10 Years On: By Royal Appointment

Just over a decade ago, I was honoured to be asked to speak at the National Equine Forum, one of the most prestigious events in the horse industry. The event was attended, as usual, by HRH The Princess Royal. and, unusually, would be held at The Royal Society in London. Here’s the only news source I can find today that verifies this story.

My speech was entitled ‘How to Run a Successful Equine Business in a Recession’ and, as a speaker, I was asked to meet Princess Anne afterwards – she was very complimentary, by the way. Every year since, I believe the event has returned to its usual venue of the Mechanical Engineers’ Institute on Birdcage Walk (although this year’s event was, of course, virtual) which means I’m also able to say that I’ve spoken at The Royal Society, the very epicentre of science since 1663. From Benjamin Franklin to Charles Darwin to Tim Berners-Lee, the list of people who could say the same is about as illustrious as one can imagine.

A couple of years later, rather less-than-illustriously, the laptop I’d written it on gave up the ghost and died on me. I hadn’t backed it up and, by the time I came to rebuild the data on its replacement, I thought I’d lost the speech. As Edmund Blackadder once exclaimed, ‘Bugger!’

Fast-forward to this morning when I was searching through my archives to find an elusive file for a thing I was doing and what do you know, badly filed in the darkest recesses of a subfolder entitled ‘Meetings’, I found it!

Obviously a lot has changed in the last ten years so I found myself reading it with slightly gritted teeth, hoping that it hadn’t aged terribly. I’m pleased to say that not only was that not the case but the points raised seem as relevant today as they did a decade ago when the world was, in so many ways, such a different place.

Anyway, without further ado, here’s the speech. I hope you enjoy it as much as I did writing it – and perhaps rather more so than I did delivering it…

At the lectern of the 19th National Equine Forum, at The Royal Society, March 8th 2011. Photo: Craig Payne Photography

How to Run a Successful Equine Business in a Recession

My Lords, Ladies and Gentlemen,

Thank you for asking me to come to speak to you today on what was originally going to be the grand and far-reaching title: “How to run a successful business in a recession”.  When I first heard that title, I wondered if I should presume to pontificate on such a topic. 

By adding the modifier ‘equine business’, the subject moves away from the standard and the mainstream towards the niche, the specialist, the quirky – which is an area I’m much more familiar with!

I also feel that the very notion of an ‘equine’ modifier is something of theme in itself – to which I will return:  The distinction, if there is one, between ‘our world’ and ‘the rest of the world’.  

I’m sure the academics amongst you would expect a well-prepared student to gain extra marks by attempting to substantiate or even challenge the premise of a question before going on to answer it. 

The most problematic of all the terms in the title is the word ‘recession’.  Firstly, the UK is not technically in a recession, as I speak – although we’re still wary of a ‘double dip’ taking hold.  Whether or not the equine economy is in recession, nobody really knows and yet, for a “£4bn economy”, it strikes me that we should know much more than we currently do.  We have a variety of surveys but no real indices of performance.  

Does recession put us at most at risk of belt-tightening or will our customers deny themselves everything but their horse? Are any more people taking up riding today or are many riders walking away?  I really don’t know.  No organisation seems to be measuring these effects in any meaningful way.  Whatever is being measured, could certainly be better shared.

Regrettably, there is almost no regular, independent data about the equestrian retail economy.  We piece together a permanently changing hypothesis, based on our own experiences and morsels of information from trusted suppliers.  

I can’t claim to be too frustrated by this, as it has always been thus but I am a little envious when I see more concerted attempts to quantify the ongoing performance of other specialist markets.

I’d also question what our definition of ‘successful’ is these days.  Significant growth is usually the simplest determinant but in the current circumstances, many would argue that profitability will do just fine.  To others, it may even be just surviving in business for another year.  

If this sounds unambitious, I would urge you to leaf through the Plimsoll Report on our Industry.  It paints a grim picture of an industry seemingly over-populated by mediocrity and apparently tolerant of the reduced margins that accompany an over-supplied and stagnant market.

In the quest for success in any economic environment, I’d say that businesses have only three basic forces that operate on us, over which we have some control.  The economist’s twin favourites of Supply and Demand are there – as well as the bit in the middle, Operations.

