Working Lunch: Joe Dwek
Joe Dwek, turning round business and the region
A North West kind of guy
Erikka Askeland meets Joe Dwek, the green industrialistnow chairman of wilmslow based grants search company j4b plc
Simply everyone seems to be in Wilmslow these days, and no wonder. There is an ineffable air of contentment, as well as a slight yet pleasant smell of money like an aged but well kept leather sofa. Even the charity shops are full with DKNY and Ralph Lauren cast offs.
I meet Joe Dwek at the building next the Aston Martin dealership. He awaits me at the offices of J4B, the business grants consultancy of which he is chairman. Slightly late and a bit breathless, I am ushered into the offices to meet Dwek who is brimming with energy, shaking my hand, kissing my cheek and telling me an anecdote about the chairman of Manchester Chamber, Anil Ruia. Then it's off out into the rain again to the restaurant across the street where, for the next hour, I will be talked at.
Dwek's garrulousness is well known, and from what I can tell, rapidly gaining legendary status. One colleague of his recounts with laughter the day they both went out to inspect a stretch of canal in deepest, darkest Speke Garston, a typical no-go area where stolen cars are regularly abandoned and set alight. Such is the duty when you are chairman of the Mersey Basin campaign.
Taking his duty seriously, Dwek would often interrogate local passers-by about the state of the waters and its surrounding areas. On this occasion, a young man on a motorbike stopped when accosted by Dwek, who then proceeded to quiz him on why he wasn't at work at that time of day. Taken aback, the young man admitted he was on the dole. Dwek gave him a firm but friendly talking to and some advice on job hunting and then sent him on his way. According to his colleague, Dwek will talk to just about anyone.
Dwek is perhaps best known for his transformation of Bodycote, once a meek and mild North West textiles business, into a multinational specialist engineering and metallurgical powerhouse. He retired as chairman in 1998 a very rich man, but he didn't slow down. Instead he became chairman of another textiles business, Worthington, in addition to running his own corporate finance business, Penmarric. He also took on J4B when its chairman Ian Hamilton Fazey, a former Insider editor, became too ill to chair the business.
Dwek now dines out on his reputation as a turnaround specialist, no matter what the business. With J4B, it was both luck and proximity that got him involved, although he still intends to see it through successfully or it's not for him.
"I didn't have the expertise in their field when I took over as chairman, but I was cheap and available - I was only next door, so I said yes, all right, I'll do it," says Dwek, although this came with the caveat that if he didn't get it profitable by the end of the year, he'd be out. "What was needed was a chairman who could bring the company to profit. If I couldn't do it, they must find another chairman."
But he did. The company, which took over its technology provider Zemeta, now provides a range of services in addition to grants consultancy including recruitment, IT development and research. They have been profitable each month since January. Where some may see a mishmash of divergent revenue streams, Dwek sees a company after his own heart.
"What is strong here is product innovation," says Dwek. "See, a company that doesn't reinvent itself over and over and over again will have no future.
"The interesting thing about J4B is it is reinventing itself and changing the rules of the game in relation to its customers. It is entrepreneurial. The organisational structure is organic rather than mechanistic, it's got the right ingredients. Now they've had a few good strokes and are able to turn it around - I'm relaxed about it."
He is perhaps slightly less relaxed about Worthington, the bra cups and clasps business based at Macclesfield where he is chairman and a significant shareholder. "When I took over the banks were foreclosing on the company. I said I would turn the business around in three years."
The ambitious turnaround plans didn't take into account a claim that the company's assets were mis-stated by about £32.2m, an issue which is still being sorted out with the group's accountants in London, BDO Stoy Hayward. Three years into the venture and Dwek says that it is just about to turn the corner now. The road has been a tough one. A fire at its key plant in Macclesfield turned into a nightmare when it turned out insurer Independent Insurance was broke and wouldn't be paying out £32.7m it owed to Worthington.
"We've always had setbacks," says Dwek philosophically. "Someone once described the textiles industry to me as the most complicated way to lose money.
"If you look at the history of Bodycote, I'm living the same bad dream again."
What he has managed to do is sell off some of the businesses and pay off the banks to put Worthington in a similar position to where Bodycote was in the late 1970s. And make no mistake, Dwek has got a few tricks up his sleeve yet.
