03 December 2010

INTERVIEW: Kevin Hill, Aqualux

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He may be reluctant to describe himself as a turnaround specialist, but there's no doubt new Aqualux managing director Kevin Hill has an agenda for change. Tim Wallace found out more...

Aqualux's new managing director Kevin Hill admits its customer service proposition has fallen drastically short of where he would like it to be. And he's determined to put things right.

Understandably, he chooses his words carefully, but reading between the lines it seems significant changes lie in wait for the company.

With a self-confessed background in what he calls "process and business improvement" - or 'turnaround' as it's more commonly known - you get the feeling Hill's uncompromising management style is specifically what Swiss parent company AFG was looking for when it recruited him back in July. He's obviously unwilling to paint himself as some kind of ruthless hatchet man, but there's certainly a sense here of a man who's not afraid to make unpopular decisions in the months ahead. And customer service, he reiterates, is very much top of the agenda.

Hill has more than 20 years' experience in the building products sector and has held senior positions with several blue chip companies including Baxi, Pilkington and Myson. Most recently he was managing director at door and window specialist John Fredericks. But Aqualux, he says, provided him with a chance to get back into a business with an international dimension...

Q What is your immediate priority as new managing director?

Improving our customer service and I'm quite happy for that to be public knowledge. There are certain things you don't want to wash in public, but I think it would be ridiculous and potentially duplicitous of us as a business if we didn't acknowledge publicly what everybody knows who deals with us, and internally people are aware of. The key thing is we need to put it right.

Q So what are the problems and how do you intend to resolve them?

I don't want to be a hostage to fortune on how we're going to put things right. I don't want to hoisted to my own petard. But needless to say there will be some key initiatives in place over the coming months.

Q What sort of initiatives are we talking about?

We need to be more open and candid with our customers about where we sit in the business. We need to deliver a better customer experience. We don't want to continually have to make phone calls because we don't have information to hand. We should be credible and we should be going the extra mile and frankly the key thing is we should be easier to buy from.

Q How soon after joining did you realise that things weren't quite right?

I only joined in July but as in all organisations you have conversations with people. They didn't know how to take the new guy on the block, but it's really about gaining trust and confidence and getting them to be comfortable in being open with you. It's also about assuring them that as a result there won't be any negative consequences for them.
It's an awful word but it's about freeing people, and empowering them to feel comfortable in their sphere. It's about having non-judgmental conversations with them to improve the business. We've got some internal projects taking place now where the brief is to identify areas of importance to attack and those areas will increase top line sales, increase gross margin, reduce waste and improve efficiency.

Q What would be your ideal customer service proposition?

It's a mix of things. It's improving our 'on time in full with no errors', it's improving our customer experience across the piece in terms of when it goes wrong how we put it right and, as I say, it's making us easier to buy from.

Q Have you identified any other weaknesses in the company?

None I'm prepared to go on the record with. It's about looking at the cost base and efficiencies. Our overall UK strategy won't see any real change. We need to strengthen our position in private RMI, stick to our knitting and be better at it.

Q Why do you think you were chosen to run things?

I wouldn't want to set any hairs on end in the sense of me having a big axe. I have a background in process and business improvement, in turnaround, but I don't want to spook the horses too much.
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Q Do you have any previous experience in the bathroom industry?

I'd been involved in it when I was at Myson, the towel warmer business, but I wouldn't profess to be an industry expert. But we sell private products into private RMI which is what I did through John Fredericks and other businesses like Baxi. The dynamics and infrastructure are broadly the same and that was an attraction because that's where my skill set was.

Q How did you go about familiarising yourself with the shower sector?

There's a lot of knowledge in this company. There are key people, senior managers, who've got a lot of valuable experience and I'm trying to spend a lot a lot of time with our key customers to understand their needs and where we do a good job and frankly where we don't.

Q What are your impressions of Aqualux so far?

As a market leader we've got a broad and potentially unparalleled range of products, access to the channels that allow us to service the private RMI sector and a good brand. But we need to shout more about its virtues and proposition.

Q How are you going to do that? Through increased marketing?

No, but part of the discussion we had was to work closer with the press and get our key messages across in the appropriate way. We haven't got any grand plans on that, but as I go and see customers I see goodwill and a willingness for us to do more with the brand and to shake it about and improve it.

Q What's your current turnover?

It's broadly in line with last year, which is circa £25 million. Based on industry figures from the BMA that's not a bad place to be. I think some businesses are about 30% off the pace.

Q Are you happy with the size of your retail network?

I think the key thing is that we're looking to grow our market share and our product range will allow us to do that. We've just got to work harder and smarter at achieving it.

Q In what sort of ways?

One of the key things is understanding installer needs better. We're looking at what we can do to improve the installer experience. We want to be easy to buy from, easy to deal with and offer easy to use products. For example we've introduced slot and lock - a five-minute installation process for the shower cubicle. We need to build on that and provide products that are fit and forget for the installer.

Q Are you planning any new ranges?

Not at the minute. What I want to do is stop the roundabout, have a look at what we're doing here, have a look at what we should be doing in a more incisive way and get to a position where we can have proper product life cycles that add value to our customers.

Q Are we coming out of recession?

For the next 12 months, we'll probably just bumble along. In terms of private RMI, there's a position of general uncertainty. Real disposable incomes aren't growing, consumer confidence isn't improving greatly, there's no obvious recovery in housing transactions, which is a big deal, and availability of mortgage finance is still not great.

Q So it's a pretty bleak picture?

No, I wouldn't say it's bleak. There are still 27 million homes in the UK. There is still a demand for our product and when these products break people replace them. There's not going to be a boom, but what we have is still plenty to go at.

Q What are the big issues for the bathroom industry right now?

The key issue for the bathroom industry is rising input costs - energy and raw materials - and increased freight rates. They're going to put additional pressure on any importing business. Currency fluctuations have also had an impact. We trade internationally, we're not immune to it. It's had an effect on our business as it has with any business that deals with the Far East. But we have our own people who live out there full time, whereas other companies don't.

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