Julian Richer: Sound Advice
Our founder & MD, Julian Richer, was invited by the Sunday Times to share his ideas and experiences in a weekly column.
Why not read about the things Julian has learnt so far about running a successful business – through trial and quite a bit of error!
After 31 weeks of tips and tales, it's all about fairness
Sunday 31st July 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
Having written here every week for the past seven months, and with high street retail not exactly being a walk in the park at the moment, it is now time for me to get back to the shop.
James Timpson called me last Christmas Eve to give me the good and the bad news.
The good? That I was being offered a chance to take over his hugely successful column. The bad: that I had to decide, on the spot, to start on January 2.
It was, as they say in the trade, an offer you can't refuse - but it meant I spent Christmas Day teaching myself how to use Word. Quite a stressful week followed. Since then, I have jumped from topic to topic pretty wildly and I thank readers for their patience.
This column has ranged from stories about my beginnings and challenges in business, to quite detailed descriptions of the way I like to work in different areas; from pieces I hoped would be entertaining, to articles covering subjects I felt strongly about, with no real business theme at all. Apologies if I have been hard to pin down.
What was I thinking?! Well, there are about six million SMEs out there, employing up to 250 people each and representing a whopping 99.3 per cent of all businesses. I feel very much aligned to them. Admittedly, it might have been helpful had I mentioned that at the beginning - it would have provided some context. But I hope at least some of you have benefited from my ramblings.
To summarise my feelings, if we run businesses responsibly, we should be proud to be in business. And by “responsibly”, I mean treating all stakeholders — especially our staff and customers, but also suppliers, sub-contractors and the community around us — with as much fairness and kindness as possible. Not only is this the right thing to do, but you will sleep better at night and I guarantee your business will prosper. I have studied it by reading quite a few books, observed it in others when advising them, and lived it in my own business for more than 40 years.
There is, of course, a cost involved: paying your people above the minimum and going the extra mile for customers, and even paying your suppliers on time. But the financial payback is huge. I am talking about savings from recruitment and training because your labour turnover will be tiny. Your best people who have the most experience will stay — they are a valuable commodity you surely want to hang on to. Your staff will take less time off for sickness and your shrinkage will be minuscule.
The latter alone is a massive saving for us shopkeepers.
I know most of us will have been tempted to cut corners with our taxes at some point in our lifetime. I now realise, though, that business owners owe a debt to society for the benefit we receive from the state infrastructure. Schools, the health service, maintaining law and order and the roads, for starters, should be paid for by us as the quid pro quo for allowing us to do what we do, if we are to be respected by our fellow citizens. Capitalism is a double-edged sword, after all — being responsible for much misery throughout history, but at the same time providing us with many things we enjoy, as well as producing jobs and raising taxes to pay for things we need as a society.
It is simply about fairness — which we all care about on an individual level, but which we sometimes forget about in the corporate world if we see an illicit shortcut or temptation in front of us.
Admittedly, doing the right thing is even harder when we see occasional horrific examples of government waste (of taxpayers’ money).
But, given time and opportunity, most of us will try to do our bit to improve things, either to chip in and help the state or to get involved in the many other worthy causes that might benefit from our input in the voluntary sector. And so, farewell: this is my last piece in this series.
I have 31 articles under my belt. It’s been an honour and a privilege to have been able to write for such an illustrious title. I have written about what I have wanted to, and felt reasonably qualified to. There is no way I could do what journalists do and come up with new ideas every week. To be honest, I have found this quite hard enough.
Also, life is all about opportunity cost because our time is so finite. I have a lot of things on my plate, which I feel I must get on with — not least the many challenges of running a business. I hope anyone who has enjoyed my articles will forgive me for stepping down.
Finally, I must thank Oliver Shah, Steve Furlong and Jim Armitage at the paper for providing me with a lot of guidance and patience, my wife for her fantastic support — and the kind readers who were appreciative of my efforts.
Julian Richer is the founder of the Fairness Foundation
Good bosses lead from the front (and reply to emails)
Sunday 24th July 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
It can be very lonely leading an organisation, so for my penultimate column in these pages, I present my top ten tips for bosses.
You are the visionary, so don’t forget to come up with the vision. Talk to as many people as possible across the organisation. Look at the numbers, visit rivals and suppliers, oversee the research and discuss it with the experts, and all the time remember to listen. Then make the decision on where your business should be going.
Walk the talk mercilessly, until you come up with a better way or hit a wall and can go no further. U-turns are not a crime if they are the right thing to do.
- Lead from the front, be brave, be determined and exude urgency. I am frightened of lots of things, but when I am leading the troops, I am the bravest man in England. History doesn’t recall many great leaders skulking at the back.
- Have total focus on your customers and staff. This includes talking to them at every opportunity and being accessible to them, even if they tell you things you don’t like. And systemise the way you listen to both groups; I strongly recommend you include an effective staff-suggestion scheme.
- Be ruthless with your time — it is the most valuable thing we have. This includes managing your own diary, however good your PA is. Although a lot of us like the flexibility and privacy of a car, I prefer public transport (especially trains) wherever possible. If it’s not available, why not sometimes hire a driver to make the time you spend in your car as productive as possible, or to rest? Your time must surely be worth more than the cost. Respect your body clock and do your most complex thinking/reading/writing after sleep; a short nap can expand your capacity hugely. Reduce the frequency of meetings and continuously review whether or not you actually need them. Start and end them on time (and record all action points) and keep them as short as possible; smaller meetings move faster when folk are standing around a high table. And record meetings for absentees. Finally, leave contingency time in the day for the unexpected, and for yourself (including, especially for looking after your health).
- Be organised. Use good old pen and paper (or electronic equivalent) to write things down and prioritise your list. Last week’s jobs that weren’t urgent might well be urgent today. Do your work in batches — it is much more efficient. I am talking about calls, meetings, reading and emails.
- Now, emails — they drive us mad and are never-ending, but one thing’s for sure: they will not answer themselves. I try to answer all personalised emails (unless they’re obnoxious) within 24 hours — otherwise, they start to slip. And it’s nice to acknowledge people even if you don’t need to answer something specific — otherwise, the sender won’t know the email was received. Become an expert in polite brevity. Some things should not be said in writing, though — if you put it in print, it is there forever.
- I have learnt many things after 40-plus years of running a business in a ferociously difficult sector, through recessions, crises and many dramas. The most important one by far is simply that it is all about the people. If ever you have a problem or are in doubt about anything, just remember that. The difference in output you will observe from treating people well is enormous. You will also save a fortune in recruitment and training costs if they don’t leave you. And your shrinkage will reduce considerably.
- Watch the cash. Businesses come and go — and more often than not go because they were not watching the cash, which is quite different to the profit and loss account. It is no good being the most profitable business in the world if you can’t pay your bills. You should watch the pennies but not obsess about them. Micro-managing is important, but the big picture is more so.
- Do what you say you will do. Remember: what goes around, comes around. So, if you are going to want a favour from a supplier one day, be sure to pay them on time. And, where staff are concerned, there is no better advertisement for a good boss and no worse advertisement for a bad one.
- Make most decisions quickly, especially when in a crisis or saying no to someone. People appreciate being put out of their misery, rather than being ignored. And remember: not to make a decision is a decision. Always sleep on the important ones, though, especially when someone is trying to rush you. It’s also very useful to discuss a decision with a confidant — if you have one. John D Rockefeller apparently never made a decision after 6pm. Or, I would add, never when you are tired, hungry or have had a drink. Good luck!
Don’t get nervous — get ready to give great speeches
Sunday 17th July 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
I don’t generally enjoy making speeches — unless they go well, of course, but you never know until you’ve finished them. All the time before then is not much fun: the anxiety building up to the event; the time spent researching, preparing and memorising the whole thing (as I prefer to deliver without notes); the hours spent practising; the travelling to the event hours beforehand; and then the moment when you stand up and open your mouth — and find that your mind has gone blank.
Thankfully, the last bit has only happened to me once. It was excruciating nonetheless. After that, I always made sure I had back-up notes in front of me.
Most of us want to speak to groups about what is important to us, or about what we’re doing in our jobs — all of which is fine, indeed admirable and worthwhile. But we are also asked from time to time to entertain an audience “as a favour” to someone, which is totally different. Either one can result in a lot of effort and stress, even for a relatively short time on stage.
And if you are asked to speak as a favour, it is annoying when the organiser belittles your involvement by saying it will “only take 20 minutes of your time” to deliver a 20-minute speech — then forgets to suggest expenses, never mind a fee. I don’t need the cash but it’s simply polite.
So, a few tips:
I suggest that you be very selective about what you accept. Our time is limited, so spend it wisely.
It’s much better to do a larger event than a smaller one, if your nerves will stand it, because you will reach more people.
And be sure to choose those who are likely to be supportive audiences, unless you are a masochist.
Also, if you become “in demand”, get good at saying no. A quick answer will be much appreciated.
Once you have committed, your diary is “set” as you won’t want to let people down. The further ahead the date, the harder it is to predict what else might come up.
If and when you do say yes, you may immediately regret it unless you are a thespian — and I’m told even they get stage fright. You have been warned.
Having said this, repetition does make it easier. When I was at school, I couldn’t speak in front of ten people. Now I’ll talk to 1,000 without a problem if I have to.
Prep is everything, and it’s a lot of work if done properly. You have to check out the transport and the venue and make sure the sound and lighting are how you want them. Don’t forget to sort out noisy air conditioning or other distractions. Check the seating layout and who will be in the audience, so you can plan for them. Then there is the content itself. I have spoken on about 20 different subjects. It’s a good idea to keep your notes to wheel out as needed, should you be invited to speak again on the same theme.
Granted, if you are doing a local village talk as a favour, the event will be much less formal and an intro chat will suffice, with perhaps a Q&A about your illustrious career.
I love lists, so I have a template to check (which I strongly recommend), especially for when I arrive at the venue days early.
I like to have plenty of water on stage, a tall stool (I usually stand but a perch is always good to have around), and a lectern for my back-up notes. I like a large clock to keep an eye on to ensure I don’t drone on until midnight. I will try to “sabotage” the heating if no one is around by turning the temperature down to stop folk falling asleep. I will rearrange the seating if I can so the audience is as close to me as possible, ideally in a fan layout. I ask the stewards to fill seats from the front, and remove any spare ones — who likes speaking to empty chairs? It suggests they couldn’t sell the tickets or, even worse, that people didn’t bother to come once they had bought them. And you must do a sound check when using those new- fangled PA systems. I don’t want to hear myself speaking, which I find offputting, so I only want the rear speakers on for the people at the back. Always remember the sound engineer’s name. It’s wise to ask them to record your session so you have it for posterity should it go well.
You might feel this is completely over the top (my wife would agree), but the event’s organisers will always indulge your foibles, putting it down to nerves — and the last thing they will want is you walking out in a strop (not that I ever have), so you are in a very strong negotiating position.
Finally, as always in life, if it can go wrong, it will, so the more you prepare, the less chance there is of this happening. Good luck!
Do meetings standing up, and occasionally hit the pub
Sunday 10th July 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
Meetings — we seem to spend an inordinate amount of time in them. While they can be hard work for all present, and time consuming, some are, of course, necessary. The challenge is to have as few as possible — and to make them as short as you can.
A few tips, then:
- It’s good to keep reviewing the need for any meeting of any type to happen more than once. Could the action points be covered by someone going round the group and following up by email? Could the frequency be reduced now the problem is being dealt with (perhaps monthly rather than weekly)?
- It is incumbent on the chairperson to do their bit. This means circulating a clear agenda in advance where necessary, with any relevant papers — and studying the papers so they know what they are talking about. It means inviting the right people with enough notice, and allowing time for them to digest the papers and prepare their feedback. And it’s best to avoid giving out copious supplementary admin packs minutes before meetings.
- Meetings should always start and finish on time. Just because we are bosses doesn’t mean we should ignore people’s diaries and commitments.
For meetings that do run over, simply record the end so those who have to leave can catch up later — if the noted action points won’t be sufficient.
Likewise for absentees — it’s always good to record the meeting for them, too, should they require it. This gives them a sense of continuity and means they don’t feel left out just because they happen to be off or ill that day. If it is important enough for someone to be invited in the first place, they deserve to have it recorded if they can’t make it.
- I like to insist that attendees provide details of anything they would like to discuss to everyone involved in advance. This is to prevent meetings being “ambushed” and running over.
- You might think this a bit harsh, but for years we have had a table we stand around for meetings of up to eight people (we could of course have a bigger one made). It would be a bit weird to do this on Zoom, and impertinent perhaps to make guests stand — but for thousands of internal meetings prior to Covid, we must have saved many thousands of hours because it definitely makes them quicker. Also, apparently, it is better for you health-wise. (Obviously a platform/ramp can be provided for a wheelchair.)
- This might sound pretty obvious, but someone should be taking minutes. I don’t mean an exact record of every cough and sneeze. I do mean a note of all action points planned by attendees, ideally with an agreed deadline. Another benefit of recording meetings is to help the person taking notes for reference afterwards if needed.
- I was at one morning board meeting with a very large client company and an attendee arrived with a big bowl (almost a bucket) of not-very-attractive mush, which they proceeded to chomp on while the chairman was presenting. I felt this was both disrespectful and distracting. Be organised and have your oat and chia pudding beforehand, or in the canteen afterwards.
- I hold all my meetings in the morning, if I possibly can, and I am not sure why — maybe because after lunch is a bit of a graveyard slot when people’s energy is low and it’s harder to keep folk enthused. Perhaps try varying meeting times to see when you and your colleagues respond best?
- Who should be at the meetings? On one hand, as few people as possible, to reduce the cost to the business. On the other, you don’t want people being left out, which could be bad for morale. At least if they are short (the meetings, not the attendees), the cost is reduced.
