Advance plans for succession

Advance Group non-executive chairman and founder Steve Coates with the company’s timeline.Advance Group non-executive chairman and founder Steve Coates with the company’s timeline.

It must have been a daunting decision for Advance Group founder Steve Coates to start up the company in 1981. He was one of the first microwave salesmen in the UK, working from his house in Luton and driving around the country completing microwave service calls.

But from a firm which recorded a £68,000 turnover in its first year, to smashing the £18m sales barrier in March this year, it has been an incredible journey. And Coates believes that the Dunstable-based firm’s success can be traced to his willingness to ask for external help, which then became his succession plan for retirement.

Throughout the early 80s, Advance developed into a fully-fledged distributor when chefs were enquiring about more than just microwaves. In 1985 the firm got its first big break, carrying out its first full design and build project for a Greene King pub. “It was a very steep learning curve, but we cut our teeth in the pub industry,” recalled Coates.

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By the end of the 80s the distributor numbered 12 staff, two of which are still with the firm, aside from Coates himself. The next major milestone was in the early 90s, when Advance helped the nearby Whitbread group to develop the Brewers Fayre kitchen template. “By then we were very proficient in designing, supplying and installing complete kitchens,” Coates said.

This template expertise has proven to be one of the backbones of the distributor down the years. Its reputation was so well known that it got the call from Raymond Blanc to outfit his Le Manoir aux Quat’Saisons kitchen in Oxford in 1998, a complex project which won the firm a CEDA Grand Prix Award. By this point company turnover had topped £7m, with the prestigious contract marking a big turning point.

However, by 2003 Coates felt the company had plateaued and looked to outside assistance to push it forwards. So he turned to his friend, Paul Twigden, who had recently retired as chief executive of the now-defunct plastics division of Bunzl, and appointed him as non-executive chairman. Coates revealed: “I explained my dilemma to him and he offered to take a look at the business. He reported that we had a great company, but that we probably lacked a bit of senior management.

“Effectively since then we have doubled the size of the company, so it was quite a brave decision for me to have a non-executive chairman, but it paid off. I’d built the business to a certain size but everyone has their own level of competence and above that you’ve got two choices: either you ask for help if you’re ambitious about wanting to grow or you stay at the same level by believing that nobody will ever do the role the same as you.”

Therefore over the next couple of years, Advance started to build a senior management team, including Peter Dinan joining as sales director in 2005. Coates reported that this was the beginning of his succession planning.

That same year, the template rollout really ramped up a gear when Mitchells & Butlers asked Advance to help develop its Vintage Inn brand’s kitchens. According to Coates: “The way we approached templates then changed to looking more at the efficiency and ergonomics of the kitchen, and we then employed an operational chef who worked in the customers’ kitchens to develop that efficiency.” Advance then went on to install 300 kitchens for Mitchells & Butlers in a 5 year period, for major brands such as Harvester and All Bar One.

Simultaneously the distributor was also furthering its service department and by 2005 this had reached at least 12 engineers. Furthermore, by the end of the decade the company started to increase its work in the casual dining and care home sectors, and was really at the forefront of the casual dining explosion. This helped to boost turnover to £16.2m by 2009, but the recession saw this drop back to £13.4 in 2010.

However, Coates credits Twigden’s far-sighted vision as ensuring that this blip was short-lived, as following a review of its overheads, Advance bounced back to a £16.2m turnover in 2011.

Coates’ retirement plans went full speed ahead that same year, as he reduced his working week, Dinan stepped up to become deputy MD. Dinan’s background as being the catering director of Laurel Pub Group proved vital, “as he had insight into what customers’ needs were, which we needed to move forward,” said Coates.

The top management team was then bolstered by the arrival of Darryl Pannell as commercial director, who himself was very experienced in restaurant chain management, and Jonathan Turnbull as finance director.

Coates subsequently officially retired as the operational MD in 2012, with Dinan then taking on the full role. “Paul helped me with that whole raft of succession planning, but then in 2013 I thought it was right for me to come back as non-executive chairman to lead the business forward. Had I not taken external advice, I’m convinced I would still be MD and the company probably wouldn’t be as innovative.”

One of its recent innovation keystones is the unparalleled asset management system IntEquip, which tracks over 30,000 pieces of equipment tracing as far back as 20 years. “We are having more conversations with customers now about whole life costs, because we can demonstrate the value that IntEquip brings to them in making their purchasing or repairing decisions,” Coates believes. This forms the backbone of its Smart Kitchens package, launched around 12 months ago, a lifecycle kitchen solution which covers the design, installation, maintenance and asset management of casual dining group kitchens.

Now only involved in the business for 2 days a month to develop the strategy with the senior team, Coates is proud that this year Advance posted a record-breaking £18m turnover. “We have a philosophy of continual innovation, and that’s what’s carried Advance through the 36 years,” he said.

This will continue in the near future, as the distributor is intending to further develop its range of services. It has also created a plan until 2020 which will see it opening up new business channels. Currently the distributor carries out about 100 projects and 30,000 service calls every year and is intending to efficiently grow both without increasing headcount, thanks to its bespoke software.

Outside of Advance, Coates enjoys working as a CESA council member, though he emphasised: “I’m still very ambitious for Advance – the journey’s not finished. We’ve got to work harder and smarter to win new business.”

Cornerstones of success

Steve Coates believes that the keys measures to Advance’s success are:
•    People – and their development
•    Fastidious customer service
•    Continued innovation
•    Planning – having a disciplined process
•    Having a bold vision of what the company should look like

Authors

2 Comments

  1. Steve Loughton said:

    Congratulations Steve, not only for the start up and early development but also for accepting that the company needed additional senior management and a strategic approach to the business and the market. Its tough for an entrepreneur to make these decisions and then find the right team.
    Advance is a shining example of your own ambition and foresight.

  2. Peter N Kitchin said:

    Well done Steve. Very interesting read. Working just two days a month certainly sounds appealing, but you look too young and healthy to have retired, or maybe that’s why you look so good!

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