Exit Report to File David A Broad Monday 7th May 1984
Introduction
It is Comart’s practice that every executive departure from the organisation is subjected to an exit interview. It is also consistent with my own commentary on the passage of events that I note down the circumstances of my departure and, following the history of Comart, it may be of use to the corporate learning curve and study of management that the basic facts be known. I have thought it appropriate, however, to wait a period of at least six months before publishing this document at least into the past personnel record of myself and the possession of whoever is recognised as the Chief Executive of The Comart Group. By this time my departure would have been largely complete and the management team settled into the new regime.
History
The past events of the Comart Group and my participation in the foundation, growth, development and structuring of the organisation are a matter of record. The numerous press cutting books provide a good ‘snapshot’ chronicling of the landmarks, and the yearly annual Reports with included Chairman’s Report present the periodic status as I have seen it at the time. They should certainly be preserved and archived for safe keeping and future year’s contributions added to provide a continuing perspective. I would only add the commentary that throughout my tenure I have sought to formalise and develop the missions, policies and plans; develop the management structure and prepared the organisation for the possibility that I might one day need a successor – if only through the arrival of the proverbial bus. It is a truism that behind every enterprise there is a pioneering and driving force, providing the raison d’etre and corporate ambition. Also that eventually the proper priority of the corporate entity must prevail and the first change of management and ownership can be the beginning of decline. Approaching the job first and foremost as the professional manager, I have sought to separate the roles of proprietor and manager, and also tried to ensure by a successor/deputy pair policy that everybody, including myself, was not indispensable. It is for the future management to chronicle how successful or otherwise this policy has been and for corporate philosophers to argue whether the skill of the top manager is assessed by his preparation and success of succession; or by the margin with which he is missed. I can be sure of one thing of which I warn – there will be more inaccurate statements of how I would have viewed future events; more wrongly attributed maxims and quotes; and more past events taken out of context than the reader should accept at face value or give credence to. There, of course, will also be more future attributions of past reasons for future shortcomings than I could have justly deserved as well. But perhaps it is the role of a founding predecessor to be used in this way. I can only have claimed to have organised the company growth and development and postured the future ambition as a long term foundation and lastly to have tried to prepare the ground for the first transition of what I would hope to be a long and prosperous future for the Comart Group.
Reasons for Leaving
These are normally assessed as a number of contributing factors influenced by one salient reason and to save the reader the task of sorting the wheat from the chaff I will start with the supporting factors and end with the essence.
I have worked hard and unstintingly for seven years in a job that arguably is amongst the most demanding and isolating – the Chief Executive of a private company. Of course one is surrounded by many anxious to advise and contribute, and there is no shortage of evenly matched professional advice carefully weighed to avoid liability; but the task, in hand, has been, of course, to drive on with personal decisions and judgement giving such input due thought but making one’s own decisions. After all, if the parties above could really cover the angles then they would be equally successful and working on their own enterprise. They each have the benefit of a boss to turn to, argue with, or to ignore. The isolation and disorientation of being chief rule-maker and achiever is alternately exhilarating and depressing.
Difficult enough, perhaps, but running an enterprise at the eye of a storm of technological revolution, economic growth and depression in confusing coincidence, and trying to contribute to the industrial and economic debate as well is stressful to say the least. Particularly so when the government of the day is of a fundamentalist, capitalist and free market approach, ‘gung ho’ on dismantling any residues of stability. Apart from my own Keynesian philosophy and belief in intervention and planning for a stable mixed economy, I have also maintained completely apolitically that all businesses need a stable environment to work in – almost whatever it is. There is no fear of that in the present day as the very organised PR and advertisements of the ruling Conservative Party condition the populace to accept the consequences as inevitable.
Also as contributing factors I would cite the Broad family wellbeing and interests. As I write we are expecting our third baby in a month or twos time; Daniel has grown up to 12 with little contact with me from the demands of the business; and Debbie, at five, is becoming a typically fascinating daughter. Sited as we are on The Great Ouse river bank and already paper millionaires, it would be easy to identify with the opportunity to retire and enjoy the fruits of success, but as a prime reason it would never stand up for the type of individual that has founded a company.
