“I didn’t see that coming” The glorious unpredictability of sport, leadership and life

December 1, 2015

Not a ReviewNot a week goes by without me stumbling over the unpredictability of leadership in business, sport, politics, and more seriously over environment challenges and global conflicts

Being alive brings with it the survival skill of reacting to the unexpected. Fear of the unknown is part of the evolutionary arrangements. Learning from the immediate is another.

My blogging tries to help me, and I hope readers,  to connect up the microcosmic with broader sets of ideas, sometimes known as theories. This weekend there were several moments in which my reaction was “I didn’t see that coming”.

Tyson Fury

Tyson Fury’s win over Vladimir Klitschko was one such story. It involved two excessively large boxers in a sometimes hilarious spectacle of drumming up business for their world championship match. The challenger, Tyson Fury, had a range of attention-grabbing stunts. He heaped on the obligatory abuse belittling his opponent. At one press conference he appeared dressed as Batman and gave a pantomime performance of apprehending The Joker. He burst into tuneless song, dedicating it to his pregnant wife, and once, to his impassive opponent.

His underdog back story of the Gipsy King was already in place, ticking many boxes some with similarities to those of bad boy Mike Tyson after whom he was named.

Boxing, that noble art, risks going down a path of gratuitous violence with increasing suspicions of its integrity of decisions, and welfare of its participants. I watch from to time to time with a mix of admiration and suspicion at the apotheosis of athleticism at the service of big business.

The long-established but aging champion was still widely expected to win, although Fury had his cautiously optimistic supporters among pundits. In the fight, Fury delivered the strategy he had boasted of in the pre-fight nonsense and was the shock winner. I for one was fooled, and perhaps so was Klitschko.

As one report put it

Britain’s Tyson Fury pulled off one of the great boxing upsets as he outpointed Wladimir Klitschko to become heavyweight champion of the world. It was a dour and often messy fight but Fury, courtesy of his superior boxing skills, fully deserved to be awarded a unanimous decision.

Ukrainian Klitschko, whose nine-year reign as champion was brought to an end, simply could not work the challenger out and did not do enough to win.

George Osborne

The chancellor stood up to present his autumn financial statement before a House expecting some humiliating climb down over his plans to scrap financial benefits. Osborne sat down to conservative cheers having found a way of turning a defeat into apparent victory.

He was no longing scrapping financial benefits as announced, he was scrapping his plans. A bemused Robert Peston for the BBC described the ‘conjuring trick’.

So how has George Osborne pulled off the magical trick of maintaining spending on the police, imposing smaller than anticipated departmental spending cuts in general, and performing an expensive u-turn on tax-credit reductions, while remaining seemingly on course to turn this year’s £74bn deficit into a £10bn surplus in 2020.

Well, it is because the government’s forecaster, the Office for Budget Responsibility, has increased its prognosis of how much the Treasury will raise from existing taxes (not new ones) and reduced what it thinks the chancellor will shell out in interest on its massive debts.

Or to put it another way, George Osborne is today £23bn better off than he thought in July, and without doing anything at all.

Time to go back to the alleged remark by Napoleon about lucky generals.

Robert and Grace Mugabe

Nothing will surprise me about Mr Mugabe anymore. Or so I thought. Then I read of the expectations of his wife that thanks to a little help from orthopaedic aids, she expects him to rule Zimambwe until he reaches his hundredth birthday. After that  Grace Mgabe is willing to assume the presidency. Grace has already astounded her observers at the speed her PhD was granted from the University of Zimbabwe, following her less successful efforts as a correspondence course student at the University of London.

Lucky Robert. Poor Zimbabwe.

 

 


Tesco’s Richard Brasher goes because “you can’t have two leaders in a team”

March 17, 2012

Philip Clarke, CEO of of Tesco [right] created the post of UK chief executive in 2010 for Richard Brasher, who now leaves echoing a metaphor that “you can’t have two leaders in a team”. Does this suggest a command and control corporate culture at Tesco?

