Dame Stephanie Shirley: ‘First-generation immigrants are wealth creators’

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Dame Stephanie Shirley

Dame Stephanie Shirley, 2016 Lifetime Achievement Award winner at the IoD Director of the Year Awards, is a former child refugee and tech pioneer. After making £150m in a flotation of the firm she founded, she dedicated her life to philanthropy. Here, she talks employee ownership, entrepreneurial spirit and female role model

Dame Stephanie Shirley came to Britain in 1939 as an unaccompanied five-year-old refugee. Born in 1933 in Dortmund, Germany, to a Jewish father and non-Jewish Viennese mother, she was saved from the Holocaust by the charity of strangers who organised the two-and-a-half-day Kindertransport from Vienna. She repaid her gratitude with a resolve to strive academically and break down gender barriers in business. Aged 18 and unable to pursue her choice of higher education (“the only science that was respectable for a young woman was botany. Plants!” she roars), she joined the Post Office Research Station at Dollis Hill, London, building computers and writing code. “I learnt computing by hanging around somebody else’s computer, hanging around in the holidays, sweeping the floor, the chats,” she remembers.

After six years of night school she achieved the maths degree that she so desired. She felt obliged to give up her job as a scientific officer after marrying colleague and physicist Derek Shirley as married couples working together in the public sector were frowned upon. And after hitting the glass ceiling at computer company CDL, in 1962 she set up women-only software firm Freelance Programmers with just £6 capital from earnings and borrowing against their house. When doors closed on her for being a woman, she took the name ‘Steve’ to get a foot back in. The name stuck and the business would go on to win contracts, including programming Concorde’s black box flight recorder. Later, she pushed through co-ownership, took on the taxman in a quest to reward her staff and subsequently gave away most of her fortune to philanthropic causes.

The recipient of this year’s Director Lifetime Achievement Award at the IoD’s Director of the Year Awards, Shirley took time out of her busy speaking and charitable schedule to reflect on her life in and out of business…

We asked her to recall her early career and assess whether women have since reached the heights in business she had wished for: “I was motivated to go into business purely for gender issues. I was sick and tired of being patronised. To be honest I am bitterly disappointed [about women’s lack of advancement]. We’re talking about 50 years ago. What I hear young women talking about today is so similar to the gripes that I had when I started working at 18. The first few years I didn’t realise how tough it was going to be because when you’re young and pretty everyone is very nice to you. And as you get more ambitious…”

She tails off and pauses. “I suppose I did think that within 50 years we wouldn’t have these problems. One time the law said you [women] couldn’t work on the stock exchange, drive a bus or fly an aeroplane. That has gone but the culture remains. In my first job we had salary scales by age. There was one scale for men and one scale for women, which was very much lower. That has definitely gone but you still have this gender gap that people are trying to monitor, measure and put in an annual report. It’s not nearly as good as I hoped it would be.”

Need for role models

Shirley believes women need better role models: “There really weren’t many for me. Maggie Thatcher – though I don’t like her politics – was a good role model because she really did a full job. When you’re early in the field there’s quite a responsibility on you because if you do a bad job for some reason it reflects on the next wave of women applying for roles. ‘Oh, we had one of those and she was no good.’ I was the first woman this and the first woman that. I’m proud of it in a way. But I was also the first non-American on an American board. I liked to do new things and make things happen but the responsibility for my gender was strong.”

Today’s campaigns to get more women into sectors such as engineering are welcomed but business has to “work on the pipeline so you’re not astonished when they appear and apply for graduate positions. Girls are doing very well at school, they are outperforming boys, dominating many of the universities but it’s just a question of making it go. Should it really take another 50 years?”

Freelance Programmers, she explains, offered her workforce the same things employees still rank as priorities today – flexibility (they initially all worked from home) and home-life balance. Both, she says, made for a more agile company. The policy of employing only women was brought to an abrupt halt by the Sex Discrimination Act of 1975, which aimed to end inequality that women had faced in the workplace but, ironically, meant Freelance Programmers had to employ men. When the business was sold to French IT firm Steria in 2007, it had been rebranded as Xansa, employed 8,500 people and posted revenue of £379.7m.

