Tricks of the trade

Racing ahead of the pack is one thing, but staying up front isanother. Nevertheless, a number of makers and shapers in the channel haveturned in success after success over the past 10 years. Simon Meredithreveals how they did it

Over the past few months I have interviewed several of the most successful people in our business: Peter Rigby, David Randall, Joe McNally, Jim Pickup, David Goldman and Brian Androlia. These are people who have seen a great deal unfold over the past decade.

Along with others like Derek Lewis, formerly of Technology and Combro, Philip Hulme of Computacenter, Mike Lunch of IBM, David Southworth of P&P, PST's Howard Strowman and many people from the distribution and reseller community, they have helped make the channel what it is today and will help to shape its future.

If you talk to these individuals in depth, the surprising fact emerges that after 10 years - often more - in the channel, they share few opinions about what has made them successful and what will make businesses successful in the future.

There has been no magic formula for achieving success in the computer business over the past 10 years. For many of those who have done well, it has been a matter of sheer hard work. David Randall had many failures before ADT and Azlan, and David Goldman said he learned a great deal from running a small, under-capitalised printing business before Sage got started.

Luck plays its part, but so does insight and ambition. The way David Goldman recognised that Sage must put its program on to the Amstrad PCW8256 is a classic example. There's more to it than just being in the right place, said Goldman. 'You have to be in the right place at the right time and you have to be able to recognise that you are there and to do something about it.'

With Peter Rigby the secret of success seems to have been a determination to create something that would last. With Randall, it was the simple desire to make that first million and from there on, sheer enthusiasm and determination drove him on.

But it was different for people like Joe McNally and Brian Androlia.

They caught the big wave early on and from that position, they have simply had to have the ability to ride it.

McNally's view that '90 per cent of any success is just commitment and hard work' would almost certainly be echoed by all the others. But he and Androlia, as well as others such as Mike Lunch of IBM and Graham Hopper of AST, are not entrepreneurs in the same sense that Randall, Derek Lewis, Rigby, Hulme and others are.

Then again, Androlia, along with Chris Buckham, turned Arche into a near overnight sensation. He told me that it was not down to his contacts with dealers but it's hard to imagine that this did not have a lot to do with it. In this business, as in others, personal contacts and loyalties still play a big role. It's not what you know but who you know.

It is hard to see how the 'trade companies' that these people have built up would have succeeded without them. It is certainly true that without Randall, Azlan would not have capitalised on its early growth and that without Rigby, SCC would not have become what it is today. Would Sage have been as successful without Goldman? It is doubtful.

There are plenty of other examples of the individual leading the business to achievement. While the individuals tend to be modest about their leadership role, in the end most will concede that the individual makes the company.

At least, in the formative years.

Later on, when the company grows bigger, their influence recedes. And letting go is the hardest part of success. It takes different types of people to succeed in different organisations and recognising what you can and can't do is important in a personal as well as a business sense.

Randall admits now that Azlan, as a public company, was probably too big for him.

Others, like Lewis, seem to thrive in larger organisations. And look at McNally - Compaq UK is a u1 billion business. Many people have mentioned Pete and Pam Fisher as important early pioneers in the business and admired their decision to get out when they did. What had started as a small part-time business became a multimillion pound company and it needed someone like David Southworth to run it.

But some people can make the transition with apparent ease - Hulme at Computacenter and Rigby at SCC for example. Keeping the company private may make a difference. Neither Computacenter nor SCH have gone public.

Over the years, Logitek, P&P and Azlan all went to the market and all ended up undergoing some kind of major internal change. That's not to say that others can't make the transition. Recent examples include Ideal, Datrontech and Persona. And of course David Phillips has always remained in charge at Northamber.

Why do companies go public? Often, in distribution, it is to pay off the venture capitalists. But there is the added temptation of becoming suddenly and famously rich. There is no doubt that it changes attitudes and perceptions. It raises money for more growth as well, but in talking to those who have been through flotation, you almost feel that this is a side issue.

Pickup, Goldman and Randall all spoke of the feeling of elation and well-being that floating the company on the stock market gave them - and not just because they made a lot of money. It was the sense of achievement and recognition that was satisfying. Goldman also said that having floated the company, he realised it was not the money but the knowledge that he was able to provide absolute security for his family that made him feel good.

Others prefer not to float because they either don't need to or don't want someone else telling them what they ought to be doing with their business. Rigby certainly feels this way. This is also indicative of the personal attachment that founders and MDs have to their companies. The more successful the company, the greater the attachment seems to be.

Those who have floated their businesses feel their personal attachment to the business is slightly diminished once shares have been sold. If they are driven by personal involvement with the day-to-day wheeling and dealing of the business, then not being completely in charge might not suit them.

