Issue 17 Business Q & A: Entrepreneur Ed Vernon

Ed Vernon

Entrepreneur Ed Vernon is Chief Executive of equity firm Synetecs and previously founded and headed up BIC systems, which he sold to BT in 2004. Here, he shares the lessons he has learned from his time in business and his thoughts on ensuring success in current turbulent economic climate.

Tell us a bit about your background.

I completed an MSc in Electronics in 1982 and started my first real job in the Wolfson Unit, an industrial design operation at Queen’s. That was a great time because it was early days for microprocessors and their potential was just beginning to be exploited. In 1983 I picked up on the personal computer. We take PCs completely for granted these days but back then they were a revelation – the same computer could function as a word processor, an accounting system or a CAD design station. BIC Systems was formed the following year and from very humble beginnings caught the wave of the PC for the next two decades. During that time we managed to see off several recessions and sustain through a number of ‘off-road experiences’.

Ultimately the business became one of the leading IT systems, services and training businesses on the island. It was acquired by BT in 2004 by which stage the company was highly cash-generative and employed over 200 people. I then helped BT develop a new strategy in Ireland and enjoyed the challenges of working in a much larger organisation. I left BT in 2006 to set up an equity investment vehicle – Synetecs – with former colleagues Johnny Convery and Alan Lilley. We recently completed the acquisition of a market-leading specialist recruitment business in England and we plan to develop this into a more significant entity. I’m a board member of Invest NI, a Trustee of the Queen’s University Foundation, Chair of the Matrix ICT Panel and a member of the Institute of Directors Northern Ireland Committee.

What are the big issues facing businesses in the current economic climate?

The world changed last summer. Since then business and economic activity has been overshadowed by a collapse of confidence in financial markets. Funding availability is scarce, the relative cost of money is higher than at any time in the recent past and the US is probably in recession. In this environment, business leaders have become more risk-averse and need to reinforce financial disciplines; be flexible with costs by aligning to incentives and performance; move online to drive scale and efficiency; bring in others to look out for blind spots; stay close to their people and customers; and remember that cash is king. Well-led businesses tend to do well in tough times by being able to buck the trend and take advantage of the opportunities. Darwin said that it’s not the biggest or most intelligent who survive change – it’s the most adaptable.

In your experience what makes a successful company?

Successful businesses demonstrate above-trend growth over long periods of time. The most consistently successful companies are driven by great leadership, are strategically-led and allow people in the business to participate in continuous improvement. This ‘collective intelligence’ allows the potential of the business to be achieved because people feel involved and so feel more committed to the business. In my experience most businesses have a strategy but fail to execute their strategy; there’s a confusion between aspirational statements and robust implementation.

What has been the biggest change you have seen since you first started out in business?

It’s a toss-up between globalisation and the internet, although one complements the other. Globalisation has driven fundamental changes over the past 20 years and, as a result, performance benchmarks have risen across the board. Manufacturing and services businesses in Northern Ireland have to export for growth, and to do so successfully against China and India they must operate in high-value niches. With only 1.7 million people there’s no alternative for us but to export. The growth of the internet has had a major effect on the development of new business models in all sectors and has created both winners and losers in the process. Its influence is accelerating.

How have you found doing business in Northern Ireland compared to elsewhere in the world?

The fundamental constraint in Northern Ireland is small market size. In various sectors the market suffers from overcompetition which reduces profit potential but consequently develops high service standards and efficiency. This can be a good basis for exporting and over recent times I’ve see increasing numbers of Northern Ireland businesses becoming successful internationally, so confidence is rising. The new Executive has delivered stable devolution and put the economy at the top of its priority list in the Programme for Government, so the platform has been established and I would be optimistic about the future.

What has been the one lesson from your career to date that you would pass on to anyone starting out in the business world?

Business is about managing ambiguity and taking risks so do things that have limited downside and plenty of upside. Self-discipline, being organised and building relationships are important but insufficient for success. To succeed also requires that X factor which you can only develop by trial and error. Failure is essential to success, so when you experience failure learn from it and move on.

Any highlights or successes you would like to mention?

I’ve been honoured by various business awards over the years, which is gratifying especially when coming from your peers. The highlight for me thus far has been successfully exiting from BIC Systems to BT, which was confirmation that the leadership team had gotten it right.

What is your biggest disappointment in your career to date?

I had a major ‘off-road’ experience with a dot com development circa 2000 which wasted a lot of time, money and opportunity. I regret the outcome but not the original decision to go ahead with the investment. We learnt a lot as a result and made sure that lessons were not forgotten. In retrospect it was a worthwhile experience although it didn’t feel that way at the time.

Who was your most notable mentor?

The former Chairman of BIC Systems was John Wright, an international banker who for a time was Chief Executive of the Northern Bank. I thought I knew about people management and motivation until I worked with John. Frank Cushnahan, also from a banking background, can cover any organisation both in the private and public sectors like no one else I’ve ever met. His energy and work rate are immense and his analysis is razor sharp. Both John and Frank have developed superb business networks nationally and internationally and not by accident.

What interests do you have outside work? How do you like to relax?

I like exercise in general and in particular walking in the Mournes with my wife Roisin. I ride Ducati and BMW motorcycles and, when time permits, I enjoy restoring classic Yamaha and Kawasaki bikes from the 70s. I also support Manchester United and travel over to Old Trafford on a regular basis. I enjoy music and have played drums since I was nine.