The official corporate statement gave the news as follows [synopsis by LWD]:

As a consequence of [group CEO] Philip Clarke’s decision to take a much closer involvement in the UK business, Tesco plc announces today [15th March 2012] that Richard Brasher has decided to step down from the Board with immediate effect and to leave the Company in July once he has effected a smooth transition of the UK business to Philip.

Philip Clarke said: “I have decided to assume responsibility as the CEO of our UK business at this very important time. This greater focus will allow me to oversee the improvements that are so important for customers. I completely understand why Richard has decided to leave and want to thank him for the great contribution he has made over many years. The depth of management at Tesco and the strong leadership team across the Group allow me to take a more active role in the UK whilst our other businesses continue to grow.

The one captain issue

The move was widely presented, as in this account from the Sun, as actions taken to deal with problems resulting from ‘two captains on the ship’.

In a letter to [Tesco] staff, seen by[The Sun’s City reporters] , Mr Brasher said he “respected” his colleague’s desire to be “more closely involved”. He then added: “However, if even the best of teams is to succeed, it must have only one captain.

…the article went on to suggest that Philip Clark had also used the same two-captains metaphor in an interview with them:

Speaking to The Sun yesterday, Mr Clarke said: “Richard has done an extraordinary set of things in his career but this decision to step aside so I can get close to the business is the top one. “There’s only room for one captain in the team. He feels the business is best served by giving me more space. I respect that. It’s a big and brave decision.”


What’s going on?

A BBC report suggested that there might have been ‘a clash of egos in the context of poor results and lack of success in a strategy of responding to changing retail conditions’. Other reports suggest that the departure seems to have been publically managed as smooth but privately was a bit more bloody (a bit of pushing and a bit of jumping?).

But a few days into the story [March 17th 2012], another BBC commentator with unrivalled business contacts, Robert Peston, reported on the story without suggestion of a boardroom battle.

Where did the idea of distributed leadership go?

Of increasing interest within leadership studies is the concept of distributed leadership. The metaphor of ‘one captain of the ship’ as reported here suggests that Tesco is more accustomed to a traditional command and control culture.


BP’s Hayward goes: How we get the leaders we deserve

July 26, 2010

Tony Hayward, BP’s CEO has been dubbed the most hated Businessman in America in the wake of the Oil Spill disaster in the Gulf of Mexico. His removal was inevitable. But does it make much sense, beyond being a symbolic gesture of a leader falling on his sword?

There is little surprise in the news that Tony Hayward is to be removed as CEO of BP. The BBC’s Robert Peston among others felt that Hayward’s days were numbered from the earliest days of the Deepwater Horizon fatalities. Peston reveals that the BP board had decided that its future would require a new CEO:

Directors also felt that the sacrifice of Hayward should not happen until serious progress had been made on staunching the oil leak and until it was possible to quantify the financial cost of fixing the hole, providing compensation and paying fines. In the last couple of weeks, there has been such progress. And if the moment has more-or-less arrived for BP to start building a post-Macondo future, then it also needs a new public face, a new leader.

The most significant charge appears to be his ‘PR gaffes’.

The demonization of Hayward

Since the Oil-Spill a storm of adverse publicity has been sustained against him. President Obama joined in with remarks in a television interview that Mr Hayward “wouldn’t be working for me after any of those statements”.

Mr Hayward has been demonised as being responsible for the world’s worst environmental disaster – and, let’s not forget, for the deaths of 11 men in the rig explosion that preceded it. Critics argue that, as the man in charge, it is Mr Hayward’s job to take the heat. Nor has he helped his cause with some misguided remarks about wanting his life back and optimistic comments about the clean-up operation. Other public relations own-goals included his refusal to answer questions put to him by a Congressional subcommittee and his decision to participate in a JP Morgan yacht race around the Isle of Wight. END

Leaders we deserve has followed this story closely. The background to Dr Hayward’s appointment in 2007 suggested that he had demonstrated top leadership potential, and had been selected for one of the most challenging of CEO positions with any global organization.

