An Entrepreneur Interview: with Peter Slee
Posted on the 17 February 2016
Peter Slee doesn’t have what most may consider to be the background of an entrepreneur.
From humble working-class beginnings, his father’s transition from teacher to insurance broker was perhaps a sign of things to come for the family. As the second eldest of six highly successful siblings, Peter began his career in 1977 as a junior clerk in a bank.
Now 54, he is at the helm of Gateshead based Spark eCommerce group, an outsourced service provider for some of the best known names in retail, and eCommerce operator in its own right.
The company, which is centred on two sites covering 170,000 square feet on Follingsby Park, employs just over 200 people, and has strong plans for growth, having battled through early setbacks that may have crippled many other businesses.
Peter, you started out in banking. It’s not the usual beginning for an entrepreneur.
At 16 I knew I wanted to get out and earn money. I joined TSB and did my banking qualifications whilst working, rather through the classical route. I stayed with the bank for 17 years.
During my time there the organisation was constantly changing, mainly from a traditional savings and deposits business to a marketing focussed organisation, selling products for commission. By the late 80’s I’d been with the bank for over 10 years and had advanced through branch network roles into running my own branch, and around this time the culture switch to a sales driven organisation was really at its peak. I was seconded to a fast-track programme at the bank’s national college in Essex to deliver training to the sales force and senior management, a position that really helped me to prepare for senior roles to come.
After a year in the role I returned to the North East to take on the role of regional business development manager, and in 1990 aged 29 was then appointed as manager of the Gosforth High Street branch. The following year I was asked to go and work with a US partner bank in New York, to understand the maturing US model and in turn develop the UK telephone banking arm. This would ultimately become the national platform for Lloyds TSB. I spent four years building that operation, it became the first 24/7 telephone banking service outside First Direct at the time.
I had an obvious vested interest in bringing the service to the North East and fortunately for me, all the leading research showed it was a good place to build contact centres. We built a 100 seat test centre here, but at the time the regional development grants being offered by Glasgow and South Wales were huge. Banks were able to set up hugely subsidised operations in those regions, which ended up as national centres, despite the same research showing those weren’t ideal locations due to accents and lack of acceptability to the UK consumer.
When did you realise, working for a bank, that it wasn’t satisfying your entrepreneurial spirit?
At the time I saw my role as entrepreneurial. Running your own branch was similar to running your own business, however in hindsight it’s clear I never had the pressures of meeting payroll, managing suppliers, and the true profit and loss responsibility that a real commercial environment brings. I knew at the time that I’d gone from an experienced retail banker to someone who could lead operations in direct channels, so I decided to leave the bank in order to do just that. At that time nobody seemed to leave the bank, it was a culture of ‘what will the bank do with me next?’ But I recognised that I’d built a range of transferrable skills and held a firm mantra of taking on the big decision. So in 1994 I took the opportunity to build a similar direct operation with Commercial Union and was then approached by Comcast (latterly NTL) to come back to the North East, in the infancy of the UK cable telecoms industry.
How did you develop your career at NTL?
I loved my time at Comcast, in the early days we had the opportunity to target a quarter of a million homes in Teesside. We set the whole business model, from operations to the network; a £25 million capital build, and the entire sales, marketing and pricing strategy was set by our small team. We drove that business end to end. We converted 60% of homes in our region to our services against an industry average of just 26%. Due to the success achieved in the Teesside operation that franchise became the flagship operation for the newly national NTL business and myself and another member of the North East senior team, Peter Wilcock ended up in national director roles for NTL.
That sounds great, why leave?
I was 40, with a big role as national telesales director and operations director for the North, Scotland and Northern Ireland. I had 5,000 people reporting into me, but I didn’t enjoy it. My role had become more of a figurehead, reporting into central HQ and implementing strategy rather than creating the plan. It was too detached from where I wanted to be. So after six years in the business I took the big decision to move on, and look for new opportunities.
You moved into Spark Response in 2003. How has the business grown and developed in that time?