Our Supply trade is still something of a cottage industry which remains heavily skewed towards the small operator.  It seems that we are only now at the beginning of a period of consolidation that has been in effect over the last two or three decades in other, comparable, specialist markets, such as the camping and cycling markets.

In a downturn, difficulties are most keenly felt by those who are smallest or least professional – and I appreciate that those two terms do not mean the same thing. 

It’s important, then, that every company should tread very carefully in their dealings with any suppliers that are the most susceptible to the icy economic winds.  There are too many small companies offering too many alternatives of similar products, resulting in too much undifferentiated competition and resultant commoditisation. 

This magnifies the risks of suppliers’ difficulties adversely affecting retailers who placed too much reliance upon them.  

Whatever the economic climate, it’s always good business sense to think very carefully before deciding about which suppliers to appoint and which to retain.  In a recession, that process becomes even more crucial.  

Your operations, literally, are everything you do and ‘you’ is the operative word here.  It’s the area over which you have the greatest control.  You can have an effect on your processes simply by deciding to have an effect on them.  Suppliers and customers can be influenced but very few companies would ever claim to be able to control either party.

In the good times, there is always the reassurance that growth is there to be achieved, as long as it can then be handled.  Whether it’s extra computing power, a new fork-lift truck or an administrative position, these are significant step-changes that accompany linear growth.  You can very often go from struggling to cope without the resource in question to struggling to justify having it when it arrives.  Generally, as long as the problem your new resource leaves you with is better than the alternative you’ve avoided, you’ve made the right decision.

As the economic cycle slowly turns, aspirations for the future are not as easily funded – every resource needs to be justified by the present, in case that’s all you can reasonably expect.  If that means the fork-lift goes back and the admin tasks need to be shared out again, that’s not an admission of failure, it’s just a recognition that the context has changed.  

The level of demand is expected to reduce in a downturn.  When demand reduces, it risks becoming outstripped by supply and so, prices must fall.  You must lower your prices and in doing so, probably your margins.  It’s simple economics.

Well, I can’t wholly say that’s not true but I can say it’s not the whole truth.  Simple economic effects will only be solely in evidence when the world is full of simple economists and, happily, that’s still not the case.  The Marketing world is a much subtler and more nuanced place to live than the Economist’s world.  We also deal in products that are decisions of the heart more than they are of the head and with customers who have a living, breathing horse to care for rather than an asset to maintain and protect.  

Yes, price competitiveness is perhaps of greater importance today but companies ignore at their peril the importance of customer service, whatever the market conditions.  Reducing prices and margins is not an adequate justification for also reducing efforts to build a positive customer relationship.  If all around are losing their heads in this regard, now is exactly the time to make sure you care more about your customers, if you want to see them more often.  

We pay attention to the price points for each category of product we sell.  It won’t shock you to learn that we sold far fewer rugs over £100 last year, compared to the year before.  Nor will you be astounded to hear that rugs under £50 were much, much more popular over the same period.  Such effects have only to be monitored as closely as possible in order that an ongoing strategy can be formulated around them.  The effects may seem fairly obvious, but with the benefit of a few specific numbers, you can be surprised to see by how much these ‘obvious’ effects are in evidence.  

The absolute favourite tactic of retailers everywhere to stimulate demand without appearing to reduce prices is ‘Bundling’ and it’s used everywhere:  3 for 2 offers, starter kits, family packs and software packages.

Bundling does come at a reduction in margin – the lower unit cost is what makes it attractive to the customer – but it’s a means of eliciting more value more quickly.  Who really needs a stock of three bottles of shampoo in their bathroom?  Or, for that matter, two?  We’ve grown used to it because as consumers, we’ve agreed that if we pay up front for more stuff, we get even more of it free.  

I appreciate that not all business are too concerned with issues such as holding stock but even service sector businesses need to understand that price points are vital to continuing to attract customers who now can’t justify the prices they used to pay.  If the price tag is the barrier, offer reduced options that are cheaper but at the same margin, one-hour riding lessons instead of two, that sort of thing.

If you want an example of service bundling, how about that idea that was invented to keep football teams afloat in the years before sponsorship and television money – the season ticket?

