Breathing on a demotivated business gave Tony Millar a chance to prove his philosophy of people and boost profit, says Chris Blackhurst.
Ask Tony Millar to list his hobbies and none springs immediately to mind. He is too busy, you see.
From anyone else such an answer would be flippant, but there is nothing flippant about Millar: he really is too busy. In just nine years he has taken Albert Fisher from six fruit and veg warehouses in the North-west of England to one of the world's largest fresh produce distribution groups. At that time it made a loss of £29,000 on turnover of £6.7 million. This year it should make a profit of £90 million from sales of over £1 billion. But, despite appearances, Millar is not in a hurry. Few people are as cautious or careful. An accountant by training, his approach is softly, softly.
His success has been built on the avoidance of risk. Even his entry into fruit and veg was part of a deliberate, well researched strategy. After merging his industrial laundry company with Michael Ashcroft's Hawley Group, he decided to look around for another industry. It had to meet certain criteria: it had to consist of mature, small businesses; costs of entry had to be cheap; there had to be few big players and it had to offer prospects for growth.
He alighted on fresh produce. It was perfect: lots of small warehouse merchants; no giants and healthy eating beginning to take off. All he needed next was a vehicle. He found it in Albert Fisher.
Since then more than 50 companies have fallen under the Albert Fisher umbrella. So far he has stuck faithfully to his own rules: never stray outside fresh food; buy only distribution and processing companies (growing food is too risky); do not make hostile bids and do not buy too big (the most that he has paid is £38 million).
Asked to pick his best deal, he says, with typical caution, that "it's a tricky one" (nor is it one he feels able to discuss on his own - for our interview his public relations man plus Richard Portergill, head of the group's European division, were present).
Finally they settle for the largest acquisition that Albert Fisher Group has made to date: three food processing businesses for £38 million from Distillers in November 1986.
They had become available only a few months previously when Guinness took over Distillers. The three businesses - Stratford-upon-Avon Canners (catering-size cans), Frank Idiens (frozen vegetables) and MCC Foods (cake and bakery mixes) - did not meet Ernest Saunders' plans for a brand-led empire.
They were not strangers to Albert Fisher, which had been trading with member companies for decades. As soon as they became available, Millar and his colleagues moved quickly, drawing up a detailed list of their assets and staff. "Our first task was to assess a ball-park figure," says Millar. As ever, he is being modest. The "ball park" figure that their research came up with was £32-35 million - just £3 million short of the final £38 million.
Other food groups were interested but only Albert Fisher wanted all three. "They'd been part of Distillers for many years," says Millar. "The more we looked at them, the more we realised what we could do." Their managers were totally demotivated. "They'd spent years under an autocratic style of leadership," he says. "They were classic examples of people who came in in the morning and went home at night without knowing what their objectives were or whether they'd done a good or a bad job." There was no incentive scheme and they were not allowed any freedom to run the companies. "They were lost in a large company. They were not seen as important as individuals."
Millar and his colleagues were a breath of fresh air. "Even the receptionist commented. She said 'You come in smiling and ask if the MD is in. The Distillers people used to rush in, not say anything and storm up the stairs.' It was a difference of style."
Under Albert Fisher, managers were given bonus and share option schemes and encouraged to regard the businesses as their own - with impressive results (Stratford alone doubled its profits within 18 months). According to Millar, there is no mystery about turning a business round. "Unfortunately, at the end of the day it's very simple. It's the difference between good and bad management."
Good management, he says, "is about spending time in the business and encouraging its people to manage themselves". Then he adds, with one eye on an impatient City which wants Albert Fisher to grow at an even faster rate: "The smaller the company, the easier that is." The City would do well to wait.
(Chris Blackhurst is City editor of the Sunday Express.)