Tag Archives: business

Guy’s newsletter: competition, collaboration & car manufacture

Last week we were visited by some of our growers from Andalucia. For years they’ve produced veg for us that we can’t grow at home without heating with fossil fuels. As I approached Pepe, who this year has grown the spinach and asparagus which precedes the UK crop, I extended my hand with typical English reserve, only to be pulled into an extended Andalusian embrace. After six years, what started as a trading relationship has developed into a lasting friendship; one that’s benefited us and our box customers and will, I expect, see one or both of us into retirement.

The contrast couldn’t be greater with our (now long past) annual trips to supermarket HQ: having scrubbed up for the nightmare session of abuse from a buyer, the visit would start with the ritualistic humiliation of a two-hour wait (calculated to soften you up) before finally we would be summoned to meet the latest testosterone-charged buyer. Thankfully, that was fifteen years ago, but I gather things at some supermarkets haven’t changed much.

Does business have to be done like this? After thirty years of trying to find an efficient and courteous alternative I have reluctantly come to the conclusion that competition is pretty good at driving innovation and improvement. Brutal as it sounds, if you don’t have the incentive to find a way of both doing what you have to do today, and doing it a little bit better tomorrow, it’s only a matter of time before someone else does and your number is up.

This is not to accept that short term, cut-throat deal making is the best way. A school friend has spent his working life making parts for the automotive industry. I’m always amazed to hear how the larger car manufacturers, having selected a partner, invest heavily in making the relationship work, in the long run and for both parties. Car manufacture must be one of the most competitive and sophisticated industries in the world; it is heartening that there, like Pepe and me, they have reached the conclusion that building and maintaining relationships is critical to long term success.

Guy Watson

Guy’s newsletter: the restraint of greed

A few of you have warned me over the years that while you like the veg, you can do without my “commie rants”. I try to confine my weekly musings to the farm but trying to run a business responsibly is itself a political act, so here’s another.

When, five years ago, I realised the business had grown beyond my management skills, I was fortunate to find my managing director Rob Haward; a man who shares my beliefs. Along with setting up a staff profit-share scheme, Rob and I agreed that no-one in the company, including us, would ever earn more than nine times the lowest wage. This may not seem radical but it was as far as we could go without making recruitment and retention of senior and specialist staff impossible; a typical ratio for a UK company of our size is between 15 and 25:1.

Since the recession began and despite Cameron’s cries of “we are in it together”, the rich-poor pay gap has spiralled out of control; executive pay was 60 times the national average salary in the 1990s, but 180 times that today. Indeed in the USA, since the recession the top 1% have taken a staggering 93% of income growth, and the picture is similar here. Not even the most rabid freemarket advocate could argue that is fair. I found myself musing on all this as a result of listening to Robert Peston’s excellent BBC Radio 4 series The Price of Inequality, but my blood reached boiling point last week with news that HSBC appears to have colluded in tax evasion by the super-rich. Worst of all was the extraordinarily complacent response of Cameron, HMRC and HSBC. Have we really sunk into such collective lethargy where we accept such moral bankruptcy as inevitable? Yet, as Robert Peston asserted to an incredulous billionaire; there are powerful rewards other than money. Given half a chance most of us want to do a good job and contribute to something worthwhile, but those potentially very strong motivations are eroded in the face of greed of the rich and powerful.

Despite all of this and to my immense pride (and my MD’s credit) there is a feeling at Riverford that we really are in it together, and we have never had better or more motivated staff, despite being increasingly out of step with executive pay. The restraint of greed can only start at the top.

Guy Watson

guy’s newsletter: noble management

Last week I alluded to plans for the business to one day become stakeholder owned (by staff, customers, or perhaps both) and why I felt that was important. In the meantime I have challenged our management team to make Riverford a truly exceptional place to work; if we achieve that, all else will follow.

In our last round of quarterly staff workshops we broke into groups to discuss what it would take to be exceptional, but also to talk about how we are doing right now. There was mention of the lack of hierarchy, of Riverford being a friendly and beautiful place to work, of a shared sense of purpose and common values, diversity and respect, opportunities for development, shared meals in our canteen, great parties, interaction with customers, loads of free veg to take home, a few gripes about poor communication, but almost no mention of money. There is a wealth of research to suggest that money is a very poor motivator, especially for complex tasks; my early experience of piece-work is that it is pretty lousy even for simple ones too. No-one makes the point more convincingly than Dan Pink. Don’t bother with the book, but if you have ten minutes, listen to the fast talking guru of motivation here.