Growing stale in the saddle

CEO tenure remains a complex area for study. Danny Miller’s work is much quoted. He suggests although CEOs may ‘grow stale in the saddle’ that for many organizations, a change of CEO is most likely to take place only as a consequence of catastrophic performance. By generally accepted organizational criteria, Tony Hayward had appeared to making a good start in his job at BP. He declared intentions were to address issues to deal with unsatisfactory operational practices. But should he have been able to put enough changes in place to have prevented the specific errors that contributed to the catastrophe which led to the deaths of eleven people, and environmental disaster

What makes a good leader? How heroes become zeroes

Research into leadership has moved away from universalistic theories. We have stopped looking for presence or absence of a set of properties which differentiate a good leader from a bad one. Even success or failure of itself is insufficient to reveal a simple answer, because all leaders deal with uncertainties and make judgment calls.

In times of crisis, orchestrated anger against a leader builds up. His statements are analysed as evidence of his or her callousness, stupidity, duplicity. The symbolic significance of speech-acts are just as important as physical actions. Sound-bites become replicated in headlines and become elements within a dramatic narrative.

Psycho-analytical models of human behaviour suggest that social groups seek ways of dealing with fear and uncertainty which address inner phobias rather than practical means of overcoming unpleasant circumstances. Under stress and distress group members react as if a leader has betrayed them. According to one text-book such reactions draw on a basic assumption of dependency: a world in which

“The leader is the all-providing and all-knowing saviour who may also become another hate figure”

Lessons to be learned

Under such circumstances it becomes a social imperative to change the leader we have to the leader we deserve. There are lessons to be learned here, about leaders, dilemmas of leadership, and the social processes which result in complex issues being reduced to a leader’s incompetence.


Tidjane Thiam’s AIA Scheme Falls Flat at the Pru

June 2, 2010

Stop Press

Tidjane’s plan to take over AIA, the Asian arm of AIG has collapsed. This news adds a postscript to the following unpublished account of the plan and of the Pru’s leader Tidjane Thiam. It raises questions of leadership and strategies for opposing a plan for major corporate change.

Original Post

Today’s news [2nd June 2010] reveals a group of active shareholders, The Prudential Action Group had been working to block the proposed bid, believing the price being offered was too high.They Prudplanned to oppose the deal at a shareholder vote due to be held on 7 June.

The Prudential Insurance group has a tradition of reliability built from generations of agents providing insurance and savings schemes for the poorest families in England. The new man from the Pru is helping create a new global organization with an audacious bid for AIA.

Tidjane Thiam could not be further from the image of businessman in charge of a traditional English financial institution. The French-Ivorian son of an Ivorian diplomat was educated as an Engineer in France where he won top grades, and later took an INSEAD MBA. His subsequent work at McKinsey ended with an invitation to join the Ivorian government, but political turbulence ended his ministerial career and he returned to business life at Aviva. When Richard Harvey stepped down as chief executive of Aviva, he was tipped as a possible future head.

Robert Peston evaluated the bid and the new man from the Pru. The BBC’s hard-to-impress financial editor, described him in ways he saw as different from the norm.

“I’d not met Tidjane Thiam, the chief executive of the Prudential, till I interviewed him yesterday. And unlike many business leaders I encounter, for whom the expression charmless nerk [does he mean nerd?] was probably invented, it’s not hard to see how he has reached the top: he’s persuasive, amusing and self-deprecating.”

The article goes on to examine Thiam’s plan to obtain finance for acquiring AIA, the Asian arm of the ailing finance giant AIG.

“As if you didn’t know, if you want serious long-term growth, there’s no better place to go shopping for business assets than Asia. And as for the putative treasure sought by the Pru, AIA, it’s at what Thiam describes as an “inflexion point”. Which means that AIA’s profits are soaring, because of a combination of recovery in the Asian economy and the great sense of liberation of its local management that they’re soon to be freed from the stigma of being owned by AIG, the US insurer that crashed spectacularly in late 2008”.

Peston is suspicious of the promised added value of mega-mergers. He recalls the hubris which followed the enthusiasm of Fred Goodwin of Royal Bank of Scotland and John Varley of Barclays regarding the acquisition of the Dutch bank ABN. He is not alone in his concerns. The Daily Mail noted

Prudential admits it may have to spend £500m hedging against currency movements as it battles to complete its right issue. That is on top of £850m of adviser fees and other charges. The massive outlay associated with the £14bn capital raising won’t help win over investors. They are already lukewarm on the insurer’s plans to shell out £24.6bn. Details of the charges were revealed in a mammoth 936-page prospectus for the share issue [an opportunity] that will have got lawyers and advisers salivating.