If it’s a training session, the person holding it obviously needs to know their stuff, which should be relevant (not a given if outsiders are involved).
And once attendees know that you start on time, they will arrive on time. As for finishing on time, it can cause much stress — especially for those with kids to manage — if we let meetings overrun.
As well as still doing this in our business, I suggested it 30 years ago at Asda and they installed a table in a room they called, if I remember correctly, the “Banana” room (presumably because some wag thought my suggestion was bananas).
I made millions on a Spac overnight — then lost it all
Sunday 3rd July 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
Reading about the recent fashion for special-purpose acquisition companies (Spacs), I feel a strong sense of déjà vu. People think this is a new phenomenon, but 23 years ago, I was part of the team that launched the highest-profile Spac of its time. It was called Knutsford, and it shone brightly before crashing to earth like a meteor.
The lessons learnt then have, of course, been forgotten today.
It was 1999. I had met Nick Leslau, the property tycoon, over dinner with good friends and we had hit it off. He introduced me to Nigel Wray, the investor who started the Fleet Street Letter. This impressive duo had been very successful in property and the stock market, which I knew little about — the latter in particular.
We decided to do something together and, to add some serious stardust, I introduced them to Archie Norman, who had recently sold Asda to Walmart. The idea was that we would combine to launch a new quoted company. We, with our vaunted reputations (mine, admittedly, considerably less vaunted than the others), would use it to buy something and run it.
Between us, we put £5 million in hard cash on the table. As the price of the shares was set at 2p, it felt like we all had a lot of them. We arranged to find a quoted “shell” company and, with the help of expert Michael Edelson, reversed into it. Our Spac was ready to pounce.
We thought a little publicity would help, so we announced the project to the media and released a picture of the four of us sitting on a park bench. That was where it started to get out of control.
The public went berserk for the shares. We were dubbed the “Awesome Foursome” and every small investor in the land had to have a piece of the action. In a single day, the shares shot up to £1.40 — a 70-fold increase. On paper, the company was already worth several hundred million pounds. It was apparently the biggest one-day share-price increase in the history of the stock market (Guinness World Records, please note), and the shares continued to rise.
Our “brilliant” piece of PR meant that it seemed every small shareholder in the country was piling in. We agreed not to sell a single share, so as not to be seen to be exploiting the retail punters.
The pressure was now on to do a deal. We hired polished advisers in smart suits and Nigel arranged a battle bus to ferry us around the City to persuade fund managers to back a deal. The only assets of the company were the reputations of my fellow protagonists, plus me with a few hi-fi shops. The press went wild and had us down to buy Marks & Spencer or some other huge business. Unbelievably, several institutions did agree to take our inflated paper, albeit at a healthy discount. But others told us to get lost and word inevitably spread. Converting the media fortune into a financial fortune was proving challenging.
The problem was by how much we should discount the shares to get the institutions to invest, as the small investors had come in at a very high price. As a small entrepreneur myself, I was bemused, but I did come to realise that with the four of us involved, and our growing team of advisers, it would be hard to agree on anything.
We were all successful individuals with strong opinions. We would meet every morning at the fancy penthouse I then had in Pall Mall. The four of us would sit at my small dining table with three circles of experts sitting round us in ever-growing numbers. I would joke that the first hour was spent discussing the important question of whether we would be having tea or coffee.
The institutions couldn’t agree on what the paper was worth, and we couldn’t agree what we should accept for it.
I was the new kid on the block, watching as the whole illusory fortune slowly slipped through our fingers. Some time later, we successfully made our exit from the shell by buying a small company. The share price came back down to earth, and we all just about got our money back and went back to our day jobs.
My mates asked me what had happened, and I really didn’t have much of a clue. In truth, there had been a good deal to be done with the right target company, but the tension between the media-fuelled share price, economic reality and possibly our own pride meant we just couldn’t pull it off.
Postscript: Archie generously says we were ahead of our time. We broke records and it was exciting — the most famous UK Spac, probably ever.
I do accept that you have to kiss a lot of frogs in life, so fair play for trying. But the conclusion for me is that I still feel, probably too simplistically, that the only place success comes before work is in the dictionary.
(With thanks to Archie for helping me with this piece.)
My art of the deal: haggle hard but let both sides win
Sunday 26th June 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
In all walks of life we are expected to negotiate to survive — never more so than now, with struggling families trying to make their devalued household incomes cover their outgoings.
But it amazes me how uncommercial we can be in the business world without even realising it. The problem is that systems introduced to combat fraud and ensure consistency — while important — are the enemy of fast and independent thinking: the qualities of a good buyer.
This is my slightly tongue-in-cheek list of tips for getting around such obstacles when dealing with suppliers.
- It is important that we are properly prepared for meetings in terms of the agenda — information is king.
First up are the stats for trading between us and them. If they are good, then we deserve better terms as a reward; if they are bad, it is obviously the supplier’s fault for not giving us good enough prices, or because stock availability has been poor.
Second comes our achieved gross margin compared to our promised profit margin at time of ordering, which are often wildly different. If it’s minuscule, would the supplier kindly show me how to run a chain of stores on X per cent, because it is patently impossible?
Then we show them the time their service phone lines ring before being answered and how long they are taking to carry out repairs for our customers. If those times are worse than for their competition, that has to be brought up.
Any pending disputes and/or promises from previous meetings are brought to a head. All these things are very helpful for “setting the scene”.
- We must have the right tools for the job at our fingertips. If a supplier says they have a load of tellies they want to shift that normally sell for £999 including VAT, we need to be able to know in a heartbeat what we want to bid for them to sell them at, say, £799.
That’s not so easy when one has to deduct the tax and all the various loadings on the product, from service to shipping, to leave the paltry margin we need to make to survive. For this, we either have to know the figures in our heads (which is ideal), or to check them from maths tables to ensure we are not making a mistake, which could be expensive when buying a couple of thousand units.
- I have my own “unique” style with suppliers, which my wife would simply describe as embarrassing, but I maintain is a little more sophisticated than she suggests. I try to take control of proceedings, albeit at all times attempting to be friendly and to inject some humour into the process — and always doing my best to be respectful. I learnt long ago that making people laugh was a great way to get what you wanted.
Now, this taking control isn’t strictly necessary, but there are elements of it that are, with two provisos: first, you must stop and listen at appropriate intervals; and second, however confrontational it becomes during the sparring contest, you must ensure you go away as friends. I went over the top in a meeting with a supplier 40 years ago and it took me literally years to repair the damage.
Taking control, for instance, ensures your painstakingly prepared notes for the meeting are not overruled in favour of a long-winded slideshow of a factory in the Far East, meaning you run out of time to discuss the important things from your list you were hoping to cover.
- This is the bit you’ve been waiting for — the negotiation itself. The whole process is a build-up to this. To be clear, negotiation is all the things that happen before you finally say yes to the deal on the table. This is where you need a checklist metaphorically strapped to your thigh, just like a pilot prior to take-off. It is no good asking for anything after you have agreed the deal — you’ll look stupid, as the horse has bolted. So, in the heat of battle, you must have in mind everything you need to remember before you push that button.
And it is very important to listen carefully to the person selling to you — to try your best to understand what they want from the transaction. Is it some quick cash? Is it market share? Is it sales volume that month, floorspace in your shops, etc?
If you can help them achieve what they want, then your buying price just got better.
Admittedly, how this translates into useful advice with a monopoly utility company imposing humongous price rises on you is another matter.
How to spread the word and get your business noticed
Sunday 19th June 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
Our business has long held the record for the busiest retail unit in the world on the basis of sales per square foot. This sounds great and ensured many speaking invitations when I was younger — but it was helped, at least in part, by the small size of the stores.
Having said that, there was a quantum leap in turnover once we discovered the medium of advertising soon after we opened our first shop near London Bridge in 1978.
The rep at the time for the hi-fi company Marantz, a lovely chap called Paul Byrne, had a batch of end-of-line cassette decks. (For younger readers, this is a transducer playing an analogue tape that goes round a spool.) He was offering them at a good price, but we knew we couldn’t sell them fast enough to pay for them. So we took out a quarter-page advert in Exchange & Mart magazine (well before the online version arrived), which I persuaded him to pay for, and the phone didn’t stop ringing. The rest, as they say, is history.
Folk were driving to us from all over the country, but we figured that for every customer who came down from Manchester, 49 weren’t bothering. We quickly bought a small freehold for only £10,000 in Stockport and they were soon queuing round the block.
Now, this is a big subject, I’m allowed only 850 words, and admittedly I cut my teeth long before social media was invented. But I’m convinced a lot of things remain relevant today:
- There is no point selling £10 notes for a fiver if no one knows about it.
- The cheapest and most effective form of advertising has always been, and always will be, word of mouth. Even if you stop everything else, be sure to try to give great service.
- These days, your website is essential — but leave enough in your budget to drive customers to it; otherwise, they will be none the wiser.
- When I was advising Asda, the then-chairman Archie Norman paused the Christmas TV advert screening so we could all taste the chocolate cake in the background to check it was sufficiently worthy of being there. That is what I call attention to detail.
- One big, eternal problem with advertising is knowing which element of it is working. We figured that 20 per cent of it did 80 per cent of the work, but didn’t know which 20 per cent. So wherever possible, we tried to measure the effectiveness with coupons, which customers would cut out in the old days for a freebie or an extra bit of discount.
Now there is much more opportunity to communicate with customers online, so that is certainly a step forward.
- It is always important to exude an air of giving customers good value. I loved the story of an American superstore hundreds of miles from the nearest lake having a canoe hanging from the ceiling priced at a ridiculously cheap $5. They didn’t sell a single one, but everyone who saw it thought this was the best-value store in town.
- You should choose the medium your target audience will look at. In the early days, we were keen to get students in to buy their first hi-fi, so they would hopefully shop with us for life. We took whole pages in Viz magazine with some edgy headlines; “Hotter than Satan’s Boll**ks” and “Go Nads Go”, the latter referring to a popular amplifier at the time, were particularly effective. This backfired slightly when someone cut out the adverts and sent them to Archie asking him whether it was appropriate that I should be advising Asda? Having never heard of Viz, he called me in to explain myself. When I sent him a copy of the magazine, he replied saying he felt my adverts were “entirely in keeping with the publication”. Phew.
- Having said that, it’s always best not to offend people if possible. There have been some classic badly thought-out campaigns, including one of mine where I used a photo of my wife (who was modelling at the time) sitting next to a loudspeaker on the front page of our catalogue. After the outcry, I didn’t try that again.
- I am not sure what the equivalent would be today, but we found that often the smallest lineage ads did better than much bigger, costlier display ones.
- And having sales all year round isn’t cool. “The truth will out,” as we say in Yorkshire. Best just to focus on giving great value (which I define, by the way, as “quality per pound”).
- Good PR is worth a lot more than an advert. So try to exhaust all avenues in this regard before you get your wallet out. But do it yourself and pick up the phone. I maintain that the vast majority of press releases from agencies go unread.
- Try to get someone else to pay for it. If the big brands can afford to sponsor the biggest football teams, they can afford to fund your modest ad campaign.
How a leap of faith connected givers with the needy
Sunday 12th June 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
I want to tell you about an idea I had. I battled with it for several years but finally got it off the ground. This is not about business, but there is a bit about persistence, overcoming obstacles and determination — and, I’m glad to say, it has a happy ending.
I don’t remember exactly how the then-Archbishop of York, John Sentamu, and his lovely wife Margaret came to be having tea at our home, but it was going well. I had struggled for years to get friends in the church to show enthusiasm for my idea to help those in need. I was convinced it was a winner.
Even though my wife thought it was a great idea too, she agreed with the consensus — that folk in the church were just too busy.
It was around 2005 and this new-fangled invention called the internet was really taking off. I observed that the church’s vast property portfolio wasn’t overused, that the church itself was under attack for its poor relationships with women and the gay community (not a great marketing approach), and that poverty wasn’t exactly going away.
My idea was for a website staffed by volunteers from churches, trained in the basics, who would load requests for cash from people in need within their communities (irrespective of their religious persuasion) onto the website. Donors from anywhere in the world would be able to see these requests and contribute directly if they wanted to. The overheads would be tiny and the hope was that every penny would go to the recipient, rather than on costs.
So far, so good. But after knocking on a lot of doors, I was starting to agree that the only things pioneers got for their efforts were arrows in their backsides.
Until the aforementioned tea, that is.
I did my pitch to John. To his credit, he loved the idea and said “let’s get on with it”. And Margaret, who had just finished a job assignment in Leeds, was happy to help, too — bingo! But there was a problem: all the best domain names to do with poverty or helping the poor had gone. John told me to leave it with him and came up with “Acts 435”, which was available. It’s a catchy name/number referring to the verse in the Bible about “giving to everyone who has need”.
We then had to put a team together. Margaret agreed to be chairwoman of the trustees, and John our patron, but we needed someone to run it. Margaret placed an ad for a part-time bookkeeper and offered office space at Bishopthorpe Palace, south of York. Only one person responded, but she turned out to be a lot more than a bookkeeper. Her name was Jenny Herrera and she was a fully qualified chartered accountant, had been a missionary in Guatemala running a children’s charity, and had returned home to start a family. I think it is fair to say she was somewhat over-qualified for the job she was being asked to do.
She soon got the show on the road for minimal cost and we learnt as we went.
Two of the biggest challenges were how to make sure the money wasn’t being claimed fraudulently, and how to work out that the donations would match the requests. We put a cap on requests of three per person, initially for a maximum of £100 (now £150). The amount was set to cover short-term emergencies that wouldn’t be covered by benefits. This money was for people slipping through the cracks — whose bed or washing machine had broken, who were faced with an unexpected heating bill, or a pair of football boots or a school uniform that they couldn’t afford. It might not sound like much, but for those who don’t have the cash, it is a big deal. All applicants are met informally by the church volunteer; we call these volunteers advocates.
