Shoot for the moon

Shoot for the moon

Mike Matthews isn’t short of words about apprenticeships or about competence of British workers vis a vis their German counterparts. And his company’s figures prove his theories can bring enviable success in practice. Brian Nicholls reports.

An hour with Mike Matthews MBE is 60 minutes of humour, frank opinion and sound reflection, leaving a lasting impression of someone who knows in his business exactly where he wants to be.

Stepping down after 12 months from his honour as North East Business Executive of the Year, his final duty is to assist in finding his successor. So what makes a North East business executive outstanding, in Mike Matthews’ view?

He has no doubt. “Number one, good communication,” he says. “It’s at the heart of any good leader. They can have fantastic plans and ideas. But if they can't impart and share them with their organisation, their customers - shareholders too if they have them - theirs won't be a successful company.”

With his group Nifco at Eaglescliffe a high climber up 29 places to 118th in the latest North East Top 200, and turnover up £19m in less than two years through the contracts held with almost all UK car builders, we can safely assume he himself communicates well. A walking tour of Nifco’s two immaculate factories (a second royal visit is expected soon) confirms he knows by name every passing employee.

And one topic he’ll readily opine on is the quality of the British worker vis a vis his German counterpart who is sometimes upheld as the paragon of productivity.

Being European operations officer of Nifco as well as managing director of the Teesside operation, Matthews can make close comparisons, since he oversees also two operations in Germany, two in Poland and another in Spain. He cites examples of how his Teesside team are setting group benchmarks in productivity.   

“We see a lot of myths being exposed,” he says. “Things are changing. Probably German customers have realised it. That's probably why medium size privately owned enterprises there are now being encouraged to put themselves on the market. Like it or not, the way forward, particularly for large scale global products, is globalisation. They've got to work with outfits that can offer a global footprint. We can.

“We're doing about €150,000 per person a year here. The German companies are doing about €100,000. We've invested much more in automation and flow, such as sales per square metre, and now have a factory half the size of that in Germany, but which has 130% of the sales compared with the factory twice the size

“It's a very efficient layout, a very efficient flow. Very effective in use of space. We're saying to the guys in Germany and elsewhere ‘we don't want to change everything you've done but take a look at what the other companies are doing and you might see something you can use in your factory.’ That gives them opportunity to take on more sales with the same overhead and, hopefully, improve the bottom line.”

Are they taking kindly to that? Yes. The Polish companies, which were struggling, and the Spanish company which was not doing so good, have taken to it like a duck to water.

The Germans? “The two German acquisitions were quite well performing companies. One was ultra keen. The other is extremely busy and probably more focused on getting their day to day job done at the moment. They've been blessed with a lot of new business.”

At the European executives’ meeting Matthews has them compare key performance indicators to consider how one operation may be performing better than another. Might it pay them to look at the practices and methodology of others? And what’s that, Matthews, poses, if not communication?

Mike Matthews MainAnother hot topic for him is training. A former apprentice and time-served toolmaker himself, he revels in imparting the skills. “We’ve apprentices now in IT, HR, finance, engineering and sales. We have moulding and tooling apprentices, maintenance apprentices.

“Maintenance and tooling have always been there. But business apprenticeships aren’t something people have done a lot with. We, though, would rather take on school leavers and sixth form leavers and train them to suit our needs, and if they do their own relative training we'll then support them to carry on and do degrees. We'll end up with a 22-24 year old very valuable member of the team with a degree and also six to eight years of the business.”

It was obvious to him networking through organisations like the North East Chamber of Commerce, the EEF and the CBI, that the way had been lost a little in training. “At one meeting not long ago they were doing that state of the nation thing around the table. It went, one speaker after another ‘struggle to hire skilled people…struggle to hire skilled people.’

“We’ve stopped trying to hire skilled people. We train and develop our own staff.”

He made the point as keynote speaker at a recent Made in the North East conference in Durham. “The message for me isn’t about the children, the schooling or the graduates - it's about the employers. We need more companies training and developing apprentices, taking on graduates and engaging with academic institutions.

“Sales success depends on skills success. That's my message to our business, and our business has responded and continues to be very successful.”

The £60m turnover this year could be £68m next, and £75m the year after. “By 2020 we'll do £100m. We’re working with Teesside University now on a skills development strategy to support this. We won’t rely on fishing in the same pond as everyone else.

“We need a lot more companies in the region and nationally to recognise their obligation, and the weakness of their business if they don’t provide these skills. Winning a £10m contract is great. But without skills to deliver – front end and backroom - it’s pointless.”

He finds no problem with young people’s attitudes to engineering. Up to 300 applications come in for 10 apprenticeships offered yearly, and in the next two years in the North East, in mechanical engineering alone, 9,000 skilled people will retire and only about 2,500 skilled people presently are coming in. “Hopefully we’re a step ahead on this.”

Part of the reason why the volume of people trained has declined over three decades, he suggests, is that on the political landscape firms have been encouraged to depend on third parties. “Unemployed people depend on unemployment benefits. Within business you’ve organisations like ourselves dependent on the National Apprenticeship Scheme. We don’t use it at all.

