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Specsavers: Family has eyes set firmly on success

The theory, increasingly heard, that family businesses should forget all the negative economic headlines and seek out opportunities to expand or diversify is all well and good if you have the capacity and know where to look. Often, however, you cannot accurately predict where or when such chances will arise. As the UK-based Perkins family found out back in 1984, sometimes opportunities come out of the blue.

Founders Doug and Mary Perkins owned a small chain of opticians in the west of England, but they sold up in 1979 and moved to Guernsey in the Channel Islands to be nearer Mary's parents. The opportunity that changed their lives came about thanks to the visionary (or myopic depending on your political bent) decision of British prime minister Margaret Thatcher to deregulate the country's optician's market.

Up until the early 1980s, the sector was dominated by a 250-year behemoth, Dolland & Aitchison, and stifled by draconian legislation that prevented advertising and marketing. Several new players entered the market, including the Perkins' who, on a table tennis table in their spare room, mapped out a vision to build a successful business in the new environment.

Specifically, they wanted the company to be seen as delivering excellent customer service, as the old, local independent opticians were perceived as doing, but with the huge buying power of a national company that meant great choice of range and savings could be passed on to the customer.

Specsavers was born and has prospered since – today, as the family's second generation celebrates the company's 25th anniversary, the business is the largest privately-owned opticians in the world with revenues of £1.2 billion, 26,000 staff and the JP Morgan Family Business Award for 2009.

In its annual report for 2008/9 Doug and Mary said: "Specsavers has not only performed well but we have actually surpassed many of our own expectations. Put this into the context of what is turning out to be the worst global economic depression since the 1930s, with extremely difficult trading conditions, and we can be justifiably proud of how the business has done."

According to John Perkins (pictured), second-generation managing director, it's all down to a modified franchising model that his parents developed, in part after visiting the US.

"I think the key difference within the Specsavers concept is what we refer to as the joint venture partnership," he exclusively tells Campden FB. "It is not about the number of stores in the Group, it is about ensuring the quality of care is there for every single customer – and that comes down to incentivising people."

Essentially, managers of Specsavers stores are given what Perkins describes as "the purest form of incentivisation" – their own business. Before deregulation, managers were generally salaried employees of D&A in a traditional, hierarchical corporate structure, but the Perkins' gave them the opportunity to own their own stores within a flat, dynamic organisation. "If you explain to a manager what they have to do to move the business forward you can pretty much guarantee that they'll be doing it in their own way once you've left the building, safe in the knowledge that you're not going to be back for a few weeks. It makes much more sense to give leaders ownership and accountability from the start," says Perkins.

To ensure that they choose the right people, Specsavers has a robust training programme that focuses on ensuring the consistent delivery of service, no matter where their customers are in the world. A crucial aspect of this is finding people who believe in the values that the Perkins family has centred the business around.

"The family culture is an incredibly important part of what Specsavers is about generally and the way in which we operate specifically," explains Perkins. However, it doesn't begin and end with the Perkins family. "We have many families at Specsavers – not only my family, but also family stories that exist in each of our 1,200 stores, all of which are run like individual family businesses."

It is for this reason that Specsavers is not marketed as a family business and none of the Perkins clan seeks the limelight. "The family feeling within each store, which is so important to local communities, is absolutely immense so we prefer not to look for situations where the Perkins family is proactively marketed as the owners and managers," says Perkins.

Business by osmosis

Back in 1984, John was at school but he still remembers the opening of the first Specsavers store in Bristol. While his friends were out enjoying themselves during the holidays, John would follow his father round trade fairs, meeting distributors or scouting out venues for new stores.

"Being subjected to the business from a young age means it seeps into you by osmosis and although being a part of it was never forced on me or my two sisters, it becomes a big part of your life," says John. While his parents busied themselves with growing the company, John decided he had no drive or compulsion to be in the family business and went to train as an accountant. However, after five years at Deloittes, he resigned in what he refers to as "a moment of clarity" – a move which surprised his father.

"I remember going to tell my father what I'd done and after he picked himself off the floor he said: 'You know nothing about the optical business - if you don't go and learn about it and our customers then you're not going to be much help.'" 

Being left with little doubt that his future lay in the family firm, John began to learn the business from the bottom up, starting with packing frames in the warehouse and thereafter working in stores across the UK. He joined the board as commercial director after five years before being promoted to group finance director; however what really interested him was business development.

As the company began to expand overseas, John took responsibility for getting Specsavers into Scandinavia (there are now more than 300 stores there), but it was a scouting mission to Australia that led to him taking ultimate responsibility for the firm. Unusually, however, it was thanks not to his father stepping down, but rather stepping sideways.

John's report back on the potential that existed down under (and the deal that provided for entry) reignited the entrepreneurial flame in his father. "Having the opportunity to re-run the Specsavers story in Australia, knowing all the mistakes he should avoid was a massive lure for him," remembers John.