The model he follows, a piece of wisdom he says he picked up from Mr Honda of the eponymous Japanese engines company in the 1970s, is to run a business that has dynamic technology, positive cash flow and a high barriers to entry. In the late 1970s, Dwek applied this to Bodycote, identifying two or three businesses with which he "exploded" Bodycote, which is the only verb to describe a company that went from a capitalisation of £32m in 1972 to a cap of £31.4bn when he retired.
He's got "one or two" ideas for the next big thing at Worthington, although he admits it was partly luck that he found an inexpensive metallurgy business as a point of entry last time round. This time, the magic word is recycling, a business which Dwek has already found success with at another of his companies, Mercury Recycling.
"The government legislations and directives from Brussels are such that it is going to be a boom industry. It's dynamic technology," says Dwek, ticking off at least one of the boxes on his list for success. "I'm looking at tyres at the moment. There are so many new ideas that it's bursting. I can't make up my mind which way," says Dwek, whose tone is more like that of a kid in a candy store than a man unsure of his decisions. "Because there are so many different prospects."
For a man who is supposed to be in retirement, he doesn't seem to know how to relax. When I ask him if he lunches regularly with the glamorous Wilmslow set he waves his hand dismissively. "I don't go out for lunch. I must tell you, since I've been retired I get into the office about seven o'clock in the morning and leave about six o'clock. Oh, there's just so much going on." Friends also admit that after six pm, he's often "barking" down the phone at them, bristling with new ideas.
He does make weekly allowances to spend quality time with his two granddaughters, to whom he is a doting grandpa. He plays golf regularly with old business colleagues like Michael Edelson, with whom he launched factoring and invoice discounting company City Invoice Finance. Edelson also got Dwek involved with the ill-fated, but at the time sexy, internet incubator Oxygen. Other investors in the company included Rupert Murdoch's daughter Elisabeth and PR guru Matthew Freud. Dwek says that the internet craze was "fun".
"At one stage, I had 30m option shares at 65p, right? You wake up in the morning thinking 'what am I going to work for?' That came and went. You never had it, so you never missed it," says Dwek. "Business is about management of risk, not falling in love with profits," says Dwek. "The minute you fall in love with what you do, you've had it, you've lost."
But what has really been driving Dwek these last few years is a project seemingly at odds with his industrialist past. As chairman of the Mersey Basin Campaign since 1999, he has overseen one of the great revolutions in environmental management, crowned with the sight of competing swimmers at the Commonwealth Games in the once filthy Manchester Ship Canal. According to Campaign chief executive Walter Menzies, Dwek represents a generation of entrepreneurs who see it as their due to put something back into the community, the type of entrepreneur who naturally makes the transformation from business man to business leader.
Dwek takes a pragmatic approach to his work at the campaign and believes that if you can create a nice environment, people are more likely to live, work and stay in the region. He will relinquish his role at the end of the year, now that an "admirable, personable and humorous" chief executive has been found in Menzies.
He says his greatest achievement at the campaign was doing what he does best, overhauling a system from the bottom up. He much prefers working for the greater good of the region where he can make an organisation in his own image. In 2001, he declined to be put in the running to succeed Lord Thomas of Macclesfield as chairman of the Northwest Development Agency. Dwek says that his time on the CBI, and earlier his deep involvement with inward investment organisation Inward left him with an aversion to "heavy politics". "I don't tolerate idiots easily," says Dwek with a laugh. "I'm very impatient."
However, he is keen on the man who got the job, Bryan Gray, and says he has time for the new NWDA chief executive, Steven Broomhead. He admires Gordon Brown, who he describes as is his type of chancellor, reminding me that Dwek is actually an economist by training. In fact, industry almost lost this man when during the late 1970s, when industry was stagnating, he almost completed his PhD at Nottingham University. Thankfully, by 1982, Bodycote was soaring and he shelved it and an academic career with it.
Having experienced the best of times and the worst of times, Dwek is optimistic about the new greener North West region and the likelihood of its success.
"Looking back now, if you had asked me if the North West could get its act together and would regenerate its environment, I would have said to you there's so many factions, so much self interest. I would have said no.
"Now the empire building has gone, the fiefdoms have gone, the NIMBY attitude has gone. What you are seeing now in the North West are some interesting developments that wouldn't have been possible 20 years ago and this is due to cohesion, working together; we aren't fighting each other any more.
"It's not Louise Ellman versus Graham Stringer, it's not Liverpool versus Merseyside, it's not agriculture in Lancashire versus the industrial belt. Now we tend to build partnerships which is excellent for the region."
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