Rupert Howell's 10 steps to start-up

Rupert Howell's 10 steps to start-up - Howell has made his impact and his fortune in the ad agency world via HHCL and Chime, but won't be resting on his laurels - or anywhere else. With Robin Price and Piers Schmidt, he's planning his next startling move. Andrew Davidson witnesses the initiation of another enterprise in pursuit of the entrepreneurial fruit.

by Andrew Davidson
Last Updated: 31 Aug 2010

Howell has made his impact and his fortune in the ad agency world via HHCL and Chime, but won't be resting on his laurels - or anywhere else. With Robin Price and Piers Schmidt, he's planning his next startling move. Andrew Davidson witnesses the initiation of another enterprise in pursuit of the entrepreneurial fruit.

1. GET THE GENE: Rupert Howell has itchy feet. Not his confession, but my assumption. He finds it hard to sit still, a big, bulky man, aged 46, with a kind, slightly daffy smile, who talks and talks and, when he does stop, always looks as if he is about to say something, as if it's hard to dam the flow. He is sitting in jeans and sweatshirt in the sparse front room of his vast new house on his sprawling Surrey estate south of Godalming. The sprawl comes with many acres, many outhouses, ponds, beautiful period features, four-wheel-drive in the garage, gardeners, electric gates - the marks of success.

It is mid-November, the leaves have turned. Howell has cashed in his home in Chiswick to move south to this much more expensive property. He has chucked in a very lucrative job running Chime plc, the marketing services group that bought his ad agency Howell Henry Chaldecott Lury (HHCL) and made him a millionaire. What is he up to? He wants to start again, he says. Those feet are shifting anxiously. He has a plan, but if he screws up, he may have to sell all this.

Maybe moving house, bringing his family down here, pitching into something new, is not great timing. He sighs. Let's go down the pub and have lunch, he says. But first he talks about why he is how he is. Dad a colonel in the Royal Engineers, Scottish mum, older brother and sister. 'Youngest siblings are always driven to overachieve, as they have to fight so hard for attention,' he grins. His elder brother is an accountant-turned-businessman, now living in America, his sister a midwife. Howell, traditional Army upbringing, Wellington school, was born with a drive, a charm and a garrulous plausibility that propelled him to the top of adland.

He ticks off his inherited characteristics: 'I cannot relax till the series of tasks I have given myself have been completed. I get that from my mum. I'm organised and I am very instinctive about people and situations.' Setting up this new business is also something he has to do: 'It's just the way you are. Ninety per cent of people prefer working for someone else, but 10% want to be leaders. If you have the entrepreneurial gene, you can't resist it.'

2. GET THE IDEA: Down the village pub, Howell puts flesh on his idea. Just as he aimed to 'change the way ad agencies work' with HHCL, he reckons there's going to be another shift in marketing services, and he is going to lead it. He spent a year finding 'an elegant way of exiting' from Chime, he says, and getting his head round just what the new proposition is going to be. It is this: 'We are about to see a fundamental change in business from supply-side to demand-side economics. For the last 10 years, successful businesses have been characterised by strong supply-side organisation, they have been run by accountants and managers rather than inspirational leaders, they have sorted out manufacturing and supply-side efficiences, aided by supply-side consultancies like McKinsey and Bain. But the era we are entering, you are not going to get organic market growth, you can't buy it, you can't save it, you've done the cost-cutting so - guess what? You've got to earn it, got to be more creative.'

Howell's idea is simple: he'll put together a team of consultants who will come up with new revenue growth ideas for top-notch corporate customers. His team will be big hitters who have run their own businesses before, know about the pressures of the bottom line. They will link up with other specialist consultancies that will help push innovation through. His contacts are impeccable, he is on first-name terms with scores of top bosses from his adland days. 'And if you talk to CEOs,' he says, 'and ask them what the long-term issue is that keeps them awake at night, it is 'Where am I going to get new growth from?' They all realise they need new ideas and they are not good at it.' He sips his pint. Howell, ever plausible, believes he is the man to solve their problems.

