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MEDIA CENTRE







02 May 2004
Sunday Herald
Calling home

Is Pearse Flynn crazy? It is a question that has probably been asked a lot of the ebullient 40-year old Irishman recently.
“There are two things where people have said to me ‘what the hell are you doing?’,” Flynn confesses. “Call centres being one and Livingston FC the other.”

To have bought into the call-centre business just at a time when much of the world thinks going to hell in a bucket or at least offshore to India is one thing. To add to that involvement in a consortium that is taking over a bust club, given the current state of Scottish football, raises serious questions over his sanity.

When I interviewed Flynn at the Callpoint building near Charing Cross in Glasgow he had been fielding calls and finalising a public statement about his involvement in the Lionheart consortium (which emerged last week as the preferred bidder to take over Livingston Football Club). He is wearing a smart suit, but with the no-tie, open-necked style of the gadget-toting technology entrepreneur .

Flynn is unrepentant and insists he is quite sane. Of his involvement in the call centre business he says: “My view is that I’m buying when the tide’s gone out.”

He and business partner Jim Park took over the running of Callpoint Europe in January this year in a deal understood to have been worth £700,000. “My biggest problem is to try and change the perception of call centres,” he says.

In a typically brash Flynnism when he did a presentation to the Entrepreneurial Exchange conference at Gleneagles on Thursday, Flynn called the last part of his talk, in which he covered his new call centre experience, Cowboys And Indians: “The people that have set the perception of call centres have caused me more problems than the Indians ever will.”

Flynn says that the call-centre business has such a poor reputation that parents in Livingston are using it as a spectre to encourage their children to work: “If you don’t work hard at school you’ll end up working in the Sky call centre.”

But, if that attitude can be changed, Flynn passionately believes the sector not only has a present but a very good future as well. “There is more business right now than I can get quality people for,” he says.

Flynn is hyper-critical of much of the way the industry is organised: “The wheel is spinning but the hamster is dead.”

“Trying to stay where you are by pouring more people in the top than are leaking out the bottom is ridiculous.” This means, he says, that his competitors in the industry are constantly having to pay for recruiting and training more people because of the high turnover of staff.

 


A different business model and more support from government, particularly in taking the risk out of long leases for premises in a business with short contracts, will help to turn the sector around, he believes. He points out that that America is already starting to fight against the threat of losing jobs to the Indian sub-continent by excluding from government tenders any company that is offshoring jobs. Similar measures should be taken here, he argues.

But he believes the tide on the issue is already turning. He says that the question his call-centre staff, who are based in Bath Street in Glasgow, are most often asked is ‘Are you in India?’

“I would really like more government help for our industry but only if we earn it in the way we treat people,” he says.

Flynn says he is operating a different model for call centres. He pays his employees more than his competitors and charges clients an extra 5%. His way means more staff are retained and he only needs to pay for one round of training, rather than having to continually train new staff because of the constant turnover.

In another approach that will further anger his competitors Flynn is recruiting by actively trying to poach the best staff from his rivals.

He claims this approach is working and says Callpoint, which lost £1.5m last year, is now profitable and cash-positive .

“I have had the great experience of telling some customers to get lost – we could not pay people properly and make any money at the rates they were being charged.

“In my view call-centres are the shipyards of our time,” Flynn says. “If we give up on them where are we going to get the industries to employ people?”

“When we start talking to customers, we show them how we treat people and how we retain people and we say that’s why we’re 5% more expensive than the other guys.” Flynn and Park believe their approach to the sector will be successful and predict that they will grow by 600 to reach 1000 staff over the year.

But despite his insistence on the importance of paying and treating his staff properly he stresses that he is willing to take the tough decisions. “I’m not a fluffy person, you have to crack a few heads” is how he puts it.

Flynn is aware of the irony of his involvement in the industry considering in previous incarnations he sold the very IP technology that allows call centres to be based offshore.

He says that Callpoint will not even try and compete at the lower cost, lower fee end of the business. "If my sales people bring something to me and I hear that India are involved in a tender for a contract I say let’s not bother looking at it.”

Flynn is cynical about the whole “offshoring” phenomenon. “What an ugly word that is”, he says, arguing it is a business solution sold to companies by consultants. He is sure it will be followed by another wave of “repatriation” advice: “That will be where the next $1 billion of consulting fees will come from.”

 


Flynn believes that companies that have offshored their call centres are already suffering brand erosion and points out companies like Dell which have already made the decision to repatriate.

On call centres he differentiates very clearly between outbound call centres which are selling to customers and inbound where employees are dealing with customers phoning them. “You cannot turn a shy person into a telemarketeer” he says.

“We have people working on the outbound side who are probably earning more than graduates. In my opinion there is a real skill in that, being able to take all the kicks in the teeth you get in that job and being able to come back for more.”

Outbound call centres are high energy places where the tempo rises to a crescendo whereas inbound call centres are much quieter, gentler places.

Flynn is structuring the business around these differences with the company being divided into separate units: Salespoint for the outbound business, Servicepoint for the incoming business and a third unit Peoplepoint which will recruit people for their call centres. The business will also offer a “disaster recovery” service where Callpoint people will go in and take over a client’s call centre if it has hit major problems.

Flynn has had a career that has seen him scale the corporate heights with top-level executive jobs in Compaq and at Alcatel but is the first to admit that all he has run has not been successful. He stepped down as chief executive of Glasgow-based telecommunications group Damovo in August last year after failing in a bid to secure funding to finance acquisitions. Damovo, controlled by Apax Partners was a sizeable business with a turnover of about £700m and 2200 employees.

Flynn clearly doesn’t relish the subject: “That was a sore one, he says. “That was not successful and it was a sore one.”

But he has had enough success in his career for him to have become a multi- millionaire. This gives him the opportunity to indulge his enthusiasms. He is a passionate Celtic supporter, where he is also an investor. He has a house in La Manga in Spain where he enjoys spending his downtime and he has his cars: “I’ve wasted more money on cars than any man alive.”

But clearly Flynn has more to do than enjoy the leisure time his money could allow him. Maybe what he is really seeking is another opportunity like that to prove himself. “I’m approached quite a lot to go back and run large plcs. I’m swithering about whether I go and do that. I had a huge job in Alcatel where I was responsible for 50,000 people. It was hellish for someone like me.”

Flynn has an interesting take on executive rewards. He recalls how the first thing that Eckhart Pfeifer did at Compaq was negotiate his exit package with the board. “If you’re going to effect large change in a large organisation you have to be insured for failure otherwise you will play the safe ball every time. You have to say to yourself for me to make the changes this company needs there’s going to be blood flowing under the door.’

It is this willingness to take on major business changes that Flynn says is what he is really all about. “I suppose I’m a change agent more than an entrepreneur. I suppose that sums me up.”

He and his business associates will have to effect real change both in the call centre business and in the fortunes of Livingston Football Club before people stop asking him what the hell is he doing.



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