Flat management structure helps business survive
It may be named after the Peak District and have a mountain as its logo, but it was a flat management structure that helped Peak42 survive the recession to aim for the dizzy heights of growth.
Daresbury-based Peak42, which helps companies improve the efficiency of their automated production lines and processing plants, was founded nine years ago by adopted Merseysider Michael Thomas and Grant Stevenson.
They were soon joined by Nigel Hall and Dave Forshaw – and today, those four directors still run the hi-tech engineering business without anyone claiming the title of “managing director” or “chief executive”.
That flat structure helped Peak42 once recession hit as its directors could all take consultancy work elsewhere to ensure their young company survived.
It took, Thomas now recalls, “some hard years of grafting” to keep the company going. But now, with clients ranging from Kellogg’s and PepsiCo to GlaxoSmithKline and Pfizer, Peak42 has won a national reputation for helping firms to save money and reduce their waste.
“We certainly saw the recession coming straight away,” said Thomas, whose soft French accent belies his Welsh-sounding name. “We saw the number of projects go down.
“Luckily for us, we are all from a technical background and we’ve got a consultancy arm to the business. So what we were able to do pretty quickly was to keep ourselves busy with various assignments.
“And we also retrenched to some of the larger projects where the Government was still pushing, like the Manchester tram extension – large projects where there’s a need for our skills.
“So even the directors took on long-term placements with others, and the company became... dormant is not the word, but certainly became very steady in its running.
We didn’t recruit any more but we didn’t lose anybody. We just kept feeding the machine to sufficient levels so that we came out three years later in a similar position to where we were three years before, which we felt was very fortunate.”
Thomas grew up in eastern France, near the Swiss city of Geneva.
“I see what you’re leading to,” he laughed when asked about his British-sounding name.
“You’d probably think I’m Welsh, wouldn’t you, putting on an accent.”
But Thomas is, in fact, the third most popular surname in France.
And Thomas added: “Funnily enough Michael, in the 1970s, was a very popular first name, with the influence from American soaps and American art.”
After graduating in 1996, Thomas headed to the UK to work in the industrial automation sector. He began in Birkenhead and worked across the North West and Ireland in software and technical roles.
By his mid-20s he decided that he wanted to move into management – so he signed up to the MBA course at Manchester Business School.
“I got my MBA at age 30,” he said. “and thought well, that’s it now, I’ve got to do something. So at age 30 and one day I left my existing employer and started our company.”
As Douglas Adams famously wrote in the Hitchhiker’s Guide to the Galaxy, 42 is the answer to the ultimate question of life, the universe and everything. It also helped to answer Thomas’s question about what his company should be called.
“We’re all into mountains and outdoor things,” he said. “One of the directors lives in the Peak District, in a house with the number 42.
“But also 42 is the answer to a lot of questions – you’ve read Hitchhiker’s Guide? There’s a lot of potential reasons why we called it that. It depends who you talk to.
“Peak42 is also the name of a mountain in Pakistan. It also happened that the website was available when we started up.”
In those early days the directors shared their workloads and created the flat structure they still use.
“We’ve got a very modern way of running the business,” said Thomas.
“The way the business is run was, certainly in the early days, very much account-led. So the four directors were responsible for a number of accounts and were all delivering project work, trying to develop relationships and trying to expand those accounts.
“It was very efficient from a fee-earning point of view. We didn’t have many overheads. We were selling through delivering work.”
Peak42 offers “systems integration” services in which it designs and helps to build new automated production lines or processing plants for clients.
That work, which makes up more than half of the company’s income, can include buying and testing hardware and running a computer simulation of planned projects.
Peak42 also works on a consultancy basis on behalf of companies that are developing their own plants or processes.
Thomas said: “We will do a lot of feasibility studies and commercial evaluations. Or we’ll do specialist resource placements – some of our clients wouldn’t have that expertise in-house and they may need somebody in their team for a while.”
Finally, Peak42 offers “performance management” services to help firms make their existing plants or processes more efficient.
More than half of the firm’s income comes from the utilities sector where clients include Thames Water, Northumbrian Water and Welsh Water.
Other key sectors include food and pharmaceuticals, while Peak42 has also worked on several projects in the nuclear industry.
Thomas said: “We work on the decommissioning side, mainly. We help them to automate the process they use to remove some of the fuel and the waste to increase the rate at which they are decommissioning.”
A chunk of its income comes from working with other larger industrial and automation specialists, such as Thales and Rockwell.
“They recognise the niche skillsets we have,” said Thomas.
“And from our point of view, it’s great – it gives us access to large, key-profile projects where we wouldn’t otherwise have a chance to actually engage.
“I’ve personally worked on the Manchester tram extension network. We took on a very senior role within the project team, but for a larger company.”
But Peak 42 also works with other smaller companies in and around its base at the Sci-Tech Daresbury campus, where it moved in 2006.
“We were an early adopter,” said Thomas.
“Clearly it was going to be a happening place here, which we felt would portray the image of the company very well.
“The image that we give out works very well with the environment that we’re in. Our customers like coming here.”
Since Peak42 began growing out of recession in 2011, the company has been engaging more and more with neighbouring companies – helped, Thomas says, by Sci-Tech Daresbury’s own support teams.
He said: “It’s nice to see people who make it their business to help you and try to connect you with other people. Sometimes when you’re busy delivering, you can maybe lose focus on those things.”
Peak42 also has offices in the North East, Nottingham and Oxford. Thomas said: “We feel our services are best deployed very close to our customers. They want to see us.”
As the business grew, Thomas decided that he needed to step away from the operations side into a business development role – albeit one without a formal job title.
That role includes focusing on winning new customers and on recruiting staff – something which, he says, is a challenge in itself in the technology world.
He said: “Although you may get a CV where all the boxes are ticked, when you actually speak to the person there’s something missing.
“We work in a very grown-up environment where people work under very little guidance. People are running their own projects, placing their own orders and taking on a lot of responsibilities.
“So sometimes we meet the right technical people but they’re lacking maybe that business acumen or that customer-facing skill.
“We certainly know from past lives that this is something we cannot compromise on. We’d rather be stretched for a little while than recruit the wrong people.”
Great teamwork is vital at any small firm. And Thomas is full of praise for his fellow directors and the way they have worked together for the company’s benefit.
He said: “It’s hard to focus on the business and work together if you have to look over your shoulder, if somebody’s not doing the right thing or if you don’t trust somebody. And with my colleagues we’ve never had any of those issues.
“We’ve always managed to have a very pleasant working environment. We don’t have anyone – or I hope so – who comes to work saying ‘oh no, not again’ when the alarm clock goes off.”
As well as engineering and mountains, the four directors also share a love of music.
Thomas, who lives in rural Cheshire with his wife and two children, plays guitar in a rock band that performs in local pubs.
Peak2’s directors all play instruments, though Thomas admits with a smile that they have never got round to forming a company band.
They do, however, all sing from the same songsheet when it comes to the company’s plans to win more contracts with current clients while growing profitability.
That growth will, Thomas said, not come at the expense of service.
“Our business is a people business,” he said. “It may be Kellogg’s and Peak 42 dealing with each other, but in reality it’s me dealing with my colleague at Kellogg’s.
“And I think it’s difficult to keep that angle when you become bigger, because if you’re a big company and you don’t get the job, people think ‘so what?’ Whereas at the moment they think if Michael doesn’t get that job, he’s going to be disappointed.”