Lessons from Local Business Legends: John Thompson Group CEO Inxpress Global
Many of you reading this will be unaware of John Thompson and the company that he launched in his spare bedroom over a decade ago. John Thompson is the founder of Inxpress and works today as CEO of Inxpress Global, the company formed to manage the rapidly expanding Inxpress franchise network that is stretching out across the world. Inxpress Global offer a unique management franchise within the transportation industry worldwide offering domestic and international distribution services to SME’s provided by selected world-class carriers. Under its auspices there are currently over 100 franchises across eleven countries turning over almost $100 million in annual revenue. The company is enjoying rapid expansion even in the current economy and by the end of 2014 it is anticipated that they will be in thirty countries, well on the way to their ultimate goal of operating franchises in fifty countries worldwide, at which point Inxpress franchises will literally span the globe. I was lucky enough to spend an hour with John talking about his business career and his success at Inxpress and was blown away by his story and business insights. If you hadn’t heard of him before, after a glimpse into his mind you’ll remember him now.
Born in Ireland in 1949, John Thompson and his family left Ireland when he was a young man and emigrated to England where he finished off his education. He completed training as a design engineer but following the experience of two years missionary service for the Church to which he belongs, The Church of Jesus Christ of Latter Day Saints, John was drawn into a sales role and began selling manufacturing machinery. Having done well as a salesman for other companies, it gradually dawned on John that he could be making the money he was making for somebody else for himself if he were to strike out on his own. By 1980, John was ready to test the water and entered into business for himself.
As he himself attests "That’s an easy decision, but the execution is a little more difficult". He started off buying and selling second hand industrial tools such as lathes with very little money behind him and slowly built up a business one sale at a time. John enjoyed his new found independence and the challenge of running this type of business but came to realise that he needed to find a business which could operate without his involvement. As John himself puts it:
"As I started to look around, I realised that in everything I was doing, I was still working for an hourly rate because I was the business. The business was limited in what it could achieve by the available hours in my schedule".
Having made that realisation, John began to narrow down, often through trial and error, the type of business opportunity that he wanted to pursue and began to establish some criteria by which he would evaluate if an opportunity was for him or not. Some of these criteria were:
1. He didn’t want to work weekends. Family and church commitments were important and he wanted to safeguard the weekend for them.
2. He didn’t want to work with the end user or the public as his experience had taught him that they were fickle and difficult to collect money from. In other words, he was looking for a business to business (B2B) opportunity.
3. He didn’t want to be perpetually chasing the big, one-off sale. Selling industrial machinery had taught him that a business in which customers are spending smaller amounts regularly was more stable than one which required a regular stream of new, big spending customers.
Inxpress Global is the culmination of a business career spent first identifying through this learning process which type of business opportunity would be ideal and then searching for a business that matched those criteria. That search led down a few blind alleys, which in retrospect John suggests "didn’t fully match the criteria and represented some degree of compromise". Whilst some of these businesses did well initially, John very honestly confesses that "I ended up losing money on businesses that fundamentally were not right".
Undeterred by the challenges posed by some of these earlier businesses, John included his family, friends and neighbours in the search for a business that could match his criteria and appointed them as his eyes and ears to report back to him if they thought they had found a business that might work for him. Then one evening in the late 1990’s, John received a phone call from an old friend from America which prompted him to take a closer look at a business model that was gathering momentum in the US. This conversation led a short time later to the establishment of what was to become Inxpress.
Speaking about the importance of involving friends and family in the search for and the launch of a small business, John says:
"Share your concepts with everybody, but if you want to learn how to run a four minute mile, pay most attention to the champion middle distance runners you speak with and take the well meaning advice of the six minute mile group with a liberal pinch of salt".
Indeed, John credits key mentors that have helped him along the way as having been absolutely essential to the establishment and growth of the business as well as the support of family and friends. He also warns of the dangers of giving too much credence to the advice of those without the right mindset. He says:
"The British are entrepreneurial. Historically, we have been called a nation of shopkeepers, but it seems that today part of the British psyche is to go to school and get a great education, get a job, work all your life and then, if you are lucky, get a pension and live on half the money you struggled to live on all your life. Whilst that is all very well and good, we need to open our eyes to an alternative path through life that anyone who persists with the right opportunity can access".
