Leaders Insights - Pursuing a Commercial Journey
The 4th in a brand new series of podcasts which engages leaders from the LATCo sector in conversation to share learning and good practice which can help other leaders and organisations facing similar challenges.
In this podcast, we will be taking a break from discussing all things covid19, which has been a recurring podcast theme the last few podcasts, and focusing wholly on a topic which is often on the agenda for many LATCo’s… and that is how to be more commercial, with success often measured by the extent to which they are winning and delivering 3rd party work for clients other than from the Council shareholder.
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Some episode timings are approximate.
[00:00:25.840] - Farooq Mohammed
Good afternoon, everyone. Welcome to the latest in this new series of podcasts which engages leaders from the LATCo sector in conversation to share learning and good practice, which can help other leaders and organisations who are facing similar challenges in the marketplace. My name is Farooq Mohammed. I'm an executive board member with the LATCo Network. And I'm delighted to have join me today, Ian Surtees, who is the CEO of Vertas Group, which is a LATCo. And I'll be inviting Ian to introduce himself shortly and tell us a little bit more about himself and Vertas.
[00:01:09.490] - Farooq Mohammed
Before we do that, what we're going to be doing in this podcast is we're going to be taking a break from discussing all things COVID - 19, which seems to have taken over all conversations and certainly the last few podcasts. And what we are going to be doing on this podcast is focusing wholly on a topic which is often on the agenda for many LATCo's. And that is how to be more commercial. And that is going to be the title of this podcast, pursuing a commercial journey and hearing from Ian.
[00:01:52.230] - Farooq Mohammed
How Vertas have gone about doing that and commerciality for many organisations. Is something that is very often measured by the extent to which they are winning and delivering third party work for clients other than their own council shareholder. Now, I first met Ian earlier this year in London at the IOD and it was part of Vertas coming on board and becoming a full member of the LATCo network. And speaking to Ian, I was certainly inspired to hear about the Vertas journey and how far they have come from when Ian first joined them.
[00:02:38.990] - Farooq Mohammed
So, I'm absolutely delighted that Ian has been able to find time in his super busy diary to meet with me today and join me on this podcast and have a conversation.
[00:02:51.440] - Farooq Mohammed
[00:02:53.930] - Ian Surtees
Hello, how are you?
[00:02:55.320] - Farooq Mohammed
I'm very good. I'm very good Ian. Thank you very much for joining me on this podcast. I'm still relatively new to doing these podcasts. I don't know if you've done these before.
[00:03:05.660] - Ian Surtees
I'm very new. This is my first.
[00:03:11.230] - Farooq Mohammed
Well, I'm not that far ahead of you, so we can help each other along as go. So, Ian, I'd like to kind of dive straight in and for the benefit of our audience. I obviously know you a little bit. Can you introduce yourself tell us a bit about yourself, your background and your career, your journey to date? Just so we have got a bit of a better picture.
[00:03:32.940] - Ian Surtees
So, I come from humble beginnings from the North East. Big football fan, obviously, Newcastle. Thought I was going to be a footballer for many, many years until at the age of 16 somebody told me I wasn't going to be. And I went into catering. I was seven, six, two for people of a certain age. And then in facilities and I've been in the sector for 30 years, let's say. I have worked in Europe and the UK and was with OCS for five years as an ops director looking after the FM business, soft services, not hard across the UK. Five and a half years ago I took this opportunity to come into Vertas as a new adventure as phase 2 of the LATCo.
[00:04:32.800] - Farooq Mohammed
Well, 30 years. I've got to say, for both those in the audience that can't see you, you certainly don't look old enough to have got 30 years under your belt. So, yeah, that sounds like a lot of commercial experience that you've brought in to into your current role. So, tell us about the organisation. Vertas, tell us about the name. Where does that come from? What does it mean? What’s the thinking behind it? Tell us a little bit about the organisation. Where is it located? Tell us about the shareholders? The services that it provides, turnover, staff numbers, just to give us a sense of the organisation.
[00:05:11.440] - Ian Surtees
So, it wasn't Vertas. When I first started, it was named Easton Facilities Management Solutions Limited.
[00:05:21.750] - Farooq Mohammed
Rolls off the tongue.
[00:05:23.630] - Ian Surtees
Well, not quite. My email was about two foot long. So, it was clear for us to change things and culturally change things we needed to change the name. Which was one of the things that we looked at with the rebranding. Traditionally we worked in the East of England. If we come on to our growth. We were when I started at around £28 million in terms of turnover and currently, we will finish the year at £76 million within 6 trading years. We employ circa 300 people across all our services. So, we have been very busy.