No the principle reason is one of job satisfaction, recognition and role evolution. My decision to move on stemmed from last Christmas and has developed from the events then and since. As an introduction to the festive season, we had the Glasgow Coventry disputes best summarised as the produce of remote communication and cursed unwillingness of an executive to subordinate his views and contribution to that of the company without much aggravation and ill feeling. On another plane, the new year’s Honours List and Knighting of the IBM Chairman was a cruel blow to my efforts at raising the perspective of the truly British Manufacturer and the selection by the Royal Household of the US Company Commodore for the Royal Warrant for, of all things, Business Computers, made me begin to wonder whether internal and external parties are as wedded to my ambition for recreating an industrial computer manufacturing base as I was. At the same time in Byte Shop planning meetings my concept of The Byte Shop as a computer equivalent Marks and Spencer developing UK manufacturers went quietly by the board as first John Lamb and then Peter King resisted any statement of ambition to concentrate on UK micro makers. They still cannot understand my feelings on maintaining a British car fleet and would preferably drive Mercedes saloons to facilitate their continental touring holidays. Also by this time the BMMG participation of both new and existing members was beginning to wane through the typical apathy that affects all voluntary organisations.
At this time two other problems with individual working relationships came to a head with differences on philosophy. First with Ian Nickson on R&D there came running battles over resistance and downright opposition to the product policy I have had of concentrating our efforts on the modular, multi user and multi-access market rather than be sucked headlong into the IBM PC market where factors of scale, cost and investment were beyond our compass. Set against my rising impatience with cost overruns and product introduction delays, and aggravated by resistance to new change note procedures, it was coming to a head. Secondly, at Xitan, Geoff Lynch has always been a difficult character to tie down to consistent plans and policies. Resistant also to central control by Comart and, again, determined to preserve the volume IBM PC compatible business rather than the more specialist software distribution markets; matters here finally came to a head with predictable management problems arising, in my view, from unheeded advice and management deadlines. Well are they all that bad? Why have I tolerated this degree of resistance – some would say disloyalty? In truth they are all creatures of the evolutionary company and group. Individually they are managers of high dedication and ability and have been encouraged to be participative and strong. Unfortunately, they now need to learn the constraint and respect for the group leaders role. Familiarity has again bred contempt and they have become immune from the easy influence of authority who has developed too closely in their company. A new leader, paradoxically of only comparable achievement as myself, would command the due respect and, yes, reverence that it is necessary to balance authority.
And, for my part, being human I have become increasingly irritable and resentful of a team that is quick to draw on my talents, longest hours and efforts, whilst being annoyingly resistant to my leadership. This paradox could be also the lack of training and experience on my part to help me overcome this latest skill requirement, and is certainly influenced by the other factors I have listed. But why has a man of my accomplishments suffered these frustrations and what is behind the timing of this withdrawal?
Reasons for Leaving Now
There have been times past when it would have been impracticable or impossible for me to part company. I do feel, of course, a strong sense of obligation and duty to my colleagues, staff, customers, suppliers and shareholders and have been anxious to fulfil both direct and indirect commitments.
In particular
- We have now virtually finished a 3 year planning exercise which has defined the three year missions, two year strategies and one year plans for all group activities which together form a programme for action and guidance during the critical period of transition.
- All group companies are now successful and profitable, and each has an executive capable of implementing the plan within the organisations resources of manpower, investment and working capital identified.
- The group is now ‘built’ and process of group evolution set in place. The Byte Shop has now been fully integrated, found its role, and the last aspect (of Microserve, its service arm) is a current activity for which the change will be beneficial.
- Resources can be applied in line with the group success to replicate and divide the joint roles I have performed in the past (CCL MD, Chairman, Secretary, Personnel Manager) for the first time to provide a more conventional organisation.
- Until a week or so’s time I have been discharging the duties of BMMG Chairman and I had to see the work complete and transition to a new officer safely accomplished under the Articles of Association.
- Under the UEH Byte Shop Option Agreement, I had to retain control of Comart until Dec 1984 or earlier if the option was exercised. Now that Brammer are acting, it provides the mechanism for my release. This point assumes I can either negotiate release from a three year service clause or breach the provision without penalty or loss. (In fact, the option has now been bought out and terminated 11/5/84).
