six years more than £1.5 billion has been invested into the area from both public and private sectors. As a result of that investment, the East End is now almost unrecognisable. Massive physical and environmental changes have taken place. Vast expanses of vacant and derelict land now

Commenting on the latest additions to Clyde Gateway, Fionna Kell, said: “The news that Police Scotland and BT have recognised the massive benefits of relocating their headquarters to Clyde Gateway is a huge endorsement for everyone who has been involved in this project and everything that

Rutherglen Links

Olympia Building

Eastgate

we have achieved for the local community.

This is a project which has not only regenerated and re-energised the East End, it has brought the whole area back to life.

air, road and rail links are second to none. This is why Clyde Gateway has become such an attractive proposition for investment - and the ideal location to do business.

“The bringing of the Commonwealth Games to Glasgow has been a real catalyst for change in the East End – and what a change it’s been.

So far, hundreds of jobs have been created, thousands of homes have been built, tens of thousands of square metres of modern, bespoke office, factory and business space has been created and over one and a half billion pounds has been invested. On top of that, the

“We are currently working to completing many more multi-million pound projects including the Albus and Rutherglen Links commercial properties – both due for completion later this year.

“It’s been an incredible journey so far, and one that is far from complete. This was never a short term plan, nor one which would end

with the beginning of the Commonwealth Games. The confidence shown by our investors and our business partners will ensure that Clyde Gateway continues to grow, and go from strength to strength for years and generations to come, creating a lasting and sustainable legacy for the East End, for Glasgow and for Scotland as a whole.”

For more information on Clyde Gateway please visit www.clydegateway.com or telephone 0141 276 1573.

Case Study - Torishima Service Solutions Europe Ltd Torishima recently moved its European HQ from Coatbridge and now lease a newly-built, high quality premises in Clyde Gateway. It is already in negotiations over the purchase of a bespoke building located across the road from its current location.

Given the nature of Torishima Europe’s business, a key consideration in choosing Clyde Gateway for its new European headquarters was the ready access it gives to the M74 and wider UK network. But Gerry Clocherty, Managing Director of Torishima Service Solutions Europe Ltd, adds that other factors also came into play – reflecting the extent to which Scotland in general, and Glasgow in particular, have proved ideal for the company’s needs.

“As an inward investor in Scotland, the support that we’ve had from Scottish Enterprise has been nothing short of phenomenal,” he says. They’ve helped us enormously across a wide range of areas – from financial to training to human resources and more. If all other companies investing in Scotland get support like this, they must be over the moon. I know I am.”

“Clyde Gateway can give us additional help above and beyond what we get from Scottish Enterprise,” comments Mr Clocherty.

“This includes things like infrastructure support, such as upgrading power supplies to meet industrial requirements, as well as further financial support and assistance with personnel.

In combination, the package we get through Scottish Enterprise and Clyde Gateway is superb.”

The Clyde Gateway regeneration area has at its heart the world-class sports facilities built for the 2014 Commonwealth Games – including the Emirates Arena, the Sir Chris Hoy Velodrome and the Athletes’ Village, site of 700 new homes.

By relocating to Clyde Gateway, Torishima Europe has not only gained a position at the centre of a resurgent local community, but has also added still further to the support it receives.

Securing the headquarters of Torishima Europe and new additions Police Scotland and BT, is just the latest in a series of successes for Clyde Gateway. The urban regeneration company won the UK-wide Regeneration category at the 2013 RICS Awards. This accolade reflected the fact that the company is not only driving an economic and physical transformation by reviving and revitalising the area’s former industrial heritage but it is also putting social change at the centre of everything it does, with local people sharing in the benefits.

Torishima has relocated its 43-strong workforce to the area, but Clyde Gateway is poised to help it access local talent as its business and skills needs grow. Fionna Kell, Senior Manager for Inward Investment with Clyde Gateway comments, “We work with all businesses coming into the area to understand their recruitment needs and to put in place training programmes that help re-skill local people to meet those needs – all the way from apprentices to fully-qualified engineers. When Torishima needs this support, we’ll be ready.”

Call 0141 276 1573 today BUILDING THE LEGACY

www.clydegateway.com 03/09/2014 09:10

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ENTREPRENEUR

CAUGHT IN THE FAST LANE For nearly 40 years Vic Covey has been a leading light in Scotland’s marketing industry. His first business, Covey Advertising, held the CALA Homes account for 21 years while he also performed as a motor racing driver. After a tempestuous spell leading the Scottish arm of Bob Geldof’s marketing business, Vic has returned to his roots setting up the Covey Agency. Iain Mercer finds out that it is very much a family affair In the final year of my university degree I secured a week’s placement at Osprey Scotland plc, a well-regarded marketing and advertising agency in Edinburgh. The opportunity arose through a connection with my late father, Wallace Mercer, who regularly used the company for a number of his marketing initiatives in property and football.

While I didn’t see my career being in marketing – I was studying business and went straight into journalism – the opportunity to work in a fast-paced work environment was not one to be turned down.

My short spell there got off to a bad start.

As students often do, I managed to sleep in on the first morning. I then repeated the embarrassing feat the following day. Suffice to say my timekeeping has drastically improved since then – a period reading early news bulletins sorted out that particular faultline.

But the person I remember standing inside Osprey’s blue-framed atrium each morning to greet that bedraggled wreck, was Vic Covey.

He is a man who by that time had survived a heart attack in his mid-thirties, built up an advertising business ranked in the UK’s top 100 before selling to a listed plc.

But what this colourful entrepreneur is less well known for is his motor racing talents.

The high-octane sport of screaming engines and scorched rubber provided Vic with a welcome escape to the pressures of running a UK-wide business.

“I started racing in Scotland in 1975 and raced through until 1982 with quite a bit of success,” he says, sitting in the MacDonald Hotel at Holyrood. “I won the Formula Ford 1600 Scottish Sports Car Club Championship at Knockhill in ‘81 and ‘82 and then in 1983 I was very fortunate to be working with the

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Japanese outfit, Canon. They were very keen to raise their brand profile and saw motorsport in the UK as part of it. I drove for them in England and in Europe over a period and actually got paid for doing it,” he recalls.

Vic senior’s racing career peaked in 1986 at the world famous Spa Francorchamps circuit in Belgium where he won a round of the Euro Metro series. No stranger to track chicanery at that time his life would encounter its most challenging turn in 1989 when he suffered a heart attack aged only 36. That, he says, was ‘game over’ as far as the racing career was concerned. But his relationship with the sport has endured and remained entwined with his business career ever since.

“I stayed quite distant from the sport for a long time until in 2003 I was asked if I could help run the commercial aspects of the Scottish Mini Cooper Cup which was >>

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ENTREPRENEUR just launching. I did and ended up becoming the series coordinator and ran it hugely successfully for nine years.

“At the same time my son, Vic Junior, had reached an age whereby he was really keen on it and he began his race career in the Scottish Mini Cooper Cup at Knockhill. He was actually considerably better and quicker than I ever was and he won the championship in 2008!”

Battle hardened from his experiences both on and off the track Vic’s latest business venture, The Covey Agency, has managed to post yearon-year profits since it opened in 2010. Quite an achievement when you consider how the recession hit Scotland’s creative industries.

High profile collapses, such as the highly regarded Navy Blue in 2011, is an example of where a company has fatally suffered from a reduction in marketing spend by the wider business community, especially among the financial services firms.

“We’ve seen our pure advertising revenues collapse over the last five years,” explains Vic. “As I sit today, while we do an element of advertising, it’s by no means the core of our business. It’s now project-driven in terms of marketing projects. We’ve had to adapt our business to effectively become a jack-of-alltrades. And we’re happy to work with clients on individual niche parts of the marketing mix, or the whole thing.

He has witnessed a massive change in the last 40 years. “There is obviously advertising activity in Scotland, but as far as a full service advertising agency model is concerned, that’s dead. There is no advertising industry in Scotland,” he says.

One of the biggest barometers of the state of the media industry in Scotland can be seen across the street from our meeting. The Scotsman building is undergoing a major refurbishment after its owner, Johnston Press, downsized and relocated to premises 60% smaller elsewhere in Edinburgh.

Ironically it was at The Scotsman where Vic cut his teeth in the advertising world; first as a calligrapher and then as a key account advertising sales executive. It was also where he got his first big break leading to the formation of Covey Advertising.

“The account that launched my career was the Royal Highland Show, which if I go

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Vic's view on social media 'Social media has become one of the most dynamic techniques for businesses to communicate with current and potential customers. There are now a number of compelling case histories showing the power and effect that social media can have.

I recently attended a Clydesdale Bank business event, where the chairman of Albion Rovers, John Devlin, shared the result of his season ticket social media campaign: ‘Pay What You Can’. It was a unique offer which attracted increased press and TV coverage and a reported 500% increase in season ticket sales.

