Jonathan Richards is the CEO of breatheHR. Set up in 2012 it now has more than 2,000 customers. Richards co-founded the company with Gareth Burrows and focuses on delivering effective simplicity to their customer base.
ET: Jonathan, you started breatheHR about five years ago, what is your vision for the company?
Jonathan R: The primary aim is to improve the way that employees are managed in SMEs. That’s not because it’s done particularly badly but because it’s another thing on the plate of the business owner. What we’re doing is taking some of the hassle away from having employees. Leaving the business owner or manager to get on with the real magic stuff which is the face-to-face, one-to-one with the employee.
ET: What are your key business challenges for the next 12 months?
Jonathan R: To carry on growing the business at the pace that we’ve been growing. One of the key points is to reframe the language. Small businesses don’t do human resources but they do an awful lot of people stuff. One of the key things we’re out there doing at the moment, is talking to smaller businesses and saying look, you might not think you’re doing human resources but you have people, so actually you do. It’s something that you can focus on. It’s very much reframing what is called HR as being a small business thing without burying it all in bureaucracy.
ET: Which technologies do you think are going to influence your industry most in 2017?
Jonathan R: There’s such a range of SaaS. There’s the Workday and big enterprise level stuff through to somebody like us down at the SME level. The technology that is going to influence us is really around automation. How do we make some of the common, the mundane or the day-to-day tasks go away so it happens in a way that is controlled but isn’t controlling the business owner?
The next one is the whole idea of centralising. One of Slack’s stated aims is they want to become the front end to the business. So it’s how we integrate with all the tools that can become a front end for breathe. A lot of the HR admin, a lot of hassle around it, just disappears again into the background.
ET: You haven’t mentioned mobile and mobile’s one of the key technologies that we’re certainly seeing around a lot of usage in the industry. I was just wondering whether that is seen in the SME space as much or what kind of emphasis you have on mobile.
Jonathan R: I see it as a given that mobile is the way of the future. If there’s a challenge for us in mobile, it’s working out what business processes, what kind of interactions should we be having with mobile. For instance, should we move the thing onto mobile? How does an employee interact with breathe versus how the systems HR administrator interacts with it? Mobile is definitely part of our strategy going forward. Do I see it as being an influence in 2017? Yeah it will, but I think it’s there already.
ET: Who is your inspiration and why?
Jonathan R: I take inspiration from all over the place. I read very widely but there were probably two people in my business career that kicked off most of what I’m thinking. They both come from the days when I was in the City. I had an MD at a City firm that I worked for who was the first to give me a break. I really shouldn’t have gotten the job that I got, but he saw something in me. That set me up for the way I like to work with other people. Everybody deserves a chance.
Another was when I was managing accountant for the firm. The boss there, the Finance Director, he was very open, very inclusive. He said: “talk to me if ever you think you’re going to leave. Tell me and I’ll help you.” When the time came, I called him on it and I did tell him and he did help me. That stuck with me along the way.
ET: How would you describe your leadership style?
Jonathan R: Very open, very inclusive, always wanting to be hearing and taking in people’s views. With a balance. We’re an SME, growing fast and we have to make decisions quickly. I’m not afraid to make decisions. I’ll take input, process that input, and then come out with a decision. So sort of one step back from dictatorial.
ET: What are your personal challenges in the next 12 months?
Jonathan R: Stepping back from the day-to-day. We’re out of the scrappy start-up mode where everybody piles in and does everything. That’s been very much where I’ve thrived. Leading the guys that work for me because they’re much more capable at doing things than I am.
ET: What was your darkest business day and how did you overcome it?
Jonathan R: Around about 2008, recession was really taking a hold. The previous company to breathe, Centurion, was a software consultancy. We were implementing big HR systems. The market was folding and I thought I was going to lose the company. I decided that I wasn’t going to lose it, that I wasn’t going to let it go. It was a case of digging deep and saying what do we need to do to hang in there. It was right down in details again, very much getting into the crux of the cash flow, getting into every single situation, probably the reverse of what I was saying was my challenge now. By doing that, and digging deep into it, we saw it through but we came out of it as breathe. The whole process was actually a really transformative one for us.
ET: What was your proudest moment?
Jonathan R: Launching breathe. When Gareth, my business partner, and I decided that we were going to do breathe. That was very much around a desire to have our own system, to have our own technology, and to do it specifically for SMEs. We set out with a ridiculously small budget and a very challenging timeframe. Between us, we got it done and we got it launched. Within an hour, we had our first client trying the system, so that was pretty enormous.
ET: Can you share a tip for new start-up CEOs?
Jonathan R: Number one that I try to tell anybody who’s prepared to listen to me is focus. It’s so easy to get distracted. Focus on what the business is trying to do and stay resilient around that focus. Not getting distracted away, not trying to do all the opportunities that come up. When things aren’t going brilliantly, just check back against your focus and double down on it again.
ET: What was the latest business book you read or your favourite book or podcast?
Jonathan R: I have two. Elon Musk’s biography which I’m actually listening to it on Audible. Awesome book, just shows the possibility of what can be done. Unbelievable amount that that guy’s achieved and I don’t think we’ve seen the half of it yet.
The book that’s probably had the biggest effect on the way I run breathe is Jim Collins’ Great by Choice. Love the concept of fanatical discipline and empirical creativity and productive paranoia. That’s something that I hold with me all the time. I had it as the deluxe screen on my phone for a while. Just as a way of running a business, I think it’s just fantastic.
ET: What’s the worst and best decision you’ve made as a CEO?
Jonathan R: Worst decision, I almost don’t think like that. If I make a bad decision, then the best decision can come instantly after that when I realise it was a bad decision and reverse it. I’m never afraid to say that I’m wrong. For me, a bad decision would be to not make a decision. Get out there, try something, see if it works. If it doesn’t work, test it. Try again. Fairly early on, in fact just before breathe came about, we had the mantra: “if you like, do it, review it, revise it” on the basis of just get out there and do it.