"I’m reminded of how fleas are trained for a flea circus. They are placed in a glass with a piece of card on top and you see as you watch that the fleas initially keep jumping and banging themselves on the card until they figure out how high they can comfortably go. I think we are trained this way during our formative years and often, even when the card is later removed and we have the whole world to go at, we still only jump as high as we were trained to".
Inxpress was born as a family business in John’s spare bedroom initially as an exploratory venture with the idea of testing the market for this service in the UK. The initial goal was for the business to simply provide a living wage for the family members involved, but the first year of operations showed that this idea had real potential. More ambitious plans, including growth through franchising, were hatched and the hard work began of perfecting and streamlining the business model began in earnest.
There were a number of challenges in the early days of the business. For example, relationships needed to be forged with the carriers so that Inxpress could benefit not only from the current volumes of business but also from the vision they sold of where the business could get to. Initially, at least, the largest operators were reluctant to play ball. Once again, John worked patiently with second tier carriers in a bid to build volume to the point where he could legitimately attract the interest and deep discounts that he hoped for from the major carriers.
By 2004, Inxpress had served their apprenticeship and were ready to play with the industry big hitters. They signed their first contract with Fedex in 2004 with a deal that could form the basis of a solid franchise offering. By this time the company was set up in new offices and was practically unrecognisable to a casual observer as the same company that had launched as a family business in John’s back bedroom in 1999.
The vision in 2004 was to grow the business throughout the UK via franchising. Inxpress were now part of the British Franchise Association (BFA) and with their support were able to develop and market an attractive franchise opportunity within the UK. The adoption rate for Inxpress franchises by franchisees exceeded expectation and by 2006, John was looking for opportunities further afield.
With enough cash in the business now to fund an attempt to take the business to America, John reconnected with an old friend and former mentor in the US who was extremely well connected in the industry, Ken Brockbank. John made Ken a partner in the business and set up Inxpress USA with him in 2006. With Ken on board, Inxpress USA took off and is today the largest and most profitable part of the Inxpress Global family.
The great work that Inxpress were doing with DHL in the US attracted the attention of Malcolm Rees who was at the time the Head of Global Sales at DHL Global. He was looking to try to solve a problem for DHL across the world and when speaking to the team at DHL America, they recommended Inxpress as one of three partners they worked with in the US to solve this problem. This piqued the interest of Malcolm Rees who arranged to meet with Inxpress. Although Inxpress were substantially smaller than the other two companies that DHL America had mentioned, Malcolm was impressed with the Inxpress ethos and the way they did business and in conjunction with the DHL Global board decided to work with Inxpress as a partner to implement the same arrangement they enjoyed in the US across the world. With this powerful ally on board, other countries opened up to Inxpress very quickly.
Inxpress struck up an agreement with DHL that they would work in some of their Asian countries and consequently Inxpress opened franchises in Australia, New Zealand, Singapore, Thailand, Malaysia, Vietnam, Taiwan, India and Indonesia. Inxpress Asia was born but it needed a leader. Over time, Malcolm Rees joined Inxpress from DHL Global as CEO of Inxpress Asia based in Singapore.
A further recent global agreement with DHL provides the means to rapidly expand Inxpress franchises across the globe. The agreement covers the countries of the European Union and the African nations as well as Canada, Mexico and the countries that comprise South America. The stage is set for Inxpress to become a truly global player.
From a position of considerable achievement, John is now able to look back and he offers the following advice to every budding entrepreneur and wannabe enterprise builder. Here is John’s advice in his own words:
1. Set You Goals High
"I wish I could go back and tell the John Thompson of 1980 to set his goals higher. Today in Inxpress we make Big Hairy Audacious Goals or BHAG’s. What I’ve found to be incredible through the process of setting and striving for these BHAG’s is just how often the BHAG’s of yesterday become the common performance of today. If we made any big mistakes in the early days of Inxpress, it was to set our goals too small…".
"The directors of Inxpress Global got together about four years ago and we introduced this concept of a BHAG. Now at this time, the company was doing $25 million in annual revenue. The BHAG we chose for ourselves was to become the first billion dollar company in our sector. We were shaking our heads in disbelief as we agreed upon this BHAG, but we set ourselves an assignment to go away and come back in six months time having analysed exactly in how many countries worldwide we could operate a franchise and having completed a business review of each country in terms of the accessible market share and what that would be worth in revenue. When we got back together and shared that information with each other six months later, that billion dollar BHAG suddenly seemed achievable".