And over the 12 years we have been going, fraud has been minuscule.
As for donations matching requests, we don’t even employ a fundraiser. People’s compassion has come through every week so far over all those years.
When the need is greatest, nearly every Christmas has seen zero requests outstanding on the website, with all wants met. The cost-of-living crisis we have at the moment means this has never been more important for people who are struggling. Donors receive a personalised thank-you from the recipient, which is a nice touch.
Some 70 per cent of donors tick the “gift aid” box, which more than covers our tiny overheads and leaves a nice surplus for an emergency fund should it be needed. Which means that absolutely every penny given is going to good use and not to cover our costs.
This makes for a virtuous circle fuelled by people’s urge to help others, and it just keeps growing. We are in 700 churches, have helped tens of thousands of people, and we think the charity gives the general public a very good example of what the church should be. I only wish the latter would make a lot more of its land available for affordable housing — but that, as they say, is another story.
Treat workers well... and ignore accountants at your peril
Sunday 5th June 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
As a salesman, when I started, I had little interest in admin/bookkeeping/business housekeeping — or anything much apart from selling. If I bought for £1 and sold for £2 and the customer was happy, that was it: job done.
But I very nearly came a cropper soon after starting my first shop because I wasn’t watching the pennies. And two of the things I did, which saved me, were hiring a qualified accountant and appointing a top external auditor/adviser.
From that point on, I took an interest in financial matters in the business on a broader scale — and thank God I did ... because there is a lot more to it than one assumes. Two fundamentals spring to mind: managing the cash, known as a cashflow forecast, which predicts how much you will have available each week to pay your bills; and the profit and loss account, which drills down to, “Are you actually making a profit or not, and if so, how much?”
There is a third important one: a balance sheet. It is much simpler — how much do you have in your purse after everyone you owe money to is paid off?
There isn’t much more to it than this, but the devil is in the detail. Getting those figures right is essential for obvious reasons. And please don’t rush your people doing this job or limit the resources they need to do it, or you will be sorry.
And, I would add, don’t forget to build in resilience and security. The former involves having cover should someone go awol — ie, could your people carry on if any one of them leaves? The latter entails monitoring and deterring someone from “having a laugh”. We have had near misses with both of these and a lot of stress could have been avoided had we been better prepared, so please learn from my mistakes.
Let’s now turn to the financial side of whether we should invest in our people.
Lots of books suggest that looking after one’s people is good for business, but few of these authors have experience of running businesses. And bosses are normally too busy to write books, so there is little evidence to corroborate what the researchers advise. But I have done both and I have first-hand proof, beyond any reasonable doubt, that this is indeed the case.
Over the weeks in this column, I have repeatedly returned to this point. But how do I persuade the naysayers, the sceptics and — dare I say? — the few accountants, if any, who remain unconvinced?
This is where a little numeracy, which hopefully we have learnt along the way, comes in. So, for the record, the savings accrued in black and white by treating your people well are as follows:
Much-reduced labour turnover saves you three large piles of cash: less spent on recruitment, less spent on training, and sparing yourself the cost of losing an experienced employee. Any bookkeeper worth their salt can easily quantify these — and you will be surprised how much is involved.
- A happy workforce working sensible hours will take less time off for sickness. You don’t want to think about the alternative: the additional costs for the business in having to arrange expensive, inexperienced cover; the lost sales because your customers are receiving rushed service or aren’t getting served at all; and the added stress for the remaining staff — which, if they become ill as a result, is a cycle of despair you really don’t want. But add up these costs anyway — you will be horrified.
- Less shrinkage — the euphemism us shopkeepers use for theft. This would primarily be “internal” from your workforce but also “external”, mainly shoplifters but also sometimes outsourced staff such as cleaners, who rarely get paid the real living wage. (If they can’t “live”, while not condoning the practice, it is little surprise they feel forced to steal.)
This saving can be huge. We turn over about £200 million and the retail norm for shrinkage is between 1 and 2 per cent of sales, so our bill should be — year in, year out — between £2 million and £4 million. With us, though, it is a fraction of 1 per cent — less than 0.1 per cent — which saves us millions of pounds a year and we are only a small business.
And our accountants will happily confirm that this saving covers the cost of our 12 company holiday homes several times over (and that ignores, incidentally, the rise in capital values of the properties over time).
- I would add, finally, that happy staff give better service. The members of the Which? consumers’ association have kindly voted us the best retailer of any kind once again this year.
Reward people well — especially if you hit the jackpot
Sunday 29th May 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
Today I am going to talk about an emotive, often avoided and very important subject: rewards. Where do I start?
As dear old Adam Smith said in The Wealth of Nations 250 years ago: “It is not from the benevolence of the butcher, the brewer or the baker that we expect to eat our dinner, but from their regard to their own interest.” While this might sound pretty mercenary to the modern ear, most people go to work to earn their living. Household bills are ramping up and the pressure to enjoy life to the full — which typically means being able to consume the experiences and products that the media assures us will lead to happiness — is growing. This costs money.
As bosses, how should we go about rewarding our hard-working people?
- Everybody, as much as humanly possible, should be paid equally if doing the same job. This obviously includes women and men, people of different races and all adults over 18. If the jobs aren’t exactly identical, don’t split hairs.
- Everybody should earn the real living wage for doing a 40-hour week, ideally with the opportunity to earn more — through overtime, for example.
- Performance bonuses are good for businesses and workers alike — as long as there is a base that they can’t fall below. We call this a TGM, or total guaranteed minimum. So if commission is involved, it is fine to pay it as long as staff don’t starve when they have a quiet week — remember to pay average commission for holidays and sickness, too.
- It’s no good giving perks to staff and then taking it out of their wages, because they will simply ask for the cash instead. Always make it clear and demonstrate that the holiday home you have just bought for them to enjoy free of charge isn’t going to affect their take-home pay.
- Sometimes, using an extra reward for length of service or loyalty is appropriate and means a lot to the recipient. This could be as simple as giving them more days’ allowance in the holiday home you still decided to buy, or maybe a company-funded jolly for those serving five years or more.
- Rewards might be linked to the profitability of the company — a thank-you “extra”, if you like. The John Lewis bonus is a great example. But this can be awkward if you have a bad year (or several) and the money has grown to be “expected”. If a bonus becomes the norm, then people factor it into their budget — that’s only natural.
- I do think the people who can have a big effect on profits deserve a bigger percentage of the improvement they generate, but this must come out of their package, by which I mean a lower basic salary if there is a big upside.
- If you are running a competition, please have lots of winners. The “suggestion of the year” that earns the lucky recipient a car they can’t drive exemplifies the wisdom of doing otherwise. And having one big winner can cause resentment among others.
- It makes my blood boil when executives are rewarded for failure when they leave their jobs. It shouldn’t even be allowed, in my opinion, so please don’t do this. It’s better to agree severance packages in advance when they join — much less acrimonious, too.
- We should separate in our minds rewards for work and rewards for taking risks. Some in the financial sector are rewarded hugely for taking risks with other people’s money, with little downside for themselves if things go wrong. However, most of the world’s fortunes were made by entrepreneurs taking huge risks — putting their homes on the line, making big personal sacrifices, working all hours and showing dogged, pioneering determination. They deserve to make it big if their life’s gamble pays off (as long as they pay any taxes due). But massive rewards for corporate executives, especially if they are not linked to risk or performance, is something else.
- The average salary of FTSE 100 chief executives in 2020 was £2.7 million — about 117 times what someone on the current real living wage would have earned — a much higher multiple than in Scandinavia or Japan. Is this fair?
- Non-financial rewards are also very important. Don’t ever underestimate the value of saying “well done” and “thank you” to your colleagues. Other benefits — such as subsidised healthcare and gym membership, longer paid holidays reflecting length of service, and paid sabbaticals — all have a value, too. They confirm to staff that you care about them.
- When our employee ownership trust purchased 60 per cent of the business from me, I gave £1,000 to every employee for each year of their service, costing me a tad under £4 million. So, the most important tip: if and when you have a windfall at work, don’t forget the troops who got you there.
Paying tax shouldn’t be optional for successful people
Sunday 22nd May 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
It wasn’t easy to track down Richard Brooks. He certainly wasn’t in the phonebook. Richard is a senior investigative financial journalist at Private Eye magazine, a legend — but not someone you’d recognise if you bumped into him. He is also the author of a seminal book on tax, The Great Tax Robbery, and another on accountancy, Bean Counters.
I had just read the first, was very inspired by it and wanted to invite him to tea — as you do. So I found his agent, who introduced us and did just that.
I used to have my London meetings in a tiny, windowless room at the back of a branch of the Richoux coffee house in Mayfair. The staff were lovely and it was much cheaper (and nicer) than a West End office.
Anyway, back to the story. I wanted to talk to Richard about an idea in the very last paragraph of The Great Tax Robbery: his suggestion that we needed to “monitor systematically multinationals’ tax payments and actions (or inactions) against tax avoidance: TaxWatch perhaps”. I agreed passionately.
I remember him looking me up and down with a “What the heck do you want?” sort of expression when he arrived; he was understandably a bit wary being asked to meet a complete stranger in a slightly weird venue — after all, he does come across a lot of rogues.
Anyway, long story sideways, he is a lovely guy and we got on very well.
Thus TaxWatch was conceived. I was happy to put up the initial loot but we needed a team to do the work, as Richard was pretty busy already. Doing what he does, he is very well connected and he soon put a squad together, with the brilliant George Turner as chief executive and Richard himself agreeing to chair the editorial board. We were off to the races.
The work they have done in the past four years has been incredible, and TaxWatch is already one of the most respected organisations in the sector.
It tracks all forms of tax abuse and works very hard on what to do about it, and has started a national discussion on what tax avoidance actually is (HM Revenue & Customs’ definition is “bending the rules of the tax system to try to gain a tax advantage that parliament never intended”, which most of us don’t seem to realise).
TaxWatch is constantly holding HMRC to account and, in conjunction with this, investigating the “tax gap”. This is the amount that is leaking out of the bucket (tax not being paid by virtue of fraud, avoidance, scams and people “making a mistake” on their tax returns). We think it is actually much more than HMRC estimates, with possibly more than £50 billion going awol every year (and more again during Covid).
To put this in perspective, the entire prison service costs only £3 billion a year to run (I would like the government to spend much more on rehabilitation as opposed to more prisons, but that is another story). Can you imagine how much good we as a nation could do with that leaked tax cash if we could retrieve it — or, better still, if we could stop it escaping in the first place?
Why do I give a damn about this? Especially when I once paid myself in (presumably very small) gold bars that I never even saw, because I’d read in the papers that there was no national insurance due on these at the time. I was in my twenties and thought it was clever and funny then, but I now know better.
I realise, 40 years on, that us business folk have a debt to society — and I spend a lot of my working life on the responsible business platform shouting about it. Where would I/we be without schools to teach our workers to read and write as kids? Who would care for them when they got sick without our wonderful hospitals? How would we drive our goods to our warehouses, shops and customers without our road network? And who would protect our goods without the police force?
If business people don’t want to pay their taxes here, then maybe they would be happier somewhere else. Good luck to them — I will be the first to wave them off at Heathrow. Of course, the public services they enjoy cost something, and we should be happy to pay for them. Denmark has one of the biggest public sector budgets in the world, but it is also one of the happiest nations.
PS: avoiding wasting our precious taxes is also important. Labour-intensive capital projects such as the mass building of homes that could be let at genuinely affordable rents would be great for the 8 million people living in substandard accommodation. They would also create many thousands of jobs, and the tax paid on those earnings would stay in this country.
In my opinion, that would be a far better use of taxpayers’ money than poor value vanity projects such as High Speed 2 and the Hinkley Point nuclear power station — but that discussion is for another day.
Join me and end the iniquity of zero-hours contracts
Sunday 15th May 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
What was a wealthy capitalist doing giving a speech at Congress House, the TUC's headquarters in London? The mood was sober. The audience were looking me up and down rather apprehensively. Luckily, I had brought some friends along for moral support.
It was January 13, 2020, and I was there to talk about what I saw as a scourge on society. I was firmly on their side. By the end of my nine-minute talk, I felt I had won the audience over — admittedly by trying a little humour, not always easy when discussing a matter of gravity for many. But I was preaching to the converted, after all.
I was talking about zero-hours contracts.
These ghastly things are occasionally harmless; if a student works a few irregular hours a week in a bar, they are absolutely fine — as long as these people have other income to live on (I am not talking about short-term contracts for pop festivals, summer jobs etc, because here everyone knows where they stand).
But it is estimated that a majority of 900,000 zero-hours contract workers don't have that luxury. They are mostly women and have had these contracts imposed on them, or felt forced to sign them when alternative work was not available. This is no different to dockers standing on the quayside waiting for bosses to come along in their trucks to offer them a day's work if they were lucky. If they weren't picked, they went hungry. That was 100 years ago — and little has changed. I feel for these people.
Research has found that workers on zero-hours contracts are at greater risk of psychological distress and being unhappy than those in full-time jobs. Do we really want stressed, demotivated and disgruntled staff?
But they're lucky to have jobs, aren't they? What's all the fuss about?
Fine. But try renting a flat when you can't provide evidence of regular income. Even decent, ethical landlords won't touch you with a bargepole.
The outcome is that some of our hardest-working and most wonderful carers, many of whom don't even earn the real living wage, literally end up living on the breadline and in debt. Some have to sleep in their cars.
Is this the society we want? Where are these workers supposed to live? Social housing stock is like gold dust, with 8 million Britons living in overcrowded, unaffordable and unsuitable conditions (according to the Church of England's independent housing commission).
Another example: a single mum, trying to juggle her busy life and keen to work, arranges childcare. She goes to work but after a couple of hours the boss says: “Sorry, love, it's quiet today — I'm going to send you home early.” What the hell?! She has earned no money and yet still has childcare costs to pay. This is just not fair.
