Channel Q&A: Mark Starkey, MD of Logicalis

Five individuals each holding a question mark in front of their faces

What has been your journey to MD of Logicalis UK?

After university I spent fours years as an accountant with Ernst & Young. Even back then I knew I wanted to get into IT, so I was keen to position myself within that industry from quite early on.

In 1998 I joined what was then called Logical Networks, entering the organisation to handle the financials for Westcon. I then went on to work for the CFO at Datatec Group, Logicalis’ parent company, where my role was pure-play finance and consolidation for the Group. After a year I returned to Operations, as back then there were two main sections of Logicalis’ business within the UK, and I became finance director of Satelcom.

As an accountant by trade, the career aim is always to become a finance director, but having worked in a number of roles by this point, I knew I didn’t want to do it forever. After about five years I stepped away from the FD role, becoming commercial director of Logicalis UK in 2005.

This was a role that I really enjoyed; the varied aspects of this job enabled me to learn much more about the whole business, getting engaged with customers, working with sales, and the wider business to deliver the right solutions, technically and commercially. I held this post for about seven years, during which time I was deeply involved in combining the operations of acquisitions such as Notability Solutions, Hawke Systems, TBC and CSF into the company to enable best value for us and for our customers.

My background in finance has stood me in great stead, but the commercial director role was really about customer engagement and sales. My predecessor, Tom Kelly, used to joke with me and say “Mark, you’re a salesman really, not an accountant,” and I believe you really need a mix of skills to become a successful managing director.

In 2012, I was appointed COO of Logicalis UK and became MD earlier this year. For me this was the right progression and I’m glad I didn’t step up from FD straight to MD – it was so beneficial to have gained the experience of being commercial director first, gaining the insight of working across the business and with our customers, before taking the helm.

What has been your best moment in business?

In August 2007 we won a seven-year contract, worth £74m, to build and operate a multi-agency public sector broadband network on behalf of the Welsh Assembly Government. The PSBA is essentially a Public Service Network for Wales and allows organisations and agencies right across the country, ranging from hospitals and universities to schools, libraries and police forces, to achieve better value for money in their use of broadband communications, improve agency collaboration and shared services as well as increasing the range of innovative services available to them.

I’m extremely proud to say that we’ve massively grown the network since the PSBA’s launch in December 2007, and we now have over 4000 public sector sites connected across Wales. For me it is all about operating a fantastic service for the whole of Welsh Public Sector and making sure we can bring innovative solutions to the communities in Wales.

What was your biggest regret?

I really don’t have one where Logicalis is concerned. There was a time, about 12 years ago, when I was thinking about leaving to go and start my own business. I was persuaded to stay and remain very glad that I did. Occasionally I do think, what if I had chosen to go it alone? However, I am glad I didn't, and remain thankful to have had a number of different roles in the same company. I think as an individual, you can learn a lot from that.

What is the best business advice you have ever been given?

A bit clichéd, but I’d say ‘revenue is vanity, profit is sanity’. Don’t be seduced by a big deal, you have to ask yourself what the real profit is behind those numbers. The worst thing you can do is sign a deal that makes a loss – it’s better at the time to lose the deal than lose money in the long run.

Some of our competitors have made the wrong decisions in the past. We’ve been very careful. That was very much a part of my remit as commercial director, to make sure we were signing the right contracts and making positive contributions. It’s easy to sign a duff deal, and the bigger the project is, the more sure you have to be that it is going to be good for the business.

Which company (other than yours) do you admire the most and why?

John Lewis – it’s an outstanding business model. Where everyone else in the marketplace seems to struggle, they succeed. Their company is completely customer-centric; it has a very clear consumer message and has fantastic customer service. It may not be the lowest cost, it’s slogan is ‘Never knowingly undersold’, but it’s all about the service. It’s an organisation that everyone in business can learn from.

Which other CEO do you believe has done an outstanding job? Why?

Jack Welsh, former CEO of General Electric. He’s just infamous. It may have been back in the 80s and 90s but I think you can still learn a lot from him. He had great ideas, he was candid, didn’t beat around the bush and said exactly what he thought. Ultimately, he knew how to make tough decisions and tackle things head on – it’s the best way.

What is the single biggest issue facing the channel in 2013?

The single biggest issue remains the economy. As a nation, we’re still very much bumping along the bottom, and at risk of a triple dip. The channel is extremely competitive, margins are being squeezed left, right and centre, every sale is a tough sale, and every customer is trying to negotiate the best deal, thereby squeezing every penny. The economy is the driving force behind the shrinking margins within the IT industry, I foresee the next five years continuing to be tough for everyone.

Logicalis says it has employed 70 people from 2e2’s UK operation and assumed some of its business – can you explain a bit more about that?

There were approximately 60 2e2 employees on one large contract, where we stepped in very quickly within a matter of hours and stood by the client to make sure that they still received the services from those 2e2 employees on site.

We then looked at a number of other assets to see what would make sense and be a good fit for Logicalis, we also sought a number of ex-2e2 employees that we wanted to bring on board. Securing this talent was highly competitive, but the way you do business counts, and going back to the John Lewis ethos, it’s not just about how you treat your customers, it’s about how you as a company treat your workers, how you operate, your core values, etc. Through our culture and approach we were able to secure a number of highly valuable employees, including a team with a focus on professional services.

What’s next for Logicalis?

Steady growth, with a focus on the bottom line and continued investment in our biggest asset – our people. That old saying: cash is king. If we make acquisitions, they’ll be the right ones at the right price, not through big borrowing but with our own cash. I think we are good at consolidating what we have and ensuring what we’ve got is the best it can be, this benefits both ourselves and our customers in the long term.


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