Nigel was early in entering the old, oak panelled board room. This was his first meeting since taking over as chairman and he was well prepared; in terms of his planning…
The business had been founded by Nigel’s great grandfather Cornelius Emanuel Havering and had remained a 100% family controlled and run business ever since. The identity of the original Clara had remained a mystery over the intervening years. One rumour said that Clara had been an early sweetheart. Another said was that it was an admiration for the outstanding operatic soprano of the time, Clara Novello. Others, made references to an infamous music hall artiste named Clara Rumpelwell.
Whoever had been the muse of Cornelius Havering, it was no mystery that the first coffee house had been opened in York in the year 1891, shortly before the death of Queen Victoria. Over the next thirty years, other branches were opened in Richmond, Durham, Ripon and Scarborough. The formula was the same; a restaurant cum tearooms in a high traffic, touristy location, a shop featuring the famous coffees and cakes, together with its trademark waitresses smartly turned out in black uniforms with white, frilly aprons.
Nigel had taken over as the 5th Chairman shortly after Clara’s Coffee celebrated its centenary, following the death of his uncle, Charles (his father’s elder brother). Nigel’s appointment continued a tradition of the most senior surviving male member of the family taking the role of chairman (his father, Simeon Emanuel Havering now being confined to a nursing home). Unlike his predecessors, and the majority of family members working in the business, on leaving university Nigel had gained an MBA from Harvard and joined one of the Big Five accounting firms where his career advanced rapidly in corporate finance.
Nigel, although delighted with the shares he had inherited, had never envisaged joining the family firm, but the role of Executive Chairman brought with it the need to run the company on a full-time basis. By now, he had amassed a wealth of information on the workings of business and the value of a long-term strategy. Looking at the financial progress of Clara’s Coffee over the years, he saw steady growth in turnover but nothing spectacular in terms of profits and little evidence of a medium to long term strategy. Of greatest concern, was that the board was failing to invest in the business, preferring to spend the regular inflow of cash on dividends for its large number of family shareholders including several trust funds (which funded education for the next generation of Clara’s dependents). Consequently, retained cash in the business was falling each year.
In the final weeks before he took up his new position, Nigel worked around the clock putting together the detailed plans that he believed would ensure that Clara’s would not only survive but flourish throughout the new century that was only now a year old.
At his first board meeting he circulated copies of his new business plan,
‘So, in summary, what we have here is an exciting, detailed and sustainable plan that will ensure the enhanced success of Clara’s Coffee. The new branches, planned initially in Chester, Cheltenham, Bath, Oxford, Cambridge and Leamington Spa will be the first steps in placing Clara’s in premier locations with high tourist footfall throughout the country. As you can see from the financial projections, we shall need to take a more modest approach to dividends during the medium term to ensure we have the cash available for this exciting expansion plan. However, as we move forward and the business grows further, the investment becomes self-funding. The profits growth will ensure that, beyond this initial highly focussed investment phase, our shareholders will be able to enjoy a far more secure and enhanced dividend flow.’
‘May I move then, that if everyone is, as I am sure, behind this exciting plan, we quickly put together a small working group to start the detailed planning and implementation?’
‘My dear chap,’ responded Peter Chancellor, ‘I rather feel that you must have little appreciation of the long and admirably cautious tradition of financial prudence that has underpinned the entire history of this proud and successful company!’
‘Mr. Chairman?’ Shot in Marion Chancellor the wife of second cousin, Peter, ‘If I might remind you, it is only an integral element of the long and prudent tradition of Clara’s Coffee that has produced your presence here today. But an outsider with limited knowledge of our fine business who has little understanding and experience of our fine traditions!’
‘Respectfully,’ Nigel responded with great patience ‘may I suggest that we carry this proposal over to the next board meeting to allow time for all shareholders to read, discuss and appreciate that which is being put forward. There being no further business the meeting is closed’
Nigel gave a graceful bow, picked up his papers and left the room.
