In the frame - Business Works

In the frame


Sir William Sargent, CEO of Framestore
otivating people, creating a positive and exciting environment in which to work and treating people well are all good ingredients in a recipe for business success. Sir William Sargent, joint founder and CEO of Framestore, talks to Roger Prentis and shows how the theory can be put effectively into practice.

q: I believe that you come from Ireland originally?

a: I am a Dubliner who has lived in Dublin for very few years of my life actually. My parents came from Cork, but I was actually raised in Rio de Janeiro in Brazil and the only time I lived in Dublin was when I studied at Trinity College.

q: You started your first business even before going to college – what did you do?

a: The Irish system didn’t support students financially in their studies at that time, so I worked as a Disc Jockey. I bought some turntables and I was doing some gigs for friends of the family and local youth clubs and so on. Then, when I was in college, I got together with someone who had the fledgling start of a business and we worked together so that I could get money to study. We were basically renting out sound equipment.

Dublin had a very lively music culture at that time that I don’t think exists in the UK. There were loads of musicians all doing lots of gigs during the weekend. Most pubs in the centre of town would have a lunchtime gig and then, later on, there would be an early-evening one at around 5 o’clock and later another at 9 o’clock. The rest of the weekend was also occupied with events, often finishing with a jazz session in a local hotel, for example.

We also had really expensive equipment that we would hire out to big rock bands that would come to Ireland, but the margins on that part of the business as a percentage of the capital cost were much lower than the domestic market. For a major band, you had hundreds of thousands of pounds worth of equipment, but you could only get 500 quid a night for it, whereas you could rent out 200 quid’s worth of equipment for a household for 20 quid for the evening.

Of course, the bit that gave us the buzz was doing a major band in a major stadium and having a ball doing it! It was hard work, but that was what got you out of bed and we subsidised it from the routine party rentals. On a good Friday, we might make four times £10 on a £200 amp in one evening so that was a good margin.

q: You studied business and law – where did you go after graduating?

Where the Wild Things Are

a: I came to London. I was part of a generation of Irishmen who basically didn’t have a job. In fact, only one person out of my whole class got a job in Ireland – the rest of us came to London or went to America because that was what you did if you were a graduate in Ireland in the late 1970s.

Whilst I didn’t realise it at the time, Ireland’s economy then was more like that of a third-world country. I now look at Treasury data and realise that the economy in the 1960s and 70s was like that of Eastern Europe ten years ago. It didn’t feel like it at the time, but that was how it was which explains why there are so many Irish people overseas from my generation.

I literally got on the boat to Hollyhead and then came down to London where I had contacts from the equipment rental business. I used those contacts to get into the music industry over here and one thing led to another – it is all about things that you like and things that you know.

All business is a mix of fun, cool things and bits that you have to do to pay the bills and I continue to work on that philosophy.

q: Does that apply to Framestore even now?

a: Very much. There are things that we do that are really cool and that are an integral part of our culture – you know that you have to at least break even or make a little money on it, but it is part of who you are. And there is the work that is straight forward bog standard that you do very professionally and well, but if that was all you did for a living, you wouldn’t keep the edge on the business or retain the people that really make a difference.

My job as CEO is to say to people that I will make sure that they are challenged and have job satisfaction, but I can’t do that 100% of the year because, guess what, there is a lot of boring stuff that needs doing too. The trouble is that the exciting stuff is often very competitive and ambitious and that can often be beyond the level of the budget. There are very few Jim Camerons that can get enough money to make an Avatar, but there are a lot of people that would like to do it! We would love to help them do it, but we have to have the budget to go with the project.

I have a business to run and my staff have mortgages to pay so I say, if I can get you 26 weeks of the year working on really interesting and cool stuff, but we don’t make a lot of money on it and the other 26 weeks is working on stuff that has good margins, but, frankly, you can do in your sleep, then I will commit to that.

I need my people to be team players, so I promise them that I will take responsibility for their development and offer them the challenges they need and want to get them excited. If I just give them 52 weeks of routine dull stuff then, guess what, they ain’t going to stay with me. I will have worked really hard to train them as a graduate entrant for five years so that they become a really top-notch person and then I will lose them because I didn’t take their aspirations seriously.

