‘I’m a custodian of the business’ – Filshill’s Simon Hannah

In an exclusive interview, Simon Hannah (pictured) talks about being CEO of JW Filshill and explains why the Glasgow-based business is likely to remain family-owned well into the future.

Simon Hannah has followed in his father’s footsteps in more ways than one, from playing rugby at international level to heading up the JW Filshill business.

It’s a path that Hannah, 45, has been proud to take, and he spoke to Cash & Carry Management’s managing editor Kirsti Sharratt about his rise to CEO, his personal development while in the role, people who have inspired him along the way (his dad Ronald is, unsurprisingly, top of the list), and future ambitions for himself and the Glasgow-based business.

You have worked at Filshill for nearly 25 years. Was it always your plan to go into the business?

Simon Hannah wanted to be a pro rugby player.

No, I didn’t really know what I wanted to do when I left school. I went to Australia for a year to work in a boarding school on the Gold Coast. I was supposed to be coaching sport but there was no rugby [union] on the Gold Coast; it was all rugby league there so I decided to move to Sydney to play. [During his own school days, Hannah had captained the Scottish schools team and played in six internationals; his dad had achieved similar success, earning a cap for Scotland.]

When I came back to Scotland, I went to Napier University in Edinburgh to do a business course but I was more interested in trying to become a pro rugby player than turning up to uni! Eventually Mum and Dad found out and they got cross with me, and then I found myself commuting from Edinburgh to Glasgow to pack shelves in the warehouse as a punishment. Nearly 25 years on, I haven’t got round to leaving!

You started filling shelves. Then what?

I spent time picking orders and loading lorries, and then I worked in the tobacco store. I was also still trying to play rugby. Dad was good: he would arrange my shifts so that I could get back for training.

However, the rugby wasn’t working out for me, and I was starting to really enjoy the business. After three years in the tobacco store I joined the buying team, and I loved it because I was dealing with some of the biggest brands in the world. I also spent a bit of time in the sales team, which was good fun.

How did you progress to becoming a director and then CEO?

I joined the board in 2008 when I was in the commercial team and Dad was still running the business. The business has been growing, but during 2008–2009 things were difficult because the financial crisis had kicked in and Dad’s health started deteriorating: he was working so hard. After sitting down with Mum and Fraser [Harrison], who was company secretary at the time, Dad decided he would retire, and I took over as CEO in 2010.

Simon Hannah (right) with older brother Nick, who is also a director of Filshill.

There had always been discussions with Mum and Dad and my older brother Nick [a director at Filshill] about me taking on running the business, but it happened very quickly.

What changes did you make to the business initially?

The credit crunch was having a big impact on our customers and we had three years [2009, 2010 and 2011] of significant bad debt. Luckily, I had spent quite a lot of time visiting different wholesalers, including James Hall in Preston and Nisa in Scunthorpe, where I’d seen some impressive systems and processes, and I knew I needed to change how Filshill was working.

Because of the bad debt, the business had to contract and I had to make 40 people redundant – the first time in the company’s history that anyone was made redundant. It was very difficult for everyone.

Did anyone help you in your role?

I was lucky because I had Ian McDonald [sales director] and Fraser at my side – stable pillars that Dad had trusted implicitly to go through this early transition.

I can also remember saying to Jim McIntyre from Royal Bank of Scotland that I knew everything about the Filshill business, but I didn’t know how to run a business. Jim introduced me to James Andrew who was president of the Glasgow Chamber of Commerce. He was also ex CEO of a family business. That led to me getting together with James for one day every month for three years; he became my mentor.

How would you describe your management style at that point?

One of my biggest mistakes early on was thinking, ‘I’ll make sure that I’m involved in everything’. Very quickly I created a culture of upward delegation when no decisions were being made in the business without my involvement, and I was drowning. James [Hannah’s mentor] encouraged me to focus on going from content to context. It was a very beneficial process.

At that time, Ian had decided to retire, and I’d been doing some work with Craig Brown [ex Sainsbury] and Chris Miller [ex Solstice Brands and Harviestoun Brewery]. I also appointed a logistics consultant.

We knew that Filshill had to become more efficient, so we measured every process in minute detail. That triggered a whole lot of things, including moving our delivery method from pallets to cages and changing our pay structures so that employees got paid for the work they produced. We managed to generate a million pounds worth of savings in the space of two years [2012 and 2013].

What other changes did you make to the business?

Warehouse banners highlight Filshill’s core values, which were chosen by the staff.

