The success of three men and a brand

6-Feb-2008

From a standing start, the Practicus directors have set high goals, gained a loyal staff and built up a thriving business. Julian May reports

Paul Wandless, Jason Luckhurst and Boyd PKershaw set up project management recruitment agency Practicus in Henley-upon-Thames in April 2004 with ambitious goals: turning over £60m and having 120 staff by 2009 and floating on the stock market by 2010.

Unrealistic, perhaps, for just three men and a blank contacts book? Nevertheless, in the first nine months the company turned over £1.4m with three staff. By 2007 it had grown to £21.4m with 44 staff, within reach of their 2009 goal. So how can they achieve such impressive growth?

Wandless insists Practicus is not just a turnover business, despite having no published earnings before interest and tax (EBIT) figures because profits have been reinvested back into the firm. "This has completely distorted what the company could have yielded if it had been less ambitious about long-term growth," he says.

Luckhurst says: "Our vision has always been towards floating by Q1 2010 and we launched the staff EMI [enterprise management incentive] scheme, which is critical to drive people to the same vision. We have over-engineered the business to achieve that growth. Our strategy is organic growth. But there are opportunities for acquisition in Europe."

Additional offices were opened in Manchester, Bristol and London last year, and the aggressive growth strategy will continue despite the downturn in the economy.

Luckhurst says: "We see it as an opportunity over the next 18 months to potentially make acquisitions within the UK in alignment with our core values.

"But we will not grow at the expense of quality and brand. If that holds our growth back, then so be it. We believe in protecting that ethos and have employed someone purely to oversee quality in the company."

The Practicus business model was forged at SThree, where the three met and started contract project management recruitment business Strategic Resource Group in 2000. The trio shared a vision of a 'new model' recruitment business.

Luckhurst says: "Rather than being driven by key performance indicators or being left alone with a desk, phone and computer, there is a third way.

"A KPI framework should give staff guidance and direction but not so much that it will stifle their creativity and personality. KPI-driven cultures find it hard to form strong and meaningful relationships."

Kershaw adds: "With Strategic Resource Group we proved the model could work… We learned to listen to our customers, which is what clients found valuable."

The first thing the directors did when they set up Practicus was ask clients what they didn't like about agencies. Then they spent the first nine months building up a contacts book.

"Previously, agencies did not understand what a project manager's role was; there was no breadth of understanding, no long-term relationships and candidates were being treated like commodities," says Kershaw.

Wandless adds: "We are interested in what our clients do. We are aware that we don't know it all. We tell people 'I don't know, educate me'."

Before taking on an assignment for a new client, the consultant researches the specific market for at least a month. Because the consultants have studied specific markets in depth, they develop at a faster pace and offer clients greater value than someone given a phone and told to make calls from day one. "It is about transparency and honesty," he says.

Practicus has remained focused on the business niche. "We do contract project management and interim HR to support change — that's it. We don't want to dilute the Practicus brand," says Luckhurst.

What also sets the trio apart is a real empathy with their clients, who include edf, Merrill Lynch, O2, e.on, DHL, Nationwide, First, Unipart, the NHS and easyJet.

Practicus supplied a contract project manager to Great Western Ambulance Service to improve its targets. Steve West, director of operations at Great Western, said: "They took the time to understand our needs. We wouldn't have been able to deliver the service we have delivered if it wasn't for Practicus. It was the difference between success and failure, if I am honest."

Wandless says: "It's fascinating to learn about how clients' businesses like easyJet and the NHS will transform over the next two or three years. The people who we assign are the people who [will] deliver that change. Our staff are part of that story."

Small but effective
Despite being a small recruitment company, Practicus has taken on management, financial and marketing consultants, implemented business intelligence tools such as Cognos, which international recruiter Michael Page uses, and set up training programmes, which have been the envy of national and international business.

"We believe we need to have that control and visibility to make proper business decisions," says Luckhurst. "Our ethos has always been 'invest now for the future'."

The most important decision was to ask for help says Wandless, and after six months Practicus took on strategic consultants Grant Thornton for advice on how to achieve their ambitious growth targets. They also built their brand with the help of Fawssett Consulting which helped differentiate them without losing their message.

"Grant Thornton helped us reverse-engineer the business, says Luckhurst. "Grant Thornton is also a nomad [nominated advisor], which you need to achieve floatation. They almost acted like a non-executive; putting governance and process in the business, and told us what the challenges were — for example, doubling the size of the business without losing the message. They told us to get a branding consultant in to talk to our clients and our people to make sure we did not lose that message. And they advised us to take on a marketing consultant. The key message was "you have to have a brand to make this work."

