Sir Tom Farmer: Kwik-Fit
The first Kwik Fit fitter on iconic ads, building a £1.2bn business and his secret sauce for success
People often ask me: ‘What was the secret?'” says Sir Tom Farmer, as he begins to recount the story of how he turned Kwik Fit from a depot in Scotland into the largest automotive repair firm in the world. “Our Michelin tyres were no different from anyone else's, our Dunlop tyres were no different,” he continues. “So what was it?”
The answer is surprisingly straightforward, and it's all about the people, insists Farmer, whose business carried a £1.2bn price tag when it was sold to Ford Motor Company in 1999. It's a lesson he learned a long time ago and one that has stood him in good stead ever since. But while it seems like a simple enough concept, don't be fooled. He'd be the first to tell you that when you've got 12,500 staff, making sure each and every one of them feels valued is no mean feat.
Farmer's first job taught him many of the business principles he has come to rely on over the years. “I joined an unbelievable company,” he recalls. “They were always encouraging you to do that little bit better. They set you targets that, if you stretched and tried hard, you could hit.”
In particular, he found out first hand the power of acknowledging your team's inextricable link to your brand's success. “You're not a van driver,” his first employer told a confused young Farmer, after offering him a job driving a van. “From today, you are a company representative. When you go out in this van with our company's name on it and you go to see our customers, how you behave, how you relate to these people will be their feeling of our company.”
Kwik Fit wasn't the first business Farmer built and sold on the premise that loyal staff who care about your business are the route to success. In 1964, at 23, he set up Tyres and Accessory Supplies, selling discounted tyres – a practice that was technically illegal at the time. But with a new law on its way to abolish the rule that allowed manufacturers to dictate what price their product had to be sold at, Farmer seized the business opportunity with impressive results.
His early success was bolstered by an accidental PR coup, when a newspaper article helped catapult his sales. He admits he may have exaggerated his plight to the reporter, without really giving it much thought. Here was a young lad who only wanted to bring down the price of motoring to the public, forced into late-night meetings in lay-bys to get his stock, while the likes of Dunlop and Michelin were trying to put him out of business. When the headline ran: ‘Tyre king Tommy, squeezed out by the big boys', he realised the power of publicity. He arrived at work to find 32 cars waiting. “And from that minute, it never stopped,” Farmer recalls.
The business became so successful that, when he sold it for £450,000 at the age of 27, he retired to America. It didn't stick, but provided a much needed break. After joining forces with another tyre company, Farmer found himself one of the youngest ever directors of a public company. But America offered more than just R and R. It gave Farmer the inspiration for Kwik Fit. “In America, there were people specialising in brakes, steering, engines and exhaust. We chose the exhaust business.”
He wanted to provide a service where people could have repairs done while they waited, instead of having to leave their car at a garage for days. The first Kwik Fit depot, opened in Edinburgh in 1971, was a big hit. By the time Farmer sold Kwik Fit, it was publicly listed, had 2,300 sites across 18 countries (1,100 in the UK) and was “very, very profitable”.
Man of the people
So how did he achieve such a healthy bottom line? For Farmer, everything hinged on ensuring his people were well looked after and highly motivated. And not through American-style, mantra-chanting pep-talks. Farmer's brand of motivation involves putting programmes or incentives in place to increase people's own self-drive. “It's not about me trying to motivate you,” he clarifies.
He soon found that running blanket programmes or competitions to get staff to try their hardest didn't get you very far, as different people were motivated by different things.
Kwik Fit was one of the pioneers of profit-sharing. Farmer believes everyone should share in the profits they help to create, and the company's accounts would attest to the fact that, when people know they're getting a cut, they will pull out all the stops to boost them. “Sometimes people are aghast when I say this, but people work for money,” says Farmer. “You've got to give people the right opportunities to earn so they feel they're being justly rewarded for their efforts.”
