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No More Penny-Pinching For Penny

Published 9 years ago
By Forbes Africa

If it weren’t true, it would sound too far-fetched to make up. The life of Penny Streeter, chief executive of healthcare staffing conglomerate A24 Group, is the archetypal rags-to-riches story of a woman who was left with nothing, didn’t give up, started small and made it big. She revolutionized the recruitment sector by turning it from a 9-to-5 business into a round-the-clock operation that dispatches temporary health professionals at as little as an hour’s notice.

Born in Zimbabwe to British parents and educated in South Africa, Streeter, who dropped out of school at the age of 16, ended up in recruitment by chance. After moving to London as a young adult, she trained as a beauty therapist but was soon looking for something more fulfilling.

“I decided this wasn’t going anywhere. I walked into an employment agency and told them I was looking for a job. They said, ‘Fantastic, we got one for you here’. That’s how I got into recruitment,” she says.

A go-getter by nature, Streeter was quickly promoted to branch manager. When the firm opened a second outlet, she hired her mother, Marion, to run it.

“We used to compete with each other about bringing in the most sales,” Streeter remembers. But one day, both mother and daughter were fired—they cost the firm too much in commission. They had worked themselves out of a job.

Irked by the limits of being an employee, Streeter decided to go it alone. She got a £30,000 ($46,611) bank loan. Her mother borrowed another £10,000 ($15,537). But their timing was bad. Within months of opening office recruitment company Elite Personnel in 1989, the United Kingdom (UK) went into a major recession. Demand for her services dried up almost overnight.

“It was a complete and utter disaster. The one day it was going well, the next day we had queues of people looking for jobs. We carried on and on, borrowing money, trying to dig ourselves out of this hole and eventually went bust,” she says.

By 1992, Streeter had lost every penny and was spiraling into debt. The furniture and cars belonging to her luxury offices in a posh part of London had been repossessed. But it wasn’t only bad timing that caused the firm’s failure. It was also “total lack of business experience”, Streeter admits. She had gone in, guns blazing and overspent.

To make matters worse, Streeter’s personal life suffered a tremendous setback. She went through a divorce which left her with nothing and—pregnant with her third child—was forced to move into a homeless shelter in a part of London her brother thought too dangerous to park his car. She had hit rock bottom.

Out of worry for the welfare of her children—“I thought, ‘How the hell do I ever bring up my kids in this environment? They are going to be drug dealers!’”—Streeter decided to give the recruitment industry another try in 1995, this time with only one asset: her determination. A value, she says, her parents instilled in her.

“At home, there was no such thing as can’t. I am lucky to be a confident person, so I had a strong belief that I could do it on my own. I knew I had to,” she says.

She started another venture, Ambition 24hours. This time, she took a different approach. Instead of getting a loan to kit out opulent offices, she rented a rickety desk in a corner of the office of a car parts dealership.

“I learnt everything from what happened [with Elite Personnel]. We didn’t buy anything. Every penny we earned we put back into the business,” she explains.

Streeter and her mother took turns working and minding the children. On weekends, they organized children’s discos to make cash.

“That’s how we raised income. We would literally earn some money to pay for a newspaper advert to recruit staff to our books and pay our phone bill. We knew we had to make instant money,” she remembers.

Ambition 24hours first recruited for the financial services industry, but Streeter’s big break came when she spotted a market gap in 24/7 medical staffing services.

“All the established agencies opened at 9 a.m. and closed at 5 p.m., including all weekend. But healthcare requires shifts around the clock, and you don’t know in advance that someone is going to fall sick,” she says.

Even though entering a market saturated by successful recruiters was a risk, her groundbreaking model took off fast, supplying round-the-clock services across England.

It was the business that within a few years would turn her into one of the most influential entrepreneurs of our time. Today, it has expanded into an umbrella group, the A24 Group, which houses a range of independently run staffing agencies, makes a turnover of £70 million ($109 million) and is said to have generated £5.5 million ($8.5 million) in 2011 alone. Streeter, who doesn’t like to discuss her net worth, and her mother Marion, are A24’s only shareholders.

Whoever imagines Streeter as a tough, aloof businesswoman in a tailor-made suit couldn’t be more wrong. The passion and love for life that drove the 45-year-old, back in the 1990s, radiates from her as she sits, dressed in a casual cotton top, a plastic pink watch studded with fake diamonds on her wrist, in her office in Cape Town, South Africa, where her business is now headquartered.

“It doesn’t feel any different, really I never set out to make millions and millions of pounds. I just wanted to provide for my family, run my business and do it successfully,” she says.

Despite making more profit in a year than most firms do in a lifetime, Streeter has stuck to her hard-earned motto of keeping it basic. A24’s offices are simple: functional carpets, plain beige walls, plywood tables and worn-out chairs. As pop music blasts through wall-mounted speakers, customer service staff outside Streeter’s unpretentious cubicle wear headphones in front of computer screens in an unadorned open-plan office, focused on attracting new business.

“I still live in the mindset of that first business. What happened then, could happen again. We’re going through a global downturn again. The same principles of don’t borrow, have crappy furniture, are still true in my business. We still have no borrowings at all,” she says laughing, “and we still have crappy furniture.”

Simplicity has become her philosophy.

“Think big, start small and keep things very, very plain,” is Streeter’s advice to young entrepreneurs. An original idea, a good business plan and hard work are far more important than large amounts of finance to get a business started. After all, she points out: “The majority of very successful entrepreneurs have started with virtually no money. The biggest driver has got to be you. People always look for others to motivate them. But at the end of the day, when you’re in business, you’ve got to be able to motivate yourself. And that’s hard.”