“People would say I was matriarchal but what it did was move [us] from a very feminine culture to a collegiate culture as that stood us in good stead and took us through co-ownership. To begin with the first few men who joined us were awful and joined for all the wrong reasons. They had a different management style and they needed to be inspired in different ways. The fact that we were all women when we started held us all together, made us cope with whatever happened… We nearly went out of business in the 1970s recession [1973-75], which was a bad one. You had to learn how to cut everything back to the essentials, get rid of all the frills. I answered my own phones. In these economic cycles you have to be agile or flexible.”

She admits to having a “slightly unpopular” opinion that women are opting out of some positions because “they do not recognise or understand the cost of success – however you define success – but if it was easy we’d all be millionaires. It takes a lot of focus to pull yourself out from the crowd even if you’ve got money to start with. I find the things that I do now much easier because I have got cash that I can throw at it but when you start as an entrepreneur each month you’ve got to somehow cover yourself.”

By 1988, her company had grown to become the multibillion-pound software consultancy, the FI Group. Those ground-breaking years brought Shirley her fair share of enjoyment, challenges and struggles but it was the closing down of projects that still makes her wince.

“I made the classic mistake of opening up subsidiaries [in Scandinavia and then the Netherlands] but copying what had been a success in the UK. I did classic market studies, there was a market but it wasn’t sophisticated enough. The staff were there, the leads were there but there was no need for a women’s company because it was much more balanced. It’s important how one closes things down – to enjoy what you have achieved, to make everyone feel that they’ve enjoyed the experience, learnt from it, and to have a celebration. Some people let things dwindle – that’s not good style.”

Dame Stephanie Shirley

“Entrepreneurs must love what they do,” says Dame Stephanie Shirley

Ownership model

Shirley took the company into co-ownership, which gave her huge satisfaction, and staff owned a quarter of the business by the time of its silver jubilee. “I wanted it to be 100 per cent,” she admits. “But a quarter is quite something for a quoted company. It took me 11 years held back by my inexperience. I was buying in consultancy and legal advice and I had to pay for that personally because we’re talking about my shares being transferred and I hadn’t got the money except my salary. When it happened it was wonderful.

“We started with four per cent, then seven per cent… but it hadn’t made much difference to the culture [of] ‘I’m still working at Steve’s company’ but when it got to a quarter, people started to realise ‘this is our company’. It energised us.” When FI was floated on the London Stock Exchange in 1996 it was worth £121m and turned 70 employees into millionaires.

Shirley had been spurred on by a meeting with Phyllis Pearsall, founder of the Geographers’ A-Z Map Company: “I asked her the big question: ‘Would you do it again?’ There was a horribly long pause, but she said, ‘Yes I would.’ That pause told me so much. It wasn’t easy. There was a lot of pain that went with it, but I am so glad I did it. There is a wonderful picture of a few hundred people waving their share certificates. It’s lovely.”

Shirley sold a controlling interest in 1991 and would make £150m from the sale and flotation on the London Stock Exchange. Only after employee ownership would she learn that her solicitors – “the clever people” – who aided dealings with the special commissioners of the Inland Revenue were learning as fast as she was. “It taught me a lot. You’re not looking at right and wrong but who has interpreted the law correctly [the issue of giving ownership to a quarter of her staff],” she says, recounting the week spent in court, giving evidence for a day and a half, with her company secretary, chairman and legal team. “I was made to feel as if I’d done something wrong,” she reflects.

Leadership lessons

The law may have come down in her favour but she says the work involved is a lesson for all those setting up a company on the back of a passion.

“Entrepreneurs don’t realise that you go into business because you love whatever it is – left-handed teapots or whatever – but quickly you don’t do it. You’re doing human resources, tax, marketing. What I would do again is to employ in challenging times a really good marketing person to find new groups of markets. Just doing what you’ve done before isn’t going to help. When I talk with entrepreneurs they talk in terms of ‘of course, I’d need a salary of this’ and ‘I’d need a company car’, and they’re talking more about what they need and forgetting what services the market might want that they could provide.”

Need is what drove the tech pioneer to philanthropy. Her charitable Shirley Foundation has initiated several pioneering autism projects including Prior’s Court school in Berkshire, which is home to 80 pupils, and the Kingwood Trust, whose 250 staff support 129 adults to live their lives to the full. Shirley’s son Giles had a severe form of autism. He died in 1988, aged 37: “I would have never chosen autism, I might have chosen music or art but never autism. That was pure chance. Yet that’s how I’ve spent the last 20 years, invested £50m in the sector… This is what I do and it’s wonderful. I’m so lucky, I’ve got something to get up for each morning. Most people my age don’t,” she says.