[00:06:05.580] - Farooq Mohammed
Well, that's been quite a journey, a growth journey, just simply by the turnover metric, in terms of when you join them, whether where and where they are today. How long ago was that when you joined Vertas?
[00:06:18.070] - Ian Surtees
I joined on the 1st of September 2014. I remember it well.
[00:06:25.010] - Farooq Mohammed
I feel like there's a story behind that.
[00:06:27.710] - Ian Surtees
No, no, no, I I've never worked in a sort of like that body organisation. I've always worked privately. So, it was a bit of the unknown.
[00:06:40.870] - Farooq Mohammed
What attracted you when you say you've never worked for a public sector-based organisation before?
[00:06:47.200] - Ian Surtees
It wasn't a public sector organisation or the the ownership. It was the opportunity to have a voice, make changes, drive the business. I think there were a lot of us in FM by name that are called directors. But we're not really directors. We hold the title, don't really get a voice. I think it's really important.
[00:07:09.630] - Farooq Mohammed
So that was a big kind of pull point for you to join.
[00:07:13.840] - Ian Surtees
Yeah. Yeah. It was the main reason, really. It was you know, I was in a large organisation, like a FM organisation where, you know, I wasn't going to be on the board for many years. I didn't think. I'm not getting any younger as we expanded on earlier. And I thought it was the right time for a change. I saw some opportunity. I saw great prospects and had the opportunity to grow a business and again, make those changes. Drive something. And be recognized for that. Independently, you know, a great opportunity.
[00:07:51.420] - Farooq Mohammed
And where does the name Vertas come from?
[00:07:55.620] - Ian Surtees
We bandied stuff around of what we need to be and basically, we started with our err, when I joined, there weren't any sort of company values. And there was a cultural change program needing to happen. So Vertas basically one of our values is sustainable. So obviously, vert being green and Tas being task orientated, I'd love to say it was more scientific than. And it was more, you know, thought out but it was. It was pretty much it was it was quite slick. And it sat with where we wanted to be. So, yes, that is ha, I'm confessing now that that is as difficult as it was, really. But it is helped with that cultural change program.
[00:08:42.820] - Farooq Mohammed
Well, I'm going to be interested in talking to you about people and culture towards the end of this podcast. And I'm just wondering about how fundamental or not that whole kind of rebranding, you know, of this kind of identity was and the impact that it had on your people. So, in terms of the conversation I'd like to have with you, it's very much in three parts. So, the first part is I'd like to kind of take you back to 2014, the start, and just understand the commercial journey. We're here today to talk about that commercial journey. And I think it's fair to say that we begin by going back to the start. And just you've already given us a little insight in respect of where Vertas was in 2014 when you arrived for the benefit of our listeners. Can you paint a bit more for kind of detailed picture, also talking about what shape the organisation was in and how big was the challenge facing you? Looking ahead.
[00:09:57.180] - Ian Surtees
I think what I found was the shareholder had done a really good job getting those services under one roof into a trading organisation. I think that was phase one to make the decision to put those services into that organisation and spin it out as such into a trading business. I think what happens with that phase one is that you take a lot of people TUPE into that organisation and policies and systems a lot of the time are transferred in there as well. So, you become an extension of your previous owner. It was quite siloed working. And I think that it was really important that we needed to change the culture of the people. That was the key driver on the phase. So, phase two, when I came in. And then you look at rebranding in order for us to think different we needed to change things. We needed to change our headquarters. We needed have somewhere that you could bring clients you were proud of. We needed to change the name. We needed to sort of upgrade what it already was.
[00:11:13.470] - Ian Surtees
We needed to have a look and analyse the commercials, the processes, policies the people and I think hugely, hugely important, I think the first conversation I had with the board and the shareholders. What do you want me to be? And I would recommend to anybody to ask the first question of what is this organisation? What and how would you like us to behave? How would you like us to act? And I mean, in terms of commerciality.
[00:11:46.920] - Ian Surtees
And that was really key that my shareholder wanted us to be a commercially driven organisation that would grow that would bring new money, that would do a lot of social and add more social value, work in the community, work with the shareholder. Look at grow the work force, great for the area, but importantly act as a commercial organisation.
