The boss of Hesco was brought in to repair and rebuild a company shattered by personal loss. BQ Yorkshire Editor Mike Hughes meets... Hesco MD Mike Hughes.
To make this easier to follow, I’ll give my interviewee his Sunday name of Michael (for me it is only my mum who calls me that, for him it is his wife, so we’re both Mikes at heart). As well as sharing names, like me he is a freelance who has found his natural home – mine with BQ in Yorkshire and his with Hesco, the internationally recognised supplier of rapidly deployable perimeter protection which shields against hostile attacks at places like Camp Bastion - the largest operational camp built since the Second World War - and against rising floodwaters as Hurricane Katrina hit America.
Known as a trusted and skilled turnaround expert, he was brought in in 2010 after the heartbreaking death of the company’s founder, multi-millionaire businessman and philanthropist Jimi Heselden. Jimi had devised Hesco’s earth-filled barrier system, the Concertainer as a way of protecting his Yorkshire home from floods and had gone on many years later to buy the Segway scooter company in America.
It was while he was manoeuvring one of those vehicles near his estate in Boston Spa that he toppled from cliffs into the River Wharfe. A broken company in need of personal and commercial help, the family asked Michael to give them the direction and stability they all needed.
“I knew no details about the company before I was brought in,” he explains in his office overlooking the Harrier jet parked permanently outside as a reminder of the company’s close military ties. “That can be a plus in that I had no preconceptions when I first met the family. They decided they wanted someone to be a bit of a bridge independent of the whole situation and I was one of two people put forward by the trustees. In a sense, it was what I did – I was a consultant out and about doing other bits and pieces and had just finished a long-term project for another business which was far more of a turnaround. I have a history of going in for short-term projects and then staying because the project becomes bigger and, by nature, I like to see things through rather than just get things going and then leave.
“I find I get on with the teams and the owners, and now I am permanently here at Hesco because it is a business I have come to be very attached to in terms of the quality of the business and the testimonials we get. We are either saving people from harm’s way in terms of bombs and ballistics or saving homes and infrastructure in flood areas. In that sense it is a feelgood business.”
The company website has been written with great emotion to reflect that close link to life and limb, telling visitors it is ‘protecting the protectors’ and adding: ‘....we maintain integrity and innovation in everything we create, preserving our humble origins; remembering that Hesco started on the need to protect a family home.’
“It is interesting when you meet employees that you realise this is a unique business, with a really interesting cross-section of mavericks, a number of who are ex-military,” says Michael.
“When you take a map of the world marked with red spots for conflict zones to be avoided – that’s where they are working. That takes a lot of training and understanding of these situations.”
Michael is used to working on the front line of business. He trained and qualified as a chartered accountant with Binder Hamlyn, was a partner at Andersen and worked at board level for a number of companies before co-founding the WPA Associates consultancy in 2001.
That level of experience has now been a key factor in one of Hesco’s biggest changes – its sale to another perimeter security specialist, Sheffield-based Betafence, a deal which was overseen locally by Richard Moran and Rachel Dean from Clarion and Alison Starr from Eversheds. It is a positive move all round, with Hesco remaining a standalone subsidiary within its new owners, with Michael at the helm.
“Betafence has been a supplier to us since the day the business started,” explains Michael. “One of the things we recognised is that we were very much at one end of the high security sector and we needed to start moving along it, so we developed this type of surface-mounted fencing, which still has certain test ratings against hostile vehicles.
“At the same time Betafence was moving from panels and posts to becoming more about perimeter solutions, so there was a natural fit in the middle.”
But more importantly to many at the firm is the blessing of Jimi Heselden’s family, who said of the sale: “We are all immensely proud of the success of Hesco and the lasting legacy that has been forged in Jimi’s name. We feel this deal is something that he would have been happy with and we know this was ultimately part of his strategy in order to move the business forward.”
That firmly marked the start of a new era for all involved, and justified Michael’s feeling that
this might be the place he would stay.
“We are a business geared up to producing these containers, so when the demand comes, nobody wants to wait six months for delivery. Our ability to ramp up and ramp down is a great asset, but then we have the technical knowledge and support - you can put a
blast wall up, but exactly where you place it is important.
“It is about the package you get when you come to us and I don’t think anyone else is in a position to offer that with the history we have. But even with that quality, when I first arrived I knew that the original patent was at its expiration and there was competition out there.
“So my very rapid assessment was that the business was going to go into a very difficult situation with reduced volume once Obama had announced a change in mission in Afghanistan (his withdrawal schedule was hailed as proof the United States was ‘finishing the job’).
“I remember having a meeting with the US Army service that deals with our contract where they told us things were going to change but there would be a ‘soft landing’. Well, it was a crash landing, because we never got another order. The business was running at £120m turnover with all the volume that came with that and overnight went to £30m.
“Ultimately, the business would not be sustainable just doing what it did, so it had to restructure and expand. Jimi was non-standard in his approach, with a company that he allowed to be run in London by someone else, looking after Hesco’s IT and IP and support in the field. So effectively the front-end services were done by another company, while another in the US, which he owned with some shareholders operated the flooding side of the business.
“It was a large company being run like a very small company and, to a degree, I think that is a great principle because the balance is always to take the good things of being corporate but try to avoid being over process-driven.
“Jimi had the intention of selling and was going through the process of setting that up and it was clear that in order to maximise value for everyone I needed to bring everything together. That took a fair amount of time.”
Throughout this challenging period, it was that character of the company, its staff and the Heselden family behind it that paved the way for change. Michael found that ideas brought up in a meeting would be instinctively developed by a workforce eager to play their part in the new Hesco.
