0:00:02 > 0:00:06Lord Digby Jones is a champion of British business.
0:00:06 > 0:00:09British manufacturing has got so much to be proud of.
0:00:09 > 0:00:13We make furniture, we make shoes, we make high performance motorcars,
0:00:13 > 0:00:18we make volume motorcars, we sell them around the world.
0:00:18 > 0:00:22But it's a constant battle to keep one step ahead of our global rivals.
0:00:23 > 0:00:27Manufacturing at the right product in the right market
0:00:27 > 0:00:30at the right time, it matters enormously.
0:00:30 > 0:00:34To survive, British firms will have to be at the top of their game.
0:00:35 > 0:00:38You're not trying to say, "I'm the cheapest."
0:00:38 > 0:00:41You're trying to say, "I'm the best."
0:00:41 > 0:00:45Now, that is what manufacturing in the UK in the 21st century is about.
0:00:45 > 0:00:49And Digby's determined to play his part.
0:00:49 > 0:00:52In a career that's taken him from his parent's corner shop
0:00:52 > 0:00:54to the House of Lords,
0:00:54 > 0:00:57he's helped transform some iconic British companies.
0:01:00 > 0:01:05Now, in a new challenge, can he help three ambitious companies
0:01:05 > 0:01:10from the worlds of furniture, fashion and electronics to succeed?
0:01:10 > 0:01:13We don't do cheap any more, we can't.
0:01:13 > 0:01:16We actually do quality, brand and innovation.
0:01:16 > 0:01:18That's what's going to make the profit that pays the tax,
0:01:18 > 0:01:22that builds the schools and hospitals.
0:01:22 > 0:01:25He's demanded access all areas...
0:01:25 > 0:01:27Wow! This is pretty big.
0:01:28 > 0:01:32..and he's not afraid to ask the tough questions.
0:01:32 > 0:01:34What part of this do you not understand?
0:01:34 > 0:01:36Ding-dong! Alarm!
0:01:36 > 0:01:38Tonight...
0:01:41 > 0:01:45..can Digby help solve a furniture company's urgent problems...
0:01:45 > 0:01:47This range that we do...
0:01:48 > 0:01:50..is slowly killing us.
0:01:50 > 0:01:52..secure the future of the business...
0:01:52 > 0:01:57We're now getting into the realms of making it real. So, exciting.
0:01:57 > 0:02:01..and help them to strike out in a new direction.
0:02:01 > 0:02:03I'd go with it.
0:02:03 > 0:02:08But it won't always be easy and there are difficult decisions ahead.
0:02:08 > 0:02:11That's why it's time to call in Digby Jones -
0:02:11 > 0:02:13The New Troubleshooter.
0:02:25 > 0:02:28Every home needs furniture.
0:02:28 > 0:02:30So someone has to design...
0:02:32 > 0:02:35..make and sell it.
0:02:35 > 0:02:41And in Great Britain, over 180,000 people do just that.
0:02:41 > 0:02:44Including the men and women of this company,
0:02:44 > 0:02:46Hereford Furniture.
0:02:46 > 0:02:49- All right, Dave?- All right, Mike?
0:02:51 > 0:02:53Mike Muxworthy's the boss.
0:02:55 > 0:02:58We manufacture wooden cabinets.
0:02:58 > 0:03:00Is this going on?
0:03:00 > 0:03:03We're manufacturing predominantly bedroom furniture.
0:03:03 > 0:03:06We're specialising these days mainly in painted furniture...
0:03:08 > 0:03:12..which is becoming very, very popular.
0:03:13 > 0:03:17To give his retail customers and their own three West Midland shops
0:03:17 > 0:03:21plenty of choice, they supplement what they make
0:03:21 > 0:03:23by importing furniture from China.
0:03:24 > 0:03:26I now have back-ache,
0:03:26 > 0:03:30which is what you expect at my age, unloading this kind of thing.
0:03:33 > 0:03:36Carrying some of Mike's workload is Kate,
0:03:36 > 0:03:40his sales and marketing manager, who's also his youngest daughter.
0:03:40 > 0:03:42- No, you can't have a wage increase. - SHE LAUGHS
0:03:42 > 0:03:47Over 1,200 furniture manufacturers went bust during the recession,
0:03:47 > 0:03:51and having made a loss of £80,000 for the first time last year,
0:03:51 > 0:03:54they're thinking about their future.
0:03:54 > 0:03:57We've had our fingers burned that many times.
0:03:57 > 0:04:00It's a worry at the minute.
0:04:00 > 0:04:02The question of survival is there,
0:04:02 > 0:04:05so it's always at the back of our minds.
0:04:05 > 0:04:09We have every confidence in the company,
0:04:09 > 0:04:12but we are also aware that things could fail.
0:04:14 > 0:04:16But with the future of over 40 staff on the line,
0:04:16 > 0:04:20failure is not an option for Lord Digby Jones.
0:04:20 > 0:04:23You're giving me loads of reasons why you can't.
0:04:24 > 0:04:26His mission -
0:04:26 > 0:04:30to turn survival into success and secure the future of the workforce.
0:04:30 > 0:04:34But do they think he's the right man for the job?
0:04:34 > 0:04:36If there's anybody out there that can give us a hand,
0:04:36 > 0:04:40which I think this Mr Digby can, it'll be more than welcome.
0:04:40 > 0:04:44He might be able to make it better than what it is.
0:04:44 > 0:04:47Anyone could be useful around here, but he definitely could.
0:04:47 > 0:04:49Could show our boss a few things.
0:04:49 > 0:04:52He'd walk around here in five minutes and know what it's about.
0:04:52 > 0:04:55- Basically. - THEY LAUGH
0:04:56 > 0:04:58This is almost the last stop.
0:04:58 > 0:05:04I'm nearly 60 and I want to go out, when I do finally retire,
0:05:04 > 0:05:07leaving a fantastic business that we've built from nothing
0:05:07 > 0:05:12to something that hopefully will become a household name nationwide.
0:05:14 > 0:05:17It's a big dream, but you've got to aim high.
0:05:17 > 0:05:19Aim for the stars and you get somewhere just below -
0:05:19 > 0:05:22that's what we've got to keep doing.
0:05:31 > 0:05:33Digby Jones is making an early start.
0:05:35 > 0:05:37He has five months
0:05:37 > 0:05:40to help turn around the fortune of Hereford Furniture.
0:05:42 > 0:05:45Championing small and medium sized businesses
0:05:45 > 0:05:47like them is his passion.
0:05:47 > 0:05:50Put together, they employ 14 million people
0:05:50 > 0:05:54and turn over £1.6 trillion a year.
0:05:55 > 0:05:59Small business in communities are the bedrock of providing profit
0:05:59 > 0:06:03which delivers the taxation which we all need.
0:06:03 > 0:06:06The days of thinking that every businessman or woman
0:06:06 > 0:06:10who succeeds is for some reason a fat cat, I hope, are over.
0:06:11 > 0:06:16But to help this business succeed, Digby needs to get under its skin.
0:06:16 > 0:06:19He's been doing his homework.
0:06:19 > 0:06:22The business has been doing reasonably well, actually,
0:06:22 > 0:06:26for a few years, but in the last year or so it's now losing money.
0:06:26 > 0:06:29They've gone off in all directions.
0:06:29 > 0:06:31And they tend to have done things
0:06:31 > 0:06:33because instinctively it seemed like a good idea.
0:06:33 > 0:06:37I might be wrong, but off the page it looks like that.
0:06:37 > 0:06:39And if I'm wrong, why are they losing money?
0:06:44 > 0:06:47Big questions for the bosses, but they'll have to wait.
0:06:50 > 0:06:52Digby wants to hit the floor
0:06:52 > 0:06:54and meet the guys at the heart of the business.
0:06:55 > 0:06:58- We'll go into the mill first. - Right down to the mill.
0:06:58 > 0:07:01Ops manager Tony Lewis is showing him around the factory.
0:07:02 > 0:07:06- This is Gary, this is our sawman, Gary Cooper.- Hello, Gary.
0:07:06 > 0:07:09Don't worry about that. Where there's muck there's brass, lad.
0:07:09 > 0:07:11Don't worry about that at all.
0:07:11 > 0:07:1515,000 pieces of furniture come out of this factory every year.
0:07:17 > 0:07:19I'm a sawyer. My job's a sawyer.
0:07:19 > 0:07:21At the moment I'm cutting T&G for drawer bottoms.
0:07:21 > 0:07:24How long have you been doing this for?
0:07:24 > 0:07:27- With this firm, nearly seven years. - Have you really?
0:07:29 > 0:07:34Next, Digby is taken to see the company's jewel in the crown.
0:07:34 > 0:07:37- This is our paint shop.- Ah, right.
0:07:37 > 0:07:40White wood comes in built, comes in on the line there,
0:07:40 > 0:07:44and any indentations, any marks we fill.
0:07:44 > 0:07:46The quality of the paint finish
0:07:46 > 0:07:50adds 25% to the final price-tag of the furniture.