[00:12:20.900] - Farooq Mohammed
It's quite a poignant question that you talk about there, asking the shareholder, what do you want me to be and I'm assuming that you mean that in an organisational context. What do you want Vertas us to be? And it's interesting because often leaders will go into an organisation and the focus very much is on visioning in terms of, you know, where do we want to be heading? Where do we want to be going? Which is quite an important leadership goal in itself. But the fact that you started by. You know, asking the shareholder and almost forcing them to take stock and think about what they want their LATCo to be.
[00:13:07.180] - Farooq Mohammed
How easy was it to have that conversation and what kind of response did you get? When we talk about the shareholder, which is a local authority, and I would expect that within that you've got different stakeholders making a distinction between the shareholder and the stakeholder. And you may even be facing competing and contradicting conflicting views from different stakeholders in respect of, you know, what do you want the LATCo to be? How easy was that conversation? And, you know, did you facilitate that or was it something that was facilitated by the shareholder themselves?
[00:13:52.580] - Ian Surtees
I think it was quite, well, very easy conversation to have, because they've done so much pre work as an organisation when they had decided to do something slightly different in terms of recruiting me. They obviously went through a process to decide what they wanted. So clearly my skill set matched what they want. You know, I'm a very commercially focused, driven guy. And I think my skill set suited well, they'd already decided they wanted to be.
[00:14:31.070] - Ian Surtees
So, the conversation. What do you want to be? And then coming back with, you know, commercially driven organisation. Clearly, we were hugely aligned. And I heard everything that I that I thought was absolutely enticing to come and be part of. So, they'd already done a lot of pre work and a lot of a lot of focus on what they want. It's been a lot strategy around understanding what they wanted to be.
[00:14:57.990] - Farooq Mohammed
Interesting. Another challenge that I hear quite a lot about is the difference between that kind of theory and the kind of reality. So, it's one thing. An organisation or a shareholder saying that, you know, we want you to actually go out there and be more commercial and as you framed it, you know, bring new money in. But when the reality kicks in, you know, for some LATCo's that, I've had conversations, but not necessarily Vertas.
[00:15:34.540] - Farooq Mohammed
It can almost feel like the shareholders then putting the brakes on. So can you kind of share some thoughts around once that decision had been made and as you say, even before you arrived, you know, the shareholder had already done a lot of pre work thinking about being more commercial. You were almost the final piece of the jigsaw that we're bringing in to enable that journey. And once they had brought you in and by your own admission, you are a very driven, very commercial individual, very focused on growth, delivering the numbers and delivering the order book.
[00:16:14.070] - Farooq Mohammed
And given where you started from, what was that number again in terms of what was the turnover when you arrived in 2014?
Circa £28 million
[00:16:26.150] - Farooq Mohammed
Twenty-eight million, so you've effectively tripled that turnover to where you are today circa £76 million, I mean, that is a phenomenal rate of growth. By any standard. So, it just kind of talk to us about the shareholder and the realization of this journey, kind of picking up momentum and picking up pace as demonstrated by the turnover.
[00:16:54.670] - Farooq Mohammed
How was that? Have you had to have some difficult conversations over the last six years?
[00:17:01.880] - Ian Surtees
With the shareholder? Not really. I've had to have many difficult conversations over the last six years, not with the shareholder.
[00:17:10.050] - Ian Surtees
The shareholders have been fantastically supportive and absolutely support where the business needs to be, wants to be. So, yes, if the shareholder is fully, fully on board with with growing the business and growing the reputation and something to be proud of, you know.
[00:17:36.710] - Farooq Mohammed
And in those six years, I expect that the local authority will have gone through elections, local elections and they may have been change in personnel. I don't know. Has that had any bearing on the kind of support that you've enjoyed and the Steer and the direction?
[00:17:57.290] - Ian Surtees
Not really. We we spend we spend a lot of time briefing the shareholder stakeholders, within that. We are fortunate. We have had a lot of consistency and continuity over that period of six years. Of course, things change, people change. But I think we've always, you know, without governance, we've always got the message out there, the transparency. The five-year business plan is shared with the shareholder and the stakeholders.
[00:18:28.950] - Ian Surtees
So, yeah, we we we don't just talk to the conservative groups that are that are inside, we talk to all the parties, cross party in our governance. So so everybody understands where we are as an organisation. And we have some really good working relationships as well within our shareholder groups, stakeholder group.
[00:18:53.780] - Farooq Mohammed
So, I'd like to kind of move us on to strategy, which I'm sure you'll appreciate is critical for any organisation, especially in the context of being more commercial and pursuing growth.