3. GET THE EXPERIENCE: Howell has already been good at selling, both ideas and himself. When HHCL was in the ascendant, his friends used to joke about how many pictures the trade mags carried of him. He was always available, always quotable, a frantic networker whom few distrusted. People like helping him. That's a gift. When he was looking round universities as an 18-year-old, the professor of business studies at Warwick offered him a place on the spot. When he went into marketing at Lucas car components, his boss, a former adman, took him aside and said: You're wasted here, you should be in advertising.

His first wife, his university sweetheart (his second wife, he giggles, was his childhood sweetheart), gave him the connections. Her stepfather was marketing director at TrustHouse Forte. He got Howell interviews at a couple of agencies. Howell was offered jobs by both, and chose Ogilvy & Mather. His first clients were a gas company and an airline. And he loved it. The pivotal moment, he says, sipping his pint, was at Lords - he's a cricket nut - when he introduced his dad to his agency boss, and his dad asked: How's my boy getting on? And his boss said: Brilliant, he'll run his own agency some day. And Howell thought: Yes, I will.

From then on, he says, he 'CV-built', wrote to all the agencies handling Procter & Gamble to get FMCG experience. Went to Grey, working on the Bold launch, then Y&R to handle Heinz. Became new-business director, was on the board at 27, bought himself a red Ferrari after his marriage broke up. 'Great age to have it,' he grins, 'most Ferraris are driven by sad old gits.' Then, he says, events just pushed him towards setting up HHCL, his own outfit. 'They tip you to a point where you think: This is my time.' He launched it in 1987, three weeks before Black Monday. Now, after the longest stock market bear run in memory, it's his time again.

4. GET THE TIMING: Howell likes counting things out as he argues his points, using ones and twos or A, B, Cs. Recession, he says, is a brilliant time to launch a business. Why? 'Because, one, there is always a high level of dissatisfaction around, you can rip people out of organisations, and business out of other businesses; and, two, you're more cautious about money. For instance, I could have kept my driver from Chime, but I didn't. I go on the train now. And the reason I do is slightly masochistic: you have to get back in the mindset of being at the coalface, earning every penny.'

But why did he get out of HHCL? 'We said from the outset that as founders we'd commit to each other for 10 years with a five-year review. We did that, relaunched the agency, broadened it out. As we came to 10 years, everybody was trying to buy us. That forced us to think about it; none of us wanted to carry on the same, we wanted step change - how to get international without selling? We didn't want to sell to Omnicom or WPP, so we did a deal with Chime's Tim Bell, who has always been a bit of mentor of mine.' Howell sold HHCL for pounds 24 million, half cash, half shares, his cut 'a bit less than a fifth'. He joined Chime as Bell's probable successor.

5. GET THE INCENTIVE: And then he walked away. 'Everyone presumes I fell out with Tim, but I didn't. He tried everything to keep me.' It just got repetitive and, in the end, he thought being a plc wasn't helping Chime. 'It's a creative business, a lot of its assets go up and down in the lifts, things are very volatile ... Tim and I discussed taking it private but I knew he was never going to let me run it. The shares were high then and I could have sold them and not had to work, but I wanted to work, knew I had another shot in my locker. You know, I wanted to tell my kids that I was doing something! Ludicrous to retire. So I decided to do my own thing.'

Those shares have collapsed dramatically in price since then. He shrugs. Actually, he says, that's been 'a huge help psychologically'. Now all he has to do is pull the ideas together.

6. GET THE TEAM: Three months later, Howell introduces me to the team so far: Robin Price, 46, the finance brain who partnered him at HHCL, and Piers Schmidt, just 35, founder of the now-defunct marketing consultancy Fourth Room.

