The logistics sector remains challenging with every company trying to differentiate themselves in a fiercely competitive marketplace. The continuing rise of fuel costs, greater expectancy on the environmental footprint and shortages in drivers are all adding to the problems faced across the industry. In this instalment of ‘Five minutes with’ Mitchell Partington speaks to Richard Morson of Bibby Distribution about his journey to CEO of the business and how they are facing the challenges in the sector.
Congratulations on the move from CFO to CEO, it has been 18 months now, how have you found the transition?
This year has been a bit of a roller-coaster for many reasons, but after almost 20 years in the world of finance (albeit most of that time in the world of logistics), laterally as a functional leader and CFO, the most natural step was to run the total business. My internal desire has always been to push myself towards my next career goal, ‘game by game’ to use a football vernacular.
The first real goal that I set myself was the respectable role of Financial Controller, you get there and look around and then an Exec role doesn't seem too far away. From then it’s a move to Finance Director and a Board role, then on to CFO and Non-Exec roles. CEO is the natural step. Although it has been the toughest 18 months of my career so far, being CEO in a turnaround business has been the most enjoyable and rewarding. Having sat on the board as CFO, I knew exactly what was needed and with a capable team to support the development of the strategy once I have developed it.
I was warned that the hardest thing for me to accept would be the letting go of the numbers, just ask Peter Clarkson my CFO and right-hand man for most of the last 15 years. I had no problem passing them over, but it comes down to trust. Your CFO won’t do things exactly as you did, the same as you won’t be CEO exactly like your predecessor. Let them do it their way, you never know, it could be better than you did it!
What would your advice be for anyone who is looking to make the same transition?
One of the best pieces of advice I received was from someone who'd made the journey ahead of me. They warned me that it can be lonely in the CEO role, you can’t get away from the fact that at times, even with a strong exec team and Board alongside you, you ultimately have to have the final say on the big decisions, which when you are in a turnaround situation as we were, can involve people and their livelihoods.
The three tricks I would share, in making the seemingly impossible, seem much more attainable was Firstly - recognising when to stop my old job - in this case letting go of the CFO tasks, Secondly - working hard to ensure I had the right team behind me, making some difficult and painful choices early on to ensure the capability and dynamics of my exec were optimal and Thirdly - getting an external coach who was not part of the business, but was simply focussed on getting me to think differently, and clearly about developing myself and manage my energy to meet the new challenges - Imagine a professional sports person trying to get to the top of their game without a coach… Unthinkable.
I've made two life changes in the last 18 months which have helped massively, firstly getting an external coach, this was one of the things I've avoided for years, I have no idea why. Getting a coach is one of the best decisions I've made; I can't imagine not having my coach now and have learned so much about myself and the what makes me tick.
The other life change has been introducing a puppy into the mix, it's amazing how much thinking time I've gained walking up and down the canal paths of Worsley with Lily. Just slowing the pace and giving yourself the time to think is one of the biggest gifts you can give yourself and your business.
Be ready for the imposter syndrome we all feel it from time to time it's just few admit it, just embrace it and kick on, believe in yourself the more you understand about yourself the stronger you become. You must understand your strengths, weaknesses and skills, they have successfully brought you to where you are, you will need to keep and develop some for the next step in your journey you may also need to leave some behind. It's all about evolution keep on learning keep improving.
Being CFO in the business for six years and operating with four different CEOs in that time gave me invaluable insight., You learn what works and what doesn't, you also realise there isn't a right way or a wrong way, you have to do things your way and be true to yourself and your value set. I'm not a loud, outgoing leader who's the best at everything, but I understand people and how to build teams. You should never be afraid to recruit people better in individual disciplines than yourself, that's not your job, you add value by leading.
I can honestly say being CEO is easy when you have a strong team alongside you, and I have to say although I am biased, I have the strongest leadership team that I have ever worked with in the logistics industry.
Was it always your goal to move out of finance into an MD or CEO role or was this just too good an opportunity to pass up?
At the back of my mind I've always wanted to become a CEO, I didn't realise it or acknowledge it for a long time in my career I focussed on the next role or hurdle in the ladder. Now I am here, and with the help of my coach, I have looked back and realised that the desire was always there, it just took me a while to realise I could do it my way. I am sure there are many more CFOs out there who can successfully make the step to CEO, just let go of the comfort blanket of the numbers and trust in yourself.
The transport/logistics sector remains challenging, what steps have you taken to ensure Bibby Distribution is well placed to further develop its service and proposition?
The key to success is the four C’s:
- - Cash
- - Colleagues
- - Customers
- - Compliance
We focus on these four areas every minute of every day and they are all linked; engaged colleagues improves customer service and experience, which improves compliance in SHEQ and fleet, all of these drive cash generation and financial performance.
The turnaround of the business has been based on these pillars; we have had to make some tough decisions, we have had to close operations and exit customer contracts that were loss making. Unfortunately, that has meant letting some colleagues leave the business.
The other key is reducing the fixed cost base of the business so that we are cost agile with changes in our customer’s volume profiles.
Culture is so important. We are on a journey, but we are moving away from a command and control structure to a listen and support. So many great ideas have come from listening to our front-line colleagues who do the job day in day out and are the key interface with our customers and the public.
What are the biggest risk factors to the logistics industry?
The sector is under significant pressure from several fronts, all in all this is leading to a massive consolidation of the sector, which has unfortunately witnessed a number of business failures over the last few years. The average number of providers is reducing, and the average fleet size is increasing which supports this.
The key factors are driver availability, with the latest figures show a circa 60,000 driver shortage in the UK, with this figure set to potentially rise significantly subject to the outcome of Brexit. There are ways to mitigate the risk, but at the end of the day without drivers we are in trouble.
Environmental factors such as clean air zones are also going to play a significant factor on those providers not using Euro 6 compliant fleet, we have invested heavily at Bibby Distribution to ensure our fleet is 99% Euro 6 compliant in 2019. For the providers that aren’t delivering to the clean air zones requirements that could result in significant fines and devaluation of owned fleet assets and impact long term value.
The group has streamlined its portfolio in recent years, does this put greater scrutiny on your business or do you benefit from greater support from the Group?
It also helps when the Group CEO John Cresswell and the BLG Board have been supportive throughout giving me the space to develop and grow and do things my way, but also being there when required as a sounding board.