Allan Leighton - Full Interview with LeadersIn

Thank you.

Well, it wasn't bold. Consignor is the most stupid name you've ever heard. If you have two of the best-known brands in Britain, the Post Office is number one and Royal Mail is number three, why would you invent something else nobody understood? It was typical: change the name of the company as if that changes anything. I hated the name from the beginning. Before I joined, I spent time talking to the postmen, and they always thought that since we changed the name, everything was going wrong. It was a very easy decision to take and very popular. When you want to signify a change, do something big, and if it can be big and popular at the same time, you tick a big box. So Consignor was dead after a relatively short period of time.

Well, it's a bit of jobs worth. Sometimes boards forget what their job is. It isn't to invent new names for companies, it's to make sure the companies work. If ever there's a lesson from what's happened in the last few months, those companies, those banks, the big names that don't exist anymore — all the governance boxes could have been ticked, but that wasn't the issue. The issue was what the business was doing, how strong it was, what the issues were, and how close the board was to the real issues. Roles of boards can become all about governance and crazy things as opposed to making sure the business functions well and that the people who run it day-to-day are good, doing the right things, and testing and supporting them. Common sense comes from the top, but it's actually more often with the operators than at the top of the organization.

The first tip is get a good chairman. No, I don't mean me, but it does make a difference. The chairman sets the tone, and then clearly the chairman gets to pick the CEO, and the CEO is the most important person in terms of the board. I've always tried to create boards where they complement each other. I'm largely interested in boards where people are still working — that's very important. A dynamic where you have people sitting around the table who every day are doing work brings a different emphasis. They're in touch. Secondly, Royal Mail is a classic. I had to build the board from scratch. I was looking for some people who understood retail, marketing, HR, IT, regulation. You pick the board to complement what you need in the organization. Getting the right board is pretty paramount. All the good boards I've been on, the companies did well; all the not-so-good boards, they didn't do well. So there's a correlation.

Well, I've been a bit lucky. I'm not sure 'master' is it. Adam Crozier is a classic. I was struggling to find somebody to run Royal Mail. I had two or three people about to appoint, and then out of the sky came Adam, who I hadn't met from Adam. He's got all the skills I look for: very straightforward, very bright, can take tough decisions, but understands that people are really important. He can cope with the pressure. I remember when I was first appointed a CEO. It's the toughest job in the world, but also the best. It's the loneliest because the buck stops with you. You have to realize that, and then either you can cope or you can't. Most successful CEOs have those characteristics.

The original idea I got from James Dyson. One of the reasons I went on the Dyson board was because 15 years ago I bought James's autobiography. One thing he does is everybody who joins Dyson builds a vacuum cleaner on the first day, because then they know they're in the vacuum cleaner business. I thought it was a simple but great idea. I wrote him a note and said I'm going to copy this idea. At Asda, our equivalent of a vacuum cleaner was the checkouts. So I used to make everybody go work on the checkouts. If you were a manager in finance, your first day wasn't in finance, it was in a store. Then you knew what you were there to do. At the Royal Mail, we deliver mail, so everybody on the board has been out at four in the morning working with postmen. We get them to follow a letter for 24 hours from posting to delivery. That way they understand how it works. The best way to do that is on day one because by day 101 nobody gets to do that. So it's James's idea, credit to him.

Scary? Because I turn up driving around, I can talk to them wherever they are. I get out of the car and they're all gone — they say 'bloody hell, it's the chairman.' But I've always believed that the best way to understand what's going on in the business is to talk to the people who do the work. In our case, those who deliver the mail, sort the mail, work behind post office counters. In retail, it's the checkout operators and people who fill shelves. Not having a relationship with them, not having a piece of radar for them, is never a good place to be.

I've always worked that way. Most people put meetings in their diary and fit their work around it. I put the work in and fit the meetings around it. I'm not a great believer in meetings — most don't achieve very much. I used to work once a month on the checkout for four hours. The girls would say I was hopeless because I could only scan 15-16 items a minute, while they can scan 30, so I'd slow the lines down. They always insisted I had an L plate. But you learn what stops them from doing a good job: simple things like buttons in a different place, certain angles, products that don't have the right scan data. That's very useful. One item per minute is a huge piece of productivity. If I could learn from them and get something changed to improve by one item per minute, that's 10% more productivity. So it's done for a reason: to make sure people can do their jobs.

Yeah, I did actually. When I eventually sold Asda and came out, people knew I wasn't doing very much. James just phoned me up and said, 'Why don't you come on the board?' My day one was build the vacuum cleaner. Build a Dyson. Did it get any suction? Yeah. What a great business that is, unbelievable.

