Keeping up with business trends is as much as some companies can do, but Alastair Gilmour talks to one chief executive whose financial institution is setting an increasingly hot pace.
PERHAPS it’s appropriate that one of the North-East’s most progressive companies has its headquarters in a former maternity hospital. The arrival of any new ideas are allowed time to develop, evolve and mature.
Early next year, the Newcastle Building Society – still friendly and still mutual – will give birth to a new processing and administrative centre on North Tyneside which is expected to recruit a workforce of 500 over the next five years. Mother ship will continue to oversee this family of expanding financial operations from the listed Portland House in Newcastle, which was designed by John Dobson in 1826 for “lying in”. The majority of jobs will be created within the society’s Strategic Solutions business based at Cobalt Park. This provides technology, processing capability and administrative support services to banks and other financial institutions – which could be viewed as a departure from traditional building society business.
The Newcastle is the biggest building society based in the North-East and is currently the 13th largest in the UK. It is now at the stage that chief executive Colin Seccombe describes as “the cusp of something very exciting”. He regards the Cobalt Park initiative as a statement of intent to remain a key employer in the North-East.
“Some financial institutions are too ready to offshore jobs to India,” he says. “Admittedly, we ran a pilot to look into it, but it wasn’t for us. Helping to create significant opportunities in the North-East sits very comfortably with the mutual status we have as an organisation.”
The bulk of jobs created at Cobalt Park will involve customer acquisition, application processing, account management, administration services and a telephone-based contact centre operation.
But, how does this square with the traditional building society function that can be traced back to the 1861 Grainger Building Society, then its unions with Newcastle Permanent in 1980 and the Universal last May? The answer lies in foresight and vision and an investment in technology that is now driving the business into areas once thought out of reach.
Colin, 54, says: “In some respects we have to be a conventional building society – providing mortgages, financial advice, insurance and handling customer deposits – but over recent years we have been building up a second string.
“Of course we’ll have the usual contact centre jobs and processing jobs, but also a lot of exciting and heavily-skilled, relationship management jobs, a real variety, not a huge sweep of people working at computer screens. Our IT systems are expected to increase in that area and staff benefits also extend into a gym and so on. We’re blessed with an IT capability that’s a real feature; we can respond to changes in the market, we can change, add on and create new systems.
“Other financial institutions don’t have the in-house resources or the capability that we have, so their ability to respond to changes in the market are limited. We’re processing accounts and contact centre services to third parties.
“For example, if you opened an interest account with the Bradford & Bingley or with Icesave (part of Iceland’s Landsbanki) our system will answer the phones, send off passbooks, send e-mails – everything is done by us here. Both those organisations have ambitious growth plans and we need to be able to respond to that.”
But 10 years ago, Newcastle wasn’t on the top of Colin Seccombe’s list of places to locate to after 23 years of specialising in audit and business advisory at KPMG in Plymouth.
“But it wasn’t at the bottom of the list, either,” he says. “Rotation every five years was part of the process in the particular area of finance I was involved in – bringing in someone with different views who hadn’t been involved in previous decisions. I was coming to the end of that period and, in the nature of business in Plymouth at that time, there wasn’t a logical step that had the same intellectual challenge. So, I thought about what I wanted to do with my career.
“In Plymouth, most directions go to sea and the geography means you have to travel quite a long way for an alternative. Bristol was the next step but it didn’t hold any appeal. It’s difficult when you know you’ve got to move if you want a challenge, but once you’ve made that decision it isn’t so complicated. When I saw the advert for a finance director at the Newcastle Building Society, I thought ‘I might just be able to do that’.
“The interview was the first time I had been in Newcastle and everything just fell into place. Moving, in retrospect, was quite a decision. You have to uproot children from school – ours were 16 and 14 at the time – and my wife gave up everything she was involved with in Plymouth.
“That was 10 years ago, but it wasn’t so bad because our eldest son had just done his GCSEs and the youngest was just about to start. His biggest question was ‘will I be able to continue with my fencing?’ As it turns out, the North-East is one of the strongholds for his type of fencing. “All four of us came here with a certain amount of trepidation but we were prepared to work at it to make it a success.
“The eldest is now teaching in Cheshire and he only spent two years of school here, but I’d be surprised if the youngest ever left the North-East, he’s well established and very happy.
“My wife is totally enmeshed in the work she’s doing. It would be relatively easy for me to decide to move, but it would be much more of a wrench for her now – and as we both know who makes the decisions in the house, we’ll happily stay here forever.
“My predecessor had to retire due to ill-health and when you’re in your mid-fifties people start to ask when you’re going to retire. Most of the things I do are related to the job in some form or other; the people and responsibilities at work rather than me as an individual. Retirement would be more of a challenge.
“I’ve only been chief executive since last July and I’m really enjoying the role so it’s too soon into the challenge to retire. In an organisation like this it’s very important to have stability within the board. It’s an unsettling time for any organisation when someone has to leave quickly. Set against the general background in which you operate, other building societies and financial organisations might see you as vulnerable in instability.
“One of my biggest concerns was that some organisations might try to merge with or take over the Newcastle Building Society. Trying to ensure there’s some degree of stability within the organisation which demonstrates to the outside world we weren’t vulnerable was one of my key tasks.”
Around Colin’s office walls – the room looks out over Thomas Heatherwick’s Blue Carpet sculpture in the city centre – are large and remarkable photographs he has taken himself of North-East landmarks. Bamburgh Castle is a favoured theme as it reminds him of a project he spend an agonising amount of time on.
