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22 March 2013

Tough at the Top

Tag(s): Leadership & Management
Last week I attended an event at The Shard where the Marketing Society reported to a group of invited business leaders and Fellows of the Society on research it had conducted with 40 CEOs. This had been prompted by Sir Martin Sorrell who at last year’s Marketing Society Annual Conference had been asked what made a great leader. He replied “A CEO with strong marketing-led vision that enables the CMO to get the job done.”  In association with Accenture the Society decided to talk directly to leaders to see what skills the modern CEO needs to succeed.  As one can imagine there were a range of responses but they boiled down to eight essential leadership skills.

1. Give a clear sense of direction.
Martin Glenn, CEO of Iglo Food Group, said “Give the whole company a sense of direction and clarity. Here is where we are going, this is why we are going there and this is what it means to you.”

2. Bring the customer into the Boardroom
Alan Giles, Chairman of Fat Face, said “It is almost as if you need a parrot sitting on your shoulder repeating the mantra about let’s not forget the customer…”

3. Communicate clearly
Carolyn McCall, CEO of easyJet, said “It’s important you understand the power of social media. If you want to win your customers’ faith go onto Facebook and Twitter and say ‘Sorry, we’ve made a mistake’.“

4. Be flexible, not floppy
Alan Brown CEO Rentokil, said “Being flexible is vital and the only way for a business to succeed, but sometimes a little rigidity and inertia can stop an organisation lurching off on a short-lived fad.”

5. Take risks but don’t bet the company
Mark Wood, Chairman of various companies, said “A ship is safest in the harbour but that’s not what it’s designed for…CEOs running a business have to take risk.”

6. Build the team around you
Julian Metcalfe, Founder, Pret A Manger and itsu, said “the only essential skill of any entrepreneur is to know who’s got fire in their belly and who hasn’t (who’s got) a shared goal to build businesses.”

7. Listen with humility and act with courage
Dido Harding, CEO of Talk Talk, said “Great leaders need to listen and hear the feedback from customers, colleagues and stakeholders and then they need the courage and clarity to do something about what they have heard.”

8. Earn your reward through building trust
Benny Higgins, CEO of Tesco Bank, said “Trust is what binds us together – with our customers, with our colleagues, and with our communities. It is only by showing the courage to lean into the truth that we can create enduring trust.”

Now most of this seems fine as far as it goes but how far does it go? I said “most” because I’m not sure about Number 3. I don’t mean a CEO should not communicate clearly. That’s vital in any job and does not especially mark out a great leader. My concern is the quote used to support it. I think the power of social media is greatly overrated. If you only apologise via Facebook and Twitter then the many who are on neither will not hear you, or hear you second hand, which may turn out to be worse.
In the body of the full report there is a better quote from Carolyn McCall whom I knew when we were both members of the Marketing Group of Great Britain and who is doing a great job at easyJet. She sums up the overall importance of having a clear vision and purpose that will help the CEO to keep moving forward when criticism seems to outweigh praise:

“A CEO needs fitness, resilience, and to have a lot of stamina. There is nowhere to hide, particularly from the market. You get knocked about regularly by the shareholders, press and customers. You need to continue and not be waylaid, you can’t be downhearted, and you need a vision and purpose.”

That strikes more of a chord with me. I know Carolyn works very long days, catching an early flight with her airline, helping out the cabin crew and chatting with customers, meeting staff at the destination airport, flying back and then meeting other stakeholders in the evening.

Sir Paul Judge, a Past Master of my livery compasny and now a serial Chairman, stresses that CEOs must satisfy all their stakeholders in order to win their trust and support.

“Leaders should do what they are employed to do by organising their people and other assets to achieve their key objective whether this is for charity beneficiaries, patients, pupils or shareholders. However, in the modern interconnected world in order to achieve these objectives, leaders must also get the respect of all their other stakeholders. They must understand and foster positive engagement with employees, customers, suppliers, financiers, government and local communities as if these are not supportive then it is very unlikely that the key objectives will be achieved.”

This is more like it but I still have a problem with the overall research. In fact I have three.

The first is that the title of CEO is taken to describe a particular type of job when in fact it covers multiple levels of job. For me there can only be one Chief Executive Officer in any organisation but these days there may be several as the position of Divisional CEO has been created. I have had a number of positions of responsibility and been CEO of two companies, one publicly quoted and the other backed by private equity.  Many might think that my biggest job was when I was Managing Director of Sony United Kingdom Limited with turnover of £2.2 billion and 5,000 employees. They were certainly big numbers and it was a prestigious position. The brand awareness was massive, Sony was then one of the very top brands in the world including the UK. We gained market leadership during my time and stretched our lead hugely. We were one of the top twenty exporters in the country and won Queen’s Awards for Export on a number of occasions. When we celebrated 30 years of operations in the UK two cabinet ministers came to the party.

However, I was just one of many Managing Directors in the giant Sony Corporation. I reported to a main board director but rarely had to meet shareholders and never had to raise money. I certainly dealt with customers and consumers but my principal suppliers were my colleagues in the business groups in Tokyo. I had balance sheet and profit and loss responsibility but only for a small percentage of our turnover. Anyway I shared this responsibility with many colleagues. 

By contrast when I was Chief Executive of NXT plc, though the sales were much lower, the profits non-existent and the brand just embryonic, the responsibility was very much greater and the job itself significantly bigger. I did have to raise money, some £40 million in my time there. I did have to deal with shareholders, a vociferous bunch with one of the most active bulletin boards on the London Stock Exchange. I dealt with global customers at senior level all over the world. I only had 100 employees but knew all of them personally and worked with everyone. The size of the job is not very well related to the size of the company.

The second problem is that when I had these positions I was too busy to take part in surveys. I reached that conclusion quite early on as there were so many requests. At first it was quite  flattering to be asked. I recall that at Sony I was invited to participate in a survey aimed at ‘Captains of Industry’. You can imagine I enjoyed that one. But after a while such blandishments were water off the proverbial. I am not suggesting that the Marketing Society did not conduct this survey using the good offices of Accenture and its own contacts. But I would counsel a health warning about such surveys in general.

The third problem is related to the first but with a twist. The sixth essential leadership skill is building a team around you and the leader quoted is Julian Metcalf, a serial entrepreneur. The skills and indeed character of the entrepreneur are very different from the professional. Lesson five is “Take risk but don’t bet the company’ but the entrepreneur does just that.

At The Shard we had three so-called CEOs presented to us to take questions, firstly from Suki Thompson, Chairman of the Marketing Society, and then from the audience. Benny Higgins of Tesco Bank and Ronan Dunne of O2 are both Divisional CEOs. Both are running significant organisations but as subsidiaries of something very much bigger. The third was our host, Irvine Sellar, Chairman of the Sellar Property Group which built The Shard. Benny and Ronan, one an actuary, the other an accountant by profession, gave solid if predictable answers. Irvine, a self-made property tycoon, was witty and incisive but clearly contrasted himself from the CEOs in the research.

Yes, it is tough at the top, and perhaps to make the point, it was my first visit to The Shard and I was looking forward to it but they held the event on the 28th floor. The Shard is a 95-storey skyscraper and at 309.6 metres (1.016 feet) it is the tallest building in the European Union. Someone worked out that it costs twice as much to visit its viewing platform per metre of height than any of the world’s other tallest buildings. But then Irvine Sellar thinks that only a fully leased building is a beautiful building and the 28th floor is still available for lease.

Source: Tough at the Top The Marketing Society in association with Accenture. 2013

Copyright David C Pearson 2013 All rights reserved

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