"We estimated it would take us ten years to reach a billion dollars and after four years we are knocking on the door of $100 million dollars. With the new global agreement in place with DHL and our aggressive franchise rollout programme into another 19 countries in by the end of 2014, that unbelievable BHAG of a billion dollars is well on the way to becoming an accomplished fact".
2. Learn To Hold Yourself Accountable
"Having a BHAG is great but if you are not measuring your performance and holding yourself accountable for your performance relative to your ultimate goals, then you are simply dreaming. Holding your people and being held accountable can be hard, especially in a family business, but it has to be done for your business to succeed. Big goals break down into bite size goals which in turn break down into monthly, weekly and daily goals. Once you know what the first step of that journey of a thousand miles is then you have to take it. Now, that might mean that you need to make a certain number of sales calls each day in order to hit your monthly and quarterly goals. If you don’t reach them then you need to ask yourself the difficult questions that your boss used to ask".
"Many small business owner set up on their own because they don’t like the boss. However, having done away with the boss, we often fail to become the boss. If you cannot do it, then you need someone emotionally detached from the business, such as a mentor or consultant, who can and will hold your feet to the flames. Accountability is the missing link in so many otherwise excellent small businesses".
3. Fail Fast
"There’s no point flogging a dead horse. If the opportunity isn’t right, the best thing you can do is to exit as quickly and inexpensively as possible. However, if you have a plan that works, you just need to go at it. You will make mistakes along the way, but if the fundamentals are sound then do not give up. We subscribe to the “fail fast” philosophy. We have encouraged a “no-blame” culture at Inxpress where if somebody makes a decision that’s wrong, we don’t over analyse or point the finger. Instead we focus on the corrective action that we can take and the lessons we have learned"
4. Surround Yourself with Good People
"I pride myself on the quality of our people. My honest assessment is that I am the weakest member of our board. You have to get good people around you and then get out of the way and let them do what they do best. I think that business owners should be primarily employee trainers. You have to train them, invest in them, motivate them and properly reward them…"
"We say to all our people when they start with us, we will not micro manage you. If you do need managing, as measured by their performance, then we will have to let you go. Almost everyone who has ever worked for us likes that about us. Generally, everyone hates to be micro managed. Most companies say that they don’t when they do. We say that we won’t and we don’t".
5. Never Spend Tomorrows Money Today
"In all of our companies around the world, we have zero bank borrowing. As quickly as we could, we repaid all the bank borrowings and all our overdrafts. That was our first priority. The second was to secure the financial foundations of the business. I always believed that until the business became rich, I could never be rich and consequently went for years before allowing myself some of the luxuries you would normally associate with success in business, such as a nice car".
"When we stand in front of potential franchisees or in front of major couriers such as DHL or Fedex, we enjoy credibility beyond that to which our market share entitles us because we can say that we have no debt whatsoever in the business".
John Thompson today cuts an impressive figure and it’s easy to believe that he has been blessed with every conceivable advantage and has never taken a false step on his business journey. "Not so", says John. Speaking of the importance of false steps along your business journey, he says:
"At Inxpress we have made every mistake going and we still make mistakes and we always will. The important thing is the corrective action we take. When you make a mistake, don’t be dismayed, disheartened or commit Hari Kiri even when they have serious consequences but look on any mistake as a learning experience and focus on corrective action and what you will do so that this mistake doesn’t happen again".
"The only way to reduce the number of mistakes you make in business is to surround yourself with people who have already made the mistakes you wish to avoid. These people are now determined to avoid the pain of that experience ever again. Every single mistake that any new businessman might make has already been made. The only question is ‘Do I want to make the same mistakes?’ With all the help available, there is no reason to fall into the obvious pitfalls if we’ll just humble ourselves enough to ask for that help".
Before I introduced you to John Thompson, CEO of Inxpress Global, most of you were oblivious to the fact that we have a potential billion-dollar businessman living in our midst here in the Borough of Rochdale. If I take anything away from my time one on one with John, it is the fact that, whilst he might be significantly closer to the reality of a billion-dollar business than we are, we are all potential billion-dollar businessmen and women. We are limited purely by the quality of our business ideas and our willingness to doggedly pursue the right opportunity when it raises its head all the way to its happy ending. To conclude with John’s own words:
"Ultimately, there is only one thing that pays in business and that is persistence. Never give up if your business idea has sufficient mileage to take you where you want to go. Yes, it’s persistence that pays. In fact, persistence is the only thing that pays. If your business is right, just keep going and never quit".