UK: Across the great divide - PROFILE OF PEARCE SIGNS.

UK: Across the great divide - PROFILE OF PEARCE SIGNS. - Pearce Signs has connected managing to familial magic and made it.

Last Updated: 31 Aug 2010

Pearce Signs has connected managing to familial magic and made it.

By Geoffrey Foster.

Big businesses that behave like small businesses are much in vogue these days. You know the sort. They're run in hands-on style by insomniac tycoons with more hands than Kali, and every one of them on the levers of management. That's the plus side. The minus side is that the business is overly dependent on one man. Quite often it's universally regarded as the tycoon's personal property, no matter how slight his interest in the equity. The non-executive members of the board are an irrelevance, and probably chosen for their abilities in that direction. The executive directors are well practised at saying "Yes, Chairman". And the boss's chauffeur, paid by the company, is equally likely to be told to take him to the airport or his wife on a shopping expedition. Private companies that carry on like big corporations are less conspicuous. The new start-up, by definition, has little need (never mind inclination) to worry about management structures, strategies and reporting relationships. If you're a very small businessman, you just get on with it. But there comes a time, if a company grows, when the dismal arts of Higher Management have to be brought into play. The chasm between the one-man band and a self-sustaining corporate culture has repeatedly been mapped, but it's still difficult to negotiate. Successful entrepreneurs frequently fail to make it - while insisting that they don't need help. Alternatively, they get across dry shod on the backs of "professional managers" recruited for the purpose. But by the time they've reached the other side, all the entrepreneurial spark has often gone out of the business.

Pearce Signs triumphantly avoided both these hazards. True, it took rather a long time over the crossing: nearly 200 years to judge by family records, but the transition certainly spanned half a century. Up to the early 1930s, when the firm was owned and run by one Harry Pearce, it was essentially a local business making pub signs and shop fascias for customers in the London area. (Inevitably, Harry was "the guvnor" to his handful of Cockney employees.) Today Pearce Group Holdings is the umbrella for a countrywide network of sign manufacturing and installation companies, which together employ some 800 people and turn over around £30 million. The group is undisputed market leader in the UK, and Brian Pearce, Harry's grandson and chairman of the board, makes no secret of his European ambitions. There's no suggestion so far that the spark might have been extinguished. Yet the business continues, and Brian Pearce intends that it should remain, in the private ownership of his family.

Aged 60, Brian Pearce is very much a man of his time - that is to say of the managerial revolution. He's also a grey man: grey-haired and frequently grey-suited. He is short and slightly built, softly spoken, candid and courteous, and in every way unflamboyant. As a manager he was largely self-taught, and much of what he learned came by way of rejecting the example of his father. Yet his father, Harold (generally known by his initials JH), played at least as important a role in the development of the company. If Brian Pearce was the manager who brought it across the managerial ravine, JH was the entrepreneur whose vision and drive took it right up to the edge. His son pays tribute: "He was a very talented man". What is more, "He established us in the marketplace."

In fact, the Pearce family had already been making signs for four generations when JH, aged 14, joined his father at the beginning of the 1920s. (The business has been celebrating its bicentenary this year, being somewhat arbitrarily reckoned to date from 1791 when forefather Samuel Pearce began an apprenticeship: it is not recorded when he took his first commission.) To get to work, JH had only to leave the family house in New Cross Road, south-east London, by the back door, and walk a few steps. The sign works was at the rear of the property. In those days the workforce numbered scarcely more than a dozen.

Harry "the guvnor", reputedly a skilled craftsman and a tyrannical employer, never retired. When death carried him off in 1959, he had been 68 years at the head of the firm. But in his latter days it was his son JH who ran things. JH was, by all accounts, a superb salesman. One of his early exploits was to win all the illuminated sign business generated by the brand new Odeon cinema chain. Unlike his father he never bothered to master the signmaker's skills but he knew exactly what the men were capable of and always insisted on high quality, of both design and execution.

Once a sign has been installed, particularly if it's an illuminated sign, it usually needs maintenance - which can be a significant revenue earner. "Between the wars," says Brian Pearce, "it was my father's inspiration that we would never do maintenance properly if it were merged with manufacturing." So each had its own personnel and facilities. Also between the wars, JH recognised the importance of going national, and began building up a network of regional operations. At first they were joint ventures. ("It was an interesting route. He'd ask: Who do we know in Leeds with whom we could set up in partnership?" - on the basis of: "We'll put up the money, you provide the local introductions.") Later, the local businesses fell, one by one, into group ownership. "We started the last three or four ourselves," says Brian Pearce. Besides being the eyes and ears (and hands) of Pearce Signs and Pearce Maintenance, the regions have their own limited production.

During the 1930s, the factory expanded by leaps and bounds, sprouting a new 40ft span every couple of years. "The capital risk decisions of those days were (in relative terms) vastly bigger than today." Brian Pearce grew up along with the business: he was an only son and clearly destined to inherit one day. When he was a child, JH would take him in to the factory on Saturday mornings (the family no longer lived in front of the shop). After the war he worked there for a while before going to university, and in the long vacations. "My father had a good wheeze," he recalls. "I would understudy a foreman for a fortnight, then do his job when he went on holiday."

JH's university, his son considers, was the army. During the war he rose to lieutenant-colonel, and was one of the senior officers in charge of provisioning 21st Army Group in Normandy. But being on Montgomery's staff taught him little about delegation. When Brian Pearce arrived at New Cross full-time in the mid-1950s - fresh from the army himself, as a National Service subaltern in the Royal Engineers - he found the company "enormously centred" on his father. Production was "totally dependent" upon him - and sales, if anything, more so. "Around him were a number of people who were the salt of the earth. They worked with total dedication but they weren't paid to think. They weren't a management team."

