The journey so far

January 8, 2018

Last autumn, it was announced that Andrew Hodgson would be stepping down from his CEO role at SMD Ltd, a position he has held for over nine years. But far from indulging in a well-earned rest, the former North East Business Executive of the Year is now even more focused on his public role as chairman of the North East Local Enterprise Partnership. He talks to Alison Cowie about his career, his passion for the North and why it’s better to get involved rather than sitting on the sidelines criticising

Andrew Hodgson is a proud Northerner who grew in Workington, Cumbria. Four generations of his family before him worked in the steel industry so, unsurprisingly, after gaining a degree in economics and accounting from the University of Manchester, Andrew followed suit.

He was quickly inducted into the management programme of British Steel and by the age of 26 became corporate treasurer, where he helped to raise £500 million to refinance the organisation.

From British Steel, Andrew moved into the aerospace sector taking a position at BAE Systems. He then moved to Airbus and spent time in the South of France, where he was involved in the launch of the A380 programme as a senior director.

In 2002, Andrew returned to the UK to be closer to his family and took a role back at BAE Systems. He played an instrumental role in transforming a loss-making part of the company, which was later sold to Spirit AeroSystems.

When Spirit was floated on the New York Stock Exchange in 2006, Andrew – who wasn’t keen on being part of a corporate – exited the company and spent six months looking for his next role.

That came when a friend called to ask if he’d heard of SMD Ltd, a subsea robotics company based in the North East of England.

Andrew, who was vaguely aware of the name but not much else, set about doing his research which included a visit to SMD’s North East office to meet Alan Recce, who had established the company,

“I saw exciting products, committed people and a whole heap of potential so it was one of the easiest decisions I’ve made in my career to join SMD’s management team,” says Andrew.

Andrew began at SMD in September 2008, just as the company was hit by a global oil and gas crisis. Undeterred, the new CEO – who describes “resilience, balance and stamina” as his main business attributes – set about restructuring the company to better service its world markets.

He implemented what was termed ‘Andrew’s nine-box model’, where he divided company’s operations into three categories (‘high volume products’, ‘bespoke products’ and ‘other stuff’ – meaning the areas SMD had the capability for but had yet to explore) and focused these on three key international markets (Asia, the US and the Middle East).

This strategy proved an unmitigated success and SMD’s growth trebled between 2008 and 2012 to revenues of £131 million.

Andrew admits that the company wasn’t altogether prepared for such rapid gains and 2013 and 2014 became consolidation years for SMD, while it became “stronger, more robust and better prepared for growth.”

Then came an approach from China Southern Railway (CSR), which bought SMD in April 2015. Andrew, who again didn’t want to be part of a corporation, began working with SMD on his exit strategy and making the necessary preparations for Mike Jones to take over the CEO role.

Initially, the timeframe for Andrew’s departure was set at 12 months but this subsequently doubled as SMD contended with another global oil and gas crisis, as well as political instability in key markets.

In addition, Andrew suffered a heart attack in August 2016, which caused further delay.

But by October 2017, SMD was in a position to announce that its award-winning CEO was stepping down.

The departure has allowed Andrew to focus more on his public role – most notably as chairman of the North East Local Enterprise Partnership (LEP).

Andrew, who became chairman of the LEP in January 2016, has had a long association with the region’s economic agency – dating back to before it established.

In 2010, the renowned businessman was asked by North Tyneside Council if he would sit on the Tyne & Wear Skills Board, a precursor to the LEP. Andrew, who is passionate about skills as a fundamental part of improving businesses, individuals and communities, agreed and in the first meeting he was appointed chair.

Keen to see some real action take place in local skills building, Andrew wrote to the then Business Secretary Vince Cable to ask for support.

Mr Cable replied to say that this would come from the newly-formed LEP.

The North East LEP was established in 2011 with a remit to promote and develop economic growth in the local authority areas of County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland.

Andrew subsequently agreed to become the partnership’s vice-chairman and helped it develop its Strategic Economic Plan (SEP), a blueprint to deliver “100,000 new and better jobs to the region” by 2024.

According to the former North East Business Exec of the Year, much of the early years of the North East LEP was spent researching the economic landscape of the region on which the SEP would be based.

“Economic plans have to be driven out of data and be logical and joined up,” Andrew maintains, but he also admits that this essential work did make the LEP seem “invisible” at times and the partnership struggled to engage with the community.

