Graham Honeyman won the top prize, but what the IoD's inaugural Director of the Year Final showed most of all was a sense of purpose and spirit through adversity

More than 400 IoD members and their guests, as well as judges and political and business celebrities, toasted the success of their peers at the inaugural Director of the Year Awards UK Final in London last month.

Guest of honour Lord Sugar of Clapton raised the subject of government’s role in supporting business, as he spoke in typically frank terms of his time working for Gordon Brown as the government’s enterprise champion. Lord Sugar joked that it was a role that had given him depression.

But he was quick to point out that amid the bad news of recession he remained confident that now was as good a time as any to start and grow a business. “I started my business in 1966, out of self-preservation and in the middle of a terrible recession. If you’ve got a good idea and a road map in your mind of where it might go, you can do it,” he said.

Director of the Year (Overall Winner); Director of the Year (Investing for Growth); Director of the Year (Global) Graham Honeyman, Sheffield Forgemasters International

Fresh from scooping the IoD’s national Director of the Year Award, plus two more gongs for global business and investment in growth, Graham Honeyman is in something of a state of shock. “I find it almost unbelievable,” he says. “I am the proudest person on this planet. I thought there was always a possibility that I may be up for something, but never in my wildest dreams did I think I would win.”

It’s a statement that shows remarkable humility. Since returning to Sheffield Forgemasters in 2002, Honeyman has transformed the company from a loss-making dinosaur into a profitable global force, almost doubling sales per employee in the process.

How has he done it? You have to look at what you manufacture, he explains, simply. “There’s no point in making things that other people make.” In rival markets, such as Korea and China, “they have hugely lower costs than we have. What you have to do is make something that’s more technologically challenging than anybody else. And on top of that, deliver on time and make sure the customer is satisfied. If they are, they will come back, they will pay a premium and they will believe in you.”

Honeyman joined Sheffield Forgemasters in 1988 as technical director, but was forced out by the firm’s US owners for disagreeing with a low-cost, high-volume strategy. He returned in 2002 to find the company losing three quarters of a million pounds a month. “At one point we were only three hours from closure,” he says. Honeyman’s focus on higher value manufacturing managed to turn the company around inside seven months. “The banks couldn’t believe that in such a short time we had managed to turn a profit,” he recalls.

“Our strategy is that when one market drops we can pick another one up. We don’t have a big brother looking after us, we have to look after ourselves. So it’s always about improving what we’re doing. We do not stand still,” he says.

Director of the Year (Public/Third Sector) Mike Phillips, West Murcia Supplies

Every day, Mike Phillips walks five miles into work and five miles back home again. It gives him a chance to make plans, he says, but it’s also an opportunity for reflection. “What I think about all the time is how grateful I am to be working with such a great team.”

Phillips is managing director at West Mercia Supplies, a procurement company jointly owned by four local authorities. While Phillips has been at the helm of the organisation, which supplies schools, colleges and government offices, turnover has doubled and profits have increased fourfold. “I have absolutely no embarrassment in saying that my mission is to get all the money I can extracted from all the deals I do put back into the public sector. Adult social services, adult social care, the young people’s agenda, can all be sufficiently funded because of the work we’re doing.”

Phillips is actually eligible for retirement under the rule of 85, which allows public sector workers to draw a pension provided their age and number of years served adds up to 85. “I could go tomorrow. But there’s no way I’m going to go. I love what I do. I have a great set of stakeholders. Everybody supports what we’re doing. I’m here for the long term.”

He admits tough times lie ahead for the public sector, particularly in convincing the private sector of its validity. “The bits about the public sector that people see are the elected representative’s expenses, the top-heavy management, and the soaking up of public money. I’m not going to deny some of that exists,” he says. “But in our world, where we sit, it’s all about driving outcomes that are outperforming the private sector. We’re about demonstrating the very best principles of efficiency, value for money, customer care and care for our staff.”

Director of the Year (Family Business) Sarah Dunning, Westmorland

We’ve all experienced a UK motorway service area on a long car journey. It tends to be a high-cost, low-imagination and low-comfort affair that tends to have little, if anything, to do with the rural community surrounding it.

Cumbrian-based family business Westmorland has always sought to be different. The company has four businesses including Tebay Motorway Services on the M6. But unlike its competitors, it has no franchises. Instead it runs the cafés and shops at the services itself.

As chief executive and a second-generation family member, Sarah Dunning explains that there is more than just running its own facilities that marks the firm out as different. Westmorland has also always tried to do the right thing for local communities and employees alike. In short, the business has been about being good but also being commercially successful and Dunning has every intention of maintaining that tradition within the organisation. She says: “We’re a values-led organisation and our business pivots around the celebration of local food, suppliers, and artisan producers. They’re values we’ve been keen to keep from the first generation.”

