Sir John Harvey-Jones once famously remarked that whenever he saw a fountain in a company foyer he feared the worst about the survival of the business. Fellow troubleshooter John Elsden would add the helipad on the company lawn to Sir John’s sure fire signs of impending corporate collapse.
The argument in both cases is that companies should never lose focus, never overstretch and al- ways keep their eye on the ball and the basics rather than the flash and the fanciful.
Elsden, among a myriad of other things, is chairman of Telemedia Systems, a highly successful spin-out from the Olivetti & Oracle Research Laboratory in Cam- bridge (now the AT&T lab).
He is also an entrepreneur who can genuinely say that he has turned Halfpenny’s into millionaires. That particular feat was achieved when Elsden negotiated the sale of Mircologic Solutions – run by John Halfpenny and his wife – to ARM Holdings last year.
Elsden has gone from being a troubleshooter for 3i in the early days after leaving Trafalgar House to being an e-commerce equalizer and enforcer of some stature across a range of hi-tech businesses.
He is equally convinced that the current generation of entrepreneurs and those piggy backingtheir success are living through an Information Technology revolution that will go down in corporate history as the period that turned the business world on its head.
There will be tears along the way, of that Elsden is utterly convinced. “Some of the current dotcom businesses are driven by emotion and sentimentality rather than real value – a bit like the investors in some of these businesses are going to wake up soon and realize they are stark naked”.
“At the same time, it is a tremendously exciting time to be in business – I’d say possibly the defining period in modern business history. People 50 years ahead, looking back on today will use a term, not yet defined, to describe the E- Industrial Revolution – this massive sea change of technology and philosophy that has affected our entire society”
“The TV has been the driving concept behind a lot of change in our society – and in the next five years it will be video-on-demand and all the wonderful Internet and interactive services that will be delivered by advanced technology into our homes. This is the dawn of a new age which will change the habits and natures of consumers and advertisers forever”.
Elsden is guaranteed to be slap bang in the middle of the revolution given a diverse range of directorships and chairmanship roles with a host of UK hi-tech businesses, many of them in the technology heartlands of Cambridge and Oxford.
His own rise to fame exemplifies the dynamics, which have helped produce the new generation of young entrepreneur’s. He went from being a 20-year-old programmer with Trafalgar House to being a director. He left in 1993 to set up his own management consultancy, Allied Powers Ltd, providing turnaround services and advice to Venture Capitalists, together with management expertise in IT, acquisitions and development for individual businesses. 3i used him extensively to help maximize the commercial potential of niche or troubled companies and he helped them come out on top in a number of early situations. Having built up the business over the next three years, he was able to diversify away from pure VC work and do more troubleshooting in his own right.
His deals include the remarkable elevation of Micrologic Solutions into the ARM stable and he was also the man behind Internet solutions company ElectricMail’s acquisition by Kewell Systems. Elsden’s clients also include Net- Connect, Apex International, Adaptive, NeXus electronics, 3Com Europe, Alcatel, Pegasus and a number of Asian venture management specialists.
In terms of taking businesses on- wards an upwards, he has already been instrumental in creating six millionaires from done deals.
In most cases, when Elsden goes into a company, there is little fundamentally wrong. “Generally there is good technology and good people but they are lacking something indefinable. It is my job to define it, to build teams and confidence and identify the most marketable technology.
“This is what I did for 3i in spinning out Telemedia Systems from the Oracle & Olivetti Laboratory. They have absolutely brilliant scientists and the team there had potentially 13 applications for the core technology on which Telemedia is based.
“The broadcast application for the technology looked the most solid commercial bet to exploit and that is exactly what happened”. Telemedia Systems is now an acknowledged world leader in a key aspect of the broadcast technology: its SpectreView technology allows TV and film company technicians and producers to browse, cut and edit material.
Gone are the days of mutilated celluloid mountains on the cutting room floors. SpectreView allows editors in the field, even in war torn zones, to direct a shoot on the current assignment while editing film using advanced video techniques brought in from another job.
Broadcasters have never been able to react so fast to global events and produce edited film so rapidly. Elsden has just overseen the opening of Telemedia’s Los Angles operation, plugging the company directly into the movie and TV capital of the world. Telemedia is also targeting the substantially growing home movie market in the States and elsewhere.
Like his idol, Sir John Harvey- Jones, Elsden has an impressive troubleshooting track record. But, like Sir John, he does occasionally meet resistance and resentment when he is asked to go into a company and ‘sort things out.’ “Generally, the reaction I get is relatively positive. Managements may feel they are doing something wrong and are fearful of their positions, but of ten all they need is a steadying hand on the tiller; a bit of focused guidance”.
“Then you get the ones who always know best and don’t want you over the threshold. You have to deal with those situations nose- on. Boards will often look lower down the company for scapegoats. I tend to look to the top when things have gone wrong.
“I went into one boardroom in one of my early companies and it was absolutely poison. When I arrived at the company I was greeted by a black hole and a telephone with a note to ring an extension number. It was a device to avoid dealing directly with the customer. The guy who ran it acted like an ogre and the atmosphere was terrible. “In that case I got the major shareholders on my side and they appreciated that the business was dead unless there were radical changes. The first thing we did was put in a nice reception area where people were made welcome, and the autocratic style of management was crushed. We turned the business around with that new culture.
“You have to bring some companies down to earth. There was one, which had an excellent core business and had received an offer to sell, but the boss thought he had a brilliant idea for the next Internet fortune and wanted me to negotiate a much bigger offer. No one else could see his brilliant idea because there was nothing to see. “When people won’t listen there’s not a lot you can do: we negotiated a deal worth three times the original offer and the majority of the board went for the deal, leaving the boss with his brilliant idea and not a lot of hope of exploiting it.” Elsden also quotes a classic example of a business that went awry through a runaway ego. The North of England company had grown steadily and solidly in a restored mill. The business started to flounder when the boss decided to move into modern glass palace complete with helipad on the lawn. He used to emerge form his helicopter and walk extravagantly with his pet dog across the lawn and into his office. Problems were soon piling up.
Elsden said” Seeing that a super traditional business can go wrong through one man’s ego reinforced the view that fripperies count for little if the basics are ignored.
“Companies, regardless of the sector in which they operate, need a number of fundamentals: a good business model, a sound management team, well researched routes to market and access to the right kind of capital at the right time. Above all of that, they must keep their feet anchored in reality and stay focused on what they do best. “These are the qualities that have always underpinned good businesses and stimulated backing from loyal investors and that will always be the case, no matter where advanced technology takes us in terms of capability”.