But this is by no means all there is to job satisfaction, and people have also got to trust the organisation they're working for, insists Farmer, who believes this will come naturally if you have an open and fair culture. This applied to customers, too, but was not always welcomed by Kwik Fit's other shareholders. Farmer met with much opposition to his decision to put a sign up reading: ‘There's one guarantee we'll give you, that we will make mistakes, but when we do make a mistake we will put it right for you.'
“People said: ‘You can't do that.' I replied: ‘Why not? We're human. People are not naïve. Why not be open with people?'”
You can't get better
Kwik Fit's advertising campaigns also helped to boost engagement with the brand. The now world-famous slogan: ‘You can't get better than a Kwik Fit fitter' was first etched onto our consciousness in the 1980s, while the commercial that launched it has since been voted as one of the top 10 ad campaigns of all time. “Our advertising was very powerful,” says Farmer, who reveals the iconic campaign had a number of objectives: uniting the team following three successive acquisitions, raising the profile of Kwik Fit and getting customers to feel good about the company.
Achieving all this, it also did something he hadn't expected. “It raised the profile and the feel-good factor of our people,” he says. “We were spending millions on telling everyone you can't get better than our boys. We took a non-descript tyre or exhaust fitter job and made it an identity. People felt good about it.”
In fact, Farmer believes the boost in staff morale far outweighed the other results. “They had something to aspire to. They had to prove to the customer you can't get better,” he says. “And it worked.”
Given the nature of the job, this was especially important. They had to work extra hard on interpersonal relationships to ensure repeat business from their customers, who were ‘distressed' purchasers. “No one ever woke up in the morning and said ‘it's a beautiful day, let's go and buy a new exhaust system,'” says Farmer. “They'd rather go to the dentist than take their car for repair because they didn't know what was wrong with it.”
To overcome that, they had about 30 seconds to make the customer feel at ease. But if they did, even unavoidable human error would rarely cause a problem, and could even cement the relationship. “We'd get a job done and it wouldn't be right, the exhaust would rattle and the customer came back,” says Farmer. “But if you proved to him or her that you lived by your guarantee, why would they go anywhere else? Get that relationship right and you've got a customer for life.”
Something that helped Farmer manage Kwik Fit's burgeoning operations was being very hands on. “I can lay claim to being the first Kwik Fit fitter,” he smiles. Knowing a business of such scale inside out prevents staff pulling the wool over your eyes. It also enabled Farmer to sniff out good acquisition targets by knowing the right questions to ask, as well as determining quickly whether his own sites were functioning as they should. Kwik Fit's growth was largely acquisitive, and throughout his time at the helm, Farmer oversaw a staggering 123 of them. “You could almost smell whether a place was good or wasn't good just by being there,” he says.
Of course, when your operations reach the size of Kwik Fit's, even the most hands-on founders will assume more of a leadership rule. “Eventually we got to the size where I wasn't managing anything,” recalls Farmer. “My role was to look for new ideas and I was no longer involved in day-to-day management. Because of the profile I had within the business, everyone thought that nothing ever happened unless I rubber stamped it – that was nonsense.”
Farmer's profile and reputation surely played a part in inflating the mouth-watering £1.2bn price he secured on its subsequent sale, and he reportedly netted £77.6m from the deal. The company has since been sold twice, yet neither owner has achieved anywhere near Farmer's original figure.
Three years later, Ford sold Kwik Fit to CVC Capital Partners for £330m, just a third of the price it had paid, in a bid to focus on its core business after “getting into difficulties in America”, says Farmer. Ford blamed market conditions for the knockdown price and insisted they had not overpaid.
Farmer, who stayed with the business until 2002, was reported to be preparing for a buy-back. “That was just talk,” he says. “You've got to identify the right time to get off the bus. The right time is at the second to last stop. And don't get back on again.”