0:07:50 > 0:07:53I love it. I love the sense of achievement you get
0:07:53 > 0:07:57when you see the final product going out the door to the customer.
0:07:57 > 0:08:00We've got such a good finish on the paint now,
0:08:00 > 0:08:02and the stain finishes.
0:08:04 > 0:08:06This, to me, summarises all my beliefs.
0:08:06 > 0:08:09I was born into a community of manufacturing,
0:08:09 > 0:08:13a spanner's throw from the Austin motor company and I'm just thrilled
0:08:13 > 0:08:18to bits that that kid in Birmingham some 50 years ago,
0:08:18 > 0:08:22actually, can still today come to places where they make things.
0:08:22 > 0:08:25And I love that.
0:08:25 > 0:08:27If I stop a man with a drill it's always worrying.
0:08:27 > 0:08:29- I'm Digby. You're...?- I'm Tom.
0:08:29 > 0:08:32'Do I think there's something to work on here? Yes, I do.'
0:08:32 > 0:08:34Will I enjoy doing it? You bet I will.
0:08:34 > 0:08:36If there was one thing this business could do
0:08:36 > 0:08:40that would make your job more efficient and easy, what would it be?
0:08:40 > 0:08:44- It would be organisation, I think. - Yeah? In what way?
0:08:44 > 0:08:48Just...this is the production area and we all work together,
0:08:48 > 0:08:50the spray shop all work together,
0:08:50 > 0:08:52and then the machine shop work together,
0:08:52 > 0:08:54but no-one works as a whole together.
0:08:55 > 0:08:58When you probe and ask the questions,
0:08:58 > 0:09:00they know this could be done more efficiently.
0:09:00 > 0:09:04They know the systems in place are not conducive
0:09:04 > 0:09:07to productivity enhancement and greater efficiency.
0:09:10 > 0:09:12Digby knows that tackling inefficiency
0:09:12 > 0:09:16is one thing vital to the company's future.
0:09:16 > 0:09:19To find out what other issues he'll have to deal with,
0:09:19 > 0:09:21it's time to meet the management.
0:09:21 > 0:09:25In the factory showroom, Mike wants Digby to see their flagship range.
0:09:25 > 0:09:27This is the future.
0:09:27 > 0:09:29This is what we paint.
0:09:29 > 0:09:32The customers can have various different heights, widths,
0:09:32 > 0:09:36different colours and they can have it delivered whenever they want it.
0:09:36 > 0:09:39He's seen the product,
0:09:39 > 0:09:42now Digby wants to understand the business structure.
0:09:42 > 0:09:44I look at this company
0:09:44 > 0:09:47as we've now got three divisions within one company.
0:09:47 > 0:09:51The one we're most proud of is, I guess, our manufacturing process.
0:09:51 > 0:09:55To complement what we manufacture we import products from China.
0:09:55 > 0:09:58We can get nice products made in China and they're beautiful quality.
0:09:58 > 0:10:01Then, a third string to the bow,
0:10:01 > 0:10:04we've started our own retail operation.
0:10:04 > 0:10:07We've got three shops, and between what we manufacture
0:10:07 > 0:10:12and what we import, we can fill quite large shops
0:10:12 > 0:10:15and give the customer, the final customer, a real good choice.
0:10:15 > 0:10:20But you sell through other routes and channels as well?
0:10:20 > 0:10:22Our biggest market, still,
0:10:22 > 0:10:25is through independent retailers throughout the UK.
0:10:25 > 0:10:28By manufacturing, importing and retailing,
0:10:28 > 0:10:31they are effectively three businesses in one.
0:10:31 > 0:10:35It's a huge challenge, but can they cope?
0:10:37 > 0:10:40If I look around here, how many different products have you got?
0:10:40 > 0:10:43I think we have something in the region of...
0:10:43 > 0:10:46in terms of all options, colour choices...
0:10:46 > 0:10:48in the region of 15,000...
0:10:48 > 0:10:50- What?! - ..product options.
0:10:50 > 0:10:53I think that's a bit on the high side, a bit on the high side.
0:10:53 > 0:10:56But we've certainly got too many.
0:10:56 > 0:10:58If it's a bit on the high side, by how many?
0:10:58 > 0:11:02- I would say we've got 2,000 variations.- Oh?
0:11:02 > 0:11:042,000 to 15,000 isn't a bit.
0:11:04 > 0:11:07I think... I think that's completely wrong.
0:11:07 > 0:11:11During the recession what's kept us alive is we've got choice.
0:11:11 > 0:11:13We've got as much to offer anybody.
0:11:13 > 0:11:16You can come in to our shop and you'll find something you like.
0:11:16 > 0:11:19However, this range that we do...
0:11:21 > 0:11:24..is slowly killing us.
0:11:27 > 0:11:29Brutally honest words from Mike,
0:11:29 > 0:11:33but how seriously is it affecting the company bank balance?
0:11:34 > 0:11:38- Digby, Jakob Reilly. Reilly.- Hello. - Nice to meet you.- Good to see you.
0:11:38 > 0:11:43Jakob Reilly's family own 75% of the company,
0:11:43 > 0:11:45with Mike owning the other 25.
0:11:45 > 0:11:49So with their own financial security at stake,
0:11:49 > 0:11:51it's vital they don't continue to lose money
0:11:51 > 0:11:54like they have in the last 12 months.
0:11:54 > 0:11:58You're looking at sort of 300... Just under £300,000 less. Why?
0:11:58 > 0:12:02It's too easy to be an importer, to be honest.
0:12:02 > 0:12:04There is a glut of imported products on the market.
0:12:04 > 0:12:08So, did the market contract or did your share of the market contract?
0:12:08 > 0:12:13- Our share of the market contracted. - Why?- Too many new players coming in.
0:12:14 > 0:12:17And why on your own "made here" has it gone backwards?
0:12:17 > 0:12:20That's got nothing to do with imported furniture at all.
0:12:20 > 0:12:25Why have the sales of your Made In Hereford product gone down?
0:12:25 > 0:12:27OK. The reason we've gone down is the number of accounts
0:12:27 > 0:12:32- that we've lost that have gone bust. - Selling your manufactured goods.
0:12:32 > 0:12:35Looking at this, surely there's an alarm bell ringing somewhere?
0:12:35 > 0:12:37Of course. None of us, really,
0:12:37 > 0:12:39have been involved in a loss-making business before,
0:12:39 > 0:12:41so we are entering new ground.
0:12:41 > 0:12:45And it's quite scary ground, I have to admit.
0:12:45 > 0:12:47But we are 100% behind Mike.
0:12:47 > 0:12:52We know that the backdrop that he's working against is extremely tough.
0:12:52 > 0:12:55It's clear Digby has a lot to think about,
0:12:55 > 0:12:59but he wants Mike and Kate to think about one thing straightaway.
0:13:00 > 0:13:04I want you to just think about how you would answer this question.
0:13:04 > 0:13:08You're trying to make stuff, you're trying to import stuff
0:13:08 > 0:13:10and then you're trying to retail stuff.
0:13:10 > 0:13:13Now, if you can pull it off, fine,
0:13:13 > 0:13:15but you're going to dissipate your talent,
0:13:15 > 0:13:17dissipate your working capital.
0:13:17 > 0:13:20This business really can't go on doing three things.
0:13:20 > 0:13:23It's got to focus.
0:13:25 > 0:13:27It's perfectly obvious they haven't drilled down
0:13:27 > 0:13:30into which of those three is making them real money,
0:13:30 > 0:13:32which isn't, which is subsidising what.
0:13:32 > 0:13:35So, they've responded with a bit of inspiration, a bit of flair
0:13:35 > 0:13:38and they've got themselves to a position
0:13:38 > 0:13:41where they like where they are in terms of what they do,
0:13:41 > 0:13:44but they don't like the result - which is losing money.
0:13:44 > 0:13:47So, they've got some big questions.
0:13:49 > 0:13:52When somebody really points it out, you do sit back and you think,
0:13:52 > 0:13:55"How have we let this happen?"
0:13:55 > 0:13:58It's not from a desire to want to make a loss.
0:13:58 > 0:14:01We've got a desire to make a profit, make a good business
0:14:01 > 0:14:05and make employment here in Hereford for all the people.
0:14:06 > 0:14:11Hopefully, Lord Jones will steer us in the right direction.
0:14:15 > 0:14:18Over the last 20 years, some of the biggest players
0:14:18 > 0:14:21in the furniture industry have faced financial difficulties.
0:14:21 > 0:14:24But we still spend around £7 billion
0:14:24 > 0:14:27on British-made furniture every year.
0:14:27 > 0:14:31That's equivalent to just over £100 for every man,
0:14:31 > 0:14:33woman and child in the UK.
0:14:35 > 0:14:39So, how can a medium-sized company like Hereford Furniture
0:14:39 > 0:14:42compete with the big household names?
0:14:43 > 0:14:45Digby's going to ask Paul Van Der Heyde,
0:14:45 > 0:14:47who knows what he's talking about.
0:14:47 > 0:14:51He's head of the British Furniture Confederation.