James [Hannah’s mentor] always said to me, ‘Culture eats strategy for breakfast, lunch and dinner’. My response was, ‘I don’t believe you’. But actually he was 100% right.

I had my team in place: Nick was a director, Chris became chief commercial officer, Keith [Geddes] became chief financial & operating officer, and Craig joined the business as chief sales & marketing officer. We all had different and complementary skills.

We decided to address the culture of the business. We asked all our staff what it meant to work for the company and we built a series of core values together. Wind the clock forward to 2021: it was during Covid, the business was doing OK, but we realised we had to revisit our core values. Nick, Craig, Chris, Keith and I locked ourselves in a room for two days and built a 10-year target, three-year picture and one-year plan, all based around our core values.

We agreed that our 10-year target would be to hit £350 million turnover by 1 February 2031. We got all the managers together and said, ‘Today’s date is 1 February 2031, we are a £350 million turnover business, we want you to talk to your teams and tell us what you did in the last 10 years in your department that got us to this point. Be bold, be brave, think completely outside of the box’.

The ideas came back, and we built an accountability chart. Every bit of functionality was appointed to an individual or a department, and we also introduced weekly and monthly KPIs [key performance indicators]. All of a sudden, things were motoring. People were empowered to make decisions.

Now, every week, the management team get together for an update and to flag any issues. This gives everyone in the business the same message. It’s the single source of truth, I guess.

Has your own role evolved as you have developed the culture of the business?

Yes. I was previously very actively involved in senior supplier engagement and customer engagement, but a lot more of my time is now about context. My five areas of accountability are culture, vision, strategy, innovation and diversification.

Every January, I present to every person in the business about how we did against our company objectives: where we succeeded, where we missed, how much turnover and profit we made, how much we invested, etc. I feel that’s important because you shouldn’t be worried about sharing that information with your people. It builds employee engagement and alignment.

How would you describe your management style today?

Simon Hannah (centre) with chief financial & operating officer Keith Geddes (right) and pick tower replenishment operative John Meazh.

I’ve always had empathy in my leadership style, but I’m definitely more empathetic now than ever before. Covid has taught us a lot, and I can’t overstate how important mental health and wellbeing are within the business.

I’m strategic and energetic, but I’m also very relaxed. I don’t get stressed – I genuinely don’t – because I know that if there’s a problem, I can share it with my team and we will work out a way of sorting it. I also make sure that we have a lot of fun.

I recognise that every business has lots of spend aligned to training and learning, but how many leaders invest in their own journey? There’s a perception that because you’re the leader of the business, you know everything. You don’t. No one does, so I’ve got to keep learning. I am constantly searching for new innovation that I can bring back to our business that is going to get us in great shape for the sixth generation rather than just focusing on the now. That’s where YPO (see box below) has been helpful.

What are the top business lessons you’ve learned along the way?

Know your weaknesses and your strengths, and surround yourself with people whose greatest strengths are your biggest weaknesses. Trust your people, build accountability and empower them to make decisions.

Also, live and die by your core values, which need to be built from the employees up. There are lots of businesses out there that have a series of values, but are they demonstrated? At Filshill, for every decision we make we ask ourselves the question: which one of our values does this align to?

As a fifth-generation family-run business, what is your succession planning strategy? Have you considered the employee ownership model?

Interestingly, you look at businesses that have gone through employee ownership – Parfetts for example – and often the family wanted to exit the business. I’m sure that Steve Parfett had a queue of the biggest companies wanting to acquire that business – it’s a fantastic business – but he chose employee ownership. It offers lots of benefits for employees and it’s incredibly tax efficient, but for us we’re committed to the Filshill business. As a family, we’re not looking to exit it. We love it.

Filshill’s fleet in front of Paisley Abbey in the 1950s.

We’ve been in the business since 1875. In two years time, we’re going to be 150 years old. I see my job as a custodian, getting the business ready for the next generation. I’ve got lots of ideas, lots of energy. I see huge opportunities for the sector, I see huge opportunities for convenience specifically. The business is in great shape and we’re ready to continue to grow.

If we want to be a £350 million turnover business by 1 February 2031 the roles and responsibilities of the senior management are going to grow. Succession is about identifying who the individuals are in the business that are going to step up and expand their roles and responsibilities in the future.