The document highlights the vast amount of shareholder cash that Pru chief executive Tidjane Thiam is putting at risk with the audacious takeover of the Asian insurance business belonging to bailed out US firm AIG.

Contained within the document are numerous warnings about the potential risks of embarking on the AIA acquisition. The Pru warns that the problems at AIA’s parent company AIG could rub off on the firm and ‘harm the Prudential Group’s business and reputation’. It also said that integrating AIA could be tougher than anticipated and that targets could be missed. Change of control clauses could impact the business that the Pru is buying, and there could be hurdles with the myriad of overseas regulators which monitor the Asian businesses.

Shareholders of the Pru are called on to help finance the scheme and were scheduled to meet on June 7th [2010].

End Note

This, as they say, is not the end of the story but the beginning. Students of leadership might reflect on the lessons from the story both for a change-oriented CEO, and for minority shareholders opposing a board’s proposals


BAE Faces Global Challenge

October 2, 2009

bae

BAE Systems faces a major leadership challenge over international contracts. How serious is the threat, and how might BAE Systems differ from other globally trading organizations?

A long-running story broke this week [Oct 1st 2009]. British anti-fraud prosecutors intend to pursue a case against BAE Systems, the world’s No. 2 defense contractor, on charges of corruption in dealings on foreign contracts worth hundreds of millions of pounds.

Prosecutors said they will seek permission from Attorney General Patricia Scotland to pursue the case against BAE, which is Britain’s largest manufacturer. In a statement, BAE Systems said it “continues to expend considerable effort seeking to resolve, at the earliest opportunity, the historical matters under investigation by the SFO.”

The cases involve alleged secret payments on sales of a military radar to Tanzania; alleged bribes behind a Czech deal to lease Anglo-Swedish Gripen warplanes; payments allegedly made on a sale of two frigates to Romania; and 100 million pounds ($160 million) in allegedly secret payments in a weapons deal with South Africa.

Christopher Grierson, a partner in the bribery and corruption taskforce at Lovells LLP international law firm, said the SFO’s decision would shake British business.

“The sheer scale of the penalties being sought, which are believed to be 1 billion pounds ($1.6 billion), is unprecedented in the U.K. and will send shockwaves across corporate Britain” END

Make no mistake. There are considerable problems and adverse publicity facing BAE in the coming months. Public awareness of Corporate Governance issues has been raised over the last year or so with the high-profile financial scandals.

Background

Background briefing reveals how the story can be treated in quite different ways. The Guardian sees the annoucement as vindication of its campaign against what it sees as corporate corruption supported by the British Government. In contrast, The Mail sees evidence of an anti-Capitalist plot.

The Guardian editorial put it this way

Last time BAE Systems was threatened by justice in 2006, it wriggled free with the aid of a personal minute from Tony Blair. His questionable claim was that throwing the book at these merchants of war would threaten lives on British streets. The pressure on the Serious Fraud Office to drop its probe into the firm’s Saudi dealings amounted to – in the words of the high court judge who reviewed the case – “a gun held to the director’s head”.

Peter Oborne in The Daily Mail writes:

Fifty years ago Britain could still boast a magnificent and proud industrial base, but today we only have two truly world class manufacturing giants.

The first of these is the superlative pharmaceuticals conglomerate Glaxo and the second is the great defence contractor British Aerospace.

yesterday’s news that the Serious Fraud Office wants BAE to be prosecuted for corruption is not just a calamity for the company, its shareholders and the men and women who work for it.

It is also a national disaster, with devastating consequences for British domestic employment, overseas earnings, and our standing throughout the world. It is doubtful whether BAE could easily survive paying the £1billion fine that the SFO is reportedly demanding, nor the massive reputational damage that would result.

Of course, we would all have to stomach this national calamity if BAE really was corrupt and a disgrace to Britain. No one can condone corruption. But is BAE really corrupt? Or is it about to become the victim of a gross miscarriage of justice?

