Corporate transformation: the secret to Jim McColl’s 'Midas Touch'

Date: 05-01-2016

Tagged as: ArticleGameplanManufacturingStrategyGrowth

 

Having already steered several successful corporate turnarounds as a freelance 'company doctor', Jim McColl really made a name for himself as the driving force behind Clyde Blowers. In 1992 he purchased a stake in the ailing firm, before leading a management buy-in and dedicating himself to its transformation. A decade later he was at the helm of a portfolio of global engineering companies. Today he heads Clyde Blowers Capital (CBC) investment fund, which takes an innovative approach to developing companies in its portfolio.

About the author

Having started his career as an engineering apprentice, Jim McColl is now the founder and CEO of Clyde Blowers Capital and one of Scotland’s richest businessmen. In 2001 he was honoured with an OBE, and he has been awarded Honorary Doctorates from five universities.

Jim MCColl

Corporate transformation at a glance

The Secret to Jim McColl's Midas Touch Infographic

I've been saddened by the erosion of Britain's industrial and engineering heritage, and shipbuilding is one of these iconic industries that's nearly extinct. Some might say we should let it die a natural death and move on, but to me it would have been criminal to let the last merchant shipyard on the River Clyde disappear, with all those skills lost forever. So in September 2014, CBC bought Ferguson Shipbuilders after it had gone into administration.

These days it has 219 employees and a strong order book – a fantastic revival and one I'm very proud of. In fact, I now see a promising future for British shipbuilding. Beyond defence contracts, I believe there is a growing market for Britain's few remaining shipyards in building and maintaining smaller, greener vessels. You can choose to lose faith, or to find opportunity.

Building a sustainable future

When it comes to traditional industries, finding opportunity is about following the market and adapting to changed demands. The first vessel built at Ferguson since our acquisition was a cleaner, more efficient diesel-electric hybrid. I believe we'll see growing demand for conversion of existing vessels to cleaner power, and from the shipping industry tightening its safety checks with regular repair and maintenance by UK yards. There's an ongoing, sustainable market with few companies left in the UK to service it.

More generally, there is a future for heavy engineering in the UK. Here again, one of the big opportunities lies in bridging the gap between traditional engineering and green technology, which is embedded in the way the younger generation of engineers think. Given government targets around the world, there will be a continuing opportunity in making traditional engineering businesses less polluting and more efficient. And Britain has the experience and expertise to add real value to that process.

Private equity done differently

I began my career working at the sharp end, on the factory floor in engineering companies, and this has been fundamental to shaping the strategic model for CBC.

What makes CBC different from most other private equity firms is that it's built on a strong operating foundation. We have real operational experience of the engineering sector embedded in our team, and work closely with the management in the companies we take on to enhance operational performance. In contrast, other private equity firms might sink money into a business without much operational improvement – or they bring in external industry consultants. It's not at their core. CBC focuses firmly on industrial businesses in core sectors where our team can apply their expertise. After all, real operational excellence is based on experience.

I do like to be hands-on with all the businesses in our portfolio. I don't just sit in my office examining numbers on a spreadsheet - I'm out on the floor talking to people at various levels so I can fully understand the business and find ways to apply my experience. The best business leaders are those who are visible, accessible and engaged with their whole team.

Secrets for a successful turnaround

Some say I have a 'Midas touch' in turning around ailing companies, but there's no magic involved. A successful corporate turnaround starts with putting effort and time into making a detailed analysis of the business and its market. When you scrutinise the numbers closely, something usually jumps out to guide your strategy.

Early on in the process, we work with the management team of the business to create a 'story board' – a high-level, compelling vision. I have a real passion for industry, so I enjoy discussing with the management team what we need to do, practically, to improve and grow the business. Passion is a great driver of positive change.

Sharing a global outlook

A new vision might stretch an existing team, but by gaining buy-in and trust early on it's made palatable. We challenge those we work with to think big, to raise the bar and take a global outlook. We get them excited about global opportunities which they may not have been aware of before. And we foster entrepreneurial leadership - a can-do attitude, a winning mentality and fast decision-making.

With the vision embedded, culture change is the next step. This happens in every business we're in - we take a networked rather than hierarchical approach to management, empowering employees to work independently, champion their own initiatives and nurture new ideas.

And finally, the most important lessons I've learnt over many years in business? To trust my gut instinct and to stick with my goals. Persistence and passion go a long way in business.

Jim McColl's tips for transformation

  • Undertake a detailed analysis - and delve into the detail
  • Think big, beyond current markets
  • Create a clear, compelling vision - and communicate it clearly
  • Foster a can-do attitude
  • Instil a cohesive culture that nurtures innovative thinking at all levels.

Jim McColl infographic - Horizontal

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