Private equity chair Kevin Lyon talks to Rachel Bridge at Drax about change, people and making a difference
When Kevin Lyon decided to swap his high-flying executive career for life as a plural chair and non-executive director at the age of 42, it felt like a bold move.
Having begun his career as a chartered accountant with Thornton Baker, now Grant Thornton, he joined British Linen Bank for two years before joining 3i Group, where he rose through the company to become managing director. But after a few years in the role, he realised that his real passion lay in working with management teams.
Now 56, he says: “Looking back, it feels like it was quite a brave move. But it was a very conscious decision. I wanted to go back to working with management teams more. I had 20 years’ experience in banking and private equity and I thought let’s see if I can have 20 years as a plural chair. It was very much a second career.”
Kevin’s decision has more than paid off. He is now one of the most accomplished private equity chairs in the UK, having achieved ten successful exits as chair and non-executive director since 2010.
He has held board appointments across a range of industries including energy, telecoms, retail, printing and leisure and his current chair roles include ACS Clothing, a men’s hirewear supplier; ROVOP, a provider of subsea remotely operated vehicle services; and Drilling Systems, a drilling company serving the oil and gas industry. He won the Institute of Directors Non-Executive Director of the Year Award in 2013.
Having chalked up so much experience Kevin now knows exactly the kind of roles he relishes. He is particularly interested in joining businesses which are at a critical point of change, whether positive or negative.
He says: “It could be that the business has recently completed a deal or acquisition, or that it is looking at a stock market listing. Or it could be that the business is facing a challenge, perhaps because it is underperforming or in financial distress. Either way, it will be an issue where the people around the table are worrying about it and trying to work out the best way forward."
Kevin adds:"I like turning up in quite difficult environments and working with people, whether that is the management team, the equity owners, private individuals, advisors or banks, to work out where the business is trying to go and how it is trying to get there, and why that makes sense.”
He says the secret to being an effective chair is being able to guide the whole team in such a way that you are able to turn discussion and disagreement into action.
He explains: “Most boards have disagreements, which is healthy, because ‘group think’ is the death of businesses, but you have to have an agreement after the disagreement. I see too many boards where there is disagreement and everyone just keeps going round the problem. You need to be able to have a discussion and to reach a point where there is an understanding and agreement about what the plan is, and then to get everybody clearly focused on delivering that and not getting distracted.”
A key element in being able to achieve this is to make sure that all the relevant people are involved in the discussion in the first place.
He says: “It is very important to get the right people in the room with the right agenda, with the right questions and the right information so you can have the right discussion. Then once you have got that agreement as to where you are going, you need to decide who you need in the room to drive that execution phase. You have got to get the right people in the room and you have to get them working well together.”
If management changes are needed, they should be done as soon as possible. He says: “Once you have decided that change is needed, you need to get the change done for everyone’s sake, including the management who are moving on. There is no value in taking too long.”
In his experience, good chief executives display several key characteristics: “They are confident without being arrogant and they have a strong understanding of the space the business operates in, of the key drivers and of the competition. A good chief executive is intellectually curious and wants to listen to different views and then discuss and debate them. The chief executives who are blinkered and always think they know best are more likely to fail.”
Kevin is clear about the secret to managing the relationship between the private equity house and the management team.
He says: “It is all about communication, clarity and focus. If you don’t keep regular communication between the private equity owners and the management teams, there is a risk that they meander off and do different things and then when they pop up again two months later they are both on completely different paths. You have to keep them focused and keep them on the plan that’s been agreed."
"If something changes, fine, let’s be clear that we are now going down a different path and that we are all happy with that. But everybody needs to own the solution and work hard together to get it to work, so you don’t have people thinking that they had a better plan but didn’t get a chance to discuss it.”
Kevin says that one of the great joys of being a plural chair is being able to apply his experience and knowledge, which has been gained elsewhere, to a new situation.
He says: “One of the things I love about what I do is that at any time I am working with five or six different businesses, all in different sectors with different types of chief executives, different ownership structures and different challenges. That comes with pressures and stresses because not all companies work the way you want them to but I love the variety of businesses that I see, the people I get to work with, and the difference that I can hopefully make along the way.”
Drax sector lead: Rob Lanham
Tel: 0203 949 9563
Drax chair lead: Nick Harlock
Director, Chair Network
Tel: 0203 949 9559