Oborne goes on to suggest that BAE Systems is operating globally where one culture’s incentives is another culture’s corruption.

The BBC analysis

As usual, Robert Peston offers an informed overview:

BAE, Britain’s biggest manufacturer, would dearly like to make a limited admission of guilt, pay a fine and move on. It would love to settle the case by plea bargain and turn over a new leaf, to use the cliché.

That’s wholly rational, in that most of the senior executives of the company weren’t with the business in the period when, by its own admission, it wasn’t as scrupulous in its business practices as it would now like to be. But its directors have a legal duty not to hand over cash or damage the reputation of the company – through what would be seen as a confession of wrongdoing – unless they are advised by their own lawyers that the SFO has an overwhelming case.

A Case for Analysis

The case offers much for analysis. The Guardian and The Mail have been useful starting points as wirnesses for the prosecution and for the defense. Might it be possible to apply a little more creative thinking to provide advice for the future of BAE Systems, and implications for global organizations in general, and Governments, based on the case?

Other Perspectives

Campaign against the arms trade

BAE Systems


Goodbye Airmiles, and you can keep your Lloyds TSB Credit card as well

June 22, 2009
John Daniels (Lloyds)

John Daniels (Lloyds)

Those nice people at Lloyds TSB explained how I could keep my 9000 airmiles by signing up for their Credit Card. After a little thought I decided to bin the offer of their credit card, and write off those airmiles

Another great marketing wheeze brought you by the nation’s favourite industry. Yes, the near extinct banking sector breathes afresh and its members are coming up with even more creative ideas to attract customers to their credit card schemes.

Last week [June 2009] a fancy set of marketing forms plopped through my letterbox. They announced that I could save my airmiles by some rather complicated arrangement which involved me in signing up for a Lloyds TSB credit card.

I rather liked the prospect of using those airmiles, collected over quite a few years of yomping to various parts of the globe. Later I had some peripheral contact with the Airmiles organization through its links to the world’s favourite airline. At that time it seemed an enthusiastic and entrepreneurial set-up open to creative ideas.

But I don’t want a credit card. Even if I did, I would have objected to what amounts to a grudge buy. It must have sounded a winning idea on the corporate deep-diving marketing away-day.

Meanwhile, in an other part of the forest …

Meanwhile, in aother part of the forest, news breaks of the remuneration package agreed for Stephen Hester, the leader appointed to RBS to sort out the mess there. It’s all a bit complicated. Their loan is generally described as coming from money handed over to the Government by taxpayers like me. I still haven’t worked out the various ramifications of the deal cut with the bank to motivate its new chief executive Stephen Hester.

The package is made up of £1.2m in pay, up to £2m in non-cash bonuses and up to £6.4m in long-term incentives. The long-term incentives will only be payable if share price targets are hit over the next three years

The admirable Robert Peston best sums up the matter of Hester’s remuneration package

Now let’s stray into the land of the bloomin’ obvious, to look at why Mr Hester’s package will be controversial.

First and most obviously, Royal Bank is cutting thousands and thousands of jobs, perhaps up to 30,000 in the coming two years or so.

Second, Royal Bank is 70% owned by taxpayers. And at a time when the public sector is expected to be squeezed hard, it may look odd to be paying so much to the boss of a publicly controlled bank.

Third, all the banks are under pressure to increase their lending to businesses and households. For example the governor of the Bank of England agonised in public last week about how economic recovery might be put in jeopardy by the inadequacy of credit made available by banks.

Why is that relevant? Well, for the chief executive of a bank, the safest way to increase profits and the share price at this stage of the economic cycle – apart from slashing costs and cutting jobs – is borrow from retail depositors at close to 0% and then lend to the government by buying relatively risk free long-term gilts paying 4%.

The Treasury is aware of this risk. Which is why it has forced Royal Bank to agree quantitative targets for the amount of credit it will make available to businesses and households. But there is a piquant question whether Mr Hester’s remuneration incentives will deter the bank from providing more than this minimum.

All that said, one paradoxical reason for paying that kind of money to Mr Hester is also – funnily enough – that taxpayers own the majority of the shares.