She also founded the Oxford Internet Institute in 2001, an interdisciplinary research establishment at Oxford University devoted to the study of the impact of the internet on society. “My life’s legacy is not going to be my company, which I thought for many years it would be,” she admits. “When I give, I try to think in terms of investing in society. I give only to things that I know, understand and care about – and that is information technology and autism.

“I think it’s pervasively important because I was given so much as a child, as an unaccompanied child refugee. The Kindertransport which brought me to this country was run by the Christian and Jewish activists who set it up, the Quakers who put up the money, the Catholic nuns who educated me. A lot of people give, give, give. I felt – and I feel still – that I was given so much that I need to justify that I was saved when more than a million children died. That has been a real motivator. It makes me driven to ensure that each day was worth saving, so I try not to fritter my life away. It made me an extraordinary patriot. I am not political at all, but I do love my adopted country with a passion that only someone who has lost their human rights can feel.”

It would therefore be remiss not to ask Shirley about the current refugee crisis. She contrasts how “well organised” the Kindertransport was with today’s “ad hoc” situation. “I read that 65 million people are floating around the world as refugees… 65 million,” she repeats. “I am ashamed of the figures. I think Britain has not done us proud because I hope I am an example as to the positive impact that a refugee makes once we settle. We’re determined to succeed. First-generation immigrants are generally wealth creators.”

The conversation leads to Brexit. “I’m not political but I suppose I am disappointed that we are pulling out of Europe. Post-war, as a young adult, we saw the European movement as a way of making sure we were never going to have another war in Europe again. Let’s hope that is still true, but I think it’s less safely true than it was… The Brexit decision is not a peaceful one as far as I’m concerned… It was all about immigration and the message of peace was lost.”

As the Director Lifetime Achievement Award winner, Shirley looks back at her IoD membership with fondness for its standards of professionalism and training that still help her today. “For an entrepreneur who did not have an MBA – they didn’t have MBAs in those days – it’s the IoD’s professionalism and its training courses. The first of many courses I did at the IoD was on public speaking, which I now do a lot of. I would go to them for consulting on HR and they had an emphasis not just on the money side but on business ethics. I did find it very helpful. When I joined, they quizzed me about business ethics.”

And of the award itself? “It is quite a thrill. What seems to happen is one day you’re the young entrepreneur of the year and within a very short period of time people are giving you lifetime achievement awards. Although this is not the first it is extremely nice and I am very pleased about it because the IoD is part of one’s business culture. It has always been very, very good for ambitious businesspeople, especially the young ones starting out.”

Dame Stephanie Shirley’s book Let IT Go is published by Andrews UK

Dame Stephanie Shirley: From child refugee to tech pioneer

Early life

1933 Born Vera Buchthal in Dortmund to a Jewish father and non-Jewish Viennese mother. Her father, a judge, lost his post after the Nazis took power.

1939 Weeks before the outbreak of the Second World War, Vera, five, and her nine-year-old sister Renate were put on the Kindertransport by their parents. The siblings arrived in Britain after a two-and-a-half-day train journey as child refugees and were placed in foster care in the West Midlands. She would later be reunited with her parents.

Schooling Attended Oswestry Girls’ High School and received maths lessons at the local boys’ school. Aged 18, she became a British citizen and changed her name to Stephanie Brook.

Career

1951 Post Office Research Station, London

1959 Joined CDL

1962 Founded Freelance Programmers, which became FI Group in 1974

1980 Appointed an OBE for services to industry

1986 Founded the Shirley Foundation

1987 Bowed out as CEO but remained as president. At the company’s peak in the 1980s, it was worth £150m.

1989-1990 President of the British Computer Society

1992-1993 Master of the IT industry livery company

1993 Retired

2000 Promoted to Dame Commander

2001 Appointed a fellow of the Royal Academy of Engineering

2009-2010 Served as the UK’s ambassador for philanthropy

2012 Released her memoir Let IT Go

2016 Awarded the Director Lifetime Achievement Award at the IoD Director of the Year Awards

@DameStephanie_

Gallery (click to enlarge)

To watch Dame Stephanie Shirley’s TED talk, visit steveshirley.com

About author

Richard Dunnett

Richard Dunnett

Richard Dunnett has been the associate editor of Director magazine since March 2013. He writes about entrepreneurs, SMEs, FTSE 100 corporations, technology, manufacturing, media and sustainability.

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