The imbalance of power between bosses and workers is always there. In my opinion, the latter group's vulnerability is multiplied many times over by zero-hours contracts. If bullying or harassment is occurring in a workplace, it is going to be much harder for those not on permanent contracts to speak out about any mistreatment. They just won't get any hours the next week.
Annoyingly, when universal credit recipients are trying to work with the uncertainty of a zero-hours contract, this makes it doubly difficult, with their income changing all the time.
How come only a quarter of countries in the EU even allow the damn things? They are a great source of poverty and misery. We should be ashamed.
So, if you are an employer using zero-hours contracts, please consider binning them. If you are not ready to do that, or your business is a special case and really needs them (such as an events company working only on sporadic dates), please switch to a “fairer hours” contract that gives two weeks' notice of shifts — with the worker being paid if they are cancelled within that period.
I promise this will be to your benefit. Your staff will feel happier and more secure. They will be less stressed, less likely to leave you or not show up for shifts, and be more loyal. Trust me.
Postscript: the Daily Telegraph kindly sent along a journalist to cover my speech. Supposedly, this was the first visit by a Telegraph staffer to Congress House in living memory. They dutifully published a piece about my rallying call, with a nice photo of TUC general secretary Frances O'Grady smiling behind me while I was holding forth. I was there to launch the Zero Hours Justice campaign, which I had set up to try and change this abhorrent practice.
We recently launched an accreditation scheme to applaud employers that refuse to use zero-hours contracts. If I have piqued your interest in a sometimes misunderstood subject, please join us: zerohoursjustice.org.
Retailers can avoid being devoured by the online lion
Sunday 8th May 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
Seeing as I'm a shopkeeper, I thought I would focus on the future of my species. I firmly believe that reports of our demise have been exaggerated.
As in all sectors, there tend to be winners and losers. And as with the story of the two missionaries in the jungle confronted by a hungry lion, survival depends not on miracles — such as being able to run faster than a lion — but on being faster than the other guy.
I believe the days of department store chains are over, with the exception of iconic standalone examples such as Harrods, Selfridges, Peter Jones and Harvey Nichols; huge running costs and limited ranges relative to the web make the rest unviable. Also challenged are poorly ventilated, part-boarded-up shopping malls with limited car parking, and those multiple chains with too many branches.
I was always puzzled at how one department store group went on a huge expansion drive just as its customers were migrating to the internet - wasn't anyone reading the newspapers?
But there have been winners in retail, too. Companies with a home-delivery element have seen incredible growth during Covid. This should augur well for their future. Likewise, web-based businesses have generally prospered, with sales post-pandemic likely to settle at a higher level than before. Those looking to start a new business will have a field day going into retail compared to when I was a nipper; many landlords are on their knees and having to "sharpen their pencils" when looking for tenants.
The unsympathetic property owners I had to deal with in my youth are having to face reality - and about time, too. They used to want only national chains that were already successful as tenants, and often demanded personal guarantees to take on an onerous lease for a worn-out, overpriced unit. (It’s great therapy having a column in The Sunday Times - everyone should try it.)
Nowadays, retail first-timers will get a much better reception in view of the shake-out in the market. And if you don’t, walk away; there are other, better deals to be had.
The public are learning to appreciate the undoubted convenience of the web for smaller items that aren't worth the hassle of driving into town — and then finding that what you want isn't in stock.
Compare that with the sheer pleasure of visiting a showroom for a big purchase in order to see, feel, smell, discuss and try out the item involved. It might be a car, a big TV or a piece of furniture.
So if you are considering going into business with something to sell, consider your sales channel carefully, with the added option now of mixing clicks with bricks. Customers like extra engagement, so perhaps think about mobile shopping apps that include demonstration and innovative feedback.
If you are in business already and suffering from the impact of the web, try to move into an area that is protected from its relentless, arguably predatory, progress. You might think about going for a niche or specialist product — one where the automated giants can't compete with you. Such as items that involve a large element of customer service. For example, our brilliant manager in Hull, Paul, once suggested to me we should get into the home projector market. Customers want to know what the differences are, how they connect to their sound system, how they go on the wall and what screen they need. We do all that in our sleep — but it's not so easy when you're confronted with a checkout basket. Thanks to Paul, we now sell a lot of projectors.
I also see opportunities for retail units in providing social spaces. Fewer people want to trek into their offices, but they do still want to get out of their homes and are embarrassed sitting in Starbucks making their cup of coffee last all day.
And as the John Lewis chairwoman Dame Sharon White has cleverly suggested, I would also love to see surplus boarded-up units being given to councils to convert into social housing and bring life back into town centres. More important, it would help the eight million folk in overcrowded, overpriced accommodation.
But retail has also been affected by post-banking-crash austerity since 2008. Real wages have been static, at best, for the vast majority since then. They have definitely not kept up with property inflation, the biggest cost most of us are confronted with. Total disposable cash has therefore been squeezed, which means less of it ends up in our tills.
Finally, some of us have made mistakes. At times, these have been human failings, but other people have deserved to fail. We won't miss those who in varying degrees exploited their staff, ripped off their customers, didn't pay their taxes and bled their companies dry. But it is a tragedy for loyal workers who are left without jobs.
What did these bosses expect?
Profits come first, but let’s also try to give back
Sunday 1st May 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
My school housemaster, Ernest Polack, was an inspirational man. He would tell us about the beatings he had taken at the hands of Afrikaner farmers after he had been to South Africa in the school holidays to protest about apartheid — now that’s what I call a role model.
On a far more modest level, I had given a talk in a small church hall in Yorkshire on responsible capitalism and fairness, which I had promised our lovely vicar I would do as a favour.
There were about 20 people there. And one woman, a nurse, asked what we could do about the constant bad news in society. My reply was enthusiastic because, as citizens with a certain degree of freedom, I think there is actually quite a lot we can do.
Working in a hospital full-time, and bringing up a family, she was under the cosh — and though I may have given her food for thought, I couldn’t help feeling her despondency.
I absolutely accept that for some people, there are not enough hours in the day. But because I have received so many advantages in life, and having no children to look after, I do feel that giving back something is the least I can do.
Given the many injustices and inequalities in society, and the snail’s pace of our democracy in correcting them, a good place for us to start is to ask, “Are there positive or helpful things we might do without having to go through parliament?” If there is something we feel strongly about, surely we business people have the particular skills to do just that?
In January, the Edelman Trust Barometer said that, “By a huge margin, people want more business engagement ... the role and expectation for business has never been clearer ...its societal role is here to stay.”
This suggests that the great British public would welcome our involvement — and, after spending a lot of time in the business community observing my peers — I think, generally, we would be good at getting stuck in. We are managers, after all — good at problem solving, organising, motivating people, ensuring efficiencies and achieving objectives, otherwise presumably we wouldn’t have survived in business.
We can’t expect busy MPs to do everything for us, especially when we have the specialist skills required. And what a good example it would set for society if businesses were seen to be doing more to support our great nation.
As a business owner, the profits must come first, otherwise you won’t have anything to give away, but you might promise yourself that as your business grows and the profits start to flow, you will apportion a proportion of your time and money to good causes. (For many years, we have put aside 15 per cent of our profits for this. Admittedly, public company bosses will have their shareholders to convince, who might not be as altruistic).
So, just a few tips:
- There are infinite good causes out there, but your resources are finite. So try to focus on one or two areas you particularly care about.
- If you prefer to give away money, then perhaps scan the news to find small organisations that are doing good work on the ground — ones operating with little fanfare or credit but making a difference to people’s lives; often they won’t attract mainstream support and you wouldn’t normally hear of them because they can’t afford a fundraiser.
- If you would like to get involved, research the subject you think needs sorting. If a relevant domain name is available, this is a great start; it suggests that no one else is dealing with it.
- Find a niche that isn’t being well served. A couple of my own examples:
a) Most of us will remember the hugely distressing case of Fiona Pilkington and her daughter, Francecca. After ten years of torment by local youths, they committed suicide. When I searched for agencies to support victims of anti-social behaviour, there was precious little around. So I set up ASB Help (Anti-Social Behaviour Help) to do something about it. Fast forward nine years and we have a terrific team who are spokespeople for this challenging sector and advising thousands of people a week through our website. There’s much more to be done, but it’s a good start.
b) When I was managing and playing in a band, I was mortified by the way musicians were treated. Most venues paid a pittance, way below the real living wage, with us having to fund our transport and gear out of that. A memorable low point for us was being offered the slops from a beer keg in lieu of payment (hopefully, no reflection of our performance), so I set up Richer Unsigned to support musicians and we now have 3,000 artists on board.
How to be a good boss (disclaimer: I'm still learning!)
Sunday 24th April 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
We would all like to be "good" bosses, I'm sure. But what does that mean, and is it even possible?
The idea of someone being in charge of another person is as old as time. Some say employment of any kind is a form of exploitation - although that depends, I guess, on your definition of it. Typically, it would involve a component of unfairness.
An estimated 900,000 workers now have zero-hours contracts imposed on them, including 300,000 care workers. I fully accept that some people might be happy with that, but those depending on this work find it very difficult to rent a home without being able to demonstrate regular income. As a result, some of those care workers can end up sleeping in their cars - or struggling single parents might be sent home early without being paid because "business is quiet" - even if they have arranged and paid for childcare.
Few would disagree that we are talking about gross unfairness here. Bosses have a big part to play in people's happiness, and nearly all us have one - even MDs and chief executives have shareholders.
Today, I would like to have a stab at what makes a good boss, having tried being one for more than 40 years:
- Bosses should not attempt to be liked. This is vanity. It just looks disingenuous when they have to make tough decisions such as cutting costs in a crisis or making someone redundant. Machiavelli suggested that bosses should farm out the bad stuff via their lieutenants to make themselves look kind - but most people would see through this in a flash. If you want to be liked, you're in the wrong job.
- Bosses should aim to be respected for doing their job well and for being fair. The difficult bit, of course, is the earning of that respect.
- By earning respect, I mean being honest about having to make tough decisions, having the guts to make those decisions, and dealing with them in a decent, generous and humane way. Ideally, we should pay the real living wage and not use zero-hours contracts without a very good reason. We should listen to, and do our best to sort out, our people's grievances - and promptly. And we must respect diversity and inclusion in spirit as well as the law.
- Bosses should do what they say they will do. This quality is sometimes sadly lacking, but nothing beats it for credibility. Try being respected when you have forgotten someone's promised pay review.
- Bosses should make minor decisions quickly. I am generally fast to decide - admittedly, sometimes too fast, but I maintain that some people are too slow. In the business world, we want to stay ahead, so speed is of the essence.
- Bosses should respond to employees' e-communications as soon as possible; first, staff won't get on with the job until they get your decision, and second, if it is a gripe, their heart won't be in the job until it is sorted. A resentful colleague is rarely a productive one.
- Workers experience much more stress than their bosses. They have worries about finding work in the first place, and about getting permission for breaks, holidays and shift changes. Then there is the inability to make their own decisions at work, as well as financial fears and job insecurity. Remembering this matters.
- Bosses shouldn't pay themselves too much and their people too little - the size of the differential should ideally seem fair to the woman or man on the Clapham omnibus (admittedly, there is fierce debate over this). In my opinion, the pay should be the real living wage or more for the lowest earners - and big rewards only if they are linked to performance.
- Have time for a colleague with a problem, whether it is an out-of-work one, or in. Both will affect their work, and we are all measured by how we behave in difficult situations. Helping an employee in their hour of need is, of course, the right thing to do and will be long remembered.
- Bosses should pay their taxes.
- Good bosses admit their mistakes and even say sorry. It's sometimes difficult to do, but I feel I get far more credibility from this than being a macho, "perfect" boss who never gets things wrong.
- Don't take yourself too seriously - better to keep your feet on the ground and remember your humble beginnings.
- Be as open and honest as possible. If you want your staff's support, you should tell them if the business has problems; they will want to help and they will appreciate your trust in them.
- Lead from the front. I don't think we remember many good military leaders who led from the back.
Here's how to turn emails from a chore into a pleasure
Sunday 17th April 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
Ray Tomlinson has a lot to answer for. Back in 1971, he invented the first email system we would recognise today. Digital messages have since saved countless trees, the oil reserves of a small planet, billions of years in time and the legs of postal workers across the world. But emails also amount to one of the most stressful and time-consuming tasks we have to manage in life.
No one seems to talk about it, apart from how behind and fed up they are with them, so I felt duty-bound to bring up the subject.
The first thing I notice is that the world is clearly divided into two groups: those who don’t answer emails (whether it’s not replying promptly or properly, or not replying at all); and those who do.
Yet interestingly, in my experience, only a few of the biggest bosses in the land are rubbish at dealing with them, which is actually quite encouraging seeing how busy they are.
So there isn’t necessarily a link between how busy you are and finding time to answer emails. Remember that old adage — “ask a busy person if you want something doing”.
And how could they afford to ignore them? The world is moving fast — and the days of snail mail are over. When we receive a letter in the office, we all crowd round it as if confronted by a rare species. Only joking, but it won’t be long.
The beauty of emails is that they are an incredibly efficient, paperless, fast way of working. It is about time we properly embraced them and thought about what best practice might look like.
For me, the fewer forms of communication, the better. There is less chance of missing things if, for instance, you have only your phone messages and emails to check. And I like the trail and search capability of emails. If you have a better system, fine, but some of my pointers may still be helpful.
A few tips, then, if I may:
- Emails take time, so you must make time for them — they won’t write themselves.
- It is far too stressful to drop everything and reply to each one as it arrives. Better to keep an eye on them and deal with anything urgent straight away if you have to. I find that going through them properly twice a day, replying in batches, is both healthier for a work/life balance and more efficient.
