School drop-out qualified for the royal warrant

Jan 7 2008 by Andrew Mernin, The Journal

From school drop-out to managing director, Phil Renton has proved there’s more to a successful corporate career than educational qualifications. Andrew Mernin meets the man at the helm of the region’s royally appointed technology empire.

AS far as endorsements for your business go, there can be few more impressive than one from the Queen. But Phil Renton and his Newcastle-based technology empire Croft have landed exactly that.

For the company, which has provided IT services and infrastructure to the royal households for the last five years, has been awarded the royal warrant – a regal stamp of approval from those at the very top of the monarchy.

The warrant puts Croft and its 115-strong workforce among an elite group of firms and makes it the only company in the country listed as providing IT services to Her Majesty.

It joins only a handful of North-East businesses to be given the honour, which includes outdoor clothing company Barbour, Procter and Gamble and fishing rod-maker Grays and Hardy, based in Alnwick, Northumberland.

For Mr Renton it is an accolade he is clearly proud of – not surprising for a man who has devoted over 20 years to the company having worked his way up from being a hardware engineer into the seat of power.

The 51-year-old pitman’s son started life in Dinnington, Newcastle. He excelled academically at his local village school but soon found himself disillusioned by education when, at age 11, he was sent to the highly regarded Edward VI School in Morpeth, Northumberland. He says he felt “how a budding footballer must feel when he wins a place at a football academy and suddenly seems ordinary when mixing with kids of equal skill.”

Not only did he find himself at the bottom end of the academic league at his new school he also saw his promising football career come to an untimely end.

“King Edwards was a rugby school. I thought I was a good footballer, but football was banned.

“Education played second fiddle to bunking off lessons and picking winners from The Sun at the bookmakers in Morpeth. The chess club and debating society were no-go areas.”

At school Mr Renton was certainly among the company of people who were destined for great things. One of his classmates was high-flying entrepreneur Karl Watkin.

The multi-millionaire who Renton remarks “went on to do A-levels” now runs various successful businesses including biodiesel company and a huge gold mining enterprise in China.

Mr Renton, who didn’t have the qualifications to take A-levels, eventually found himself at the back of the dole queue.

And so his career options seemed limited until “a good Samaritan” in the form of his former school’s deputy head, Dan Tweddle, came to his aid.

The teacher arranged for him to have an interview for a post as a trainee TV and audio engineer and so began his career in technology and communications.

After six weeks on the dole, Phil spent several years working as a customer services engineer fixing TVs, cash registers and computers.

In 1985 the Northeasterner joined Croft which at that time was world’s away from the multi-faceted group it is today.

“When we started in 1980 we were called Easy and Best and as you can well imagine, we couldn’t wait to get rid of that name. We were a typical computer company writing software, providing hardware systems cabling buildings – we were a one-stop shop.”

And then came the internet and everything changed. “For me I was unbelievably sceptical about the internet and never in my wildest dreams did I think it would have the impact it has had.

“It’s been absolutely amazing but it’s still not finished and still has a long time to go.

“At the time I couldn’t see the potential it had. I just fixed things and concentrated on my job.”

In 1992 Phil, who by then was a director and shareholder in the firm, was asked by his four fellow directors to carry out a management buy-out as they were looking to exit the company.

“I actually say they didn’t like my aftershave because they all wanted to leave the company at the same time.

“They said the company had become too big, it had become a services company and it was no longer about sales or software.”

Croft had grown to a £3.6m-a-year firm employing over 80 people across four UK offices.

After visiting numerous financial institutions, Phil finally completed the buy-out in 1993. At the time Phil “felt like Billy no-mates” and so strived to take the company forward by employing people who he claims were better able than him to run the firm’s various divisions.

“There was a major change in the IT industry. The PC was becoming a commodity product, they were being sold with three-year warranties which would affect our business because that’s what we did – we fixed PCs.

“What was daunting for me was that the margins in the service market were going to shrink and they have rapidly. In those days we were making 25% net profit – today we are making 5%.

“Also, people were becoming accustomed to PCs, so it was no longer a mystery. We couldn’t go forward just as a maintenance company so we had to re-engineer the firm so it wasn’t reliant just on services.”

Today Croft is very much a national company with clients the length and breadth of the country and several revenue streams to rely on.

As well as its five-year relationship with the monarchy – providing IT services to the Queen – the company has a £1m-a-year partnership with telecoms giant BT. It also provides services to building supplies company Jewson, which has around 1,000 branches across the country.

The company’s annual revenue last year was expected to stand at around £7m, down from £7.9m in 2006.