As CEO, I must never take my eye off the ball. I have £20m worth of computers, 60,000 square feet of West End London office space, but the only thing that really counts is the 600 people that work here. There is really nothing else that matters.

q: are the challenges of managing your business?

a: The more talented people are, the more challenging it is to manage them generally. People who are really top-notch, and I have some really world-class people here, are really tough on themselves. Not only will they not accept second best from themselves, but they expect it from everyone around them. They have exceptionally high standards and they will not work to a lower level. It is that grit in the system that makes us world-class. The analogy is sharpening a knife – you get the perfect, honed edge from the rubbing against a hard, abrasive surface. That’s why we are able to do some of the best work in the world.

Framestore office

I employ a lot of people who are extremely skilled and educated – with PhDs in mathematics, physics and computing – about two-thirds of my staff is like that. We are working at the forefront of artificial intelligence and computer graphics so we need the best technical people. Managing them becomes a challenge sometimes. I will have to say, “Well, can’t we just get this out of the door now?” but they always want to get it 100% perfect. Every single technologist thinks that they can run the business better than me and often they say that if we didn’t have any artists and people like me around it would run a lot better and more efficiently. It applies to every single technologist that I have ever worked with and it’s great because it means that they really care about the business.

q: Is there a problem with maintaining a team spirit amongst such highly-technical specialists?


a: It isn’t really that difficult. If they are surrounded by like-minded people who are equally passionate, then it works. And remember, they can only get the finished product out of the door if they work as a team. No single individual can do even a fifth of what is required, let alone 100%. They can operate without contact between departments or contact with the clients and breaking those barriers can be a challenge. Their strength is their focus and dedication and it is the manager’s job to bring the softer aspects together and make sure it all works.

Part of the problem is that the education system encourages such loner behaviour. At university they get so many hours lectures a week and then have to spend the rest of the time working alone. In the end, nobody else can do the exams for you, so you just have to cut everybody out and say that you are going to work until midnight to get it done.

My job is to find ways to break any barriers and encourage people to integrate and work together. We have a café where people come for lunch and people will sit together with their colleagues and people from other floors and talk about problems. Even the building reception is designed so that people have only one way in and so meet and talk. It is a way of breaking the e-mail culture and # getting people to interact.

q: You started Framestore in 1986, very early in the history of CGI (computer graphics)?

a: Making films using computers basically started in the mid-1980s. It took about 10 years to gain momentum in the film side for obvious reasons – video resolution is about one sixteenth of film resolution, so it is down to processing power and storage.

So, we started on television work and commercials, but even then we could only do about 90 seconds of material on equipment that occupied the space of a normal office or room. Now you can buy a £600 Mac that has more power than the Cray computers of that time.

The early stuff in film was on things like The Young Sherlock Holmes and Jurassic Park. In Jurassic Park there was only about four or five minutes of dinosaurs in the whole film and people see that as the great breakthrough in use of computer graphics in film. The material is very cleverly spliced into the overall story, but, really, there is a surprisingly small amount there, but it took an enormous amount of resources to produce.

We didn’t start with any analogue equipment – we actually started digitally, so we were at the very beginning of the process. Basically, we took a punt. We borrowed a huge amount of money that we couldn’t afford to pay back – it was far more than our personal assets. We had everything on the line and if it hadn’t worked in the first 12 months then we would have been bankrupt and on the streets.

q: At the time, did you think that it would ever become so successful?

a: Never. We were adamant that the business would be kept small and that we would never let it grow larger than 20 people. We were very clear about that – we wanted perfection and to keep it small and compact and avoid bureaucracy.

It depends on the number of projects and what size they are, but at the moment, in round numbers, we have 700 people – about 650 here, 50 in New York and a dozen in Reykjavik. Effectively we operate in the advertising and feature film worlds. On the film side, we work with the six Hollywood studios, some mini-majors and in the TV-resolution end we work mainly with the large advertising agencies and occasionally the broadcasters.

Nanny MacPhee

My vision for the company is that we do absolutely world-class moving images across any platform. That is not how we state it usually, but it is the reality of what we do. An image can start up on a cinema screen, go to a computer screen or whatever and that’s the way the world is going. Take Pirates of the Caribbean: my daughter has consumed it on the PSP, the PS2, PS3, the television, at the cinema and on an aeroplane. So she has seen it on six different screens and formats.