In making social media work, however, it does require the discipline of constant review and effort. It simply does not work if a client opens a Twitter and Facebook account and assumes everything will happen as a result. Clients need to have a clear vision as to what communications are relevant and what they can expect to achieve. Results can be stunning if it is a well-executed campaign. If it’s done badly, however, the results can be dangerous and catastrophic.'

back to 1973, I handled personally from home,” recalls Vic. “I had actually been for a couple of interviews with ad agencies, but didn’t get anywhere. Actually, I wasn’t too impressed with some of the people I had met and thought: I can do this myself. I had the Highland Show account to kick-start the business, which is exactly what we did in June 1975.”

“In those days there was no such thing as

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media independency, so in pure advertising terms you were buying media space and getting a commission; that’s effectively gone.

And there were bigger clients who were more Scotland-centric. By the late 1980s we had 90 staff with offices in Glasgow, Aberdeen, Edinburgh and Southampton. You just couldn’t sustain that today, nobody can. There are no advertising agency networks anymore.“ At its peak in 1989, Covey Advertising was >>

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ENTREPRENEUR XXXXXXXX AUTUMN 14

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ENTREPRENEUR turning over in excess of £6m and was one of Scotland’s top six agencies. It specialised, perhaps unsurprisingly, in the motor industry looking after well known companies such as Arnold Clark. But Covey also capitalised on the housing boom during the early 1980s. One account which made a significant contribution to his early success was CALA Homes, which the agency held for 21 years starting in 1980.

“Apart from being very good at it, we worked really hard on client service, the creativity we brought to the table was outstanding and it helped build a fabulous brand,” says Vic. “But there is no loyalty and nothing is forever.

21-years was way beyond what most agencies hold accounts for. It’s not totally unusual, but it’s certainly not the norm. Ultimately CALA went because people change and the biggest influencer in our business is not necessarily how good or bad a job you’re doing, it’s the people. If key people change that can be the catalyst for change.”

Their client book and presence in Scotland’s capital was what piqued the attentions of the London-based Osprey plc, who bought the business in 1997.

A new headquarters was built in Edinburgh’s Causewayside area ‘arguably at the wrong time’. Thereafter, adds Vic, the rot quickly set in.

“We entered into a three-year earn-out deal with Osprey. At the time it was very sexy for all parties. It turned out not to be quite that when we got to the end of the third year. Despite hitting all the targets and being due quite a considerable sum of money, the cupboard was bare.”

Osprey was eventually sold for £1 to Bob Geldof’s Ten Alps Media Group in 2001.

The early days of his relationship with the former Boomtown Rats’ front man were successful and the Leith-based arm of the Ten Alps operation regularly contributed net pre-tax profits of over £1m.

Despite the considerable endeavours of a 10-strong team, relations soured.

“The conversations were all about cost-cutting and money and not about investment, vision and the quality of work we were producing.

Through 2008 to 2010, when I departed, it became close to intolerable and certainly not pleasurable.” Vic was sufficiently

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disgruntled that he wrote Ten Alps a cheque to facilitate his exit.

It lifted a restrictive covenant clause which would allow him to resuscitate the Covey brand and bring it back to life through its latest incarnation: The Covey Agency.

“I was very fortunate that my creative director Euan Carmichael, who I knew from my days at Covey Advertising, Osprey and Ten Alps, was up for the challenge and joined me.

He is part of the family and treated as such.

Vic Junior is working in the business and my daughter Victoria helps with the accounts so, yes, it is a small family business.”

As a result of returning to the spirit of Covey Advertising and providing a personal, hands-on approach The Covey Agency has developed an impressive roster of clients.

Finland’s Suominen, a global player in nonwoven wipes, sits alongside a cluster of house builders such as Stewart Milne and Lundin Homes. Servicing clients in motor

sport remains a favoured niche, but the ‘horrific’ cost of actually competing in the sport has brought a premature end to Vic Junior’s involvement in this year’s Ginetta GT5 Challenge.

To give an idea of the level of expenditure required, Vic says the budget for being part of a three-car team in the UK Renault Clio Cup during 2012 was ‘well in excess of £300,000’.

Shortly after this interview concluded Vic was off on a road trip to the Isle of Arran for a few days’ break.

In a business context he tells me that he often drives to meet people wherever they are in the UK. If someone calls a meeting in Watford, for example, he jumps in the car and is there.

I get the impression he’s just that sort of guy; fully committed and determined to add value and go the extra mile for his clients and their businesses. n

Euan Carmichael is part of the family and treated as such.Vic Junior is working in the business and my daughter Victoria helps with the accounts so, yes, it is a small family business

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SCOTTISH EXPORT AWARDS 2 0 1 5

JOIN US TO CELEBRATE SCOTLAND’S EXPORT SUCCESS BQ Scotland Magazine is delighted to announce the Scottish Export Awards 2015 Nominations open Monday 6th October 2014 across a range of export categories.

For more information about the event including tickets and sponsorship opportunities contact Bryan Hoare on 0191 426 6183 or email bryan@room501.co.uk

www.bqlive.co.uk/exportawards

TUE 31ST MAR 2015 HILTON HOTEL GLASGOW

BUSINESS LUNCH

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BUSINESS LUNCH

THE LORNE GATHERING Lorne Crerar is chairman of Harper Macleod LLP, the law business he founded. It has grown to become one of Scotland’s most prominent firms, recently merging with Bird Semple and was the official legal services provider of Glasgow 2014. BQ Business Lunch writer Jenny Hjul caught up with him after the Games in a new Glasgow steakhouse, opposite Kelvingrove Park >>

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BUSINESS LUNCH Lorne Crerar arrives early for lunch, before the local business community descends and before I’ve had a chance to dig my Dictaphone out of my bag. By the time I get organised he is already enthusing about a new gin distillery in the Highlands and apologising for not being a whisky drinker, despite his love of all things Scottish.

This is the public sector boss talking, rather than the lawyer, but he could be either, in his sober blue (suit, shirt and tie). He could also pass for a university professor, albeit an exceptionally well-tailored one.

What he definitely does not look like is a

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trouble maker but that, he reveals, is what he was a long time ago, with a penchant for fighting and throwing rocks through his headmaster’s window.

It may be unkind to mention this behavioural blip so soon but surely there is hope for everyone if a man with his CV once ‘struggled’ to get into university. There is nothing about his demeanour now that even hints at adolescent angst and asked to describe himself he says ‘affable, easy going, but pretty driven’.

The staff, in all his offices, would no doubt agree. He exudes quiet self-confidence and, despite what must be a very full diary, he

A rare place for steaks on Sauchiehall Street The waitress in the Butchershop Bar & Grill, a Glasgow University medic, said it was very busy during the Commonwealth Games, with athletes from the nearby SECC as well as spectators, and the promotions for students suggest it is a popular haunt for the young. But it was subdued on the Thursday lunchtime we were there and we had a secluded corner to ourselves.

Lorne and I both started with the gin and herb infused Scottish salmon, which was faultless. He let me choose the wine and I ordered two glasses of New Zealand’s Spy Valley Sauvignon Blanc – partly because you can’t really go wrong with a Malborough Sauvignon and partly because he had just dropped into the conversation that he was in New Zealand for the rugby World Cup three years ago, in his capacity as chair of the Six Nations disciplinary panel.

The Butchershop calls itself Scotland’s best steakhouse and Lorne asked for the House Signature Steak Salad, medium rare with English mustard. He said it looked nice but the meat was a bit chewy, and he didn’t quite do justice to the salad, though he pronounced that ‘fine’.

My Sun Blushed Tomato Risotto was delicious, though could perhaps have done with a little less of the balsamic vinegar.

We couldn’t manage the puddings but settled for coffee (me) and tea (English breakfast for Lorne).

Our bill for lunch was in the region of £45 and good value at that, but I would like to experience the Butchershop in full flow, which I expect is at night, and work up a bigger appetite next time.

My taxi driver said he’d taken his wife there for dinner recently; it had set him back about £100 but was well worth it.

The Butchershop Bar & Grill, 1055 Sauchiehall Street, Glasgow, G3 7UD.

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seems relaxed and unhurried over lunch in the Butchershop Bar and Grill, at the Kelvingrove Gallery end of Sauchiehall Street.

But Lorne insists he was “a difficult pupil” and it took dedication from his secondary teachers at Kelvinside Academy to turn him around.

“Because I’d done so little by the time I got to my O-levels I had to work hard from very limited groundings,” he says.

Scraping into Glasgow Law School was his salvation. “I got a clean sheet and that was such a great opportunity.”

He’d always wanted to be a lawyer – “for reasons I never really understood. I really loved the logic of the law and even now, give me a book of fiction or give me a legal textbook or a session case and I’ll read the session case.”

He ended up graduating as the best student in his class. ‘I surprised everyone, including myself,’ he says.

He did his traineeship in one of Scotland’s oldest firms and was a partner within a year of qualifying. But it wasn’t long before he was looking for a new challenge and he jumped ship to Ross Harper & Murphy.

