Let IT Go_The Memoirs of Dame Stephanie Shirley
Page 24
I was on my way to Paris that day, to give a speech. Later on, I was photographed on a barge on the Seine, with Penny Tutt. Even in black-and-white, you can see how red my eyes are. I understood the realities of the matter: the fact that Hilary and the board had every right, if they chose, to decide that I was dispensable. But that didn’t make it any easier to bear.
Eventually, encouraged by Penny (and a little inspired by the thought that it had been from Paris that Margaret Thatcher, just a year earlier, had returned for one glorious last stand against those who had decided that her party no longer needed her), I went back and negotiated a compromise whereby I would remain in my current role until my 60th birthday and then leave the company completely. That seemed slightly less humiliating, and I was glad to have stood my ground to that extent. But my final two years at the company, up until July 1993, were overshadowed by the knowledge that I was only there on sufferance.
Perhaps you need to have founded your own company, and built it up through decades of life-defining effort and commitment, to appreciate how personal such rejection can feel. Obviously, none of us is indispensable in any job; and, equally, most of us will be replaced at some point by a younger, less experienced person who is more attuned to the particular challenges of the moment. I had considered myself reasonably aware of such truths and indeed was proud of my success in managing succession. But there was something about the haste with which the directors I had brought in had tried to bundle me out of the door that got under my skin. It felt like a challenge to my sense of self-worth; just as it felt like a challenge to my sense of self-worth when I heard Hilary spoken of as the sole begetter of FI Group’s success. “What about the company she started off with?” I found myself saying, noiselessly, on more than one occasion. “What about the client book, the personnel, the culture, the goodwill, the freehold headquarters and the paid-up pension scheme?”
But I knew that no one was listening and, in fairness to myself, I had enough self-knowledge to realise that no one else was interested either. When you give away control of an organisation, as I had deliberately done, then, clearly, it is no longer in your control. Its behaviour will be determined by factors that have nothing whatever to do with you or your agenda. Individual members of the organisation may retain warm feelings towards you; but to the organisation itself you will at best be an irrelevance and at worst a nuisance. That is what giving away control means.
So: I wiped my eyes, got over it, and moved on.
There was plenty to keep me busy. My non-executive directorships took up an increasing amount of time; especially that with Tandem Computers (now part of Hewlett Packard), which required regular travel to sunny California. My general verdict on non-executive directorships is that, when all is going well, it is hard to imagine more stimulating and constructive employment. When times are hard, the imbalance between responsibility and power can make them feel like a hateful burden. (After Tandem and AEA, which I gave up in 1997 and 2000 respectively, I only ever took on one further non-executive directorship, with John Lewis, from 1999 to 2001.) But it was good for me at the time to try looking at the world from the perspective of companies other than FI Group, and to move among people who considered that what I had achieved with FI Group was worthy of admiration. I was the first commercial person to sit on AEA’s board, and I was able to introduce a number of marketing concepts that made a big difference to the company’s future. Similarly, I was the first non-American - and the first woman - to sit on the board of Tandem, who seemed grateful for my knowledge of the European market when the company subsequently expanded.
The British Computer Society and the Worshipful Company of Information Technologists were both fairly demanding, too. Each, in its different way, represented something I believed in. The former stood for the idea that information technology is not just some narrow specialism but, on the contrary, one of the key industries upon which the UK’s future prosperity depends. (This idea seems more obvious now than it did 20 years ago.) The latter stood for the principle that, like any thriving industry, the IT industry has a responsibility to give something back to society; and that that “something” can as usefully be expertise as cash. I subscribe to both ideas as fervently today as I did then.
There was also Giles to be dealt with, and the Cuddy and, later, the Kingwood Trust, as well as the paid speeches and other activities that I continued to do for FI Group. So I was never less than busy, and retirement came round pretty quickly. Although I viewed my main career’s approaching end with trepidation, it all concluded surprisingly amicably. At the final FI Group AGM that I attended I was presented with the biggest bunch of flowers that I have ever seen - bigger, I think, than me - while a month or so later they gave me a lovely party on board HQS Wellington (the “Head Quarters Ship” permanently moored on the north bank of the Thames near Cleopatra’s Needle), where so many of my old colleagues, contacts, clients and suppliers had been rounded up that I felt as though I was on This Is Your Life.
By the next morning I was at peace with myself. I felt quite certain that, whatever unpleasantnesses there had been, I could look back on my career at FI Group with warmth and satisfaction. I had achieved my three main ambitions - to establish a successful and soundly based company; to hand over control of the company to the workforce; and to ensure highly competent leadership succession. It had, beyond doubt, been worth the effort and the pain; and, now that those objectives had been achieved, what would have been the point of continuing?
20: Starting Over
DEREK AND I spent much of the next year adjusting to a new kind of life. Derek had grown used to retirement; I had not. I tried for a while to do less with my days, and even treated myself to a visit to Australia, where I spent a few precious weeks with Renate, whom I had not seen for nearly a decade. But when I got back I felt uncomfortable having so much time on my hands - and worried that, having devoted so much energy and attention to providing for Giles, I had neglected to provide myself with a pension that would allow me to enjoy my retirement.
