John Hirst: Confusion gives way to fusion at Premier Farnell

It's been a slow-burning recovery, as the chief of the electronics group explains to Sheridan Winn
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The Independent Online

John Hirst is in positive mood. Premier Farnell's results on Thursday may have shown a fall in profits but the reaction of the City was good, with encouraging signs for this year, and the atmosphere at the group's headquarters in Mayfair is upbeat. It's a fitting tempo for a former jazz drummer and a far cry from May 1998, when the ex-ICI high-flyer took over as chief executive of a struggling electronics distributor.

Formed two years earlier through the $2.8bn (£1.6bn) acquisition of the US-owned Premier Industrial Corporation by Farnell Electronics in Leeds, the organisation suffered from underinvestment and an insular, silo mentality. The controversial merger disappointed shareholders and led to profit warnings and poor communication with the City. There was a lack of leadership and strategic development; Hirst's predecessor had left six months earlier. Both companies had an autocratic style; communication and basic skills were missing. Neither a marketing nor a human resources chief existed at the top of the organisation, while the lack of a central IT supremo meant that each business was installing different systems for the year 2000.

"It was a tricky situation," admits Hirst. So why did he take the job? "I thought the business had more potential for growth than any I'd seen before. There were a lot of strengths to the company. It wasn't all bad. It was in good-quality markets and had the nucleus of an outstanding future."

Although "bursting with enthusiasm", Hirst did not underestimate the scale of change that would be needed. "I have always tried to say that if we found something wrong, this is how we would fix it," he explains. "I wanted to make sure we announced what we would deliver, not aspirations. I think we have the reputation now for being pretty straightforward."

Hirst is said to be approachable, a good listener and a formidable communicator. Humour is never far away. Incisive but patient, he likes to take all the bits of string and unravel them, then see what he can create. "I get nervous of the 'vision' word; it's overplayed. There are some great visionaries who don't actually do anything. I thought I could see a brighter future and make it happen."

The group's annual results don't, on the face of it, show the full extent of the progress. Pre-tax profits fell from £67.2m to £57.1m on turnover only slightly up. But a series of one-off factors and the weak dollar had an effect and Hirst's promise of double-digit growth this year made the City analysts happy.

It's been a long haul. When he arrived in 1998, Hirst's first plan was "Investment for Growth". He changed the technology, he changed the way the company worked and he changed the people. Of the 100 or so managers in place five years ago, only a few remain today.

To help to integrate the global business, he began regular team meetings for senior leaders. A £30m investment in leading-edge software unified the systems and gave a better understanding of the customers' needs. Where Premier Farnell had once taken a "one size fits all" approach, it now became highly customer focused. In a move away from the paper catalogue business, 15 per cent of its 1.2 million clients now connect electronically and its eProcurement platform is a world leader.

But, after two years of exciting development, the company fell into a trough. "The middle period in 2001-02 was the most testing time," says Hirst. "The electronics market was suffering its worst downturn in 30 years. The US was badly hit: it's difficult to grow against a market that is falling by 60 per cent. There were management problems. Having invited a lot of people to join the company, I found that we needed to release 10 per cent of them."

Communication was another factor. Hiring a large number of people from outside had brought new energy to the business, but the senior management team didn't always speak the same language. "I 'spoke ICI', our group director, HR 'spoke Coca-Cola', while our chief operating officer 'spoke Motorola'. Some people came in speaking 'small business'. You've got a huge task in ensuring you share a vocabulary that means something."

At the worst point, Hirst started to doubt himself. "I began to wonder if something had gone wrong that I wasn't able to work through - or if I'd left it too late to change the senior team. There were fissures and cracks. Having hired people, I was reluctant to change them."

He made the necessary changes, however, reiterated the strategy and modified it to take into account the emergence of e-commerce and new developments in technology. The years 2001-02 were ultimately a big development period.

The brand also needed updating as Premier Farnell's position in the market was changing. Hirst argued that it was only when the company understood what it wanted to do that it could build a strong brand. "You have to share values in an organisation and they have to be aligned with what the market needs. We began with two organisations, each with long histories and with sometimes overlapping, sometimes conflicting values. It was clear we needed to step up the activity to provide core values. You have to work hard to continually align these."

In 2003, Premier Farnell began a "core value" programme. Over a three-month period, each of the top 50 managers, Hirst included, hosted meetings with groups of six to eight staff to talk through issues in the company. The meetings would often go on for three hours and in the end every member of the 5,000 staff had been to at least one.

"The Big Picture", a wall-sized illustration depicting Premier Farnell's progress, encouraged staff from all levels to talk their way through the journey. 'Why did we do that?' 'We used to be like that and now we're like this'. The deliberate mix of teams forged new relationships and a commitment to the values. Hirst had found the glue he was seeking. The follow-up, "The Great Customer Experience", has just begun.

In a £2.4m rebranding last year, some of the group's big businesses such as Newark, Farnell and Buck & Hickman were unified under the new InOne name. The net result was the winning of a series of major contracts with Lockheed Martin, the US government, Rolls-Royce and General Motors' Vauxhall.

It's been an uphill climb for Premier Farnell but now Hirst can enjoy the view. "It's like hill walking: the first bit seems to take for ever. It's only when you get up the slope, then stop to look down, that you can see how far you've come. You need to do that from time to time, to give yourself a sense of achievement."

Biography: John Hirst

Born: 9 August 1952.

Education: Johnson Grammar Technical School, Durham; Leeds University, degree in economics.

First job: Articled clerk, FS Rowland & Co, Consett, County Durham.

Recent career (1992-95): Chief executive, ICI Autocolour.

1995-96: Chief executive, ICI.

1996-97: Chief executive, ICI Performance Chemicals.

1998-now: Chief executive, Premier Farnell.

Hobbies: Ex-drummer with an eclectic taste: rock, blues, jazz - particularly African jazz. Skiing. Football - supports Sunderland FC.