“I did that in truth to do criminal law but the glamour of it was quickly dispelled for me,” he says.

He returned to the business division, steered the company through financial difficulties at the end of the 1980s, and then left, taking the commercial practice with him. Harper Macleod was born.

“We had about £2.5 million turnover so it was the best deal I ever did in my life,” he says.

“Now we’re £21 and a bit million and have just joined up with Bird Semple, which will take us up to £23 to £24 million and 350 people.”

In fact, the merger is imminent when we meet

I really loved the logic of the law.

Give me a book of fiction or a legal textbook or session case and I’ll read the session case

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but Lorne is characteristically cool. “Harper Macleod has been my baby. It’s been an amazing journey but what it’s always been is a business.”

And as the chairman of the business he employs executives to manage things…”they are much better at it than me”.

Besides, there are other demands on his expertise. One of these is Glasgow University, where he was invited back to tutor at just 23.

He taught ‘almost every subject’ in the law department and when a banking chair came up he wrote a book on banking to prepare himself and got the job. These days, he teaches two classes every Thursday evening, to undergraduates and postgraduates, and loves it.

“I enjoy being around the students and because I’m practising I can give an insight into the law. Both classes get a chance to come to

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my office and see what people do.”

But he is concerned about the lack of opportunities out there for today’s law graduates and says that to do well ‘you’ve got to be very good, you’ve got to have a passion”.

“The number of jobs available to graduates in Scotland is shrinking and will, in my view, continue to shrink.”

Since the crash in 2008 a significant number of training openings have disappeared as some of the big employers have been taken over. And the internet is also to blame, he believes, as people increasingly go online for legal services.

“We live in a fast changing world and the legal world is no different. The challenge for many businesses is to work out what service people need of you tomorrow or next year or three years from now…so you’ve got to be changing all the time and moulding

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your business to meet that demand.

“The really successful firms of the future will be legal entrepreneurs who see the opportunity to generate wealth by the delivery of legal services and not in a traditional way.”

Lorne takes on eight trainees a year and many of his team, senior partners included, are former students. He looks for hard workers but also people who will fit into what sounds like a congenial workplace. In 25 years there have only been a couple of “very singular individuals” he’s had to get rid of.

“Quite a lot of professional service firms are beset with politics but somehow we’ve managed not to have that because we’re a collegiate and inclusive and transparent firm.

“Lawyers, in the main, are very cerebral people who can be very different,” he says. A lot are “pompous and arrogant” though they do a great job. >>

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BUSINESS LUNCH If he is hard on his own profession – which, he says, still hasn’t forgiven him for reforming property buying and selling with the introduction of the Home Report (another of his babies) – he is generous about others.

Politicians and civil servants, in particular, have impressed him with their commitment. He has worked with public bodies, in various roles, for 20 years and says he has learned more about leadership here than in the private sector.

Devolution has “absolutely worked”, he thinks. “Before, if you wanted Scottish legislation it would take you years to get it into Westminster…now you can affect change so much quicker.”

He probably wouldn’t have been appointed chairman of Highlands and Islands Enterprise (“a dream job”) if he felt uncomfortable working for the government, but his exuberance for everything the position entails is heartfelt.

“You get to meet people trying to grow their businesses in the most beautiful part of the world and the organisation you’re in charge of helps them meet their aspirations.”

His three years will be up in March but he would happily extend the contract, if given the chance. Although a Glaswegian, home for Lorne and his wife is in the Highlands and he spends as many weekends as possible in Gairloch. His father, who was a dentist in Renfrew, had connections to the area and Lorne moved into his parents’ house there when they died.

“It’s on the sea and before going to work on Monday morning I have a cup of coffee on the decking and look out to the Torridons and Skye.”

But it’s not a feet up in front of the fire retreat for him and if he watches television at all it tends to be at four in the morning, thanks to insomnia. A talented sportsman in his youth, he remains an outdoors man and enjoys hill walking, fishing and sailing.

Four years ago he bought a ketch – “I couldn’t sail but there’s not much you can’t do if you put your mind to it” – and has ventured, with brave friends, to the daunting waters of St Kilda.

“It’s my favourite place on the planet…the Galapagos Islands don’t come close to St Kilda.

It is the largest gannetry in the world,

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You meet people trying to grow their businesses... and the organisation you’re in charge of helps them meet their aspirations so when you get within five miles you can hear all these screaming birds. It’s remarkable.”

He says he’s been caught in “really bad weather”, a force nine gale, but realised that “the boat is a much more capable animal than you are. You’re down to your own limitations, not the boat’s, the boat is fine but it’s how you handle it.”

I ask him what’s more scary, being at the mercy of a storm or the sharks of the business world and he laughs. “Oh the boat! I’ve been doing the business for far too long.”

Lorne’s wife – the former head of the Glasgow Housing Association Taroub Zahran – is a city girl, he says, but she loves the Highlands too and when he eventually retires he would like to “be home in Gairloch”, not full-time

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but “certainly the summers and spring and the early autumn”. Not many months elsewhere then.

He turned 60 in July and while he has never been bothered about his age – “I am what I am” – he has a problem with 60: “It sounds like the end is nigh”. He made it clear at home that there were to be no celebrations, because his birthday was in the middle of the Commonwealth Games, for which Harper Macleod was the legal adviser.

“So that was all agreed, I thought, and I then I came home to a huge party of friends from all over the place.”

He will most likely step down from his firm at 65, but he wants to find something else that stimulates him and admits to still being restless. “I don’t underestimate how much a challenge is important to me personally.”

His marriage to Taroub, last year, was his second and brought him two step sons, aged 22 and 18. “It’s a new life for me,” he says, after years of being single and with no children of his own.

“The beneficiary of that has been Harper Macleod. I’ve devoted time to it instead.

If I was invited to a dinner or weekend away I would almost without exception do it and that’s a luxury most people with a family don’t have.

“Now I don’t do anything like as many events.

In Harvard [where he did a leadership course in 2000] they asked ‘how many of you are too busy’ and everyone put their hands up.

Then they asked ‘how many of you do things you don’t want to do’ and everyone put their hands up. They said work out what you don’t like doing and don’t do it again. Mine was black tie dinners…sitting beside the same people from the same companies.”

Lorne may not be the reclusive loner he once was but he is content with his own company, whether on the train journeys to Gairloch or during his walks from where he lives in Glasgow’s west end to Harper Macleod across town. He likes time to “think, get ready and reflect”.

He says he’s lucky – in his work, in his personal life, in the chances he’s had – but he’s too modest. Like many high achievers, he has made his own luck and is now reaping the rewards. ■

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BIBBY ON WINE

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FROM LINLITHGOW TO THE CAPE: MY WINELAND TRAVELS

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BIBBY ON WINE

Creative director Tony Bibby is the originator of a new children’s television series, Teacup Travels, currently being made for CBeebies

by Edinburgh film company PLUM Films.

The story-telling begins with a cup of tea in Aunt Lizzie’s home. BQ invited Tony to sample something a little stronger in the Champany Inn cellars My Uncle used to say: “You can tell a good bottle of wine by how many stories poured from it.” So, as I release the cork from a chilled bottle of very nice Sauvignon Blanc, let me tell you about the time, not so long ago (last week in fact), when I took up the kind invitation to visit the sumptuous Champany Inn in Linlithgow.

Entering the 16th century pan-tiled building, I was greeted by Jason Davidson, son of Anne and Clive who together both own and run this iconic Scottish restaurant with its 16 luxury bedrooms, and adjoining Chop and Ale House.

After also being warmly welcomed by Anne, Jason invited me down to view their cellars – and that’s where the story really begins!

The deceptively long cellar houses approximately 36,000 bottles! (That’s a lot of storytelling!) And as I passed through the collection of old Italians, elegant French and rich Spanish, I was met by Mike Anthony, the expert Sommelier, who introduced me to their notable South African collection, generated by the Davidson’s South African family connections.

Having been fortunate enough to spend a fair bit of time out in South Africa’s winelands, I was looking at a display I could really relate to, both as a personal preference when it comes to drinking wine, but also each bottle triggered fine memories of a stunning part of the world.

I read recently that while South Africa is considered a ‘new world’ wine country, the tradition can be traced back over 350 years to 2nd February 1659, when the first grapes were

pressed and South Africa’s wine story began.

Despite its African geography, the Cape winelands, situated at the southern-most tip of Africa, enjoy a Mediterranean climate with cool, wet winters and warm dry summers. And together the mountain slopes and valleys form the ideal habitat for the wine grape. Added to which the sea breezes from the Atlantic and Indian oceans cool the vineyards during the warm summer afternoons, which slows the ripening process and creates the intense fruit flavours that are so popular with lovers of South African wines.

I was invited to sample two elegant wines that have both earned the privilege of carrying the Champany name, but aren’t born from a vast Linlithgow vineyard.

They have been carefully selected and imported from the Newton Johnson Vineyards – family run winery situated in the Upper Hemel and Aarde Valley near the breathtakingly beautiful coastal town of Hermanus. (Hemel-en-Aarde literally means heaven on earth).