0:14:51 > 0:14:54I'm an ignoramus of the sector, so I have this idea
0:14:54 > 0:14:57that the market is swamped by flat-packs from Sweden.
0:14:57 > 0:15:01- Would I be right? - I think you're wrong.
0:15:01 > 0:15:04And we can talk about particularly a large Swedish retailer.
0:15:04 > 0:15:07They have, I think, been a very good influence on British furniture.
0:15:07 > 0:15:10They woke up people to the prospect that actually,
0:15:10 > 0:15:12changing your furniture can be a good thing.
0:15:12 > 0:15:14And they haven't won the battle.
0:15:14 > 0:15:17They represent a very small percentage of our UK furniture.
0:15:17 > 0:15:19So, five years on from today,
0:15:19 > 0:15:24do you expect the import side of the sector to be greater than today,
0:15:24 > 0:15:26- proportionately, or less? - I hope it will be less.
0:15:26 > 0:15:29I think the cost of bringing furniture in from overseas -
0:15:29 > 0:15:33be it just the logistics costs or just the timetable -
0:15:33 > 0:15:35costs of bringing it over get more and more difficult
0:15:35 > 0:15:38so the opportunity is there for us to grab
0:15:38 > 0:15:42to make sure we make more of what people want in the UK efficiently.
0:15:44 > 0:15:47So, a chance of survival. But what do people want?
0:15:49 > 0:15:52As author and editor-at-large of one of the UK's biggest design mags,
0:15:52 > 0:15:55it's Henrietta Thompson's job to know.
0:15:55 > 0:16:01And she's seen a growing trend in Hereford Furniture's target market.
0:16:01 > 0:16:04I think what's been interesting in the last few years
0:16:04 > 0:16:08is that there's been very little in the middle market.
0:16:08 > 0:16:10For that middle class customer.
0:16:10 > 0:16:12I think it's been very, very high-end,
0:16:12 > 0:16:16where you buy your Italian leather sofa for thousands and thousands
0:16:16 > 0:16:19or it's been...it's been very low cost.
0:16:19 > 0:16:21- Flat-packish.- Flat-packish.
0:16:21 > 0:16:24So, it's quite a good time, at the moment,
0:16:24 > 0:16:26to be in the game of selling people furniture?
0:16:26 > 0:16:29You think the buying appetite has changed?
0:16:29 > 0:16:31I really do, actually.
0:16:31 > 0:16:33I think that people are increasingly wanting
0:16:33 > 0:16:35to express their personalities through their homes.
0:16:35 > 0:16:38I think that people are really more design aware
0:16:38 > 0:16:40then they've been...well, ever, really.
0:16:40 > 0:16:43And there's more exciting stuff to choose from.
0:16:43 > 0:16:46And do you think that people will pay more for quirky and a bit different?
0:16:46 > 0:16:49Innovation doesn't have to be quirky. It can be clever.
0:16:49 > 0:16:51It can just be doing something differently,
0:16:51 > 0:16:53it could be a new material.
0:16:53 > 0:16:57And whether people pay more for that? Yes, if it's done well enough.
0:16:59 > 0:17:03So, there is a market ready to spend on the right product
0:17:03 > 0:17:07but to beat the foreign names, UK manufacturers like Hereford
0:17:07 > 0:17:10will have to work hard to attract customers.
0:17:11 > 0:17:13But are Mike and the team doing enough?
0:17:17 > 0:17:19After a final fact-finding tour
0:17:19 > 0:17:23of their shops in Sutton Coldfield and Kidderminster...
0:17:23 > 0:17:25We have the Union Jack here as well. Marvellous.
0:17:25 > 0:17:31..Digby's ready to thrash it out with Mike, Kate
0:17:31 > 0:17:34and shareholder, Alan Reilly.
0:17:34 > 0:17:36We need a big conversation now.
0:17:36 > 0:17:39I've had a good look at the factory, I've had a good look at the outlets.
0:17:39 > 0:17:42First up, that nagging point for Digby.
0:17:44 > 0:17:49You are a manufacturer, you are a retailer, and you import.
0:17:49 > 0:17:53I wonder whether it is possible for you
0:17:53 > 0:17:55to effectively succeed in all three.
0:17:55 > 0:18:00Tell me why I'm right or why I'm wrong.
0:18:00 > 0:18:03I feel we've got something very, very special.
0:18:03 > 0:18:06And my answer is,
0:18:06 > 0:18:08why not? We can do it.
0:18:08 > 0:18:11Why not? Because you haven't persuaded me
0:18:11 > 0:18:14that the specialist knowledge needed to make a success of retail,
0:18:14 > 0:18:17the specialist knowledge needed
0:18:17 > 0:18:20to make a success of import and distribution
0:18:20 > 0:18:23and the specialist knowledge needed to be a manufacturer...
0:18:23 > 0:18:26I don't think you've persuaded me that you've got sufficient ability
0:18:26 > 0:18:29within the three of you to make a success of it two or three years out.
0:18:29 > 0:18:30I think as far as...
0:18:30 > 0:18:33By the way, you might have specialist knowledge
0:18:33 > 0:18:35to do one of those things extremely well.
0:18:35 > 0:18:37So, I'm not saying you're not good enough.
0:18:37 > 0:18:40I'm saying, are you good enough to do all three?
0:18:40 > 0:18:43But Digby has to move on to immediate worries.
0:18:43 > 0:18:46The business wants to be a recognised, household name,
0:18:46 > 0:18:50but they don't display their brand on their furniture.
0:18:50 > 0:18:53I can't understand for the life of me
0:18:53 > 0:18:55how a company that wants to promote the brand Hereford
0:18:55 > 0:18:58is prepared to have its products put somewhere
0:18:58 > 0:19:00without the name Hereford on it.
0:19:00 > 0:19:03At the moment, with our current supportive network of customers,
0:19:03 > 0:19:08we're not brave enough to brand everything as Hereford Furniture.
0:19:08 > 0:19:11Our brand and our pockets are not deep enough
0:19:11 > 0:19:14to be able to say, "Right, 50% of our business,
0:19:14 > 0:19:17"we're going to say you either brand it or you don't buy it.
0:19:17 > 0:19:19"You're not buying? Fine, OK."
0:19:19 > 0:19:23So, suddenly, my losses of £80,000 will be a loss of £200,000.
0:19:24 > 0:19:27- Mike... - Digby, what are we doing...
0:19:27 > 0:19:30..how can you hope to build a brand when,
0:19:30 > 0:19:33by your actions, you value it so little?
0:19:33 > 0:19:35Right. What we are going to do,
0:19:35 > 0:19:39and this is an announcement that I can make here and now.
0:19:39 > 0:19:42We are introducing Hereford By Design.
0:19:42 > 0:19:46And Hereford By Design products will only be sold to companies
0:19:46 > 0:19:51that are prepared to sell it as branded product.
0:19:51 > 0:19:53When did you think of this?
0:19:53 > 0:19:57It's been mulling around for a number of months.
0:19:57 > 0:20:00- When did you...- On Monday... - After I visited you!
0:20:00 > 0:20:03- Yes.- Well, that's all been worth it then, hasn't it!
0:20:03 > 0:20:06HE LAUGHS Quite right too!
0:20:06 > 0:20:09See? You're getting value for money already!
0:20:10 > 0:20:13But the time for laughter is over.
0:20:13 > 0:20:15With four months to make a difference,
0:20:15 > 0:20:18Digby's revolution must begin.
0:20:21 > 0:20:25Managing production and range can have a dramatic effect on profits.
0:20:25 > 0:20:30In the late '90s, consumer goods giant Unilever cut 700 brands
0:20:30 > 0:20:35from its portfolio and saved over a billion pounds in the process.
0:20:39 > 0:20:42Digby thinks that if Mike did the same,
0:20:42 > 0:20:44he could make huge savings too.
0:20:44 > 0:20:47And as one of Britain's best-connected business leaders,
0:20:47 > 0:20:50Digby knows just the man to make it happen.
0:20:50 > 0:20:52PHONE RINGS
0:20:52 > 0:20:55- Good morning, Stewart.- Good morning.
0:20:55 > 0:20:57He's been friends with Stewart Towe
0:20:57 > 0:21:01since playing rugby at school together 40 years ago.
0:21:02 > 0:21:05What this is about is, instinctively,
0:21:05 > 0:21:07there's a better way of becoming more productive,
0:21:07 > 0:21:10more efficient in how they make the stuff.
0:21:12 > 0:21:16In 1976, Stewart joined a steel rolling business
0:21:16 > 0:21:19and 30 years later, he bought it.
0:21:21 > 0:21:23His focus on efficiency helps the company
0:21:23 > 0:21:26hit clear profit of £7 million a year.
0:21:29 > 0:21:31We can get one man on each shift
0:21:31 > 0:21:34producing around half a million pounds worth of product every month.
0:21:37 > 0:21:40I think there's a bit of a lack of crackle.
0:21:40 > 0:21:43The workforce, they haven't had pay rises for a couple of years,
0:21:43 > 0:21:46they're under the cosh a bit and I could just do with you
0:21:46 > 0:21:49smelling it and saying what you think.