Whatever the state of the economy, businesses always have to perform or eventually, they will cease to exist.  Recession merely brings a heightening of this ever-present reality, a greater possibility that your company will fail.  At the same time, it brings a greater possibility that your competitors will fail, which in turn presents extra possibilities that your company will succeed.  We tend to think of Opportunity and threat as polar opposites but they never exist in isolation of each other.

I mentioned earlier a theme: the curious relationship between the ‘horsey’ and the ‘non-horsey’.  If we are truly to achieve success for equestrian businesses, I must take this opportunity to impress upon us all to better engage with all those in our world and become more inclusive to  those from the wider world.

The sphere we inhabit is different from the wider, mainstream world and yet it is a subset of that world.  In the horse, we share a key differentiating factor from the rest of the world.  We believe it gives us a common reference point and a set of shared values that are distinct to the non-horsey world.  

It’s very reassuring to see the equine community gathering together on occasions such as this but like any community, we must acknowledge that ours has had its fair share of net-curtain-twitching and perhaps even the occasional garden-fence squabble over the years.  With all that in mind, one might take the view there is less solidarity across our community than we’d like to think.  

One might go further and conclude that the very notion of a single, convenient ‘equine’ umbrella to distance ourselves jointly and defiantly from the rest of the world seems more than a little illusory.  ‘Riding’ is really a multifarious, mongrel construct, made up of a slew of different disciplines and, of course, the unaligned, much-maligned ‘happy hackers’.

Even if the horse does define us all as an extended family, such a kinship is both a blessing and a curse.  Like an island community, we very often seem to draw comfort and strength from our differences from the ‘mainlanders’ who “don’t understand our ways” and we are often quick to highlight our differences from the mainstream.  

I’ve heard many ridiculous statements over the years like “horsey people don’t have time for the internet” or “our customers don’t want that kind of service – they can get that at ASDA”.  

If you looked at our customer database – of over a quarter of a million people – you’d see that many of them live in normal houses in suburbs or even towns and cities.  You’d know that most of them are able to use the internet and you’d conclude that when they’re not around horses, they like to immerse themselves in the subversive counter-culture by visiting such places as Tesco, McDonalds, IKEA…even Primark.  I would add that many of them wondered what all the fuss was about during the hunting debate and a significant proportion even believes, quite firmly, that hunting should remain banned.  

It’s very easy to overlook the huge number of riders and horse owners who, rather inconveniently, don’t care about any of the disciplines and wouldn’t recognise a British Olympic rider if they met one while out on a hack.  This part of the market, our customers, our community views their horse, as an escape from the rest of the world, not as an outward expression of belonging to an artificially-constructed ‘horse world’ or, heaven forbid, any reason to indulge in competitive activity.  

Should that really be such a surprise to us?  Do we really want our community to consist solely ‘the right sort’ of people if it is to flourish?  Can we afford to be too choosy in a recession?  In fact, forget the economy.  Do we dare risk turning away the very people who may even assure the future of equestrian sport itself?

I’ve always felt that above all else, business in general – but retail in particular – demands and thrives on brutal honesty.  If too few people are visiting your shop, who or what do you blame?  The weather?  The economy?  The Government?  Suppliers?  Perhaps even the stubbornly unco-operative customers themselves?  There comes a point where you have to accept that by doing things differently yourself, you can improve the situation.    

Honesty itself won’t add a penny onto your revenue but it has a strange habit of pointing you towards the ideas that do put more money in the till.

As a marketer, it’s natural, even tempting to want to segment the market in which one operates and the horse world with its myriad of different sports seems ideally suited to this.      

What can be less easy to do is to gain that same level of connection with all customers at the same time, from those who would define themselves by their chosen discipline but crucially, also those whose passion is just as fulfilled by ‘looking after’.  

Faced with this challenge, the few elements that I’ve observed to be truly common across the whole of the horse world appear to be grooming, mucking out and a compulsion to support anyone who helps horses.  A common denominator seems to be to do with clearing up a mess of one sort or another.  It strikes me that it neatly highlights a necessary pragmatism that defines those who spend their time around the horse and it’s very similar to the kind of pragmatism that seems to me to be one of the most vital factors in achieving success in any business at any time, not just an equestrian business in a recession.