Price, tall, bespectacled, sardonic - 'are you sure you have enough photos of Rupe in stock for this?' - is an old mate who helped pull the financial backing behind HHCL when it launched, and ran it without ever getting his surname above the door. He joined and left Chime with Howell. An accountant by training, video facilities manager by experience, Price likes running back office.

Schmidt, young, with a crew-cut and keen eyes, is one of the consultancy world's thinkers, classical musician by aptitude, child of academics. He's been brought in for brains. Ex-Charles Barker PR and Interbrand Newell & Sorrell design, he worked on the BA tailfins project before setting up Fourth Room. So called because ...? 'We named it after a fable we'd written about creativity,' says Schmidt (first room, you emulate others; second, you follow linear thinking; third, you just follow precedent, and in the fourth, 'you let go of what you think you know and true creativity takes place').

Ah. There's no room for scepticism. We are sitting in a tiny ground-floor meeting room at Harbottle & Lewis, media lawyers. Howell conducts proceedings from the end of the table, describing how far he's got, how it's all evolving, CEOs canvassed, potential partners sounded out. Hardly any money spent yet, just the investment of their time, living off savings. But they're nearly there.

Price looks down with a little smile like he's heard it all before, and Schmidt grabs his turn to talk. If Howell was, in his own words, 'born with the bunny', the highly articulate Schmidt will make it a crowded warren. He talks up the new proposition like it's his own.

7. GET THE PROPOSITION: What consultants come up with is strategies,' says Schmidt, eyes glistening slightly, 'But what's crucial is putting them into practice ...' He talks for 10 minutes, drawing out the proposition on a sheet of A4, how marketing service consultancies bang on about 360-degree communi- cations - he allocates boxes in a small square, advertising, PR - but miss out how it is implemented through people and behaviour, the sense of place, products and services. More boxes and squiggles.

He talks about how complicated consumer choices have become, how they face not monopoly but confusopoly, how they defer decisions, how products are wrapped around services and services around products and you are never quite sure what you're buying, how agencies can't help clients, they can only advise: buy more advertising. A new form of consultancy must emerge that helps push innovative ideas through ...

8. GET THE STRUCTURE: To get real growth, you have to effect real change, Howell butts in, all the way through organisations. So the structure is this: they are setting up a network; at the hub will be their new venture, The Growth Consultancy, run by the three of them. Then, attached by spokes, will be The Growth Organisation, a cluster of specialists who are drawn into each problem, HR people to effect internal change, experts on management coaching, internal communications, organisational change, and more. They'll only go in at the top, through the CEO, so no-one will say: this is from marketing, we won't deal with it.

There will be 'people who can think of new products and new services too. I've got one financial service boss who says to me: 'We're too close, we can't see the wood for the trees, we need new ideas.' These people exist, and we are going to have them in a ring around the hub.' Howell is going shopping.

9. GET THE MONEY: Why would these specialists sign up? Howell's grin becomes more bashful. 'I may be immodest, but people think highly of us. They know we're well connected and client-centric, and we have been financially successful before. I cannot tell you how many people have been in touch since it was announced we were leaving Chime, offering jobs or wanting to join us.

'Honestly, our issue is sorting the wheat from the chaff. They'll find breaking new ground almost irresistible and they'll want to work with the others we bring in. The sort of specialists we are interested in will run firms classically three to five years old, employing between 30 and 50 people; they have gone up the S-curve and are wondering where the next growth is coming from ...'

From the Growth Organisation. Howell's going to buy them. 'It's the classic buy-and-build strategy,' explains Price. The vendors get a mix of money and paper and are part of an organisation that in five years' time is worth handsomely more than the sum of its parts.

'If you get the conglomerations right,' says Howell, 'particularly if it has a purpose above and beyond a financial purpose, you can achieve multiples of way beyond what individuals can do.' Price's eyes narrow. 'This has gone to another level since you last spoke to Rupe in November. We are quite clearly going to have to raise a substantial amount of money. We've already had large numbers of people offering to back us.'