0:21:49 > 0:21:52Look forward to seeing the process and taking it forward.
0:21:52 > 0:21:55All the best to you. Take care.
0:22:02 > 0:22:05Mike's modest 36,000 square foot factory
0:22:05 > 0:22:08produces a huge range of furniture.
0:22:08 > 0:22:10It can't cope.
0:22:10 > 0:22:12This is the biggest single threat to the business.
0:22:12 > 0:22:14We are struggling,
0:22:14 > 0:22:17there's not a lot of orders in and we've got a lot of problems.
0:22:17 > 0:22:20You lose confidence in yourself and your own ability.
0:22:20 > 0:22:25We can't carry on. Our planning system is chaotic.
0:22:25 > 0:22:28If we don't change, we will fail.
0:22:28 > 0:22:31So, let's at least plan what we're going to do
0:22:31 > 0:22:34and give ourselves a chance than carry on in this chaos.
0:22:40 > 0:22:43Stewart sets about his investigation.
0:22:43 > 0:22:45Four hours of walking the floor...
0:22:48 > 0:22:50..and meeting the workers.
0:22:50 > 0:22:53It's communication between, like, management to supervisors
0:22:53 > 0:22:56down to us on the thing, like.
0:22:56 > 0:22:58We need to plan a bit better, really.
0:22:58 > 0:23:01If we were just building for stock it would be so much more efficient,
0:23:01 > 0:23:07when you start doing just one bed, two chests, one wardrobe.
0:23:07 > 0:23:10Without the money to refit the factory, efficiencies have to come
0:23:10 > 0:23:13by reducing the range the workforce makes.
0:23:14 > 0:23:17Creating that balance between the number of products that you offer
0:23:17 > 0:23:21and the efficiency and effectiveness of the factory
0:23:21 > 0:23:23is perhaps one of your biggest challenges.
0:23:23 > 0:23:25Absolutely. I would say the biggest.
0:23:25 > 0:23:27And if that's the challenge,
0:23:27 > 0:23:31Stewart's there to help Mike find the solution.
0:23:31 > 0:23:34Specifically, what have you in your mind
0:23:34 > 0:23:37as to the areas you're going to limit?
0:23:37 > 0:23:40So, is it about drawer configuration?
0:23:40 > 0:23:45Sizes? Colours? What do you think is the main aspect?
0:23:45 > 0:23:48What we've got to do is to cull some of the ranges
0:23:48 > 0:23:50and be quite hard in culling.
0:23:50 > 0:23:54If we had a maximum of 20 pieces in the range...
0:23:54 > 0:23:59- As against a current number of approximately how many?- A thousand.
0:24:01 > 0:24:04Radically, Mike is considering dropping
0:24:04 > 0:24:0749 out of every 50 product options.
0:24:07 > 0:24:09I mean, it's very interesting when we talk
0:24:09 > 0:24:12that we're all singing from the same hymn sheet.
0:24:12 > 0:24:14- Absolutely.- Which is great.
0:24:14 > 0:24:17Now we've just got to have the courage of our convictions
0:24:17 > 0:24:20- to just get on and do it. - Get on and do it! Absolutely.
0:24:20 > 0:24:23That's going to be the key to the next couple of months.
0:24:23 > 0:24:25And probably for the future of the business.
0:24:31 > 0:24:35All Mike has to do now is tell the lads on the floor.
0:24:38 > 0:24:41Hello, gentlemen. Can we just have five minutes?
0:24:43 > 0:24:47What we will be doing, probably from the new year,
0:24:47 > 0:24:53is we will cut a lot of the ranges and we will only build for stock.
0:24:53 > 0:24:55The big thing for us, I guess,
0:24:55 > 0:24:58is we've got to try and get the customer to order what we make.
0:24:58 > 0:25:00We're going to get 40% more out.
0:25:02 > 0:25:06So, you'll need a faster screwdriver, Dave.
0:25:06 > 0:25:08- OK.- OK. Thank you, gentlemen.
0:25:11 > 0:25:13That means we get a bigger bonus, Mike, yeah?
0:25:13 > 0:25:16- Pardon?- Does that mean we get a bigger bonus next year?
0:25:16 > 0:25:18Well, one thing that would be nice,
0:25:18 > 0:25:20- you know we have this share of profits?- Yeah.
0:25:20 > 0:25:23Well, this year, of course, we've got a share of losses.
0:25:23 > 0:25:26So, I'll be coming round with a little cup saying,
0:25:26 > 0:25:30- "10% of our losses, please." - I've made no losses!
0:25:34 > 0:25:36With that gentlemen Mr Digby coming down,
0:25:36 > 0:25:40I think they're starting to listen to him a bit.
0:25:40 > 0:25:42We're just mere mortals, us.
0:25:42 > 0:25:45With somebody with power like that, maybe they'll listen to him.
0:25:45 > 0:25:48If Hereford Furniture wasn't here, where would I get a job?
0:25:48 > 0:25:5163 years of age, nobody would employ me.
0:25:51 > 0:25:54It's important that he makes the right decisions
0:25:54 > 0:25:57for everybody that works in the factory.
0:26:11 > 0:26:13So, Mike has committed to a plan
0:26:13 > 0:26:16which should make them more efficient.
0:26:16 > 0:26:20Digby wants more. Have they crunched their numbers?
0:26:20 > 0:26:22I just would like you to comfort me
0:26:22 > 0:26:28that there is some pretty hard analytical financials behind this.
0:26:30 > 0:26:32They're talking figures again,
0:26:32 > 0:26:36so Mike has brought co-director Jakob for support.
0:26:36 > 0:26:38When you say the financials,
0:26:38 > 0:26:42if we reduce the number of models we're doing,
0:26:42 > 0:26:45which means that we can then manufacture for stock,
0:26:45 > 0:26:48- we will get 40% more through the works in one week.- Right.
0:26:48 > 0:26:52From a cash-flow point of view, that's sustainable, is it?
0:26:52 > 0:26:55- We think so, yeah.- You've run the numbers on that, have you?
0:26:55 > 0:26:57Haven't done a cash flow forecast, no.
0:26:57 > 0:27:00- Based on what they're going to do? - It's something...
0:27:00 > 0:27:02We are stepping somewhat into the unknown.
0:27:02 > 0:27:06I understand that, but can you give me a bit of paper, Jakob,
0:27:06 > 0:27:09that actually says THAT is the financial implication?
0:27:09 > 0:27:12- Not at the moment.- Right, when would you be able to do that by?
0:27:12 > 0:27:15We don't have enough accounting resource in the company.
0:27:15 > 0:27:18We are very small. We have a book-keeper, she's very, very busy.
0:27:18 > 0:27:21- Mike, we would have to sit down and do it.- We can do it...
0:27:21 > 0:27:23You're going to have to do it, you know,
0:27:23 > 0:27:25I might be the pain in the bum that has to tell you this
0:27:25 > 0:27:29but actually, I'm the least important person for why you need this paper.
0:27:29 > 0:27:31- The real people are you.- Yeah.
0:27:31 > 0:27:34Because if you get it right and you get the template,
0:27:34 > 0:27:37you can feed in figures and you can feed in things,
0:27:37 > 0:27:40so you know where you are.
0:27:41 > 0:27:44And good quality, profitable businesses go bust
0:27:44 > 0:27:47simply because they're not managing their cash.
0:27:53 > 0:27:56Do you know something that struck me early doors today
0:27:56 > 0:27:59was that they knew they were coming to this meeting
0:27:59 > 0:28:03and they knew the financial ramifications of this big change.
0:28:03 > 0:28:07They didn't have one figure they could tell me
0:28:07 > 0:28:11was a material evidence of change
0:28:11 > 0:28:13that they expected or that was happening.
0:28:13 > 0:28:15It's very strange in a business.
0:28:15 > 0:28:20- I don't understand the need... - Why we would need to budget.
0:28:20 > 0:28:23I mean, we do a budget every day, every week.
0:28:23 > 0:28:27I know where the turnover should be, where we need to be.
0:28:27 > 0:28:33- Yeah.- Budgets are always down to guesstimates anyway.
0:28:33 > 0:28:35I think he's talking from the perspective
0:28:35 > 0:28:38that that's the formal way of doing it.
0:28:38 > 0:28:40That's the textbook way to plan
0:28:40 > 0:28:44when you make a big change, and he's not wrong.
0:28:44 > 0:28:47You never know. You might find that having done it, you think...
0:28:47 > 0:28:50"Why haven't we done it before?" OK.
0:28:50 > 0:28:53If it's not too onerous, if we can do it and it's easy to do,
0:28:53 > 0:28:59- then why not continue doing it? We'll see.- OK, OK. Right.
0:29:20 > 0:29:23With the range reduction under way,
0:29:23 > 0:29:26Digby wants to sort out their second big issue.
0:29:26 > 0:29:29Mike and the team want to launch a new,
0:29:29 > 0:29:33exclusive brand called Hereford By Design.
0:29:33 > 0:29:36But is it a brand that the UK market actually wants?
0:29:36 > 0:29:40Digby needs to see proof and if that wasn't hard enough...
