Three-point turn

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Ian McIntosh , boss Red Driving SchoolImage copyright Red Driving School
Image caption Ian McIntosh became boss of Red Driving School in 2012

Would you quit a stable, well-paid corporate job to become the boss of a failing driving school chain?

Ian McIntosh did that in 2012, when he became chief executive of Red Driving School, and admits it was a “pretty big gamble”.

The firm was not only running at a loss, it had run out of cash, despite having been rescued from administration just two years earlier.

If its investors hadn’t propped it up, it would have gone under, Mr McIntosh says.

“There wasn’t a day during that first year that I didn’t question whether the business would survive.”

It was a desire to “have a stake in something” that convinced him to take the leap, the laidback Yorkshireman says.

Image copyright Red Driving School
Image caption The company says the fall in the pound had made it more expensive to lease its cars

He had climbed high in his career in the food industry, but had never been a chief executive, or owned his own business.

In this case he got both – buying an 11% stake in Red, the value of which he declines to share but says was “pretty substantial”.

“I had missed the opportunity to own my own business earlier in my career because I had a mortgage to pay and a family to feed. But I was ready to take the risk and sure I could turn this business around.”

Six years later and Mr McIntosh’s bet has paid off. Not only has the 60-year-old pulled off a nifty three-point turn at Red, returning the business to growth, he’s also avoided his fair share of scrapes en route.

Before Red he spent two decades working for big manufacturers – first as a senior manager at chocolate firm Mars, then as president for the Americas and Europe at AAK, the Scandinavian vegetable oil maker.

Image copyright Red Driving School
Image caption Red has more than 1,400 instructors

He says he was “very well paid” with “good bonuses and incentives”, but it was time for a change.

He certainly got that at Red – when he joined it was in “dire straits” and went on to lose £1m that year.

“It was totally unlike the corporate world I was used to. There was no golden parachute in my contract to protect me if things went wrong. And of course I had invested my own money,” Mr McIntosh says.

Within six months he says he had come up with a turnaround plan for the business.

The first big change was to fix the firm’s payment collection systems. Red’s customers typically paid in cash at the time of the lesson, but this was causing problems. Quibbles over costs between customers and instructors were common.

And customers felt less committed to turn up for a lesson, often leaving the instructor and Red out of pocket.

Image copyright Red Driving School
Image caption Mr McIntosh has returned the business to growth

Now all customers pay in advance online, Mr McIntosh says.

“It means the customer is protected, our reputation is protected and the instructor doesn’t have to worry about getting paid.”

Red also had “far too many people on its payroll who just weren’t contributing enough”, which led Mr McIntosh to cut 400 jobs.

It now has just 90 full timers at its Middlesbrough offices, along with around 1,400 instructors and instructor-trainers who work as franchisees.

“It’s always difficult letting people go, but I made sure we selected people fairly and the reasons were explained. We were as compassionate as we could be in terms of compensation,” Mr McIntosh says.

By 2014 things were improving but Red’s backers, the private equity firm Kelso Place Asset Management, were unconvinced.

“In late 2014 we got a VAT bill due in January and there was no way we were going to be able to pay it,” Mr McIntosh says.

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“That was the point where the private equity firm thought we’d go under – but I knew we’d be fine. I spoke to HMRC and they gave us time to pay.”

Since then Red has reported “steady” profit growth in each of the past three years. In its most recent financial year it made sales of £11.5m and a £1.2m profit.

It has also become Britain’s largest driving school in terms of instructors on the road, although Mr McIntosh admits its share of the total market remains small.

Paul Caddick is editor of Intelligent Instructor, a magazine for the driving school industry. He says Red is now in a good position to “withstand the natural ups and downs” of the market and hang onto its position as a leading national franchise.

He also praises its marketing – including the way it has highlighted young celebrities learning to drive with Red, such as Games of Thrones star Maisie Williams.

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