Last updated on April 12th, 2013 at 09:12 am
I was fortunate to be among a select group attending an event organised by Business Link at Trelissick Garden on 15th November where the guest speaker was Nick Hewer, Alan Sugar’s closest adviser.
It was fascinating to hear Nick speak with real candidness of the seminal moments in business that he and Alan have shared over the years and his insights into their deals that made the headlines and which form important parts of Britain’s business history.
Nick was born in Swindon to an Irish Catholic mother and an English Protestant father. After being educated at a Jesuit boarding school in Ireland, Nick moved to London to work in PR, starting his own PR company in 1966 aged 21. Nick’s PR company was first hired by Amstrad in 1983. Nick joked that Alan was quite a contrast to one of his other big clients, the Secretariat of HH the Aga Khan.
After selling his PR company in 1998, Nick was thinking of moving to the south of France to take things easy, but Alan quickly changed his mind with Nick joining Alan’s Amstrad business in the late nineties to help out full time. In 2004 Nick decided to leave Amstrad, with Sugar throwing a big farewell party for him at London’s Dorchester hotel. However, shortly afterwards in February 2004 Sugar persuaded Nick to join him filming The Apprentice.
Amstrad and the PC market
The product that really shot Amstrad and Alan Sugar to prominence was the Amstrad home computer that when released in the mid-eighties retailed at less than quarter of the price of their IBM competitors. Nick stated that within two years of its release, Amstrad had approximately 36% of the European PC market and by 1987 were making an annual profit of £200 million. Amstrad’s second generation of PCs, the PC2000 series, were launched in 1989. However, due to a problem with the Seagate hard disk shipped from their US supplier, these had to be recalled and fitted with alternative controllers. Amstrad later successfully sued Seagate (recovering £200 million), but following a high level of customer dissatisfaction and bad press Amstrad lost its lead in the European PC market and the damage to its reputation meant that it never recovered. In Nick’s words, this “killed the business”.
Amstrad was also key to the introduction of satellite TV in the UK. With Alan Sugar wondering what he could do next after the collapse of his PC business, he was approached by Rupert Murdoch in the late eighties to see if he could help with the set up of Sky TV. Without having any idea of what he was talking about or how to produce the dishes at first, Sugar agreed to build the set top box and dish and supply 100,000 units a month for £199 each in return for being the sole supplier to Sky. In order to produce the product for under £199 and make a profit, Sugar bypassed the satellite manufacturers and eventually found a hub cap company to make the dishes! Amstrad subsequently became Europe’s number one supplier of satellite receivers/dishes and ensured the success of Sky TV.
Hewer reflected that Sugar’s nine years in football as chairman of Tottenham Hotspur was not one his most successful ventures. Thinking it would be fun, Sugar teamed up with Terry Venables and bought Tottenham Hotspur football club in 1991, acquiring the shares together on a 50/50 basis. Venables’s share of the money to buy the club never materialised, so Sugar lent the requisite amount to him which Nick suggested was part of the reasoning for the souring of the relationship between the owners which eventually led to the acrimonious sacking of Venables as manager. Nick said that Alan tried to install into football the normal rules of business behaviour which helped make him very unpopular with the fans. Sugar ended up making £20 million when he sold the club, but has regretted his involvement ever since.
Although not the initial favourite for the show, Nick disclosed that Alan was desperate to secure the role, so much so that he effectively kidnapped the producers by inviting them on his private jet and then flying them to stay with him for two days at his house in Marbella. Nick said that after several years of Alan turning down any pay rises for Nick, it was the sweet irony of Alan offering to negotiate Nick’s salary with the BBC that clinched his agreement to also appear on the programme.
Nick mentioned that 20,000 people apply annually for The Apprentice, although over 27,000 apply for the junior version which gives great satisfaction to Alan Sugar knowing that the success of the programme has had such a positive impact on the school age generation.
In Nick’s opinion the real heroes of the show are the editorial team who are the best in the business. The editors spend almost three months working their way through 100 hours of film for each episode in order to produce 12 hours of slick TV for the series.
Nick revealed that two different versions of The Apprentice’s conclusion have been filmed this year in which both finalists have been told that they have been hired. This meant that after one version had been filmed, it was a case of telling the person who had not been chosen to dry their tears and get ready for it to be done again! The actual winner won’t find out they’ve won until the day the final show is aired.
One of the most interesting insights was that in real life Alan very rarely fires people and hates to see anyone leave his organisation, which Nick said helped explain why he’s held onto his job for so long! Another poignant comment was that in the Chinese version of The Apprentice, the Sugar equivalent is not allowed to say “you’re fired”, but instead repeats the line “you must find another opportunity” – maybe the UK catch phrase is a touch too blunt and aggressive.