[00:19:08.500] - Farooq Mohammed
So, what was your your approach? What was your strategy to achieving the growth that you clearly have achieved over the last six years? What was what was a kind of core of that strategy.
[00:19:21.570] - Ian Surtees
So I think to start with, you know, you strategically review all of your service areas, your behaviors, your processes, policies, people, ability, culture, you do all of that stuff that most people do within an organisation. How are we going to grow? So, we had at the time 300 circa, 300 clients.
[00:19:42.980] - Ian Surtees
So, we looked at our service density portfolio and what we could do in terms of bundle services. That's one area> Organic growth, so tendering for work against the commercial world, public or private. An area of our growth has come from organic growth and acquisition. We've acquired eight businesses within the six years. We have a model that we prefer to self-deliver our soft services. And there were some areas within the business that we weren't self-delivering. So, we've gone about our strategic acquisition strategy, quite pointed.
[00:20:28.650] - Farooq Mohammed
It is really interesting to hear about the acquisition element within that growth strategy? I think it's fair to say that it's quite unheard of within the kind of LATCo context. The fact that you've done eight acquisitions in six years, I think one would be a massive achievement for any organisation. Talking to the shareholder, I'm very interested to hear, you know, how you went about positioning the ambition to grow through acquisition. That strategy and what response did you get? Unless you're going to tell me that your shareholder was already in that space, quite supportive.
[00:21:14.650] - Ian Surtees
Yes, they were to be fair, when I went through the process, there was a recognition that it would be through organic growth, service density and there may well be opportunity for acquisition. It wasn't a hard sell. It was something that it already thought about. I think for me it was very, very structured. It was what do we need? What do we self-deliver, what do we outsource? What are the benefits? And we went through quite a lot of that and within our five-year business plan is an acquisition strategy. So, it was very clear on where we wanted to go to achieve our certain targets. What would underpin some of that growth.
[00:21:56.460] - Farooq Mohammed
And was that to position towards having a local versus national kind of a footprint? Or sorry, let me reword that! Positioning for a national versus local footprint?
[00:22:11.580] - Ian Surtees
Not at first, I think. I think you go through phases, where I want to make sure that the business was financially stable. We wanted to look at the culture and the brand and the people and all of that good stuff. Change systems away from. So, we have an element of independence. We're not relying on our shareholders for things. That's the first phase. Then you start to look at the east of England, the eastern region. So that acquisition came with a portfolio of clients that all that that meant that our geographical spread would change just by client base of what we acquired. So, when we acquired, for example, our security, business or park security, they were trading down from the south coast Portsmouth and all the way into London and up the East Coast. Norfolk and Cambridge. That was great. We then looked at maybe spreading our wings gently. Going into areas bordering counties of Norfolk, Essex, Cambridgeshire. I'm not sure other organisations and LATCo were too excited about that. But that's what we decided to do. And we did that and then as we progressed with our acquisitions and then other opportunities, it sort of flowed really. And if this is a good time to talk about our national versus local. Strategy. It's sort of chicken and egg. We had a long, long debate about. You know, we were in the east of England and went down into Essex, down into London. And we're going upwards and outwards.
[00:23:58.790] - Ian Surtees
If you want to be a truly national business when the time is right, what comes first? Do you win UK wide business and recruit a team, or do you recruit a team and then target U.K. business? That was a big debate. So we we thought the time was right to go and bid for some of these larger contracts and bid against some of what I class as tier one FM providers such as Mitie, ISS or OCS etc? And lo and behold, we won the ambassador of theatre group whilst we're having a discussion about what do we do? How do we set up? The ambassador theatre group 38 theatres across the UK. So by winning that it automatically made our thinking quite clear that we won that business right. What do we do? And when you then map out all of the other business that we've got, the acquisitions that we've got, the geography and the client, you then help service hubs and service areas. So it's sort of evolved as such. That comes with its own challenges, obviously. I'm sure we'll discuss those. But that was that was how we we approached.
[00:25:11.030] - Farooq Mohammed
Interesting, just going back to the acquisitions, and from my own experience, I know that once an organisation acquires a business that brings its own set of challenges in terms of integrating them into your own business. How was that? I mean, you've done eight in six years. I mean, that's some going. Can you talk to us about that kind of integration piece? And then have you been.
[00:25:42.060] - Ian Surtees
I think you learn a lot as you go. I think the biggest learning for me is make sure that your due diligence is accurate and detailed. I think there's a point where you don't actually know what you're buying until you have bought it. So due diligence will give you commercial due diligence, but you don't get a cultural due diligence paper. That can be where the challenges are.
