An Interview with Victor Watson

Victor Watson
Victor Watson

An interview with Victor Watson. This business man has “been there and done that” in the course of a life in business. Building up a company, defending it from unwelcome predators, developing and launching new products, building successful commercial partnerships……… The chance to eavesdrop on the conversation of such an experienced man is invaluable. Please take advantage!

Victor was the Managing Director of Waddingtons, a very successful printing, games and manufacturing company based in Leeds, Yorkshire (UK). He is now President of Print Yorkshire.

Bizenko - What has been the greatest challenge faced in your career?

Victor Watson

Many people could answer this for me. The greatest challenge was fighting the unsolicited takeover bid from Robert Maxwell in 1983, followed by a second bid from the same guy the following year in 1984.

Many people thought we were bound to lose and Robert Maxwell was bound to win as he had such a good reputation for success in business. He didn’t have a good reputation in other regards of course,

Bizenko - That poor reputation came out later, didn’t it?

Victor Watson

Many people disbelieved him in 1983, because he had been in trouble before. But amazingly, despite this, many people believed him and lent him money, and continued to do business with him. He had many supporters. He didn’t deserve them, but he had them.

Although, he was a good businessman in some regards.

Bizenko - What was the name of the predatory company?

Victor Watson

Pergamom press and British Printing Corporation.

Bizenko – Can you tell us a little about your company, Waddingtons?

Victor Watson

Waddingtons were a famous manufacturing company. From a household point of view we were famous for playing cards, and board games and jigsaw puzzles, which was about 15% of the business. The main business was packaging, in which area we were one of the 6 best companies in the UK.

Every household would have been aware of our company through Waddingtons Games. Shareholders were aware of it from our packaging and Printing strengths.

Bizenko - How did the takeover bid come about?

Well we had an initial takeover bid from someone else (Norton Opax), and as I described Mr Maxwell at the time, he was like a shark that smells blood and comes swimming over to the action.

He did not initiate many takeover bids, but he joined the action. He let someone else think of the ideas. He was an opportunist, not a planner. His bid for us was opportunist.

I remember his call to us. The call was early in the morning, 7am, on 17th June 1983, to my home number. However, I was at the office. I think he was impressed with this. You see, Waddingtons were in a bit of a fight and we had the business to run. Maxwell came on the phone line with those plumy tones of his saying:

“I have come to rescue you from those awful people, what do they call themselves, Norton Tampax?”Â�

The real name was Norton Opax, so he had a bit of a sense of humour. And I said:

“We do not need rescuing Bob!”Â�

Later, on the radio, I said that I had used two words, but that because it was a family programme, I couldn’t repeat the first, but the second was OFFÂ�!

Maxwell replied:
“Well I am going to bid anyway because I think you need to be saved, and we can do great things together. You will be second in command of Pergamom press and BPC.Â�

If Maxwell would have organised it better, we could have done great things together. But he wouldn’t, so I said (and I am rather pleased with this mixed metaphor)

“I do not want to play second fiddle to a one-man band!”Â�

I had observed Maxwell in action and concluded that, basically, he was a one-man band. He was the sort of man who made all the decisions, and then changed his mind. However, he would then only tell half the people of the changes, so that half his people did know and half did not know the plans. There was confusion the whole time.

And yet, he was brilliant. People ask me how I can say that about the man who was, at the time, the enemy�, but you have to be truthful. He built a great business. Later on he got too big for his boots. Later on he got a propensity for not telling the truth.

Bizenko – How did you discern that propensity not to tell the truth?

Victor Watson

Well, had already been in trouble and had an “Inspectors report”. The Board of Trade ran an investigation into his dealings, and they produced that marvellous statement that he was not fit to be steward of shareholders fundsÂ�, a most damning statement really.

The report was about an inch and a half thick of A4 paper. The final page or two was taken up with 120 conclusions, and each one was damning of Maxwell. The points included falsifying accounts, backdating agreements, untruthfulness of many many kinds. He was a cheat.

In the early Pergamom days, he already had four companies, two were privately owned and two were publicly listed. One of the public companies went bankrupt, being owed money by the private company, which was never repaid.