It's just knowing what's going on. That seems obvious, but you don't unless you set up ways of doing it. I have a thing called 'Ask Allan' in the Royal Mail, and I had it in Asda. I get up to 5,200 emails a day from people saying, 'We tried this, it didn't work' or 'Those idiots have done this.' I get them direct, unfiltered, and we respond to everyone within half an hour. People want to know that you've got it. From that, over time, you build a pattern. That radar is very important. In any organization with lots of people, if you're clever, you get a lot of information. People ask how I deal with all these emails — easily, because it's important. If you see it that way, you get it fixed. Boards should have radar. Think about all the stuff that happened in companies — where did it come from? It didn't just appear. So where was the radar? Sometimes you pick up things that aren't what you think, so you can ignore them. But about once a week you get an absolute gem. If something happens that affects a lot of people, you'll get a lot of emails and quickly see a pattern.

Absolutely. That's part of it. Plus it's very important that people know you do. If I happen to look at my BlackBerry and messages come, I'll often send a message straight back. So within a minute they get a response. Then they email back saying, 'That can't be you, I only sent this a minute ago.' I send another email back. They then go and tell a hundred people. If you can create a feeling in the organization that you are pervasive, in every bit of the business, it's very powerful.

Yeah, I do it all the time. I've always done that. I'm not a great person for royal visits. I just turn up at places, not to catch people doing wrong, but to see what it's really like. Anyone can make things look good if they know you're coming. I see as much good as bad. I wander around buildings, sit on desks, chat with people. You pick stuff up and people see you. The idea is to be seen. If I drive past a store or delivery office, I go in. It's all part of radar. Talk to customers and the people working. I think many CEOs spend too much time with direct reports. The danger is ignoring the frontline. I always said the key bits are the top 15 people and the hundred thousand who do the work. Everyone in between is developing. So I believe in communicating straight to the front line, no filters. Cascading information doesn't work because there is permafrost and 'business prevention squads' that change the message. If I could talk to everyone directly every day, that would be the best.

That's what I do. I go down direct. People don't like it for about six or nine months, then they get used to it. The big thing about communication: the test of communication is did it happen. It isn't whether somebody sent an email, did a bulletin, video, or newsletter. That's not communication. You ask for something, either for information or task, and did it happen? That's the test. It's pretty straightforward.

One: hold your breath. It's always much harder than you think. But clean sheet. I always do a 100-day plan. Spend 100 days looking drains up in the organization, then develop a plan. Fix things as you go. Every week you want to change something. Most businesses I go into, there are good people in bad companies. The number one thing is not to bring in too many new people. Find the good people in the bad companies. Often you find really good people who haven't been motivated or didn't think what was happening was right. You have to be open-minded. The first 100 days, you get as much change as you can because after that it becomes difficult due to bias. John Molton said a turnaround manager is different from a nurturing manager. He said you destruct for 100 days and then restruct for the rest. I don't necessarily agree that you have to be a different person. If you're a good manager, you can do both. You build, rebuild, build, rebuild.

Um, there are two things. There's always this thing about, you know, can you identify these characteristics? If you could, then if you could inject them in everybody, that's fine. They're all very different, and that's the point. But they're all pretty focused, they're all pretty good at communicating, and none of them are in it because it's a popularity contest. And if you look at it through, that's what you see. And then there are different characters. If you take Terry Leahy on one extreme and Philip Green on the other extreme, two different characters, you wouldn't see or meet, they're very different, but they do a lot of the same things just in a very different way. And that's why I say, everybody says, well, who's the one person? You go through the normal boring stuff, and in my view, I always say there isn't one. They are, you just want to be politician, it's not true. Because the thing I've always learned, which is the great thing about all the people in that book, I've worked with, and they're all pretty bloody good. And there's a bit that you learn from every single one of them, and the thing to do is work with people, see what you can learn, and then mold that onto what you are, because everybody's different. You could go through that book and say for every one of them, that's that bit. James, that's what you know, each one of the things, there's a bit of a.

I got a phone call and my secretary said it's Rupert Murdoch. And I said, you know, somebody's winding me up or I'm in terrible trouble, I'm in the News of the World, one of the two. And she said no, no, no, it really is. And it was Rupert. And he said, look, you know, we're looking for some non-executive people and your name came up. I'd really like to meet you. Are you around in London in the next 48 hours? And I said, well, unfortunately I'm not. And he said, well, where will you be? And I said Hull. And so, where's that? So I explained to him where it was and he said, what are you doing there? Someone got to visit some stores. And he said, I'll come up there. And the very next day he got on a plane, he flew to Hull, he came to the Asda, he met me in the store. The first thing he did was walk straight up to the where the newspapers were. It was midday, there were no copies of the Sun because we sold out. He got the phone, he phoned David Yellen who was the editor, and said to David, I'm in Hull. Which to them they would think, god, what's he doing in Hull? And I'm in this Asda and there are only a couple of the newspaper, David, what's going on? He got me then basically. But it's this thing about if you want to do something, do it. And the eye for detail at the same time. Also, he sent a message which was, I'm Rupert but I'm out and about, I'm in Hull. And they would be thinking what is he doing in Hull? I'll have to look around. So the word would go round that he was in Hull looking around.