- It drives me nuts when people ignore their emails. All personalised emails (as opposed to mailshots) deserve an acknowledgement, even if a reply isn’t strictly necessary; otherwise, how do we know the message has been received? If you’re busy, a simple “x” is fine and friendly.
- Emails should be replied to in a timely manner for three reasons; a)Your lieutenants won’t get on with the job until you have given them the go-ahead to their query; (b) It is less stressful for me than thinking of colleagues not getting on with things because I haven’t got back to them yet! And (c) There is nothing more demotivating for a colleague than to have the boss not reply — or nothing ruder, in the case of a customer or supplier. What the heck?
- Emails answering a question may be brief, but too short is rude.
- When being asked to do something you don’t want to do, don’t prevaricate — or worse, forget to answer. If the answer is “no”, say it quickly and put folk out of their misery. That’s always much more appreciated than being ignored.
- Keep on top of the damn things. I try to reply within 24 hours come holidays, sickness, days off or Christmas. (Obviously, if I were seriously ill, then fair play.) I imagine there is nothing more daunting than a backlog of 3,000 emails going back many weeks.
- At the bottom of my emails, I have a note asking recipients to kindly acknowledge safe receipt. And out of courtesy to them, I ask for replies only in their working hours, as I choose to work at different times. If people struggle with dyslexia, then it may be easier for them to dictate emails and/or have a written explanation at the bottom.
- Emails are two-dimensional and some things should not be said in writing, especially tricky conversations when sensitivity is required or where you may have got your facts wrong — remember, once it is written down, it is there for ever.
- It’s a good idea to read your emails through, because spell-checkers can have a (sometimes embarrassing) mind of their own.
- Double-check that the recipient’s email address is correct and, to avoid sending prematurely, put it in last.
- Especially when replying, copy in only those who need to be copied in. It irritates everyone else if you don’t.
My simple piece of A4 paper will help you run your life
Sunday 10th April 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
I am obsessive about being organised. Apart from the businesses and charities I run or oversee, I write books (and now this weekly column). I also managed and played in a busy band until recently, am pretty involved with the responsible-business movement, have an active interest in fairness in society, enjoy time with my family, have a social life, exercise regularly and answer my emails promptly. And, importantly, I have a good work/life balance.
If I don’t keep on top of things, I get stressed, which isn’t good for my health. I also don’t want to let others down, which is even more important. So how do I organise my life? It all revolves around a piece of paper and a pen — those amazing inventions that have been around for 2,500 and 5,000 years, respectively. I am genuinely surprised that more people don’t use them.
Now, before you accuse me of being a fusty old Luddite, I have, and regularly use, iPads, a Mac and a laptop — and I touch-type as well. But, as with design and furniture, I like a combination of old and new, using (in my opinion) the best of each. And I would hate to discard old technology such as the trusted pen and paper, just for the sake of it.
Being blessed with an average memory at best, I realised early on that if I wrote things down, I couldn’t forget them. And as soon as I could afford to go to restaurants, I noticed that waiters who wrote down orders always got them right.
I love lists, too (a bit weird, I know). So, the engine that drives my very busy life boils down simply to this: a collection of lists on one piece of A4 paper, which I call my “worksheet”. I have shown this system to my busy friends, who love it, too. The beauty of it is, if you adopt this worksheet, it will be a live, ongoing overview of everything you are doing, right in front of you, all the time.
I use a very fine pen (uni-ball deluxe micro) so I can write small and fit a lot onto the page. I divide it into columns for lists: one for each of the people I work with; others for calls, homework, emails, things to do when I am out and about, and pending items; and one for my monthly Zoom call to the whole company. Anyone replicating this will have their own mixture of columns of varying lengths, but you get the gist. As soon as the page is full, I carry over what’s outstanding onto a new sheet and start again.
A few pointers:
- As I go through my jobs list, I highlight priorities with a star and tick the phone messages I’ve left and my emails/texts once sent. But I cross them off only once I have received a reply.
- The manual process of transferring outstanding jobs from the old to the new sheet is a good way of assessing their priority and can push you to get on with it.
- I cannot overstate the benefit of having an overview of your tasks in front of you on one piece of paper — for you to oversee throughout the day.
- The talented and charming Sacha Berendji — who has a big job as head of property, store development and technology at Marks & Spencer — has gone one step further and has his overview on an iPad, which he swears works just as well. That is way over my pay grade, but if it works for him, it may work for you.
I like the instant view that paper gives you. It’s cheap, too, and doesn’t require a charged battery or faffing about with a password. And it can’t break, no one is ever going to nick it, it’s virtually weightless and it has never let me down for coming up to 50 years.
- Aficionados might splash out and put the worksheet in an A4 plastic sleeve to save it from coffee spills.
- I always take a copy or photo of mine (and my diary, too) before travelling, in case I lose them. It hasn’t happened yet, but it’s good insurance.
- When you write things down, your brain doesn’t have to waste energy trying to remember them — and then get stressed when it can’t. So there’s a double-whammy benefit here.
- If you’re out and about without your worksheet, then it’s fine to jot down notes on a small piece of card (which you’re less likely to lose than a scrap of paper) until you get home to update it.
- For years, I wrote my diary myself, but I now have the luxury of getting one printed each year, with all my nearest and dearests’ birthdays and key dates. I have never yet missed our wedding anniversary(!). The cover is printed in dayglo yellow so the diary is less likely to be left in a taxi or on the bus, and it has a reward sticker attached in case it does. Most people I know use digital diaries — much slower than my speedy paper version.
Time is your most valuable possession, so look after it
Sunday 3rd April 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
I normally start writing these articles at 5am. I was already a busy chap when I took on this column — I am still involved in the two businesses and several charities I have set up — but I am certainly not a workaholic. I love spending time with my Mrs and our friends, travelling and doing normal stuff. Like all of us, I am trying to cram as much as possible into the few years we have on this planet.
And I overslept today, on the morning I had earmarked to write about time management — typical!
So without further ado, here are a few tips on the subject that I find useful.
- The most valuable possession we have is time, so use it wisely — and that means owning your diary. Only you should put things in it, and you should be ruthless about what goes in there. I had the best secretary in the world for 27 years but I still decided how I allocated my time.
- Leave contingency time in every day for those surprises, dramas, unexpected demands and interruptions that come from left field (or in case you occasionally oversleep). And time to help a friend or colleague in need.
- You must have time for yourself, too — time to exercise, time to think, time for family and friends and hobbies, time to pray (if you do), time to do nothing and time to sleep, otherwise you will be miserable and make yourself ill. And then what’s the point?
- We all have different body clocks. I am an early bird (usually); others are night owls. No matter, but respect yours.
- Do one thing at a time. Work in batches. Phone calls, meetings, emails, reading — all are quite different. Remember Adam Smith and his pins? An incredible lesson — do look it up. Or Henry Ford. Specialisation is efficiency.
- Your mind is naturally clearest after sleep. I liken mine to a still pond then, so early mornings are an ideal time to write or to read complex reports. And I find a short afternoon nap does wonders for my work capacity.
- Continually prioritise your jobs list. What wasn’t urgent last week might well be urgent today. And if it doesn’t need to be done immediately then don’t stress yourself out over it, making yourself late for what does need prioritising.
- Do you really need to have those meetings so frequently? Maybe you did at first, if you were developing a team or nurturing a colleague with problems, but can you reduce them over time and free up some space? And though we all like to see our friends, surely they will understand if you are under the cosh and have to see a bit less of them.
While we’re on the topic of meetings, ensure they start and finish on time (you will soon get a reputation for this, ensuring that colleagues arrive promptly). And please keep them as short as possible. Ingvar Kamprad, the founder of Ikea, divided his life into ten-minute units, which is perhaps a little extreme — but how can any meeting last more than an hour?
- Make decisions quickly. Over my nearly 50 years in business, I have prided myself on “getting on with it” — and that includes not dithering over what comes across my desk. On balance, I haven’t made worse decisions than if I had taken much longer. Not to make a decision is a decision itself, after all. And it’s always better to say no to someone quickly and put them out of their misery.
- When you are in a pickle at work — and I have been many times: recessions, disasters, fires, cashflow problems, near bankruptcy in the early days — the best thing you can do is get a grip. When the going gets tough, the tough get going. Don’t wait for something to work before you try something else. Try everything — time is of the essence. You may never know what it was that put the fire out, but if it worked, who cares?
- Don’t be frightened to delegate in order to stretch out the time you have available. It is fine to pay a driver £15-£20 an hour to ferry you about if you can use the time saved more profitably to work, or simply to rest.
- A good way of weeding out a few of the less important requests for your time is to justifiably decline due to the pressure of work but ask the person to come back to you in, say, six months, when you might be more free. Not many will — so the few that do, you’ll be happy to help.
- Keep trying to improve your time efficiency. At school I was taught a lot academically that I didn’t use in life, but sadly not how to touch-type. During Covid, at the age of 61, I finally taught myself using a free online site, keybr.com. It’s one of the most satisfying things I have ever done, and saves me a huge amount of time by making the 100-200 emails I write a day fly by.
Here’s a suggestion: unless you have an oil well, read this
Sunday 27th March 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
If you run a business and you’re thinking of turning the page, do so at your peril. Unless you’ve won the pools, or have got an oil well in your back garden, you should read this. I am going to talk about suggestion schemes.
We bosses think we’re clever because we tend to be very confident (which, certainly in my case, isn’t fully matched by ability). But we can’t be everywhere at once. As our little businesses grow, we have to learn both to delegate and to listen to our colleagues on the front line. This happens suddenly for shopkeepers going from one to two stores.
If we can systemise this feedback, it is the difference between pulling a cart up a hill yourself, or being pulled by others.
This feedback can be about how our people are feeling, but also about possible business improvements. I’m going to discuss the latter.
Hopefully, you’re still with me and are becoming receptive to the idea. The problem is that so many organisations get the execution wrong (note: I said organisations; this is not just good for businesses). Having put successful schemes into Asda, Marks & Spencer and the Halifax, I can suggest how to do it:
- The organisation’s most senior person should head the scheme and be the face of it; employees want to please bosses and are more likely to do what they ask.
Also, as the Grand Fromage is supposed to have the global view from his or her elevated status, and is “clearly” the cleverest in the organisation, this is the best person to oversee the ideas.
- Suggestions should be easy to submit — no need for eight pages of forms to fill in. A paper serviette from a restaurant would suffice for us in the old days as long as we could read the idea and the person’s name was clear.
- Answer every suggestion — it’s simply bad manners if you don’t. If someone has been brave enough to submit one, and caring enough to try to help you, then they at least deserve acknowledgment.
- Turn them around quickly! How motivating do you think it is if it takes 18 months to get back to someone? (That is, if they are even still with you by then.)
- All suggestions should get a financial reward (HM Revenue & Customs allows “thank you” prizes of up to £25 tax-free).
In my opinion, these rewards should be “little and often” — much better to have lots of winners than one person a year winning a car, which, inevitably, they don’t like because of the colour or can’t even drive. And don’t offer a percentage of the possible savings as the reward. Suggestions should be about improvement across the business and not just about saving money.
One thing’s for sure: if you give out 10 per cent of the money that you think the idea will save you, the colleague will think it’s worth more and that you’ve shafted them ... so what’s the point?
Floyd, the then-manager of our original tiny Chelsea shop (it was actually in Fulham but we liked to say Chelsea), was worried that when it was packed with customers, he might not spot a person in a wheelchair arriving. He suggested we put a bell at waist height outside the store to help them. This cost us money, and on a percentage of savings basis, it was worthless, but it was a lovely customer service touch.
- Encourage your people to go off site for brainstorming — ideally, to a quiet bar (note from HR: you can’t legally force people to drink alcohol). After a couple of beers, the ideas will flow. Admittedly, some will be unintelligible.
- Measure and publish results by shop, department etc, to keep everyone on their toes.
- Use the ideas. Once your people see that they can actually make a contribution to the organisation’s development, and get rewarded for it, guess what? They will come up with more suggestions — and then you have the most virtuous circle possible.
NB: Please don’t expect huge ideas; it is about evolution, not revolution.
There is not much point telling me that we should sell washing machines in our very small stores — I want to know how we can improve hundreds of tiny things that only the folk at the front line know about and I couldn’t possibly be aware of.
For those of you who have studied the success of manufacturers in the Far East, a successful suggestions scheme would be the engine that drives your kaizen (literally, “good change” or continuous improvement).
We have run our scheme for almost 40 years and swear by it. Nothing has made us more productive than listening to our people.
If you want to stay on song, choose advisers with care
Sunday 20th March 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
When I was managing our band and in need of an opinion, I soon realised the answer I would get depended on where it was coming from. Our friends kindly told us we were wonderful — but if we needed advice from hardened industry insiders, I was lucky to get a return call.
If we want the truth and good advice, we must choose our advisers carefully. There are many people who “want to help”. It is a minefield. I’m talking about professionals — lawyers, accountants, doctors, the many consultants who offer their services, and non-executive directors (NEDs) too. And then there are friends and family, all of whom may want to have their say. But who do you listen to? Some tips:
- It is not the highest paid who are necessarily right.
- Advisers aren’t commodities, so don’t just look for the cheapest either. It is the quality of the advice that is important.
- The best specialists can be great, but problems often comprise several components, so try to ensure they have general knowledge, too.
- Advisers can be intimidating, which annoys me; and the more confident and slick they are, the more I worry.
- If you find a good one, try to build a rapport with them; the better they know you, the better they can advise. Don’t penny-pinch on their bills, and pay them on time; you don’t want to lose them.
I also look back at my role models in life and remember the bits about them that inspired me.
Good legal, accounting and medical advisers are of course important, but the crucial challenges are choosing them in the first place and then deciding when to take their advice.
