At the start of the coronavirus crisis, Hattons Model Railways MD came up with a bold idea that had the power to help everyone – competitors included.
Hattons occupies a special place in the world of model railways. It’s the industry’s big hitter, the Tesco or Amazon of miniature trains with a team of 65, a large online presence and a sizeable store in Widnes that attracts enthusiasts in their droves.
At the start of the coronavirus crisis, MD and majority shareholder of the 74-year-old company Richard Davies figured that, like him, his competitors were about to enter a period of unprecedented uncertainty.
While his own business was well placed to cash in on online orders from model railway fans stuck at home with time on their hands, he was concerned about the welfare of his employees. It was such a frantic and unsettling couple of weeks that he proposed a “non-aggression pact” with his competitors, which would see everyone cease trading for a while so that they could all take stock of the situation. If everyone agreed, no single firm would be able to prosper at the expense of the others.
“I actually felt that Hattons was in a position to be able to benefit from the government lockdown,” said Richard, “but I thought that the best course of action was for all of us not to compete during a very tough time. The supermarkets were starting to collaborate with each other, and I thought this was rational and fair, so I set up a Zoom conference with our competitors where I suggested we all shut our doors and worked out together when and how we would reopen. I wanted to keep the playing field level and protect our staff.”
All or nothing
It didn’t work out. Richard explained that while three of the seven parties he tried to get onside were in agreement, the pact needed backing from all of them to work. In the end, it was probably good for his business that it didn’t happen. Hattons has been busy, but he’s not sure if the same can be said for all competitors.
Some have certainly struggled, he said, including one from whom Richard bought stock because they were unable to sell it. In order to give the other business some much-needed support, he resisted his usual instinct to negotiate and paid what they were asking for.
“I do actually care about everyone in the industry,” he commented. “I’ve got a good relationship with most of the people in the model railway sector, and I’m not just in this for the short term.”
While the retailers might not have formed the alliance Richard had been hoping for, the Hattons MD does feel that the pandemic has brought them closer together. “We’ve all been talking about our attitudes to re-opening our stores and about ways we can help each other,” he added. “We’ve been sharing links about safety equipment that will enable us all to trade, and we’re sharing stories that can help others to learn. Everyone is better off if we collaborate.”
In truth, however, he has come to accept that partnerships aren’t always easily formed. Next time, he said he would be prepared for negotiations to take longer than anticipated and would also come to the table willing to give away a little bit more than everyone else, if necessary, just to get things rolling.
“I don’t think there’s enough hours in the day for competitors to be seen as rivals,” he said. “The world is changing so fast. If you attempt to do everything on your own then you’ll fail, so play to your strengths and try and build relationships with the right people.”
The reset button
A major positive to have come out of the coronavirus crisis, said Richard, is that it has given him the chance to press the “reset” button. Specifically, he’s been able to think more laterally – and enjoy the reduction of “noise” around the business.
“The definition of running safely during coronavirus is almost identical to the definition of running a business elegantly,” he added. “I would say that we’ve been able to reduce handling of our stock by 20 per cent or more. It’s been like a time and motion study and the business is running more efficiently than ever.”
Richard’s top three tips during the coronavirus crisis
- Trust your staff
I thought that when we were going to move people off site that I would be scrutinising all the staff, but I’ve been really surprised by how we’ve trusted them. It’s been good to realise that I have got great faith in my people.
- Have a clear plan for how software is going to be used in your business
In 2020, every company that exists needs to regard itself as a technology company.
- Look at the numbers, but consider gut feeling
You have to get the balance between data/spreadsheets and what you emotionally feel is the right thing for the business. You can’t allow one or the other to become dominant.