Thank you for listening.

The speakers at the 19th National Equine Forum, at The Royal Society, March 8th 2011. Photo: Craig Payne Photography
HRH The Princess Royal at the 19th National Equine Forum, at The Royal Society, March 8th 2011. Photo: Craig Payne Photography
The programme of the 19th National Equine Forum, at The Royal Society, March 8th 2011.

CSG: The First 85 Years

Posted on http://www.csg.co.uk/blog on November 6th 2019

https://www.csg.co.uk/blog/csg-the-first-85-years

2019 is an important year for CSG – it’s the 85th anniversary of our birth! ‘Hampshire Cleansing Service’ was founded in January 1934 by Edgar ‘Bunny’ Hart, the patriarchal figure of the family that still owns the company today. In that time, while so many aspects of daily life, business and waste processing have changed beyond recognition, the basic principles of the Cleansing – and the Service – remain very much in evidence today.

csg_lores-5337-800x426
CSG (Cleansing Service Group) celebrates its 85th birthday in 2019.  Photo: CSG

In 1933, Bunny Hart was a man in a hurry. Born in 1898, the seventh child of a successful butcher in London, he’d already crammed a lot into his first thirty-five years. He’d served in The Great War from 1917, become an expert skier in Kitzbühel, graduated as an engineer in 1923, taken a job in Chile in 1924 and, when the post became untenable, worked his passage as he toured around North and South America for the next two years. Upon his return to Britain, he started work for a tanker manufacturer in Southampton and began to court the woman he would eventually marry.

Despite the respectable job and steady relationship, his independent spirit hadn’t waned – he wanted to control his own destiny. The contacts he’d generated around Hampshire had convinced him that there was was a business opportunity for emptying the contents of the products he’d previously sold. Collecting sewage could never be described as attractive work but he would almost certainly have been encouraged by the old adage “where there’s muck there’s brass”. The growing levels of regulatory reform, even then, were an encouraging sign that unprofessional competition would be prohibited and it meant that, if Bunny could earn a carrier’s licence, he was sure he could build a healthy business.

Evidently, Bunny’s acumen and professionalism were impressive enough to convince the licensing body to award him a licence towards the end of 1933, sufficient for his needs. Now, all he needed was a vehicle. On 2nd December, he managed to procure a second-hand, solid-tyred 800-gallon Dennis tanker from Wokingham Rural District Council for the princely sum of £5. It’s difficult to imagine a real-terms value of such a figure without knowing the effects of over eight decades of inflation so you may be surprised to learn that £5 then was the equivalent of just £250 today. Compared to the 25 guineas (the equivalent of £1,330 today) to buy the latest ‘2 in 1’ gramophone and radio set from His Master’s Voice, Bunny’s £5 tanker still seems like a real bargain.

Of course, it wasn’t quite as cheap as it sounds – the ancient tanker needed to be updated and that’s where the real costs were. Renewing the old hose cost £47 7s (£2,400 in today’s money) and replacing the impractical solid tyres with a modern, practical pneumatic set cost a rather eye- watering £104 18s 4d (£5,300). Finally, sign-writing costs were £4 2s 6d (£209), a canny bit of marketing spend to publicly announce the new company everywhere the tanker went. The legend of the ‘£5 tanker’ sounds romantic but in reality, it represented what might today be considered an initial investment of over £8,000. Not a lot to start a business, perhaps, but quite a lot of money to stake on a firm belief of success.

On January 1st 1934, with his Dennis tanker upgraded and his ‘B’ licence effective, Bunny was ready to take on the waste disposal industry. It has to be said that 1934 wasn’t the most encouraging time to start a business. The Wall Street Crash was only a few years before and Britain had endured three years of economic decline as a result of the Great Depression. Then, just as the economy was recovering, tensions began to rise again in Europe as a resurgent Germany fell under the spell of Adolf Hitler, barely fifteen years after the Armistice was supposed to have put an end to the threat of more war. Perhaps this all seemed a world away from rural Hampshire as Bunny pursued his ambitions. Whether or not such concerns formed part of his thinking, they would not stop him trying.