As the world evolves, we evolve with it, whether the underlying imagery is for communication, entertainment or product promotion. What matters is the interesting iconic imagery which we are really good at and now it is being consumed on an ever-increasing range of devices. Because we are at the high-end of the process, we are often involved in all stages of the production. Of course, if someone just wants a commodity version of what we do – this is the concept and we want five versions – then, by definition, we will be too expensive for them because of our equipment and people profiles are at the high-end.

q: How do you see convergence between the different platforms?

a: Convergence is a dangerous word. It was not until the most recent versions of the games consoles that we started to see it. I was in a business that was in the games industry and in the film industry, and it was clear that there was no connection between the two because they were different genres, different creative solutions. However, in the new generation of games, all of the story telling and creative disciplines from film are now being used. Story boards, story telling, the episodic approach have now all merged into the games world and games now have the visual quality to be enjoyed as a film-like experience in which the player controls the story.

Prince of Persia that we delivered in the last few weeks (which will open in the next couple of months) I think will be another block buster. I expect it to do really well and that was a games franchise that had been successful for years that has now moved into film. They are taking the characters and story lines that came out of the games world and created a film and that will eventually feed back into the next version of the game and so on. And, of course, you could create comic books from it – but it all comes back to the art of story telling. Story telling is a very visual art now, but you can tell it across very different platforms from print to the moving image and you can tell different versions in the movie format from such as the iPhone to the film screen.

q: Have you ever been tempted to go into education?

a: I love the idea of it, but I am not tempted because there just aren’t enough hours and enough brain power left at the end of the day. Until I stepped down from my government role last year, I was working 7 days a week. I was involved with the government’s National Skills Strategy with Patricia Hewitt, Digby Jones, Brendan Barber and Charles Clarke, so the idea is close to my heart, but it is really just a matter of time. I would love to do something, but just not at the moment.

q: You are clearly passionate about developing people and education – how do you see the UK’s position at the moment?

a: In Ireland, the government started to invest heavily in education in the 1970s which then paid off in the 1980s and 90s. As a result, Ireland has become what it is – ignoring the current economic crisis that has resulted from liquidity problems and the failure of the property sector. The economy has benefitted hugely from harnessing the talented students and that has attracted huge inward investment and resulted in some stunning successes.


We struggle to get the nature of graduates from UK universities that we can plug into our business today compared to five or ten years ago. Two-thirds of my graduate intake now comes from European, rather than British universities. It used to be 95% British intake. On the one hand, of course, the business has grown so that I need more, but I just get better-trained graduates from the European colleges. My senior management team has put a huge amount of effort into the British colleges as well as the French, German, Scandinavian ones, so it’s not for want of trying hard.

q: So what is missing from the British universities?

a: Connection with the business community. It’s as simple as that.

The German college which only started about ten years ago, spent a huge amount of time engaged with the industry and with us as a company. They developed the courses in response to our specific requirements and the students are trained to be really commercial when they come out. It is just the complete opposite between the German, French and Scandinavian cultures compared to the British.

q: Why?

a: There are some good examples of it working in the UK, but those are usually down to a maverick lecturer operating slightly outside the rules of the college. A lecturer who is passionate about their subject and their students will get on a train and come down to our offices in Soho to find out what we are doing.

Generally, the British system is completely focused on government funding. If you have the business community on one side, the colleges in the middle and government on the other, then they have to spend so much of their time and effort dealing with the government that they are always facing in that direction. The process of obtaining government funding is not simple and straightforward, so culturally they are not used to facing business and spend all their time complying with what government wants.

q: Your first government role was with the Small Business Council – how did you get involved?

a: Yes. Previous to that, I had never met a Minister in my life. Like most business people, I was busy running my own business and had virtually no exposure to Civil Servants at all. I had no real interest in interacting with them, but, having said that, I have always been passionate about Trade Associations and the like. You cannot sit on the sidelines – you have to engage with your community, so I suppose that the government work was an extension of that with my trade association. As a business person, you don’t have the right to sit on the sideline and criticise unless you get stuck in yourself – however little, but you must do something whether it is the Chamber of Commerce, the CBI, trade association or whatever.

Civil Servants are developing policy from their position and as they see the world working, so if the business community doesn’t interact with them, they develop it in isolation. To then turn around and criticise what they do is unfair, because they have done their best to develop it intellectually to address the problems that they see.

