Strengthening the network

30 October 2015

For Business Voice’s first interview with CBI president Paul Drechsler, Pip Brooking joined him on the road visiting Calor Gas, Aga Rangemaster and a TeachFirst partner school.

“We need to create a more positive attitude and culture in this country to encourage greater innovation and risk taking, so that we can actually win on a global basis.” For Paul Drechsler, who became CBI president in July, that’s a pretty simple formula – and “a common purpose” that ties companies of all sizes together.

“I don’t tend to think of business as big, medium or small. I tend to think of business as a network of relationships and if you get them to work well, you deliver great value for your customers and consumers. If you don’t,” he warns, “you miss out to the competition.”

The value he places on connectivity was evident during his visit to CBI members in the West Midlands, as he discussed contacts he had in common with senior executives at Calor Gas and Aga Rangemaster.

And in response to the topics they raised, he readily drew on his experiences in construction and manufacturing and his knowledge of pensions, energy and trade gained during his 40 years in industry at international chemicals firm ICI, construction company Wates Group and now shipping-to financial-services company Bibby Line Group.

His anecdotes reinforced his message that no business operates in isolation – and that the challenges they all face are already firmly on his CBI agenda.

In pursuit of growth

The president’s regional visit at the end of September came at a significant time for both companies, with Calor celebrating its 80th anniversary that month and Aga Rangemaster announcing the completion of its sale to US foodservice equipment specialist Middleby Corporation the same week.

Both are investing in their business to expand in new markets – Calor domestically into LPG fuels for vehicles and alfresco living appliances for the home, and Aga Rangemaster internationally, with its current focus on China and Germany.

Calor already has a wide base from which to drive growth. In industry, it helps power factories, forklift trucks and transport; in farming, it’s used to keep chickens warm and dry grain for milling and brewing; and that’s alongside its more well-known use for gas barbeques and central heating for off-grid homes and holiday parks.

“We’re confident in our ability to grow the business,” said managing director Stephen Rennie, adding that the firm benefits from its supportive family ownership (it’s owned by Dutch firm SHV Energy).

Drechsler talked to the Scottish MD about the CBI’s renewed relationship with the Scottish government – touching on the fact that he recently shared the stage with first minister Nicola Sturgeon. His first official CBI speech at CBI Scotland’s Annual Dinner focused on Scotland’s strength in trade, the EU and skills, while Sturgeon’s emphasised that her door was open to business. She even joked that “maybe one day we will see CBI and SNP on the same side of a referendum”.

But the main focus of the conversation at Calor was on energy – with Rennie and his colleagues raising concerns about the UK’s infrastructure and energy security.

“The infrastructure and energy debate will be central going forward,” argued Drechsler. “It will not go away. It’s vital to growth in so many different ways, for job growth and for productivity.” 

He made it clear that he shared Calor’s frustrations, branding energy policy over the past 10 years as “consistent inconsistency”. And he should know. From 2007 to 2012, Drechsler chaired the CBI’s Energy Policy Committee – an experience he calls “character building”.

But, speaking to Business Voice, he adds that his involvement in that committee demonstrated to him the strength and value of the CBI. “I’ve seen first-hand how, through collaboration, we can develop much clearer views of key policies that could make a big difference to economic growth,” he explains.

“[The committee] was a very diverse group of people with a very diverse set of interests yet they regularly rose to the challenge of formulating policy proposals for difficult, complex issues in order to guide government policy.”

Cooking on gas

At Aga Rangemaster, Drechsler regaled executives with a tale of meeting his then-prospective father-in-law over a traditional Aga. But a lot has changed for the business since then – a tour around the firm’s Leamington Spa factory, which recently produced its millionth cooker, highlighted its evolution and continued innovation. Traditional heavy metal presses are interspersed with robots, bought second hand from car manufacturers. Flexible processes mean the company can tailor products to individual consumer specifications. A home economist upstairs acts as “the eye of consumers” and ensures products are up to scratch.