0:29:43 > 0:29:45..they have to prove it to Emma Bridgewater too.
0:29:48 > 0:29:51Starting from her kitchen table in 1985,
0:29:51 > 0:29:56Emma now has 250 staff and a turnover of £14 million a year.
0:30:00 > 0:30:03Her brand is so strong that people around the world
0:30:03 > 0:30:05are happy to spend up to £20 a mug.
0:30:07 > 0:30:11Digby thinks that's a lesson for all manufacturers,
0:30:11 > 0:30:15including Mike and Kate who, along with shareholder Louise Powell,
0:30:15 > 0:30:17have prepared a presentation.
0:30:19 > 0:30:22We're obviously making some drastic changes to the business.
0:30:22 > 0:30:26Emma's been there, she's done it, she's created a brand.
0:30:26 > 0:30:29And if we can take a little bit of her success away with us,
0:30:29 > 0:30:31I think we'd be very happy.
0:30:38 > 0:30:41For Digby, getting the rebrand right
0:30:41 > 0:30:45is about more than just a new name for Hereford Furniture.
0:30:45 > 0:30:47They're going to rationalise the range,
0:30:47 > 0:30:50they're going to narrow it and focus it.
0:30:50 > 0:30:52That's going to work for lots of back office reasons,
0:30:52 > 0:30:56it'll make them more money, enhance productivity,
0:30:56 > 0:30:58but it'll only work if they get customers buying.
0:30:58 > 0:31:02It'll only work if they can communicate with the customer
0:31:02 > 0:31:06and say, "This is why it's good for you, Mrs Customer, Mr Customer."
0:31:06 > 0:31:08That is something you've done really well.
0:31:08 > 0:31:12Whether it's the end user or whether it's a shopkeeper,
0:31:12 > 0:31:14you've got to know a lot about what's motivating them,
0:31:14 > 0:31:16what's making them tick.
0:31:16 > 0:31:19And finding that out and responding to that is something that...
0:31:19 > 0:31:21when we started to understand that,
0:31:21 > 0:31:25that was a massive big, big step change in our business.
0:31:26 > 0:31:29This is their moment to impress.
0:31:30 > 0:31:34Nationwide, our brand is invisible, it is unknown.
0:31:34 > 0:31:38Consumers have absolutely no awareness of Hereford Furniture.
0:31:39 > 0:31:42We need a vehicle for change to get from where we are
0:31:42 > 0:31:48to where we want to be - the vehicle that we have is Hereford By Design.
0:31:48 > 0:31:52What we're going to do is take our current ranges and upgrade them.
0:31:52 > 0:31:56They will become premium ranges that have additional features.
0:31:57 > 0:32:03- This is very nice and clean and... - But it's not high design.
0:32:03 > 0:32:08- Have you got plans to make them stand out?- We have.
0:32:08 > 0:32:12We now have soft close drawers that have integrated
0:32:12 > 0:32:14to raise the quality and appeal.
0:32:14 > 0:32:18And that's very nice. I know. I take that.
0:32:18 > 0:32:22How are you going to make that something that I don't walk past?
0:32:24 > 0:32:27Soft closing drawers and smooth paint finishes
0:32:27 > 0:32:29clearly aren't doing it for Emma.
0:32:30 > 0:32:33But Louise is ready to play their trump card.
0:32:34 > 0:32:36When we were looking at our brand strategy,
0:32:36 > 0:32:40I had a feeling or concept I wanted to put over in everything we do.
0:32:40 > 0:32:42My mother's Danish.
0:32:42 > 0:32:45Now, I couldn't find a word in the English language
0:32:45 > 0:32:48but there is the perfect word in the Danish language.
0:32:48 > 0:32:50The word is hygge.
0:32:50 > 0:32:53It's about social interaction, it's about belonging.
0:32:53 > 0:32:56It's about being at home and wanting to be there.
0:32:56 > 0:32:58It's a warm, glowing, lovely feeling
0:32:58 > 0:33:02and that's what we would like our brand to encompass,
0:33:02 > 0:33:04this feeling of hygge.
0:33:06 > 0:33:09You've given us some interesting high aspirations,
0:33:09 > 0:33:12but not hearing a connect about how you're going to make sure
0:33:12 > 0:33:14the design changes are actually going to have
0:33:14 > 0:33:16a "buy me" effect on the customer?
0:33:22 > 0:33:25The tiniest design detail can make all the difference
0:33:25 > 0:33:28when it comes to brand, as Emma is keen to point out.
0:33:30 > 0:33:32This is all sponge decorating in here.
0:33:32 > 0:33:36What Hannah does is to do the whole pattern
0:33:36 > 0:33:40- and sign it. - That's my initials on the plate.
0:33:40 > 0:33:43- It's quite a nice thought, isn't it?- Yeah.
0:33:43 > 0:33:45That they're signed by you. I really love that.
0:33:45 > 0:33:47Saying, "Wow! Hannah's done this."
0:33:47 > 0:33:50"Hannah's doing lovely work." Exactly right.
0:33:50 > 0:33:54It says this is handmade, unequivocally.
0:33:54 > 0:33:59And each of the people who works on it owns that part of the process.
0:34:02 > 0:34:04Tour over, and it's time for feedback.
0:34:06 > 0:34:09Do Emma and Digby think that the Hereford By Design brand
0:34:09 > 0:34:11is strong enough to go to market?
0:34:12 > 0:34:15How are you going to give the word Hereford the wow factor?
0:34:15 > 0:34:18Why is Hereford going to be something where I go...pow!
0:34:18 > 0:34:21When I say I want more, I want design.
0:34:21 > 0:34:25And by that I don't mean a smooth paint finish.
0:34:25 > 0:34:28Go mad. Where's the red? Where's the dark blue?
0:34:28 > 0:34:31But how many do you sell?
0:34:31 > 0:34:33- Well, you don't know and neither do I.- Yeah.
0:34:33 > 0:34:36That's no reason why you shouldn't be offering some dark blue,
0:34:36 > 0:34:38some dark purple, some orange.
0:34:38 > 0:34:41Extraordinary colours and they might be in tiny numbers,
0:34:41 > 0:34:42they might only be ones.
0:34:42 > 0:34:45Until you do something like that, nobody talks about you on Facebook.
0:34:45 > 0:34:49Because if people are going to start talking about you,
0:34:49 > 0:34:52which is the desired intention,
0:34:52 > 0:34:55the word Hereford - is it the right word?
0:34:57 > 0:35:00Because one thing you did influence both of us
0:35:00 > 0:35:03- this morning with was that. - We loved that.
0:35:03 > 0:35:07With a great respect, Hereford doesn't carry, for me,
0:35:07 > 0:35:10a cache that's going to make me go "wow".
0:35:10 > 0:35:13That just sounds sensible, doesn't it?
0:35:13 > 0:35:19It sounds what this is - functional, decent, value for money and boring.
0:35:20 > 0:35:23- THEY LAUGH - Thank you!
0:35:24 > 0:35:29It is really interesting to compare. Which do you like best?
0:35:30 > 0:35:33So, why would you want to go on doing this?
0:35:34 > 0:35:37The Danish brand idea has struck a chord
0:35:37 > 0:35:41with everyone at the table and the conversation is about to take a turn
0:35:41 > 0:35:45that could change the face of Hereford Furniture forever.
0:35:46 > 0:35:50So, if we're at a point where we don't have a recognisable brand,
0:35:50 > 0:35:53because we're at a point of zero,
0:35:53 > 0:35:58do we go straight to this rather than going Hereford By Design?
0:35:58 > 0:36:02- How bold do you feel? - And then eventually go for this?
0:36:02 > 0:36:05Digby, last time we met you said you've got to be brave.
0:36:08 > 0:36:11- I'll go with it. - EMMA GASPS
0:36:11 > 0:36:13Well, there we go! That's fantastic!
0:36:13 > 0:36:17Because it gives us a skeleton and it gives us personality.
0:36:19 > 0:36:22- You can't wait to get at it. - Yeah, let's go!
0:36:22 > 0:36:25It's been decided, they're going to ditch their
0:36:25 > 0:36:30Hereford By Design brand and want to replace it with Hygge.
0:36:31 > 0:36:34The one great thing about this wonderful Danish word
0:36:34 > 0:36:39that doesn't have a definition in English is that it's going to excite
0:36:39 > 0:36:43in people the question, "What's this about? What's this mean?"
0:36:43 > 0:36:46It therefore demands an answer and you get an excuse to start
0:36:46 > 0:36:49talking about your product and your brand and your beliefs
0:36:49 > 0:36:54and you begin to create a feeling more than the product on its own.
0:36:55 > 0:36:58And I think that's inspired today and I take my hat off to them.
0:37:00 > 0:37:03- Okey-doke.- All right?- Yeah.
0:37:04 > 0:37:08I know we have obstacles that we need to overcome in production,
0:37:08 > 0:37:11but it's certainly a vehicle by which we can do that.
0:37:12 > 0:37:15We've got to do it, we've just spent the last six weeks
0:37:15 > 0:37:19rationalising our products and rationalising colours.
