Blake & Associates: Howard Blake

Blake & Associates: Howard Blake

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It’s hard to believe that Howard Blake started his business with just a typewriter and a home office. It’s even harder to picture him visiting his first clients on a banged up scooter. But that is how determined the founder of what is today a leader in the international business process outsourcing sector was.

Ask Blake (49) what made him launch his own business and he’ll tell you it was desperation. In reality, he is a born entrepreneur who would find it difficult to work for anyone. An attorney by profession, he started out in estate administration, and then became a legal advisor before joining a firm of staid attorneys in KwaZulu Natal. Not happy there, he left.

With a wife, two kids and his back against the wall, he launched Blake and Associates in 1990 when he was just 27, working from his kitchen. Today, the business is known simply as Blake and has established itself as a highly respected leader in business process outsourcing and contact centre services, focusing on all aspects of customer lifecycle management and not just debt collection. It has an annual turnover of R350 million with offices in Namibia, Botswana, Mauritius and the US. Blake also employs more than 3 000 people and has had a massive impact on the development of the community of Phoenix, which is close to the company’s head office in Mount Edgecombe, Durban.

Overcoming early challenges

Accountability is something Blake mentions often. He is known for taking full responsibility for what happens in the business – the good and the bad – without looking at the team that implemented the decision. He’s always accepted that ultimately the responsibility remains with him, and this is still one of his keys to success.

Blake faced and prevailed over a number of challenges common to start-ups. In the first two years of the business, he was lucky enough to have a sympathetic banker. His father had died when he was a child, and family resources were few. Money was always an issue in the beginning. He had no collateral to start the business and laughs when you ask where he got finance. But he also required very little money to get it going.

“Where I was fortunate, is that the mainstream technology available to everyone today had not evolved yet. I did everything manually, providing an excellent manual service that we slowly morphed over time into a fully automated one, which made it more possible than in today’s environment where so much outlay is required for infrastructure. I started out with just me and an assistant. Today, you would have to have a lot of money to start this kind of business. Technology has raised the barriers to entry from that point of view.”

Another issue he had to tackle early on was that people were reluctant to work for the business. Blake recalls that is was difficult to convince those early staff members that he would indeed be able to pay their salaries. He says it took a lot out of him to find people who were ready to join and take the risk alongside him.

“But the secret to success is simple,” he says. “You just have to persevere. The minute you stop, it’s over. You have to try to project yourself into what your endgame is. I always made sure we paid our staff on time, even if it meant we owed the bank a little more each month. I held onto my vision and honed the service aspect of the business. That’s what set us apart. It’s like Starbucks – without the customer service focus it would be just another coffee shop.”

The idea came about after Blake identified the need for a debt collection service without high legal costs. His clients were doctors and service stations. Soon the list grew to include vehicle dealerships and furniture retailers. Then the explosion of store credit cards between 1993 and 1996 boosted the business. Retailers across the spectrum turned to the firm for debt market advice to minimise risk.

Blake might be highly successful today, but he did not have an easy time of it at the beginning. By July 1991 he was worn out by trying to sell his services to bigger clients and ready to lock the door and throw the key away. But then he landed a contract large enough to enable him to service the business’s debt.

“As it so often happens in business, just as I was about to give up, we closed a fantastic deal. I had been pursuing a retail company for months, and my tenacity eventually paid off. I demonstrated to them that we had the capability to improve their debt collection and minimise risk, based on the work we had already done. I proved that we could manage their debt on a more scientific basis and help them to create better default prediction models. Within a few months I was employing 16 people.” The business doubled every year from 1993 to 1997.

“We help companies leverage their markets and enhance their customers’ brand experience,” says Blake, who is now the firm’s chairman. Among his oldest clients are Foschini and Truworths.

Identifying opportunities

“I was oblivious to the competition at the time,” he says. “I developed our system based purely on good service. One of the most unique aspects of the business was that I allowed retailers to use our letterheads and infrastructure so that they did not have to hand over their book. From that, as the business grew, we developed service offerings that drilled further down into their business, so today we look at the entire customer lifecycle, taking into account the opportunities to cross-sell and up-sell, and always enhancing the customer’s experience of the company and the brand.”

Blake notes that the South African market is still immature when it comes to business process outsourcing. Where his American counterparts would have a much wider mandate, South African business leaders tend to want to hold onto the family silver. But attitudes are shifting slowly but surely.

“As a continent, Africa has the opportunity to leapfrog when it comes to communication technology.

