Risk and Reward
Part 3 in our series of interviews with Martin Ainscough
The other thing I’m kind of fascinated by listening to your story and the time we worked together is your attitude to risk and reward. You said earlier, “that was a gamble I was prepared to make” and we’re talking today because I met with Bill Parkinson and had a conversation with him because he’s written his book
Yes I’ve read it….it’s a really good read.
I’m really fascinated about this whole risk and reward and whether people who grow their businesses to such an extent have a different attitude to risk and reward and making the most of the opportunity.
What I say whatever you do don’t ever risk everything on anything.
So the stuff that I was doing, although it had a risk element to it, we’re talking about the bigger deals, in reality cranes were always very saleable.
It got to the point where I had guaranteed buy backs off of manufacturers so if the world collapsed I could send them back but you only get that when you get to a certain position.
In the earlier days, the manufacturers wouldn’t do that. We were a much smaller player but it was always the knowledge that you were buying something with good residual value. You knew you weren’t buying something that tomorrow wasn’t worth anything and in actual fact in the inflation days it got to the point where I was buying cranes and selling them 5 years later getting more money than I’d paid for them.
Don’t get me wrong, yes it was a risk but it was a calculated risk.
It was a progression. In reality the time that we risked breaking the company was when we bought Grayston White & Sparrow because had we not got the integration right, had we not taken all that cost out, had we not got the rates up, we could not have serviced the debt so that’s the reality.
That’s probably the biggest risk I ever took. That could have finished the business if we’d got that wrong. But we were so confident in our ability that we were good at what we did. Good systems, good people ….you know we were just confident that we could do it.
Why do you think you were successful?
Everyone has their different story, I only have my own. If I look at it and think why do I think I’ve been so successful?
I’m not the cleverest guy in town, not at all, I left school at 15 no qualifications, I was a sham, quite a shy kid, I was little.
There was nothing at school that would have ever said this guy is going to be successful in business, but I wanted to be, that’s the thing, whether it’s because I was little, whether it was because I wasn’t sporty, academic but my dad had this business that I had always said that I was always so proud to see my name on this wagon and that’s true.
My ambition was to go to work in a suit and tie, and look at me now I don’t need to wear a tie, why do I still wear a tie. This is me because I’m doing business, I’ve got my business head on.
When I go home I’m different person.
To me it’s all about the fact I left school I went to work in the scrap yard first of all, worked outside in the yard for a couple of years but even then I was looking at how things could be done quicker, better.
One of my uncles went off sick and they needed someone to answer the phone and even then and I was probably only 17, I thought right, I’m sure I’m not unique in this, by the time my uncle comes back from his sickness everyone is going to be asking to deal with Martin; that was my little thing.
“Martin speaking how can I help you …. “
Fantastic service, good with the drivers.
It was like the stock exchange to me. I had 2 phones going I was writing things and even then they all laughed at me.
It demonstrates an attitude of mind.
In the old days it was only a little scrap firm, a bit of builder’s merchants and the odd crane and someone would ring up and say I want 10 bags of cement, 2 tonne of sand whatever and you’d write it all down, who is it ..oh it’s Jim Smith, thanks Jim.
So then you’d say to the driver, right lads, get your scrap of paper and tell them 10 bags of cement, 2 tonne of sand, you’d get that on then you’d get another book out and think where did he say he wanted it going to I’ll ring him up, who’s got Jim Smith’s number, do you understand what I’m saying?
So I thought, this is stupid, I’m writing all this stuff, 3 or 4 times, I’m not always getting all of the information because I’ve not got the prompt.
So I designed what we called an internal order action don’t ask me where I got that from I was only 17 and they all laughed at me but used it for years after, of course they’ve got computers now.
So all I did obviously, it’s not rocket science is it? The bottom sheet was a certain colour, right go and load that up on your wagon, he’d come back I’d keep the master copy the top copy I would give the other 2 sheets to take with him. Get a signature off the customer. We’d cut out so much, it’s only little things but having that attitude, that mindset to say how can we simplify this how can we improve the communication.
So you were really setting goals; working out how to improve the business. You were planning all the time.
Absolutely planning all the time.
I had confidence, confidence in my ability.
Not blind confidence, but confidence in I’m really working at this now, I’m demonstrating that I can do it to a degree and it then its progresses in steps.
You’ve got to have confidence in what you’re doing.
Any business to be honest with you needs to look at a 3 year forecast.
I understand when it’s smaller companies but monthly management accounts it’s a religion its absolutely a religion.
I can remember when we first started having board meetings in the 80s people thought we were trying to be big time, we weren’t, this was time set aside to look back and say what have we done last month, how were we doing, what are we doing going forward. Things change, what do we need to improve on?
We were always looking at the longer term as well as the history of what we had been doing and I would say to anybody that any business of any scale whatsoever you must know your numbers.
It’s all about the numbers. The rest of it is, there’s an old saying it’s all about the cash and the rest is conversation and it is. So it’s a plethora of different things. The most apt description I’ve got for doing what I’ve done in my life and what other good Chief Execs do, is to be a good one you have to be the conductor of the orchestra, you shouldn’t be playing an instrument.
I used to interview people and trying to impress me by saying I’m quite happy to roll my sleeves up and I won’t change that and I used to think you’ve just lost yourself a job, I don’t want you. You’ll not see me with a pair of grubby hands because I’ll make sure somebody else does it efficiently.
Read the rest of the series here
An Interview with Martin Ainscough Part 1 – Growing the business
An Interview with Martin Ainscough Part 2 – Finger on the pulse
An Interview with Martin Ainscough Part 3 – Risk and reward
An Interview with Martin Ainscough Part 4 – How training helped
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