One of the shareholders of the public company was Harold Macmillan (the former Prime Minister) And even then, with that bad episode, people seemed to forget it, they would say: Well, he’s a foreigner, and doesn’t understand how we work.Â�

Maxwell jolly well did understand how we worked. People would make allowances for a foreigner. Perhaps the British are too tolerant.

Bizenko - How did you resolve this challenge?

Victor Watson

We decided to fight the takeover really hard. Remember, most people thought that we would lose, including some people in our own camp. So our first job was to assemble a team of really competent people. Like Cazenoves the brokers, Kleinwort Bensons the merchant bank, PWC the accountants, very good lawyers and fantastic PR people.

The next task was to persuade these people that we were going to win. Merchant banks tended to think that a victory in any takeover battle was to secure a good price� (to include a good fee for them!). However I said that a good price was not a victory. That would be defeat. We must retain our independence.

The key to fighting a takeover bid is to assemble a good team, make sure that they are properly convinced and directed, and that they all think the same way.

Bizenko – What does victory look like when you have two companies trying to take you over?Â�

Victor Watson

It’s a battle for the minds of shareholders and also the press. One must master the Public Relations and press statements. All information is valuable, and telling the truth was most important.

Bizenko -Â So the shareholders had to be persuaded that Waddingtons remaining independent served their best interests?

Victor Watson

Yes and it is not always easy to convince people. In our case the bid in 1983 was about 100 pence. Our merchant bank said that we could defend this bid up to about 180 (pence) per share. In August a few months later, we managed to win at 280 pence per share.

Eighteen months later the price was 500 pence per share, so if people had been paid out at 284 (pence) they would have thought that it was marvellous, but it was not, compared to what
was to come later. The great challenge was to convince people what was possible and what was the true value.

Bizenko - What happened to the predatory companies? How does a company in their situation realise that their bid has failed?

Victor Watson

Well they both kept on fighting us right to the very end, believing that their bid was ok. It was a close run thing.

In the case of a bid, the end of the processÂ� is determined by certain rules. A bid cannot go on forever. There has to be a fixed closing date for any bid. In fact the Maxwell team made the mistake of fixing a closing date to suit themselves, which they then wanted to change. But they couldn’t change the date.

When they realised this, wanted to change the terms. However, the rules said that you couldn’t change the terms. They wanted to increase the dividend (offered to shareholders), which effectively changed the terms. But we managed to get the takeover arbitrators to tell them that they attempt this change of terms, as to do so would be against the rules.

There are a hell of a lot or rules, and instances of applying the rules and regulations to try to win in this sort of contest.

The main dialogue was with the shareholders. Did they want to support an old established company that had looked after shareholders, which we did, or did they want to support some other arrangement? There were many shareholders who wanted to support us on emotional grounds, because they liked us and they felt that they had been treated fairly by Waddingtons.

Bizenko – What makes a good manager?Â�

Victor Watson

These days the emphasis is not on management but on leadership. Lots of people say that everyone can be a manager, but not everyone can be a Leader. There is some truth in that, but I think a good leader needs to be a good manager, and a competent administrator.

A good leader formulates with his team a good plan, good aims, and then manages to get everyone pulling in the same direction. You do that by good management. But also by administration, by making sure that everyone understands the plan, and all of the information.

When there are changes, making sure that everybody knows about them, keeping them all together, leading the team. Leadership is important, but the component parts also need to be drawn out, they include management and administration, along with inspiration of course!

Bizenko – What attributes and behaviours typify an idealÂ� customer?

Victor Watson

Being able to pay the bill, first of all.

An ideal customer, really, is someone who is on the move�, someone who has good ideas, a good business and is growing. So you can follow the star (as it were). It seems to me that that is more important than anything else. Having as a customer a successful company. A growing company beats all of the other things.

Bizenko – How do you find and retain an idealÂ� customer?

Victor Watson

You look around all of the time for customers through a sales team. The companies who are successful are fairly obvious. They are the ones whose products are better displayed. For the public companies, this is evidenced in their report and accounts.

Bizenko – Describe what you consider to be the vital components of the perfect business deal?

Victor Watson

Basically, I think it is where everybody thinks the agreement is useful for him or her.

Different partners all have their plans and aspirations. The perfect business deal keeps them all happy. If they all think that they can get something out of it, they can put something into it.