0:37:19 > 0:37:22And I think that's a fair enough, from a production point of view
0:37:22 > 0:37:25but it's when we talk about we're making for stock for three days,
0:37:25 > 0:37:27- and two days a week we can... - We can make specials.
0:37:27 > 0:37:30Exactly. And if those are going to have a higher price point
0:37:30 > 0:37:36and be real specials and exclusive to our company then yeah, why not?
0:37:36 > 0:37:39It doesn't matter if you paint them pink with yellow spots!
0:37:39 > 0:37:42- Or Emma Bridgewater polka dot! - Or any other kind of spots! Yeah!
0:37:56 > 0:38:01It's 24 hours since the visit to Emma Bridgewater
0:38:01 > 0:38:06and Kate's still buzzing about their new Danish brand name.
0:38:06 > 0:38:08It's a concept that we are trying to register
0:38:08 > 0:38:12which is a little bit difficult when you try and pin it down to words,
0:38:12 > 0:38:14meaning and classifications.
0:38:14 > 0:38:16She has spent the last hour on the phone
0:38:16 > 0:38:18to the Intellectual Property Office.
0:38:18 > 0:38:23It's quite a straightforward process but you need to register
0:38:23 > 0:38:26both the name and format that you'd want it to look like.
0:38:26 > 0:38:28We don't want to limit ourselves
0:38:28 > 0:38:32in terms of just applying it to furniture, for example,
0:38:32 > 0:38:36when in the future we could look at using it for our advertising
0:38:36 > 0:38:38or for home accessories.
0:38:38 > 0:38:40So, we are getting into the realms of making it real.
0:38:40 > 0:38:42So, exciting.
0:38:43 > 0:38:47But Kate's excitement is not shared by her dad in the boardroom.
0:38:48 > 0:38:50What's that?
0:38:50 > 0:38:53All that is is the month's P&R, which we know is out because...
0:38:53 > 0:38:57Digby wants Mike and Jakob to prepare a cash flow forecast
0:38:57 > 0:38:59to support their range reduction.
0:39:00 > 0:39:03The point seems to be lost on Mike.
0:39:03 > 0:39:06The end goal of this exercise is to make Digby happy.
0:39:13 > 0:39:16Could there be any other benefits too?
0:39:16 > 0:39:18I don't think so because I know what I'm expecting.
0:39:18 > 0:39:21We know the business extremely well
0:39:21 > 0:39:24and you know what the break even figure is,
0:39:24 > 0:39:26so it's quite simple that if you can sell more
0:39:26 > 0:39:30without increasing your overhead, you'll be better off.
0:39:32 > 0:39:37If you sell less and you don't reach your overhead, you will lose money.
0:39:38 > 0:39:43So, we've spent probably five hours doing a projection and forecasts
0:39:43 > 0:39:47and it hasn't really proven anything, it's only a guesstimate.
0:39:47 > 0:39:49If we sell X amount we will make a profit.
0:39:49 > 0:39:53If we don't, we won't. End of.
0:40:00 > 0:40:05A week later, and Digby has received Mike and Jakob's figures.
0:40:05 > 0:40:07But they haven't given him enough detail.
0:40:07 > 0:40:10When I first came to see you that morning -
0:40:10 > 0:40:13what seems like an eternity ago, but was only a few weeks -
0:40:13 > 0:40:16but when I came to see you and I looked through the figures
0:40:16 > 0:40:18and I then look through these tonight,
0:40:18 > 0:40:20I'm not seeing that much difference actually.
0:40:20 > 0:40:23Well, you're seeing a reduction in stock, actually, of £200,000.
0:40:23 > 0:40:25I am. That's true.
0:40:25 > 0:40:28If I'm being polite, I'd say it needs a bit more work.
0:40:28 > 0:40:32If I'm being harsher, I'd say take it away and think again.
0:40:32 > 0:40:36When are you able to come and show us how to do it?
0:40:36 > 0:40:39Sure, that's the next step, isn't it, really...
0:40:42 > 0:40:45A frustrating conversation for Digby,
0:40:45 > 0:40:49but now his thoughts turn to the company's new Danish branding idea.
0:40:51 > 0:40:54The brand can be British,
0:40:54 > 0:40:58although it comes from a different country in its stem, if you like.
0:40:58 > 0:41:00There's nothing wrong with that.
0:41:00 > 0:41:03You can't get much more British than Norwich Union,
0:41:03 > 0:41:05and yet Aviva is a Spanish name.
0:41:05 > 0:41:10So, there's nothing wrong with taking
0:41:10 > 0:41:16a Scandinavian name and going out to market "from Britain",
0:41:16 > 0:41:18proud of its British heritage.
0:41:18 > 0:41:20Nothing wrong with that at all.
0:41:20 > 0:41:22It's how you do it and what you do it and whether you get them
0:41:22 > 0:41:26to buy into it and whether you get them to go forward.
0:41:26 > 0:41:28I think Kate gets it. She's there.
0:41:29 > 0:41:32But the guy who's built the business up,
0:41:32 > 0:41:34he's having a bit more problem getting there.
0:41:34 > 0:41:37He knows he should. He's not lying to me or to himself.
0:41:37 > 0:41:39He knows he should.
0:41:39 > 0:41:43It just takes a little bit longer to get the water wings off
0:41:43 > 0:41:45and leave the side of the pool.
0:41:56 > 0:42:00There's only two months before Digby's consultation ends,
0:42:00 > 0:42:02and with major changes happening,
0:42:02 > 0:42:07he wants to know how it's going down with the men on the floor.
0:42:07 > 0:42:09Could we get all the guys in the mill together
0:42:09 > 0:42:13and bring them here for two minutes so I can have a chat with them?
0:42:13 > 0:42:16Mike has moved key staff around
0:42:16 > 0:42:19to try and improve communication and productivity.
0:42:19 > 0:42:22But has it worked?
0:42:22 > 0:42:25I mean, you are aware that we've hopefully got a change going on
0:42:25 > 0:42:27in the way...what you make for.
0:42:27 > 0:42:30You make for stock and it's all changed.
0:42:30 > 0:42:32Am I getting a nod?
0:42:32 > 0:42:34It's changed since Dave's gone over there.
0:42:34 > 0:42:36It's easier to talk to Dave now,
0:42:36 > 0:42:43cos he's taken charge over there and it's easier for us to talk to him.
0:42:43 > 0:42:47- What do you think, Dave?- I think it's gradually going to get better,
0:42:47 > 0:42:51me being from the spray shop anyway. I know what it's like.
0:42:51 > 0:42:53I think the trouble is when an area gets behind,
0:42:53 > 0:42:56they seem to blame another area.
0:42:56 > 0:42:59That's where the bitchiness comes from.
0:42:59 > 0:43:02So that we are against each other, sort of thing.
0:43:02 > 0:43:05I think if there's any problems, I think people think
0:43:05 > 0:43:08you're having a go at them and they're taking it personally.
0:43:08 > 0:43:12When it's not actually personal. It's not like that.
0:43:12 > 0:43:14This is a real eye opener for Digby.
0:43:14 > 0:43:18If Mike's going to push through with changes, he needs his staff on side.
0:43:18 > 0:43:24At this late stage, Digby can't let communication issues ruin his plans.
0:43:26 > 0:43:30It is clear to me that there is a changed air down there.
0:43:30 > 0:43:34One or two of them said to me, "I can see there are changes coming in.
0:43:34 > 0:43:38"We're making more for stock and stuff." Do not be complacent.
0:43:38 > 0:43:42It's going in the right direction but you've got a long way to go
0:43:42 > 0:43:45on the communication issue. They've all said that.
0:43:45 > 0:43:50Shouldn't be seen by you as a criticism you should run away from,
0:43:50 > 0:43:54you should actually think, "Actually, I'm quite pleased about this
0:43:54 > 0:43:57"and I'm heartened and I'm going to do more."
0:43:59 > 0:44:01With Digby's words ringing in his ears,
0:44:01 > 0:44:05Mike sits down with the senior team for an honest chat.
0:44:05 > 0:44:07We have got to work together.
0:44:07 > 0:44:10It's not loads of things, it's not all the time. It's the odd thing.
0:44:10 > 0:44:13I don't think it is, but we need to get it right.
0:44:13 > 0:44:17I'm thrilled at the way we've got the leaders of the teams
0:44:17 > 0:44:21to understand the issue and to have the courage to turn up
0:44:21 > 0:44:25and say, "Hey, I want a bit more of the old up-down communication."
0:44:25 > 0:44:27I'm very pleased about that.
0:44:27 > 0:44:29If something goes wrong there's just a knock-on effect.
0:44:29 > 0:44:31So, if someone does something wrong...
0:44:31 > 0:44:34I think we need to get rid of negativity.
0:44:34 > 0:44:36So much negativity it's unreal.
0:44:36 > 0:44:38- Morale's low, isn't it? - That's the main reason, yeah.
0:44:38 > 0:44:41Not being harsh on you, Mike, but when you come round there,
0:44:41 > 0:44:44everyone is negative when you come round, I think.
