MICHAEL Ball has worked his way to the top at chimney maker Schiedel through bad times as well as good, as he tells Peter Jackson.
SIX years ago Michael Ball felt like the last man standing. He was sales director of Washington chimney maker Schiedel when its Austrian parent company, dissatisfied with its performance, embarked on a wholesale clear-out of senior management.
He says: “Schiedel brought in a totally new management team, it decided it needed a total change of direction. They got rid of the chief executive, they got rid of the financial director and they got rid of the plant manager, so yes, I was like the last man standing.”
Didn’t he feel vulnerable?
“You do and you don’t. At the end of the day, if you are confident in your own ability, you don’t tend to worry about things you can’t have an influence on. If they had wanted to get rid of me, they would have got rid of me, I would have gone and found another job.”
But they didn’t get rid of him, he remained as sales director, the company began to prosper and when the previous chief executive was promoted in June 2011, Ball took over the reins.
He tells me the story while we sit in the plant manager’s office. The factory is currently undergoing a refurbishment of its office areas and space is at a premium. Ball, 41, is tall and thickset with a boyish and open manner. It is easy to imagine him enthusiastically cheering on NUFC, the team which, as a season ticket holder, he follows home and away.
The company he heads, Schiedel Chimney Systems, began life 45 years ago as Rite Vent. It was founded by John Garrod who sold it to venture capitalists in 2001 and it went through a management buyout before being bought by Schiedel, a multi-national with sales of £170m, in 2004.
In simple terms the company makes steel tubes which act as chimneys and vents for domestic heating systems. Ball proudly shows me round the factory with its rows of gleaming tubes ranging from the diameter of a cricket ball to something Santa Claus could just about squeeze through. There is, of course, more to it than just rolling out a tube and Ball explains that the laser weld is critical to quality and performance. It also has an operation in Northern Island near Dungannon which makes ceramic liners.
Schiedel supplies the residential market with chimneys and flues for central heating boilers and – increasingly – wood-burning stoves. It also supplies the non-residential sector which comprises commercial and public buildings such as schools, hospitals and swimming pools.
“We get a drawing from the architect or contractor and we design a system for that application and make it and then send our fitting team to install it,” explains Ball.
The third part of the business is OEM, original equipment manufacturer, where Schiedel makes flue kits for boiler manufacturers which they can brand as part of their own product.
It also has an export division and an intercompany operation which supplies other Schiedel plants throughout Europe.
Schiedel in Washington sells more than 500km of system chimneys, connecting flue pipes and chimney liners every year. In the UK and Ireland it employs about 100 people.
Ball was born in North Shields and brought up in Whitley Bay and attended Whitley Bay High School. He left to join the Newcastle sales and estimating office of Biddle Metair which made heating convectors, and while there he attended Newcastle College on a day-release programme for a building services qualification.
He joined the firm just to get a job and the office was closed after two years, making him redundant, but it had given him some sense of vocation.
“After I was made redundant, I did a HND in building services engineering at Northumbria University,” he says. “I was interested in the general aspects of how a building works. Apart from bricks and mortar, it’s a lot more complicated than people think.”
Shortly after completing the course he joined Rite Vent in 1994 to work in the sales office. He had not done any sales before but he was not deterred.
“No, I guess I’m a fairly confident guy in my own ability.”
His confidence seems to have been justified for after just three years in that role he was promoted to run the non-residential side of the business. At that time it was turning over about £200,000 a year and after Ball had been running it for eight years that was up to nearly £2.5m.
How did he do that?
“I’m passionate about customer service,” he says. “All successful businesses have good customer service levels. If you give a good service, price almost becomes a second issue. It was all about getting close to the customers, developing relationships and making sure communication was strong.”
He was then promoted to commercial manager which gave him responsibility for the sales office and shortly after that he took on the role of sales director.
But however well he was performing, the company was disappointing its new Austrian owners.
“It was really badly managed for the period before the management team was changed. The old management team didn’t have any real focus,” says Ball.
