Barry Clare – Micro CV

In September 2006, Barry became a non-executive director of Selective Beauty, a 3i-backed cosmetics distributor in France.  The following month, 3i invested in Healthcare Brands International – chaired by Barry, the company turns innovative medical products into successful consumer brands.

From 2004 to 2006, Barry chaired two German companies for 3i:

• betapharm is a generic drugs company.  During Barry’s chairmanship, its sales growth rapidly outpaced the market.  betapharm was sold to India-based Dr. Reddy’s for €480m.
• Barry led the turnaround of pharmaceutical company Lichtwer, disposing of the manufacturing operations and successfully refocusing the business on its core brands.

 Between 1991 and 2001, Barry created the international ‘over-the-counter’ healthcare business for Boots and grew it into a business with revenue approaching £500m.  From 2000 to 2003, Barry was a non-executive director of emerging markets bank, Standard Chartered.  

You’ve grown many successful businesses.  What’s the secret?
Barry: I focus on two elements: strategy and empowerment.  Setting the right strategy for growth is what really excites me.  Whether you’re dealing with a turnaround or a completely new business, you have to rise above the detail and develop a compelling vision of where you’re hoping to be in five years’ time.  You then have to translate that into some clear objectives, pick a great team and let them deliver.  Empowerment is vital, both for me and the people who work for me – but it’s only possible when you have very clear objectives for the business.  That’s one of the reasons why the private equity model is particularly effective.  It’s far easier to align stakeholders’ interests around clear goals when you can bring everybody to the same table.

How does the size of the business affect your approach?
Barry: To me, connectivity is the vital issue, not size.  To create a business that really hums, each part of the company needs to be clear on its role and the parts must work in synch to create a well-oiled whole.  Clearly this can be harder to achieve in a bigger organisation, because objectives and roles start to become blurred, and very few people understand how the entirety fits together.  As an industrialist working with 3i, one of my key aims is to build bridges between the different parts of a business so that if, for example, we’re planning a sales drive, everyone knows about it and plays their own unique role in making it happen – from marketing and production to finance and HR.  Some people are there to score goals and some are there as goalkeepers – each person has a part to play but they need to be absolutely clear what that part is and how it fits with everyone else.

How do you engage the management teams you work with?
Barry: It’s vital that people understand where the business is heading, so typically I’ll gather together a new management team and ask them to think very clearly about where they want to be in five years’ time.  Most people find the outcome easier to describe than the path, so I’ll ask them to write a future-state annual report.  What do sales look like?  What does the product portfolio look like?  What are the analysts and our competitors saying about us?  In essence, I’m asking them to describe success.  I’ll then ask them to tell me how they achieved it.  Having identified the goal, it’s much easier for them to say what we now need to do to make the goal happen.  They then start to believe that they can win, which is where empowerment kicks in.  Once you evolve positive belief, it makes it easier to deliver results and attract further great people to the team.

Why was betapharm such a big success?
Barry: Because the strategy was just right.  Germany is Europe’s biggest market for generic drugs and yet no global player had a significant presence there.  The industry was on the verge of change and consolidation, and it was clear that there’d be strong international demand if we could build a very strong local player – so that’s what we did.  When we first acquired betapharm, it was largely a sales team.  We put the infrastructure in place to turn it into a fully-rounded business.  We also established a strong pipeline of new products and successfully gave the company a unique profile in the medical community.  As a result, sales growth rapidly outstripped the market.  The business was perfectly-positioned for sale because we’d done all the work, and it made a great buy for the ultimate purchaser, Dr Reddy’s, because it was just the right size and complexity.  It had scale but it was still affordable, and it only operated in one country, so it didn’t present a massive integration challenge.

Why do you choose to work with 3i?
Barry: Put simply, I find them good people to deal with.  Their investors are open and straightforward.  They’re competent.  They do an exceptional job on due diligence.  3i has always had great contacts and a great network, but in the last few years it’s really started to use those assets to stimulate deal flow.  I’ve worked with several private equity firms and 3i is one of the firms I feel most comfortable with.  I think two factors really mark 3i out from the competition.  Firstly, 3i is not just focused on financial management – it’s strong on operational improvement too.  Secondly, 3i appreciates the importance of a well-motivated, well-rewarded management team.  Some private equity firms see managers as hired hands but 3i understands that managers are at the heart of value creation.