Probably the other important thing is that they all get on with each other. If a deal involves any sort of partnership, getting on with each other is important.

Trust is important. I find it amazing how many joint businesses fail because people have not analysed these matters correctly at the beginning.

Having different aspirations or objectives means that they are bound to come to a disagreement sooner rather than later. In fact, I think disagreements in joint companies are frequent, but if there is a good relationship, they can be resolved. But if there is distrust, or a poor relationship, then it will end in failure.

Bizenko – Have you ever experienced this?

Victor Watson

Yes. On one occasion we had a joint venture with Metalbox, a very large business in this country, and International Paper, one of the largest companies in America. We did get on well with them all. But we did have different objectives when it came down to it. Objectives that we could not afford as a smaller company. So the venture came to an end. Fortunately we got on with everybody, so we were able to disentangle it. Otherwise it would have been a disaster.

Bizenko - What questions do you ask in order to avoid problems in any business situation?

Victor Watson

You need to know where the other party has come from�, what their objectives are and their financial strengths. You need to know (from a possible partner) what commitments they have, what promises they may have made to other people.

I think probably that is the most important consideration; What people call baggage these days. Knowing what people have committed themselves to in other ways. Either financial or otherwise.

Bizenko - And how would you uncover these sorts of things

Victor Watson

They come out through conversation and analysis. The process is called due diligence. but it is more complex than that, because sometimes the important information isn’t obvious. Through conversation you learn information that might not be listed anywhere else.

Perhaps the boss of a company is terminally ill, and no one has told you. It can be very important if that company relies on that individual. Intelligent conversation, anticipating and asking relevant questions to find out everything you need to know.

Bizenko – What business practices or habits have impressed you when dealing with other companies (customer or supplier)?Â�

Victor Watson

I am impressed by those companies that seem to have a straightforward idea of where they are going. In addition to clear heads, those companies that have simple systems, those that seem to be free of bureaucracy. Most of all those who treat their own people well.

Bizenko – How would you go about getting to know a company’s systems?Â�

Victor Watson

Only by conversation and experience. Companies that are incredibly complex, even for the simplest little things like expenses and permission to purchase, would concern me. Some companies are incredibly bureaucratic in these matters.

I have observed that the use of complex systems often comes about because the company management do not trust anybody. They have these systems to try and catch people out. But that is no good. This level of distrust is like a cancer in the company.

Bizenko – Which marketing campaign has made the best impression on you and why?Â�

Victor Watson

I have thought hard about this. I think the most remarkable marketing campaign involves a story about Robert Maxwell.

Maxwell decided to bring back a London daily newspaper, and announced his intentions loudly. Mr Maxwell had a rival called Lord Rothermere of the Evening Standard. Rothermere had previously had a title called the Evening news, which had been withdrawn, leaving only one evening paper (The evening standard) at the time of the Maxwell announcement.

Maxwell was correct in a way, in that there was room for another one. But secretly, Rothermere and his team decided to bring back the Daily News, so that there would be two evening newspapers in London, both with a good name� and both owned by Rothermere.

Rothermere brought back the Evening News the day before Maxwell was to launch his new newspaper. It was a secret re-launch, and a surprise. Of course Rothermere will have had the necessary distribution infrastructure in place to achieve this because he owned the Evening Standard.

The re-launch of the Evening News was absolutely devastating for Maxwell. Firstly because it was a surprise; and secondly because the Standard was being sold at a high price, and the Evening News was sold at a low price.

Maxwell did not know what to do. Should he attack the expensive newspaper on quality, or the cheaper one on price? Maxwell didn’t know how to price his newspaper. The most pressing problem was that he only had a day to work on his strategy.

Maxwell failed, his newspaper was a complete failure, due to Rothermere’s tremendous marketing coup of bringing a newspaper to the market with out anybody knowing. Maxwell had trumpeted his new newspaper, and so Rothermere took the decision to outflank Maxwell.

Bizenko - Which marketing campaign has made the worst impression on you and why?�

Victor Watson

I cannot answer that question, as there have been too many bad ones. I think that there are too many bad advertising campaigns on television these days.

I suspect that the makers of some of the commercials are trying to win prizes for creativity, rather than help their clients. Consequently some of the target consumers do not know what the product in question is. It is a lot of money wasted. The failed adverts often are not direct enough.