There’s no need for the laying of terrestrial networks; everything can work wirelessly. That’s the beauty of the Web – you can go from nothing to smart technology that enables you to trade globally. It’s great for the development of young people, who are able to see that the world is much bigger than the town they come from.”

Expanding into overseas markets

In 2002, Blake saw the need to either lock the business into a boutique offering and look after the needs of South African clients only, or to look for opportunities to leverage the organisation’s vast capacity and infrastructure.

“Some of our processes had been pioneered by the company and were not yet tried and tested. We overcame that by providing a range of services for the mobile industry in the UK. Because we did not have the expertise internally to interact with that market, we brought in an expatriate team. We formed a joint venture with a British company looking for capacity in South Africa. Initially, they were fairly sceptical about our abilities. We provided the capital and the infrastructure, and they provided the management and day-to-day expertise required to run the business. That relationship continued for six years.”

During that time, Blake began to explore the American market. In 2006, the company set up a call centre team in Mauritius to look after American customers. The focus was on customer service as all calls were inbound. From that experience, the company looks after a fair chunk of business in France using the Mauritian team.

“Initially it was extremely difficult to move into overseas markets,” he says. “We were coming in off the back of a mature industry.  But again, perseverance paid off.

To enter the global market, you have to be patient and you have to be aware of where your expertise lies and where it is that you need to bring in experts who know the local territory. There is no way of doing it quickly. You must be prepared to take the time to do it properly, cover all your bases and ensure that you have the capacity to bring on board local partners. Now, because we trade globally, we have a deep understanding of the business standards that are required and the expectations of our customers in Europe, the US and Africa.”

Blake says the company is leveraging its longstanding innovation drive as call centre functionality migrates from voice to data-oriented services. “Instead of calling and speaking to someone, customers can now have their problems and queries resolved through live online chat and other Internet-based services. That does not mean voice will ever disappear, but online services is an area that will continue to grow rapidly as back office services that really enhance customer experience.”

The international expansion changed the way Blake did business. Because European and American markets are so much more advanced, it accelerated the company’s maturity at a rapid rate, enabling Blake to introduce a number of new service offerings.

“We did a lot of support work in the e-commerce environment, which allowed us to grow a whole new line of business in South Africa. We are now able to guide our clients through the e-commerce process and provide best practice advice, services and platforms. We are in the process of building the first of two major e-commerce platforms for a huge local retailer. The company is doing things that enable South African clients to catch up with their overseas counterparts at a rapid rate without having to pay the school fees.”

Bringing shareholders on board

Over the past ten years, the company has always had external shareholders, some of which have changed over time. Blake says it’s because they are drawn to the high-tech nature of the business, but once they’re in, they’re not quite sure what to do with it. His own conviction is that he would much rather own a smaller percentage of a big business than the whole of a smaller one. That’s why he was always open to investors.

In 2008, furniture retailer JD Group increased its shareholding in the company from 27,5% to 55%, with Blake remaining a shareholder and running its operations. “They were not customers before they became shareholders. Now that they are, JD Group have given us enormous reach into the retail market. Their involvement in the business immediately allowed us to be taken more seriously by some of the bigger players. It showed that we were a business of substance. We’ve pooled many of our resources when it comes to IT expertise.”

Although technology played a large part in growing his business, it was his unfaltering entrepreneurial spirit that led to the longevity and success of Blake & Associates, which, in turn, led to him being nominated in 2008 for the Ernest & Young ‘Emerging Entrepreneur of the Year’ Award. “As part of the awards process, I was asked what motivates me. I have to say that I love seeing what we have been able to conceive and create. My vision for the company turned into a working business model that employs people, creates opportunity and adds value to the economy. That’s exciting. It’s also far more rewarding than pure financial gain, which is what I think you’ll find with most true entrepreneurs. There is something amazing about developing a realistic, viable business proposition. From there, the opportunities just flow.”

Blake says that building the business had a massive impact on his personal life. If you don’t have the support of your family you cannot do it, he cautions, adding that he really had no option because he did not have a job. But although he had a wife and two kids, he simply could not see himself working in the corporate sector for the rest of his life.

He risked everything to set up the business, even selling T-shirts at that point to at least have some income. It was a big step for someone who had no inheritance, and no private school old boys’ network. He’s not sure that he would have the guts to do it all over again, but right now he is adamant that being an entrepreneur is who he is. One thing he was never prepared to sacrifice was time with his children. But that came at a price. The hours he spent with his kids had to be made up and he often worked late into the night. “You have to be there to support your children, but when you are in the service industry your clients really don’t care about things like that, so you have to do it entirely in your own time.”