In terms of the direction in which the second generation might lead the business, she adds: “There are lots of ways to get stronger and innovate and we all want the company to grow.” The £38m turnover company has got planning permission for a second motorway services area on the M5 in Gloucestershire, which will employ around 300 people.

And, says Dunning, Westmorland will continue to invest in its people. The business is, she explains, evangelical about its differentiation and purpose. How staff connect with that purpose and how they feel that they are part of the service it offers is a key driver.

Delighted at winning this year, Dunning offers advice to next year’s entrants. The judges want to see the zeal behind a business and what really makes it tick. “It’s not about numbers—it’s about the passion.”

Young Director of the Year Cathy McCorry, Grafton Recruitment

When Cathy McCorry took over at the helm of Belfast-based business Grafton Recruitment in August 2008, the economic downturn was making its presence felt. She says the sector had been “severely hit” and that the increasing numbers of recruitment freezes and redundancies were having a knock-on effect on Grafton’s margin, turnover and profit—it experienced a 40 per cent reduction in client requirements during that first year. The necessary restructuring of the organisation meant a cull of several revenue-generating staff.

Yet against this backdrop McCorry still improved profitability from a loss of £350,000 in 2008 to a profit of £1.87m in 2009. She credits the turnaround to something quite simple: a customer-centric strategy. She says it was a matter of refining the company’s core service so that it was “the very, very best of what we could do”. And the firm’s investment in training and development, even during the worst part of the recession, also stood it in good stead.

Running a people business, says McCorry, has influenced her thinking. “Our approach is completely personal and driven by my belief that every employee has a personal relationship with our organisation and every employee is responsible for our success. It’s all about empowering and developing our people."

Director of the Year (Environmental Leadership) Mervyn Jones, Aquamarine Power

As chairman of Aquamarine Power, a wave energy company, Mervyn Jones is at the forefront of the UK’s drive for affordable, reliable renewable energy. Aquamarine Power is developing the world’s first hydroelectric wave energy converters and has operations in Orkney and Northern Ireland.

A prototype of the converter, known as the Oyster, is already deployed and is exporting power to the national grid. An improved model, capable of generating 250 per cent more energy, is in development. As well as being inherently good environmentally, Jones has made the business a good place to work.

“We knew the only way we would grow quickly and make a step-change in technology would be by having brilliant people,” he says. “These people know when they are being fobbed off. We have to reward them well and treat them well. If you skimp on the people you are not going to survive.”

Jones has driven the business in three years from a Queen’s University spin-out, via a merger with the renewables division of Scottish and Southern Energy, to the point of commercialising the technology. From the outset he insisted on a corporate governance structure worthy of a larger organisation, claiming that transparency and leadership are as important in small start-ups. “To meet the environmental agenda, firms like ours have got to grow quickly and you need to be busy doing the business, not worrying about corporate governance,” he explains.

He is undaunted by the scale of the firm’s challenge. “Global climate change isn’t going to wait. Everybody will soon be waking up and saying we’ve got to get it sorted and the solutions to these challenges will be found by great people working in inspiring organisations,” he says.

Director of the Year (SME) Simon Biltcliffe, Webmart

Simon Biltcliffe is justifiably proud of his achievements at Webmart. With a staff of just 46 people, Webmart has a turnover of £37m and despite tough trading conditions has continued to grow in recent years. Biltcliffe’s approach to running the business is based on seeing things from a different angle and doing the unexpected.

But despite standing apart from the rest of the print crowd, he says the firm isn’t that good at PR. “It is important to win awards like this from a PR perspective because we are shockingly bad at PR and marketing,” he says. “Winning something like this gives us a voice where we otherwise wouldn’t be heard. We are a relatively small company and we do things differently in a way that we think is better. It’s lovely to be recognised as being a leading light in the way that we approach things.”

Since Webmart’s foundation in 1996, it has enjoyed what Biltcliffe calls “sustained growth”, something that is at least partly the result of his strong leadership and vision, combined with a focus on operational efficiency and innovation, notably through the in-house development of complex IT systems.

But Biltcliffe has also imbued Webmart with  a strong sense of ethical and philanthropic behaviour. As well as carefully developing its  in-house talent, Biltcliffe also bases the company’s unique business model on his personal philosophy, which he puts simply as “be good and do good”.

This extends to looking after staff—who all receive 50 per cent of profits back as a bonus—to the local and wider UK community (through the Webmart Charitable Trust) and also overseas communities (the Webmart Business School in Ethiopia). The company and the staff employed there all have what Biltcliffe calls “a philanthropic buzz”.