Prior to 2003, it was a bit of a basket case. It had seen numerous changes in senior management and ownership. At that time the business hadn’t made a penny of profit, it felt hugely dysfunctional, had a disengaged workforce, and didn’t have a handle on its cost base and client contracts. In 2002 just before I joined, a small consortium of London based investors with worldwide business interests, headed by my now Chairman Barry Stiefel, got involved and stabilised ownership of the business.
At the time we had a major contract with a national DIY retailer. It was the early days of eCommerce. We built their online platform and had over 200 people dedicated to that contract. By 2006 we’d made great strides, we had the ‘right people on the bus’, achieving far greater client and staff retention, and were breaking even on a £10 million turnover. Then one day we had a quarterly review and their director walked in and said “thanks very much Peter, great job, there’s your six months’ notice”. That was a real bombshell to face.
Being critical of myself and my chairman at the time, we hadn’t read the tea leaves. If ever there was a company that was going to take the activity back in house, based purely on their extensive infrastructure it was going to be that client. We’d helped them prove the concept that their customers would buy online.
Around that time I’d recruited my co-director, Noel Lambert as operations director. I’d stepped into the MD role and our main investor returned to London and became our chairman. In the year following the loss of our key client, our revenue halved and as you’d probably expect, the company delivered a significant loss. So we had some difficult decisions to make, and cuts were made through the loss of 47 jobs. Looking back though, it was a really valuable time for us and although we definitely went down the ‘cut once, cut deep’ approach it also resulted in some really positive staff collaboration and resulting HR innovations which stay with us today.
How did you bring the business back from that?
Thankfully our investors and their long term view came into play. Collectively we realised we were in a good space. The mail order or home shopping market as it was called at that time was growing into what is now eCommerce, one of the fastest growing sectors of recent times. We were in a good location, had good people, good clients and understood our cost base. Most important of all, Noel and I were confident in our ability and the capability of our team. We decided to rebuild and take the business forward.
Within two years the business was in profit, with revenue back over ten million. This coincided with internal restructuring, and consolidation of space. Our ethos was transparency with the staff, strong communications, and facing up to tough decisions. We built a plan based on a similar aggressive trajectory for the next three years. This was September 2008, just after Lehman’s collapse, and an occasion when the wider perspective of our investors was invaluable. As an example, after seeing our plan our Chairman said “forget that, the next few years are going to be the toughest you’re ever going to face. Focus on client retention, focus on staff retention, and focus on improving profitability through efficiency”.
And that was the story of 2008 through to last year, steady but unspectacular progress. Growth in turnover back to £11 million and steady profitability, £1 million EBITDA, and half a million pre-tax profit. When we talk about profitability, retaining the right people helps; they understand their role, they understand the products, and they understand the technology. Introducing smart technology in various places in the business also helped.
Ultimately though, it was all about the team and achieving the right balance between commercial focus, innovation and staff engagement. This was a process led by co-director Noel Lambert and then developed through the years by the extended management team.
What sort of changes are you going through at present?
We’ve overseen a change in strategy, whereas historically we’ve worked with huge retailers who had their own infrastructure, we now work with fast growing, typically privately owned eCommerce brands who want to focus on their core expertise of marketing and product development. Micro Scooters being a great example of this.
In doing so we’ve de-risked the business, so when another major retailer last year took their contract back in house, rather than make a loss as we did with the DIY retailer exit, it will be more like break even this year. By this time next year the business will have grown beyond the size it was at its peak, with a much healthier mix of clients.
What do you do to keep your staff? What’s your staff turnover like and how do you keep those numbers down?
Staff engagement, retention and turnover have always been key areas for us. On the eCommerce side of our business for example, our average tenure is over eight years. We measure each department weekly in terms of tenure, and how we retain our people is really down to our culture, which we’ve won awards for.
Our culture is ultimately down to the proximity between the staff and the senior management team. Engagement is the big thing for us, our clients really like our approach and it’s a dynamic which definitely differentiates Spark in a hugely competitive sector.
In 2006 we launched an internal newsletter called Sparklife, and our own reward and recognition (R&R) scheme. Both have been modified over time, but this year our R&R scheme set a new record for employee rewards. We’re constantly looking for other ways to increase employee engagement, and we’re about to go live with an innovative staff engagement platform which has been developed in the North East. The system uses weekly, anonymous micro surveys to regularly monitor employee engagement levels. We see this being a key driver for us going forward, especially in our outbound consumer sales operation. The team there is naturally less stable as people come and ‘have a go’ at sales. Even there we average two years as our tenure, which is good for a sales operation. We’re also launching two other initiatives in 2016 to give our employees a further say in how the business can be improved.
