The Big Question: 'The Apprentice' is a hit - but how good a businessman is Sir Alan Sugar?
How successful is Sir Alan Sugar?
At the start of each episode of The Apprentice, a sonorous voice-over informs us that Sir Alan "has built a business empire worth £800m".
According to the 2006 Sunday Times Rich List, Sugar is indeed worth £790m. He owns 28 per cent of Amstrad plc, worth £47m. (Sugar extracted about £1.5m in dividends from Amstrad last year, plus a chairman's salary of £368,000.) He also owns the Viglen computer company, (value £107m), Amsair, a private jet business run by his son, and Sugar can also lay claim to £480m worth of property and £150m of personal assets, including a 15 per cent stake in Tottenham Hotspur.
However, he is falling behind in the league table. Sugar has slipped from being the 45th richest person in Britain in 2004 (when he was worth £703m) to the 55th in 2005 (£760m) and this year down to number 71 (£790m).
How did he make his fortune?
By being good at selling, spotting good opportunities in consumer electronics and by shifting into property in the 1990s. He is self-made, big-time, and has been an entrepreneur "since I was a 12-year-old kid, making ginger beer and selling it to my neighbours. At 14, I got hold of some undeveloped camera film and sold it to friends at school. If there was an opportunity and a demand, I'd be there. It was an instinct, and gave me a buzz that has never left me."
The fourth child of a Jewish tailor from Hackney, he left school at the age of 16, had a brief flirtation with the civil service and selling for other people (tape recorders), before he found making money for other people irksome: "Once you decide to work for yourself, you never go back to work for somebody else."
In 1968, aged 21, he started Amstrad, ( Alan Michael Sugar Trading), starting with a turntable cover for a record player, cutting costs and undermining rivals by outsourcing. He's been doing that ever since. He then made amplifiers and tuners, but the breakthrough was Amstrad home computers, especially their word processor. In 1980 Amstrad was listed on the Stock Exchange, and it doubled its profit and market valuation every year in the 1980s. At its peak, Amstrad achieved a stock market value of £1.2bn. Since the 1990s, however, the product flow has been less phenomenal. In 2002 Amstrad released its cheap phone/e-mailer with mixed success. Balancing recent failures has been the shrewd move into property (Florida, Spain and Britain).
What do you do all day, Sir Alan?
Apart from the property, media appearances (last seen collecting a Bafta), and charity work (Great Ormond Street Hospital), Sugar runs Amstrad. Few of Sugar's wannabe apprentices could name any Amstrad products, not even the set-top boxes they supply to BSkyB. Amstrad also make a video phone, various hi-fis and even a Spongebob Squarepants radio.
Sitting slightly oddly is the Integra Face Care System - "the ultimate face care system that's proven to significantly reduce the appearance of lines and wrinkles". Obviously not something Sir Alan has tried himself. Integra was entrusted to last year's Apprentice winner, Tim Campbell.
What about his business methods?
"I don't like liars, I don't like cheats. I don't like bullshitters, I don't like schmoozers, I don't like arse-lickers."
There's a bit more to his technique than that, but not much. After paying due respect to Sugar's achievements, a former head of one of the country's largest institutional investors told me: "In business you tend to judge someone by their friends." When I enquired as to who Sir Alan's friends were, he just gave me a wry smile.
Of course, Sugar has friends, such as Philip Green, who could be fairly said to have been cut from the same cloth. Sir Richard Branson, again a publicity friendly entrepreneur, has also known Sugar for 30 years. The more establishment end of the business world doesn't have quite the same view. "He is no role model," says Mike Emmott, head of employee relations at the Chartered Institute of Personnel and Development.
Unsurprisingly, given that Sugar sayings like "you seem to have gone from anchor to wanker" are unlikely to see their way into any management manuals . The outgoing Director-General of the CBI, Sir Digby Jones, says, "We can't go round as bosses treating people like that. Not a single member of mine rolls up in a Rolls-Royce or Bentley, insults people and at the end of it says 'you're fired'."
Actually, according to those close to Sugar's old friend Branson, Sir Alan's version is that the punchline is "what I'm told to say" by the television folk.
Sugar can command loyalty. Witness his two long standing lieutenants and co-stars, Nick Hewer and Margaret Mountford. Ray Burgum, who analyses Amstrad for the brokerage WH Ireland, attests, as many of Sugar's apprentices do, that he does listen and will respond positively to criticism, respecting those who offer it. Still, Sugar should always be remembered for saying: "I'm not happy with this camaraderie stuff. If you survive here, as sure as I've got a hole in my bloody arse, when its down to two of you, people that are nice about you now will not be."
Sugar once said: "When I started my own business making amplifiers and hi-fi units I made them in my garage or workshop. Michael Dell, too, started off by assembling computers in his garage and went on to form the Dell Computer Corporation in 1984, which is now one of the world's largest PC manufacturers." For all its success, Amstrad, we may note, is not.
Sugar often says that being a good salesman or woman is not enough . Yet maybe Sugar's bias towards sales sent his company down a different path to those followed by Bill Gates, Steve Jobs or Michael Dell. One thing Sugar doesn't spend a long time agonising over is his time as owner and chairman of Spurs: "a waste of my life" he calls it.
Amstrad have created a prototype animatronic Sir Alan Sugar that says "you're fired!". More seriously, we should expect Amstrad to be an important supplier to BSkyB as it launches its high-definition TV service before the World Cup.
Is Sir Alan Sugar a good role model?
* He started with just £100 and has built an £800m business empire
* Gone are the days when business was conducted through the old school tie and over long, boozy lunches. Sugar-style hard-working entrepreneurship is the key now
* No one has done more for the profile of business in Britain
* Sugar's a lightweight compared with the likes of Michael Dell. Nowadays he makes most of his money out of property, like falling off a log
* In the show, he is a bully whose methods would land most employers in an industrial tribunal
* There's more to a successful enterprise than just salesmanship
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