[00:26:15.700] - Farooq Mohammed
And it sounds like you faced a few challenges. You've had to overcome.
[00:26:21.280] - Ian Surtees
Absolutely. We obviously have bumps in the road, and we have challenges every day. I think you learn by your first one and you don't repeat what you or you try and not repeat what you what you've done from the first one. And the process of the first acquisition to the eighth was very, very different. So, yeah, like everybody, we have bumps in the road and we had issues and integration isn't isn't easy. Certainly, when we talk about new UK wide businesses and we have a HQ and centralized functions such as finance and HR, etc, in Ipswich. And we've got clients in Aberdeen, Edinburgh. Yes of course we have had some challenges.
[00:27:08.230] - Farooq Mohammed
You touched on the fact that moving into other local and regional markets around the UK, some of the LATCo weren't too happy about you doing that.
[00:27:21.640] - Ian Surtees
I wouldn't have thought they are. Competition is good for everybody, isn't it?
[00:27:28.050] - Farooq Mohammed
Yeah. Yeah. And that's what I was going to ask you about, the kind of competition. So, you've not had any kind of direct competition where you found yourself. You talked about tier one FM companies and competing against those. Have you found yourself competing against other LATCo's and what's that? You have?
[00:27:47.420] - Ian Surtees
Yeah, absolutely. Certainly, we we have many LATCo competing against us in various tenders and bids. And it is I believe the competition is good for everybody.
[00:28:04.820] - Farooq Mohammed
Yeah. Raises the standards.
[00:28:08.170] - Ian Surtees
[00:28:12.800] - Farooq Mohammed
So, you talked about the local versus national approach, particularly in respect of clients, and you gave an example of Ambassador Theatre Group. Thirty-eight cities across the country. I'm also aware that Vertas has other very innovative clients, national clients, high profile clients that you've taken on. Has it all been plain sailing? Has it all been easy for Vertas in terms of making those adjustments?
[00:28:50.390] - Ian Surtees
No, nothing's ever nothing's easy. I wouldn't say yeah. I think there are always going to be when you are entering a new market. When you are taking people on a journey, a cultural change, moving from regional lines to a UK business, there are plenty of challenges, cultural challenges, clients challenges. And when you then decide that you think you're ready to go into the environment where you are challenging to tier one, and clients become bigger and more robust. I think that is very, very, very different.
[00:29:30.300] - Ian Surtees
I think the company operates; a lot of our business historical businesses has been relationship based. With some of the larger clients is quite a lot more contractual. And I think that's a cultural change in some of my team that we had to really, really train in. We've had to recruit and bring in some of this skill set also.
[00:29:58.280] - Ian Surtees
So that's been a huge step change from the relationship-based transaction to the contractual transaction. And yeah, we've had bumps in the road, let's say, with various people about expectation. You know.
[00:30:18.420] - Farooq Mohammed
Well, that brings us nicely on to culture, and I wanted to ask the question around, you know, from my own experience of conversations that I've had with LATCo's at different stages of the journey, just simply making the transition to establishing an arm's length company, providing services back to the shareholding Local authority in itself can be a challenge for many, let alone then factoring in a commercial approach into the mix as well. On top of that, which can suddenly become an impossible transition for many organisations, I think you've already kind of touched on some of these things. But what would you say are key steps that you've taken to achieve that fundamental step change? You've just talked about going from a service-based relationship transactional model to very much a contractual commercial based model and recognizing the change in skill set that's needed to enable that change, that switch.
[00:31:32.560] - Farooq Mohammed
You've also talked about acquisitions of businesses, which I expect will have brought in some of that commerciality that you needed within the business, which would have worked for the better in terms of then making the organisation. I think when we've had conversations before, I found it interesting to hear from yourself, given your background. You've talked about having to be a lot more focused and sharper in dealing with the private sector, which I found quite curious, because in my mind, even though you're the chief executive of Vertas, which is a LATCo, given what I know about your background, in many respects, you are the epitome of the private sector, commercial individual. So just just going to bring it back together. I have kind of gone off one now!
[00:32:33.650] - Farooq Mohammed
Culture! How have you kind of changed that for Vertas. What do you think are the one or two things that you've done that people listening to this conversation could think ah that's what we should be kind of focusing on?
[00:32:47.010] - Ian Surtees
I think it's in stages. What we focused on when I first started was the fundamentals, the low hanging fruit. Let's say. The policy and the process and the governance and compliance and all of that good stuff.