By 2031 I’ll be 53. Still pretty young. My son Adam will be in his late 20s, my daughters Abbie and Zoe will be 22 and 18. If they were interested in coming into the business, I definitely would want them to go and work in a big company first. I also have nephews and nieces. The business is big enough for them all to work in it, if they choose to, but there’s no pressure on them to do that. I think they’re the luckiest kids in the world because they’ve got a choice.

Also, there’s nothing wrong with a business remaining in family ownership even if the family don’t want to run it. CJ Lang is a good example of this – the family still own it but have recruited highly talented people like Colin McLean, Jim Hepburn and Stephen Brown to run the business.

For us the biggest benefit of being family owned is that we don’t have to report to shareholders or the City. If we decide that our staff need a bit more support [for example, we recently made a cost-of-living support payment to all staff] we can take that step without having to justify any impact on profit.

You acquired the Iain Hill business last year. Are any more acquisitions in the pipeline?

I’m pretty sure that in 15 years time the business will be very different. Diversification is going to come from within the sector, and that could involve acquisitions. There are always good businesses that you watch. However, our primary focus right now is to maximise the efficiencies in the new environment because the last thing we want to do is take our eye off the ball of what we’ve worked so bloody hard to build in the last few years.

Who do you admire most in business?

Simon Hannah with the person he admires the most: his dad, Ronald.

Charles Wilson [ex CEO of Booker] is an incredibly smart guy, and I also admire and respect Andrew Selley [CEO of Bidcorp] a lot. He runs a massive business and he’s a great communicator. Everyone I speak to at Bidfood loves working for Andrew.

But, in answer to the question, I’m always going to say my Dad; he’s my hero, he’s who I admire the most. When I came into the business, he said, ‘It’s not just about learning the business, it’s about learning the people’. When Dad looked you in the eye and shook your hand, there was nothing else that was going to happen other than what was agreed. He is totally trustworthy and a true gentleman. He has had a very positive influence on me.

Good manners, high moral standards and traditional family values also came from my Mum. We’re lucky as a family; we’re very close. Mum and Dad still have us round for Sunday lunch, and Mum tells us that we’re not allowed to talk about the business around the table. We still do though!

Dad (now 77) is still really interested in the business and will phone every day, asking questions. He is such a good sounding board and he’s so proud of what we’re doing.

Do you have any personal or professional ambitions that have yet to be fulfilled?

I’d like to be a single handicap golfer! I play off 11 at the moment. In terms of business ambition, hitting that £350 million turnover target by 1 February 2031 would be incredible. And let’s say we mess it up and only get to £320 million – it wouldn’t be that bad, would it?

‘I’m a better leader, husband and dad as a result of being in YPO’

YPO (Young Presidents’ Organization) is “probably Scotland’s best-kept secret for business leaders”, according to Filshill’s CEO Simon Hannah.

Described as the global leadership community of extraordinary chief executives, YPO has 34,000 members worldwide, and Hannah is membership officer of the Scotland Chapter.

He recalls: “I wanted to learn about what’s going on outside of our sector because wholesale – and Scotland – can be a bit of a goldfish bowl at times. I met with David Sands [former CEO of a family business with 29 stores] who had been in YPO for a while and it didn’t take him long to convince me to join.”

To qualify for membership, applicants need to be under 45 (50 for women) and lead a business with a turnover in excess of £10 million.

“My forum get together every six weeks and the emphasis is on talking about you, your family and your business,” Hannah explains. “As the saying goes, it can be quite lonely at the top, and when David told me that YPO is a space to offload, I thought that was exactly what I needed.

“People expect a CEO to be composed and calm all the time; sometimes it’s quite nice to go there and feel free to be emotional. I’m definitely a better leader, a better husband, a better dad, as a result of being in YPO.”

There are various elements to the organisation, including an online exchange where YPO-ers can reach out to members across the world, and local, national and international industry networks that organise learning events.

Members can participate as little or as much as they wish. In Hannah’s case, during lockdown he completed a course called The Culture Map run by Harvard Business School and INSEAD, and this year he has already attended an event in Austin and he has trips planned to Kentucky, Toronto and Miami.

“There’s some really interesting innovation we’re looking at, around data, machine learning, artificial intelligence that I have picked up on my YPO travels. I would never get exposed to this if I didn’t invest the time in attending international events,” he says. “YPO has opened my eyes to just how big the world is and how many things in other industries can be applied to what we do in wholesale.”

In addition to YPO, Hannah is involved in Scottish Edge, which identifies and supports entrepreneurial talent. As part of this, Hannah coaches and mentors up-and-coming entrepreneurs.