Blake is candid about his interests. “I don’t read successful people’s biographies. They really don’t interest me. I learn from reading business books and from my mentors in the JD Group. I believe that if you have hit the ceiling in terms of what you can do, you must look past your capabilities. Make yourself scared. That’s the best way to grow.”

He’s always been the personal driver for the success of his business. It’s his unfaltering belief that things can always be done, not only differently, but also better, that has driven the massive success of the company.

He has consistently refused to accept the current status quo as the best way of doing the job. Together with his passion for delivering a top quality brand experience to his clients, this is what has been driving his company to integrate unsurpassed levels of technological innovation, business practice and managerial skill with exceptionally high levels of service.

Driven to innovate

One of Blake’s clients, an insurer, has handed over its entire social media interface to the company.  Another of the retailers Blake acts for has one million customers and an average of 80 000 new account applications per month. “What interests me is what is being done to look after those one million clients, rather than just focusing on the new customers,” says Blake. And it’s that kind of thinking that has led to the company’s trademark innovation. “We are constantly looking for more web-enabled processes that allow us to chat live with customers. This means instant feedback, but we’re also trying to migrate out of the voice market into data interactions. Not only do you then have everything on record, but you’re also saving time and resources.”

That’s when he starts talking about the distinction between Blake’s classic business and innovation arm – which is what has enabled a business that’s more than 20 years old to stay way ahead of the game.

“The classic business takes care of itself these days and has an excellent management team. I focus on innovation and I have taken full responsibility for it. I do an enormous amount of research on the Net and I also have a team of seven researchers working with me. They go off and investigate markets; they go to trade shows, exhibitions and tech forums. We also serve several companies coming out of Silicon Valley, which obviously gives us great exposure to new technologies. It helps that we are now in a position where capital is not an issue, but innovation begins with great ideas and paying attention to your market – something we have always done. We’re going through another reengineering process, which is something we do regularly – every 18 months, in fact. We leave the classic business alone and hone new innovations. Then we take those to our clients in product form to find out if they are interested.”

Blake says that innovation requires a huge amount of effort and research. He has a long-standing association with Harvard and is a regular reader of the Harvard Business Review. Educating yourself, he says, is critical. He’s also a Twitter addict and interacts every day on the micro-blogging site. “I watch the feeds and click through whenever I see something that is relevant. We are now in the business of social media on top of everything else, so I have to be interested.”

Staffing solutions

When your business is all about customer service, it’s important to have the right employees. Blake has approached staffing as a vital component of his business – and a way to impact his local community.

1990 Blake is a business of one. He finds it difficult to convince early staff members that he will indeed be able to pay their salaries. One of his biggest challenges is finding people who are ready to join and take the risk alongside him.

2010 The company peaks at 3 000 employees and is actually focusing on downscaling its headcount and employing more technology. It’s possible to do this in such a data intensive business.Today, Blake hires unemployed school leavers, kids who have a wealth of experience on Facebook, Twitter and BBM. “Maybe it’s because I was once unemployed. I have empathy with these kids. We take on even those without experience, train them and help them tackle bigger things,” he says.

7 000 The number of people who the Blake group has employed over a period of 13 years, most of whom were unskilled and unemployed when they started with the company.

The Blake brand

Over its 20 year history Blake has grown from a one-man show to a business that employs 3 000 people and operates across three continents. Here’s the company in a nutshell.

The company

Blake provides contact centre solutions in customer lifecycle management, offering a solution based on servicing niche markets and identifying unique partnerships involving business process enhancement and back-office outsourced solutions.

Customer lifecycle

Blake is committed to working with clients throughout their customer lifecycle.

Client acquisition, customer service, customer retention and business process outsourcing are evolving in the South African market. These, together with broad-ranging cost saving initiatives among corporates, will support Blake’s activity levels. “We will continue to market traditional business services, but we are also pursuing opportunities to leverage our executive skill set to enhance business processes and provide differentiated service levels,” says Blake.

Adding value

The company adds value through technology, people, process and relationships to improve service levels and productivity as well as delivering successful business outcomes. It also builds partnerships that enhance its customer value chain.

Rebranding

The company recently got a makeover and has a whole new look. The landscape was changing and the business needed to change accordingly. The rebranding campaign – from Blake & Associates to Blake – was the perfect way to introduce Blake’s embrace of the future, as well as showcase its in-house talent.

Online

The company’s online presence needed to be renewed in line with the new branding. “The company’s web site, blake.co.za, is an essential integrated business tool. Not only does it facilitate business activity but it also serves as an important source of information for prospective clients,” says Blake.

Monique Verduyn
Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.