Most management is diabolically cynical and short term. Instead of relying on the ignoble assumption that we all behave like a bunch of donkeys following carrots, the world would be so much better if we could harness the powerful and ennobling desires for purpose (contributing to something worthwhile), mastery (getting better at stuff) and autonomy (shaping your own world), as Dan Pink says. Building the fulfillment of these needs into daily working life is the key to happy, high performing organisations. One might ask why most management in the last 30 years (particularly in the public sector) focuses on monetary carrots for quantifiable results, when these so obviously don’t work well. The answer is that it’s easy, a bit macho and appeals to the cynical and lazy. Those shaping our NHS might ask themselves why 700 of their staff have volunteered to travel to west Africa to fight Ebola. Great management relies on a willingness to believe in people, and to keep on believing even when things don’t work out  first time.

Guy Watson

guy’s newsletter: the f word & togetherness

Twenty years ago my evenings were spent chugging around south Devon in a beaten up Transit van, delivering to our early vegbox customers. Our offering was pretty basic but the reception was rapturous and we never looked back. It certainly beat being abused by supermarket buyers. As customer numbers grew, I bought more clapped-out vans, employed wayward drivers, and started getting complaints about service, bruised veg and bad driving. It made sense to contract out the delivering and go back to what I loved and was good at: growing the veg. What started as a loose agreement with musicians and misfits with underutilised vans evolved into a franchise by the late ‘90s. We now have around 70 local franchisees delivering anything from 100 to 1,400 boxes a week, along with great customer service. You’ll know them as your local vegmen and ladies.

I never meant to get into franchising. For years no one could mention the f word; to me it meant bad burgers and a wired-back, ‘have a nice day’ smile. Some franchises are exploitative schemes to make a quick buck, but ours is different. Most Riverford vegmen joined because, like me, they love good food, believe in organic farming, good business and making the world a better place. We are totally dependent on each other and on the growers that supply us.

Last month we gathered at Sacrewell, our farm on the edge of the Fens, to share experiences and innovations, to plan, drink, eat and make merry. Since the recession hit in 2008 it has been harder to win and keep customers. A few franchisees left, but mostly we’ve collectively adjusted to a much harder market with a renewed determination to do better. The feeling of togetherness was wonderful and left me full of optimism for the future. Good business, like many good things in life, is all about nurturing long-term relationships. Selfishness and greed can be good drivers for lazy managers to achieve short term gain; a sense of shared purpose and an innate desire to do things well is harder to harness, but potentially much more powerful. In the early hours, outside a tent full of dancing franchisees, I felt happy that the f word could be good.

Guy Watson

Riverford franchise conference

Riverford franchisees gather in a teepee at our franchise conference

An incredible species

As I write, the sun is out, the pressure is building and there is a faint hope of some settled weather. Already the days are starting to draw out and there is a sense of renewal. I can almost hear the earthworms gasp as some air gets back into the soil. Surely this will be a better year. One confused primrose in bloom is enough to fill me with optimism. The run up to Christmas is always insanely busy and overwhelmingly focused on survival. No-one wants to talk to me or listen to my latest idea so I am obliged to stand back, watch and marvel; we really are good at what we do. Can I say that without courting complacency, the death of many an organisation?
I have spent 25 years searching for better ways of growing, harvesting, packing and selling our vegetables and, more recently, dreaming up ways of encouraging people to cook with them. My self-appointed role has been to look for what we do worst and then stamp my feet, obsess and make everyone’s life hell until we have improved it. I suspect this perpetual state of restless dissatisfaction is fairly typical of entrepreneurs and may well constitute a mild form of madness; it is hard to live with, anyway. Most people work best when they feel good about themselves, so perhaps it is me that needs to be improved.
My resolution for 2013 is to enjoy our achievements, to celebrate and encourage more. I know there are more than a few amongst you that have a vision of me and a few rustics gathering your veg each week. It does all still feel very personal but there are almost 400 people now picking, packing, grading and delivering, plus a bevy of IT wizards, accountants, cooks and mechanics. To stand back and watch is to marvel at human ingenuity, flexibility, learning, communication, planning and determination. It could so easily fall apart if it wasn’t for the shared values and direction; there is always a host of people ready to pick up and repair when things fall, as they inevitably do from time to time. We are an incredible species and these 400, together, make Riverford an incredible business.
Guy Watson

 

Planning, prices, promises and prizes

Back in the 1990s, when I was still striving to appease supermarket buyers, I was appalled by the waste that inevitably resulted from pursuing their fickle favour.