Newton Johnson specialise in creating limited quantities of premium wine, and are proud to boast that they operate to the ‘old world philosophy’ of ‘creating wines with a sense of place’. And after pulling the cork from the chilled Sauvignon Blanc, the fresh citrus aroma fruit characters live up to

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that promise! The delicate colour disguises the clear, bright refreshing flavours. Pleasant notes of citrus on the nose give way to a more herbaceous type of Sauvignon rather than tropical fruits. And for the connoisseur, note that the wine has 8% Semillion, which adds some complexity and a little more ‘interest’ to the wine.

Next, I’m treated to the elegant ‘Champany Thistle’ red, and another story. I learned that it’s made up of three grape varieties, Syrah, Mourvèdre and Grenache. And while the wine is predominately Syrah, the Mourvèdre is added to give the wine some backbone while the Grenache adds a little more perfume.

It has a fairly bright, youthful colour.

Raspberries and redcurrents on the nose – with a subtle, nicely judged, oak. And velvet tannins with a good, long elegant finish.

But why the name ‘Champany Thistle’? Well, in South Africa it’s against the wine laws to have more than two grapes as the name of the wine. So while the likes of ‘Cabernet – Merlot’ is fine, ‘Syrah - Mourvèdre – Grenache’ is not.

For this reason the Davidsons took inspiration from the large thistles that grow outside the Cocktail Bar windows at Champany, and made their find legal. Unfortunately the thistles have been-and-gone for this year, but they will be back! As will I, as on my departure I discovered the establishment’s Champany Cellars wine shop, an Aladdin’s Cave of fine wines, where you’ll find the Sauvignon at £11.50 and the Thistle at £15 a bottle.

But that’s another story…

Tony Bibby owns and runs FORTY-SIX, a creative consultancy that works across a range of international blue chip companies. And when he’s not doing that, he transfers his creative skills and thoughts into stories for children. One of his original ideas, Teacup Travels is being developed and produced by PLUM Films, in Edinburgh, into a series for CBeebies. n

Thanks to Champany Inn, Linlithgow, West Lothian, Scotland, EH49 7LU. For reservations call: 01506 834 532.

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MOTORING

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MOTORING

REVVED UP IN THE TUNNEL OF LOVE Managing director Dave Quigley knows the sound of a great V8 engine. So how would he fare with a Bentley? He relished every moment spent with a delightful companion on the road >>

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MOTORING

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I know V8s, I’ve had a few. Some British, mostly American and I love ‘em. The torque, the grunt, but mostly the noise. I think it might be a bloke thing, listening to the rumble on take-off, or positioning your head between the tailpipes for maximum burble. As she watched me squatting behind the muscular rump of the Bentley, my (much) better half gave me the kind of baleful look that I’d direct toward a copy of OK magazine or a £40 scented candle.

I’d always associated Bentley with the glorious Rolls-Royce slushbox powerplants of yesteryear or with the 6 litre V12s that came about following their acquisition by VW. So a titchy 4.0 V8 engine was something of a surprise, although knowing that it was derived from Audi’s engineering department gave me something to look forward to.

The delightful folk at Edinburgh Bentley gave me the guided tour. Lower stance, black badges, less chrome on show at the front, black gloss below the coach line and

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more power all define this as the S package.

Mulliner options include contrasting stitched quilted leather, 21” gloss black alloys and auto cruise to name but a few. The car looks subtly more aggressive and purposeful than its forebears. No slush here.

I’m no expert, but my old V8s of 5.0-7.5 litres would produce 200-350bhp on a good day through their naturally aspirated set up and hit 60 anytime between 8 seconds and 10 minutes. The V8S shoves out 520 bhp and does it in around 4. Oocha! How do they dig out all of that power? I’m not qualified to drone on about torque, performance, understeer blah, blah – you can Google that and will find that the pundits like the car rather a lot.

So what does the punter say? I think it’s brilliant, looks and sounds amazing and delivers what you want and just when you need it. I’d suggest that the V8S moves Bentley firmly into the sports tourer camp.

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I headed for Glasgow along the M9 in search of a Prius to upset. I found one drifting along at 60 and hit the pedal. I wasn’t for looking down at the speedo as the S surged to an unmentionable speed with consummate ease and left the eco warrior rocking in the V8 slipstream. That said, Mr Prius would be pretty impressed – although my overall consumption was around 22mpg for the test owing to, er, congested traffic conditions, the car was hitting 30+ on the near-silent motorway cruise thanks to the ingenious technology that reduces the car to the equivalent of a V4.

Off-motorway, the car again displayed its Jekyll and Hyde characteristics. On light throttle the car is silky smooth and quiet – any request for power is met immediately with exhilarating acceleration, the growl, and seamless delivery through the autobox’s eight gears with the assuredness of the permanent 4WD. In the city and on the winding roads north of town, I felt completely at home cruising or gunning

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the car. The steering is nicely weighted and it reacts very quickly with no discernible lag from turbo or transmission. Bentley advised that the V8S would feel like a much smaller vehicle and they were right.

For fun I took the car around town (with an assortment of passengers) to check out its kerb appeal. At rest, the car looks assured and quietly confident, on the cruise it sounds magnificent and reverberates nicely around city streets. Public response: excellent. For a laugh I took it through the Clyde Tunnel, rubbing shoulders with a Maserati GT on the way in. I gave it a blast half way through

and I was laughing out loud as I shot out of the south side, pretty confident that the Maserati guy would’ve been reaching for his Viagra.

I’m not sure why buyers would go for the bigger V12 GTs. For me, the smaller, slightly less expensive V8S does the job. It looks sporty, yet magnificently Bentley and will dawdle or rush with equal aplomb, appealing to both racers and cruisers alike whilst delivering great performance and very acceptable fuel consumption. Oh, and the noise. If you go for a test drive, include a tunnel and you’ll buy it. n

MOTORING

Dave Quigley is a director and partner with Specsavers Opticians and Hearcare in Scotland. The company operates from 64 locations throughout Scotland and over 2,000 in another seven countries - and is No1 for eyecare and hearing.

The car Dave drove was a Bentley GT V8S Coupe with a list price of £160,000.

Thanks to Scot Symon, Brand Manager, Bentley Edinburgh, Fort Kinnaird, Edinburgh, EH15 3HR. Tel: 0131 475 2100

For fun I took the car around town to check out its kerb appeal.

Public response: Excellent

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BIRTH OF THE COOL

FASHION Chet Baker

The laid-back and effortlessly stylish look pioneered by the jazz greats began life in a side-street store, writes Josh Sims

He is adjusting the collar on a shirt – navy or maybe black, with white buttons. More unexpectedly, he is wearing an Alpine-style hat, high, narrow-brimmed, with badges. What would look comical on anyone else looks effortlessly right on him. But then this 1956 black and white photo is of saxophonist Gerry Mulligan, looking into a dressing-room mirror. He’s a cool dude in a cool era. What is perhaps stranger is where that dressing room is: not in one of the high fashion hubs of London or Paris, not Milan or even New York – but in a small, side-street store in Cambridge. And that’s Cambridge, Massachusetts.

Here was found Charlie Davidson’s The Andover Shop.

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It was here where Ivy League style took hold, where the WASPish under-graduates of Harvard, Princeton or Columbia developed a none too formal, nor too casual style of dress that would arguably become the lynchpin for western male sartorial standards for the next half century and more: crisp white button-down Oxford shirts and army surplus khakis, saddle shoes and penny loafers, hopsack blazers and flannel trousers, knit and rep ties and shawl-collar cardigans. It was, defiantly, the look of good grooming, privilege and money. It was defiantly white. That worked for Mulligan. But then what would fellow jazz maestro Miles Davis also be doing there, in everything – background, race, culture – an outsider? Or >>

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FASHION Gerry Mulligan

Miles Davis

Wynton Marsalis

Duke Ellington

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FASHION John Coltrane? They were, in the words of Roy Haynes, also a visitor, just picking up the “slickest shit out”.

Jazz has long been associated with ideas of cool, and a cool that is not just this week’s fashion, but which comes from the core, that grows out of living apart from the mainstream, from going one’s own way – it’s the cool of a James Dean, Steve McQueen or Cary Grant, sometimes imagined, sometimes projected (“Everybody wants to be Cary Grant,” noted Cary Grant. “Even I want to

Miles Davis

be Cary Grant”) but often innate. Certainly, the great players of jazz from the 1950s to 1960s – chiming with post-war prosperity, the birth of the teenager, the civil rights movement and the spread of TV as a mass media – effectively invented the modern idea of cool that would later inform the performances and personae of Dean, McQueen et al.

