Month: July 2005
Role:
It would not be unkind to John Lillywhite to say that he is the very opposite of a dot.com millionaire. As a breed they were inexperienced and perhaps the ultimate case of style over substance. And ultimately most of them failed. Not so Lillywhite. With almost half a century in the business, there are few in this country with more experience. He was practically at the birth of the IT industry. And certainly no one would describe Lillywhite as a failure.
Lillywhite stumbled into the IT industry. Seeing a job ad for a
'commercial apprentice' for ICL in his hometown of Croydon, he realised it would be a way to become an accountant without going to university his widowed mother could not afford to send him.
'In those days an apprenticeship was the way you started. It gave me a fantastic grounding in the business. You saw everything, from the shop floor up. You really got a good understanding of what was going on.
'After four years, and a lot of nights and weekends, I qualified as an accountant.'
These were the days when a job meant a job for life. Lillywhite worked his way steadily up the ranks of ICL. 'I was MD for spares. I worked in Pune, Delhi, and Bangalore. I also worked in Europe and the US. I kept moving. I don't think I did the same job at ICL for more than four years.' In 1968 he ended up in Northern Ireland, a relationship that was to last nearly four decades.
The depth of experience this gave him, Lillywhite believes, has been one of the reasons he has been able to succeed in his second career. 'I do worry about people who don't learn their trade. I am not against MBAs and the like, but I am not a great believer in running companies by theories and philosophy.'
Lillywhite had promised himself he would leave ICL at 55. He wanted something else. What was he wasn't sure, but he knew that it wouldn¹t be endless rounds of golf. 'My wife was still working and I remember on about the second or third day she left me the Tesco shopping list. I thought to myself 'there is no way I am spending the rest of my life grocery shopping.' I started to make calls.'
His second career kicked off through his deep links with Northern Ireland. In 1990 ICL had helped set up a small software start-up with Queen's University for a total investment of £50,000. Called Kainos, ICL owned 51% of the company. Lillywhite had been on the board from the start. But ICL decided to rationalise its holdings and sell off 31% of its holding.
Lillywhite made the deal. Everyone walked away happy. ICL got their money, Kainos got their freedom, the VCs were delighted and Lillywhite ended up as Chairman. The company is currently valued at around £15m - £20m.
Success breeds success. 'The phone didn't stop ringing. I was in demand.' Over the next few years he helped a number of Northern Irish technology companies set up, taking them from start-up, or in one case the verge of bankruptcy, to financial success.
He was asked to become Chairman of Lagan in late 1999 when the company,little more than a start up, was teetering on bankruptcy. In 2001 Lillywhite and the executive team negotiated a £3m deal, with £1.5m to be paid that September. But after the infamous 9/11 the investors pulled out. For one month Lillywhite and the executive team personally funded the payroll. He worked his contacts, found friends, staff, banks and Invest NI and, together with the CEO, pulled together a deal. That stake is now worth some £15m.
Even though he has an envious track record Lillywhite refuses to allow himself to be cast as a management guru. He puts his success down to some simple rules. 'Some of it is gut instinct, but it is mostly about simple common sense. What is the idea like? Is it ever going to make money? What problem is it solving? What is the market? Who are you going to have to fight to get to the market? And then most importantly what is the team like?'
'When people approach me I ask them two questions: Who do you think is going to be the CEO, and what percentage of the company do you expect to own?
'When they say 'I am' we then have a chat about how business really works. And when they say '100 per cent' I say how does five per cent sound to them? In reality that could well be what they are going end up owning.
'And I also ask what do they think I will bring? The right answer is helping the company; monitoring, corporate governance, selecting management teams, helping raise money.'
The relationship between CEO and Chairman is, in Lillywhite's view, central. 'I will spend a lot of time with the CEO, a lot of drunken time if needed, to get to know what he or she wants. Do they want to build a company that will one day see a blue plaque on the wall of their house, or do they want to make £2m in 18 months and sell it? Both perfectly valid, but it makes a huge difference.'
'Part of the role of the Chairman is to help the CEO, but also to protect him or her. VCs can add vast amounts but can also be very aggressive and demanding. Part of my job is to get their added value and allow the CEO to get on with his job.
'But a big part of the role of Chairman is to make sure the executive is doing its job. Have they got a strategic plan, how are they executing it? It is not my job to write the plan, but it is my job to make sure that it is there.
'The board must add value to the company, otherwise they are a drain. All non-execs are on annual contracts and that includes me. I look for people who have the skills the company needs at that time. If the skills they have are no longer relevant, then it is time for them to move on.'
One wonders when, if ever, it will be time for Lillywhite to move on.
John Lillywhite
1959: Joined ICL as a commercial apprentice
1994: Chairman of ICL Ireland
1997: Retired as Group Financial Director of ICL (now Fujitsu Services)
1997: Became Chairman of Kainos
1998: Deputy Chairman Lo-Q
1999: Chairman of Lagan
2001: Chairman of Meridio
2005: Chairman of APT
Ben Rooney is a freelance business journalist. Ben can be contacted at ben@benrooney.com
John Lillywhite - bio
John Lillywhite is a Fellow of the Institute of Management Accountants and has been in the Information Technology industry for over 40 years. Married with one daughter, he lives in East Horsley, Surrey. In 1997 he stepped down as Group Finance Director of ICL (now Fujitsu Services) after a long career with the group in which he worked in the UK, Europe, USA and the Far East filling roles in divisional management, and various aspects of finance. In the last few years before stepping down he was group CFO with responsibility for acquisitions, disposals, start-ups and recovery programmes. He is now chairman of five high tech companies: Lagan Technologies Ltd Meridio Ltd Nascent Form Ltd Kainos Ltd Lo-Q Plc |
