Lara Morgan Founder of Pacific Direct
Several years ago Lara Morgan promised her staff that if the
firm’s profits ever reached £1 million, she would take them
all on holiday to Barbados. In 2005 she delivered on her
promise. Morgan and her 26 staff flew to the Caribbean for
an all-expenses paid week-long holiday.
It was not the first time Morgan had showed her appreciation to her staff. One year she sent them all a huge bouquet of flowers after they exceeded their monthly sales figures.
Another time she taped £50 notes to the bottom of their chairs for them to find.
She says: ‘It is just a laugh. There are a lot more good people in this world than there are bad, and if you give people a chance then it generally produces motivation, teamwork and momentum. It is very important to me that we have fun in the workplace. I am here so many hours of the day that if I am not enjoying it, then what’s the point?’ Born in Germany, where her father was serving as an officer in the British army, Morgan was brought up in Hong Kong after her father was relocated there and from the age of 11 she was sent to boarding school in Scotland. She left school at 18 to get a job in Hong Kong selling business gifts to banks and airlines.
After three years she went to live in the Middle East with her fiancé where she sold advertising space for Yellow Pages, ending up as national accounts manager overseeing 128 people. She admits: ‘I was in completely over my head, it was sink or swim. But I like having a challenge.’
When the Gulf war started in 1991 Morgan and her fiancé moved to New Zealand where she ran triathlons instead of working until the two of them returned to the UK so that her fiancé could study for an MBA. On the way home they stopped off in Hong Kong to see her parents where Morgan was approached by the company she had worked for selling business gifts and asked if she wanted to try selling them in the UK.
She said yes and her big idea was born. On arrival in the UK she started ringing round hotels. She got her first order,Lara Morgan 51 for a pre-threaded needle sewing kit, from the Dorchester Hotel in London. She says: ‘As I left their office they reminded me that they would only take a few at a time, invoiced as and when delivered, delivered within 24 hours, and I was expected to hold stock, did I have a warehouse and would the items be customised – to which I said yes that was all fine. Which was utter rubbish – the warehouse was underneath my fax machine at home.’
She discovered she had a talent for selling, however, and by the end of her first year working alone had managed to rack up sales of £108,000, having imported all the products from Asia. She says: ‘I used to get up at six and drive to London, do five or six appointments and be back in the office by about four in the afternoon. Then I used to do everything else – the rubbish bins, the phone, the fax, quotes, typing, the accounts, all my bookkeeping.’
It was largely a process of trial and error. She says: ‘I was continually asking people what to do. It is of huge value if you have no pride and no shame and are willing to say:
“Look I don’t know what I am doing, could you help?” There was no planning involved.’
As sales mounted the business outgrew her relationship with her fiancé and she moved to live in a one-bedroom flat which doubled as an office. Indeed, she continued to work
Fact file
Marital status: married with three children
Qualifications: three A levels
Interests: reading business books, playing sports, going to the theatre and musicals
Personal philosophy: ‘If you don’t ask, you don’t get.’ from home for the next four years until her new boyfriend insisted that the office move elsewhere.
Then in 1996 European cosmetic regulations changed, making importing products more difficult and she decided it was time her company started making its own products. She spent £200,000 opening a factory in China and another £39,000 taking over one in the Czech Republic. She says: ‘We did them at the same time, rather stupidly. It was not planned. I bought the factory in China and then our Czech supplier said they’d run out of cash and could I find some. I said: “Yes – in return for 51 per cent of your company.”’ The gamble paid off and the business continued to grow, helped by Morgan’s enthusiasm for encouraging her staff to stay focused on the business. She took business books with her to read whenever she had to travel abroad for work and each time came back brimming with new ideas. She says:
‘My first three employees used to shake in their boots because I would come back from a trip with two or three books where I had turned over the corner of the pages and scribbled all over them. The first thing I would do after trips was photocopy pages of these books and put them in their in-trays with a note saying: “You might be interested in this, do have a look at this, read this.”’
She also discovered two books by an author called Bob Nelson which struck a chord. One was called 1001 Ways to Energise Employees, and the other one 1001 Ways to Reward Employees. She says: ‘I have got a business library in the office and whenever one of my employees does a good job I go down there and read a page. What is really exciting is that I turn over the top right hand corner if it is a good idea but I turn over the bottom corner if it is a great idea. So I even have a structure. If I really like a book I have got two copies of it.’
She admits: ‘My staff take the piss out of me relentlessly.
Some of the titles are so naff and yet there is something that attracts me to them. I think a lot of entrepreneurs constantly strive to improve their businesses but I just look for the simplest, fastest ways.’
By 1999 the business was growing so fast that Morgan realised it was time to work out where it was actually heading. So she booked herself onto a four-month business growth development course at Cranfield Business School in order to write a business plan. While she was there she also came up with the idea of incentivising her staff with the promise of a free holiday to Barbados.
She says: ‘When I wrote my business plan I decided to come up with something which meant that not only was I demanding a huge amount, I was also going to reward it with a similar amount. When you are making profits of £200,000 it seems pretty arrogant to say we are going to make £1 million profit and so I felt it was a good idea to give people a significant return.’
Before her incentive could become reality however the business hit a major hurdle. Two years ago, with the tourism industry on its knees, Morgan was forced to make 30 per cent of her staff redundant.
She says: ‘I almost lost everything. The combination of the buildings coming down in America, foot and mouth, Sars, chicken flu, the run up to the Iraq war and then general devastation of global travel meant that we weren’t seeing the same growth. It was pretty serious.’
She survived by staying determinedly upmarket and selling to only the best hotels. Pacific Direct supplies hotels in 103 countries including the Waldorf Astoria in New York and Sandy Lane in Barbados and was set to have a turnover of £17.5 million in 2006. In 2008 Lara Morgan sold the business for £20 million.
Now 42, she thinks the secret of her success is to be continually learning. She says: ‘I read business books passionately like a lunatic whenever I travel. When I came back from a trip from Italy, for example, I put 18 different sheets of photocopied articles into people’s trays which had been scribbled on and circled. There was an article on rent negotiation, there was one on new technology so I put that in the IT guy’s tray, and there was a marketing one on websites. I invest in my staff a lot – but I haven’t forgotten myself because I also need to learn a lot.’ Morgan is also a great believer in doing things her way. She says: ‘I like to do things differently. I don’t want to be anyone but me.
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