Allan Leighton, 58, former chairman of the Royal Mail, made his name at Asda in the 90s, when he and Archie Norman turned round the ailing supermarket chain before selling it to US retail giant Walmart for £6.7bn in 1999. Leighton left shortly afterwards, saying he was 'going plural', ie taking on a string of non-executive directorships at companies such as lastminute.com, BhS and BSkyB. His latest book, Tough Calls, is out now.
business:life: What do you think has been your toughest call?
Allan Leighton: Oh God, I've had so many of them. I seem to have one every day. But going back to my days at Asda, I arrived at a company that had once been a great success but had turned into a great failure and I thought if you go back then you get yourself back on track. It's very interesting, we sort of went back ten years. It's quite a big thing to go backwards sometimes and that was a pretty big call. Our advertising went back too because we resurrected the 'Asda Price' campaign. When I arrived, all the advertising was about fresh food and added value when Asda was actually about price. That's how the whole thing was built up. The story of Asda was that the guys who created it — Noel Stockdale and Pete Asquith — went to America and looked at some of the big supermarkets there. They came back and decided if they could keep prices low then they could have more volume and have bigger stores and if they had non-food products — non-food had a higher margin — that would enable them to keep the food prices even lower. It was a very simple but eloquent model. But by the time I got there Asda had moved into the south, spent a lot of money on new stores and bought what was then Gateway, which was a very bad acquisition in terms of cost. The supply chain collapsed and everybody was dealing with crisis rather than thinking about the fundamentals. People don't like to go back because they think they should always go forward but I term this 'Back to the future with modernity' because it was the modernity bit that got people to buy into the strategy and realise that it was a good thing to do.
bl: How shrewd are customers?
AL: Most businesses have some sort of DNA, particularly those that are successful. When you move off the DNA it doesn't work. What creates a really significant downturn in your performance is often one simple thing. I remember at Mars there was an occasion when the Mars bars were trucking along brilliantly and then — within a couple of weeks — sales fell off a cliff. The guy who was running it at the time, who was great, just said, "Look, just tell me what's changed". And it was the bite height of the chocolate. On a bar that is the most important thing because it's what gives it substance and the chocolate hit. The manufacturing guys had shaved the amount of chocolate down off the top of the bar and customers had worked it out. If something changes customers pick it up pretty quickly.
bl: Which one quality can no CEO do without?
AL: Endurance. In many ways CEOs have the best jobs in the world, but they're the toughest jobs and the loneliest jobs. I used to think it was just me: everything seemed to be going wrong all of the time. Then you realise when you talk to other people that it's all like that. I remember sharing this thought at a dinner only last week and talked about what I called the "3 o'clock on a Friday syndrome" and everybody nodded their heads. You feel as if you've got through another week. Friday comes along. It's generally dress-down day or something, everyone's a bit more relaxed and the weekend's coming up and, at about 3 o'clock, somebody walks up to your desk and you see by their expression that they're coming with bad news. And that's why I think that endurance is a very important strength because it's relentless. That's why people love it, but it is relentless.
bl: What is the worst decision you ever made?
AL: I make those every other day! Somebody said to me the other day that something goes wrong in business every day and the first job of the CEO is to stop it going wrong every day then build off the back of that. The other thing is that you're right only two thirds of the time — and that's a pretty good strike rate — which means you're wrong a third of the time. It takes a bit of time to accept this, particularly when you start out because you think you shouldn't ever go back on a decision. One of the army guys quoted in the book, who was great on this, had the line: "No plan survives first contact." And I think that's just a great way of thinking about it. Modify as you go, I think, has become a skill that good leaders develop.
bl: Which business person do you most admire and why?
AL: I always answer the same way: there's not one individual. One of the ways I have been fortunate is that I've worked with lots of really great people and very different people. The thing is rather than pick an individual — because you can never be like anybody else — what you can do is take bits of people and bits of what people do and you bolt that on to who you are. But who you are will always be 70 per cent of yourself and you can't be anybody else. I think you can change yourself, improve yourself and adjust yourself by 30 per cent. One way you can do that, as Sam Walton [the founder of Walmart] said, is to "Copy shamelessly" and I think that's always been good advice.
bl: You're a patron of Breast Cancer Care. Is there a particular reason why you chose to get involved with them?
AL: Two things really. My mother-in-law died of breast cancer but the other thing is that when I was at Asda we asked people which charity we should support. Two thirds of our colleagues at Asda were women and they were overwhelmingly in favour of Breast Cancer Care and so we built up a great relationship. I think it's a great cause and basically all the things I do — books, speeches — all the money goes to them. It's a tough time for charities and so everything I can do I do because the things that the charities support don't go away when the money goes away. It's something I enjoy doing and everything's pink, which is my favourite colour.
Interview by Dominic Midgley. Allan Leighton is the author of Tough Calls (Random House Business Books, £18.99). All author royalties will go to Breast Cancer Care.
blog comments powered by