Nor did it help that the previous owners had sold the factory on a sale and leaseback deal to raise capital which saddled the business with crippling lease costs.
“Long term it was killing the business and there was no light at the end of the tunnel.”
He survived the cull, not only because his performance had impressed but also, as he modestly adds: “I was one of the few people left in the business who knew the business inside out.”
Over the next four years the new management team turned the business around. Turnover went up from around £14m a year to about £18m and a loss-maker moved into the black.
“Previous to the new team the shop floor was running 24/7 with 150 employees on the production side of the business and now we have 44 and we have increased the output,” he says.
“We have been constantly improving efficiency and that has been a key factor in keeping costs down by doing more for less. We have cut a lot of waste out of the business, all of the non- value-added activities.”
Lean manufacturing principles were introduced to the shop floor with lessons learned from the automotive and aerospace industries. The parent company also invested heavily in Washington, with £1m spent on one machine and £250,000 on a laser-cutting machine last year. A stitch-welding machine was another £100,000 and the office refurbishment is costing nearly £200,000.
A key investment was £2m on buying back the factory, relieving the pressure of the lease costs.
The new management team was in place for four years before the successful chief executive moved on to be replaced by Ball.
He says: “I wasn’t surprised by that because I think I had always been lined up to do it. Yes, I was pleased because it was a new challenge. If you look at where I came from in the sales office to heading the company, it’s a big rise.”
One of his first decisions as chief executive was to continue filling the role of sales executive. “I’m a very firm believer that the CEO of the business should have some direct customer focus. We have put a structure in place that allows us to maintain our level of service without the cost of a sales director.”
He finds that the parent company leaves him to get on with it and he meets his immediate boss about once a month for a business review, often meeting at Heathrow.
Now the business is doing well despite recession in Europe and threatened triple dip at home. It hopes to grow sales to £20m next year, although it does not expect to significantly add to the 70-strong headcount in Washington.
Ball also sees significant potential for growth in export markets.
Traditionally it has sold in some 28 markets across Europe with four key destinations for residential products: Denmark, the Netherlands, Greece and Japan.
“That part of our business has seen a real bad drop in sales, a dramatic drop in sales,” he says.
It has gone from representing about a quarter of turnover to less than a 10th in five years, largely due to tough economic conditions on the continent.
“The good thing about export is that it’s high volume but the bad thing is that it’s low margin, so in some ways I’m not too bothered that we have lost it because it was putting us under some financial strain in terms of profitability.”
He explains that the current strategy is to retain its current business but to concentrate on new opportunities, particularly the Middle East for commercial contracts for shopping malls, government buildings and hospitals. Encouragingly, the company has just completed two contracts in Jeddah in Saudi Arabia worth a total of £440,000.
He strongly believes the company should go for the higher-margin work.
“You don’t undersell your product, the product has a value. There are people who are cheaper than us in the market place. Quality service is critical to the business. Unlike previous managers of the business where they have chased volume at low price, my view is, turnover is vanity, profit is sanity. If turnover was to reduce but profit was to increase, I’d be happy.”
I ask him whether he found his rise through the ranks difficult and he confirms something I have long suspected.
“To be honest the higher up the tree you get in a company, the easier your role gets,” he says. “A lot of the stress is within the middle management, that’s the reality.
“The role of chief executive is more about how you steer the ship and the most important thing in the role is probably communication.
“I also believe that you should have an open and honest policy. You shouldn’t necessarily go into a huddle every time you want to talk about something, you should be able to talk with the staff to a certain level as you would with the senior managers.”
Ball has been married to Alison for 15 years and they live in Darlington with their three children Evie, 12, Dominic, 11, and Nancy, nine.
“Monday to Friday I tend to be away on business so I tend to only see them at weekends. It’s important that when I am at home I spend time with them.”
Is he ambitious?
“The grass is never greener on the other side. But I’m sure in the coming years there’s a challenge outside Schiedel somewhere, whether that’s within the group – it has other businesses in the UK.
“I’m not totally convinced my future lies within Schiedel long term. But certainly for the next two to three years I have a lot of work to do here.”