[00:33:02.530] - Ian Surtees
And we got it to a position where we could trade well. We then reviewed, we stopped, and we reviewed our people. And we've spent a lot of time on our erm, on our people strategy and leadership pathways. So. So that is obviously through our succession plan, our nine-box modelling that we do based on our appraisals and our operational reviews on a monthly basis. We identify or we give people the opportunity who want to get on a leadership pathway to get on to that path.
[00:33:42.770] - Ian Surtees
And that includes, you know, personal development. I did my MBA with when I was with Vertas. The timing was tough. It was in the first two years that I brought that I started with Vertas. So, in hindsight, maybe. But we we put people through personal development. We have got an emerging leaders’ program. So, we have identified people who we believe are the next generation. We do mentoring with the SLT and the director's myself. I do mentoring.
[00:34:20.170] - Ian Surtees
We have some mentoring programs. And again, we very much look at succession planning and the next generation I have just. I've just implemented an associate director level in the business, started in April as a as a sort of shadow board. So, I see those four associate directors and they are people HSQE and two in operations that are the next board members. And I think underpinning that, we have a senior leadership team that consists of about 12 people who are the next generation downward.
[00:34:58.210] - Ian Surtees
So, I think it's a constant review of what you have. And taking people on a journey now. Not everybody wants to go on a leadership journey, but I think we have enough people to do so. Yeah, we've we've got to the finals for an award in London based on our people strategy. And I think that will pay dividends in the long term.
[00:35:23.460] - Farooq Mohammed
Congratulations on making the finals. When do you find out?
[00:35:27.530] - Ian Surtees
We found out that we were we were up against Volkswagen, Coca-Cola and Deloitte and we didn't win.
[00:35:34.650] - Ian Surtees
But I wasn't really fussed about out that. We got to the final and we were recognized for what we've done. This is a relatively small organisation, is a great honour.
[00:35:43.490] - Farooq Mohammed
I think within that peer group, I mean peer group within that mix. I mean, that's a fantastic achievement in itself Ian and a thing that's certainly a credit to you. And certainly, listening to the long list of examples that you've just given in terms of how you've gone about changing the culture. It's quite evident that there's been huge investment in people and talent to move the organisation forward. I have to ask the question, did you encounter any pockets of resistance within the organisation in terms of making that switch, you know, towards becoming a more commercial organisation?
[00:36:23.760] - Farooq Mohammed
And how did you go about tackling those pockets of resistance if that's the right word?
[00:36:31.650] - Ian Surtees
Yeah, absolutely. You would be surprised if I said we haven't, we have people within the organisation who've been here and who had been here for many years. Some people do not want to change. Some people don't want to live and breathe the new values. Some of it. Some of those people have left the business. Some have from from the starting point of not really sure, are now sitting in the senior leadership team. And so, I think it depends on the person.
[00:37:04.710] - Ian Surtees
I think all we can do is give the opportunity. I think we're very transparent in discussing where we're going to be and what we're going to what we're going to do and how we're going to do it. And people ultimately will decide whether or not they want to be part of that journey or not. And we have had people who haven't. We've got the majority, thankfully, who have, which is great.
[00:37:28.520] - Farooq Mohammed
One of the other kind of challenges for many LATCo's and local authorities is the relationship between them. So between the shareholder and the LATCo and that kind of governance piece and looking around at just the members within the LATCo network and the different models there, there's a real diversity in governance structures and the roles and responsibilities that come within that and where those roles sit or where those responsibilities sit with the different stakeholders. You've got quite an interesting governance model from the conversations that we've had.
[00:38:13.680] - Farooq Mohammed
And I think when you've characterized it in terms of trying to choose my words very carefully here, when you've characterized it in terms of being allowed to get on with managing the business, I certainly think you've got that kind of balance right. Could you, for the benefit of our audience, just talk to us a little bit about your governance structure.
[00:38:38.470] - Ian Surtees
So, we have a. Chairman, chairman of the board, and there are obviously five statutory directors. We are allowed to make decisions to a level, obviously, but we've got our independence as a company board to, as you say, get on with it under quite a sort of robust governance process, transparent process.
[00:39:12.000] - Ian Surtees
So, in terms of governance, you've got the individual boards. I've got two sister companies and the three businesses sit within a holding. Company, the holding company, the three CEOs are managing directors, set of statutory directors on that holding company. Plus, the chairman of the boards, plus an elected member as a statutory director of the holding company. So that gives some governance of that holding company level. That elected member then reports into and we do as well a cross party elected member, shareholder group.