So I carried on working conscientiously at my non-executive directorships and my paid speaking engagements, and continued to network as though I had never retired. This networking had no conscious objective; it was just a way of living that I had grown used to. I liked mixing with the movers and shakers of business and politics, not because of any personal advantage they could bring me but simply because I enjoyed (and enjoy) their company. They interested me. In the IT industry, the most powerful, influential and innovative people were, in many cases, my friends. Once I had sought their company in the hope that it might produce business for me. Now I did so primarily for pleasure - although, who knew, maybe something might come of it anyway?
Derek and I also threw ourselves, with renewed enthusiasm, into managing the Cuddy and the Kingwood Trust, which I hoped could be established as stable, self-sustaining organisations. We had, unfortunately, developed over the decades a fairly encyclopaedic knowledge of issues relating to the care of children with autism (Derek had even joined a committee devoted to improving education legislation for disabled teenagers) and it seemed a waste not to make good use of this expertise. I also devoted a ludicrous amount of time to dealing with the fact - mentioned in chapter 18 - that Giles had not been receiving the financial support to which he was entitled from the state.
This anomaly was eventually resolved - not entirely satisfactorily - in March 1995, with the outstanding payments (backdated to August 1994 but not, unfortunately, to September 1987) made to the Kingwood Trust, which by then had been registered as a charity. There were drawbacks to this re-engagement with the state: both The Cuddy and the Trust were subsequently plagued with visitations from representatives of the various relevant authorities. Boxes of all kinds were constantly having to be ticked, and many of the demands that were made of us didn’t seem to be founded in the slightest understanding of autism.
At one point
we were told that Giles had to start attending the local Training Centre. My warnings that they would not be able to handle him there were ignored. So along he went and, within a week or so, they began to insist that he be accompanied by one of our carers. A week or so after that, they insisted that he shouldn’t come at all - which was fine by us but seemed a rather painful way of arriving at a conclusion that we could easily have reached in advance through informed, open-minded discussion.
But any such irritations were far outweighed by the lifting of the financial burden, over which I had been losing serious amounts of sleep since my salary from FI Group had stopped. These new local authority contributions, combined with the grant from the Disabled Living Foundation, covered most of the costs incurred by the Kingwood Trust in caring for Giles. Additional charitable donations from us were also needed, which was daunting, but at least the required level now seemed more manageable. There was also the crucial comfort of knowing that this financial relationship between the state and Giles had nothing to do with Derek or me and could thus be expected to continue after we were dead.
To ease the financial strain further, in 1995 we sold the Old Schoolhouse in Amersham - our home for the past 25 years - and bought instead a modest duplex in Henley-on-Thames. It was rather more compact, if not cramped, than I would have liked, but Derek was convinced that it was what we needed, and it did have the advantage of requiring minimal care and maintenance. The fact that there was no room there for most of our furniture from the Old Schoolhouse was a boon for the Kingwood Trust. Conchiglia, the new care home that we were in the process of opening in Radley (outside Abingdon in Oxfordshire), needed lots of furniture, so we gave it whatever we didn’t have room for.
The net result was that our lives were suddenly simpler. There was less home to be cared for, no gardening to be done, less distance to be travelled in order to get to The Cuddy. There were also fewer calls on our time from The Cuddy, whose management had moved on from the inspired amateurism with which Phil and Paul had made it work in the early years. We now had an experienced manager, David Williams, who ran the Trust, the Cuddy, White Barn and Conchiglia with such professionalism that I was beginning to sense that here, too, I might soon be surplus to requirements.
Sometimes I wondered if we had simply reached a stage in life where there was nothing much left for us to do. Perhaps I no longer needed to be pushing myself to exhaustion every day; perhaps we could now settle down and prepare for a quiet, contented retirement.
But not yet. Two things happened in the spring of 1996 that changed the way I looked at the world. One, in March, was the death of my sister, Renate. We had seen sadly little of one another over the previous 25 years, but she had remained a big part of my world, and it was a shock to lose her. Her life had been messier than mine, and in material terms less successful, but to me she was always the same strong, reassuring older sister who had held my hand when we arrived in England and helped me settle safely into our new world. She had had a failed marriage and a knack of falling for unsuitable men; she was overweight; she ate all the wrong things; she had heart trouble and diabetes and I hate to think what else. But she always had a tremendous life-force, generating warmth and a sense of humanity whoever she was with. She had successfully fostered three boys, in addition to her adopted daughter. And one thing I discovered after her death (I flew to Australia for the funeral) was that, in her chosen field of social work, she was considered by many Australians to be a heroine: a tireless, compassionate champion of disadvantaged children who had changed many young lives for the better.
We had kept in touch mainly by post, sending each other letters and gifts several times a year; but the price and inconvenience of international telephone calls in the early days meant that we often went years without speaking. The last time I had seen her was that visit to Australia three years earlier; I was grateful to have had that chance, which by our standards was recent. I mourned her sadly, and, inevitably, reflected more frankly than usual on how much time I had left and how I would best use it.