They will normally have no skin in the game, so if it is an important decision — and if you are not happy with what they are telling you — get a second opinion (my mantra here is “they advise, you decide”). Be extra vigilant when they have a vested interest in giving you advice that will result in a load more work which they are recommending “they” do.
Consultants are fine in short bursts if they provide specialist skills that you don’t have in-house. This is OK as long as they know their stuff, which isn’t always a given.
It’s best to go with introductions from satisfied customers where you can. This applies to all advisers, so do ask around. If you want a good accountant who won’t cost a fortune, try contacting a friend in a similar situation to find out who they used. I did this years ago and the wonderful man is now retired, but I am still with his firm after many years. It was a good call.
Be suspicious if consultants need a team with them. It’s much better, and cheaper, for you to offer your people to assist the expert.
Also, remember: the longer the job lasts, the more they earn — which isn’t ideal. If you fear they might swing the lead, you could agree a fixed price for the work rather than pay by the hour. Sometimes if you do this, it will amaze you how quickly they finish the job.
As for NEDs, I have had good and bad experiences.
A good one in a small, privately owned firm like mine (pre-employee ownership trust) will sit quietly and write you a report after a meeting, with useful observations and suggestions. A disruptive one, in extreme circumstances, could help wreck your company, so be cautious.
For many years, I had an informal NED — who I would describe as a friend of the business — who sat in on our board meetings. I respected his judgment and it worked well. He was a safe pair of hands at the table who would whisper in my ear, metaphorically, if I needed a steer.
Networking events are fine if you enjoy them. I don’t, particularly, and find them time-consuming. And all the events I’ve ever been to have been full of people trying to sell me something. Because I regard my time as very precious, I always thought it was more efficient if I just called on people (and happily paid them) when needed.
Back to the band: I did eventually find a terrific informal adviser, Ian Grenfell, who manages some of the most successful acts in the business. Although he firmly warned me off even contemplating the music industry, being the stubborn entrepreneur I am, I didn’t take no for an answer.
In spite of our best efforts — playing more than 400 gigs, producing two good albums, supporting some terrific bands including Jools Holland at the Albert Hall — we just couldn’t cut through.
So on this occasion, at least, I ignored the wrong guy. That’s life, I guess.
Great service isn’t complicated, but it’s very hard work
Sunday 13th March 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
We have been voted the best retailer of any kind by members of the Which? consumer group for six of the eleven years in which the award has been going. So you might expect me to know a bit about customer service — I hope I do.
But there are no shortcuts, because you are only as good as your last sale — and if we want to win that vote again, we will have to work just as hard as last year.
It helps to boil down service to the three Ps: people, processes and product. The “people” bit covers recruiting the best ones for the job, training, caring for and motivating them, and monitoring and rewarding them (the latter specifically for giving great service).
The “processes” are making sure that the stock is in the right place, in the right size and colour, and at the right time. It must also be efficiently repaired if it goes wrong — all this depends on distribution, IT, tills, call centres and after-sales all doing what they are supposed to do. And the “product” itself? It has to be fit for purpose, “as described” and of merchantable quality. More than that, has it “delighted” the customer, offered value for money (which I define as quality per pound) and was it reliable over the long term?
So, there is a heck of a lot to get right — it is no wonder that many businesses underestimate what is involved and ultimately fail. The good news is that none of this (apart from IT and tills, for me) is inherently complicated. It is just good, old-fashioned hard work.
When dealing with customers one-to-one, the “people” challenge should always be to offer two things. One is consistency of experience — Amazon and McDonald’s are brilliant at this (whether you approve of them or not). The other is a personalised experience, which is about tuning into each customer as an individual so they feel they have been served by someone who genuinely cares. The two parts of the experience are slightly contradictory; if you are not careful, consistency can become robotic and the opposite of personalised. So this is where the very hard work of the sales teams come in, and we should appreciate them for it. And with the robots coming, we should do everything we can to preserve their jobs; if we don’t, who will buy our products if everyone is out of work?
Sorry, I digress.
The first thing most of your customers will experience, if they are visiting you, will be your premises. The environment should be friendly and at the right temperature for customers. There should be welcoming signage, as opposed to a list of things they can’t do in the shop. It should be well maintained and presentable. The music — in terms of content and volume — appropriate, and ideally doorways will be open (only if away from the road) and free of chuggers.
If you are a service, mail-order or telesales business, you should similarly dissect the entire customer experience (including after the sale) to check you haven’t missed anything. Monitoring and measuring all the customer interfaces is imperative so you can quickly hear from your customers when you have messed up. You should also include checking that your people are opening their shops on time, and that they have remembered to wear their name badges; sadly, we found that when they didn’t, their service level dropped as they weren’t identifiable (funny, that), though we do reward good service to make the effort worthwhile.
A few last pointers, if I may:
- The first and last moments with a customer are crucial to get right. In a shop, don’t ignore customers waiting at the till or browsing — and don’t lose interest the minute they have parted with their cash. That is a big turn-off!
- Don’t judge a book by its cover; I am small and not a picture of sartorial elegance, but underestimate my spending power at your peril. In the eternal words of Julia Roberts in Pretty Woman, “Big mistake!”
- If you really want a customer for life, tell them not to buy if they are unsure. They will remember that and love you for it.
- If a customer has a problem with your product or service, pull out all the stops; they feel vulnerable and upset and annoyed and will never shop with you again if you don’t. We do screw up, but we manage to turn round 96 per cent of these important customers. A good start is to answer your customer-service phones and emails in a timely manner and make it easy for them to complain. (Every receipt we issue includes my direct office email, so customers can contact me when we fall short.)
- And finally, do what you say you will do. There is no better advertisement for a good business and (especially now with social media involved) no worse advertisement for a bad one.
With people power, we can stamp out bad capitalism
Sunday 6th March 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
I was enjoying a lunch with my friend Simon Fox, at the time head of the Reach newspaper group, when he told me he was keen to do something on responsible business — a subject close to my heart. I reeled off a list of ideas. The one he thought had most potential was a Good Business Charter, an accreditation scheme for businesses that would act as a credible signpost for customers who wanted to spend their money ethically but didn’t know where to go.
A few weeks later, I was having a cuppa with Jon Lewis at the outsourcer Capita — a great boss. I let my charter idea slip. Without missing a beat, he said he wanted to be our first member. I knew we were onto something.
For this to work, Simon and I had to have buy-in from the biggest businesses and unions. We wanted it to be non-party political and had a dream of both extremes of the political spectrum working closely and happily together for the greater good. The questions were:
- What would a Good Business Charter look like?
- Who should be involved in representing these two distinct groups?
- Could these opposites work together?
However, Simon knew the then-boss there, Carolyn Fairbairn (now Dame Carolyn), and suggested we put a call in. She is very well spoken, which I found a little intimidating, and she sounded cautious, so at the end of the call I immediately phoned Simon and said, “That’s that, then.”
How wrong I was. A few days later, we got a call saying they were up for it and that Carolyn would appoint her deputy, Josh Hardie, to our board. Bingo!
Over at the Trades Union Congress, I told its general secretary Frances O’Grady about my plan and she said, in so many words, “Good luck with that!” But she still gave us her support, and she appointed one of her top people, Tim Sharp, to our board.
So, who to run it? Ten years before, I had set up a charity with John Sentamu, then Archbishop of York (now a Baron) to help those in need. Operating out of 700 churches, we had helped tens of thousands of people. The chief executive was a brilliant woman called Jenny Herrera, and I suggested to her that she might fancy a new challenge. Thankfully, she agreed.
There were ten deal-breakers, we felt, for companies wanting to join; it was vital to us all that the public had confidence in the calibre of those we signed off. The bar was not set too low. There are five conditions for workers, and other criteria covering consumers, the environment, sourcing, prompt payment and tax. In fact, Tony Danker, the current director-general of the CBI, says he thinks the bar is quite high. But the public will like that even more.
And it was a joy to see the TUC representative getting on so well with the deputy director-general of the CBI. There was never a cross word.
We planned our launch for February 1, 2020, just before the pandemic and the worst time in history to launch anything. But then, as businesses came up for air, they began to “get it”; the applications started rolling in and from there they accelerated.
This was a scheme that gave good operators well-deserved recognition and would differentiate them from the crooks. And remember that the millions of decent, hard-working people in business trying to make an honest buck, hate the latter as much as the public do. But more importantly, with Good Business Charter accreditation, consumers would know where to shop.
As of today, we have the best part of 1,000 companies with us. Capita was the first, as promised. Other terrific firms such as Legal & General, Unilever, Aviva, TSB and Deloitte followed. So did some fantastic smaller ones such as Brompton bikes and Jerba Campervans. There were some great charities, too: Trussell Trust, Oxfam and Amnesty. We even have York as our first GBC city.
And then there are the investors, job seekers, charity donors and tourists looking to support worthy organisations. We firmly believe we will grow even faster as soon as people become aware of what we are doing.
My wife and I have funded the whole thing to date, so it is free to sign up, with only very small subscription charges planned in the future.
I have a dream that in ten years’ time, half the shops and businesses on the high street will be busy and they will be the ones with Good Business Charter stickers in their windows. So please come and join us: goodbusinesscharter.com.
Capitalism can be ghastly, but we can all help to fix it
Sunday 27th February 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
Capitalism can be truly ghastly; it is inherently based on greed, has been responsible for some of the worst violence in terms of slavery and exploitation and has caused untold pollution and misery. It is also responsible for producing goods and services we wouldn’t want to be without, some of which we even love — and there is no other system I know of that has better stood the test of time.
On a personal level, I have done very well out of it. I’ve been able to start up my little enterprise and thrive in an atmosphere where businesses are encouraged, and that was wonderful.
So how can it sometimes go so wrong?
- Bosses undeniably have a lot of power over their workers, who are inherently vulnerable, especially if the jobs market is flat or there are few other opportunities in their area.
- Because of lax rules and poor enforcement there is ample opportunity to avoid paying tax and get away with it.
- As businesses grow, they get more powerful. This can buy disproportionate influence in government, which can tempt them into taking unfair advantage for favours or contracts.
- As shareholders put pressure on management for continuous growth, and reward it, this can prevent a long-term view and result in tempting, unethical shortcuts to benefit the bottom line.
- If the shareholders’ only contact with the company is a dividend cheque plopping onto their doormats twice a year, this is a disaster waiting to happen. Who is monitoring the conditions of the miners in Angola producing those profits?
- Some bosses just don’t get it. They are convinced that by ripping off their customers, exploiting their people, bleeding their companies dry and not paying tax that they are being clever. At best they will have a short-term cost advantage ... but as we say in Yorkshire, the truth will out.
My book, The Ethical Capitalist, explores this in much more detail but I’m happy to give you the heads-up here. We have to encourage good business behaviour because it is so beneficial for everyone, and we need to do much more to keep the non-believers in check. There are three ways to do this:
First, the state — and I’m speaking non-party politically — must do much more to keep an eye on the rogues. Throughout Covid, while most of us were busting a gut to keep going, there was serious abuse going on under our noses; ugly profiteering, zero-hours workers thrown on the scrapheap, employees fired and rehired at lower rates, furlough and support loans fraud, horrendous health and safety abuses in Midlands sweatshops, and those creeps squealing loudly from their tax havens for handouts. Surely it’s government’s responsibility to do more to police this?
And the good news is that if we went after the “tax gap”, which my friends at TaxWatch reckon is more than £50 billion a year, it wouldn’t even cost us taxpayers a penny extra. We must focus on retrieving this money with at least the same enthusiasm and resources that we use to go after the much smaller benefit cheats. Remember that our entire prison system costs £3 billion a year. Can you imagine how much good we could do with that extra £50 billion?
Second, we must try to persuade businesses that by doing their bit they will see the benefits — hence me keeping on banging that drum. And we should absolutely applaud and celebrate the likes of Unilever boss Alan Jope for caring about the products he produces. He manages 450 brands. Surely consumers want them all to be responsibly and ethically produced, including his delicious mayonnaise?
Finally, the great British public have a big part to play. They must turn the dial on what is acceptable. Scandinavia has been ahead of us on this for a while. They vilify tax avoiders and have much tougher penalties for them, and business people there moan like hell. But they don’t leave because they love the free childcare, terrific schools and hospitals, the streets are clean and crime is low.
Businesses paying their proper taxes means the state can afford bigger public spending which produces a happier society. And surely we all want that? As Adam Smith said 250 years ago: “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”
So the public must vote with their feet for the benefit of all concerned.
That great ethical bank, TSB, has done some excellent research confirming what I thought. The public do care. TSB found that 97 per cent want to support good businesses. But the problem is consumers don’t necessarily know which ones they are. Understandably, bad ones don’t go around advertising it.
So I had an idea. We desperately needed a credible third-party accreditation scheme to sign off good businesses which would then act as a signpost for consumers, and also reward the good businesses making the effort to do the right thing.
Next week, I shall tell you how the Good Business Charter was born.
A few seconds of love cost me £4m, but it was worth it
Sunday 20th February 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
It was the middle of May 2019 and The Guardian, Daily Telegraph and The Times leader columns all agreed that I was a hero. John McDonnell from the left and a plethora of Tory politicians concurred — and, quite frankly, I was a little embarrassed.
I am a great fan of the film Life of Brian, where a little-known chap is going about his daily life in Judaea at the time of Christ. He’s mistakenly “discovered”, as people wrongly believe him to be the Messiah. That week I knew how he felt.
What had happened? I had sold my business into an employee-owned trust, or EOT. My wife and I were without kids to whom we could leave the business, and I was concerned at what would happen on my demise.
In 1929, John Spedan Lewis sold his shares into an EOT, and this little-known “exit device” is still possible today. A trade sale, or venture capital-inspired deal, would have led to our unusual and successful culture being damaged; the holiday homes would have been sold off, then the freeholds (we own 90 per cent of ours) — and most of us remember what happened to Woolworths.
