With the amount of time he spends in the air, it’s a wonder Simon Grinstead spends enough time on terra firma to run a successful business. En route to meet one of BNB Recruitment Solutions’ divisional managers in Geneva, he is worried that he won’t make his flight.
“My work principle is to go where the money’s made, so I’m not very office-bound,” he explains. “I go to spend time with the businesses as I feel you pick up a lot more, you meet the people and you get a feel for what’s going on.”
Grinstead’s hands-on approach has been central to a turnaround in both strategy and performance at BNB, which owns well-known recruitment brands Barkers and Norman Broadbent. With a new management team in place, plus a recent name change from BNB Resources to BNB Recruitment Solutions, the group has emerged from pre-tax losses of almost £20m in 2001 to just £0.2m last year, and increased its turnover last year by 23%.
Like many businesses, BNB was hit by the dotcom backlash in 2001 and was forced to close its Myoyster.com online recruitment business and drop 10% of its staff. A board restructuring followed, BNB de-listed from the London Stock Exchange’s official list to the Alternative Investment Market, and the firm approached investors to ask for permission to increase its borrowing powers.
Grinstead came on board after BNB acquired his firm Apollo in March 2004, and became executive chairman. At that point, BNB was still reeling from three years of instability and needed fresh leadership to regain its focus.
“Myoyster.com had absorbed a lot of the capital of the business. On the one hand [BNB had] invested in something that hadn’t returned, and at the same time its core businesses’ results had deteriorated because of the market – so it took a double hit,” says Grinstead. When he joined, Grinstead’s brief was to build a new management team that would “take BNB back to its core business and its original brand”.
System addict
Grinstead’s approach to turning BNB around is systematic and methodical. He describes his business strategy in quasi-scientific terms and outlines each element in minute detail. The crux of the turnaround is taking BNB’s business from a transactional focus, where clients ask for a role to be filled or a recruitment advert to be placed as and when they need them, to an emphasis on building longer-term relationships with its clients.
It has been successful so far: according to 2004’s annual figures: 50% of BNB’s income now comes from contracts. Most are for periods of between one and three years, with some for longer.
For BNB’s staff, this has required a philosophical shift. They’re not just selling placements or advertising any more; they’re selling a concept. So if a client embarks on a major recruitment drive, consultants must ask themselves: ‘Have they thought of recruitment process outsourcing?’ or: ‘Do they require an interim manager?’ By using this approach, BNB’s productivity levels have soared. Revenue per head has increased by 30% and the firm now employs significantly more client-facing consultants than non-client facing.
BNB finance director Paul Turner says this culture change has filtered smoothly down the ranks of the company from the very top. “He was the champion in seeing these changes implemented. He was the sponsor. These changes have become part of the language of our business and I’d attribute that to Simon,” he enthuses.
A £2m investment in IT systems has also helped oil the wheels of BNB’s turnaround, particularly in its Barkers recruitment advertising business. Previously, a ‘job bag’ (all the elements required to create an ad campaign for a client) would pass through 22 pairs of hands before the campaign would see the light of day. Now this is all handled by a computer system, and the increase in productivity shows through in the revenue figures.
“We’ve had to develop new muscles to work with clients on a strategic basis,” explains Grinstead. “We monitor across the board – our offices and business units – what percentage is transactional and what’s recurring. We can see with each quarter that the proportion’s changing.” In BNB’s Leeds office, for example, business was 97% transactional in mid-2004 and now that figure is 63%. “Getting the whole organisation thinking about looking at the clients’ needs first is an organisational development issue,” he adds. “It involves retraining people but also getting them to understand the strategies and the concepts behind that.”
Going for growth
Grinstead’s goal now is to expand the business. Over the past two years, the firm has made four acquisitions:
• legal recruiter Garfield Robbins
• European recruitment firm Apollo Group, which owns a number of recruitment and HR consulting brands
• executive search firm MGMS
• recruitment advertising firm TCS.
While there’s no doubt that these purchases have made a positive contribution to BNB’s bottom line and will continue to do so, Grinstead argues that the key reason for this ‘buy and build’ strategy has been to insulate the company should the market again take a turn for the worse. BNB’s clients can now tap into specialist sector expertise – for example in financial services (from MGMS) or public sector (a practice Norman Broadbent’s management has focused on building). Increasingly, they expect just that of a recruitment provider.
“The market’s moved on,” says Grinstead. “In the past the margins in the industry were much higher. You could do very well by going for business in a volume or a generalist way.” It also means that if one area of the business underperforms, then other revenue streams can stabilise it.