The other significant event, just a few weeks after Renate’s death, was that, after years of anticipation and delay, FI Group was finally floated on the Stock Exchange. It was six times oversubscribed, and within three months its shares were trading at 409p per share, from an offer price (in April) of 235p. This capitalised the group at £121.5m (up from £69.8m at flotation) and made many of the staff rich beyond their wildest dreams. (By this stage the workforce controlled 54 per cent of the equity, through a combination of individual shareholdings, the Shareholders Trust, and a Qualifying Employee Share Trust into which I had been selling shares - qualifying for roll-over tax relief - since June 1995.)
Hilary and several other directors became instant millionaires, while hundreds more found themselves sitting on substantial fortunes. More than a third of the company’s shares were owned directly by its workforce - more than 70 of whom would become millionaires within a decade. When you take into account all the others who amassed smaller - but still substantial - windfalls, that is an awful lot of lives dramatically changed by the simple mechanism of being handed a part of the company they worked for.
I don’t know what most of them did with the money. I don’t know how many of them made or make any connection in their minds between their financial good fortune and the fact that, in many cases, I “gave” them my shares (and in other cases allowed them to buy them at a favourable rate). To be honest, I don’t really see those transfers as gifts: it was their work that made the company’s wealth, and they had a right to a share of it. I was fair, not generous. But every now and then, even now, I run into someone whose life was changed as a result of those shares, and the cumulative effect of such people’s stories can be quite moving. “It was thanks to you that I was able to care for my father at home...”; “I used the money to start my own business....”; “I was able to take a year off when my husband was sick”; “I retrained to do the job I’d always wanted to do”; and so on. One long-time colleague told me recently that the sale of the shares had “enabled me to retire at 55 and undertake considerable pro bono work with charities and not-for-profit organisations... I have established my two children on the property ladder and have been able to make significant - in my terms - donations to the Worshipful Company of Information Technologists, my local hospice and church, and other charities. I have also established a scholarship at the University of Hertfordshire for a local female student to study IT...” Perhaps there were people who put the money to bad use, but I like to think that, on the whole, the ripples of that transfer of ownership have been benign.
Meanwhile, I needed to come to terms with the fact that my own remaining shareholding in FI Group now had a value (three months after flotation) of about £21.5m. I knew that this was only paper wealth, but, even so, it was considerably more wealth than I had ever imagined that I could possess. Perhaps I should have seen it coming. Instead, it was a shock. From lying awake at night wondering how I would be able to finance both my retirement and the Kingwood Trust, I abruptly found myself faced with a quite different problem: how could I make constructive and sensible use of this huge fortune?
In theory there was nothing to stop me from converting the shares into cash there and then. I saw no reason to do so, however, and I am glad that I didn’t, because that was only the beginning. These were the early years of the dotcom boom, the great speculative bubble that saw the price of technology shares increase nearly six fold (as measured by the Nasdaq Composite Index) between 1995 and 2000. FI Group was one of the prime beneficiaries of this boom. On the one hand, it was at the cutting edge of technological and organisational innovation, which appealed to the market’s greed; on the other, it was (unlike most other dotcom ventures) a solid company with a sound business model that was already generating consistent and substantial profits - which appealed to the market’s conservatism. To me, it still seemed a highly attractive investment, and the fin
ancial community clearly felt likewise. Over the next few years, the share price soared, and soared, and soared - and by 2000 had more or less quadrupled from the offer price.
Even in 1996, it was clear that there was a good chance that my wealth would now increase by many millions of pounds a year without my having to lift a finger. Having spent half my life working 70- or 80-hour weeks trying to keep alive a young company that was paying me only a minimal salary, I found this prospect odd, and faintly obscene. Wealth as a reward for hard work, I could understand; wealth simply as a reward for wealth seemed wrong.
But I soon realised that, in joining the ranks of the super-rich, I was entering a world in which normal values don’t always apply. I particularly remember a series of meetings with a financial adviser who was determined that he could make sufficiently dramatic inroads on my tax liabilities to justify a large fee for himself. My initial scepticism - why should I object to paying a reasonable amount of tax? - turned to contempt when he suggested that Derek and I should get divorced. Why? “Because it would be more tax-efficient.” I dispensed with his services soon afterwards. (This episode reminded me of the previous time I had been advised on managing my wealth, a few years earlier. That “expert” invited me to become a Lloyd’s Name: a lucrative-sounding arrangement whereby I could make a fortune from the insurance industry merely by signing up for a share of the profit of policies written at Lloyd’s. When I pointed out that this sounded too good to be true and insisted on seeing the small print, I was scorned for my unsophisticated timidity. Luckily, I stuck to my guns: the small print showed that I would also be signing up for a share of the risk, and I declined to have anything to do with it. Scores of other self-made people were ruined in the 1990s after signing up as Names without applying common-sense scepticism to the proposition.)