MEETING WITH LUCY RENNIE (LR COMMS) AND DAVID LOWE (AUTAC) 10 November 2023
“Transform Your Business.”
A well-attended meeting with several new faces this time, looking forward to hearing from Lucy, a long-standing member and friend of the Club, with David Lowe her client, the owner of Autac. We don’t do B2B selling over our breakfasts, but it’s always good to hear about undoubted success especially when it requires change. How did they do it?
David Lowe left school at 16 with few or no qualifications and started farming, then became a driver’s mate, eventually working for 10 years as Commercial Director of the Culina Group (the transport business that bought Eddie Stobart in 2021). Then came one of the quirks of fortune. His wife Sallie was an employee of Macclesfield family firm Autac which made cables for trucks, planes, EVs and the like; they had always treated her well. However, with no succession planning the owners wanted to retire, and invited Sallie and David to consider taking on the business. The couple decided to buy it, financing the purchase from his pension fund, their home and all their savings. This was in 2016.
David had brought examples of what Autac manufacture: electrical retractable cables for a multitude of sectors, including but not exclusive to commercial vehicles (OEM and Aftermarket), defence, aviation, communication, agriculture, marine, chemical, medical and safety. Any truck has a lot of them connecting the cab with the trailer or body, as do cars and caravans, but the product though vital was not high tech with plenty of competition especially from China.
While this was going on, Lucy was also changing tack. Brought up in New Mills she had headed to France where she worked for Airbus, using her language and people skills; Lakshmi Mittal became her boss as she advanced to Head of Comms at ArcelorMittal providing a wide range of services to 300,000 employees globally. “But it was like lots of SMEs,” she said. In 2014, back in the Peak District, married and with a new baby, it was time to put that experience into practice with her own consultancy.
So two remarkable people with a wealth of knowledge and skills came together – but not just yet. David had taken a long look at the business he had just bought, and realised there was a big challenge ahead. “The factory ran everything, and the business was just ticking along,” he said, meaning that the factory employees pretty much decided on shift patterns, overtime, delivery dates etc – with no practical management or focus on the needs of customers and no future planning. So first he had to look at the leadership and structure, and “create some energy, passion and growth.” He regards himself not as a boss but as a caretaker – so the business can be passed on in great shape, perhaps to his own children in due course. But there’s no doubt who is in charge.
In 2016 he created a 3-year Plan and shared it with staff. “Three senior managers then left,” he said dryly – if they didn’t buy into the new vision, they were better off elsewhere. But it was all cordial, no hard feelings. It worked. Through 2016, 2017 and 2018 Autac saw 10% growth every year. Dave found “every excuse” to visit customers to find out what they needed, and “any excuse” to get suppliers to visit them. An efficient factory with engaged employees and managers greeted them, and a willingness to learn from every encounter. In other words, Autac was now starting to make a very good impression.
By 2019 the next Plan was needed. His due diligence had shown that Autac had some big blue-chip customers and he could see the huge potential to grow and work with more. That was when he called Lucy, assuming the next stage would involve branding, advertising, communications. So his brief to her was, “Help us look the part, so we can play with the big boys.” A reminder, as Lucy said, that “If you’re not branding yourself, others will do it for you.” It takes years to build a name, and hours to destroy it. But the first thing to do, is improve the offer itself.
She arrived and told him, nicely, to get lost – she needed to talk with employees and managers without him present. And that was a revelation: David might have believed he had purpose and values, but the rest were still somewhat in the dark. She sat down with his team, listened to their thoughts and stories, and asked: “What do you think are the values of this business?” and they picked honesty, teamwork and quality.
“Branding isn’t a fancy logo,” she said. “It’s the spirit and reputation of the business.” Comments like “high quality,” “innovative,” “good to deal with” do not come lightly. And most of all, building trust has to start with leadership; it has to be visible, and to be seen doing the right things, in order to be believed by everyone they deal with.
We are living in “VUCA” times, she said. Volatility, uncertainty, complexity and ambiguity are dominating choices and judgements. People are looking at brands and businesses in a different way; brand loyalty and stability are long-forgotten traditions. Brands need “purpose, substance, provenance and positive realism – that means, you don’t have to say everything is rosy” – honesty is a vital element.
“But in the end,” David insisted, “it’s all about people.” A point made to us before by successful enterprises such as Premier Inns and Timpson.
Also on the list: “We are part of the community” – so Autac does a lot of charity work, and backs staff who undertake charitable activities. David and Sallie (the Finance Director) lead from the front, having raised very large sums for Prevent Breast Cancer in memory of Sallie’s sister, including David hiking up Everest. “You end up networking with lots of people,” he pointed out. It all helps create the personality of the business.
But it’s not all easy stuff. David: “Knowledge is Power: you have to go where the market is, know what the customers want and need.” The aim is to create a sustainable profitable and innovative business, but this means serious investment: if you’re dealing with Scania or MAN, they need to take you seriously.
Then… Covid hit. “A perfect storm.” David says he didn’t sleep for a week, with no idea how to react. China shut down, every plane halted, the order well collapsed. Their biggest competitor in Italy went into freefall. Autac decided to stay open, with rigorous cost control, ensuring full productivity for every hour worked and paid for. Within six months that paid off, as customers found this small British manufacturer still had parts and was willing to engage on solutions; an order well of 100,000 possibles suddenly surged to 2 million. Their lead time went from 6 weeks to 28 weeks, the cost of copper and components soared. But comms was the key – keeping customers informed on their order, ordering three months ahead themselves, and ensuring staff and managers were abreast of it all. At monthly management meetings he shares as much information as possible on sales, costs, problems and solutions – “I’m really teaching them, how to run the business.”
By the end of Covid’s first year turnover was up to £2.8m, then £3.7m in 2021 (“HR was a nightmare, with a lot of agency staff”), £4.4m by 2022 with lots of repeat business, and this year it should top £5.2m. “We are still growing; we have not saturated the market,” David said proudly. 30% of sales are overseas, with customers now in many countries. He felt they have a real head of steam and momentum, are aiming at £7million and should reach £10m before long.
In October 2022 the announced a £2.8m investment in a new state-of-the-art facility, a second manufacturing site wit a sizeable 12,500 sq ft that nearly tripled the floor space. It was up and running in 5 weeks and opened in January 2023. As a keen member of the Northern Automotive Alliance (NAA), Autac were thrilled in September to win the Manufacturing Excellence Award sponsored by Jaguar Land Rover UK. One feels it won’t be their last.
Asked about Brexit, David .. shrugged. Yes, extra paperwork added some cost, but it was sorted quickly and UK Customs were ready. It took longer for the Europeans to get their heads round it all, he felt; Autac didn’t lose any business, rather the opposite.
Autac has been in existence for 60 years next year, and its future has never been brighter. If you’d like to hear more about how Lucy and David worked together to transform it, they talk on her “Future Proof Your Business” podcast (on Apple, Spotify or wherever you get your podcasts) or go to www.iamlucyrennie.com/podcast where she has other examples for you to enjoy.
A sparkling, fascinating morning, with lots of great ideas. Thanks to both.