Berkeley group as a study of entrepreneurial leadership

September 15, 2015

Tony PidgleyBerkeley Group reports a profits surge as it prepares to enter the FTSE 100 index. This news is tempered by resistance from its instructional investors over its executive remuneration arrangements

The Berkeley Group corporate web page suggests this is a modern company complying with the ‘newer bottom lines’ of Corporate social responsibility. Its financial growth has been found attractive to institutional investors. Now the cachet of entry into the FTSE 100 as a solid blue chip company beckons.

Its situation is even more positive at present as government house building policies have given the sector a boost.

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Will Tim Cook’s Apple become a leading Ethical Data Corporation?

March 6, 2015

Paul Hinks

Apple WatchWhen Tim Cook inherited Apple, it was as much an opportunity to fail rather than an opportunity to succeed in re-inventing to Corporation through transformative technologies in the spirit of Steve Job’s legacy. The proposed strategic move into Big Data may prove more significant even than the development of the much- anticipated Apple Watch

Apple’s ‘spring forward’ event scheduled for 9th March 2015 will showcase Apple’s upcoming innovations – including Apple’s much-anticipated watch . This is an important moment for Tim Cook.

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Sir Philip Hampton shows ethical leadership or perhaps cautious pragmatism

April 11, 2012

Future Manyumba

Royal Bank of Scotland Chairman Sir Philip Hampton [right] turned down a £1.4 million bonus in January. Was it evidence of a ‘wind of change’ or a self-saving political statement?

On the 28th of Jan this year, Sir Philip Hampton announced that he would give up his £1.4 million bonus as Chairman of Royal Bank of Scotlan. Few people may disagree with his actions, accepting that the RBS team is doing a tough job. Indeed some would question why he should take such a personal sacrifice when his colleagues in the private sector are still getting astronomical bonuses by comparison.

Frontline leadership

The decision was symbolic in nature. His actions could prove to be a watershed moment in the history of the finance sector in the UK. Sir Philip Hampton has previously held successful positions with Sainsbury plc (chairman), Lloyds Banking group plc, BT group, British Gas and British Steel.

As the head of a bank which is 83% owned by tax payers, public opinion is something that bears a strong influence on decision making. What does it say when bank executives pay themselves huge bonuses when in essence the shareholders (tax payers in the case of RBS) are having to bear with the pains of the Government’s austerity measures?

Decision Dilemma

Sir Philip Hampton demonstrated restraint by example, demonstrating the subtle and pervasive powers of symbolic leadership. He faced the dilemma of either taking the money or suffering personal loss and alienation from fellow executives in the banking industry. Accepting the money at a time when the bank is cutting jobs (cost cutting measures) would have made him look hypocritical but giving it up risked demoralising other executives (within RBS) who ultimately may feel pressured to emulate him. I believe that his choice sent out a compelling ethical view point for business and industry.

The force of sacrifice

Within days of this action, the RBS CEO, Stephen Hester decided to emulate his chairman (some may say he was left with no choice). Within a week, executives of Network Rail also decided to forego their bonuses . Through his ethical symbolic actions, Sir Philip Hampton may have started a chain reaction which is going to transform the banking and private businesses landscape. The momentum is building with politicians and business community now calling for a public debate about the morality of executives’ bonus scheme during tough times.

Challenging times – Adapt or Die

A leader does not necessarily have to ‘stay the course’ just because it is his/her natural style but has to have the flexibility to adapt to the changing times.

Hero or Villain?

It is difficult to see the actions of one man changing the bonus culture of banks in the short term. However, his actions have shown participative and visionary leadership likely to have momentous influence in the long term. He has chosen to make his actions congruent with his beliefs. Now he can stand up and talk about the need to cut bonuses of bankers with moral authority.

Acknowledgements

Future Manyumba, a LWD subscriber, is originally from Zimbabwe, and is a Process Engineer with training and experience in hard rock mining in Southern Africa (gold, nickel and copper). His interests include geopolitical global issues, leadership and football.

Image of Sir Philip Hampton is from the RBS website.


Sir Martin Sorrell defends leaders’ pay rises

December 19, 2011

Sir Martin Sorrell has an impressive if sometimes controversial business career. His robust defense of his 70% pay rise captures his leadership style

Harvard educated Sir Martin Sorrell has been a candidate for a LWD leadership post for some while. He appeared on the radar screen again, as I caught the end of a BBC interview in which he justifies his most recent earnings rise of 70% last year.

His broadcast performance was consistent with that of an earlier interview [2009], suggesting a leader who was both tough and successful.

Sir Martin Sorrell is the chief executive of WPP, the company he founded in 1986, which is now the world’s largest group of advertising, marketing and communications companies. Widely regarded as one of the most important figures in his field, he recently joined Evan Davis on Radio 4’s business discussion programme The Bottom Line. He shared his vision about the future of advertising, the benefits of scale, why tough love means you sometimes have to bite the bullet and reduce your headcount, and how long the present financial crisis may last.

His 2009 predictions turned out to be rather refuted by events. However, that is largely true for other distinguished leaders in these turbulent times. There is an interesting parallel in his admiration of Rupert Murdoch with the comments made later by Tony Blair in his memoires. These endorsements of the tycoon’s achievements help us avoid the ‘hero to zero’ mentality which can be found in much of popular leadership narratives.

Furthermore, most pundits did not get close to anticipating the aftershocks of the credit crunch emerging in 2008.

Rupert understands…

Somebody like Rupert Murdoch understands that he’s not just in the TV business or the film business. He understands he’s in the communications business. Rather like Theodore Levitt used to talk about the buggy whip industry. They’re not in the horse and buggy industry. They’re in the transport industry. And when the railroads came in, they were threatened; but if you thought about it as being the transport industry, you won.
Rupert understands that. He’s in film, he’s in TV, he’s in outdoor sites in Russia. He’s spread his empire around the world.

“A recovery of sorts”

“The first half of 2009 will be very tough – I think the second half of 2009 will get relatively better. Relative to the first half.
And I think in 2010 we will get a recovery – what we called in a recent statement a recovery of sorts “.

Tough love

Sir Martin’s career has been hugely successful and his success has been rewarded with honours and wealth. He takes risks and cuts his losses when they occur. In the interview he also talked about ‘tough love’ and the benefits of ‘letting people go’ however painful the decision. (Although he didn’t seem too pained, it seemed to me).

The Daily Mail, a popularist tabloid newspaper, was unconvinced about Sir Martin’s case. In an article hostile to his lifestyle The Mail noted:

My pay is very low, moans advertising tycoon with a basic salary of £1 MILLION a year

Sir Martin, 66, said his bumper income, which rose by 83 per cent to £4.2million last year, was fully justified and was mostly linked to the firm’s performance. He added that he considered his basic salary, of just over £1million, to be ‘very low’.

The juicy details

The article also replicated much that can be found on wikipedia on juicy details of his high-profile divorce which has arguably contributed to his celebrity profile, albeit for non-business matters.

Acknowledgements

To the website Short Person’s Support for the image of Sir Martin. The site also offers the following quotable quote:

Aunt Vorthys: “A nice young man … A pity he’s so short.”
Lady Ekaterin: “He’s not so short … He’s just concentrated”

[Lois McMaster Bujold, in Komarr]