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The Briggs Materials Handling Supremacy Out with the New and in with the Old by Paul Casebourne

The 5 Keystones of Outstanding Performance Proved Barloworld hands the UK market reins to the seasoned management team that transformed Briggs Equipment UK, lead by former NACCO top performer, Richard Close, the perfect man for the job.

For years now the link between Barlow and Hyster in the UK market has been synonymous. Things change and the South African based capital equipment specialist has finally yielded to the fact that Hyster, which represents only 2% of its interests, would be better served by others. Enter Briggs Equipment. On Monday October 1 2012 the Barloworld UK team will wake up to change.

Has anyone ever said to you the traditional values are the best? That is because there are no new fundamentals and fundamentals are the bed rock of trust.

Growth Blockers
The last 30 years has seen short ‘termism’ in many sectors, encouraged by the need to feed pension funds, fueled by banks and insurance operations, all of which have systematically tempted businesses (especially small ones), to make fast returns with the short term in mind. All too frequently these strategies are underpinned with financial products designed to prop up their crumbling ideas, all based on their self interest and not the customer. It’s like no one understands us. Hardly the right nursery to cultivate the sort of enterprise that leads to national holistic success so stifled in the UK by the very people who evolved as a result of industrial success in the first place. In the end it has been industry, forced to go it alone, with little in the way of financial or political good will, who are leading the recovery. Far be for me to say ‘We told you so’….but ‘we told you so’ back in the 80’s and Sir John Harvey Jones prophesied the outcome of the last 30 years of Thatcherism with the wholesale destruction and disposal of perfectly good businesses, including our own motor industry, mining, ship building and steel production. Throwing out the babies with the bath water come to mind.

All these businesses needed was a balanced political will to reconcile change with the need to manage the nation through very tough times. Instead of which it got brushed into vast brown sites which now are full of empty office blocks while construction is still dawdling along instead of leading the way. All this at a time when we are screaming out for affordable homes. If only we had had national due diligence then! We do actually own a bit of our national heritage, it’s called the vote.

My last bank manager, who was about 12 and authorised to sign off up to £10,000 vanished in 2001 and I haven’t seen him or anyone else since (except an ex-Vodafone salesman upgraded to my business account manager who lasted about 2 months). Thankfully I don’t need them, but I wonder how things may have been if I had had some real help from someone who actually cared about my business more than selling me an insurance I would never need under pressure from his bosses. I did without, I am glad I did now, in hindsight, but it was a bit lonely making it on my own at the time.

Capital Equipment – a tough Market Place
A year in capital equipment is 5 in any other business. This is not a sweetshop, you can’t buy a 40 tonne container handler in John Lewis. In other words we don’t get annual harvests like other businesses. Project work is essential to our performance. It takes a long time to establish a strong customer base. We are often – all of us, working on projects 3 to 5 months in advance and more usually years ahead and you can’t rush these things. (Although on the whole we do cope with the occasional stampedes pretty well.)

One of the interesting statistics which has evolved from this feeding frenzy of takeovers to feed the oversized financial institutions who were starving for the money they provide is once the acquisition had gone through only 50% of them actually work well (Deloitte).

When Briggs Equipment announced their acquisition of Barlow there were some very disturbed waters still to navigate. I went to see if Briggs had the leadership necessary to avoid the Deloitte statistics on the mine field of merging companies and this is what I found out.

Merger or Mayhem – The Model
‘The fact is’ says Richard Close (CEO) "we just don’t know. On Monday we get a bunch of keys. I will have senior officials in every Barlow location. They will be fully equipped (mainly with two ears and both eyes), we have a lot to learn here and much to offer’. I asked who had been appointed to manage the merger. "You’re looking at us" ….Closed doors and management from ivory towers are not how Briggs Equipment has been turned round I deduced…but then having done a few I would expect a hands on or at least a hands available team.

All successful businesses have a successful business model and Sammons seem to be the role model as owners of Briggs. They have a hybrid of comparable styles similar to the John Lewis employee participation model with a liberal helping of the Southwest Airlines engine room powerhouse philosophy*. If you ever wondered why people work long hours, without being asked, don’t wear watches and love their jobs, these are the drivers that create that environment.

The Philosophy
They believe that when you deliver your best to the point of need, money is no longer the issue. It is the inevitable consequence of a job well done. They know that this year’s profits are less important than the 5 year and 25 year plan, and that the long term journey is a line you step up to every morning and every shift. It has taken trillions of pounds and generations of committed people to build the world we have today, these are the business philosophies of dedicated oak tree planters not lottery addicts! I don’t think Barlow have much to worry about and neither do their customers, if this is really the basis of how Briggs are succeeding.

* For more information on these business models I can recommend the highly inspirational videos on Utube for John Lewis – by John Lewis Retail and ‘Southwest Airlines’ ‘It’s so simple’ by Charterhouse learning.

Below are the companies affected by the changes and how they are all linked together.

Briggs’s New Train Set:
Hyster Yale don’t outsource their production to some remote plant in Gwangju, they have held on to their core skills and have soaked up globalization without losing their brand or identity. These are the warrior classes of engineering. They are working just as hard on costs as they do on quality and they don’t compromise. They have some impressive engineering resource especially in Hyster.

The 5 Keystones of Briggs’ Operating Success

Keystone 1 One agenda What does the customer want, find the right solution, deliver it.

Keystone 2 Listen

Keystone 3 No passengers
Everyone has a set of controls and shown (not told) how to use them to best effect. then left to get on with it. You are on site, on the phone, on the spot.what is it that needs to be done …good do it. We expect you do just that as you would if it were your own business – because this one actually is!