0:44:44 > 0:44:47When I come down? You think I'm negative?
0:44:47 > 0:44:49No, not negative. They just seem like they don't want to talk to you.
0:44:49 > 0:44:52"Mike's coming. Shoo him away, like..."
0:44:52 > 0:44:55That's the feeling I get from people down there.
0:44:55 > 0:44:57Mind you, in a way I'm quite happy.
0:44:57 > 0:45:00I don't want people to talk for the sake of talking.
0:45:00 > 0:45:03But equally, I try to pass the time with everybody.
0:45:03 > 0:45:09But, OK. I'll spend a little bit more time on the shop floor.
0:45:09 > 0:45:12- OK, guys, we really do have to go and do some work.- Right. Let's go.
0:45:17 > 0:45:19The chairs are not very comfortable!
0:45:23 > 0:45:26As the team gets back to work,
0:45:26 > 0:45:29Mike takes a moment to think about the future.
0:45:30 > 0:45:33I'm very keen that we've got three young guys -
0:45:33 > 0:45:37and they are young guys - who are part of the management structure.
0:45:37 > 0:45:40I think they will work well together.
0:45:40 > 0:45:43But we just need them to believe in the job.
0:45:43 > 0:45:46We've got a way to go, but we're getting there.
0:45:46 > 0:45:48We're getting there.
0:45:48 > 0:45:51Mike's thoughts soon turn to his role.
0:45:51 > 0:45:53The industry has changed a lot in the 30 years
0:45:53 > 0:45:55he's been working with wood.
0:45:57 > 0:46:01When we come to IT and internet sales,
0:46:01 > 0:46:04and you don't actually see the customer...it's all...
0:46:04 > 0:46:07There's a lot of whizz kids out there,
0:46:07 > 0:46:10and we need a whizz kid to come in.
0:46:10 > 0:46:13Five years ago I would sit in a meeting and I would have
0:46:13 > 0:46:16an opinion and my opinion,
0:46:16 > 0:46:20I thought, was very valid and very strong.
0:46:20 > 0:46:23Now I sit in meetings and I really don't know
0:46:23 > 0:46:26what they're talking about, they could well be speaking French.
0:46:27 > 0:46:32And I do believe as a company evolves, as a company changes,
0:46:32 > 0:46:35the management has to change with it.
0:46:35 > 0:46:37Good afternoon. Hereford Furniture.
0:46:37 > 0:46:40My baby is this business,
0:46:40 > 0:46:44and the business is growing up and maybe it's time
0:46:44 > 0:46:48the business left home, or maybe Daddy leaves the business.
0:46:48 > 0:46:50We've got to see it grow and flourish.
0:47:02 > 0:47:04In a month's time,
0:47:04 > 0:47:08Digby Jones will visit the furniture factory for the last time,
0:47:08 > 0:47:12but he won't be leaving without tackling their communication issues.
0:47:17 > 0:47:22So, in an effort to bring morale up, the machines are shutting down.
0:47:23 > 0:47:27The lads on the floor are going on an awayday.
0:47:27 > 0:47:29It's a big cost but I hope it's worth it.
0:47:31 > 0:47:33Some will look at it as a waste of time,
0:47:33 > 0:47:37some will look at it as it's better than doing their normal job
0:47:37 > 0:47:40for a couple of hours and some will really buy into it.
0:47:40 > 0:47:43So long as we get 50% buying into it we'll have succeeded.
0:47:45 > 0:47:47And Mike's right.
0:47:47 > 0:47:50Some of the team aren't exactly excited about the prospect,
0:47:50 > 0:47:52paid or not.
0:47:52 > 0:47:57If it weren't for this, I'd be sat in front of my telly.
0:47:57 > 0:48:01To be honest, I've worked 48 years and had nothing like it before.
0:48:01 > 0:48:03I don't know what it's going to do. I honestly don't.
0:48:09 > 0:48:12They're going to Hereford College of Arts,
0:48:12 > 0:48:16where Digby hopes the creative atmosphere
0:48:16 > 0:48:19will help them put aside their doubts and differences.
0:48:21 > 0:48:23Handling the 21 sceptical students
0:48:23 > 0:48:27are senior lecturer Delyth Done and her team.
0:48:27 > 0:48:32What we really wanted to do today is to give you a chance
0:48:32 > 0:48:35to create something which is really about you marking your quality
0:48:35 > 0:48:39and for you guys to work collectively
0:48:39 > 0:48:42so it really feels like your stamp, that marks you being craftsmen.
0:48:43 > 0:48:47So, a stamp to go on the furniture as it leaves the factory.
0:48:47 > 0:48:50A mark of their quality craftsmanship. A symbol of pride.
0:48:50 > 0:48:55What do you what to do? Anyone?
0:48:55 > 0:48:58A point that seems lost on the lads.
0:48:58 > 0:49:01I see it as everyone thinks it's a day off. That's what I think.
0:49:01 > 0:49:04Everyone comes here, let's all have a good chat and everything.
0:49:04 > 0:49:06That's what I see it as.
0:49:06 > 0:49:09We've cut out our logo, mine and James's.
0:49:09 > 0:49:12There it is. It took all of three seconds.
0:49:15 > 0:49:17We make everything out of wood
0:49:17 > 0:49:19so we could have maybe a tree or something.
0:49:19 > 0:49:24An hour later, after a slow start, the designs are finished
0:49:24 > 0:49:29and uploaded onto the computer, ready to be made into stamps.
0:49:29 > 0:49:33When I was at school, it was a green and black computer screen.
0:49:33 > 0:49:37They didn't even have a computer when I was at school.
0:49:37 > 0:49:42As the stamps are 3D printed, the mood is changing.
0:49:42 > 0:49:45Stop the clock! There we go!
0:49:45 > 0:49:48This afternoon's been good, really. Better than I expected.
0:49:48 > 0:49:54Actually couldn't believe we worked together, which usually we don't.
0:49:54 > 0:49:56So, yeah. It's all right.
0:49:56 > 0:49:58Just want to see what the finishing bit looks like now.
0:49:58 > 0:50:01OK, everybody. We've got our prototype stamps.
0:50:01 > 0:50:03And as the final results are being stamped...
0:50:03 > 0:50:05Go, Keith.
0:50:05 > 0:50:08- Woo!- There we go!
0:50:08 > 0:50:11..the boss arrives.
0:50:11 > 0:50:13CHEERING
0:50:13 > 0:50:15Boo, hiss!
0:50:15 > 0:50:17Who was that?
0:50:17 > 0:50:19- MIKE:- Did you make these today?
0:50:19 > 0:50:20These were all made, yep.
0:50:22 > 0:50:25- We came up with the designs for each of them.- Fantastic.
0:50:25 > 0:50:28The detail that you get on them is amazing.
0:50:28 > 0:50:32It's definitely a start. I don't think it's solved every problem,
0:50:32 > 0:50:35because we need a lot more things like this to happen,
0:50:35 > 0:50:37a lot more time to bond, really,
0:50:37 > 0:50:41cos a lot of the areas just don't have the time to do that.
0:50:41 > 0:50:43Also, we need everyone to be in it 100%.
0:50:43 > 0:50:46I think it was quite productive in the end.
0:50:47 > 0:50:52Everybody worked together and, as I say, they opened up,
0:50:52 > 0:50:58and then we got some decent sort of results in towards the end.
0:50:58 > 0:51:02I've got the proof in my pocket of what we've done.
0:51:02 > 0:51:05I just want to point out - that one's mine.
0:51:05 > 0:51:06THEY CHUCKLE
0:51:17 > 0:51:19It's five months since Digby first visited
0:51:19 > 0:51:21the furniture factory in Hereford.
0:51:24 > 0:51:27Today, he's back for the final time.
0:51:27 > 0:51:29Today, I look forward to seeing Lord Digby.
0:51:29 > 0:51:31I hope he'll like what we've done,
0:51:31 > 0:51:34and, yeah, today should be a good day.
0:51:35 > 0:51:37Maybe we should speak after he's gone.
0:51:46 > 0:51:49Digby wants to revisit every area of the factory,
0:51:49 > 0:51:51but first, Kate wants to show him
0:51:51 > 0:51:54what she's achieved with their Danish brand concept.
0:51:55 > 0:51:58What our Hygge website will allow us to do
0:51:58 > 0:52:00is to be more creative in the designs
0:52:00 > 0:52:01and to try new products
0:52:01 > 0:52:05that in the past we would have been reluctant to be daring.
0:52:05 > 0:52:09When the website goes live, it'll be a full online showroom,
0:52:09 > 0:52:12store and social media hub,
0:52:12 > 0:52:14something they've never had before.
0:52:14 > 0:52:17Now they need to secure their trademark.
0:52:17 > 0:52:19So what happens if you don't have Hygge?
0:52:19 > 0:52:23We're currently waiting for the decision from the IPO
0:52:23 > 0:52:27and if the name is not available and we're not allowed to use it,
0:52:27 > 0:52:30we will continue with the website exactly as it is
0:52:30 > 0:52:32and it's just the name that we'll change.
