With his bluff Mancunian approach to the world of work, cloud-computing entrepreneur, self-made multi-millionaire and chairman of ANS Scott Fletcher is proud to have made it to the civic honours list.
It's probably the most quintessential of all British middle class character markers that when conferred with an honour the Brit will feign indifference: "What's this thing? It was probably my turn." But cloud-computing entrepreneur Scott Fletcher is different. He's "chuffed" with the MBE he has just received for services to business and the community in the north-west of England. But then again, Fletcher isn't middle class: he's the archetypal northern lad made good. He remembers as a boy touting around the pubs of backstreet Manchester, flogging cockles and mussels, "fighting for every pound". And he's proud of that, too.
"It's one of those things that if you have not received one, you don't really know how it works. Basically, you just receive a letter from the Cabinet Office and it lands on your doormat and you open it and it says in the strictest confidence that both the Prime Minister and the Queen request that you become a Member of the Order of the British Empire." Fletcher, who is chairman of the ANS group of companies, then describes how his reactions alternated between "the jaw hitting the floor" and thinking that maybe his mates were having a joke with him. Uncertain how to react, Fletcher went down to his mum's and she promptly burst into tears. Fletcher reflects on some of the reputed benefits of such an honour, including the perhaps apocryphal notion that you might be upgraded on British Airways, although he imagines "maybe it takes a bit more than an MBE to get upgraded these days".
Fletcher also sees the serious side to the accolade, regarding it as recognition of "northern grit and determination". He made his way to the top via an apprenticeship – "they called it the YTS in my day, but it was effectively an apprenticeship" – which is one of the reasons he is such an outspoken champion for the employment model today. In 2013, he founded the Cloud Academy, a year-long apprenticeship programme that "aims to rectify the skills gap within the IT sector and support young people as they develop a career in the industry".
Despite the fact that his personal wealth can be measured in the millions and his companies turn over at least £50m annually, the Mancunian entrepreneur is determined to stay close to his roots and to run businesses in a way that give something back to the world that he came from, something he thinks "all businesses should do. I've always tried to run businesses along the model of giving something back to the community and so other people can get a leg up". Broadly speaking, the basic philosophy behind Fletcher's corporate social responsibility program is simply 'a way of getting people out of poverty'.
Head in the Cloud
Fletcher's day job is as chair of the ANS group of companies that he started from his bedroom in 1996. He is also a numbers man and is not afraid to repeat the equation that best expresses his success: £50m turnover organisation with 200 employees, 500 customers and a decent business model. The key to this success is to "run a business properly in incremental steps, which I consider to be first running it without debt, with profit second. We went into the recession turning over about £10m and came out the other side at about £50m. I think engineers will be capable of doing the maths for themselves, but let's put it this way: with a first-year turnover of £300,000, you can see that in an 18-year period we've increased our revenue by a factor of 150. What this shows is the benefit of steady growth while constantly reinventing yourself. Today we deal in cloud computing. But five years ago, if you mentioned the word cloud, people would have thought that you were talking about the sky".
Fletcher sees the consumer uptake of the Cloud as being similar to the way the pioneers of Internet retail worked. "You have early adopters, but most people are really just hanging back to see what can happen." According to Fletcher there are also parallels with the great age of railway building in the US when "there were lots of new companies that just popped up all across North America. Most went bust, but the ones that survived did very, very well. We can see that today in the way markets behave when it comes to new technology".
The railway boom analogy is one that resonates even deeper with Fletcher, as he explains how companies would originally generate their own electricity until it dawned on them that it might be more efficient to buy it in from outside suppliers. "We manage and maintain our client's infrastructure to enable them to improve their businesses. They don't sit in a back room pedalling away, generating their own electricity, so why should they be managing their own systems when they can draw on a service provider? That's where we are heading with cloud computing."
Fletcher is proud of the stereotype of 'working-class lad made good' and is more than comfortable reflecting on an impoverished background where the biggest obstacle to business growth was lack of capital. "These days I invest in a number of small companies and one of the reasons I do that is because these people remind me of me when I started. When you're at the beginning it really does come down to grit and determination. Attitude."
He is often asked whether entrepreneurs are made or born: Fletcher thinks that largely speaking it is innate. He is more the product of the school of car boot sales than any business school learning, which meant that he quickly developed an attitude that read: "There was no way it was going to fail. More than that, you just don't accept it when people tell you that it is going to fail. Eventually you push through the first glass ceiling, and then another, and then another."
Fletcher realised that he was on the trajectory to business success when he employed his first accountant. As with the people who do their own IT or generate their own electricity, he says: "I was wasting my time doing things that other people could do for me, while I wasn't doing what I should have been doing." Freedom from managing his own accounts meant that he could concentrate on sales. The cycle continued when he bought in his first sales exec, which in turn freed up his time to concentrate on the next aspect of running his business.