Keystone 4 See through accountability

Keystone 5 Team commitment
Its not about Plan A, it’s how you handle Plan B. Informco-operate, adapt, improvises overcome, learn and move forward and just for the record, yes you are your brother’s keeper when it counts!

How can they be confident that this strategy works? Because they have already done it in North and Central America so they know. It might be a good idea to see how all this fits together and why this is actually deliverable and not just ‘talking the talk’

Questions Questions
Richard Close was asked what arrangements they had in place for IT ?(A loaded business admin question)
If you want to put a CEO on the spot you ask the searching questions, often simple, short, innocuous, seemingly harmless but nonetheless probing questions, they expose gaping holes in strategy which when revealed can be extremely damaging. Investors will rip you apart on the rocks of ill considered preparation. A CEO can’t hide or bluff his way around hours of good research by someone who may have a double first from Cambridge on a mission.

Are there going to be times that the Fish and Chips collide with Hot Dogs and Hamburgers? (the culture train crash)

In a new situation any CEO needs armour. Cultures, practices and business systems are wrecking grounds for mergers, so you might expect him to say " We know there will be issues but we are prepared for these" that way if they overcome them quickly it looks like strong management and heroes. If it is a harder route then they can say it was a tough assignment. Either way they are off the hook. This is pretty much the answer that emerged but there was one big difference in the way it was delivered.

Richard opened by saying they were in for the long haul and that the same drivers for customers applied to employees, so aligning in this way does not split the business from its objective, there is no ‘divide and rule’, management is not getting in the way, it’s there to help create it. There are no hooks!

" I don’t see I.T. as an issue" The team were quick to respond to this question. They said they have all the time in the world to develop what is there. Progress by layer on to strong foundations is better than progress by bulldozer. They fleshed out responses on several occasions with additions and details not questioned, demonstrating that although he said they only had sketchy information the due diligence hadn’t been sketchy at all. Richard and team were responding like they knew exactly what they were doing, I felt that this was going to be an interesting match.

Should the former Barlow team be concerned for their jobs?

With 22 sites and some doubtful resource reporting on their website, I have no doubt the due diligence has produced more than a few headaches to contend with in the property portfolio alone. Briggs have only 3 sites, a 1hr 55m performance average response time currently against 3 hours guaranteed and over 600 mobile tool boxes fully trained and fully resourced coping with both planned and unscheduled work.

Briggs have not written off the importance or benefit of these 22 sites, but, as an analogy their 3 rapid response aircraft carriers contain a range of jump jets and attack helicopters which can be parked in any garage anywhere fully supported by the mother ship as opposed to based permanently on it. Richard and his team are looking at how the pilots and ground crews could better support each other. Something more akin to a fully equipped field combat hanger (as opposed to airfield) which saves a trip back to the nearest carrier could be an answer. Time and expense are of the essence for the field teams and customers alike. Still this asset acquisition is a big issue, materials handling is not renowned for runaway profitability, there are lots of equally good businesses out there who will give you and them a good run for the money the market conditions allow. Have they thought of that?

How the holding companies earn their money
The advantage of having a Sammons Enterprises in your wallet is you can be sure that the first proof they mean business is when they put up the money not just to secure the asset but to develop it too. Renewing infrastructure is a normal activity born out of the need for better business tools. That is good considered change, it would be wrong to rush it.

Sammons have virtually no debt and no pressure to send their children down coal mines to feed hungry private loans or for that matter impatient institutional shareholders. I think the Barlow folk have just swapped a job for a career. It would appear they are in very capable hands now….their own! The Board of Barlow did not transfer.

So there is the back drop, there are 11 groups of people here. One manufacturer with all their eggs in two baskets is opting for one basket for both types of egg. Briggs is mother hen so you would think that such a strategy has been very carefully nurtured over a fairly long incubation period. If you thought that, then I think you would probably be right

Since 2% of Barloworld revenue is attributable to Hyster, there are not about to be profit warnings semaphored from the roof of the ‘JALSH’ (South African stock exchange) . In fact quite the opposite, it would seem to be a good bet right now. It is an issue for NACCO though, so I wasn’t surprised to see a representative from Hyster Europe there. Digging a little deeper we find that Richard is a former top NACCO materials handling man (at MD level) prior to reversing the former misfortunes of Briggs, so NACCO couldn’t have a better father figure to look after their children, Hyster and Yale. With Briggs in profit and one successful merger with Barlow under their belts and a string of other noteworthy results it was only a question of time before the UK’s turn came up. I think NACCO are a bit partial to our "Warm Beer" and "Fish and Chips"

To a man of the calibre of Richard Close, this may not be the most demanding of roles but it is deeply sensitive in the market sector in which Briggs now operate. It really matters for Hyster Yale (following their recent spin off). The fact the announcement was so sudden simply confirms to me that plans are well advanced for a smooth customer experience as the two companies get on with the job of business as usual. They must know that two shots at this would not be helpful. If I was NACCO, I may have thought of all this a very long time ago.

The current team may never see the full growth potential of this plan but one thing is for sure it will be providing careers for many generations still to come. In this respect Richard Close and Sammons Enterprises are probably the only option that provide the correct attitude for a specialist in the capital equipment sector. This is not the disposable end of engineering where throw away equipment has any contribution to make. Having watched a great number of our manufacturers vanish to the onslaught of ill designed imported tat that didn’t meet the most basic of engineering standards, and then to cap it all had no service. It is good to see that the old values are not old at all, they are in fact fundamental. Hyster Yale and Briggs are of this culture. Their results and equipment speak for themselves, they are also now delivering world class support for their range and couldn’t have picked a better company with exactly the values needed to deliver such world class service.

Cometh the hour cometh the man.

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