He is widely regarded as that rarest of animals, an untarnished world class banker. And we surely can’t complain if a competent individual is running a state institution Also, if Mr Hester were to make the full £9.6m, Royal Bank’s share price would need to have risen to more than 70p over a sustained period – which would yield a profit for taxpayers on our 70% stake of £8bn.

Which looks a reasonable deal for the state – unless you think, as many do, that because bankers were to a large extent to blame for the economic mess we’re in, it’s too early for any of them to be earning this kind of money

Mea Culpa

In an early version of this rant, I foolishly mixed up the Lloyds TSB air miles for credit card story with the RBS Bumper payday for Stephen Hester story. The first effort read more smoothly than the second version, but suffered from the slight problem of being utterly confused.


Robert Peston interviews Andy Hornby of HBOS

October 5, 2008

Andrew Hornby, head of HBOS, is notoriously discrete. In a rare interview with Robert Peston after the tsunani week of mid September 2008, he predicts an 18-month long haul in financial markets, and house price deflation, and identifying shortage of credit as the primary causal factor of the credit crunch

The interview took place in advance of the Tsunami week in the world’s finance markets, and makes no mention of the dramatic events that were about to befall HBOS and its leader. It retains merit because it permits a ‘before and after’ analysis

Pressed on the bank’s treatment of customers, Mr Hornby identified a triple whammy for consumers of food prices, fuel costs and utility bills, resulting in less discretionary income to save. The key to an unblocking of illiquidity will be the US housing market, where a return to health will then accelerate global confidence.

Hornby disagreed that HBOS had irresponsibly managed leading over the last few years, but defended its current cautionary stance and restricted lending.

Peston: Not a single senior banker has resigned or been fired [That can’t be right unless Peston is referring to HBOS rather than bankers in general].
Hornby: We are taking responsibility, which is different from being fired.

Peston: Morgan Stanley at the end sold short.
Hornby: No comment, [but pointed to how quickly the markets cleared.]

RP outlines AH’s his glittering career What had been learned? Planning for (and dealing with) uncertainties. Later in the interview AH returned to the inter-connectedness of global factors, and need to keep a five year planning perspective [by which time the long-term trends in housing and finance will have been restored.

Peston: Are you profiteering in current circumstances? [By increased charges to customers]
Hornby: No, we in UK are competitive internationally.

The interview format remains a one-dimensional glimpses of leaders and their competencies Overall, a competent but unremarkable rather low-key performance. Strengths. Reminded me in assuredness and confidence of an interview by Louis Gallois of EADS. A leader able to reassure and communicate trust in his competence. The style seemed particularly appropriate for the current circumstances.

Within a week he was defending the proposed takeover of HBOS by Lloyds TSB


Bush wages war on financial terrorism but fails to rally the troops

September 26, 2008

President Bush launches one more campaign in the war against terror. But this time it is against the terror that threatens global capitalism

The aging generalissimo is preparing to step down. Perhaps he will hand over to a dynamic young leader. Perhaps to one even older than himself. But step down he will, in a matter of months.

While he might have wished for respite, he has to confront one last crisis in his last days as President. The United States faces the most severe financial crisis since the 1930s.

His plan is to fight the financial war with a $700 billion attack force. But he has to win support of his financial generals who are not convinced.

When he addressed the nation he looked tired and had lost the jaunty air which has been a feature of his press conferences.

Peering at events from the UK, BBC’s celebrity journalist Robert Peston suggests that Bush is trying to bully the troops into line.

Political impact

The political ramifications of this battle are becoming clearer. The presidential aspirants have been dragged into the crisis before they would have chosen. Senator McCain has made the more assertive move, claiming that it calls for a temporary cease-fire in the Presidential campaign. He suggests a face-to-face debate scheduled for Friday [September 26th 2008] should be cancelled. Senator Obama gives a more nuanced response (a ‘yes and’). Sure, the financial crisis is vitally important and urgent. But a wannabe President has to deal with more than one thing at a time.

That exchange struck me as significant. McCain made a plausible move. Obama’s response worked better for me.

So what?