A few years later JH needed to take several months off, and left his son to run the business. "I found it enormously onerous trying to keep his systems going," says the son. "I spent all my time progress chasing. People whose job it was to do something didn't do it because they knew that he would." Brian Pearce realised that competent functional managers were required to head departments like production, but at first he couldn't think how to introduce them into the company: "My father would only have frustrated them". Then he hit on a solution.

He appointed a succession of personal assistants to himself: young men who'd "had the first edges knocked off" in the commercial world. After they had sat at his desk ("working like hell") for a year or so, and become familiar with the company, "something would come up" - and they could safely be let loose on a proper job. Members of the present management team who arrived by this route include group MD Michael Short. Having spent a couple of years as PA, Short lobbied to become general manager of the service subsidiary. His wish was granted, but first he was required to carry out a special task. He had to put production scheduling on computer, which meant spending six months with IBM writing programs.

JH vowed that, like his father before him, he would never retire. As Brian Pearce remembers, "he continued as a presence for a very long time" - arguing that, since he was not getting in his son's way, no one else in the business was affected either. "He never really understood," says the son sadly. In the end he did go. But it was not until he died a couple of years later, in 1982, that Brian Pearce truly felt himself to be chairman - and free to order the company as he wished.

For example, although he disapproves of joint managing directors in principle, Pearce had felt obliged to divide day-to-day running of the group between Short and Fred Allen, son of his father's former right-hand man. However Allen departed soon after JH died, which presented him with a choice: to appoint a successor or to confirm Short as sole managing director. "He got it right," observes Short laconically.

The business has enjoyed a good ride since Brian Pearce assumed unfettered control. It has been carried along by a buoyant high street (until recently) and some big orders - from retailers, banks, building societies and others - reflecting customers' growing preoccupation with corporate identity. It's true that the 1970s were quite exciting too. Turnover increased from under £2 million in 1970 to close on £10 million in 1980, and to well over £30 million in 1990. But in the late '80s, before the recession began to bite, profit margins recovered almost to the level that Brian Pearce used to know in the '50s. Moreover this wave of prosperity swept almost right across the group.

The past couple of decades have inevitably seen changes in the group's composition, but its centre of gravity is largely unchanged. Pearce Signs, the old manufacturing heart of the business, is still easily the biggest subsidiary, accounting for a third of the whole - and together with the maintenance company for well over half. In the early '60s manufacturing moved out from the cramped New Cross site (currently shared by maintenance and the group head office) into a purpose-built factory at Broadstairs, on the Isle of Thanet, which was then a development area. Elsewhere the regional organisation continued to expand; and a number of acquisitions and spin-offs at home - and alliances abroad - further extended the bounds of the Pearce family's clearly signposted estate.

The first important purchase - from TI - was a Midlands manufacturer of road signs. Pearce Gowshall has since emerged as the UK leader in this niche. In 1989 the group broadened its base in the distribution sector, buying a struggling producer of pavement displays of the kind that swing in the wind outside shops. Membership of Britain's largest sign company is said to have worked wonders for Pearce Cowling, as the subsidiary is now called. A few years earlier, the acquisition of a glass-reinforced plastics moulder made up for several failed attempts to develop GRP techniques in-house. Davand also services rival sign makers, which might explain the absence of the usual prefix.

The spin-offs were the products of local initiative. The MD of the northern region realised that installing protective screens in front of building society counter staff would entail much the same methods and materials as he employed to erect signs on the outside of the building. Hence Pearce Security Systems. Similarly, Pearce Festive Lighting - which has in the past been responsible for Regent Street's Christmas decorations - grew out of the maintenance company.

In spite of the occasional stumble - as with GRP - it's abundantly clear that Pearce has grown into an ably and energetically managed enterprise. Yet it's supposed to be among the weaknesses of private businesses that they cannot easily find first-class talent. In Pearce's case, moreover, making and fixing signs is not exactly the sort of activity that's going to attract clever people willy-nilly. Even the better recruits are likely to be "the salt of the earth". Which explains why Brian Pearce has repeatedly looked outside the company when filling senior appointments.

On the other hand, no high flier would join Pearce in the hope of making it to the top, or of carving out what used to be known as "a piece of the action". Brian Pearce has made it plain that ownership will remain with the family trusts, and his ultimate successor is even now being groomed for the job. His chartered accountant son, Nicholas, 32, has already been with the group for half-a-dozen years and is currently on the board of Pearce Maintenance.

Non-executive director Leslie Priestley (former chief executive at TSB) opines that Brian Pearce's biggest achievement has been the creation of the management team. Given the obstacles, that may be a fair assessment. Seven or eight years ago Pearce was looking for an executive to head the manufacturing company. He found Doug Tonks, a big Geordie physicist who was formerly a general manager in a high-tech corner of a plc. "I was not worried (about making the switch)," says Tonks, now deputy group MD. "The chemistry was right."

So, no doubt, was the money. Brian Pearce believes in seeing top people adequately rewarded - and motivated. In a good year over 30% of his own remuneration (which totalled £170,000 in 1990) takes the form of incentive payments, and the same principle applies to all senior managers. "We are very piecework oriented," emphasises group MD Short. "If you're going to get big people into a small company - and keep them - you've got to allow scope for egos, and you've got to have a rewards system that actually works. That's a big thing for the chairman of a private company to acknowledge."

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