Bob Keiller has achieved a lot in his career: he led the management buyout of Production Services Network (PSN) from Kellogg Brown & Root (KBR); he became the chief executive at FTSE 100 constituent Wood Group; and at the start of the year he took over as the chair of Scottish Enterprise. Along the way, he was the chair of the Entrepreneurial Exchange and he led the Helicopter Task Group to improve safety in the North Sea. Yet in among all of those senior appointments and accolades, Keiller also managed to chalk-up a more off-beat achievement – his words were once dubbed by a Russian voice-over actress.
“Now that was a strange experience,” laughs Keiller as he leans back in his seat at Scottish Enterprise’s office at Haymarket in Edinburgh. “We had just completed the deal to buy PSN from KBR back in 2006 and we needed to introduce ourselves and our strategy to our 6,000 members of staff around the world. Most of our workers were based out in the field, not in offices, so we couldn’t simply send out an email. Instead, we recorded a video to be shown to staff out on site.
“But not everyone speaks with the same broad Borders accent as I do, and so it had to be dubbed into Arabic, French, Russian and Spanish. The only voice over artist that they could get at short notice to record it in Russian was a woman, and so my introduction to many of our members of staff came through a female voice.”
Clear communication – in English or Russian – has played an important part in Keiller’s career. At PSN, clear communication was needed to instil an ethos and a set of values that helped Keiller and his team to grow the company’s value from US$280m to US$1bn in the space of five years and increase its headcount from 6,000 to 9,000 workers.
At Wood Group, clear communication was needed when working with customers, staff, trade unions, shareholders, City analysts and other stakeholders. Now, at Scottish Enterprise, clear communication is going to be just as important. “A lot of people have an outdated view of Scottish Enterprise,” says the new chair. “They may rave about Scottish Enterprise because of something good that it did for them six years ago, or they may criticise it for not being able to help them twelve years ago. But that’s not the whole picture.
In addition to the company support it offers, Scottish Enterprise has an enormously strategic remit for sustainably developing the whole economy, in real time. It is tasked with industry oversight, attracting inward investment, supporting government strategy and developing Scottish commerce throughout the world.
“Yes, there are still things that we can do to improve the service that the agency offers to companies. Scottish Enterprise has been criticised for being cumbersome, bureaucratic and slow, and perhaps in some instances it has been guilty of this. But where that has been the case, it’s being addressed.
“What I’ve been most surprised by since I joined back in January is the sheer breadth of the support that Scottish Enterprise offers to businesses. The agency’s account managers work with more than 2,000 companies each year and there are more than 1,000 instances of financial support and grant aid being awarded each year too.
“Scottish Enterprise is also involved in so many situations – whether it’s when businesses are set up or when businesses are saved – where it won’t get a mention in the end credits. All you’ll hear about is the politician who was involved and the angel investor. Often in those situations, Scottish Enterprise has been the glue that has held the deal together. “So what we need to do is raise awareness about the work that Scottish Enterprise does and the help it can offer. We need to tell even more stories.”
One of those stories is about Can Do Scale, a programme to help Scottish entrepreneurs who have the potential to scale-up their business. The course includes a summer school and online training devised by Bill Aulet, a senior lecturer at the Massachusetts Institute of Technology (MIT) and managing director of the Martin Trust Centre of MIT Entrepreneurship.
Last summer, 70 entrepreneurs took part in the pilot summer school in Stirling including: Kristine Moody, founder of Perth-based outdoor gear supplier Team Magnus; Jim Law, chief executive of sporting social network app Find A Player; and Michelle Ferguson, managing director of Glasgow-based St Andrew’s First Aid Training & Supplies.
Keiller is keen to stoke the debate about what constitutes a “scale-up” and has been discussing the topics with fellow members of Entrepreneurial Scotland during its annual meeting at The Gleneagles Hotel back in April. “If a dog-grooming business in Dundee goes from one member of staff to two members of staff then it’s scaling up,” explains Keiller. “But that kind of expansion isn’t going to move the needle when it comes to creating inclusive economic growth.
“Scottish Enterprise’s account managers are working with companies that have the potential to scale-up enough to make meaningful economic impact. Most of these will be businesses that are already turning over £10-£20m a year and have the potential to grow so that their revenues exceed £100m and they will have a global footprint.
“Those businesses need to have the potential to grow – that’s not something that you can create from scratch. They need to have the right leadership team and the right strategy, and it will also involve elements like exporting and financing.”
One example that Keiller points to is Browns Food Group, which started as a small family butcher in 1885 and has steadily scaled up to become one of Scotland’s largest cooked meat producers. Scottish Enterprise account-manages the company, providing strategic advice, training and support to help it achieve its commercial ambitions.
The agency has already identified 50 companies for its scale-up support. These firms will receive help and advice over the next 18 to 24 months, and the scheme is expected to expand to around 100 businesses by the end of the year.
Taking over as chair of the board of Scottish Enterprise appears to be something of a departure for Keiller, who has spent his whole career in the oil and gas sector. He left Jedburgh Grammar School after his fifth year to study engineering at Heriot-Watt University in Edinburgh, graduating with a master of science degree in electronic engineering, which included a nine-month industry placement.
He joined BP in 1986 and six years later moved to Amerada Hess to work as a loss prevention supervisor on the Scott project. Keiller joined American conglomerate Haliburton – best known for its involvement with BP in the Gulf of Mexico oil disaster and for its former chief executive and chairman, Dick Cheney, serving as defence secretary under United States President George Bush Jr – in 2002, initially working in its energy services division before switching to KBR, its engineering and construction arm, to run its UK operations from Aberdeen.