0:52:32 > 0:52:36But the feeling of Hygge and for furniture to have a meaning,
0:52:36 > 0:52:39that is what we will continue.
0:52:39 > 0:52:41- So the dream will become reality? - Yes.
0:52:41 > 0:52:44I'm a convert, you've got me. Well done.
0:52:46 > 0:52:48A big step forward for the new brand...
0:52:50 > 0:52:51..but what about the product range
0:52:51 > 0:52:55that only five months ago Mike said was slowly killing them?
0:52:58 > 0:53:01Well, his retail customers have been officially notified
0:53:01 > 0:53:03that the range has been reduced.
0:53:04 > 0:53:08The results are obvious on their new mezzanine stock level.
0:53:08 > 0:53:12Here we've got all the stock items that we need.
0:53:12 > 0:53:15What we've really done is alter the way we do the planning.
0:53:15 > 0:53:17So instead of planning each job -
0:53:17 > 0:53:21we do one of this, one of the other,
0:53:21 > 0:53:24we're now saying, "Right, these are the items we sell.
0:53:24 > 0:53:26"We'll make 5, 10, 15 whatever it is."
0:53:26 > 0:53:28So we're really on the change now.
0:53:30 > 0:53:32But can the lads see the change?
0:53:34 > 0:53:37I've not got to cut loads and loads of different things now,
0:53:37 > 0:53:39which is better for me.
0:53:39 > 0:53:42One-off things, I just cut lots more so I can build a stock up,
0:53:42 > 0:53:43gets ahead of it then.
0:53:43 > 0:53:46- And are you seeing that happening now?- Yes, I am.
0:53:46 > 0:53:50We are starting to get lists where it's all truffle, all off-white.
0:53:50 > 0:53:52In that way, it is working, yeah.
0:53:52 > 0:53:55Have any of you got anything else, an idea or a thought?
0:53:55 > 0:53:59Nothing production-wise has changed at all.
0:53:59 > 0:54:00- Nothing?- I don't think so, no.
0:54:00 > 0:54:02It's still exactly the same.
0:54:02 > 0:54:04So why did he say just now that it has changed?
0:54:04 > 0:54:05These boys are saying it to be polite,
0:54:05 > 0:54:07that's what they're saying it for.
0:54:07 > 0:54:08Has the list changed, Chris?
0:54:08 > 0:54:10We are getting lists in now where you're doing
0:54:10 > 0:54:13a list of off-white and a list of truffle.
0:54:13 > 0:54:14We never used to do that.
0:54:15 > 0:54:17Mike's doing really good stuff here,
0:54:17 > 0:54:21but if I've got a bloke in the spray shop who doesn't actually believe it,
0:54:21 > 0:54:23then something's going amiss in between.
0:54:23 > 0:54:25It's like having a fabulous engine,
0:54:25 > 0:54:28but nothing's connecting it to the wheels,
0:54:28 > 0:54:30therefore they're not going round.
0:54:30 > 0:54:32I can't see how they can say nothing's happened,
0:54:32 > 0:54:35when everything has changed, everything has moved.
0:54:35 > 0:54:37Ah, cos you're in your helicopter,
0:54:37 > 0:54:39and you're looking at all of this
0:54:39 > 0:54:41and you can see in an instant
0:54:41 > 0:54:43that things have changed.
0:54:43 > 0:54:46You've just walked me through evidence of change.
0:54:46 > 0:54:48You need to reinforce it all the time.
0:54:48 > 0:54:51- If we haven't got them on side... - They're not offside.
0:54:51 > 0:54:54They're not agin you. They're really not agin you.
0:54:54 > 0:54:57I can see just how successful you've been in other areas
0:54:57 > 0:54:59and I take my hat off to you.
0:54:59 > 0:55:01Well done, Mike. Now your challenge, my son,
0:55:01 > 0:55:04- is to get them to believe in you. - Absolutely.
0:55:07 > 0:55:10Time for one last conversation,
0:55:10 > 0:55:14and one last chance for Digby to ask one familiar question.
0:55:14 > 0:55:17Where are the financials, Michael?
0:55:17 > 0:55:19And because Digby has seen huge changes,
0:55:19 > 0:55:22he's convinced it's more important than ever
0:55:22 > 0:55:24they produce accurate forecasts.
0:55:24 > 0:55:26If you get this right,
0:55:26 > 0:55:28and I have every confidence you're going to,
0:55:28 > 0:55:30you're going to be branded,
0:55:30 > 0:55:33you're going to be more efficient and productive
0:55:33 > 0:55:35and you're going to start being attractive.
0:55:35 > 0:55:37Nobody is going to walk through this door and say,
0:55:37 > 0:55:40"I'll tell you how attractive you are - can I write you a cheque?"
0:55:40 > 0:55:43When they ask to see the financials of what you're going to do next year,
0:55:43 > 0:55:45"I need to know what I'm going to invest in,"
0:55:45 > 0:55:46and you go, "Well, it's up here."
0:55:46 > 0:55:50Digby, why do I want to sell it? We are a family company.
0:55:50 > 0:55:52Make me an offer I can't refuse, it's yours.
0:55:52 > 0:55:54I couldn't make you an offer you can't refuse,
0:55:54 > 0:55:56cos I don't know what the offer will be,
0:55:56 > 0:55:58cos you're showing me nothing that says I can make the offer.
0:55:58 > 0:56:01- I don't need to show you. I don't work with a bank.- But, Dad...
0:56:01 > 0:56:03We work with family business.
0:56:03 > 0:56:05It's family money.
0:56:05 > 0:56:08- We have tried...- You and I should both shut up. Go on.
0:56:08 > 0:56:11- We all keep saying, "Fail to plan, you plan to fail."- Yes.
0:56:11 > 0:56:14So let's give it a try,
0:56:14 > 0:56:18because we see ourselves being successful, so let's plan.
0:56:18 > 0:56:24The trial we've done for Digby, we missed in month one by over 100k.
0:56:24 > 0:56:27In January, we were following our old model.
0:56:27 > 0:56:30Our new model came into effect as from 1st February,
0:56:30 > 0:56:33so we are now seeing the benefits of that.
0:56:33 > 0:56:37I know we've only just started it, but we are seeing the benefits.
0:56:37 > 0:56:40It's a deficiency in the business that I think,
0:56:40 > 0:56:42and I think your daughter is telling you, you ought to rectify.
0:56:42 > 0:56:45The good thing this business has, on that subject,
0:56:45 > 0:56:48is instinctively, in your gut,
0:56:48 > 0:56:51rarely have I met somebody who understands it so well
0:56:51 > 0:56:53- in the unwritten form.- You do.
0:56:53 > 0:56:56It's just that the business is a bit vulnerable
0:56:56 > 0:56:59if that bus comes along and takes you into the hereafter.
0:56:59 > 0:57:01You've just got to do it.
0:57:01 > 0:57:03And you, Kate, are the future for this.
0:57:03 > 0:57:09In his darkest moments, just think... Remember Digby sitting here,
0:57:09 > 0:57:12say, "Dad, he said don't stop this."
0:57:12 > 0:57:13And when you feel like saying,
0:57:13 > 0:57:15"Oh, but, Kate, that's all about tomorrow,"
0:57:15 > 0:57:17- we're old men, mate.- We are.
0:57:17 > 0:57:19- She's the future, not us. - Absolutely right.
0:57:25 > 0:57:26Though it's the end of our time with Digby
0:57:26 > 0:57:30and the end of this process, it's the start of something new
0:57:30 > 0:57:33and the start of our journey with the changes that we've made.
0:57:35 > 0:57:36Yep.
0:57:39 > 0:57:43'It's small, medium-sized businesses employing one more person
0:57:43 > 0:57:45'that solve unemployment.
0:57:45 > 0:57:47'It's small and medium-sized businesses'
0:57:47 > 0:57:52that grow because they take risk and they change,
0:57:52 > 0:57:54and then they take on another person.
0:57:54 > 0:57:55They make more money, they pay more tax,
0:57:55 > 0:57:57they build more schools and hospitals.
0:57:59 > 0:58:03That is why it's important that small and medium-sized businesses
0:58:03 > 0:58:05in our nation survive and prosper,
0:58:05 > 0:58:09that's why it's important that Hereford Furniture does well.
0:58:10 > 0:58:11These guys pull this off,
0:58:11 > 0:58:15of course, they'll have done right by themselves, by their investment,
0:58:15 > 0:58:18by their courage, by the people who work here,
0:58:18 > 0:58:21but they'll have done right by the city of Hereford
0:58:21 > 0:58:23and they'll have done right by our country.
0:58:23 > 0:58:25And, frankly, you can't ask for more than that.
0:58:31 > 0:58:35Next time, Digby helps a textiles company shape up
0:58:35 > 0:58:38to take on the economic might of Asia.
0:58:41 > 0:58:44It has "What part of this do you not understand" written all over it.
0:58:44 > 0:58:48- It's down to resources and money. - Don't tell me you can't afford it!
0:58:48 > 0:58:50You got a chequebook in there as well, Digby?