Don't do things just to be popular. Do things because they're the right thing to do. And actually what happens is if they are the right thing to do, even at the time people don't like them, eventually because it is the right thing to do, they'll see that. And that's when you become popular, if that's what you want to be. And Asda is a classic example for me. That was a love relationship. I described it as tough love. And I felt personally responsible for every single person in that organization. And we'd grown up together, we'd come from a complete disaster to something, the best place in the country to work. And that's what that place was voted to be. But it took a lot of time to get there, but in the end people knew. It sounds very trite that I really cared for them and I knew they all cared for me. But the big thing was because of that, we all worked harder. The business was better. It wasn't a loving for that, it was because the business worked and we all felt really proud about it and part of something.

There's a lot of smoke and mirrors behind all this stuff, but most of it's common sense. Most of it is what people do every day in some way, shape, or form. And I've always felt this way: there are very few people I know who aren't capable enough to be better than they are at what they do. And I've always felt that the job of leaders is to make sure that that happens. And again, it sounds very trite because I said, I've got a lovely thing to say. The only reason is, if you do that and others can't do it, your business will be more successful. And in the end, it's all about business.

Leadership is about doing the right thing. That's easy to say, difficult to do, but it isn't that difficult to do. Every day I always do this: you look in the mirror test. You can bully everybody else but you can't yourself. When you're doing some stuff, you look in the mirror and say, am I really doing the right thing here? And if you are, and that's what you feel because it's something you've built up over a period of time, then that's why you keep doing it. And often that is some of the tough things you have to do. That's what leaders do. And managers make sure all the things are done right, and that's an executional thing. There's a difference. When I came to the Royal Mail, I remember getting all the managers together for the first time. They had never ever been together in their lives, this is like all 1500 of them. I didn't have any charts or flip charts, so we won't talk about put up with him, we'll go down the track. And they all said to me the same thing: why did it all go wrong? Because we did exactly what we were told to do. So they tried to execute, which is the management task, but the problem was the leadership had given them the wrong thing to execute. So you can execute the wrong thing. That's what happens, and in many ways that's the most frustrating thing for people when you get off and doing it: well, I did exactly what you told me to do. The difference is that the leadership is there to make sure that people are doing the right thing, and then they're executing it right. That's the difference, and it is a subtle difference. That's why you don't want everybody in the company, this is what drives me mad, everyone wants to be a leader. Well, that's the last thing you want. Part of the thing that is great, I think it was really good about British business for a long period of time, which has lost a bit, is we had great managers. And being a great manager was enough. Actually, the great managers are what keep the thing going all of the time. And then suddenly you're trying to make everybody a leader. You don't want that. The most potent force you can have, because I always believe that strategy is 20%, execution the rest. The doing the right thing is the strategy bit, that's always the easy bit. The execution bit is the heartbeat, and that's where you need great managers. That's why being a great manager is much more important than being a great leader.

Both. You can't be a CEO if you don't have the leadership qualities. But not everybody can be the CEO. I've always thought when I've been a CEO, the most successful businesses I've ever been in is because I've had great managers, great execution. This thing about execution, which everybody talks up, it's not an act, it's a habit. You have to create the habit, and it's so much your habit people don't even know they're doing it, they just do it. Tesco is a great example. Why I think Tesco at this moment is the best retailer in the world? They just execute better than everybody else because it's become habitual to them. They don't have to think about it, it's just the way it happens.

Most people are natural decision makers. We make them every day, that door, that handle, that drink. So I don't believe all this stuff. I was talking to some people yesterday and I think people just use an excuse. Most people, in fact the majority of people I know, are natural decision makers because they have to every day get up and say what you're gonna wear. You don't think, well I just hang around here for four hours and oh dear, I should have been at work two hours ago. So it's something that's in people. The issue is this thing about how people change when they come to work. How people suddenly appear to be different when they work when they're not at work. How people are very confident in and around their own home and then become totally the reverse when they get out. It just doesn't make any sense. My whole thing is I always felt my job is that I don't know anybody who gets up every morning and thinks I'm going to really screw up at work today. That's my job, I'm going to screw up as much as I can. But that's what happens, and it happens because the environment isn't right for them. So if you can make it easier for people to do their work, then they'll do better work, and therefore they'll be more confident, and therefore they'll make better decisions, and off you go down the track. I've always started from this great thing about simplifying everything: make it easy for people to do their job. If you just do that, then you'll see people's confidence levels and decision making and everything else improve. Because it's easier, I do a better job, because I do a better job I feel better about myself, and therefore I make better decisions, and therefore I do a better job. This whole thing about being on a roll, that's what that is. You make a good decision, you get confident, you get a result, so therefore you make another good decision, you get confident, off you go. That's what it's all about.