“It is a very can-do attitude, which makes us very responsive internally as well as externally to our customers. Internally, there was a very human side to what I was doing, which was difficult at first. Coming from outside, I wasn’t personally impacted by what had happened, but there were a lot of people who were.
“There was also quite a lot of wariness about this new guy coming in, but maybe one of my skills is an ability to work well with management teams to get things moving in the right direction, because costs and structure had to change. When I first got here we had nearly 300 people over three sites, but we now have a core workforce of about 60, which we can flex up and down as required.
“It has been difficult for them because many of them were unbelievably well-paid, but with all of the loss of volume and margin erosion, that just wasn’t sustainable, so we had to cut it by more than 50% of what they were on – and in the marketplace we have today, I would still say we are at the top end.
“But I had empathy with them because on my factory floor what you were doing before and what you are doing now is not very different, it is still hard work but they were getting less than their previous wage. Alongside that, some of the existing management couldn’t mentally adapt to the change so we had to go out and find some people.
“We also invested in product development because Jimi’s biggest strength was his inventive streak and that had gone, so we had to use the people we had and look at ideas that we had patented but not really developed. There was no sales force as such because three customers accounted for 93% of the turnover, so we converted some of our guys out in the field.
“This was the same process that entrepreneurs usually go through when working on a start-up – building a workforce and a market and putting a commercial front on the business. The core product hasn’t changed but after that there isn’t a single part of the business that has stayed the same and that includes finance, legal and the production process.”
But the Hesco brand remained as strong as ever and was a big reason for Betafence’s move, with its CEO Michele Volpi saying: “Together we will provide comprehensive security know-how with trusted brands that have been tested to the limit and proven in the field across numerous key markets around the world.”
Now the brand could be taken to a wider field with new defence and flood-related products. The need for acquisition became clear and a hard-armour business in Washington was bought and Hesco Armor was born, with the trademark passionate appeal to potential customers: “Whether at home or on the battlefield, these heroes put their life on the
line every day to protect those in need. They deserve to be protected by the best”, says the website, accompanied by impressive videos of Hesco products under fire.
The business was fairly small when it was taken on, but the brand has moved the US-based business from $1m sales to $8m in two years.
“The name translates across the world and a lot of the people who are buying our armour are from the military and have come home and gone into law enforcement, so they know Hesco’s reputation. That and some great technology opened doors which might take some time for smaller businesses.
“But as I say to people in life, no matter how good you are, how good your product is and how good your strategy is, there is always an element of luck in everything we do. Do not
kid yourself it is all your own hard work.
It’s the same with me – yes, I am the conductor and I do some direction, but there is a lot of input from a lot of people that helps determine our direction.”
Hesco is also working on the front line across the world battling floods although that business has been “a bit stuck in the mud” for the last few years because of less severe flood issues in the States. Michael explains: “In parts of the Mississippi we have walls holding back eight feet of water, but we knew weeks in advanced that it was coming. It starts up in Canada and you can almost tell from the weather conditions what is going to happen.”
The market is different here in the UK because the problem is more flash-flooding and the Hesco barriers are at their peak performance when installed ahead of foreseeable problems, although its new Jackbox product has been bought by the Environment Agency. It is based on the same Concertainer principle, but is more lightweight, doing away with the wire mesh and relying on impermeable material cubes that can be folded out and filled.
There is also a potential for gabians (the empty mesh basket used to contain earth and stones to make a barrier), as BQ readers may have seen along the widening sections of the A1. But the construction technique used is different and means Hesco containers are much more rigid and – thankfully for the troops behind them – will not be flexible so that they can settle into a resting point as is the case with retaining walls around civil engineering projects.
Michael’s role as a turnaround specialist has its own inbuilt challenges, particularly around having a limited time at a company he might start to enjoy. As he has said, Hesco seems set to change that, but it is something he has encountered many times. “It is easier in certain circumstances, and I am quite good at detaching myself from certain aspects because you just can’t always be emotional about the people,” he admits.
“You plan strategically what needs to be done and then you think about the people and slot them in. If they don’t slot in then you are there to take the hard decisions. The strength is in being able to cut yourself off and make the decisions and I suppose the weakness is that the longer you are in a business, the more attached you get to the people and a people-person might not be able to be hard enough on the other bits.
“You always have to look at it from a positive aspect – yes, we have just halved a workforce, but by doing that we have saved half a workforce and are looking at expansion.”
He has lived in Yorkshire since he was 18, and all three children were born at LGI so he is truly an adopted Yorkshireman, with his wife a GP in the county as well. “I think it is the best place in the world,” he says. “I can’t think of anywhere else to live. I go away and travel a lot and I love coming home to Yorkshire and getting off in the Dales and places like Whitby – it’s a fantastic county and Leeds is a great city.
“I went to university in Leeds when the region was all carpets and textiles and the city was
a ghost town after 5pm, so I have seen complete change and now the restaurants are heaving.”
Intriguingly, before his 18th he was a very mobile teenager because his dad was in the forces. “I suppose that gave me a bit of insight for the work we are doing at Hesco, but not hugely. It was probably more influential on how I am as a person and how I deal with things,” he says.
His approach over the six years he has spent at Hesco shows that wide experience is no bar to being called an entrepreneur. The spirit is the same, as is the inventiveness and commitment to a product and unless you are going to try to force home the same model each time, each venture needs to be a start-up, with fresh ideas and a clear desk from Day One.
Like his adopted city, there has had to be courage and foresight to break away from
old traditions and reinvent the way things are done, and like Leeds, Hesco is so much the better for that.
Like his namesake writing this today, Michael is a prime example of the 50+ entrepreneur. We’re a match for anyone half our age..