While I’m very proud of this business and what we’ve done over the years, you’ve got to have restlessness, a frustration, and a dissatisfaction to keep accepting that we can always do better.
How has the business changed?
We’ve been successfully strengthening our brand position in a competitive outsourced sector. That has allowed us to focus and attract our core market; fast growth eCommerce brands. We’ve also diversified through the purchase of the assets of Ethical Superstore in 2011 and the formation of Spark eCommerce Group.
So tell me about Ethical Superstore?
It’s a business that was founded in the North East by a great team of people. Ethical Superstore is an online retailer of ethically sourced, fair trade and environmentally friendly products. It was the biggest player in that sector online, but it was a business that was losing one million pounds per year. We acquired ownership of the business after their investors discontinued their support. At that point the business had accumulated losses of £5 million and a hugely disenchanted supplier base who’d all had their fingers burnt to some extent.
We thought we could do something with the business. It had a strong brand position but weak customer retention. We had the infrastructure to support the business, we really liked the people involved and also knew they would add new skills to our business, and benefit from the additional expertise we could offer. None of our other clients specialised in the ethical space or had a similar range of products, so there was no conflict of interest, and we also knew it would offer additional revenue streams in the form of marketing services we could provide to some of our smaller ecommerce clients.
Five years on and we’ve now got a small, strong, collegiate team of marketers and buyers driving three brands in the ethical market; Ethical Superstore, Natural Collection, and Spirit of Nature. The product range is evolving and the brands are strengthening, but more importantly, the business is profitable and has serious growth plans over the coming years.
What’s your motivation now, at this stage?
We’ve done a lot of good things in the business, things that I’m proud of. We’re now right in the centre of the eCommerce space, an industry in which UK consumers spend over £60 billion annually, and is set to grow by another 16% in 2016.
My ambition is to grow this business to its ultimate point, whether that’s by purely maintaining our North East base or by adding additional locations further south. I’m restless, but firmly committed to the business and to improving what we do. I’m 54 and if I had remained in banking I could well be retired, something I can’t imagine right now. I honestly feel so much younger than my years. Succession planning is high on our agenda however, we have a developing brand position and a sales & marketing approach which majors on digital and is delivering results, all areas I really want to see through and keep a strong personal focus on business growth and staff engagement.
When it comes to getting the right staff for the right roles, is the talent here in the North East?
It’s getting tougher for some roles, especially in technology. I heard recently that there are 2,000 unfilled tech roles in the North East. Across other areas we don’t have a problem recruiting. We have a good network we’re constantly talking to, so we meet the right people. We try to promote from within but equally we realise that there are times when new ideas and fresh insight from outside the business is valuable.
So are all of your staff based here in Follingsby?
Yes, we occupy two units on Follingsby Park, which house all of our people. It works well for us being in what I regard as the Sunderland/Washington/Gateshead corridor. Were close neighbours with major employers such as Nissan, and many of our employees are from Sunderland, Felling, Hebburn, and Jarrow, whilst the senior management team are drawn from further across the North East.
Our location allows us to attract talent from north and south of the Tyne, whilst we don’t compete directly with locations in Newcastle city centre or Doxford Park.
You’re a big supporter of mentoring. How important is that peer-to-peer network?
I went to improve my mentoring skills a number of years ago in a session with the Entrepreneurs’ Forum, but I’m not involved in any formal programme. Over the years I’ve developed a philosophy centred on building strong relationships and maintaining detailed knowledge of businesses both in my sector and region. I hold an abundance mentality, in that I’m happy to share experience which often results in being invited for a coffee to meet someone who wants to “talk about this or that”. As a consequence I’ve developed a really valuable and close network of both professional contacts and friends from the business community in the North East. I also spend a lot of time in London, where I’ve built a solid network specifically in the eCommerce and retail space, which has been invaluable both from a knowledge transfer and business development perspective.