So what? I don’t get to vote in November.

There will be plenty more mud flying around, but more seems likely to stick onto the Republican candidate and his high octane vice-Presidential candidate around their grasp of financial affairs. These hits may be harder to brush off.

It just looks, for the first time in months, that the odds are swinging back to Obama, and that vulnerabilities in the McCain campaign will do his prospects real damage.


Paul Walsh defends Diageo’s social responsibility

July 29, 2008

Paul Walsh, chief executive of the world’s biggest drinks company, defends Diageo’s social responsibility policies

In a wide-ranging video interview with BBC’s Robert Peston, [July 28th 2008] Paul Walsh examines the social responsibility policies of Diageo, and provides a glimpse of his leadership style.

The loyalty of a lifer

Mr Walsh is one of a disappearing breed, a corporate lifer in the fashion of Henry (Hank) McKinnell of Pfizer. His tenure as CEO is also substantially beyond that of current norms. In this interview, he did not appear to be under pressure to justify his belief in the social responsibility of his company. The question was framed around public debate in Great Britain on the vexed issues of underage drinking and its social consequences.

Not in the witness box but bearing witness

On this matter, as elsewhere during the interview, Mr Walsh was not so much in the witness box, as someone bearing witness, given an opportunity to share his personal faith in the company and its values. This is a claim that comes more easily to the corporate lifer, whose commitment has been demonstrated by decades of loyalty.

Diageo? Most of us (including many financial commentators) still refer to Diageo by its centuries-old earlier name Guinness. You can see the attraction of moving to a name that avoids preserving an image of a single-product company. The brand shift occurred at a time when creativity in branding seemed to have been at a low ebb, and when rebranding decisions tended to favour the Rorsachean over the impactful and memorable. But that’s another story.

Admitting a mistake

Watch out for how Walsh deals with a recent commercial decision. ‘We got it wrong .. we listened .. we put it right’. Walsh seems quite relaxed and invulnerable to the risks of revealing something about himself or his company.

The boys with the black stuff

Some years ago, when the company was known as Guinness, spent some time working with its marketing and corporate managers in several different countries. In those days, the culture was a remarkably coherent one. In Ireland, the job as ‘Guinness rep’ brought high social status. The parish priest was not unknown to use his pulpit to mention job vacancies in the company. But arguably, the strong and dominant image of Guinness was beginning to restrict strategic transformation.

Success was recognized through hard-won achievements as the ‘boys with the blackstuff’ spread the word and the product as successfully as their Christian brothers around the world.

But transformation to a global force has not been accompanied with the replacement of leaders who put financial ratios above the products which have been the lifeblood of the organization.

Facing the media

Robert Peston has argued that business leaders are too reluctant to put themselves forwards for public scrutiny.

In this interview he demonstrates again his claims that such exposure is desirable and valuable for the corporation.

The Need for Creative Ideas

However strong its leader, Diageo faces problems of social responsibility raised at the interview. The firm will need more than good image management to strengthen its global brand. Creative ideas will be a necessary part of the product mix.


Why British Business Leaders won’t appear on TV shows

March 28, 2008

paxo.jpg

In the US, appearing on the right news shows is part of a business leader’s job. In the UK, there is far more reticence by business leaders to court such publicity. Which culture is better served by its leaders and celebrity news presenters?

In one of his recent blogs, Robert Peston draws attention to an interesting difference between American and British business leaders.

When a chairman or chief executive appears on BBC television or radio, he or she is typically talking to millions of people in the UK and across the globe via our assorted programmes and channels and platforms. That’s appealing to a minority of business people, such as Stuart Rose of Marks and Spencer or Justin King of J Sainsbury. Their visibility, they believe, sends out a strong message of confidence in their respective businesses to their customers, employees and shareholders. Other executives are more reclusive, they cherish their privacy – which is understandable. It’s part of my job to persuade them they have a duty to be accountable, via the BBC, to the many different groups which have an interest in their respective companies

Well, yes, up to a point. As one of the BBC’s celebrity business journalists himself, Robert Peston has taken an understandable perspective. But methinks he doth protest a bit too much. Or, anyway, glosses over a very interesting difference in the way in which the media interact with business in America and the UK.