Needless to say, Streeter—who was named Confederation of British Industry (CBI) Entrepreneur of the Year in 2003 and received Britain’s highest decoration, an Order of the British Empire (OBE) for ‘services to enterprise’ three years later—drives the A24 Group with a keen eye for cost control.

“I have to make sure we’re not waking up tomorrow, the market has changed and we’re all out of work. It’s not just me now, it’s everyone I employ,” she says.

She likes to hold the reins tightly, so she’s set up a flat management structure, with herself as chief executive, a finance director and the management of the group’s agencies straight below.

“Flat management makes it easy to get to the heart of the business, without having to go through masses of chains of people. I want to be able to communicate directly with the person who can make the maximum impact and change on that business immediately,” she explains.

One of her most important decisions, she says, was to move the company’s headquarters to South Africa in 2004. With an £11 million ($17.1 million) investment plan, she set up sales and back-office resources on the tip of the African continent to supplement her UK facilities.

“My finance manager thought I had lost my marbles,” she laughs. But the move was much more than a romantic whim after a beautiful holiday to the country Streeter spent her teens in.

Although A24 was extremely successful in the UK—it was Britain’s fastest-growing private enterprise in 2002—the group had been suffering major staffing problems. Numerous employees had started to break away to set up their own agencies or join the competition, taking clients and databases with them.

“We were taking them to court to get injunctions. It was a very negative point for us. It cost hundreds of thousands of pounds,” says Streeter.

At the same time, Streeter struggled to find well-trained consultants, the group’s key asset.

“I realized that by moving operations to South Africa, I could protect the business from theft and regain with South African staff what I needed in terms of service. If we had remained in the UK, it would have been slowly eating away at us,” she believes.

Initially, it didn’t look like the smartest move. The business took a dip and two years to recover. But then, Streeter made her next move and acquired Nursing Services of South Africa, the country’s largest temporary staffing firm, adding another star to her shiny belt of agencies.

“When we came to South Africa, it was like going back in time. We found existing nursing agencies were arrogant, not flexible enough and had no service orientation,” Streeter recalls. Twenty-four-hour staffing also took off in South Africa.

Today, A24 is run from three centralized recruitment hubs in South Africa and the UK, plus smaller branches throughout both countries with 450 permanent employees and about 13,500 temporary personnel on its books.

But even someone as successful as Streeter makes a wrong call from time to time.

“I’m not immune to making wrong decisions. As CEO, you have to be able to make decisions really fast, right or wrong, and then you have to live with them,” she says, admitting that failing remains her biggest fear.

“If I’m wrong, I correct decisions quickly and hold my hands up to them. It’s better to make a wrong decision than no decision at all.”

That’s what happened in 2006, when Streeter decided to expand into recruiting services to the oil, gas, construction and engineering sectors, having set her eye on major emerging markets like the Arab Emirates. For almost two years, A24 invested heavily to prepare the launch of this new business arm. But when the 2008 global economic crisis began to unfold, Streeter knew she had to cut her losses: “We pulled out of the market immediately. Places like Dubai were starting to collapse. We could see we were going to run into huge payment issues. It was about knowing to get out at the right time.”

It was a hard decision to make, she says, but one that was once again based on the lessons she learnt from the failure of her first company in 1989, when she kept pouring money into a venture that had no chance of succeeding.

“You’re giving up business that is still there, which in a lot of ways seems ridiculous, but it’s about weighing the risks,” she says. She also shelved plans to expand operations into the United States.

Instead, Streeter decided to expand again on home ground. In 2010, she bought another competitor, the British Nursing Association, at one point the giant of the UK nursing industry, and its associated nursing agency brands Grosvenor Nursing and Mayfair Nurses, owned by Pinnacle Staffing, for a mere £2.75 million ($4.15 million).

“We’ve got that sick giant now, and hopefully we’ll get it back to where it was,” she says, without illusions about the complexity of rebuilding a struggling business.

“When you grow your own business, it’s your baby, you know it inside out. When you adopt other people’s children, they don’t do things the same way. It’s quite a learning curve and completely draining.”

Streeter clearly thrives on challenges, with acquisitions being her core expansion strategy. That’s not a new business strategy, but Streeter adds a twist: instead of fully merging the new acquisitions into her existing operations, she runs them in competition to each other. Each A24 agency operates independently, has different business strategies, different pricing structures and service models.

“I like starting new businesses and understanding their dynamics. I wanted to make sure we’re a bit like the soap powders in the supermarket: you have all those different brands but you end up buying the same one. I wanted the same effect for our agencies. The choice would always be one of our brands,” she explains. “I’m effectively trying to dominate and drive out competition.”

It’s also a way of keeping herself on her toes. Although she calls herself risk-averse, Streeter has a keen eye for new market trends and isn’t afraid of branching out. When she heard IT experts talk about the advent of another global tech bubble, she decided to invest in information and communication technology (ICT). She set up an IT development department to design tailor-made software for the group, giving it an advantage in speed and accuracy in the registration, management and booking of temporary staff.

Then, she took it a step further. A24 is developing management services software, which will be launched next year as a stand-alone operation within the group.

“In everyone’s business, technology is the driver now. If your technology isn’t right at the cutting edge you’ll be dead and buried,” Streeter believes. “Business is a real thing where what worked yesterday isn’t necessarily working tomorrow. I continually have to keep reinventing.”

Unsurprisingly, she has no intention of resting or retiring. Her business is like her fifth child, says Streeter, who has re-married and now has four children.

“The children see the business as their other sibling. When I told one of my daughters I was thinking about selling Ambition, she laughed at me and said, ‘You would sell me first’.”

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Related Topics: #A24 Group, #Healthcare, #London, #Penny Streeter, #Zimbabwe.