“We go out and do our own. For me it’s an intrinsic need to have a constantly refreshed and full pipeline of skills coming in. We’ve taken away the need of third party bureaucracy. We’ve taken our automotive principles of ‘lean’ to ultimate extremes, introducing it on a business level and on a communication level.”  He reels off other bodies Nifco doesn’t rely on in this respect.

“Companies like ourselves became completely disorientated with all the different bodies coming in over the years with changing names to promote skills – three and four letter acronyms you can’t even remember now.”

Mike Matthews talks at times like a retired street fighter. “Yes,” he admits, “I was brought up in a need environment, on a council estate in Darlington. I've experienced being seriously short of money to a point where Mam and Dad struggled to buy me a school uniform. That gave me appreciation of money.

“We didn't want to go to university, me and many classmates, because we were all in the same boat. Our parents were all skint. We had to get a job. Earn some money. It was the only way. I never foresaw myself in a job like this.”

“This job” has him responsible for 500 UK employees soon to be 850 in a £100m business – responsible also for five plants on mainland Europe achieving €280m sales with about 2,500 people.

“I'm responsible for all of that,” he says as if reality is just hitting home. “That's my job. I’ve a well stamped passport and more air miles than I care to mention. Through growing up where I did, young ladies I dated typically came from the other side of the fence metaphorically. Their parents had good jobs, or were well placed businessmen. I saw the other side of life.”

To get all these dates he must surely have been good looking? “You wouldn't be able to tell these days. But it provided me with snapshots and aspirations. At about 23 I looked around as a relatively young toolmaker, pretty effective at his job. The toolmakers around me, mostly in their 50s, frankly, were a miserable bunch. I didn't want to be a 50-year-old misery.

“But I didn't have a degree and jobs I now wanted were for graduates. I moved to another company and realised it wasn't the company, it was the job. I didn't like the cycle of getting a table full of steel, some new drawings, making the tools over some 12 weeks. They take the tools away. You never see them again. You'd invested blood sweat and tears putting life and soul into that for three months. It went and that was it. Such an unrewarding cycle of occupation…

“I decided I had to change. Ironically the company I'd left, Elta Plastics (later taken over by Nifco) was advertising for a technical sales representative, graduate level. I applied, explaining I wasn't a graduate but I'd worked in the company before and left in very good circumstances.

“I got the job, probably because they got me cheap if I'm honest, because I was prepared to sacrifice something on wage, being non-graduate. I started that job at 24, wanting to be sales manager at 30 and sales director by 40. I became sales manager at 28, deputy managing director at 38, so I exceeded my targets. I've probably got my mum to thank.

“My mum always said to me: ‘Shoot for the moon, and even if you don't catch it you'll still go a long way’. I still set myself and the business stretch targets. We don't get upset and pre-occupied if we don't achieve them. We'll just look at why we didn't, then try to figure out the root cause to put a counter-measure in place the following year. So trying to achieve the unachievable is what I do, and the business does.”

Eight seems to be Matthews’ lucky number: sales manager at 28, deputy managing director at 38, managing director in 2008 and head of Europe at 48. He’s one of four regional heads within Nifco globally, one step below the main board, and the most senior non-Japanese person in the business.

He describes the Japanese takeover of Elta Plastics in 1990 as a “soft landing”. Some time passed before change took hold. “The Japanese are not very aggressive in making changes,” he explains. “They’ve a considerate and thoughtful culture - mindful that things done at the wrong pace with the wrong people can actually destroy a business.  

“They showed us the way, engaged us then let us decide for ourselves over time on change. We really progressed through self-driven change. I'd be as bold as to say we're better than the Japanese in some aspects of the job.”

Has he made that clear to the board? He chuckles. “I'm not known for being shy. I do it with a smile and a high level of politeness. But I'm also acting on some fundamental principles I learned from them, like benchmarking and continuous improvement. We in turn take them, in some cases, to new and extreme levels.”

Challenges still

Matthews excels in bad times too. When recession struck in week 42 of 2008 – “the company fell off a cliff” - a third of the workforce had to be paid off. But, unlike other companies that cut their sales teams and marketing budgets, Matthews intensified the sales drive. The wisdom of that decision is evident in the figures today.

Other challenges will continue, however, for as Matthews says: “Our aim is to globally survive quite savage rationalisation by our customers. Ford Motor Company, for example, in 2006 had 4,700 suppliers. Now it has 2,500 suppliers and aims to get that down to 750 worldwide. “We want to be one of the 750 survivors,” says Matthews.

His tone imparts determination, not a mere expression of hope.

Yet more horsepower

Mike Matthews’ life is driven by horsepower at home too. One of his hobbies is buying houses that become projects. Now he, his wife and two teenage daughters have moved into a house at Manfield village, near Darlington. “My wife and my younger daughter ride horses, so we wanted somewhere with a bit of land. As the choice is quite limited we’ve taken on something likely to keep me busy - for the next five years!”