[00:39:56.680] - Ian Surtees
So, it's important that it's across party, obviously, to brief everybody, to keep everybody up to date. And we present our we meet quarterly, and we present our monthly our quarterly sorry performance. We present our five years business plan. We receive some strategic direction from that shareholder group in terms of their challenge, their direction, what they'd like to see. It's quite robust but is very transparent. And it gives us an element of freedom to run the day to day business.
[00:40:32.090] - Ian Surtees
But the strategic governance, guidance, and compliance from the shareholder. That gives them a degree of comfort.
[00:40:41.890] - Farooq Mohammed
It sounds like it's some model that works really, really well, and he talked about the chairman's and use term plural. I understand you have the same chairman.
[00:40:52.400] - Ian Surtees
We have a chairman that chairs three boards, which gives us consistency there. And the chairman sits as a statutory director on on the Suffolk Group Holdings as well. So, we have that LATCo governance arrangement.
[00:41:12.510] - Farooq Mohammed
And you talk about briefing the cross-party shareholder group. And I think the word that you use there briefing is making a distinction between reporting. So it very clearly kind of suggests that it's a high level of trust within that kind of relationship and delegation to get on with managing the business to the holding company, given that they also have a statutory director, an elected member on the board of the kind of holding company. Is that correct? I'm just trying to work out.
[00:41:53.030] - Farooq Mohammed
So, I'm trying to work out what kind of thing would you have to go back to the cross-party shareholder group for in terms of decision making? It sounds like you have quite a lot of delegated authority.
[00:42:06.800] - Ian Surtees
We do. But if there's something that we discuss at board level, and, think that we need to escalate upward. So, if we're looking at very large acquisitions, we would also know on that elected shareholder group, the one five one sits. The deputy chief executive sits as well.
[00:42:25.820] - Ian Surtees
And because we are very, very transparent. Any decisions that we think would would need that sort of signoff. We have those discussions. A lot of things are in our five-year business plans, including acquisitions and the like. Outside of the formal membership. Sorry shareholder group meetings. We also meet with individual people more frequently. So, with the shareholder from the services that we're providing to them, with the deputy chief executive, with the one five one officer on a monthly basis.
[00:43:02.170] - Ian Surtees
And we share all of our information in an open book manner. So, yeah, it's. It starts off. Obviously, you can you gain some trust as you go. But I would always ask, well certainly with things that the shareholder group and points of reference that need to be escalated are as such.
[00:43:28.600] - Farooq Mohammed
And just on the cross -party shareholder group Ian, what what what is the mix between the different parties? What what's the balance? Is it fairly even in terms of numbers sitting on LATCo?
[00:43:40.340] - Ian Surtees
Yes, you asking me a question I can't answer. There are about twelve. I would think. Four or five are from the conservative group, and then you have Labour, Lib Dems, etc, who make all the remaining elected members.
[00:43:55.500] - Farooq Mohammed
So, the administration of the majority. Yeah. Plus, the plus the officers that sit on their. We also generally go to independent scrutiny and audit. Obviously, we are formally audited on an annual basis.
[00:44:11.390] - Farooq Mohammed
My penultimate question is very much, you know, getting your perspective as an individual, given your journey and where you've come from, which is the private sector. What are your thoughts about the LATCo model? And do you think the conventional public sector outsourcing to tier one contractors, private sector organisations still have a future with the LATCo model gaining in popularity. What are your thoughts on that?
[00:44:42.430] - Ian Surtees
Well, I think there's an opportunity, certainly for first generation TUPE transfers or people who are who are looking to outsource services on a first generation basis that are sort the middle, middle, middle house is rather than outsource everything to a tier one. I think there's an opportunity to joint venture with another. Public sector organisation, that then gives you a voice in a shareholding in that. So, you won't you don't lose full.
[00:45:22.910] - Ian Surtees
You don't lose, lose, lose, lose the the opportunity to mould that business and drive up business, you have a voice and a seat at the table. I think that's really interesting. I think over the last two, three years, some of the tier ones have. It's well publicized some of the tier ones of not manage their business and a lot of people have been affected by that. So, I think to give you an element of control and the opportunity to still have a voice, the LATCo model works for me hugely.
[00:46:06.470] - Farooq Mohammed
Do you think the private sector still has a future in this space? In the outsourcing space?