It is critical for government to engage with business and be sure to get its input. The cost of employing people for a five-person business is about ten times that for a large corporation due to the economies of scale, for example, so systems need to be designed so that they work for the small companies – and, of course, if they work easily for small companies they will work for larger ones too.

q: You then moved to the Better Regulation Executive which seems to follow from what you have just been saying?

a: Yes, I was persuaded to do it, in honesty. I was involved with shaping the Philip Hampton review with the Better Regulation Task Force, so I was fully in support of the two road maps that they proposed and confident that they would really make a difference. After the Small Business Council, I really wasn’t looking for any further government involvement as I had “done my bit”. Everyone from the Prime Minister, through the Cabinet Secretary to the business community was supportive and they pushed the “duty button” which always works!

There had been six previous failed attempts at a similar exercise and I told them that they shouldn’t expect more than a 20% achievement of the agenda. It couldn’t be achieved in a single parliament and I had seen what had happened before to such initiatives. A couple of years in, someone would be looking for cost-saving or something and start asking what had been achieved and pointing fingers. I told them that they had to be absolutely serious and committed – Lord Sainsbury under Michael Heseltine came up with 400 ideas and successfully implemented one. It wasn’t that they didn’t want to do it – I was very lucky that I was able to tap into the resources and had the necessary support.

q: Some people are very critical of Civil Servants which you don’t see as fair?

a: Indeed. People like Digby Jones – he was very critical their performance when he stepped down as a Minister. In life, you get out what you put in and how you work with people and handle them and so forth is so important. People in the public sector are extremely committed and professional. You can bring your private sector experience into it, but not transpose it directly – just like you can’t transpose from one company to another.

Guiness surfer

You have to work out what the levers are that you can pull. In the public sector, you have people who are so motivated that it’s unbelievable. You don’t have to motivate people like that – they get up in the morning believing what they do really makes a difference. They believe passionately and the brightness of people you meet in the public sector is stunning. They have made a conscious choice to be in a world where they are paid less money compared with the commercial world. What you can bring is a new insight and maybe new ways of doing things to get more benefits. The environment is quite different – it is a different culture, a different league – and the challenge is to bring people with you and to work with them sympathetically and positively. In the private sector you can command and there is a punitive aspect to leadership that is absent in the public sector. There is also a strong media aspect to the public sector – I can waste 10 to 20p in the pound here on bad decisions and that is OK because if I don’t take risks nothing happens. In the public sector if you waste one penny in the pound, despite the fact that you might be delivering the very best world-class service, you will be on the front page of the Daily Mail the next day. They make nothing of the fact that 99 pence was spent really well. Risk taking is hugely discouraged and trying to fix problems becomes a cover-up issue.

After my four years working in the Civil Service, I have a very strong protective feel for it. The integrity, the structure, is incredible and unique in the world. Our Civil Service is held high throughout the world – the calibre of our people is in a different league compared to other countries.


q: What about the current state of the UK economy?

a: I have to pick my words carefully because I attend the HMT Board meetings every six weeks. The UK economy is in a tough place. We shouldn’t underestimate it and I am pleased that there is an election just coming up.

I was planning for a slowdown, but the financial sector's problems tipped it into a recession. We increased the peaks through excess credit and, as a result, the troughs were also lowered. We need to get back to a more normal cycle.

Our economy is very resilient and I am confident that it will bounce back, albeit with a debt overhang. The question is then how we deal with the debt and over what timescale. It will be a long recovery, come what may.

a: What could be done most expeditiously to help that recovery?

Capital investments and exports – this time around, consumer spending is not enough to pull us out of the recession. The current state of Sterling strongly favours exports. I am an exporter (75% of my business is exported) and I think that we have to take every opportunity to harness what the market has to offer now. We should encourage all organisations that can to add exporting to their everyday offerings and BIS should actively encourage anyone who can export to do it.

The economy is built on generations of exporting. We need to continue and develop that. We have all under-invested over the past few years too. Now that there are signs that things are improving, we should all invest and the government should do all in its power to encourage that investment.

Credit is another problem. Nobody seems to have articulated yet how much the supply chain is providing funding to other businesses. Somebody needs to do that. We have seen invoice payment times gradually slip and my own company has effectively been a provider of credit to our customers. If we can bring invoice payments back to more reasonable times, we will have better cash flow and more money to invest in equipment, training and people.

In a nutshell, that’s the way out of the recession.


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