But they'll be careful, adds Howell. What they create could be very valuable to the big marketing services groups some way down the line; they won't let the Omnicoms and WPPs in on day one. It could be venture capital. 'VCs are desperate to find things to put money into, this is such a strong idea.'

How much? 'It could be anything up to pounds 50 million,' says Price. 'We are working it up now, getting into the costings and the mechanics, then we will start talking to people ...'

10. GET GOING: And its first acquisition? Some targets have already been chosen. Final negotiations have to take place, but business can begin. And will clients sign up for the new vision? Of course, if Howell has retained his touch. His every other anecdote is about this dinner he's been to, that boss he's talked to, his delight at getting on the new Whitehall committee looking into government communication - a link with the Labour Establishment that, as a dyed-in-the-wool Tory, he needs. It's all coming to- gether. 'Yunno,' he says as we pack up, 'I can't wait to get on with this, much as I like sitting in the country. I'm getting itchy feet.'

I knew. Will he have an office? 'We don't want a conventional base in central London, something small, we are looking in Richmond, somewhere nice, but we are not going to have any of those central corporate costs, the overheads will be just the three of us.'

Pay yourselves much? Earlier he'd told me he hoped to pull pounds 100k a year from it to start, then a lot more. Now he says there are bigger rewards in sight. 'We'll be paid a fraction of our market rates but if it comes off down the line, we will make a lot of money. If it doesn't, we won't. That's the entrepreneurial game, isn't it?'

Howell puts on his coat, those itchy feet taking him to the door. Will it all work out? Will the plans change again? He gives me the number of one of his best-of-breed targets, a research agency he wants to make the first spoke to his hub. Its boss tells me that Howell's been talking to him since September and has to come up with the right cash deal, but he will have no trouble in luring many to work with him. 'Rupert has great charisma, but people also have tremendous respect for what he's achieved. HHCL was the agency of the decade - it really did make a difference. He and Price and Schmidt are a great team, the proposition is good, they are taking their time over getting it right, and talented people are going to want to work with them.' Will the clients? ... Watch this space.

The Growth Consultancy plans to open for business after Easter

MAKE RUPERT HOWELL'S 10 STEPS WORK FOR YOU

GET THE GENE: Single-minded determination is the wellspring of entrepreneurial success, and you need plenty of it. Have you got the gene? If you're not ready to bet your house on your new business, the answer is no.

GET THE IDEA: In theory, the easy bit. But how good is your idea? How big is the market, how much of it can you corner and how tough is the competition?

GET THE EXPERIENCE: Lifelong adman Howell's experience, reputation and contacts give him a head start. In a perfect world, you'd have the same, but thriving businesses have been set up by people with no knowledge of the sector.

GET THE TIMING: The difference between success and failure is often a matter of timing - like selling your dot.com shares before the market crashed. Catching a wave on a surfboard requires a combination of skill, instinct and luck.

GET THE INCENTIVE: Think about what you want to gain from the venture - fun, money, independence, lifestyle, self-esteem, making a difference - and be sure your business plan delivers. If you aren't motivated, no-one else will be.

GET THE TEAM: Find partners with skills and personalities that complement your own and the whole team should become more than the sum of its parts. Employ a mate only if they really are the best person for the job.

GET THE PROPOSITION: What will you offer customers that they can't get somewhere else, and how are you going to make them buy it?

GET THE STRUCTURE: Proper systems and procedures minimise growing pains and maximise your chances of success.

GET THE MONEY: Raising money is tough - be prepared to knock on a lot of doors and to have them slammed in your face. Put up as much of your own capital as you can - risking your own shirt will help persuade investors that you are serious. Then do your sums, print up your business plan and get on with it.

GET GOING: 'Action this day' was Churchill's motto, and it should be yours. Success depends on making things happen. If you don't do it, nobody else will.

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