John Caudwell: Up for the challenge

John Caudwell is in restless mood. As well as positioning his billion-pound mobile phone empire for the challenges of the years ahead, he has grand ambitions in the games sector.

Business mogul John Caudwell is in restless mood once again. As well as positioning his billion-pound mobile phone empire for the challenges of the years ahead, he has grand ambitions to take on all-comers in the games sector.

Few entrepreneurs rival John Caudwell’s work ethic or achievements. From humble beginnings sweeping the floor of a pottery factory, Caudwell has scaled grand heights and now sits atop the mobile phone industry where he has few rivals.

Never one to hide his light under a bushel, he puts his success down to personal resilience, a will to win and the ability to work long hours. He also claims that that if he hadn’t got into the mobile phone game, he would have thrived at something else.

However, mobile phones it was and his Caudwell Group now boasts no less than ten different enterprises, including such business stalwarts as phone retailer Phones4U, handset distribution business 20:20 and Dextra Solutions, a manufacturer and distributor of accessories. In all, Caudwell employs no less than 7,500 people. This figure would have been much higher had he not sold one part of his company – network airtime reseller Singlepoint – to Vodafone last August for the princely sum of £405 million.

Caudwell though is not resting on his laurels. Despite his success – and seemingly impregnable position – in the mobile telecoms market, he remains as cautious as he was 17 years ago when he flogged his first handset.

‘The central theme in the industry is one of consolidation. Most of the businesses involved have grown rapidly in the last few years and there is not enough room for all of the current players to survive at network, distribution and retail level. All of my businesses are under an increasing challenge to be the best,’ he says.

A call waiting to happen
Caudwell first moved into the mobile phone business after working part-time as an engineer at Michelin and running a car repair business. He believed he could gain a commercial advantage at car auctions if he could speak to potential customers either before or while he assessed cars. The problem was that payphones were either inaccessible or had long queues.

The simple solution to this issue was a mobile phone, but he soon realised that there was actually greater cash to be made selling phones than in the car auction game.

He quickly became a mobile phone dealer, but it took him eight months to sell 26 mobile phones (each the size of a brick he remembers fondly) from a corner shop in Stoke-on-Trent in 1987. The following year he had sold £1 million worth and with every year the business boomed. He now claims to sell a mobile phone or accessory once every split second somewhere in the world. In 2002, sales were over £2 billion with pre-tax profits of just over £30 million.

While his role has been transformed by this rate of expansion, the business remains very much in Caudwell’s sights. He maintains that he is still ‘pretty hands-on, but not to the extent I was 15 years ago, when you’d find me cleaning the toilets!’

Creating customer excellence

At present, his hands are full attempting to reform the culture and service approach of his business. This won’t surprise observers of the Caudwell empire, as good customer service and enviable working conditions are not areas in which he has excelled in the past. For instance, Singlepoint was labelled “one of the worst companies in the UK” by the website following a stream of customer complaints and staff criticised the working conditions.

Caudwell’s crusade is to make all of this a distant memory. ‘Phones4U is high up on my priority list. We are four months into a programme designed to create customer excellence – this will be made up of intensive training courses and monitoring what every sales person does in every store. Every single customer is being called with a questionnaire to see how satisfied they are with the service,’ enthuses Caudwell.

This is no mean task considering that Phones4U has in excess of 350 stores nationwide, but Caudwell is convinced this method will be vital in helping to see how the company is performing and in identifying which regions and stores are performing best.

Of course, monitoring aspects of his business – often to the point of excess – is not alien to him. Monthly board meetings often pick out a weak store, which is swiftly followed by a visit from Caudwell himself.

A man people love to hate

Caudwell’s management style is as exacting as his business monitoring. He caused a stir last year when he banned all internal emails at Phones4U, claiming that this would save employees and the company time and money. He was also accused of bullying his staff to gain their support for his plans to develop luxury homes near Stoke.

But when his management style is under scrutiny, he has a simple answer. ‘My number one governing principle is that a good manager should not need managing. I should be there to provide advice, but in reality this is somehow different. My style is to look at someone intensely for the first six months. If it’s working well, I will generally oversee them. Good people will always want autonomy, my job is to put that framework in place.’

He maintains that despite the criticism, he has a philosophy of being very fair to people and that some people might confuse hardness with unfairness, but he is adamant that there is no crossover.

‘You can be very hard and very fair. My strategy is to be very demanding and upfront. If things aren’t done well I am not happy and will have a hard conversation with a chance to put things right. However, it’s not very often that things work if you move people around – you can’t patch people into different jobs,’ he concludes.

His musing on people management uncovers an interesting fact about his overall approach to recruitment. It is, quite simply, one of his biggest headaches. ‘You can never get it right – all you can do is get it less wrong. You can’t gauge somebody’s appetite. People are a huge challenge – they are motivated by different things. There is absolutely no doubt that money is a motivator – too many downplay the importance of it to sound politically correct,’ he stresses.

Game boy

With Phones4U in the process of yet another transformation, and other areas purring with profits, Caudwell has now turned his attention to the games sector. He is keeping tight-lipped about his exact plans, but acknowledges that his biggest challenge will be winning the hearts and minds of his customers.

‘If suppliers are comfortable with their existing distributors, they may not be keen to switch – but such is the brand of the Caudwell name that I know we will be taken seriously. There have always been suppliers who will deal with us because we give incremental value,’ he believes.

Of course, he needs little motivation to drive this project and others forward. He has enough personal incentive due largely to the fact that he owns 97 per cent of the business. He claims that he has never been tempted to sell it – and he is equally dismissive about flotation.

‘Unless there is a reason to float there is no point in me taking the time or the effort. I could look at it as a partial exit to create wealth but I am interested in keeping the business growing,’ he maintains.

See also: Five of the UK’s richest self-made entrepreneurs

Oli Haill

Oliver Haill

Oliver worked for Vitesse Media, the original publisher of GrowthBusiness, from 2003 to 2010, as a writer, editor, and Head of Research for the editorial team.