The net result was that John was left holding both the FD and MD positions while his father moved to Australia. After six months he admitted defeat with this dual role, which led to an important step change in the way the company was run. Although John took over responsibility for leading the company north of the equator, thereby keeping ultimate control in family hands, it was who the family brought in to support him that was key.

"My father had the presence of mind to realise that he didn't have all the answers and that the business could only get to a certain size if he was not prepared to bring in professional managers from outside Specsavers – people who were much better than either him or my mother at certain things," says John.

As a result, the family brought in a number of "terrific guys" – an HR director from Vodafone, a CIO from Bupa, a marketing director and CFO from Boots – who put in place commercial structures and processes, and brought new skills and competencies to the company's top table.

John was actually the last of his siblings to join the company. Eldest sister Julie joined straight out of university and is currently country director for the Netherlands, a fast developing market for Specsavers. Other sister Cathy manages the company's technical teams, while her husband is director of group services. Nevertheless, John is keen to point out that no preferential treatment is given to family members.

"It's very much a meritocracy - we didn't float in on a cloud saying 'this is my family's business' – and if we don't do a good job our father would be the first to say the situation was unacceptable," says John. "In fact, I would say that a higher standard of behaviour and performance is actually expected of family members.

"Because my sisters and I have seen the effort that our parents put into building the business, we understand the correlation between hard work, treating people with respect and success."

When asked about how he thinks the family is viewed by the non-family management, he is unequivocal. "We're no different at all - the rest of the board see us as colleagues above all else."

Having said this, John admits that many of the non-family management enjoy working there precisely because it is a family business. "They like and enjoy the culture and the values that the family brings".

Clearly, the family has no intention of selling – indeed, John says doing so would serve no purpose. The company is able to expand organically of its own volition without the need for outside capital and the family enjoys having the freedom to drive its direction. 

Future challenges

For the next stage of Specsavers' development we return to their old nemesis Dolland & Aitchison. In January 2009, D&A was swallowed up by Boots, the UK-based health and beauty group, which has its own opticians business. The new group leapfrogged Specsavers to become the UK's biggest optical chain in terms of number of stores – not that John is unduly worried.

"We measure size in terms of market share by volume and by that measure we're streets ahead. Obviously they have us firmly in their sights, but we just have to do things better today than we did yesterday. If you want to be number one, you have to act and behave like you are number two."

However, with a global business to manage, the family has to be focused on more than its UK core market, where it has a market share of 35% and where one in three people who wear glasses buy them from Specsavers. 

The company also has stores throughout the UK, Ireland, the Netherlands, Sweden, Norway, Finland, Denmark, Spain, Australia and New Zealand. Specsavers became the number two player in the Australian optical market in less than 12 months and fully intends to be number one. Continued expansion into Europe is planned with the immediate aim of being the market leading opticians in the Netherlands and Scandinavia.

The company has also diversified into selling hearing aids and intends to become a leading supplier by applying the same tactics that it applied to the optical world, namely: dramatically reducing prices and improving choice and quality.

When it comes to looking after its own people, Specsavers is no less forward-looking. It is the only optical retailer in the world to offer web-based training sessions, while a planned Specsavers Academy intends to continually educate its staff.

Such an entrepreneurial, winning mentality allied to strong family values and a dedication to philanthropic projects is classic family business territory. The Perkins family believes that it has found a winning formula and is summed up by John's response to the question about the family company's ultimate goal: "we've never wanted to be the biggest, we've just wanted to be the best." 

The Dame behind the vision

You could be forgiven for thinking that John Perkins, the second-generation managing director of Specsavers, would have selected one his own personal milestones as the biggest achievement from the past 25 years. However, the self-effacing 37-year-old prefers to select the moment his mother was made a Dame of the British Empire.

"If one was ever looking for the personification or the encapsulation of 25 years in business, we look at the fact that she received this recognition on behalf of everyone in the company and the family. It was a massive achievement and I know that everyone was incredibly proud," says John.

As co-founder, Mary is an integral cog in the Specsavers wheel. Today, she monitors the culture and direction of the company and oversees its professional and consumer reputation. In 2007, she won the Most Outstanding Woman in Business Award at the National Business Awards.

However, she was and remains an avid philanthropist, leading the company's backing of a wide range of local, national and international charities.

In 2008, the business raised more than £250,000 for Vision Aid Overseas to build a much-needed eyecare clinic and school of optometry in Zambia, while Diabetes UK is the corporate charity and stores raised more than £130,000.

In March 2008 Specsavers signed up to a global ethical trading policy, ensuring the company and its suppliers continue to provide safe and healthy workplaces for those who make products, where human and civil rights are respected, and take commercially reasonable steps to safeguard natural resources and the environment.

"Making money is not the main motivator for my parents; rather it's the opportunity that financial success provides them both with to do so many things that they believe very strongly about," explains John.

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