[00:46:12.410] - Ian Surtees
Absolutely. I think a lot of a lot of LATCo's are becoming more commercial and a lot of LATCo's now have the ability to do as we do and challenge the traditional public sector providers. And you can see that. You can hear that. You can sense it. We're coming up against more LATCo's in some of our bids, which is a good thing as well. So, yeah, I think its horses for courses, but absolutely no problem. I think it has a future.
[00:46:47.060] - Farooq Mohammed
Ultimately, it's got to be advantageous for the taxpayer.
[00:46:51.290] - Ian Surtees
Massively, Hugely, Yeah, absolutely.
[00:46:56.270] - Farooq Mohammed
So, we're now on to that the last question, unfortunately, time has caught up with us. And one of the things that I'd like to ask my guests is to invite them to share what are the kind of big lessons that they've learnt on their journey. And in your context, given that this podcast is about pursuing a commercial journey, I'd be interested to understand what are the kind of big learnings that you could share with our audience? Other local authorities and potentially other LATCo competitors who are listening to this podcast about what your secrets are? What what what lessons that you can share.
[00:47:40.870] - Ian Surtees
How long have we got?
[00:47:44.920] - Farooq Mohammed
Not very long.
[00:47:47.260] - Ian Surtees
But I've learned many, many, many lessons. I think investing in your people is absolutely key and is absolutely priceless. I think understanding what you want to be. I think setting up the parameters and the framework to work to it. I think being consistent, and transparent. Is absolutely key. I think there's a. A recognition that not everybody will make it where you want to be. And I think. It's really important to assess what you're doing. I think it's important to stop and review. And if you have to make tough decisions, make them, and not making decisions is the worst thing, is the worst thing you could ever do. Probably sums it up.
[00:48:48.000] - Farooq Mohammed
A lot of wisdom in that I think that counted five or six things in what you just said there in terms of. Let me see if I got this right. Investing in your people, pretty key, understanding what you want to be, which is where you start in your journey from putting in place the parameters and framework that enable you to embark on that journey. Being very consistent and transparent. And I expect that both in respect of your staff internally as well as your shareholder, to build that trust within the relationships to move forward. And the last one, the fifth one was around making tough decisions and not making those decisions. Can can can be a dear price to pay for it is that fair.
[00:49:46.040] - Ian Surtees
[00:49:46.690] - Ian Surtees
And the other one is that that everybody can, me included, can run at 100 mile an hour. There's a you need a, you know, a good board to say. Stop, let's review let's just review where we are. Not everybody runs at the same pace. And I think it's really important that you take it in bite sized chunks. It's not so much you get overwhelmed as a leader. It's the people around you may be overwhelmed. That might not want to say, you are running really, really quickly.
[00:50:25.330] - Farooq Mohammed
Wise, wise words Ian very wise words, Ian. It's been an absolute pleasure, an absolute delight. We've covered quite, quite a lot of the last 40, 45 minutes. I hope you've enjoyed the podcast. Enjoyed the conversation.
[00:51:24.940] - Ian Surtees
Great really good to catch up.
[00:51:26.680] - Farooq Mohammed
Yeah. Yeah, I'd very much like to invite you back again to perhaps kind to delve a little bit deeper into maybe the governance side or the investing in people's side, which I think there is quite a lot there that we didn't really get an opportunity to get into. So once again. My, thank you. On behalf of the LATCo network for making time to do this podcast with me, and I'm sure our listeners will find it of great use.
[00:52:00.450] - Farooq Mohammed
So just a final few words from me before we wrap up. For those a few that are listening to this podcast, this is the latest in a series of podcasts with leaders from across the LATCo network. All of the podcasts are available on the LATCo Network website.
[00:52:22.330] - Farooq Mohammed
If you want to go to the website, the URL is www.LATCo.network. You can also follow us on social media that is, Twitter, Facebook, and LinkedIn. Again, those social media channels are badged by the same handle. By the same name. LATCo Network.
[00:52:45.140] - Farooq Mohammed
Just another reminder, the annual LATCo summit that was planned for this year is now postponed and remains so until further notice due to the COVID-19 situation. And once there is any change or any update on that, we will let you know. And if you are interested in joining the LATCo network and again, there is information on the website that tells you all about the benefits that are available in becoming a member. Finally, tell the other people, too, about the LATCo network and to look out for these podcasts. And if you have any particular topic suggestions or questions you would like to see addressed or answered in this series. Then please send an email to email@example.com
[00:53:43.340] - Farooq Mohammed
My name is Farooq Mohammed from the LATCo Network. Thank you for listening to this latest podcast and I look forward to sharing with you again at the next one.