It was Capitol Records that, in the year before Mulligan’s snap, helped popularise the term with its album ‘Classics in Jazz: Cool and Quiet’, Davis underscoring the ineffable definition of this ever-so-desirable state of being with his seminal ‘Birth of the Cool’ compilation in 1957. By association with its performers, and their performances – in smoky, ill-lit, intimate late night venues, immortalised

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in evocative monochrome photography – ‘cool’ came to be associated with the idea of a nonchalant manner and effortless style, as much in playing as in posing. More than any record label before or since, the visual style of Blue Note in particular – boldly typographic, modernistic, unexpected and unmistakable, and perhaps the first to match the artfulness of sleeve design to that of the music – drove this home. Its most striking aspect, its colour-wash, stained glass effect appropriately gave its subjects the power of saint-like iconography.

But the clothes had to match, in part to sell the complexity of the music. And what better way for a sound that was radical than duds that also cut against the grain – by appropriating the uniform of the conservative, by undercutting the US national power-broking tribe much as Teddy Boys were doing in the UK, taking the style of one’s betters and, well, making it better? The result was more than a gravitational pull for pioneering jazzmen to the east coast caucasian enclave, and this one little shop of collars, cuffs and clubhouse rules. It was, appropriately enough, the meeting of dissonant notes, of the establishment and the experimental, the square and the hip, to create as much a new aesthetic of style as of sound.

Yes, the style-seeking jazzmen were building on the shoulders of swing and bebop giants – Louis Armstrong and Duke Ellington were none too sloppy with their wardrobes either. Billy Eckstine - whose big band extraordinarily hothoused the talents of Dizzy Gillespie, Art Blakey, Charlie Parker and Miles Davis among others – even designed and wore his own collar shape, the ‘Mr. B’, a high-roll collar that (with some imagination) formed a ‘B’ shape over a Windsorknot. But the simplicity of the newly-adopted and twisted Ivy style perhaps only made the post-trad music feel all the more avant-garde.

And the music came first. Far from being unpracticed, unnatural wonders with their instruments, the likes of Davis and Coltrane, Mulligan and Haynes, as well as Bill Evans, Charles Mingus, J.J. Johnson, Paul Desmond and other dedicated musicians of the period, had given recitals since childhood – and for these they were expected to dress presentably, which back then meant like their parents, as adults-before-their-time, in scaled down takes on the era’s wide-shouldered, peak-collared suiting. It was a habit that stuck, as visits to The Andover Shop – or the likes of J.Press, as favoured by Ahmet Ertegun, the co-founder of Atlantic Records – would refine. What these jazz masters wore, often as signatures, consequently attained an unexpected hispster credibility: Dizzy Gillespie’s double-breasted pinstripes, goatee, black horn-rimmed glasses and beret; Stan Getz’s

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FASHION dark Italian suits and skinny ties; Lester Young’s tilted porkpie hat; Thelonius Monk, with his outsized specs and beret too... Oh how they loved a hat, belonging to a period when any self-respecting man about town would risk social opprobrium to go about without one, even if in not so studiedly unstudied a way.

Then there was Miles Davis. It was Davis – searching for a look to announce his cleaned-up comeback – who made the clarion call to this definitive, artsy, neo-con jazz dress when,

$185 a pop. Bourgeois similarly overhauled Chet Baker who, as the promoter would put it, “arrived from California dressed like a ragamuffin”, also in 1954 - and again at the same store. In 1958 the cover of ‘Chet Baker in New York’ – note the title, pointedly east coast, against the bohemian and badly-dressed west coast – had him in rep tie, white button-down and navy blazer, his hair slicked back. We’re decidedly not in Baker’s hometown of Yale, Oklahoma anymore – more Yale, Connecticut, home of the elite training ground of American blue-bloods. Later Baker would adopt a trademark minimalistic dark suit and white t-shirt – at a time when tailoring played only to the accompaniment of shirt and tie.

Like all moments in style this great era of jazz cool was, of course, set to pass – not least because the jazzmen’s way

Jazz has long been associated with ideas of cool – a cool that is not just this week’s fashion

Chet Baker

in 1954, the aptly-named jazz promoter Charles Bourgeois took him to the Cambridge haberdasher to find what he would call Davis’ “costume”. The trumpet player left having put the I back into Ivy, with his own distinctive blend of soft-shouldered, narrow-lapeled tweeds and madras jackets, blindingly-white button-downs, flannels and Bass Weejuns.

The following year, playing the Newport Jazz Festival, he took to the stage in a custom-made, side-vented seersucker sack coat, club-collared shirt and a bow-tie. Described thus, he could have looked like a pre-war door-to-door salesman, stiff and falsely smiling. He looked anything but. He looked like a man of tomorrow. Six years later, in fact, he was being hailed by ‘Esquire’ as a model of style for his bespoke suits, made by Emsley in New York and costing him a whopping

with a button-hole, tie-pin or pleat, just so, would enter the dress vernacular. It would become, superficially at least, the norm. They moved with fashion too, so that by the 1960s Davis, for one – how the great had fallen – preferred kick flares and fey neck-scarves. And, naturally enough, they got older and their outlook changed. Maybe, as the world grew ever more obsessed with image, at the expense of content, these maestros felt less and less like dressing the part.

The legacy lingered, with the likes of Wynton Marsalis, who in the 1980s rocked 40s elegance when everyone else was rolling their jacket sleeves and forgetting to put on socks. And, as the fashion business has acknowledged, it lingers in jazzland even today: among the notables, David Sanchez – who’s modelled for Banana Republic, Joshua Redman – who’s modelled for Donna Karan, and Greg Osby – who chiefly just models his own vintage fedora but, like Mulligan with that Bavarian number, just looks straightfrom-the-fridge dad. But, the music aside, the greatest legacy goes beyond jazz. Jazz’s lifting and re-energising of Ivy style gave men a model of cool that is timeless. It is for less well-dressed men to, as Charles Mingus had it, look to its golden era of style and “sing their praises while stealing their phrases”. n

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EQUIPMENT

GRAND DESIGNS Car manufacturer Ford’s executive design director Martin Smith talks about the challenges and rewards of turning his boyhood dream into a lifelong career >>

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EQUIPMENT

Martin Smith counts many objects in his repertoire of things that inspire him: his vintage Omega watches, an original Bertone car model which he keeps on his desk, a couple of massive hand-guns (“it often raises eyebrows when I say that, but where I live in Germany sport shooting is quite common”) and his bespoke loafers, which he designed himself. “But they only took 10 minutes to design, even though it’s nice to have anything to your own specification,” he notes.

Of the objects, it is the Bertone model that is perhaps most revealing – because Smith himself is a car designer, more specifically the executive design director of Ford, for Europe and Asia Pacific, where this year he celebrates his tenth year at the car giant. Indeed, not just any car designer, Smith can claim to

be the designer of the world’s best-selling car – the Focus.

That also happens to be the best-selling car in the world’s fastest-growing new car market – China.

“Some boys are into planes or trains. For me it was always cars. I always wanted to be a car designer,” says the man who, still in short trousers, wrote to the Mini maestro Alec Issigonis requesting some tips on how to get into the job.

“But it’s certainly gratifying when you can work at your hobby, especially when someone else is prepared to put up $1bn to put your design into production and you can then actually drive it around.”

Not that Smith’s success comes through simply doing what he wants – and this despite his greatest hits including the likes of the Audi Quattro and Audi TT. One thing he has learned over his career – which began with Porsche just over 40 years ago, before heading both the external and then the interior design studios for Audi, and then overseeing design for Opel and Vauxhall before being lured away by Ford – is exactly what his job is.

“And that isn’t necessarily to design something I like but something that is right for the company,” says the Sheffieldborn Briton, who is credited with giving Ford its so-called ‘kinetic design’ philosophy – one that helped, through introducing a more complex surface architecture, transform a maker of often rather dull cars into one of much more dynamic, energised ones.

“I think cars just happen to be the most complex piece of industrial design there is – as well as the necessities to be safe and functional, it has to look good too,” he adds. “The fact is that people subconsciously expect aspects of a car design, like safety, to be there. What they really respond to is the sense of the driving experience being reflected in the way it looks. You have to express to them the car’s capabilities in those looks.

Today any car has to exude that it is a quality piece of work.

The customer wants gorgeousness. Well, at least some people do. Of course some people buy a car like they buy a refrigerator. I buy a refrigerator as I would a car – I assume it >>

Some people buy a car like they buy a refrigerator. I buy a refrigerator as I would a car. I assume it will keep things cold – but I want it to look good

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will keep things cold, but I want it to look good.”

Smith says, smiling, that he just happens to like all the cars he has designed. But getting that balancing of style and functionality is, he admits, no easy trick. Car design has become an ever more complex business too. While, when he began his career, cars were developed using sketchpads and clay modelling, now to these have been added the tools of computer-aided design and illustration – “not that this doesn’t mean car design cannot still be artistic,” he adds. “People often tend to think you press a button and a car design is produced, which definitely isn’t the case.”