In 2004, he took over KBR’s global production services businesses. Within a few months, he and partner-in-crime and colleague Duncan Skinner hatched their cunning plan to lead a management buyout of the business. Haliburton was already looking to sell KBR and so Keiller and Skinner approached their US parent in early 2005 with the idea of spinning-out the production services unit as part of the process.
Over the course of the next 15 months, they agreed a US$400m funding package from Halifax Bank of Scotland to buy the business for US$280m and provide the working capital needed to set their newly-independent company off in the right direction. The process was complex because the management team wasn’t buying a single legal entity but was instead purchasing a range of business units spread throughout 20 countries. But, when the deal was signed on 30 April 2006, PSN was born.
“We had a five-year plan for the business,” remembers Keiller. “We bought it on 30 April, 2006, and we sold it to Wood Group almost exactly five years later, to the very day. In that time, we scaled-up the size of the business from 6,000 staff to 9,000 staff and increased its value from US$280m to US$1bn, which created a good return for our management team and our shareholders. That came despite the credit crunch and the global financial crisis in 2008.
“At the end of those five years, we had the choice of refinancing the business, but there wasn’t the appetite for that among the shareholders. It was felt that we’d completed our five-year plan and that the time had come for an exit. We had been approached a number of times over the years by potential buyers but – having trumpeted the benefits of spinning out the business from a large American owner – I would have felt like a bit of a hypocrite to have then sold it back to another large global corporation.
“In the end, we had two offers on the table and both buyers were prepared to pay the same amount for the business. We decided to sell to Wood Group because the idea of selling to a Scottish business really appealed to us.”
Wood Group bought PSN in December 2010 for US$955m, with Keiller remaining with the business as chief executive of the combined production services unit and joining the London-listed company’s main board.
In 2012, Keiller stepped up to the top job, becoming chief executive of Wood Group as part of the succession plan that involved chairman Sir Ian Wood stepping down and being replaced by out-going chief executive Allister Langlands. Wood had been chairman of his eponymous company since 1982 and had served as chief executive between 1967 and 2006.
“When I joined Wood Group, part of the deal was that I would stay for five years,” explains Keiller. “It wasn’t written into my contract, but that was the agreement that myself and Sir Ian Wood had reached and we shook hands on it. It was very important for me to honour that agreement.”
Stepping up from PSN to Wood Group saw a change in the scale of Keiller’s responsibilities. He went from overseeing 9,000 staff – a high enough number in most entrepreneurs’ books – to supervising 45,000 staff in 60 countries. The nature of the job meant spending a lot of time in airports, travelling around the world to speak to customers, staff, trade unions, investors and other stakeholders.
“I’m looking forward to less international travel now,” laughs Keiller. “A typical trip for Wood Group would involve flying into Perth in Western Australia for a day of meetings and then moving on to Adelaide, Melbourne, Sydney and Brisbane. Then I’d fly home to spend perhaps a week in the office before going out to do the same thing in North America, in South America, in Africa and around the Caspian Sea. I was working six days a week and I’m now looking forward to bringing that down to four days a week so I can spend more time with my family.”
So after fulfilling so many high-profile roles in the oil and gas industry, what attracted Keiller to become chair of Scottish Enterprise? “Everything I’m doing now is all about giving something back,” he explains. “I’m interested in inspiring other people so that they can be the best that they can be in business. I’m lucky because I don’t have to worry about having to go out and earn a living now.”
Keiller’s remuneration for his final year at Wood Group – including his salary, bonus and incentives – stood at £1.1m, while he also received a payment of £477,346 in lieu of notice as a ‘good leaver’. As chair of Scottish Enterprise, he will receive a fee of £38,721 a year, according to the Scottish Government’s public appointments website. But Keiller has a very specific purpose in mind for the cash.
“I’m using my fee from Scottish Enterprise to run a small office in Aberdeen,” he explains. His AB15 outfit will allow him to operate as a business advisor and management consultant, which will include acting as a mentor to around ten entrepreneurs at a time and providing help to social enterprises in partnership with Steve McCreadie.
“Steve McCreadie is a force of nature,” smiles Keiller. “He did amazing things with the Aberlour Trust and now he’s running The Lens, a programme that brings together charities, funders, the government and the private sector. I’ve been helping to teach charities how to pitch for investment.”
Social enterprise is a topic that’s close to Keiller’s heart. Back in 2009, he and Skinner, who was his finance director at PSN, organised the rescue of Glencraft, a charity that employed blind and partially-sighted people to make mattresses and beds. “We helped to put Glencraft on a solid financial footing by introducing them to customers in the hotel and offshore industries,” he explains. “I’ve just bought a Glencraft mattress for my daughter’s bed.”
Keiller has clearly decided that “doing the right thing” should also extend into his business dealings during his three-year term as Scottish Enterprise chair. Over the past two years, The Herald newspaper ran stories about the agency investing in companies in which his predecessor, Crawford Gillies, held shares. While Scottish Enterprise made it clear that it has “robust systems” in place to avoid conflicts of interest, Keiller has gone one step further.
“I sold all of my shares in individual companies and put the cash into tracker funds before taking up my role as chair,” he says. “That means that there can’t be any questions about Scottish Enterprise investing in companies in which I hold shares – it’s about doing the right thing but also being seen to do the right thing. That’s also fair to those companies in which I used to hold shares because it means they can now apply for support without any fear of a backlash.”
Ironically, selling his shares landed him with a large capital gains tax bill. “It’s cost me money to take up this post,” he laughs. Taking a step back from investing means that, for the time being, Keiller won’t follow in the footsteps of other North-East oil and gas entrepreneurs by becoming a business angel. “I think I can do more good at the moment as a mentor than a business angel,” he says.