Aga Rangemaster CEO William McGrath was upbeat about opportunities for the business and the West Midlands’ region overall, saying the transformation of Jaguar Land Rover (where Drechsler was to finish his day) was a “game changer” for local businesses. And, like Drechsler, he emphasised the importance of having a ‘can-do’ mentality, rooting for business and showcasing its success stories.

Discussions were also positive around the EU, although here Drechsler emphasised the need for businesses to help explain the benefits of Europe to their employees. “My number one concern is complacency,” he said.

“A referendum is an opportunity for people to express their feelings and their point of view on an issue. This happens to be a very big and complex issue, and it’s incredibly important that people understand what the implications of the result are,” he explains when I pick up on this later.

“If every employer goes out and makes sure their employees understand the nature and character of the European challenge and what an ‘Out’ vote would mean for their business, for their employees, and their community, I’m confident we will have done all we can as a business community to make sure that people make well-informed and the right decisions for this country in the longer term.”

A force for good

Indeed, businesses’ impact on the local community is something that Drechsler feels very strongly about – and as a board member for Business in the Community and chairman of TeachFirst, he has decided to focus his energy on education.

Asked why, he says: “I’ve had a fantastic business career and enjoyed myself all around the world. I never expected to find some of the greatest poverty on the planet on our doorstep.” Yet he found it while working for Wates Group on various social housing projects.

“The more I looked at what we could actually do, the more I tried to understand what’s at the heart of deprivation, unemployment and disadvantage – and that’s education,” he says.

I never expected to find some of the greatest poverty on the planet on our doorstep

“People underestimate the vast amount of resource and effort that many companies are putting in to support the local schools and colleges and universities.”

Calor and Aga Rangemaster are just two companies of many that have realised the importance of people. And as well as raising concerns about the impact of the housing market on their employees, both explained how they are training their own staff and helping teenagers develop the right skills for the world of work.

As well as visiting the region’s businesses, Drechsler was keen to show his support for new teachers at John Henry Newman Catholic College in Chelmsley Wood, Birmingham – one of 980 partner schools to the TeachFirst programme that Drechsler chairs.  

TeachFirst aims to find, train and support people to become the kind of teachers that can make a difference to pupils from disadvantaged backgrounds. At the college, he met nine young teachers who had gone through the programme within the past four years – including one who had just been on a sponsored trip to Shanghai to learn how they teach maths there.

“There’s nothing more satisfying than to see a young person’s eyes light up when they’re informed about life’s possibilities, in terms of work or career, and when they get insights that they don’t get at home,” says Drechsler. “With a little amount of effort, not a lot of money, but human talent, many of the 3.5 million children living in poverty can be switched on to the great possibilities of life.”

But he adds: “Economic growth will come from people but only if we can compete on a global stage”. And for that, he continues, you need “brilliant infrastructure”.

Fighting spirit

Along with preparing for the EU referendum, people and infrastructure are Drechsler’s priorities for his time at the CBI. But he is keen to be as responsive as possible to issues as they arise because “all of our companies have to be able to fight and succeed on a day-to-day basis”.

Currently, his biggest concerns on this front involve recent government interventions.

“Every time there’s intervention from government or authorities, it could change a playing field from being level to imbalanced. It can change the challenges that companies face. The national living wage and the apprenticeship levy are examples of how you wake up one morning and all of a sudden your competitive landscape and the economics for your business have changed dramatically.”

But if he could only change one thing by the end of his tenure? “If we make the right impact as a business community and the CBI does its job, then the voice of business will be more respected, more carefully listened to, and more influential. Ultimately, I want to see business go up the Edelman Trust Barometer.”

Saying this amid continued media focus on the Volkswagen emissions scandal, he concedes it will not be the easiest ambition to achieve. 

“It can take weeks, months, years or a lifetime to build a great brand and a day to lose it. So we have a lot of work to do. As a business community, we’ve got some things wrong; we should admit to that. On the other hand, we have far, far more to be proud about and we have to go out and we have to tell that story.

“We’ve just got to keep at it.”