The Choice of a Successor
The nature of my role at Comart requires that my resignation/departure has to be accompanied by the disposal of my controlling shareholding to an organisation who can manage the company successfully. Also one that can recognise and respect its integrity, structure and potential for future growth; whilst allowing me to leave it with no further personal obligations – a fairly tall order!
However, from a range of organisations who had approached me during the recent past, and, without engaging in widespread indiscreet search or a dutch auction, I have chosen Kode International PLC for the following reasons:-
- Group Managing Director, Peter Smith, has been twice interviewed about his approach, style and views on the future. I have also studied the man and assessed his capabilities. In an industry short on mature management talent of the right computer orientation – he is ideal to command the respect, participation and support of the three Comart Group MDs and Comart Finance Director. Also to provide future guidance.
- Kode PLC. is a computer company. It has a full listing on the Stock Exchange and is one of the most established companies of its kind. Though historically with its origins in the teleprinter market, the last two years of Smith’s tenure have seen past acquisitions and computer content rising and our acquisition is a significant step in this process.
- Kode’s and Peter’s style is to have a delegated approach between operating companies and himself, and liaison and coordination is achieved by monthly meetings of company heads. The chances of conflict between Chairman and Managing Director of subsidiaries is therefore reduced and should not cause difficulties.
- CCL’s plans for French and German subsidiaries in no way conflict with Kode International’s activities. In fact Kode are looking at Belgium/Holland.
- Kode is of the right size to enable the size of the Comart Group to be absorbed whilst allowing Comart to achieve from 1/3 to 1/2 of the future sales revenue and profit contribution so as to avoid the possibility of being a business of secondary priority. In turn this doubles the strength and potential of Kode as well.
- A strong synergy with Kode is the maintenance services. Firstly Kode have the services of Murray Dolan – ex of CFM and Microserve is needing the central control and leadership that this can provide. Service centre disposition seem to be relatively complementary and Kode’s presence in Belfast and Dublin is a particular advantage. Lastly, Kodes 100+ engineers are a significant force but would not completely swamp the 20+ C Group engineers because of their specialisation and skills.
- Lastly, having discussed the likely outcome of the acquisition at length with Peter Smith, we have anticipated most eventualities which will allow the aspirations of personnel, executives, directors and shareholders to be met whilst protecting pension and profit sharing rights.
Positive Benefits from Acquisition by Kode International PLC
Although the motives for the decision have been clearly stated, and the timing and choice of a successor justified – it was again characteristic of my wishes that the acquisition should additionally provide further benefits to the Comart Group.
The reader will readily understand that having spent 7 career years in establishing the organisation I would be anxious for it to succeed further.
There are several which I would list as follows:-
- Under present plans it is the Comart Group’s corporate ambition to seek a full listing on the Stock Exchange in 2/3 years’ time to provide the status of a full PLC. This would inevitably have been an expensive process (£500-700K) and would have been an acutely sapping experience in terms of senior executive time and resource. By the Kode acquisition Comart Group Companies become part of a PLC without this cost and disruption.
- It will be the objective of the 1984/5 Comart Group budget to provide for the finance and resources to meet a growing activity. However, there will be the need to limit certain Xitan/Byte Shop growth and the PLC backup and finance would at minimum provide a security and resilience whilst tracking at these high levels in relation to capital base. At best there could also be the chance of increased finance and growth opportunity.
- It will provide a new and positive leadership to allow the removal of the personal element in clashes between myself and IN/GL and GBC. Although these have been, in my view, business issues, it has been impossible to use any higher authority to isolate the claim that personalities have been involved. In particular it will provide a new acceptance, respect and the opportunity to improve norms of formality, administration and behaviour.
- Lastly, there may well be potential benefit from the use of Kode Group Services such as legal/company secretarial, property, and Kode are known to want to develop further their group presence in this geographical area. They may even choose a new group name for the enlarged organisation and ‘Group Micro’ has been discussed.
Conclusion
As a consequence of this acquisition, passage of events and outcome I hereby both offer and, on behalf of the Company, accept my resignation with effect from the anticipated completion of contract in early August.
My best wishes to all at the combined organisation and every success to the corporate marriage.
21.30 8/5/84