ET: What are the key challenges currently faced by your industry?
Jonathan R: As a very focused SaaS HR for SMEs, the focus is keeping simplicity in a way that is very relevant to SMEs. It’s all too easy to bloat a SaaS product. We put out a release every two weeks. We could load it with all sorts of “really useful stuff” but that just wouldn’t necessarily be relevant. In the greater SaaS world, I think it’s connectivity, particularly again in the SME space. It’s how we interact with the likes of Xero, Pipedrive or Infusionsoft so that small businesses are seeing some kind of joined up thinking.
ET: You’ve got quite a different pricing model than in many other SaaS companies targeted at SMEs. Is there a reason behind that?
Jonathan R: It is kind of an interesting one.
The starting point for me is simplicity.
Having a big pricing table is not something that I think actually helps. Per employee, the price changes constantly. If I’m a small business owner and the number of employees is fluctuating, the amount that appears on my credit card could be one employee up, three employees down. Do I check the numbers or do I just put then through on a nod? With our pricing model of banding it, I think there’s a lot more stability there.
It is an interesting one and there are companies that go different ways. It’s our policy at the moment but do we ever think about going per employee? Yes, we do, but at the moment the view is we just love the word simplicity. I joke to some people that if they say that the thing they like most about what we do is it’s simple, I don’t see that as being any kind of an insult. I see that as a “Congratulations, you’ve done your job right. “
ET: That ethos of simplicity ties back to what you said earlier where you said you do a release every two weeks but you don’t want to bloat the product. You must be keeping your overheads low but still manage to offer support to your customer. Do your partners, the HR consultancies, provide that extra level of support around the HR piece?
Jonathan R: The starting point with that is it comes back to my 15 years as a management accountant. If I know anything it’s how to manage costs. I want that price to be at a point where no SME owner should really feel they need to turn it down on cost. Underlying that, my cost model is such that I’m making money. I don’t believe in the land grab or the let’s just throw money at it to build a customer base.
It’s really down to managing that cost, what you do and how you offer support. We have UK business hours telephone support, so the numbers are there and published, but it’s a case of making sure that the customer has lots of other options. We have chat, we have online and we’ve got good training resources. We have a partner academy where they can teach themselves how to use the system. It’s really a case of understanding, monitoring, checking up on what type of support a customer needs and then giving it to them in the right way. It’s constant work, constant thinking, but it’s definitely do-able.
ET: How do you see your company changing in the next two years, and how do you see yourself creating that change?
Jonathan R: We’re growing. We’re almost grown out of our current office, so there’ll be an office move. We talk quite a lot internally about the business growing up. That will inevitably involve more procedures and more structured ways of working which I think is a very good thing. Having said that, we’ve got to keep the flexibility and the agility of a small business. We’re very deliberately growing the dev team because one of the ways we see to keep ahead of the game is to keep the product evolving. Whenever we put in a piece of development, we say is it simple enough? How do we make it more simple? If it doesn’t pass that test, then we don’t release it. We go back and think again.
I like to think that just in the last few months, we’ve now entered our own target market, which is kind of a funky place to be. We deliberately target 20-50 employee companies and now we’re in that space. That’s been quite an interesting journey.
ET: What’s on the roadmap in terms of the software?
Jonathan R: Two ways we think of it. There’s a fairly constant revisit of areas that we do, so an example of that would be the performance management side. There’s a lot of talk of changing the way that performance management is done, particularly in the big company stuff. We’re revisiting all of that and seeing how we can make feedback a lot more instant, about how we can encourage business owners to do a lot more one-to-ones.
ET: Are you talking about continuous appraisal?
Jonathan R: Yes. Again, it’s an interesting language one for us. We try and stay away from the corporate, the HR-y feel of language. What I’m all about is getting the owner or the line manager to meet with the person that works for them and just talk, because that’s really where it works. There’s a bunch of work we’re doing around that.
We’re thinking again about mobile, about how we can build on what we’ve got there. We’re doing a little bit of future thinking and playing around with voice, seeing what instances there are there.
ET: Are you talking about integrating with things like Alexa
Jonathan R: Yeah, Alexa, Siri and Cortana. I think that’s some way off yet, but I love the idea of somebody deciding they want to book a holiday and saying to Alexa: “book me a holiday.” It goes away and does that in the background, checks who else is on holiday and if the rules are met, then it gets approved. We’re a little way off that. I’m not sure that the space is ready for that. I’m not really sure the tech is ready for that in a secure way, but it’s definitely an interesting angle.
ET: What are the trends in SME HR that you’re hearing from your clients?
Jonathan R: The first trend is there’s a broader recognition that people need to spend more time with their employees, with their people. It’s always been there and the advance guard have been saying that for a long time. There’s a recognition that HR is needed but not calling it HR.
ET: In the mid- and large enterprise, what we’re seeing is a greater focus on talent retention and internal talent growth. You’re reflecting that in a sense in a more SME-style language.
Jonathan R: Yeah, I’m not sure I like the language, but it’s the whole Jim Collins thing. Get the right people on the bus and get them in the right seat. A business owner or a leader of a small business should be spending more of their time on that kind of thing. If they do that, then the business will, in a way, manage without them doing the hands-on day-to-day.
ET: What’s the one question you’d like to ask another CEO to answer?
Jonathan R: I’m nosy and I love small businesses. I’d be much more interested to sit down with them and have lunch and chew over how they’re thinking and what they’re thinking. I’m particularly keen on getting ideas from outside of the software world, out of the tech world. Anybody I can sit down with and just understand a little nugget about their business.
ET: Thank you Jonathan.