He knew that, as they said about the Gold Rush, a century earlier, there was money in them there cesspits – but unlike 1840s California, the ‘gold’ was being constantly replenished. And so it proved. As the 1930s went on and the world moved inexorably towards another war, Hampshire Cleansing Service had indeed begun to grow as Bunny had intended. At the outbreak of war in 1939, six vehicles were operating around the county.

It couldn’t be denied that the war footing was good for business. With so many army bases, airfields and camps becoming established in the area, a huge increase in demand for sewage collection was, literally, a natural consequence. By the end of the war, the company employed a hundred people, the fleet had risen to thirty-five vehicles, and coverage had extended to three counties.

Unsurprisingly, the post-war years saw the military sewage collections dwindle but crucially, the company had become capable enough to replace that revenue with work from schools, factories and holiday camps. The fleet extended to a range of different vehicles, capable of extracting and dispensing the matter in different ways but the same basic principles of ‘Cleansing’ remained – and wherever people were gathered, the potential for another sewage collection existed. It may seem to have been a rather rudimentary business model but it’s easy to overlook another vital element – ‘Service’.

It’s unlikely to have been by accident that Bunny ensured that the word ‘Service’ remained in every iteration of his company’s name. His years as a salesman will have convinced him that sales do not just happen mechanically; they are agreed to by people, placing their faith in the quality of a job done well, assured that the experience will offer the reward of diligence and integrity beyond the basic process. Particularly in the case of domestic customers in remote areas, with their cesspits, the regular, reassuring sight of a friendly driver has defined their relationship with our company, retaining their trust and their custom over many years.

Throughout the 1950s and 60s, the company continued to seek out further opportunities to grow but by the beginning of the 1970s, Bunny had become gravely ill. When he died in 1971, he left a hugely successful legacy – a company that had begun to develop its capabilities and diversify into other areas of waste disposal. For some time, it had became necessary to add ever more specialist knowledge in order to operate in each specific sector of the wider waste industry.

In the years that followed, a wave of new regulations on employee health & safety, pollution, the deposit of poisonous waste and many more must have seemed frustratingly restrictive, compared to the ‘good old days’ of simply dispersing sewage into the field of a friendly farmer – but it was a benefit in disguise. Just as Bunny had benefitted from the the protection from unprofessional competitors that his licence gave him in 1934, the industry was challenging its most competent exponents to expand at the expense of those who could not adapt to the tighter regulations. Few companies were better placed to meet these challenges than the newly-assembled ‘Cleansing Services Group’.

Over the last five decades, the market has continued to sub-divide into more distinct specialisms, regulations have continued to strengthen, CSG has continued to add greater capability to the group and performance has continued to grow. Were he alive today, Bunny Hart may be amazed at the depth of knowledge now required in order to operate in so many sectors, the level of expertise in chemistry, logistics, environmental law, employee training – let alone the disciplines required to support it all, such as funding schemes, HR policy, social media management and many, many more. Given his fore-sightedness, perhaps he might not.

In 85 years, CSG has undergone a metamorphosis from a small, local provider of a specific service to a huge, diverse amalgamation of a wide variety of specialisms, all loosely connected with the world of consumption and waste. In a quirk of fate, one of the most innovative areas of our operations today is the same, necessary removal and treatment of sewage. Now, as it ever was, there’s still ‘brass’ wherever there’s ‘muck’.

In 1934, a very different Britain was still shaped by her Victorian heyday, in the twilight of Empire. The country mourned the passing of two of its greatest composers, Elgar and Holst, a 19 year-old called Stanley Matthews made his England debut and a writer from Australia called PL Travers published a book called ‘Mary Poppins’. It was, in so many ways, nothing like the Britain we inhabit today. And yet, the basic rules of business apply today, as much as they did then – the vital importance of doing a job well, to the absolute satisfaction of the customer.

May those fundamental guiding principles continue to guide CSG over the many decades to come! 

Archive: The Perils of Success

First published on 23rd April 2008 on www.robinsonsequestrian.com

As seasoned readers of this blog may attest, much of my information from the outside world comes from the BBC website.  On one of my many forays there recently, I came across a story which made me grimace. The story was (believe it or not) ‘Riot Fears Absent Ahead of IKEA Sale‘, which on the face of it seems quite a departure from the concept of news.