Although the business climate at BNB has been in a state of continuing change over the last three years, its board of directors has remained constant. BNB’s
non-executive directors are Julian Treger,
"In the past the margins in the industry were much higher. You could do very well by going for business in a volume or a generalist way."
also a non-executive director of Corporate Services Group; Roderick MacLeod, a former non-executive director of Select Appointments, and the MP John Redwood, who is BNB’s senior independent non-executive director.
At one point BNB’s management team had to re-finance the business through a share issue – which would dilute each director’s personal stake in the firm – yet Grinstead insists there was never any question the measure wouldn’t be approved.
As an outsider coming into the business, Mike Sheard, chairman of MGMS, says the level of professionalism demonstrated by BNB’s top brass impressed him. “There was very little in the way of politics,” he recalls. “They work hard to satisfy everyone in the group and I feel supported by them.”
Corporate casualties
Grinstead’s success at BNB is down to more than luck and good manners, however – this isn’t his first business turnaround. In the 1990s, Grinstead was brought in as UK chief executive of Swiss recruitment company Adia, which owned the Alfred Marks recruitment chain, to stem its losses. He recruited more client-facing consultants, just as he has at BNB, installed a new IT system and implemented a new sales strategy. The firm returned to profitability and in 1996, Adia merged with Ecco to become high-street recruitment brand Adecco. Before that, he was drafted in as chief executive of the world’s second-largest inspection business, Inspectorate International, a company that had been built up through acquisition and was losing money.
So why did he come back for more of the same? More than anything, insists Grinstead, you have to believe it’s going to work. “When you analyse a business, you have to have a belief in the clients, the brands and the people. The Barkers and Norman Broadbent brands have a lot of resonance in the market. I asked clients how they felt and my confidence to go forward stemmed from that,” he recalls.
There’s also an element of heroism involved in saving a business, and this is where Grinstead becomes animated. “It’s a bit like when there’s a building on fire and everyone’s running out"he says. “Someone has to run in to put the fire out and try to save the doors and the windows and whatever’s left and be part of rebuilding it – putting the roof back on and making it a usable space, getting people and furniture into it and making it a productive space.”
That doesn’t mean, however, that Grinstead will pack up his desk and move on to his next turnaround project any time soon. It’s seeing a business return to stability and start growing again that gives him the greatest satisfaction.
“I’d rather build a stable platform than fix an unstable platform,” he concludes. “Now BNB is international, it has a market listing, and sells a range of services to its clients, who spend more and more of their HR budget with us. We need to gain their respect.”
Snapshot: Simon Grinstead
Degree: MSc in Management, University of Oxford
Lives: With his wife and three sons in Little Venice, London. Also spends a lot of
time in Geneva.
Hobbies: Rowing – he occasionally goes back to row with his old Oxford crew; equestrian sports – he owns horses; swimming and skiing.
Typical week: Visiting clients and business divisions around Europe, meeting new recruits, talking to investors. Two or three nights a week will be spent at a business function and lunch is usually “on the trot”.
Words of wisdom: “You’ve got to take whatever action is necessary for the greater good. If people are practical and the business isn’t operating in an efficient and productive way then changes have to be made.”
Diary of a turnaround
2001:
Board restructuring. BNB calls in a new chief financial officer, Paul Turner. It de-lists from the London Stock Exchange’s official list and moves onto the Alternative Investment Market.
2002:
Two share placements of £3.2m (January) and 4.2m (November). Disposal of non-core advertising business (January). Doug Bugie appointed as chief executive of Norman Broadbent (March). Robert Bain appointed chief executive of Barkers (September).
2003:
Unnamed acquisition target falls through (January). Successful £8m acquisition of legal recruitment firm Garfield Robbins (September).
2004:
£8m share placement (March). Acquisition of Apollo Group for £1.2m (March). Simon Grinstead appointed executive chairman (May). Acquisition of recruitment advertising rival TCS for £5.35m (July). Acquisition of search firm MGMS for £7.25m (November)
2005:
Announced group turnover for 2004, up 23% compared with the previous year. Krista Walochik appointed as chief executive of Norman Broadbent. Doug Bugie becomes executive director on BNB’s board.
With the amount of time he spends in the air, it’s a wonder Simon Grinstead spends enough time on terra firma to run a successful business. En route to meet one of BNB Recruitment Solutions’ divisional managers in Geneva, he is worried that he won’t make his flight.