Director of the Year (Large Company) Ciaran Sheehan, Care Circle

Nobody goes into the care business with the sole aim of turning a profit, says Ciaran Sheehan. “They go into it because they want to make a difference to someone’s life. That’s what we do.”

Sheehan’s firm, Care Circle Group, which he founded in 2001, happens to be extremely profitable. But Sheehan says his first priority will always be the residents. “Other companies take the view of cutting costs in food or refurbishments, and don’t invest in training. We find that running our nursing homes like hotels can actually make more money. You can run a values-based business and still be profitable.”

Having grown profits by a quarter in each of the past two years, Care Circle is growing steadily and is on target to double in size by 2012. “I still see our business as a small company, even though we’re approaching 400 people,” says Sheehan.

“The company is built on a care ethos,” he says. Its motto, “We care about people who care about people”, isn’t just a line, either. Care Circle invests heavily in support and training for all its staff. “All of our decisions around investment and expenditure are geared towards improving residents’ lives,” says Sheehan, adding “you can’t get a promotion unless you commit to a training programme.”

Care Circle’s philosophy is based on a simple equation: happy employees, serving satisfied residents. It’s why occupancy rates are almost 100 per cent. “Our business is recognised as one of the best care companies in Northern Ireland. That means the business is more profitable and all we do is invest profits in our people.”

Director of the Year (Lifetime Achievement) Sir Terry Leahy, Tesco

The shortlist for this inaugural Director Lifetime Achievement Award, suggested by readers of Director and voted on by a panel of readers and leading business figures, included legendary, high-profile entrepreneurs, champions of sustainability, leaders in corporate governance and well-known innovators. One name stood out from the list as a clear role model for all directors.

Sir Terry Leahy has been chief executive of Tesco since 1997. He is widely seen as the chief architect of the firm’s rise from an average UK grocer to a global powerhouse. Tesco is now the world’s third-largest retailer and Leahy is often quoted as being Britain’s best businessman.

In an age of ever-increasing mobility, Leahy is a rare example of the single-company career man. He joined Tesco as a fresh-faced marketing executive in 1979, not long after graduating from Umist. He rose through the ranks, eventually becoming marketing director. Alongside his mentor, the then Tesco boss Lord MacLaurin, Leahy recognised Tesco needed to do something different to rise above other supermarkets.

That something was the introduction of the Tesco Clubcard, the loyalty card scheme that allowed the store to collect information on spending habits. The success of the card since its introduction in 1995 has been the engine that’s driven the company’s phenomenal growth. There are now 15 million Clubcard holders in the UK—roughly a quarter of the entire population—and total sales have reached £57.5bn from more than 2,000 stores. Tesco has made more than £1bn profit every year since 2001. Earlier this year Leahy announced profits of £3.4bn.

While small-shop owners bemoan the presence of smaller city-centre Tesco stores, a hallmark of Leahy’s time at Tesco has been a willingness to innovate. This has included new store formats. It’s no surprise that as well as some of the smallest supermarkets in the UK, the Tesco Extra store in Pitsea is the largest.

Throughout this period of extraordinary growth, which has seen Tesco achieve international expansion in an unprecedented way for a British retailer, Leahy has remained a calm and considered, low-profile figure. Often described as the UK’s best example of what leadership writer Jim Collins describes as a “level-five leader”, Leahy makes an effort to visit Tesco stores once a week.

Management writer and serial social entrepreneur, Jo Owen, describes the Tesco boss as the perfect corporate role model. As he points out: “Sir Terry Leahy proves you do not need a planet-sized ego to be a great leader. Nor do you need a huge PR team to puff your achievements. Sir Terry represents leadership as most of us could at least aspire to: devastatingly professional and effective.” Sahar Hashemi, co-founder of Coffee Republic and founder of Skinny Candy, agrees. “Sir Terry is the most brilliant role model for young people. He proves success is not just about a flash of brilliance, but rather a long, steady climb,” she says.

The latest—and final—chapter of Leahy’s career at Tesco again highlights this devastatingly professional approach. He set out with two objectives—to make the store the UK market leader and to give it the strong international presence that would allow for greater financial stability. Earlier this year, having recognised that these objectives had been achieved, he stepped aside.

Sir Terry has transformed the British retail landscape and succeeded where many UK retailers have failed in building a strong global retail business. Whatever else he achieves, his name will forever be associated with the transformation of Tesco and the UK High Street.

For a full report on all the winners and runners up, see the November issue of Director magazine