Technology has also changed what cars actually are: and, Smith says, the advent of new technologies, from the voice control systems already on the market to the retina controls to come, from changes in power plants and materials that will allow vehicles to be lighter, tougher, more efficient, “will radically change the way the typical car looks, both its interior and the exterior.

But I’ve no idea what exactly that look will be. Not yet.” Presumably two of Smith’s latest designs – the Edge concept, an upscale, more sleek take on the SUV, and the first-of-its-kind C-Max Solar Energi concept, with a solar panel roof with a concentrator lens that provides 30km of sun-powered driving

a day – at least hint at the future. If, that is, customers buy into the ideas. Certainly customer higher expectations have transformed the market during Smith’s time in the business too, whether that be for the way super-cars are built and sold, or volume producers like Ford. Customers, in fact, are what drive the market. And the customer is ever more vocal, with an opinion that needs to be taken into consideration with each new iteration of a model.

“The latest Focus, for example, responded to a lot of points raised by consumers about the design - that the front end was too busy, or the lights too large,” Smith says. “People get very emotional about car design, which is good because we’re always trying to add more emotion into a car design. People actually write in to tell us what they want. Of course, we don’t just listen to one guy in the street who tells you he thinks your car is ugly. But we do have to listen to a groundswell of opinion over several years.”

Indeed, those changing demands have affected the way the industry operates at all levels: witness Ford pushing on with its Vignale concept, essentially an upgrading of the materials, presentation and sales environment of its cars that aims to put it more on a par with much more expensive vehicles. “The difference is that in my work we still have to work within a budget that allows us to produce cars in major plants, that sell all over the world and do so at a good price,” says Smith.

“They don’t have quite the same problems at Rolls Royce. But I don’t mind. In fact, I love the challenge of designing mass production cars. In my job even a commercial vehicle gets a lot of attention - even that has to look good.” n

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INTERVIEW

HOW BUSINESS CAN DELIVER A BETTER WORLD FOR MORE PEOPLE What kind of Scotland do we want to see? And how will business play its part in shaping the wider world in future? After the referendum, there is time to pursue fresh agendas. BQ Editor Kenny Kemp spoke with Gib Bulloch, managing director of Accenture Development Partnerships

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It’s a sweltering day in central Glasgow. The city is buzzing with gallus delight as Glasgow 2014 – years in planning and preparation – is now in full swing. Sitting at a table in the glass hothouse of the Millennium Hotel is a visionary Scotsman: a man from the Isle of Bute who has been at the forefront of where economic development meets massive social change on a global scale.

If one of the legacies of the Commonwealth Games is a re-consideration of the role of global capitalism, then Gib Bulloch is among the torchbearers, suggesting that a better, fairer and more collaborative way forward >>

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is really the only sensible option.

And as we all consider how we heal the division in a post-referendum Scotland, it is worthwhile looking at where corporate business intersects with wider society and its position as a force for good, helping alleviate global poverty, eradicating disease and lighting the darkness through education.

With the Commonwealth covering one third of the globe, the Games in Glasgow were an appropriate setting for frank discussions at a conference about how Western businesses might properly help in Africa, India and in other developing parts of the Commonwealth.

Gib Bulloch has big thoughts about this future space. And it’s well worth paying heed to what he says, because he’s a man of action. He is managing director of Accenture Development Partnerships (ADP), set up by Bulloch and like-mined colleagues ten years ago. While ADP might be a radical ‘cell’ working inside Accenture, Bulloch is not some kind of reconstructed socialist prophet.

ADP has become an influential adjunct to Accenture, one of the world’s leading management consultancies with over 290,000 staff around the globe and revenues of £17bn. The global firm is an innovator in business strategy and digital technology. While Accenture exists to help corporate business succeed, increasingly – and spurred on by ADP’s success – it recognises that those who work in major businesses around the globe now expect well-run companies to do much more to engage with the societies where they operate. When we say much more; we mean much, much more.

Of course, some of this makes good business sense. In the battle to attract the smartest people of the Millennial Generation into the work place, firms must be more engaged with how they produce and sell their products – and how they behave. The starting point is about good corporate citizenship, but Gib Bulloch believes there is a great deal more.

“We are reaching a crossroads in the world’s economic development. The next decade is going to be a very exciting one. We can already sense the turbulence in many places.

The disrupters of technology will make a significant impact in the sphere of economic development. My strong belief is that we will

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We are reaching a crossroads in the world’s economic development. The next decade is going to be a very exciting one. We can already sense the turbulence in many places see business play a much stronger role than it has done in the past. Business must become a true force for the global development of everyone – not just the lucky few who were fortunate to be born in the West,” he says.

With global unrest part of our daily diet of international news, Gib Bulloch is clear that high-level collaboration is needed to deliver on the required scale.

“I’m positive that things can be done – no matter how complex they might appear at first.

It does involve all sectors of society converging to identify a problem. The past is obsolete.”

He cites the treatment of women with obstetric fistula in Tanzania helped by a pioneering NGO working with the Vodafone Foundation, or Nandos partnering with mining giant AngloAmerica. He is also passionate about Myanmar, where 76% of the population are without electricity yet 96% have a mobile phone.

He says rural electrification can be delivered by a micro-grid of telecoms towers where

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connectivity is improved exponentially.

“Cross-sector convergence involves government, local and national, working with not-for-profit and private companies with knowledge of specific technology that they are willing to adapt. We’ve a blank canvas in many spheres but we have digital brushes,” he explains.

It may also involve a new kind of financial instrument called a Development Impact Bond (DIB) where various investors provide the capital. The private investor is repaid based on the impact of the social program. If it succeeds, investors succeed, it if fails, then it will be lost.

The UK government has launched a DIB in Uganda aimed at alleviating sleeping sickness.

Accenture has been leading in its involvement in places such as Haiti, after the earthquake, and working with UNICEF in Africa.

“Accenture’s first generation model was binary and black and white. We would work with the NGOs, improving their back offices,

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logistics and helping with their technology.

But we weren’t in a positon to tell them how to do the deep technical stuff in international development. We had no expertise in this sphere,” he says.

Then several years ago, it became clear that new business thinking was required to enhance traditional ways of economic development. For example, how could more nurses be trained more quickly for African nations? If the Kenyan government required 20,000 new health professionals but only had places for 200 per year, how can this be changed? Does e-learning have a greater role to play? This is exactly the kind of work Accenture Development Partnerships has been undertaking with community health training.

“The world has not stood still. Over the early phase of ADP’s existence, the whole issue of corporate social responsibility (CSR) came to the forefront. However, the language in recent years has been about ‘inclusive’ business.”

He says business guru Michael Porter is now talking about ‘Shared Value’ rather than ‘shareholder’ value.

Indeed, when you look at the development landscape more broadly, Bulloch’s ideas on what he calls “cross-sector convergence” do seem to be taking on concrete form.

Consider, for example, the partnership between Coca-Cola, The Global Fund to Fight AIDS, Tuberculosis and Malaria, and the Bill & Melinda Gates Foundation, which has just been expanded with the co-operation of the Tanzanian government.

Project Last Mile began in 2009 and focuses on harnessing Coca-Cola’s supply chain expertise to distribute essential medicines in Tanzania.

The idea being that if you can get a Coke can to almost anywhere in the world, no matter how remote, why not essential medicines too?

In June the partnership announced it would be expanded to eight other African countries.

The director-general of the medical stores

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department in Tanzania claimed it helped increase the availability of medicines in clinics by nearly 30%. For Gib Bulloch, that certainly looks like progress.

Bulloch’s general point is that businesses – of all shapes and sizes – are beginning to play a different role in society. It is inevitable, he believes and he points to SAB Miller’s recently launched Prosper initiative, which looks at water consumption, as evidence of this trend.

“Increasingly, CEOs are wanting to talk about their values. We will see business playing a different role and understanding and measuring a broader definition of value, than the one-dimensional and narrow definition of profit. Business leaders are increasingly embracing this broader definition of value.”

This aligns with Accenture’s stance on corporate citizenship, which is around Skills to Succeed, which involves more Accenture people spending time working in not-for-profit charitable and NGOs organisations. >>

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INTERVIEW

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“We’ve been asking as an organisation, is there more we can do? We’re a 300,000 person organisation. The easy route would have been for ADP to be spun-off but I stay in Accenture because I believe what we do is part of the organisation’s DNA. We need to stay attached and get into the bloodstream of this large consulting organisation because we have 6,000 commercial clients. Even a few percentage changes with this group could create thousands of social enterprises across the globe.”

He accepts that this is not always an easy sell to his other consulting colleagues within Accenture.

“We are flying at 180 degrees in the face of most policies in Accenture. Especially in our early days, Accenture was looking at mature markets and commercial clients who could pay the fees. In every dimension, where we were going into parts of Africa where there was great need for us, but no real commercial market, there were questions to answer. Yet we now have 27,000 people on our Accenture database queuing up to help with these new kinds of project – often at half of their current salaries. Why? Because they know that it is good for society and good, ultimately, for business.”

He says this is what smart young people now want in their careers – and the leadership is waking up to this.