Phil blames the drop in revenue on the dwindling cost of computer hardware. “Computers are constantly going down in price. Four year ago this laptop was £2,500 its now £350.”

For someone who spent most of his early career in a hands-on role as an engineer, Phil seems to have become adept at being a corporate leader. His speech is littered with business jargon straight from the pages of a Jack Welsh or Donald Trump management book. He is also prone to the odd corporate metaphor which wouldn’t seem unusual coming from the mouth of David Brent, the boss from BBC comedy classic The Office. In one instance he likens his business to a bus. “What’s most important is to get the right people on the bus and to get the wrong people off the bus and along with that it is important that the right people are sitting on the right seats on the bus and then you can start to talk about where the bus is going.”

Asked about long-term plans for the business he philosophically says: “No company can grow revenues consistently faster than its ability to get enough of the right people to implement the growth and still remain a great company.

“If your growth rate in revenues consistently outpaces your growth rate in people you simply will not build a great company.”

One of the most important items on the managing director’s agenda is cutting staff absentee levels.

According to Phil, companies with over 5,000 employees have an average of 10 days sick per person a year while British Airways staff have and average of 16 annual sick days.

At Croft, however, the company has reduced its average to 3.5 by introducing a league table system to encourage repeat offenders into turning up to the office.

He is also keen on his workers having fun and has an evangelical zeal for team-building and ensuring his staff enjoy their jobs. He recalls fundraising mini-golf events with Alan Shearer and even a prank when a member of his team was forfeited to dress up as a penguin and buy fish at the seafood counter at Morrisons.

Looking to the future, Phil believes advancements in technology can play a major role in reducing businesses’ carbon footprint.

He says technological innovations such as improved video conferencing with 360 degree cameras and other remote applications will ultimately reduce the need for businesspeople to travel.

In the meantime, school dropout Mr Renton continues to prove that qualifications aren’t the only catalysts to a high-flying career.

If the right people are on the bus you can talk about where the bus is going

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The Questionnaire

What car do you drive?

An Audi A6. I was cajoled into this by Andrew Maidwell, the MD of Audi North-East who are a long standing client, when he said I have to get you out of your "pipe and slippers" car referring to my Mercedes.

What’s your favourite restaurant?

Aphrodite in Cramlington who make a Kleftico to die for. A little known restaurant in Whitley Bay, called Sorrento makes the best peppered fillet steak in the Universe. No chance of me getting a table there now.

Who or what makes you laugh?

The company’s profit and loss account has made me chuckle a few times over the years.

What’s your favourite book?

For several years The Power of One by Bryce Courtney ranked number one but it has just been joined at the top by The Kite Runner written by Khaled Hosseini. I really hope the forthcoming film does the book justice.

What’s your favourite film?

As good as it gets … Jack Nicholson’s facial expressions reduce me to tears.

What was the last album you bought?

Long road out of Eden by The Eagles.

What’s your ideal job, other than your current one?

When Dennis Clark, the NSPCC local events manager retires, I would love to take over his job.

If you had a talking parrot, what’s the first thing you’d teach it to say?

It must be my turn to go to the bar.

What’s your greatest fear?

Not seeing the Toon lift a trophy in my lifetime.

What’s the best piece of business advice you have ever received?

T-CUP. Think clearly under pressure … pinched from Sir Clive Woodward at an Entrepreneur’s Forum function.

Worst business advice?

Management buy-outs are a piece of cake from the same guy who keeps giving me tips to back his horses.

What’s your poison?

Landlord from the Crown Posada.

What newspaper do you read, other than The Journal?

Just the Journal.

How much was your first pay packet and what was it for?

£8. Four pounds for me and four pounds board for my Mam which thankfully was a flexible payment. I was a Trainee TV and audio engineer.

How do you keep fit?

I go to the gym four times a week but the exercise bit is carrying my sports bag in. As soon as I smell the chlorine from the pool and catch sight of the exercise equipment I put my bag down, order a coffee and read The Journal.

What’s your most irritating habit?

I am often accused of "detailing people to death".

What’s your biggest extravagance?

My season ticket at St James’s is taking some justifying at the moment.

Which historical or fictional character do you most identify with/admire?

Lord Collingwood. He was a typical North country man – never duly elated by success or depressed by failure, caring little for public applause.

And which four famous people would you most like to dine with?

John Darwin, the mysterious canoeist, supermodel and jungle celebrity Janice Dickinson, Sir Ian Blair and Sam Allardyce. It would be great to sit and listen to Sir Ian Blair interviewing John Darwin. Big Sam would be there to organise the table setting but he would put Janice on the right when everyone knows she’s a left footer.

How would you like to be remembered?

His wallet was always open.