Quantity control that drives Quality Street

QUALITY STREET is Britain's largest private rented housing company. It owns about 2,500 properties and manages a further 1,000 for other people.

The company was started by Paul Mugnaioni in 1988 and turnover has grown from pounds 140,000 to a projected pounds 14m for 1994. From the first the Nationwide Building Society has had an interest in the firm. At the outset it took what was in effect a 75 per cent stake, and then in 1991 sold its shares back to Mr Mugnaioni but continued to lend money. In January it again bought a 75 per cent stake to reduce the deficit in the balance sheet of Quality Street caused by falling property prices.

Mr Mugnaioni gained his experience as director of City Housing in Glasgow from 1982 to 1987, handling 174,000 properties. 'The key thing I learned was that in the UK there wasn't a thriving ready-access private rental sector. After the Housing Act in 1988 made it easier for landlords to rent out their properties, I felt it was the time to launch Quality Street.'

Quality Street employs only 130 people, although it covers a variety of towns in Britain. 'We basically have only two layers between the cleaners and the board,' Mr Mugnaioni said, 'so communications have to be excellent and everyone is expected to know exactly how the company runs. We have no titles and everyone is on first- name terms.' Even Mr Mugnaioni's business card carries only his name, and not his title of chairman.

'It is all about people treating other people with respect, employees earning respect and using their common sense,' he said. 'We are very lucky in setting up the operation from scratch.'

To emphasise this each member of staff, Mr Mugnaioni included, must work one day a month as receptionist. 'The idea behind this,' Mr Mugnaioni said, 'is that we have a three-ring telephone policy in the company - in other words it should never ring four times. We have one receptionist, with about about 10 to 15 lines, so everyone else - from the maintenance people to the sales team - will have to answer the phone at some time, and it is essential that they all know the right way to do it. The receptionists' job is very challenging. They are the public face of the company and need to know everything about it.'

He also finds that asking people to do something other than the job they were employed to do quickly determines whether they are right for the company. 'The ones who reckon their time is too valuable to go on reception are the ones who will not stay.'

Other jobs are swapped, too. 'A year ago, I spent a couple of days being an assistant concierge,' Mr Mugnaioni said. 'He was on pain of death not to say anything to our customers. I tidied up the bins, emptied the rubbish, cut the grass. It gave me a fabulous insight. It was really important to do that. He has to do a range of things from helping people fill in benefit claims to picking up leaves.'

The one problem with this work ethic is finding the right staff. 'It can take a long time finding the right applicant and we put a lot of energy into recruitment development,' Mr Mugnaioni said.

'I see the company as a series of happy families. They have their problems, but these are discussed and sorted out as soon as possible. And we believe in continual stretching and developing, which is why we also run a leadership programme that looks for potential team leaders.'

He also has achievement reviews every six months at which everyone is free to voice concerns. 'We believe in confronting issues, not sweeping them under the carpet,' Mr Mugnaioni said. 'If anyone has a glum face, it will not be long before someone will make it their business to find out what is wrong.'