Every year I revised my will and all the associated papers (which I’m sure my very patient lawyer George enjoys enormously) to minimise my wife’s admin hassle should I predecease her. Death is a macabre subject which no one likes discussing — but one thing’s for sure, not discussing it is irreversible.
So, for many years, I had planned for my shares to be sold into a company trust. I was always worried about how this would go through without me being there and, importantly, the hassle my widow would face in handling it.
The government wanted to encourage employee ownership. But as vendors had to sell a controlling shareholding to an employee-owned trust and wait for their money — in my case for many years — many were nervous. As part of the Graeme Nuttall review in 2012, the law was changed to make these sales tax free; an owner of a company making, say, £1 million, with a valuation of £10 million, could sell his or her shares into a trust in return for upfront cash or a loan note, and the proceeds would be free of capital gains tax, other things being equal. And, as our intention was to give it all to our charities anyway, that was fine with me. So, it was a done deal; only it wasn’t quite as easy as that.
I “volunteered” David Robinson, our chairman, to make it happen. Two and a half years later it did, with me barely lifting a finger apart from the many interviews I did after the event with supportive journalists, which I quite enjoyed. We weren’t originally even going to tell anyone, but David suggested we invited a journalist from The Guardian to sit in on the announcement at our annual managers’ conference at the Salvation Army Hall on Oxford Street. She kindly did, and placed an appropriately small piece online.
In the Sally Hall there was total silence at the end of my speech when I added that I would be personally gifting £1,000 to every colleague for each year of service as a small “thank you” to celebrate the occasion. Admittedly, it was the end of a long session and some might well have been asleep — or maybe they hadn’t heard what I’d said properly.
“Did the old man say £1 for each year of service or was it £10?” ... “No, he definitely said £1,000” ... “He couldn’t have” ... “No, he did” ... hence the silence. As confirmation was needed, I repeated it and as word spread across the hall there was a huge cheer. I think it fair to say, in those few seconds at least, that some of them possibly loved me, a very rare experience in the life of any boss. It was rather pleasant. The session ended with some very large bearded guys lifting me literally off the ground.
Following the completely unexpected press furore that ensued, The Guardian ran whole pages every day that week and most of the mainstream press followed with generous coverage, including the BBC. I was even invited on to the Today programme, which had always been on my bucket list. Mishal Husain and Nick Robinson were happy customers and were lovely to me. It was a shame my folks weren’t around to hear it.
Our sales colleagues proudly wear their number of years’ service on their badges, which meant that customers could see that X in Holborn had 29 years’ service and so had £29,000 coming. This made for some interesting conversations as to how the colleague might be planning on spending it, which I imagine began to irritate some of our very patient, wonderful people after a while!
Postscript: My celebratory gift to the troops cost me a shade under £4 million and was the best £4 million I could have spent. Obviously the love didn’t last, but hey-ho. It certainly was a very exciting chapter in our history. Finally, I suggest that anyone considering selling their business, and wishing to preserve their culture, should at least consider this form of exit: employeeownership.co.uk
I dodged the online retail asteroid - and you can, too
Sunday 13th February 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
I had a problem. It was the late 1990s and things weren’t looking good. Retail was under attack with the arrival of the internet and you could read the writing on the wall. I remember walking with my wife on the beautiful beach at Filey in North Yorkshire, discussing the serious possibility that shopkeepers selling commodity products could go the way of the brontosaurus if we weren’t careful.
When the first search engines started, you could type in the model you wanted — be it a camera, telly or anything else with a number — and they would churn out the cheapest price for you. This included goods from non-authorised retailers that couldn’t provide back-up, cowboys selling fake products, items being advertised that didn’t existand people trading from their front rooms — none of which the great British public realised. It was the Wild West and it was already causing us problems.
One advantage of the web was that sellers could show infinite ranges (whereas us shopkeepers had to pay for the stock, ship it, display it nicely in expensive stores, pay sales staff to provide service etc). But, these new-fangled sellers were at great risk because if a competitor dropped their price by a penny, they would no longer be top of the search engine’s recommendations and would be stuffed. They couldn’t sell their wares unless they dropped their price, too. Quickly, the profit in the product would be eroded and it would be a zero-sum game with no winners among the sellers. So we had to figure out a way to survive in this environment. The web’s other advantages were that it offered immediate pricing visibility for shoppers and competitive downwards pressure on prices that should benefit consumers if it could get its act together. Sellers could advertise online, then buy from their supplier only when they got an order themselves. That’s not to forget the time and travel savings for consumers who could purchase goods and have them delivered without leaving their armchairs.
So what the heck were we going to do?
- Suppliers wouldn’t like the fact that online dealers didn’t want to commit until they had an order. We vowed to go the other way — what we called “narrow and deep”. We would specialise in committing to ordering big quantities of a small number of lines, but we wanted better prices in return so we could compete and survive.
- Retailers traditionally had higher costs, the biggest being their properties. Thankfully, I had always gone for sites in much cheaper secondary locations that we could, over time, afford to buy outright (and to this day we own the freeholds on more than 90 per cent of our sites, so don’t have to pay rent). We figured that our products are a “considered” purchase, unlike an apple or a newspaper, so customers would be prepared to travel to us. In other words, we were a destination.
- Costs were key when competing with the web, and we were very careful about opening more stores that we might not need as the web began to have an impact on retail — a point not heeded by some other retailers, which suffered accordingly.
- Service online would be limited to text, photos and, ultimately, film footage; more expensive and complex items would still benefit from live interaction with knowledgeable people. So we decided to move into more specialist products such as projectors, higher-end hi-fi and more sophisticated TVs. We thought customers would appreciate the great service that we tried to give. Suppliers loved this, too; they made no money from a £99 telly.
- If we could develop niche products or our own exclusive lines that weren’t sold on the web, we wouldn’t have to compete with the whole world. We could focus on value (which I define as “quality per pound”) by cutting out the distributor in the middle to reduce prices — and benefit from the product reviews this would generate.
- We needed to convince manufacturers that if they didn’t regard retail as a distribution channel worth saving, we would all go out of business, as indeed many did — Comet, Best Buy, Maplin and lots of independent electronics retailers. But it took me ten years to do this. I had to have several conversations with suppliers along the lines of, “Can you please come and collect your products before it rains, as your stock is outside on the pavement?” When they asked what I meant, I’d reply: “I mean that unless I can compete with the web and make a margin to cover my costs, I don’t want your product!” They got the message in the end.
These measures saved us, and I am here to tell the tale.
The moral of this story is that businesses evolve all the time and if you don’t go forwards, you go backwards. As this example shows, asteroids can sometimes be avoided if you spot them early enough.
Measuring worker's happiness is good for business
Sunday 6th February 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
I usually get a laugh when I say: “Working for Richer Sounds is like being in the mafia . . . no one leaves us voluntarily” . . . (I do hasten to add, “hopefully not for sinister reasons”).
Labour turnover is a useful measure of how happy people are, albeit a crude one; if you are the only employer in the middle of nowhere, they obviously can’t just walk out and go somewhere else. But normally, if they aren’t leaving you, it is a good sign.
Admittedly, measurement is not an exciting subject at first glance, but bear with me. How do we know if our loyal people feel appreciated? How would we know if things are going wrong, and what is the point of all this anyway?
The culture of an organisation, IMO, is what its employees think about it at any point in time. In other words, it is incredibly delicate. We once sent a badly worded email that wrecked morale overnight (thankfully, it was swiftly corrected). Staff are human beings and should be handled with extreme care.
Done correctly, “measuring” should not be a dirty word. Indeed, we find that “what gets measured, gets done” — and it is accepted by our people with four important provisos:
- They should understand why they are being measured
- It must be done fairly
- They should have an input into the process
- To make it more welcome, measurement should be linked, where possible, to reward.
The more measurement you are doing, the easier it is to link performance to reward, because it is better for employee motivation if you can.
We are not interested in sales per se; any fool can boost sales by slashing prices — and they will quickly go bust if they’re not careful (especially if margins are tiny). It is much more useful for businesses to measure and reward gross profit generation, which is sales multiplied by profit margin.
One of the most important measures we have are the anonymous weekly morale scores we receive from every colleague across stores and support departments. Every team submits its average and lowest score, and if either is below a 7 (out of 10, not 100!), we start sensitively investigating. It may be a non-work problem for which we can offer help, or it may have been a quiet week in the shop or a short-staffed department. At least we are aware of the issue and can monitor it. I really don’t want to sound like Big Brother here, but I think it is much better to know that there is a problem than not.
We have several key processes or “safety valves” in place, such as respected colleagues’ reps and “shadows” for new recruits. By the way, we hate annual employee assessments; they are time consuming and demoralising. Another is a genuinely anonymous (so people can really speak freely) attitude survey. Importantly, this is carried out in company time, and is designed to “take the temperature” annually across the company.
One statistic, which must be handled with great care, is measuring absenteeism. If a company with oppressive rules on sickness has a low absenteeism rate, it could simply be due to fear that sick people feel forced to come to work. They won’t be able to work properly and will make others around them ill, too.
And don’t forget to measure your customer service statistics carefully . . . especially the number of good and bad interactions, and the percentage of disgruntled customers you manage to turn round. We have the members of consumer group Which? voting every year for the best retailer in the land, which keeps us on our toes!
The good news is that all this listening, measuring and caring for staff is good for your business. I am going to be talking about the huge financial payback in due course, but please believe me when I say that a happy workforce is the most profitable investment you can make.
Loyalty matters – especially when the going gets tough
Sunday 30th January 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
Without doubt, the toughest job us bosses have to do is let people go. I even find it hard saying the words; I am of course talking about making people redundant.
I always promise to preserve jobs at all costs, as I’m very aware of the sometimes devastating consequences on people of losing them. I care about this more than practically anything, the only exception being the survival of the company.
But sometimes there really is no alternative because the needs of the organisation change and colleagues may no longer be required. Thankfully, in our business, this has happened very rarely. But when it does, it is especially hard if you have worked closely with people for many years, they have dedicated those years of their life to the company and they feel that you, the boss, have treated them well. In this case, the “betrayal” can appear even worse to them. So how should we handle it?
One: we should be completely honest with our employees from the start, and should avoid over-promising. Jobs cannot, and therefore should not, ever be promised for life, however much we would like to. Sometimes, with senior executives, severance terms can be agreed in advance, which may save aggravation later on if things go wrong.
Two: redundancies must always be the absolute last resort, carried out only after any possible offers of retraining, relocation and other work have been made. Otherwise, all our people promises will be perceived as hot air.
Three: and then, only if all else fails, parting company should be conducted as humanely and generously as possible.
Four: redundancies should always affect the minimum number of people.
I talk about the five elements of staff motivation: fun/happiness, recognition, communication, rewards and loyalty. The last of these, in my opinion, is the most important because it underlines the sincerity of all your other actions. Our definition of the loyalty we aim to provide might best be described as “a care above and beyond what would normally be expected by an employee”.
Colleagues’ health is high on the agenda, and is obviously one of the biggest causes of stress for them and their families. An unhealthy employee clearly can’t work as well as a healthy one, so these are two very good reasons why we should always step in and help if we can.
While the NHS is rightly revered, sometimes serious problems need a more prompt diagnosis than is available. We often send colleagues to a private doctor for a comprehensive general consultation, or offer time with a specialist (either of which would probably cost us about £200). Local appointments can sometimes be hard to get, so this is a great way of showing you care for that person, and you can be sure they will tell their grandkids how the firm stepped up in their hour of need.
We systemise the monitoring of our people’s health. My head of HR sends me, in extreme confidence, a “colleague care” report every Friday night wherever I am. It details all serious issues and what we are doing to help, so I can be aware and can contact the colleague directly, which I often do.
We offer heavily subsidised healthcare if colleagues would like it, but if anyone slips through the cracks, we will still always help them if we can.
Another important thing is always to deal with staff issues quickly as an absolute priority. Never say “I’ll get back to you” and then forget — especially when dealing with questions over pay discrepancies or reviews. If you don’t respond quickly, the colleague will be miserable, which will affect their work — and, ultimately, they will leave.
And then there is something that many firms miss: we always bend over backwards to promote from within. There is nothing more demotivating than someone coming in from the outside, over the heads of the home team, without any experience of what we do. Indeed, if we want to be loyal to our own people, how could we even consider this? There are always exceptions to the rule, and there are two obvious ones here— where specialist skills are required that you don’t have, and to correct anomalies in diversity and inclusion. For example, if all your people are white, straight guys between the ages of 20 and 30, this is not healthy — however angelic they might be.
I remember visiting a big supermarket chain with Archie Norman in Ireland and the founder telling us his staff were all very happy. He based this on the fact that they were all grinning (obviously in fear), which was patently ridiculous!
So the next thing we need to know is whether our people do feel that they are both treated well and that we are loyal to them. We can only do this by having safety valves in place in terms of both effective upwards communications and careful measurement. I look forward to discussing these in detail next week.
My five magic steps for a more motivated workforce
Sunday 23rd January 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
I gave a talk to the senior team at the media giant Emap in 1993 about my experiences working both with huge companies and my little one. I had discovered factors that seemed to motivate people, and they boiled down to five elements.
Emap’s then boss, Colin Morrison, said I should write a book about them; he kindly helped by asking Paul Keenan, a rising star there, to assist me. The Richer Way came out in 1995 and still sells well to this day. Big thanks to Emap for the encouragement, and to Kate Miller, who wrote it with me.
So that’s the book. I am very happy to discuss these five elements of staff motivation to save you buying it.
One: let’s start with fun and happiness. I fully acknowledge that it is unrealistic to expect any workforce to come to work whistling every day. But there is an awful lot that bosses can do to make work more pleasant — or less unpleasant, if you prefer. And the fun should be appropriate to the workforce, the customers and other stakeholders.
