The Managing Director's Handbook Part One

It is almost five years now since I became Managing Director of Severn Delta on completion of a MBO.

The exact anniversary falls on March 27th to be precise.

As this landmark approaches I am thinking over the lessons of the last five years and how I can distill these down into useful guidance for others new to the role of MD, whether that be at the helm of their own company or not.

I found myself in odd territory. Yes we had just completed a MBO but the entity we had bought had never traded as an independent company, was not organised to function as an independent company, did not have systems independent of the now former-parent company, and there was the small matter of it having been in administrative receivership!

I stood at the helm of our new venture without a beginners guide to being a Managing Director to hand and without having first completed a crash course in turnarounds and start ups. This was my first directorship. I was 34 years old. For the record I did not make it to University and have not completed a MBA. (Although I admit that my sidekick in all this, Martyn Shiner, could tick a few of these boxes!)

Living within a failing organisation for three years prior to the deal, the fire storm birth of Severn Delta and the treacherous seas we launched our vessel upon provided all the lessons required.

Even if I had no handbook, no guide, I did have a clear idea of what a Managing Director was NOT. So that is where I started and thus where I will start now.

With a warning:

You are not cut our for this role if:

You do not have a head for strategy, and cannot spend a big percentage of your time with your head in the future with your hands holding firmly onto today.

You do not have a head for numbers, if a P&L is alien, cash flow a mystery, a Balance Sheet gobbledygook.

You do not have commercial verve and an ability to think about how every aspect of your business is affected by every decision you take.

You think marketing is bullshit.

You cannot admit making mistakes. Particularly the big ones.

You cannot learn from your mistakes. Particularly the big ones.

You cannot fire people who have worked closely with you for many years but need to go.

You cannot look the Bank in the eye having burnt a mountain of their money in the first 9 months and convince them to keep faith, that they will get their money back.

You cannot tear up a carefully crafted plan and start again in a big hurry when it doesn't pan out.

You think this job is about just keeping the day to day steady.

You think technology or software will solve the problems in your business.

You cannot lead, cannot take people by the hand and say "come on jump out the window with me it will be alright".

And most of all,

If you do not have a unfailing belief that you will succeed one way or the other, because if you doubt you will not succeed.

Even in the darkest days of our first year when the loss was huge, the debt enormous and time quite frankly running out, I did not doubt for a moment that we would succeed, and nor did the man standing beside me.

One of these is a great help. A damn good Financial Director who will tell it how it is, with a straight bat. If he is also an open source obsessive with a vision consider that a bonus!

Of course in my case the man beside me had committed cash to the venture as well so it was his money we were burning as well as mine (although most of it was HSBC's!).

He is fond of saying "Debt focuses the mind."

Damn right. More to follow.