It's very different. There's a bit of potluck in it, a bit of intuition. You just see where you think there's some talent, and then you give them something to do to see if they can translate the talent. Because I know lots of people who are very talented who can't execute anything well, that's pretty useless. And I know people who aren't so talented who do great execution. So there's a bit of intuition in it, but it's the same things you're looking for: characteristics in people that you've seen before in good people. We all make judgments about people every day, and largely our judgments about people are more right than wrong. They're 70% right, 30% wrong. Picking top talent is exactly the same ratio. So it's like, I can't make decisions oh I don't know about people. So scratch that. It's quite reassuring to know that even people of your seniority and expertise still make bad hires, certainly 70/30. Everything you do, I always get into trouble for saying this, but I'm right two-thirds of the time. That's a pretty good strike rate, but it means I'm wrong a third of the time. One of the things when you leave businesses, you have to realize that actually you're wrong a third of the time. So remember that you're wrong a third of the time and therefore have the ability to adjust. I'm not bothered about any more people thinking, well you must have got it wrong, so I'll go and say look I got that bit wrong, so we're going to go down this path now. And people think, oh well good, as long as we know what we're doing. The best people I know are right two-thirds of the time. And when you realize that a person's in the bottom third, you made a hiring mistake.

Sometimes, sometimes. But if I think it just doesn't work, then they have to go. That sounds very callous, but it's not, because people who you keep in an organization who you don't think are going to be able to do the job, that's the worst thing you can do to them. You know, let them loose and let them go somewhere else where they can actually align their strengths.

Well, I don't. For every raving fan, I've got somebody who isn't. It always sounds great than it is. I don't do it anymore, but my kids often Google me and it's 50 good, 50 bad. Particularly because when we had the strikes in the Royal Mail, there's some pretty bad stuff. That's part of it. One of the other things you have to be able to do is have broad shoulders, let it roll off your back. I've known Don for years, you sort of driven me around for years. If you're in a car with somebody a lot of the time, you need to have somebody you can get on with. There was a time I spent more time with him than I did any of the other directors. The second thing is you want to be in a position where in the car you can talk about whatever you need to talk about on the phone. So you build up a cadre of people. I've got Donna, I've got Christina up in Leeds, I've got Rita here. The great thing about them is they're, in the best sense of the world, just really great ordinary people. They've got no airs and graces, they've known me a long time, they don't let me get away with anything. What other people won't tell you, they'll tell me straight away. If they think I've screwed up, I get it from them first pretty quick.

Well, great entrepreneurs can work with very little. They don't need lots of, in fact often they're better working on their own. They can come up with an idea and turn it into something pretty quickly without a lot of resource. Those of us that have run large companies for a period of time find that pretty difficult now. Brent and Martha, who I worked with for a long time, they turned that idea around pretty quickly. It was just the two, three of them actually because Martha's brother worked. So that's the difference: they can turn something into something pretty practical pretty quickly with not a lot of support. And that is the difference. It is often why entrepreneurs then find it very difficult. They're great at starting things up, get to a level, but then get frustrated when you've got to get into the day-to-day management of things, when you've got to implement. That's often the wall that's very difficult. That's why in my experience, with the internet, particularly Lastminute.com where we bought lots of other internet companies all set up by really great entrepreneurs, as soon as they became part of Lastminute, they all left within a year because that's not what they do. They invent things. So that is a subtle difference.

Treat people with respect. You can give people bad news, but you have to be honest with them. My mum always used to tell me that we were all brought up with, respect is something you earn. She always told me it wasn't, she said respect is something you give, and when you give it every day to people, then eventually you might earn it, but always think about it that way round. I like to give lots of people bad news and lots of people good news. I try to do it the same way. I just try and tell them as it is. They may not like it, but they respect you for it. The Royal Mail had so many issues. Half the people today still don't agree with half the things they do, but they'll all generally say, well at least he told us. He told us it'd be like this. I think that's the most important thing. Somebody told me, if ever you have to fire people, fire them the way you'd like to be fired. Not fire them with a bonus. That's the one thing I've never done. I refuse to do that, and I refuse to have contracts which say if I get fired I ever get paid off. I know that legally that's what people do, I just don't think that it's right. I think it's very hard on people in an organization to find out the people who led them badly get paid a lot of money for leading them badly.

Yeah, I finished the Royal Mail in March. I've done seven years, so I'll be the longest serving chairman of the Royal Mail, which is a great thing to do. It's a great part of our history. I'm spending a lot of time working for the Western family at the moment, which I've done for a number of years. Who knows, I'll do something else back here at some stage. The great thing for me is things happen and you just decide along the way whether you want to do it or not. I could never see a situation where I wasn't doing something.