Some examples from our business: we have 12 holiday homes that enable more than 70 per cent of the entire workforce to have at least one free holiday a year (we do ask for a small contribution towards the benefit in kind). This is a much-appreciated perk, the usage being a good measure of what our people think of it.
All colleagues with more than five years’ service (more than half the workforce) go away together every year, with all expenses paid and in company time — while having to endure only a one-minute welcome speech from me.
Additionally, pets are invited to join their “parents” at work as long as they are friendly — and, as the great majority of our colleagues are music and film fans, they also appreciate the generous staff discounts. We also have subsidised social activities, Christmas parties — which I am forbidden to attend — and many other things.
We take the service we offer seriously, but not ourselves; we try to retain a sense of humour as long as the work is getting done and we remain respectful of others. We encourage fun and friendly banter in store; it relaxes our customers and is good for the atmosphere — the only proviso being that it is appropriate.
We realise working long hours is not fun, so we ban excessive hours and six-day weeks unless in an emergency. We avoid a macho culture by encouraging our people to work “smart” rather than “long”. If you don’t crack down on this, your people will make mistakes, be miserable, get sick and, ultimately, leave.
Two: recognition is mostly about saying “well done” and “thank you”, neither of which us bosses say enough. Granted, workers are supposed to work, but most do more than they are paid to in terms of responsibilities or hours. If they do, be sure to thank them. And the only way you would know is by measuring (to be discussed in due course), as you can’t be everywhere at once.
You should also try to systemise the praise so as not to leave people out.
One simple example is that every night I drop a line to every store or department that has had a good sales day; I congratulate them and thank them. It’s as easy as that. Another example is the gold aeroplanes we give our high-flyers for going the extra mile. They wear these ABCD awards ( “above and beyond the call of duty”) proudly on their uniforms and customers then ask how they earned them.
Three: communications should be looked at separately and divided into four. There are two types of “downward” communication: information and instruction (telling the troops about the organisation and explaining, for example, how to use the tills), both of which should always be done in as friendly a way as possible. Are these communications as simple, short and infrequent as they might be? Does everyone see them who needs to? How do you know? Then there is upward communication, so you can be told when your people are upset, worried or angry — and also, importantly, when they have a good idea. And finally, there is sideways communication — how departments talk to one another.
Four: rewards should be linked to performance whenever possible; it is no good asking your people to give great service if you only reward sales. And nobody must earn less than the real living wage (with, ideally, the opportunity to earn more).
Five: finally, and the most important element, we expect so much from our people — so surely it’s only right to be loyal to them at every opportunity?
If you pay attention to these five areas, your business will flourish, your people will stay with you longer — so your recruitment and training costs will be lower — and your staff will be happier and give your customers better service. Also your shrinkage (the polite term for theft) will be reduced significantly. What’s not to like?
A trip to Asda convinced me that people matter most
Sunday 16th January 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
Having read In Search of Excellence in 1982, I took apart and rebuilt my then tiny business because I was so convinced that the authors, Tom Peters and Rob Waterman, were right. I tried lots of new things. Granted, some didn’t work — but most did. A fair few were considered to be “off the wall”, according to conventions of the time.
One that received a lot of publicity was our policy of giving the use of a Rolls-Royce on a rolling basis to the store of the month with the best customer service. The perk went down a storm after I also agreed to cough up a petrol allowance, because the winners couldn’t afford to drive it unless I did. There were stories of colleagues taking the mother-in-law out for tea to make a good impression — and indulging in all kinds of courting rituals. A lot of fun was had.
Inevitably, this was a disaster waiting to happen. After five Rollers were written off, the last in quite a serious accident (through no fault of the employee concerned), we decided to call it a day — much to the relief of Peter, our long-suffering insurance broker.
After that, we invested in more stationary perks. We bought the first of our many holiday homes, a lovely beach house on the south coast, ignoring the strong advice of our bank manager at the time who protested that we “really didn’t have to do this” — which, of course, was entirely the reason we did it. This meant our people could, without exception, have a well-earned break — typically, a second holiday they might not otherwise have been able to afford.
Then, in 1992, when the business was quietly flourishing and we were becoming a small chain, a friend asked me to meet the legendary Archie Norman, who had just moved to Yorkshire to run Asda — which had big problems. He was a McKinsey man who, aged 32, had taken the brave decision to join the Kingfisher retail group as finance director, without any formal accountancy training, and was now ready for a bigger challenge.
Archie came to supper and didn’t say much, so I just nervously talked about what I was doing. He took copious notes. The meal finished with me being invited to lunch with him and his board at Asda House in Leeds. At that lunch, he asked me to advise Asda alongside the McKinsey team of management consultants he had in at the time.
My mother was by then very ill with cancer, but she was impressed when she saw Archie’s letter confirming the “job”. I think the third-party validation showed her that I wasn’t completely useless!
My remit at Asda was quite unusual but suited me perfectly. Archie told me to do anything I wanted in the company and write him a monthly report with my suggestions — which I did. We debated them loudly (both) and emotionally (me), much to the amusement of his colleagues in the open-plan office. I remember one slightly alarming incident very early one morning outside the Pudsey store, when I was surrounded by suspicious security staff who wondered what the heck I was up to, checking out the car park as if I were casing the joint.
Archie, now chairman of Marks & Spencer, has integrity, is an incredibly hard worker and is very bright. He was a great role model for me, too. Coming up with so many ideas for him — ideas he was willing to try — was very satisfying. Luckily, the majority worked.
We discovered that although Asda, with its 70,000 workers, was completely different to my business, many ideas were transferable. Two of the most effective were removing hierarchies by calling everyone a “colleague” — which may seem trivial but did make a real difference on the ground — and the “Tell Archie” suggestion scheme. This generated thousands of ideas from the troops, who now had real access to the top team and so could contribute to the organisation’s development directly.
There were many fine people working at Asda at the time, and I was only a small part of the jigsaw — but we did some great work, and had some fun, too.
I remember trying to narrate a customer service video with the great Asda chief executive Allan Leighton dressed as a rather attractive (female) checkout operator, with me utterly failing to keep a straight face.
The upshot of all this was that morale improved, profits improved and Asda ended up being the biggest turnaround in British retail history when it was sold to America’s Walmart for £6.7 billion after just seven years.
Having seen both my tiny business and Asda’s huge one benefit from treating staff well, I knew I was onto something. I had discovered that it was all about the people — that bosses could, without any doubt, see a huge difference in output from their workers depending on how they treated them. In fact, this was the most important thing I have ever learnt in business.
The 7 ways I saved my fledgling business
Sunday 9th January 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
When I opened my first shop at London Bridge in 1978 aged 19, I quickly realised I had a lot to learn. Although I loved selling, and although I believed I would have to give customers great service if I wanted them to return, I really didn’t have much of a clue.
This was very different to my earlier trading experiences. I had done well since the age of 14 at the boarding school I attended in Bristol. I loathed sport, so on games days I hired a big Mercedes to drive me around all the hi-fi shops in the area. I would buy up electronics they had taken in part-exchange, refurbish them and resell them on through Exchange & Mart magazine, as well as to my school friends.
By the time I was 17, I had three lads working for me on commission and was doing OK. My £10 stake had multiplied hundreds of times, and thanks to a little discipline on my part, I managed to save 50 per cent of the profits. This took pressure off my parents, who were having a tough time financially.
After I left school, one of my suppliers gave me a job at a shop in the City of London. A few months passed and I was champing at the bit to find a shop of my own. On my travels, I discovered that a tiny unit at London Bridge might be coming available and asked to see the guy who owned the lease.
This turned out to be a wonderful man called Vic Odden, a successful photographic retailer. I invited him to dinner. Over this seminal meal, he agreed to lend me £20,000 and let me take over the lease to his spare unit without me having to pay “key money”.
However, he wanted 74 per cent of the shares and I had to put my school trading profits into the business, which I happily did. And after a fun couple of years thinking “this is easy”, the problems started. I confused turnover with profit — a pretty basic mistake. You can “see” the takings, but not the losses.
I didn’t have an accountant, only an unqualified bookkeeper. My then auditor took little interest and barely looked at what I was doing. There were no controls in place to make sure I kept track of cash or stock, and theft was rampant. And no one — meaning me — was keeping a sharp eye on costs. Lastly, up to this point, I had never heard the magic words “cashflow forecast”.
All in all, it was a disaster and very different from buying for £10 and selling for £15, which had been my trading experience so far.
Although we had problems, it never occurred to me to throw in the towel until I visited a wealthy mate’s dad for advice. He told me to do just that.
To this day, I’m pleased to say I have a fair amount of confidence, which isn’t always matched by my ability but has still helped my career (thankfully my wife is the opposite — wiser, and far more modest). So I approached a former schoolfriend who had been successful in property, and he kindly lent me some short-term cash to give me breathing space. I will for ever be grateful to him.
What did I do with this reprieve?
One: I stapled three sheets of A4 horizontally and divided the combined whole into 13 vertical columns, each representing a week. At the top, I put our expected takings, and underneath our expected outgoings. I carried the net balance from the bottom of each column to the top of the next so I could predict my expected cash position over the period. And it was frightening!
Two: I could see that it would help to postpone the outgoings on the chart, so I had to delay my payments due.
Three: I hit the phones asking for extensions from suppliers. I happily (and gratefully) offered to pay interest for the extra time I needed. I sent post-dated cheques so they would feel secure, and didn’t bounce a single one.
Four: I always took calls from nervous credit controllers who had heard I had problems. I was always honest with them, while obviously keeping the conversations as upbeat as possible.
Five: I signed up a fantastic firm of accountants. The partner who handled my business, Geoff Barnes, remains a close friend to this day.
Six: I extended our year-end to give me time to generate profits and climb out of the hole I was in.
Seven: I hired a qualified accountant to work in the business. Hooray!
The rest, as they say, is history.
Postscript: I repaid Vic’s loan in nine months. And I subsequently paid him handsomely for his shares, not begrudging a penny.
But the moral of this story is about determination. There are events and twists of fortune we can’t change in life, and I have been blessed in many ways for sure. But there is also making one’s own luck. I wasn’t tall or good looking, I was rubbish at sport and my parents weren’t wealthy. But I was a determined little so-and-so.
Customers and staff should be like your children - equal
Sunday 2nd January 2022 - Julian Richer, Founder & Managing Director of Richer Sounds
Talk about a new year challenge. I’m taking over this column from my good friend James Timpson, who has done such a great job writing for Sunday Times readers in the past year.
I know I have big boots to fill.
For those who don’t know me, I’m a small retailer (5ft 7in) selling hi-fi, home cinema equipment and tellies, although I very much hope a good few of you are already customers of mine — and happy ones.
I started my business with £10 aged 14 to take pressure off my parents, who had sent me to a very expensive boarding school they could barely afford.
Fast-forward to the present day and Richer Sounds turns over circa £200 million in a ferociously competitive business environment. The chain is the biggest hi-fi retailer in the country, is proud to have been given a Royal Warrant from the Prince of Wales and has been voted retailer of the year by the Which? consumers’ association’s members for six out of the past 11 years.
Most importantly, it gives 15 per cent of profits to charity, and as of two years ago it’s majority-owned by the staff.
I’m still managing director, working very closely with Julie Abraham, our chief executive, and David Robinson, our chairman. I also oversee the eight not-for-profit organisations I’ve founded, and in addition, I have a passionate interest in both responsible capitalism and social housing.
Over the coming weeks and months, I will try to dispense what I hope will be helpful advice from lessons learnt running a business for almost 50 years.
My earliest childhood memory is of my parents — who both worked at a Marks & Spencer’s branch in Kilburn, north London, where they met — talking about its then chairman, Simon Marks, Baron Marks of Broughton. I know I was young because he sadly passed away in 1964 when I was five.
He would turn up at stores without notice in a huge, chauffeur-driven Rolls-Royce. His first job would be to check that the staff loos were up to scratch, and then that the canteen was offering decent hot food for the troops. This made a big impression on my folks — and evidently on me, too, because I remember it to this day.
In 1982 I read In Search of Excellence, by two bright young academics, Tom Peters and Rob Waterman. It was a bestseller then and a hugely influential book of its age.
The authors had analysed the greatest companies in the US at the time and discovered the two things they had in common were that they all treated their staff and customers well.
This might not sound revolutionary today, but it was a eureka moment for me. I took a microscope and a knife to my business and never looked back, both with regards to my thinking and management style, but also our profits.
Everything from then on would be absolutely focused on these two groups of wonderful people: our customers and our employees (whom we henceforth called colleagues). I am often asked which is the most important.
My stock reply is: “Try choosing your favourite child.” I regard them as equal.
In practice, from a customer service point of view, it means working hard to achieve both consistency and a great experience, which are different things.
The former can take you in the direction of being robotic if you don’t manage it carefully. The latter is all about tuning into what customers want and trying to give them a great, personalised experience.
We do not always get it right — and that’s why it’s crucial to measure customer interactions, making it easy for them to tell you when you’ve messed up.
In our case, that means making sure that every customer’s receipt has my email address on it. Believe me, I am quick to hear about it if we get something wrong, and I’m pleased to say that, over the past year, we have had a 96 per cent hit-rate in terms of turning around these disappointed customers. For our customer service team, it’s a big job.
When it comes to colleagues, I concluded many years ago that staff motivation has five key components. Work should be as much fun as possible. Staff deserve systemised recognition — straightforward ways of complimenting them on their performance. Good communication is essential, both upwards and downwards. Rewards should be both relevant and linked to achievement. And finally, bosses should be loyal to their workforce.
The postscript of my personal story concerns Steve Rowe, the terrific M&S chief executive with whom I’ve had the pleasure of working closely as an adviser. Given my family history, he is convinced that I must have been conceived in the changing rooms at his Kilburn store, and has promised to put a plaque up to commemorate this important event. I’m still waiting.