Bizenko – What factors make a manufacturing process successful?Â�

Victor Watson

Well if a product or process is patented (protected) it has a very good start. It has to be something that people want (so it depends on the buyers) does it work? Is it reliable? Is it what everybody wants? Is it new? Is it fashionable?

My company went into Milk packaging in the 1930s (long before I was involved) and for the time it was a very bold move. The initial attempt was killed off by the events of the Second World War.

At the end of the war it was hard to bring the product back because the raw materials were twenty times the price. Also we were up against doorstep delivery, which was the standard practice in the UK, where as in the United States, the standard practice was buying milk in the supermarket.

A new opportunity arose for this packaging when J Arthur Rank (the cinema magnate) decided he wanted to sell orange squash in the cinemas. We altered our packaging to suit Orange squash (which is acidic), with a special wax based coating.

That became an enormous success. Rank actually said, rather rashly, at a shareholders meeting, that he made more money selling orange squash than he did selling cinema tickets.

Our customer was Schweppes (later to become Cadbury Schweppes), one day Schweppes said to us:

“We are doing very well with this product. You are making a lot of money, we are making a lot of money, but basically the product isn’t good. People drink it because it is cold, but when you warm it up to room temperature, it tastes awful. And it tastes a little bit like wax as well. So Waddingtons, you must find a new package, otherwise we are all finished”Â�.

Our expert (Norman Gaunt) who was a brilliant Chemist and researcher first of all thought of plastic coating cardboard. He then had the idea to use the plastic but to remove the cardboard substrate altogether. In other words,

Why not just have a plastic container?

So he basically invented a plastic container (the first one) for a soft drink.

That made another fortune for Waddingtons, and put us into the plastics packaging business. Our product was a deep-drawn, thermo-formed container. It was a patented process, well researched, something that was needed by the consumer, and therefore a perfect example of a good manufacturing process.

Bizenko – How long was it before any competitors were able to compete?Â�

Victor Watson

At least ten years, by which time we were developing other types of plastic container for other products. For example, plastic inserts for chocolate boxes and other extensions.

Comwol – Please recount your experiences of introducing new processes or technologies to any business?Â�

Victor Watson

The most important one was the plastics one that I have just mentioned.

However, they weren’t all successful. The saddest one we had was called monowebÂ�, which was a self-adhesive label process. Self-adhesive labels are generally supplied on a substrate, which is thrown away. You peel the label off, stick the label onto the package and throw away the substrate that the sticker arrived on. This was very wasteful.

The same guy, who invented our plastics business, had the idea to supply a self-adhesive label, which would have no substrate at all. So it would be self adhesive on one side, and the other side would have a release coating on it. So that you could roll it up. It would be sticky on one side, and self-adhesive on the other (a bit like sellotape is).

We developed machinery for it, and got customers like Heinz. After a while all of the Tomato Ketchup bottles had our monoweb label on. But in the end, the idea failed; you might ask,

How could it possibly fail when it was saving all of that money?�

It failed because the opposition caught up, they all increased the speeds of their machines, reduced the weight of their substrates, made themselves much more efficient.

The efficiency of our rivals effectively made our product rather too complex and cumbersome and expensive. It was a great sadness, and not just for us, but also for those companies who we had in place as licensees.

Monoweb petered on for a while, but it became obvious that it did not have the competitive edge that it had had when it launched. You could argue that we did a great service to the community by forcing competitors to become more efficient. That’s what competition does for you.

Bizenko - Who is involved in a successful manufacturing process?�

Victor Watson

One leader (in our case the chief chemist). The right leader attracts the right team. A team of inventive and lively people.

Also, you need to keep these people in check so an accountant should be involved. The job of the accountant is to do the sums and to present the team with the correct figures, telling them how much they have spent, facing them with the hard facts about cash.

Bizenko - What factors are crucial in any R&D campaign?�

Victor Watson

I think it is vital to encourage your researchers and developers to get out and about. They have got to get to know customers and suppliers. They have got to go to exhibitions, travel abroad and so on. They also have to feel that they have the right to do all of this.