While he now lives in Geneva, Gib’s parents, both former teachers, still live on Bute, he attended the University of Strathclyde studying marine architecture and engineering. He then went offshore as a graduate petroleum engineering working with BP, primarily on the Buchan Alpha and the Beatrice field.

“Working with these seasoned engineers, great people and diverse, they kept a young graduate’s feet on the ground, but my heart and soul wasn’t in engineering,” he says. At 25, he returned to Strathclyde Business School, financing his own MBA by taking out a loan.

“When you pay for your education and invest in yourself, it focuses the mind. I had never worked harder.”

He went to work with Mars in sales and marketing, and then began to look at consulting, joining Accenture in 1996. At this time, Accenture was a global partnership

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set up in 1989 and Gib joined a niche strategy practice known for its IT and telecoms consulting.

“I loved the first few years: it was varied and strategic and I learned so much from our partners. Accenture was then around 50,000 people, it’s now close to 300,000. I had done the MBA to step out of engineering and then I went and worked in the energy division. In my 20s, I wanted to earn as much money as possible, drive a fast car and live with a good lifestyle in London. That was the zeitgeist of the 1990s. Success was measured in terms of your salary and your bonus.”

In Gib’s mind something was niggling. There remained a Scottish ethos of public service firmly in the back of his mind, possibly instilled by his parents and Scottish island upbringing.

One day on the Tube he was reading in the

He has kept in touch with the families and enterprises over the last 12 years, but it framed his longer term thinking.

“If you want to start thinking out of the box, then you have to live out of the box, and my year in Macedonia was living out of my box.

One of the legacies was developing individuals in Macedonia and helping them to step up to bigger jobs. Although, I probably got more out of the experience than I put in.”

He returned to mainstream work at Accenture, but pressed the right buttons for internal business transformation that he would spread right across the whole of the consulting business. Thankfully, Accenture was ahead of the curve on CSR. “While I was the first VSO on this programme from Accenture, there have been many hundreds of people from our organisation

In my 20s, I wanted to earn as much money as possible, drive a fast car and live with a good lifestyle in London.

That was the zeitgeist of the 1990s FT about how VSO (Voluntary Services Overseas) was looking for people with greater business background.

In September 2000 he signed up and, within a few weeks, with the blessing of his Accenture bosses, who granted him an enhanced sabbatical away from the office, he was on a year-long project in Macedonia, helping to build a small enterprise, earning $100 a month.

He said: “In Macedonia I lived with the family for the first few weeks while I did an emmersion in the Macedonian language.”

While the family was poor and there were acute ethnic tensions that spilled over, Gib experienced a profound sense of community and generosity.

“I realised that the people who have so little, tend to give so much. And I’ve found this in Scotland too – they tend to give more than those who are very comfortable in life. They were generous proportionately. In Macedonia, I was welcomed with open arms.”

doing similar things around the world in the past ten years,” he says.

VSO and Accenture have developed a long-standing relationship. Its former chief executive, Mark Goldring, now the chief executive of Oxfam, became a friend of Gib’s.

Accenture colleague Paul Gurney decided to pick up the mantel with employee-generated giving and involved hundreds of employees on treks to Kilamanjaro. Gib’s involvement with ADP took up more of his thought leadership.

“There is this positive chain reaction in life in that little things, that seem very trivial, but decisive positive action can create this domino effect that you don’t know where it is going to go. This has snowballed.”

While the feel-good factor was immense, Gib began to think beyond this.

“Were we changing the system? Were we lifting the size of the problem? The size of the response was incongruent. It was clear to me that much more could get done, if all of the major consulting firms such as Accenture,

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McKinsey and EY should be in the Balkans.

Yet this doesn’t just go for the Balkans, but for Africa too. Why are we not getting business skills into these countries and regions? We were short-changing them.”

Wasn’t there a danger of business imposing itself on governments?

“There is a human rights agenda here. I come at it from the fact that every child, irrespective of your parents’ wellbeing, or whether you are born in Burma or Glasgow, you have a right to a quality education that is funded for you. That is the secret. We are not going to by-pass governments but the government’s role changes from service delivery of all things to ‘choreography.’ This is about bringing the competencies together to deal with the challenges.”

While he insisted he was never good at football at school, he says the problem was he always chased the ball, while those who were better at the game, anticipated where it was going.

“There’s a metaphor in there about how countries can chase the ball or move into a different space that says ’Let’s use the power of the digital world to fundamentally enable things to be done in a new way’. A billion people on the planet don’t have electricity in their healthcare. If 300 million kids go to school without electricity, does this not scream business opportunity for the likes of Scottish Power?”

Transparency in payments and new methods of funding will help. He said that when the UK government instigated a mobile phone payment system for the police force in Afghanistan, the police thought they were getting a 30% pay rise. In fact, they were only getting what they should have been before without deductions from corrupt middle-men.

“It’s about knowledge and technology transfer and empowering these countries. Technology will be a great disrupter in developing countries in the next five to ten years.“ Gib Bulloch is a man who offers nuggets of hope – that it is possible to build a better and fairer world. “I feel I have the best job in Accenture. I have turned my hobby and passion into my day job.”

He’s not a politician – he’s a leading business consultant. That he has the ability to speak freely and openly about this is refreshing. n

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BIT OF A CHAT

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should public money really be going into more drinks projects? I’m sure someone will keep me straight about this.

>> So many nail-iases

with Jock Yuler >> Design for life Wyatt Mitchell, the first art director of the esteemed The New Yorker magazine, was in Edinburgh at Magfest talking about his amazing journey from hip-hop magazine Vibe to a magazine where a scintilla of change is an anathema to its readers. He spoke of his first day of work in his previous magazine, Wired. He began working on a design the moment he arrived and didn’t leave until 5am next morning. He says a designer can never have enough time to create the perfect pages.

I do hope they let the BQ design team home at least once a week.

>> A sobering question Speaking of whisky, I understand that the Glasgow Distillery Company is now open, producing the first gin and single malt whisky in the first new distillery in the city for 100 years. So good wishes to Makar Glasgow Gin, a ‘superior Juniper-led spirit’.

The company is a partnership between drinks industry specialists Liam Hughes and corporate financier Ian McDougall, of McDougall Johnston Advisory, and an unnamed Asian based investor. But we understand that Scottish Enterprise has awarded a regional selective assistance grant for £120,000.

When Grant’s, Diageo and Edrington can make international profits from whisky production and new distilleries are springing up all over Scotland, why

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Now I enjoy an occasional snifter of Drambuie. But a Rusty Nail? Well, that’s a serious business. So when William Grant & Sons announced that it has bought the Drambuie whisky liqueur brand, I thought this is a darn good fit for this notorious cocktail – and dear old Drambuie. When the Hollywood Rat Pack of Frank Sinatra, Dean Martin, Sammy Davis Jr, Joey Bishop and Peter Lawford downed several lethal Rusty Nails in the Manhattan 21 Club in the 1960s, it was a blend of Scotch, Drambuie and a twist of lemon. With Drambuie joining a stellar portfolio of premium brands, the Rusty Nail could now be mixed with Glenfiddich, the Balvenie, Tullamore, Grant’s blended whisky or even with D.E.W. Irish whiskey. So plenty of options.

According to one mixologist, the Rusty Nail was actually born during the British Industries Fair of 1937 and called a B.I.F. After 1937 and during the Second World War, the Rusty Nail took on other aliases including

the D&S, LittleClubNo1, a Mig-21 (during the Vietnam war), and, in Chicago, a Knucklehead. I think the whisky boffins are going to have a lot of fun with this – surely a blended Grant’s and a Drambuie should be a See-You Jimmy Nail.

>> Funny money Heard this on Radio 4 comedy show.

Some new definitions for words. The price for building a cathedral: perspire; the price from a poet writing an ode: perverse, and the cost of your lunch in a Korean restaurant: perpetuate.

>> Creating a buzz Congratulations to Darren Bunker, Raymond Kerr and their team at QubeGB based in Galashiels in the Borders. They retained their place in the Sunday Times Tech Track 100, coming in at 52nd, dropping back from 32 in 2013. A great feat for the telecoms engineering and installation business set up in 2007 and with 62% rise in sales over the last three years. May your smartphones never stop buzzing.

>> AND A PARTING SHOT … ON WORK ETHIC

Slash, the former Gun N’ Roses guitar hero, whose Sweet Child of Mine is Radio 2’s second greatest riff of all time, says: “No matter what I was under the influence of, I was always pretty responsible, and understood that doing the work to get the word out was important – even when it was just promoting the band in the local clubs. No matter what the job was, I would take it on. So I still do that, but especially now that I’m completely responsible for my own existence.’

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Why your wealth manager should never stop

managing your portfolio.

The issue with investment opportunities is that they rarely stay opportunities for long.

Too often one blinks, and they’ve gone.

Which is why we at UBS believe in proactively managing your portfolio.