‘Damn, damn, damn!’ He muttered under his breath as he walked back to his office. ‘I should have anticipated this and sounded out Peter & other key players before the meeting.’ Meanwhile, he made up his mind to speak to as many members of the staff as he could over the next few weeks to get their views in general about the company.
He started visiting the coffee shops the following day and enjoyed his chats with various members of the team that he met. A picture of a warm and committed group of people showed itself but the full picture that was beginning to emerge was giving him some cause for concern. However, the following week an event took place that changed his life both personally and professionally, when his father, died following a massive stroke.
Having always been very close to his father, the shock was profound. The funeral was a large but very sombre affair but at least the board members of the family had the good grace to show the appropriate respect for his loss and made no mention of the events of the last board meeting.
It wasn’t until the reading of the will that the second shock came. Various bequeaths were made to family members and charities and Havering Hall (the old family seat) was put into a trust for future generations. There were various cash bequeaths to family members and some of the longest serving employees. But it was the bequeath to Nigel that caused both him and the assembled family members the greatest shock…but for very different reasons.
The accompanying letter, dated and signed some years previously stated, “Both of us, Charles and Simeon Emanuel Havering are united in seeing great challenges ahead for the company as it moves into a new century. However, we also see great intellect, expertise and leadership potential in Nigel Havering creating the ability to see Clara’s Coffee through whatever challenges arise in the years ahead. For this reason, we have together decided to leave the entirety of our equity to Nigel on the death of the remaining brother, in order that he has an unchallengeable position to carry through whatever strategy he deems appropriate. Good luck my boy!”
The next few weeks went by in a flurry of travelling, discussions, research assessment, planning and more late nights. As the date of the next board meeting drew near, Nigel knew his plan was complete.
On the day, Nigel was anxious; not of the relevance nor the potential success of his plans but of the attitude of the board and the disruption that might occur. He went searching amongst his father’s wardrobe and found the old black, Saville Row, chalk-stripe suit he had always worn to board meetings. Still neatly pressed, it fitted him perfectly and teamed it with a crisp white shirt and his own old school tie. A personal twist came with a beautiful white rose he plucked from the garden. He felt ready to present a powerful, established but updated family image.
‘The remaining item is the Business Plan carried over from the last quarter’s meeting.’ Nigel introduced when the other business was concluded, ‘The substance of the plan remains unchanged but is reinforced with some very detailed and relevant research carried out during the intervening period.’
Walking around the long table he then handed out copies of the updated Business Plan, beautifully, leather bound and embossed with the Clara’s Coffee emblem on the cover.
‘The plan contains detailed information on the six most promising development sites for the new Clara’s Coffee shops together with fully costed acquisition, development, staffing and marketing costs. I have also included full details and costings on the introduction of a new employee benefit plan including a profit share scheme which will commence in year three as the increased profits become established.’
‘But…’started Marion and Peter Chancellor both springing to their feet.
‘Furthermore’, continued Nigel ignoring the interruption ‘I am pleased to announce that Clara’s Coffee will be sponsoring an established hospice charity that will ensure the care of elderly and sick retired staff members who are in need.’
‘Finally, I shall be personally funding a new charity to identify and train the entrepreneurs of tomorrow, focussed on the more deprived areas. Although I shall fund this work in its entirety, it will of course bear the Clara brand.’
‘Now, in the interests of Clara’s Coffee and all of our stakeholders, I ask, who will stand with me and support this exciting new plan?’
‘Outrageous!’ Shrieked Clarissa Fernway, aunt of Peter Chancellor, ‘Simply outrageous behaviour! Our dividends!’
There were murmurs of ‘Hear, hear’ From various members scattered around the table.
‘For those of you who haven’t put the implications of father’s bequest to me into full perspective, let me enlighten you. I now command 50.1% of the equity and voting rights of this firm and I will do what I will do and you can’t do a thing about it! Now, I ask you again, who is with me?’
Amongst the various outbursts and muttering, a clear, bright, confident, younger voice rang out
Nigel looked and saw Melissa Fernley-Whittingham, his slim, delightful third cousin smiling warmly at him
Image courtesy of Fashionma.blog.Ryerson.CA