Aside from the quite blatant (for the BBC) commercial nature of the story, this story tells you not what has happened, but what was unlikely to happen.  Of course, the reason why the absence of riot fears was news is that in 2005, that’s precisely what happened when IKEA opened a store in Edmonton, North London.  It was this story that was the reason for my cold sweat as it reminded me of the day we re-opened our Superstore on Sunday 3rd November 2003…

As you may or may not know, in September 2002, we lost our retail store in Ashton-in-Makerfield, Lancashire after it was destroyed by a fire.  Happily no-one was injured, but it meant that we had to take over a year to clear the site and custom-build a brand new Superstore as a replacement. By November the following year, the anticipation amongst local riders had been building for weeks and at our Sunday opening time of 11am that day, hundreds of people were there to witness the official opening of the new Superstore which was then, as now, the largest of its kind in the UK and beyond.

As we were sponsors of The Pony Club‘s Prince Philip Cup at the time, we decided to invite the holders of the Cup (Wylye Valley) to open the Superstore.  A stretch limousine, red carpets and a big ribbon were laid on, especially for the event.  As a finishing touch, we even arranged for two mounted police from the Merseyside Constabulary to escort the limo, a gesture we were very grateful to accept as it helped make our opening such a great spectacle.

After such a long time of being unable to serve our retail customers, we had been concerned that we needed to win this custom back as quickly as possible, so the fact that we’d managed to generate so much interest was, I remember, a great relief.  I also recall that weeks beforehand, we had decided after a fair degree of deliberation not to advertise the grand opening, just in case too many people turned up.

In retrospect, that was quite a wise move. Put simply, the day turned very quickly from being a dream to a nightmare.  Once the doors opened, more and more people continued to pour in, so that by late lunchtime, the Nosebag café was gridlocked, queuing time at the main tills had risen to 45 minutes and at least one customer had fainted while waiting to be served.  With so many people inside, we had begun to adopt a nightclub-style ‘one out, one in’ policy of admittance.  Everything we tried to do to maintain the safety of the situation seemed to have a knock-on effect elsewhere.

Ashton Reopening

Outside, things were if anything even worse.  For at least half a mile in each direction along the A49, cars were parked both sides, nose-to-tail – many on yellow lines.  With only enough room for two cars to pass slowly in the space between, every time a bus or a lorry came along, they had to wait for a gap in the traffic coming the other way before they could pick their way through.

Very quickly, tailbacks began to snake back both north and south.  There was nothing else for me to do but to jump into the road and hold back the traffic in one direction every time a bus or a lorry was trying to get through in the other.  My abiding memory in all the gathering chaos was of standing on one of the Queen’s highways, directing the traffic, holding it back so the Police horsebox could pick its way out through the congestion!  I couldn’t help thinking that things were the wrong way round!!

Worse still, there was a Collectables Fair on at Haydock Racecourse that day.  Again, you may or may not know that the entrance to Haydock Park is approximately 400 yards south of our Superstore, along the A49 Warrington Road.  Their traffic was becoming caught up in our traffic and tailing back still further another mile south along the A49…    …where it crosses the M6 motorway!  It was, I believe at this point, where queues were affecting cars attempting to leave the M6 at Junction 23, that the police helicopter was mobilised!

Once you realise that you’ve lost control of a situation to that extent, you have to begin to worry about the consequences.  All I could think was how much more scary the day could have been if we’d advertised our opening properly.  Looking back now, I’m staggered and eternally grateful that it wasn’t worse.

With the ‘benefit’ of that experience, I now have every sympathy for all concerned when stories such as the IKEA opening happen. The moral of the story?  In business, the vast majority of the time, you’re constantly guarding against failure.  It can become second nature to try to maximise every opportunity because if anything doesn’t work as well as one had hoped, the costs can be high, financially, to one’s reputation and – dare I say it – one’s ego.  With shop openings and high-profile promotions, it can often pay to spend a little time guarding against success.  Too much of it can be even worse than not enough.

The cold sweat’s gone now I’ve shared that with you.

Thanks,

Paul.