Alysoun Stewart, head of Grant Thornton's strategic services, says: "Rapid-growth companies often hit what I call the second brick wall, reaching a point where organisational needs and complexities have outgrown the capabilities of management. This hasn't happened at Practicus."

Wandless adds: "Our business is built on recommendations and networks. It is what makes us stand out and reinforces our tagline: 'The right one, not just anyone'. We care about the right solution, the right candidate, and ownership and a responsibility for that process."

Achieving Investors in People certification has also given Practicus a framework to implement growth but it has not all been plain sailing.

Kershaw explains: "We made mistakes when we first started, because everyone we employed, like us originally, didn't have recruitment experience, which was a disaster. We believe it is important to get the balance right — employing people with industry experience, but also sales and recruitment experience."

This spawned a progressive training programme, including hypnosis and using stories to teach better business practice, and performance coaching to form a positive relationship between personal and work goals.

"We are even going through performance coaching ourselves," says Luckhurst. "The recruitment industry has long had this macho culture of working long

hours. But what you actually do is spread your work out over longer hours; you don't actually do more work. With a work/life balance we are finding our staff come into work invigorated and get a lot more achieved."

The company spent £3,200 per head on training last year, which will rise to £4,000 this year. Luckhurst says: "The industry that spent the most per head on training last year in The Sunday Times customer experience survey was financial services — £1,999 per head. They also had the highest customer services ratings. We are spending double what financial services are spending. We believe that this not only up-skills our people internally, which generates more business, but it creates loyalty."

Kershaw believes it is important to change the language of business, too. Appraisals have been replaced with 'planning for success' reviews, which are updated every quarter to support consultants.

Wandless adds: "We involve our staff in many of the operational decisions. Over half of our business is made up of internal recommendation — we have an environment where our people are proud to introduce their friends and networks to the business."

The directors believe there is a direct correlation between what staff do outside work and their performance inside. Kershaw explains: "We started tapping into our employees' personal goals, and mapped their goals and what action we need to take to achieve them. The trainer takes all of that information along to a recording studio, and maps it out on CD/DVD and overlays it with their favourite music and positive affirmation.

"We look at what we call the 'wheel of life'. Where do you spend your time, home, life, leisure and work time? It is very clear where you should be shifting your emphasis."

Practicus has also taken on performance coaches — former Olympic and England cricket coaches — to help staff achieve their goals, using visualisation, frameworks, neuro-linguistic programming (NLP) and hypnosis.

And probably the most progressive of all methods is employing trainer-author Margaret Parkin, whose expertise is the power of storytelling and metaphor in business.

She told Recruiter: "A good manager is able to empathise with their staff. But how do they know what their employees are feeling if they don't tell you? By storytelling or metaphor you can engage people more in conversation by using a figure of speech rather than linear language. It is working on a deep level. It is a very gentle, non-invasive but very powerful way of making changes."

She adds: "At Practicus they are focusing on appraising and developing their staff innovatively and all good managers should do this. If you tell a story with a metaphor, you are encouraging a team to work together towards a collective goal. You can discuss it again by overlaying the analogy on to the business's team."

Practicus is also measuring the results of staff training on the bottom line. "So confident are we that we are able to both choose the right person and retain that person that we are going to remove all rebate clauses from our rec-to-rec supplier contracts," says Wandless.

Ultimately, Wandless says that the benefits of joining or staying at Practicus have more to do with sharing values and goals with their team than incentives.

"The main motivation is that our business goals are closely aligned to the personal goals of our people. We take time to understand their goals; we help make them a reality and ultimately, we end up on a journey together."

Snapshot profiles: Practicus directors

Paul Wandless: marketing and creative director

• Previous experience: former regional and national journalist and ex-news editor for ITN.

• Set up Strategic Resource Group for the SThree Group

• Expertise: media relations, television production and management

Jason Luckhurst: managing director

• Previous experience: financial management at GE Capital in Australia. Helped manage and relocate Avco Finance from Sydney to Melbourne

• Expertise: programme management, business change, outsource re-engineering

Boyd Kershaw: HR and training director

• Previous experience: New Zealand Telecom in customer service

• Travelled around the world for five years on a one-way ticket

• Managed pubs for five years

• 1997: recruitment — Computer Futures

• Expertise: Customer service, training management and human resources