“My work principle is to go where the money’s made, so I’m not very office-bound,” he explains. “I go to spend time with the businesses as I feel you pick up a lot more, you meet the people and you get a feel for what’s going on.”
Grinstead’s hands-on approach has been central to a turnaround in both strategy and performance at BNB, which owns well-known recruitment brands Barkers and Norman Broadbent. With a new management team in place, plus a recent name change from BNB Resources to BNB Recruitment Solutions, the group has emerged from pre-tax losses of almost £20m in 2001 to just £0.2m last year, and increased its turnover last year by 23%.
Like many businesses, BNB was hit by the dotcom backlash in 2001 and was forced to close its Myoyster.com online recruitment business and drop 10% of its staff. A board restructuring followed, BNB de-listed from the London Stock Exchange’s official list to the Alternative Investment Market, and the firm approached investors to ask for permission to increase its borrowing powers.
Grinstead came on board after BNB acquired his firm Apollo in March 2004, and became executive chairman. At that point, BNB was still reeling from three years of instability and needed fresh leadership to regain its focus.
“Myoyster.com had absorbed a lot of the capital of the business. On the one hand [BNB had] invested in something that hadn’t returned, and at the same time its core businesses’ results had deteriorated because of the market – so it took a double hit,” says Grinstead. When he joined, Grinstead’s brief was to build a new management team that would “take BNB back to its core business and its original brand”.
System addict
Grinstead’s approach to turning BNB around is systematic and methodical. He describes his business strategy in quasi-scientific terms and outlines each element in minute detail. The crux of the turnaround is taking BNB’s business from a transactional focus, where clients ask for a role to be filled or a recruitment advert to be placed as and when they need them, to an emphasis on building longer-term relationships with its clients.
It has been successful so far: according to 2004’s annual figures: 50% of BNB’s income now comes from contracts. Most are for periods of between one and three years, with some for longer.
For BNB’s staff, this has required a philosophical shift. They’re not just selling placements or advertising any more; they’re selling a concept. So if a client embarks on a major recruitment drive, consultants must ask themselves: ‘Have they thought of recruitment process outsourcing?’ or: ‘Do they require an interim manager?’ By using this approach, BNB’s productivity levels have soared. Revenue per head has increased by 30% and the firm now employs significantly more client-facing consultants than non-client facing.
BNB finance director Paul Turner says this culture change has filtered smoothly down the ranks of the company from the very top. “He was the champion in seeing these changes implemented. He was the sponsor. These changes have become part of the language of our business and I’d attribute that to Simon,” he enthuses.
A £2m investment in IT systems has also helped oil the wheels of BNB’s turnaround, particularly in its Barkers recruitment advertising business. Previously, a ‘job bag’ (all the elements required to create an ad campaign for a client) would pass through 22 pairs of hands before the campaign would see the light of day. Now this is all handled by a computer system, and the increase in productivity shows through in the revenue figures.
“We’ve had to develop new muscles to work with clients on a strategic basis,” explains Grinstead. “We monitor across the board – our offices and business units – what percentage is transactional and what’s recurring. We can see with each quarter that the proportion’s changing.” In BNB’s Leeds office, for example, business was 97% transactional in mid-2004 and now that figure is 63%. “Getting the whole organisation thinking about looking at the clients’ needs first is an organisational development issue,” he adds. “It involves retraining people but also getting them to understand the strategies and the concepts behind that.”
Going for growth
Grinstead’s goal now is to expand the business. Over the past two years, the firm has made four acquisitions:
• legal recruiter Garfield Robbins
• European recruitment firm Apollo Group, which owns a number of recruitment and HR consulting brands
• executive search firm MGMS
• recruitment advertising firm TCS.
While there’s no doubt that these purchases have made a positive contribution to BNB’s bottom line and will continue to do so, Grinstead argues that the key reason for this ‘buy and build’ strategy has been to insulate the company should the market again take a turn for the worse. BNB’s clients can now tap into specialist sector expertise – for example in financial services (from MGMS) or public sector (a practice Norman Broadbent’s management has focused on building). Increasingly, they expect just that of a recruitment provider.
“The market’s moved on,” says Grinstead. “In the past the margins in the industry were much higher. You could do very well by going for business in a volume or a generalist way.” It also means that if one area of the business underperforms, then other revenue streams can stabilise it.
Although the business climate at BNB has been in a state of continuing change over the last three years, its board of directors has remained constant. BNB’s
non-executive directors are Julian Treger, 