When buying a business, Farmer had a tried-and-tested philosophy. “We said: ‘Take your pay and go away, but leave us your telephone number.' There was always something we wanted to know, but if they were there, it was their business. They were emotionally tied to it. If you wanted to change the colours from brown to blue, they'd ask: ‘What's wrong with brown?'”
Passing it on
After leaving Kwik Fit, Farmer established Maidencraig Investments to bring together his private interests, which focused on property development. It includes a small VC arm to invest in start-ups. He has also backed Farmer Autocare, a business which helps people set up in the automotive repair industry. He strongly believes in the power of mentoring, and years ago his mentor taught him one of the founding principles of Kwik Fit: the most important people in a business are your staff, second are your suppliers, third your customers and investors come fourth. “If you didn't look after number one, you had nothing in your business,” says Farmer. “If you didn't look after number two, number one didn't have a business to operate.”
These days Farmer works extensively with young people. He's been involved with Young Enterprise for years and is chairman of the Duke of Edinburgh Award scheme, but focuses on helping youngsters from disadvantaged areas. His efforts both in business and the community have been widely recognised. Among the many honours bestowed on him are a knighthood, a Papal knighthood and the prestigious Carnegie Institute Award for philanthropy.
But you can tell he's not comfortable talking about this recognition. “I never hesitated in courting every bit of publicity I could for my business. But I wanted to keep my private life to myself,” says Farmer, who doesn't think it's right to flaunt your philanthropic endeavours. However, he will admit his good deeds are not solely altruistic. “Two people benefit: the person you've helped, and yourself,” he says. “Being able to do things for other people definitely helps build your feel-good factor.”
He's also concerned that people are losing sight of true philanthropy, which isn't just about writing a cheque. “It's about doing something to help your fellow man,” he says. “That can be just giving up your time.”
As well as donating millions to good causes, Farmer works with a catalogue of charities and community organisations. But he's quick to champion the unsung heroes who help others every day and never receive any recognition for it, just as he attributes Kwik Fit's success to the people in the business.
“The chef knows his steak is the same as everyone else's,” he says. “His secret is his sauce. Our secret sauce was our people. We had better, more highly motivated people than any of our competitors. And for me that's what it was all about.”
Life of Farmer 1940 Born in Leith, Edinburgh1964 Sets up Tyres and Accessories Supplies, selling the firm five years later for £450,000 1971 Kwik Fit begins trading1980s You can't get better…' TV ad makes Kwik Fit a household name 1990 Saves Hibernian FC from financial collapse1997 Receives Knighthood1999 Sells Kwik Fit to Ford for £1.2bn2002 Leaves Kwik Fit and donates time and money to philanthropy
In his own words:
I don't believe in gut feel. Gut feel just tells you that you've got indigestion. But I do believe in intuition – and intuition comes from years of experience.”
On coming out of early retirement
Halfway through the meal, my wife leant across and took my hand and said: ‘Darling, I love you, but I never married you to live with you seven days a week, 24 hours a day. You're driving me crazy!
On management skills
When we got to the size that we were, we tried to impress on the country and area managers that we didn't employ computers. You should never expect people to be always operating at 100% performance, because it's just not possible. You have to be flexible.
On hiring his first team
I didn't know anything about employing people, so I got lads who'd been brought up on the street with me, or worked in the tyre company with me. It was a bit like the Band of Brothers, there was an unbelievable relationship. We had complete trust in each other, and it was the trust that you wouldn't let your mate down.
On a healthy cashflow
We never had any financial challenges. We bought on long-term credits from our suppliers, and sold short-term. We'd get 120 days credit from suppliers, and sell the stock in 30 days, so it was self-financing.
On exit tips
Be sure that you want to sell. And as far as trying to get the right price goes, you've just got to negotiate properly. In a nutshell, use your entrepreneurial skills!
On ‘You can't get better than a Kwik Fit fitter'
We were hesitant in doing it, because you could lose one letter and change the whole meaning. Drop off the ‘t', and it says you can get better.”