“It was quite leading-edge at the time, a sequestration of some of our assets,” he says. “We thought of a ‘castle’ theme and came up with ‘Bamburgh’. I spent most of my days then in London and that picture hangs as a memento of the pressure and the grief it gave me.”
The Newcastle’s expansion follows a rapid period of growth – the building society currently employs more than 1,000 staff across its 37 branches and main offices. In May 2006 it merged with local rivals Universal Building Society, giving the company assets of £4.5bn. Universal’s employees and systems were fully integrated by the beginning of this year, an exercise that appeared to be extremely well managed.
Each year the Newcastle donates around £100,000 to a mix of grass-roots charities and voluntary organisations, among them the highly-successful Seven Stories, the Centre for Children’s Books, which was launched as a three-year joint initiative between the Universal and Arts and Business. Colin is also chairman of the Sponsors Club.
He says: “It’s corporate social responsibility, a jazzy title but something we encourage executives and all the staff to take part in. Some of us are involved in The Prince’s Trust, Seven Stories and the Community Foundation which, as a mutual organisation, we should be looking at doing. It’s important we have something in and out of business which is a benefit for staff and to deliver something back to the community.”
The Seccombe style is to involve management in every step, to meet and reassure staff and customers at every opportunity. A series of branch “roadshows” is one such method.
“We do an hour-long presentation then a question-and-answer session,” says Colin. “They aren’t about a hard sell but about where we’re going with the business.
“It’s really a chance for me to meet real customers, hear what their thoughts are, and an opportunity to meet the staff in the branches. You can end up getting obsessive about ivory towers where only the important things happen. Face-to-face contact in business is of immense importance to us – ignore that or forget it at your peril. When you stand up and are asked ‘why’ and you can’t think of an answer quickly enough, you need to go away and think why we’re not doing it.
“Throughout the organisation we’ve got creative people looking for ways to expand the business, to take it further. My role is to challenge, to question, to decide between the good ideas and which ones to put resources into, according to the progress we want to make.
“I encourage managers and executives to think more openly and be more responsible for their areas, to identify opportunities; it’s something we perhaps were never previously open to.”
Some of these ideas are still under wraps – one development involving business customers and replicating what the savings and mortgages side does excites Colin particularly and will be revealed soon. Another is a pre-paid card which can be loaded with a set amount of money.
“It looks and operates like a credit or debit card but it’s much more secure with the same flexibility,” he says. “We’ve been working very closely with Mastercard. It can be used for currency rather than carrying travellers’ cheques and taking a load of cash – and you can use it securely in stores or ATMs across Europe. They can be issued to children so they don’t have to carry cash around. Limitations can be built in to determine where they can and can’t be used, like off-licences.
“We’re in the real early stages of development of that market; opportunities are growing all the time. We are very fortunate that we got into this early and are one of the leaders in the UK. It’s one area we’ll see significant employment growth in.
“One NorthEast has offered us support in meeting our objectives there (a £1.3m grant). That revolves around the jobs we’re creating.”
So, does all this mean the end of the friendly, mutual building society and all its traditions and services that people have come to rely on? Colin Seccombe is emphatic on that one.
“We’re keen to emphasise the first part of our business is conventional building society business,” he says. “That won’t be overlooked and it’s important that we improve what we offer customers in our branches. The profits we make out of servicing business customers can be used to benefit building society customers. Both sides will work very well together.”
With all that on his plate, it would seem any thoughts of a career in photography are on hold.
Bold plans: Colin Seccombe, chief executive of Newcastle Building Society, is overseeing a major expansion of the society’s work, but knows that its traditional work remains of central importance to staff and customers.
CV: Colin Seccombe
Date of birth: October 28, 1952
Attended Queen Elizabeth’s Grammar School, Crediton, Devon, 1964-1971
Degree in economics and accountancy, Southampton University
Fellow of Institute of Chartered Accountants (FCA) in England & Wales
Partner in Plymouth offices of KPMG until 1997
Joined Newcastle Building Society in 1997 as financial director and appointed chief executive on July 1, 2006
Married to Marian in 1977
Two sons , Mark, 26, and Neal, 24
What car do you drive?
SAAB 95 Aero
What’s your favourite restaurant?
Horn of Plenty, Tavistock
Who or what makes you laugh?
Dame Edna Everage
What’s your favourite book?
Good Pub Guide
What was the last album you bought?
Ama-Buruxa Daweb Cultural Club, Namibia
What’s your ideal job, other than the one you’ve got?
If you had a talking parrot, what’s the first thing you would teach it to say?
Yes dear, I’ll do that at the weekend
What’s your greatest fear?
Doing corporate bonding outdoor courses
What’s the best piece of business advice you have ever received?
Be reasonably unreasonable in what you ask for
What’s the worst piece of business advice?
Take your partners at face value
What’s your poison?
What newspapers do you read, other than The Journal?
Times, Daily Mail
How much was your first pay packet and what was it for?
£100 per month with KPMG as a trainee
How do you keep fit?
The question is flawed since it implies I am fit – which I am not
What’s your most irritating habit?
Winding people up
What’s your biggest extravagance?
Which historical or fictional character do you identify with/admire?
Martin Luther King
Which four famous people would you most like to dine with?
Nelson Mandela, Thomas Jefferson, Michael Palin, Muhammad Ali
How would you like to be remembered?
Just to be remembered.