Veg boxes are the antithesis of this. The contents of your boxes have been meticulously planned; cropping plans and prices agreed with our growers right up to May 2014; a few cabbage seedlings are already germinating under the grass. All that planning and commitment reduces waste, allows our farmers to invest with confidence, and helps us to keep prices down – and stable. Sticking to those commitments makes us a little less flexible and responsive to fashions and trends than we might be; the stuff has to grow first.

Having made our plans and done our sums, we will be putting up veg box prices by an average of 4.1% on 1st January; sorry, but it’s only once a year. After the worst growing year we have experienced, we need to return a little more to growers, particularly those with the more risky green crops. Most are being incredibly stoical with an unshakeable faith that things can’t be as bad next year, but bank balances have been drained this year and they need the prospect of some profit to keep taking those risks.

A small piece of good news is that we are removing the charges for debit card payments. I have harboured a minor obsession with how these charges are concealed in transactions and as a point of principle wanted to make them visible. However, what started as a principle has become a niggling annoyance to customers and staff so I am bowing to convention on this one. Charges on credit cards will remain: transactions cost more, and most people can opt to avoid them by using a debit card.
Finally, I am officially the BBC Farmer of the Year; a fine honour and one that I cherish dearly. I won the title in 2004 but it means so much more to win when times are hard; I feel we have earned it this time and I can’t stop smiling. The title itself is good, but winning is made so much better by all the messages of support from staff, customers, suppliers and other farmers.

Thanks to you all.

Guy Watson

One last commie rant

Thanks to all of you who have offered support following our appearance on Countryfile in my bid to become the BBC’s Farmer of the Year. If you are sufficiently interested, there was also a more in depth interview on Radio 4 (www.bbc.co.uk/programmes/b01n98v3).

And another thanks to the hundreds of you who responded to last week’s newsletter about my plans for Riverford becoming stakeholder owned. Behavioural science provides a wealth of evidence that greed is a very poor way of getting the best from people; for a compelling 10 minute overview, see Dan Pink at www.youtube.com/watch?v=u6XAPnuFjJc. The world would be a better place if more people found the confidence to encourage our desires for collective purpose, personal autonomy and the innate need to learn and do things better. It’s a big challenge, but I would love to find a system of management and ownership that harnesses these motivations. The hundreds of comments on Facebook and by email give me renewed determination that Riverford must always be owned by those who shape its future: customers, staff and suppliers. I have been working on this for six years and still have a way to go. In the meantime, with your support, we are so lucky to be able to farm and run the business in accordance with our values. Most of the profits that we make are re-invested and those that do leave the business go mostly as a staff profit share.

Enough ideological ranting; what about the vegetables? We have just finished harvesting in France. The new tunnels are half up and we start planting again in January. Despite a grim summer the chillies have cropped very well; so well that we are drying quite a few and I am hoping some of you will have a go at making chilli strings for home drying. They are available now; £3.75 will buy you a half kilo bag of chillies (about 30 chillies) and instructions. All you need is a large-eyed needle and strong thread, eg. buttonhole. They will keep for months, providing a ready supply for your cooking. They look so bright and cheerful I like to decorate my Christmas tree with them.

Guy Watson

who owns those potatoes & does it matter?

Last time I met Keith Abel, Riverford’s arch rival, he told me over a pork pie: “The problem with you, Guy, is that you’re so boring”. He looked pretty pleased with life and I wondered if he was right.

We started our businesses about the same time. He was selling potatoes door to door; I was growing them. We both ended up selling vegetable boxes. I reckon ours are better, but he has always been better at selling them and making money out of it. After 20 years, with impeccable timing, Keith sold his creation to a venture capitalist backed by Lloyds Bank and bought an estate in the country. But within two years, without Keith’s vision, the business was struggling. The venture capitalists left, Lloyds took control and Keith was brought back to save the day, which he seems to have done very successfully. Last week William Jackson, a food group with no history in organic or home delivery, bought the business from Lloyds for an undisclosed sum.