It means your client advisor will seek out new investment opportunities, based on the latest market developments.

And regularly review your portfolio, balancing and optimizing it, according to your risk profile.

But one thing remains constant throughout all of this.

Our commitment to meeting your financial goals.

And that’s something we’ll never stop doing.

The value of investments can fall as well as rise.

You may not get back the amount originally invested.

Colin Aitken UBS Wealth Management Wemyss House, 6-8 Wemyss Place EH3 6DH Edinburgh +44 131 247 2921 www.ubs.com © UBS 2014. All rights reserved.

EVENTS

AUTUMN 14

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

SEPTEMBER 24-25 MADE The Entrepreneur Festival: Sheffield, Sheffield City Hall, Barker’s Pool, Sheffield, South Yorkshire S1 2JA. Scottish entrepreneur Michelle Mone and Superjam’s Fraser Doherty among the speakers. www.madefestival.com 0191 4266333. Wednesday 5-7pm, Thursday, 9.30-5.15pm.

30 Building Homes for Scotland Post - Referendum. Crowne Plaza Edinburgh, The Roxburghe, 38 Charlotte Square, Edinburgh, EH2 4HQ www.futureukandscotland.ac.uk - 0131 651 4740. 9am-4.30pm

NOVEMBER

25 Northern Star Business Awards 2014, AECC, Bridge of Don, Aberdeen, AB23 8BL - www.aecc.co.uk - 01224 824824. 6:30pm until late.

3 Writing a Journal Article, Royal College of Physicians of Edinburgh, 9 Queen Street, Edinburgh, EH2 1JQ - www.rcpe.ac.uk - 0131 225 7324. 9.15am-4.30pm.

OCTOBER

3 Measuring Wellbeing in Scotland: Charlie Woods, Director of Universities Insight Institute. The David Hume Institute, Royal Society of Edinburgh, George Street, Edinburgh. 6pm. Non-members £25. www.davidhumeinstitute.com

1 60 Really Useful Minutes: Customer Service, 10-11am. Edinburgh Chamber of Commerce, 40 George St, Edinburgh, EH2 2LE - www.edinburghchamber.co.uk 0131 221 2999

3 Time Management, The Lighthouse, Mitchell Lane, 11 Mitchell Lane, Glasgow, G1 3NU - www.bgateway.com - 0141 242 8333. 6-9pm.

5 Press and Promote, Ardoe House Hotel and Spa, South Deeside Road, Blairs, Aberdeen, AB12 5YP - www.agcc.co.uk - 01224 343 900. 7-9am

1 New Ventures in East Africa: Challenges & Successes, 11:45 -2pm: AGCC, Exploration Drive, Aberdeen Energy Park, Bridge of Don, Aberdeen, AB23 8GX -www.aecc.co.uk - 01224 824824 2 Glasgow Business Awards, 6:30pm – 11pm. - Hilton Glasgow, 1 Williams Street, Glasgow, G3 8HT - www.glasgowchamberofcommerce.com - 0141 204 2121 2 Is Self-Employment for You?, 10-11am - Dunfermline Business Centre, Izatt Avenue, Dunfermline, KY11 3BZ - www.bgateway.com - 0141 242 8333 2 SPE Seminar: Drilling automation – Do I Need Some Too? Time TBC - AECC, Bridge of Don, Aberdeen AB23 8BL - www.aecc.co.uk - 01224 824824 8 Blackadders Mock Employment Tribunal, 8-10am. Discovery Point, Discovery Quay, Dundee, DD1 4XA - www.dundeeandanguschamber.co.uk - 01382 228 545 8 The Future of the UK/ Scottish Relationship. Peter Riddell, chief executive of the Institute of Government. The David Hume Institute, Royal Society of Edinburgh, George Street, Edinburgh. 6pm. Non-members £25. www.davidhumeinstitute.com 10 Women Mean Business, Ardoe House Hotel and Spa, South Deeside Road, Blairs, Aberdeen, AB12 5YP - www.agcc.co.uk - 01224 343 900.

11:45am-2pm 10 Think Digital: Tomorrow’s City Centre, The Lighthouse, 11 Mitchell Lane, Glasgow, G1 3NU - www.glasgowchamberofcommerce.com - 0141 204 2121.

8am-2pm.

14 Deep Offshore Technology Network Breakfast, AECC, Bridge of Don, Aberdeen AB23 8BL - www.aecc.co.uk - 01224 824824. 6:45-8:45am.

20 Low Carbon Networks & Innovation Conference. Time TBA - AECC, Bridge of Don, Aberdeen AB23 8BL - www.aecc.co.uk - 01224 824824 20 Inequality in Scotland: what are the causes and what are the implications?

Speaker: David Bell, Professor of Economics, University of Stirling. The David Hume Institute, Royal Society of Edinburgh, George Street, Edinburgh. 6pm.

Non-members £25. www.davidhumeinstitute.com 27 Premier Series Dinner with Lady Susan Rice,. The Balmoral Hotel, 1 Princes Street, Edinburgh, EH2 2EQ - www.edinburghchamber.co.uk - 0131 221 2999.

5:30-9pm 27 Shire Connections,. Meldrum House Estates Ltd, Meldrum House, Oldmeldrum, Inverurie, AB51 0AE - www.agcc.co.uk - 01224 343 900. 11:45am-2pm.

5 Social Media – the basics. John Player Building, Stirling Enterprise Park, Stirling, FK7 7RP - www.bgateway.com - 0141 242 8333. 9:30-12:30am 5 Pilot Share - AECC, Bridge of Don, Aberdeen, AB23 8BL www.aecc.co.uk - 01224 824824. 7am-2pm 6 The Annual Employment Law Conference 2014, AECC, Bridge of Don, Aberdeen, AB23 8BL - www.aecc.co.uk - 01224 824824. 8am-4.30pm.

7-14 ExploreExport week, run by UK Trade & Investment, Scottish Development International and Scottish Enterprise.

6 Becoming an Employer, Musselburgh East Community Learning Centre, Haddington Road, Musselburgh, EH21 8JJ - www.bgateway.com 0141 242 8333. 6-9pm.

10 Networking Skills, The Lighthouse, Mitchell Lane, 11 Mitchell Lane, Glasgow, G1 3NU - www.bgateway.com - 0141 242 8333. 6-9pm.

10 ExploreExport event, with Scottish Development International, at BT Murrayfield Stadium, Edinburgh EH12 5PJ. Cost £50 which is being subsidied

by Scottish Development International.

12 SPE ICOTA well intervention conference, AECC, Bridge of Don, Aberdeen AB23 8BL - www.aecc.co.uk - 01224 824824. Time tbc.

12 Pensions, a Lamborghini and the Changing Landscape, AGCC, Exploration Drive, Aberdeen Energy Park, Bridge of Don, Aberdeen, AB23 8GX www.agcc.co.uk - 01224 343 900. 11:45 – 2pm.

20 The Presidential Address: Tackling Trends in Inequality. Professor Anton Muscatelli, Principal and Vice Chancellor of University of Glasgow. The David Hume Institute, Royal Society of Edinburgh, George Street, Edinburgh. 6pm.

Non-members £25. www.davidhumeinstitute.com 21 WedoScotland. Annual Awards and Dinner. www.wedoscotland.com 27 There and Back Again, ALSGBI 2014 Annual Scientific Meeting, AECC, Bridge of Don, Aberdeen, AB23 8BL - www.aecc.co.uk - 01224 824824. 8:30am-4:30pm.

27 Breakfast Connections: One Year on with Ian Craig, CEO, Transport for Edinburgh, Ghillie Dhu, 2 Rutland Street, Edinburgh, EH1 2AD www.edinburghchamber.co.uk - 0131 221 2999. 8:30-10:30am.

27 Entrepreneurial Exchange annual dinner and awards ceremony, Glasgow Hilton. www.entrepreneurial-exchange.co.uk 28 HMRC Presentation - Tax and Self Assessment. John Player Building, Stirling Enterprise Park, Stirling, FK7 7RP - www.bgateway.com - 0141 242 8333, 6-9pm.

28 HYDRO 14, Time TBA - AECC, Bridge of Don, Aberdeen AB23 8BL www.aecc.co.uk - 01224 824824 29 Facebook Strategy for Business, The Falkirk Stadium, 3rd Floor, 4 Stadium Way, Falkirk, FK2 9EE - www.bgateway.com - 0141 242 8333. 9:30am-4.30pm.

BUSINESS QUARTER | AUTUMN 14

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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What a bank should be

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That’s why our clients get a dedicated, expert Relationship Director.

We believe credit partners should meet you directly, so our decisions are as transparent as possible. We work hard to do right by you and your business now and in the long term.

It’s thanks to this approach that we’re proud to say 4 out of 5 of our business customers would recommend us.

Find out how we’re supporting businesses like yours across the UK at santandercb.co.uk and if you’d like to get in touch, call Steve Hand on 0777 150 6701 or email steve.hand@santander.co.uk

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