You can listen to the podcast version of this interview at the end of this article.
The best piece of management advice Sir Tom Hunter ever got was “leave others thinking of their actions and not your own”.
The one-time billionaire businessman practises what he preaches, giving millions to projects with his venture philanthropy model, where his input is matched or supported by other income streams in order to bring about a positive outcome. His Hunter Foundation has two clear aims – to help fund educational and entrepreneurial projects in Scotland and sub-Saharan Africa.
He set it up in 1998 when he sold his business, Sports Division, for £290 million.
“I was actually at an Entrepreneurial Exchange conference when I got the phone call,” he tells Scottish Entrepreneur.
“At the time, JJB Sports and Sports Division were very big rivals, so when Dave [Whelan of JJB Sports] phoned saying would I think of selling I said ‘no, no, no, I’ll buy you!’”.
“Sports Division had been my baby for 14 years, it had taken over my life. It had gone from just myself to 7500 people and I was loving running the business. But once Dave called and I took a cold towel and thought it through, I thought this could be another exciting chapter. I had probably reached the level of my own competence.”
Together with his wife Marion he made three key decisions – not to run any more businesses, to set up a charitable foundation and not to leave his children huge wealth.
“The children were pretty young at that time so they travelled to Africa with us and saw that life wasn’t all about fancy houses and we just generally talked to them and brought them up to be independent thinkers,” he explains. “We said ‘go and find out what you want to do and we will support you.’ We have a couple of musicians and a marketeer and they’ve done it for themselves, which is important.”
Born in New Cumnock, Sir Tom learned the business basics at the age of six, spending time with his father in his grocer’s shop. Later he had a stall at the Glasgow market The Barras, selling slippers, then he started selling trainers out of the back of a van. His sporting goods empire grew from that point.
“Doing stuff like that is what I call my real education,” he says. “Actually getting out there and speaking to customers and being in places like the Barras is a real education. I haven’t met anybody who’s successful who’s not an extremely hard worker, it’s definitely one of the pre-requisites to put the hours in, but to put them in on the correct things.”
His father gave him his first loan of £5000 and remained a huge influence in his son’s life, coming into the office until the day he passed away. His wife, too, has been an invaluable source of support and encouragement.
“When you’re involved and passionate about your business you sometimes can’t see the wood for the trees,” he says. “Marion’s blessed with something called common sense. She can very quickly get to the nub of things and she keeps my feet very firmly on the ground, that’s for sure.”
Sir Tom is very honest about the challenges he has faced, both as his business grew and later as chairman of the Hunter Foundation and chief executive of investment vehicle West Coast Capital.
In the early Sports Division days he opened an indoor go-kart track in Maryhill, which lost him money and focus, but it was when the credit crunch bit in 2008 that he suffered his worst loss. £250million was wiped from his portfolio and he simply didn’t see it coming.
“I took my eye off the ball, we lost focus in our business and we weren’t prepared for the financial crisis – these are my mistakes,” he admits. “It was a sobering time and it cost us a fair amount but I like to think we’ve learned from our mistakes and we won’t be making them again. I knew it was my fault, I didn’t do a good enough job and that was a pretty low point.”
Sir Tom’s pragmatism is apparent throughout the interview and when I ask him if he has a bullshit detector, he jokes that Scots are given them at birth, it’s just that his is particularly fine tuned.
He is a passionate Scot, eschewing the tax havens of the very rich to remain in the country of his birth. He points out that whenever he travels and tells people he’s Scottish, 99 times out of 100 he gets a positive response.
Encouraging entrepreneurialism in Scotland is one of his passions. It forms a large part of the Foundation’s work - incubator Entrepreneurial Spark; business fund Scottish Edge; social enterprise Social Bite; the Scottish Business Awards; and the Hunter Centre for Entrepreneurship at Strathclyde University are among the initiatives it supports.
“A couple of statistics struck me recently – 100% of the new net jobs are going to come from companies under five years old – therefore are we educating our young people to work in and lead scale-ups?” he asks. “The World Economic Forum said that if you’re in primary school today, 65% of the jobs you’re going to come out and do haven’t even been invented yet – the challenge for us is to prepare our young people for that.”
He admits to being daunted by the word philanthropy when he first began to consider charitable work – but when his father put it in business terms, he realised it was just common sense.
“When we sit down with a stubborn problem and set out with great partners to change it, it’s a bigger buzz than any business deal because it’s transformational for a community,” he explains.
Having decided back in the 90s that he and his family did not need any more wealth, it seems he has stuck to his guns. He admits he is still trying to strike the balance of leaving neither too much nor too little to his three children, but hopes he can ultimately help the country he loves so much to move forward.
“I’d like my legacy to be that we were the catalyst for a positive change in Scotland – I’d be very happy with that,” he says, then adds “but I’m not planning to croak it any time soon. There’s still a lot of work to do.”