At the time of the original sale I was besieged by accountants, lawyers and merchant bankers, all claiming they were perfectly placed to maximise the value of my business and ease me into a life of champagne-swilling happiness. To have let them get their avaricious mitts on my baby would have felt like selling a child into prostitution. Nothing would please me more than to show them there was a better way.

Prompted by an awareness of my own mortality and an admiration for the John Lewis Partnership, I spent a couple of years visiting co-ops and researching employee ownership. Later I got excited about persuading all of you (our customers) to buy Riverford, converting us into a customer owned co-operative. The lumbering complexity and looks of non-comprehension when I tried to explain it put me off, though I have not quite given up. When I am too decrepit to be any use, my stab at immortality is to devise a form of ownership for the benefit of all those involved: staff, customers and suppliers or perhaps a combination of all three. I just haven’t quite worked out how to do it yet.

Guy Watson

Our 25th anniversary

25 years ago, having given up my brief career as a management consultant, I returned to my father’s farm for Christmas to rethink my life. Milking cows in a family partnership hadn’t worked for me; nor had the urban hedonism of 1980s London and New York. I concluded that I was unemployable and so would start my own business.

By Easter, I had ploughed up the best field on the farm and sown my first leeks, lettuces, cabbages and sprouts. I had beginner’s luck; those first seeds emerged well and a demonic determination gripped me. I worked day and night, invested every penny back in the business and was considered mad by my neglected friends and family. I was going to make it in veg if it killed me. I took setbacks personally, but never seriously doubted I had found my path – even when faced with docks, couch grass, pestilence and supermarket buyers. 25 years on I have mellowed a bit, but remain as obsessed by veg as ever. Somehow in the intervening years I have gathered followers (co-op members, joint venture partners, 450 staff, franchisees who deliver your boxes) and spawned a giant. Every three seconds, on one of our four farms, we are packing a veg box; 40,000 each week. Scale has brought opportunities to challenge the norms of farming and business and I’m fairly sure we have made things a little bit better for our staff, suppliers, the environment and for you, our customers. Without your support I’d still be moaning about supermarkets like a stuck record. Together, we have challenged and fought for a better way, and for that, I am both grateful and proud. From all our suppliers and everyone at Riverford… a big thank you. We’d love to see you at our Pumpkin Days at the end of October for a bit of a celebration – more details to follow.

Guy Watson

25 golden carrots – have you found one?
To celebrate our birthday, we’ve hidden 25 golden carrots in our veg boxes this week, Willy Wonka-style. If you find a golden carrot in your box, we’ll bring you a bottle of fizz. Good luck!

Meat, veg, milk + siblings

Riverford is a family business. All five of the second generation are working on the farm, with our father and founder acting as our environmental auditor. Watson sibling relations are better than most but we are all stubbornly independent, particularly me (veg) and my two brothers: Oliver (dairy with his partners) and Ben (meat, shops, preserves etc). To keep the peace we operate as overlapping but separate businesses; hence the different logos and probably slightly confusing communications.

Ben started butchering and curing my father’s pigs in our garage in 1983. Over 27 years this has developed into three farm shops in Devon, a commercial kitchen making preserves, pies etc and eventually the meat boxes, which we deliver alongside the veg boxes. Ben is as obsessive about good meat and how it is produced as I am about vegetables. He will continue to be the inspiration behind our meat offer but we (the veg crew) are better at putting things in boxes and the logistics of delivery, so this summer we took on the running of the meat box business.

I hope this development will not put off the vegetarians amongst you. Grass clover leys and the livestock that graze them are vital to building soil fertility between vegetable crops. To support farmers throughout the rotation it makes sense to sell the resulting meat and dairy products. Through our long relationships with these farmers we know where our livestock comes from, the breeds, how it was raised, how it was killed and hung. It is butchered and packed by hand by a dedicated team of skilled butchers who share in the profits.

Most of us eat more meat than is good for us and the planet. We will continue to celebrate the culinary possibilities of vegetables and to challenge the assumption that meat should be the centrepiece of a meal. Last week this approach won our Riverford Field Kitchen the Observer Best Ethical Restaurant award for the second year running; well done to Jane, Sam and their team. We would like to encourage the meat eaters amongst you to enjoy better meat, less often, in smaller quantities and with complete confidence that the animal has been treated respectfully.

You can make bespoke meat or fixed content meat box orders (the boxes tend to be about 10% cheaper) at www.riverford.co.uk.
Guy Watson