Eventually and inevitably you simply reach the stage where you need an injection of capital. "Most businesses will get to this point when they hit the plateau of maybe 10 to 20 people turning over a couple of million. You just can't move from there. The reason for that is that the next step on is where you're turning over £10m and you have maybe 40 staff. That means you need a lot of managers, and a different style of management." Fletcher recalls that for him this point came at the end of 1999 on the back of the dot-com bubble. "We managed to generate some hype around the business: we made our own luck, were in the right place at the right time and suddenly found ourselves being valued at £20m when it was probably worth only a tenth of that."
We don't need no education?
Fletcher is not a man to mince his words: "The problem we've got in this country, possibly in Europe and even further afield, is that what we teach in schools isn't fit for purpose in the modern economy." He has no wish to criticise teachers who he sees as playing a pivotal role in producing citizens for future societies, "but the bottom line is that I don't see anybody in government with the guts to really make the changes that are needed to make education relevant to modern industry – particularly in the STEM area". Fletcher muses on how many kids know how to write a basic program these days, before explaining that he learned to do it from a magazine when he was aged 11, which he credits as the beginning of his journey to success.
"Today many businesses are IT from end to end and so if you want to go into it, you have to know it means right from the start."
Fletcher gives a litany of examples of small but rapidly growing businesses which have harnessed the power of Internet retailing and computer automated distribution that exist "simply to make our lives better. The other day I bought myself a new fridge online and it arrived within 24 hours. These little businesses are where young entrepreneurs can make real money. And yet the young entrepreneurs who are still in school are being tested on their handwriting. I mean, who uses a pen any more these days? Honestly, no one does. So why on earth are we testing kids on their handwriting ability, when we should be testing them on their keyboard skills, or their ability on other electronic devices that are actually of some use to them?"
For Fletcher it all boils down to "somebody needs to take a leap of faith that allows us to do something differently in our education system. But I don't think that anyone in government has got the bottle to stick their neck out and do something about it".
Apprenticeships – you're hired!
Although Fletcher is very good at making his feelings known loud and clear, he is also the man who puts his money where his mouth is. A keen supporter of local business, Fletcher is also known for being a champion of youth and apprenticeships. Frustrated with apprenticeship schemes he considered to be all window dressing with no real career pathway, he founded the ANS Cloud Academy to give "some of the local kids in Manchester a chance to get a job." According to Fletcher, if an apprenticeship is run properly it takes the form of a job with training, something that he is continually trying to explain to politicians "who don't see it this way. They think it is training. But it's not, because an apprenticeship is a job with training and the training is on the job".
Fletcher knows whereof he speaks: he recalls that his grandfather did an engineering apprenticeship that included on-the-job training. "That's the key starting point. But the way in which a lot of schemes are set up today is that they start off with training, followed by some kind of vague hope that that it will lead to a job. So you're left with all this low-value training with high pass rates. It's much better to do something a bit more difficult, although that probably involves a bit more investment. We've gone straight in at level III at the Academy and we don't see any level of dropout."
Fletcher is adamant that he is not driven by the prevailing culture that makes professional and vocational training easy. "We make it tough, but at the end of 12 months there is a job. Not only is it a job: it's a real job, where our kids are earning £15,000 a year, which for Manchester is actually quite a good wage. And these are normal, working class kids, from working-class areas, who by the time they're in their mid-20s, could well be on £30,000 year."
As he warms to his theme, Fletcher develops the idea that there are plenty of people out there just like his apprentices who can bring a wealth of talent to the IT industry. "But they are held back because they have found it difficult to hit requisite pass levels at school. But what's that got to do with anything if they've got the right skills for a career in the high-tech industry? The whole thing seems to be centrally driven by ministers and civil servants who don't really understand what's going on. They seem to think that apprenticeships are a way of giving less bright or less able people a cheap university degree."
The entrepreneur then conducts his own thought experiment where a young Scott Fletcher is asked what he would like to do. On the one hand he can "go to university and get drunk every night for four years, qualify with a degree that is out of date and be landed with £30,000 worth of debt" or he can "at the age of 18 go into an apprenticeship with a guaranteed salary that would rise to £15,000 per year in the first 12 months, where you know there's a job at the end of it, where you have no debts".
For Fletcher, it is a classic no-brainer: "It's nothing to do with bright kids and less bright kids: it's do with identifying chances. Unless you have a real reason to go to university – for example, to pursue a dyed-in-the-wool profession such as medicine or law – you can't justify doing it. If you are one of those people with a real academic vocation and you want to become a professor or a researcher or something like that, then that is of course fantastic. But in terms of preparing people for the modern economy, it's not the best route and the apprenticeship route should at least be seen as equal."