Summary
The view from the top of business. Presented by Evan Davis, The Bottom Line cuts through confusion, statistics and spin to present a clearer view of the business world, through discussion with people running leading and emerging companies.
Evan's guests delve into the concept of quality in business - how to get it high, and why it might end up low. They also compare notes on their respective weaknesses. Who do they turn to for help should they need it?
In the studio are Jon Moulton, founder and chairman of private equity firm Better Capital; entrepreneur and investor Deborah Meaden; David Haines, chief executive of German sanitary fittings manufacturer Grohe.
Producer: Ben Crighton Editor: Innes Bowen.
Transcript
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| 0:00.0 | Thank you for downloading this programme. In this edition of the bottom line, Evan Davis and his guest discuss quality and CEO weaknesses. |
| 0:09.0 | Hello and welcome to the programme. One of the most frequently used words on this programme is quality. Our guests like telling us how important it is to them and they use it to describe their products. So today we'll delve into the topic more deeply. |
| 0:24.7 | And you may think of chief executives as all powerful, but what about their vulnerabilities? |
| 0:30.0 | Who do they ask for for help when they need it? |
| 0:32.8 | But before any of that, let's meet my three guests. |
| 0:36.1 | First up is John Malton, venture capitalist and founder of the private equity firm, Better Capital. |
| 0:42.5 | Your specialty is turnaround, so you better just explain what that is. |
| 0:46.3 | That's buying companies that are losing money, no profits, losses. |
| 0:51.6 | Dealing with the company, which is normally something to do with stupid strategy, stupid |
| 0:56.4 | management, incompetent management, occasionally just bad luck, getting rid of the costs that are |
| 1:02.4 | crippling them, the division that's crippling them, making the business grow, developing the new |
| 1:07.9 | sites, turning them back into profit and making them very valuable again. |
| 1:11.7 | Would people be right to say that is the same as asset stripping or what they think of as |
| 1:15.4 | assets stripping? No, it's completely different. Asset stripping is where you buy a business |
| 1:19.9 | and fundamentally close it and take the cash out of selling the assets in the business. We don't |
| 1:25.1 | do that. We develop businesses and grow them |
| 1:28.6 | so that we can sell them at a good price based on profits. Your goal is the company continues |
| 1:33.4 | as a good going concern, a bigger going concern. On average, for every two pounds we spend buying |
| 1:38.1 | a company, we spend three pounds on sorting the company out, and we typically don't see any cash out of the company to always sell it. |
| 1:46.3 | Right. You would think there are quite a lot of turnarounds to be done now? There are very many |
| 1:50.6 | around. The odd thing is that businesses aren't failing at a very large rate in this very weak economy |
| 1:56.4 | due to low interest rates, banks not wanting to let things fail, government not wanting things to fail. |
... |
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