Under the surface, emotion is a major influence on the way this industry works. Whatever they might say, there is no doubt that many of the individuals I have interviewed throughout the year take their successes and failures personally, and that they have friends and enemies in the business. These friendships, these enmities, will often have as much influence on the shape of a distribution channel, on the forming of a business relationship, as the market conditions.

But one thing they all have in common is a desire not to air their grudges in public. They all seem to recognise that they have these emotions and that they must not allowed them to exert undue influence on their business decisions. Recognising the emotional factor is the trick. Ignore your emotions and they will take over your decision-making.

Successful people do not dwell on their disappointments, failures or injustices for long. Any grudges they hold are always directed outwards, against other companies or individuals. They have the deepest respect for their own colleagues and staff and most believe in nurturing the family atmosphere of the business.

In such companies there is no doubt that these people are seen as father figures. Much of their success can be put down to their ability to command respect and to manage and motivate people. They are leaders in the true sense, and some are also managers.

The family atmosphere can be overdone, though. There are companies where the leadership is too important and the company becomes all-encompassing and incestuous. Randall admitted that this had been a problem in the old days at Azlan. The company became too wrapped up in itself.

But Randall and all the others display great loyalty for those who have worked with them and helped them. They are also compulsive people though and, one senses, very tough to work for. Their standards are extremely high and they will take personal responsibility for making sure that things get done. Woe betide those who don't do what they should.

Having said that, most of them will also encourage people to speak up and add to the debate. McNally said that one of the things that makes him cross is when people don't voice their opinions.

But positive feelings about people inside and outside their own businesses far outweigh the negative ones. The high flyers also display, without exception, voluble enthusiasm for the industry. Although they have all made their millions they have stayed with the business and carried on when there was no real necessity to do so from a financial point of view.

All of these people have a tangible thirst for success. They will not be beaten and, if they are or if they withdraw from the field for some reason, you can be fairly certain that they will be back in the field soon. Two notable examples are Jim Pickup, who returned to the industry after leaving Logitek to get Xenon moving, and David Randall, who moved from Azlan to start Techex Communications.

The king of them all is Derek Lewis, who, having become entangled with MBS, bought back Combro and turned it into Technology (now Tplc), sold it to ICL and now, having left that business, is running the FM side of United Utilities. Don't be too surprised to see Lewis' name in the computer papers again in the future.

Part of the reason these individuals have succeeded is their seemingly insatiable thirst for success and their passion for the business. Another common quality is that they seem to believe they can do almost anything.

What is more, they are able to make others believe that they can achieve almost anything too.

Other qualities they all seem to share are a belief in continual growth, whether it is organic or by acquisition, a commitment to marketing, and a belief in taking a strong stand when it comes to limiting costs. Whether these are elements that will contribute to continuing success in the future, though, is something even they can't answer.

Everyone has, to some degree, been swept along by the rapid current of the PC business over the past decade. Growth is continuing and there are still opportunities to catch fast currents - the trick is spotting them at the right time. But the river is bigger, wider and slower now.

Making acquisitions has been a favourite way of boosting turnover very fast and substantially. But you have to be careful. Grow too quickly or, as Logitek did, make the wrong acquisition at the wrong time, and you could find yourself in trouble.

Pickup's approach with Xenon, for example, is much more measured. Randall has a very clear focus with Techex Communications. They strive for growth but there is a distinctive plan and a path they expect the company to tread. In both cases, growth has to be healthy, namely profitable, and areas where the business has no expertise are avoided.

Having the money to make the purchases seems to have been a rule of thumb at Sage during the past few years. At least then, the risk is under control.

If it doesn't work out you don't owe anyone anything.

Keeping the cash and avoiding borrowing seems to be another good rule.

SCC and Computacenter are prime examples of how effective this strategy can be in the dealer business. In distribution, of course, it is practically impossible.

Letting the world know you are there has clearly been an important way of fuelling growth and ultimate success. Goldman said that at one point Sage was spending 40 per cent of its turnover on advertising.

But this was all done with intent and to a budget. Keeping costs under control is also regarded as sound business practice.

None of the people I have interviewed had much sympathy with those who failed when times got tough. They all benefited from the surge of the market in the mid 1980s but when the recession came managed to cope one way or another. They seem to dismiss the recession as if it were almost an excuse.

The qualities all these successful IT channel players have in common are their vision and their determination. All of them - and many more like them - have had a clear idea of where they wanted to go and what they wanted to achieve from the beginning.

Most of them keep on going long after they have achieved their initial targets, setting new goals and striving to reach them.

Is it, then, something we can learn? To some extent, success in the IT industry seems to be a matter of how hungry the individual with the vision is for success. Determination, resilience and will power are the all-important factors.

But industry leaders also have to have the vision. As Goldman says, not only do they have to be in the right place at the right time, they must have the ability to recognise that this is the right time and place and be ready to take full advantage of the situation.