These issues came to a head when the proposed North East devolution deal fell apart at the 11th hour in September 2016.

Andrew – who by this time had taken on the role of chairman ­– heard of the deal’s breakdown from a hospital bed while he recovered from his heart attack. A passionate advocate for more local decision making, the news both angered and disappointed him.

Andrew admits that, during the period, “the LEP felt alienated from the business community and isolated from the political community”.

He also reports that there was much “soul searching” among the organisation with many of the LEP board members taking the decision to leave. Andrew, himself, contemplated stepping down but chose to continue in the chairman role and bring about change to the beleaguered organisation.

“My philosophy has always been if you’re asked to do something, and you’re willing and able – and you feel as though you can make a difference – then it’s better to do it, rather than sitting on the sidelines and criticising,” he says.

Andrew brought together a new board and insisted on a culture of respect where everyone’s opinion was valid but where once a direction was agreed, it would be supported by everyone.

He also instigated a refresh of the SEP to “sharpen up its messages and relaunch into a more receptive environment”, and encouraged better communication and engagement.

Andrew is particularly pleased that out of the 38 LEPs nationwide, the North East LEP is now the most followed on Twitter.

Over 2017, the North East LEP has continued to work with private and public partners on several initiatives that aim to boost economic activity in a number of key sectors.

Last month, it was announced that the Government’s new careers strategy will centre around the Gatsby Good Career Guidance Benchmark, which was piloted in the North East and managed by the LEP over the past two years.

The North East LEP has also been instrumental in securing a North of Tyne devolution deal, which was announced in the Autumn Budget.

This process, Andrew explains, began almost as soon as the wider North East deal collapsed.

“By chance, one of the meetings I had on returning to work after my heart attack was with [Communities Secretary] Sajid Javid. He told me that the leaders from Newcastle, Northumberland and North Tyneside had asked if a deal with three was a possibility if a compelling case could be put together. He then asked me to find out what the local business perspective was on this,” Andrew reveals.

Andrew and the LEP set about gathering together members of the region’s business community via its organisational bodies: The CBI, North East England Chamber of Commerce, Federation of Small Businesses and the Entrepreneurs’ Forum.

Over several meetings – some of which also included local authority leaders – four key points were agreed on.

Firstly, that the North East business community wholly supported devolution at whatever level that could be achieved; secondly, that the door should remain open for any other North East local authority to join devolution if they chose to do so; thirdly, that there should not be a timeframe for any joining authorities; and fourthly, that no area should be worse off than if there was no devolution at all.

Andrew wrote to the Communities Secretary detailing these points. This helped to show Government that North East businesses spoke with one collective voice and, it is claimed, this proved pivotal in the North of Tyne devolution signed-to deal being agreed last month.

Andrew admits that the prospect of delivering the SEP across a region where one half may be able to make quicker, more localised decisions than the other will be a challenge, but it’s one that the North East LEP with face head on.

“People may be frustrated by the position we’re in but one thing about the LEP is that it’s non-political. We just do our best with the cards that are played to us.

“The responsibility of the LEP is to deliver the SEP across all the seven local authorities, and I take that responsibility very seriously,” he adds.

Priorities for the North East LEP in 2018, Andrews says, will be to ensure the smooth passage of the North of Tyne devolution deal and commitment to the four fundamentals agreed on by the North East business community.

In addition, the chairman is also keen that the North East LEP aligns to wider economic strategies, such as the Northern Powerhouse and the Industrial Strategy.

“I’m a passionate advocate of both the Northern Powerhouse and the Industrial Strategy and believe it shows long-term commitment by the government,” says Andrew. “But the North East has to make sure it is in a position to best maximise opportunities in the North and nationally, and work with businesses in other areas.

“For example, the automotive sector in Sunderland should be looking at how it can work better with the automotive sector in Warrington and in the West Midlands.”

In terms of North East LEP’s commitment of providing 100,000 new and better jobs for the region, Andrew reports almost half of this target has already been achieved but recognises that now is not the time for complacency.

“I think the North East LEP has made fantastic progress but anyone who’s ever run anything for a long period will tell you that it’s easy to become jaded. We must guard against this complacency and find new ways to energise ourselves. There’s still a long way to go.”

North East LEP

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