Hollywood invented the star system as a brilliant marketing strategy. The image of the star was supported by the studios and developed the image-building techniques and principles.

Off screen, the Holllywood star had to have an impeccable public life. On stage, the image was also that of the heroic figure. The male lead is exceptional, and yet someone who is also recognised as role-modelling important cultural norms. These include self-reliance, championing the oppressed against the forces of evil or morality. The faithful lieutenant knows his place, and his place is to perform well but not to upstage the star.

Every Lone Ranger has his Tonto …

The drama creates the world in which the audience suspends disbelief in the artifice. When successful the production helps generate popular demand for more of the same. For sequels and even prequels. The images replicate themselves.

We do things differently

Pursuing the metaphor, we can detect cultural differences. If Hollywood produced its heroes capturing and arguably helping create the American dream. While influenced by Hollywood, The British Film industry developed its own cultural mores through its own golden era of war-time propaganda firms in the 1940s, Korda, and Rank were driving forces behind the studios at Ealing and Pinewood.

These centres of creative film-making also helped establish the courageous and modest British hero with intrepid sidekick.

Every Holmes had his Watson …

Propaganda films reinforced the rigid class stratifications of the 1940s, although if anything the class divide between hero and chirpy sidekick in the war dramas strengthened the notion of an officer class, leading a nation of cheerful and indomitable lower orders.

Fast forward

In their related ways Hollywood and Pinewood found space for the rebellious hero. They also celebrated the progress of the self-made man.

Let’s fast-forward to a world of multi-media communications. California has provided a former American President, and its current State Governor.

The candidates for the next president of The United States are a charismatic young man making good; the dynastic successor of a former charismatic leader: and the veteran war hero. More than ever, media presentation will be vital in deciding the way the non-party voters move.

A similar context can be seen around the image-making of commerical figures. With some honourable exceptions, American TV interviewers of business leaders tend to be far more respectful.

The encounters are more obviously a performance in which each of the actors knows his or her parts. There is little difficulty in seeing how that old sociological metaphor of role-players applies. The business leader acts out the role of the able, honest, trustworthy figure. The interviewer acts out the role of able honest, trustworthy lieutenant.

The convention permits some variations in the playing of the roles, but there has also been a lot of convergence towards what is box-office.

Meanwhile, something quite different has happened in the UK. There has always been a theme of the revolutionary and rebellious hero. In the UK, the theme has developed into the celebrity newscaster taking on the establishment. The lawyer, politician and BBC journalist Robin Day was an early proponent in the 1960s.

Fast Forward to Modern Days.

The trend-setting Robin Day has been followed by another generation of celebrity journalists. The dominant themes of drama has all-but-been inverted, with the action reverting to the ancient Greek dramas in which vengeance is meted out to evil leaders by the avenging nemesis as played by the interrogator. It’s Tonto punishing The Lone Ranger. For episode after episode.

The star-system now builds up the image of the studio or channel’s new stars. Competition is fierce. As the Guardian recently reported, the stars are really battling with each other.

The paper was commentating on a public spat between two of the snarliest beasts in the media jungle, John Humphrys and Jeremy Paxman.

To help decide the issue, perhaps we need a Celebrity Newsreader [contest] , scoring the two on Aggressive Interrupting, Exasperated Repetition and Curmudgeonly Books about England …

The problem with superhero battles, as any comics fan will tell you, is that it leaves the way clear for an arch-nemesis to clean up with nefarious schemes. Have you seen how much work Sir Trevor McDonald is getting these days?

Quite. It is hardly surprising that business leaders and politicians are avoiding the roles offered them in the dramas.

Leadership lessons

If the increasingly dated style of Humphrys and Paxman were to be seen and compared with interviewers with a less confrontational, yet engaging style, we may well get more glimpses of our business leaders.

Would we be better off as a society? The American system offers more showings of their business and political leaders. They are not particularly popular as prime-time material. As with the president’s well-managed press conferences, they are too rehearsed to be particularly revealing.

Perhaps in the UK, a successor to the much-missed Antony Clare would be worth seeking.