Give these colleagues the responsibility and give them the authority to do it. There is no substitute for a regular call to your customers. Finding out what the customers are going to want. Finding out enough about their business to know what they might want if only it was available. They cannot always tell you what they want, so if you can come up with something that they might want, then you are away.

Bizenko - Which business person or event has had a motivating effect on your attitude towards business and why?�

Victor Watson

Robert Maxwell! His actions had the effect of putting Waddingtons on the main stage. We beat him twice, which was marvellous for the morale of the business. Everybody felt great. We had customers who wanted to deal with us because we were winners. I was always well aware that it was good for us.

At the Annual General meeting during the takeover episode, we had a packed house at the Connaught rooms (a meeting place in London). It was a very busy meeting with advisors of all kinds, points of order and so on. I was very busy. At the end of it my wife said:
You really enjoyed that, didn’t youÂ�?
And she was correct, I had really enjoyed it.�
It was a bit of drama. Some people in my position would have been fazed, but I really did enjoy it. I was very motivated by it all.

Bizenko - Describe the events or personality traits that have given you a bad impression about (a) business?�

Victor Watson

I’m not sure I understand the question. There are bad people in business, crooks, people who are twisters. Is this what you mean?

Bizenko -Well, we hope to get people interested in business. If there is a perception that there are crooks in business, we would like to point out that there is also plenty of room for the good guys too. How did you cope with the bad elements in business?�

I see. Well, the BBC has a stereotype of a businessman who wants to get rich quick and never mind the truth, and it’s wrong, it’s neither fair nor helpful. That is just the way they are.

There are academics that think the same way too. In fact I was involved in a conference for young people on Ethics, Morality and Business, and an academic from Leeds University presented a paper, which said that the object of business was to do the other man down and end up with everything.

I said to him
“This is hopeless. You suggest business is like a game of Monopoly where everyone goes bankrupt, except one person. That’s not like business at all. There’s room for everyone to succeed”Â�.

Twisters do not last for long. They get caught out. Often they caught out by their own deviousness. Cheats get caught out on the long term, even if the long term can take a while to arrive!

Bizenko – What business venture are you busy with at the moment?Â�

Victor Watson

My activity now is as an investor. However I am also president of Print Yorkshire.

Print Yorkshire are funded by the regional development organisation and our objective is to raise the profile of printing in the area. We encourage printing businesses to get out and about, make them know each other, make them more efficient. Leaner manufacturing is the name these days. Better manufacturing, better training, better research, everything you can do to make the printing business better.

Bizenko - Why does Yorkshire have such a strong reputation for the printing industry?�

Victor Watson

Yes it does, but nobody knows why! It happened about 100-150 years ago. The number of printing businesses in Leeds exploded from about the year1860 onwards, for the next 40 or 50 years. Leeds became one of the largest centres of printing in the land. But there is no geographical reason for it.

Then, of course the ancillary businesses grew up. At one time, there were four or five manufacturers of printing machines in the west riding of Yorkshire. Then the customers tend to grow, and the suppliers grow.

They call them centres of excellence these days, after Michael Porter (Harvard Professor) who studied these matters. He pointed out that there are certain centres around the world where this effect has been seen such as Florence for Leather, Amsterdam for Diamonds. They go on to dominate the world.

Bizenko - ” What is your Favourite business quoteÂ�

Victor Watson

There’s no substitute for a regular call on the customer.


Time spent on reconnaissance is never wasted (which is an old Army saying, but it applies well to business)
Bizenko - What is the one thing you wished you had known when you started in business?”

Victor Watson

I wish I had known more about Finance, and more about Commercial Law.

Bizenko - What was the most valuable advice ever given to you

Victor Watson

Don’t hang about. Get on with it.

Bizenko - “What is the best advice that you can pass on?”

Victor Watson

The secret of happiness is someone to love, something to do and something to look forward to.

Bizenko - What do you consider to be the biggest opportunity in business at the moment?”

Victor Watson

The Digital Economy. These days, people know more, in more detail and more rapidly then ever before. Taking business advantage of this is the biggest opportunity.

Bizenko - What would be your dream job?�

Victor Watson

An impresario. I would love to stage Aida at Wembley stadium.

Bizenko would like to say a large THANK YOU� to Victor Watson for his time and answers.

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