Michael Richards profile
Creating a business from scratch and then turning it into a successful enterprise isn’t easy for most people. But Michael Richards isn’t most people.
Always one for a challenge, Michael set up his own business in 1991 after an early career in HR at Dun & Bradstreet and an education in Aeronautical Engineering and contract computer programming. It was his time at D & B, combined with his computing skills that spurred Michael on to set up HR software supplier, Snowdrop Systems, when he was just 27.
After riding out the early nineties recession, Snowdrop Systems quickly had a turnover in excess of £1 million and soon appeared in the Deloitte and Touche Fast 50 awards year on year. Snowdrop was also included in both customer service and “Best Companies to Work For” awards many times over; a sign of its strong culture as well as commercial success. And it was just this success that caught the attention of Sage UK in 2006 leading to the acquisition of Snowdrop in May 2007.
Like many before him, Michael’s hunger for business was strong. In fact, the sale of Snowdrop in many ways acted as a stepping stone to better things. After departing Sage at the end of 2007, Michael worked hard to identify opportunities with a range of businesses – some fledgling; some well established and looking for help; some just needing guidance or that extra cash injection to reach the next level.
But whatever their needs, the thread that runs through all these investments is potential. Commenting on his business interests, Michael says: “It doesn’t really matter to me at what stage a business is, if I feel that it has a product or service worth selling; it’s got good, passionate people involved; and my research tells me that it’s commercially viable.” He continues, “Quite often you’ll find that there’s been a great deal of pure entrepreneurship at the beginning that has led to an excellent product. But a gap in leadership and/or marketing capability has undermined its ability to achieve significant market penetration.”
And that’s where Michael comes in. “When I’m expressing an interest, I make it clear that I’m not just there to give them financial support. I have to see a concerted effort to improve business results. That can be through a change in sales and marketing strategy or a re-think on the overall business plan. Sometimes there needs to be an underlying cultural change to create real belief amongst the employees.”
Michael’s new ventures are not just intended to create further wealth. “I go into business to watch things grow and know that I’ve helped to make that happen. It’s one of the reasons that I left Snowdrop so shortly after the sale: the potential for growth was still there but it was now part of something so much bigger that I couldn’t take the same pride in it.” He continues: “Business is personal for many people and the thing that worked with Snowdrop was the sense of family. Yes, you sometimes have to make tough decisions and it isn’t always easy for people, but with a smaller business everyone involved has the chance feel that they have personally contributed to its success. That’s why I prefer to work with SMEs; you create a greater sense of collective purpose that’s a huge factor in making the business grow.”
Despite Michael’s love for business, taking the plunge with other businesses as an investor has had its challenges. Michael says: “I think the biggest learning curve has been understanding that I no longer call all the shots. When you own a business you work hard to listen to your colleagues, but sometimes you need to make a decision that others won’t like and they have to accept it. When you’re an investor, much as people may value your opinion, you don’t get to make the final decision anymore and that’s been tough.” But with involvement in multiple projects this can also have its upside: “It takes time to get to grips with a new business and sometimes when you can rely on others, at least part of the time, you feel less like everything is resting on you, which can be reassuring.”
However, there is still a strong streak of the CEO in Michael, evidenced by his incorporation of the business consultancy 2nd Head. On his decision to set up 2nd Head, Michael says: “I see so many decent businesses that could benefit from an outside perspective and an injection of resource, be that IT, marketing or sales. Typically I work with a business on its growth plan and then provide the necessary resources from within my team, depending on business needs. Working in this way allows me not only to identify problems but also enable the business leader to harness the support that he or she needs within a cohesive structure. This is better than outsourcing to lots of agencies that don’t communicate with each other, as this often causes an unnecessary headache for the business leader, who already has plenty to worry about.”
On the name 2nd Head Michael says: “It has serious business connotations: acting as the 2nd Head for someone, the person who can offer a fresh perspective and sound business advice. In essence, giving your experience to people and letting them benefit from it. But I also like the name because it sounds fun. Business consulting can be rather dry and I want people to expect something different with 2nd Head.”
So is there anything that Michael sees as essential to business success? “It may be stating the obvious, but quite frankly it isn’t as simple as saying ‘sort out your finances’; ‘get better at marketing’ and so on. You need a balance of so many things; you need to be good at all aspects of business. There’s no point having a great product/service and strong finances but awful sales and marketing. Key to this is identifying the right people to work for you and to delegate appropriately. If you can create a culture of excellence then you will succeed.”
